Tyler Technologies, Inc.

and stay within the allotted time, please limit your question to one question per person. You may get back into the queue for a follow-up. And as a reminder, this conference is being recorded today, April 25, 2024. I would like to turn the call over to Hala El-Sherbini, Tyler's Senior Director of Investor Relations. Please go ahead.

Thank you, Krista, and welcome to our call. With me today is Lynn Moore, our President and Chief Executive Officer, and Brian Miller, our Chief Financial Officer. After I give the safe harbor statement, Lynn will have some initial comments on our quarter, and then Brian will review the details of our results and update our annual guidance for 2024. Lynn will end with some additional comments, and then we'll take your questions. During this conference call, management may make statements that provide information other than historical information, and may include projections concerning the company's future prospects, revenues, expenses, and profits. Such statements are considered forward-looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties which could cause actual results to differ materially from those projections. We would refer you to our Form 10-K and other SEC filings for more information on those risks. Also in our earnings release, we have included non-GAAP measures that we believe facilitate understanding of our results and comparisons with peers in the software industry. A reconciliation of GAAP to non-GAAP measures is provided in our earnings release. We have also posted on the investor relations section of our website under the financials tab, schedules with supplemental information including information about our quarterly recurring revenues and bookings. On the events and presentations tab, we posted an earnings summary slide deck to supplement our prepared remarks. Please note that all growth comparisons we make on the call today will relate to the corresponding period of last year, unless we specify otherwise. Lynn?

Thanks, Holla. Our first quarter results provided an exceptional start to the year, exceeding our expectations across key metrics, including revenues, earnings, operating margin, and cash flow. Recurring revenues grew almost 9% and comprised 84% of our total revenues. SAS revenues grew 22%, our 13th consecutive quarter of SAS revenue growth of 20% or more, exceeding expectations of a 20% CAGR in SAS revenues through 2025. In addition, transaction revenues surpassed our plan with higher volumes and positive pricing trends. Our performance demonstrates the power of our business model against the backdrop of robust public sector demand, supported by generally healthy budgets. Our leading sales activity indicators remain elevated, and our pipeline reflects growing sales synergies as we execute our integrated go-to-market strategy. During our investor day last year, we announced our Tyler 2030 vision, which aligns our strategic focus on four key growth drivers, leveraging our installed base, expanding into new markets, completing our cloud transition, and growing our payments business. Leveraging our unmatched installed base has been a cornerstone of our growth strategy, and we're pleased with the outstanding execution by our sales organization, driving impactful cross-sell and up-sell activity that further deepens existing client relationships and expands our market reach with new client engagements. Notable cross-sell and up-sell wins during the quarter included a records management and ERP pro contract, including payments, with Ada County, Idaho, leveraging our state enterprise relationship. An on-premises contract for our full enterprise public safety suite with the City of Columbus, Georgia, adding to its existing Tyler Courts, corrections, ERP, tax, and permitting solutions. An enterprise ERP win with the Texas Legislative Council, facilitated by our existing Digital Solutions Division relationship in Texas, which avoided an RFP process to secure a new enterprise ERP client in a nontraditional market. A combined SAS contract with the city of Juneau, Alaska for enterprise assessment attacks and enterprise permitting and licensing solutions. By prioritizing the cloud as one of our key growth drivers, we are unlocking new levels of innovation and responsiveness in making the cloud accessible for our clients while providing enhanced security. Our new software SaaS mix continued to expand and comprised 93% of Q1 new software contract value. We're particularly encouraged to see a growing preference for cloud technology in the state and federal market with our application platform and an accelerated shift in public safety cloud demand with multiple client-driven SaaS selections. In fact, 75% of our first quarter enterprise public safety deals were SaaS. Because the pace of the shift to SAS in these markets this year is faster than we previously anticipated, we have lowered our expectations for license revenues for the year. And across Tyler, the volume of flips signed in the first quarter was in line with our expectations, with a 21.5% increase in average ARR. Key first quarter new SAS deals and flips included multi-year SAS arrangements with the Hawaii Department of Natural Resources and Land Between the Lakes National Recreation Area that build on our momentum in the outdoor recreation space. Competitive SAS wins for public safety included a full enterprise public safety suite contract with Palm Beach, Florida, which was focused on a cloud-only strategy. We also won a sole source enterprise public safety contract with the city of Evanston, Illinois, which expands our growing footprint in the Chicagoland area. An enterprise appraisal and tax SAS flip with Fulton County, Georgia, which includes Atlanta, The contract with ARR of more than $1 million was executed on accelerated timeline with a go-live completed within one month. Two public safety SAS flips with Birmingham, Alabama and Germantown, Tennessee, both of which were client-driven SAS selections and accelerated go-lives. The Kansas Judicial Branch signed an enterprise justice appellate court SAS flip as we continue to see a growing interest in moving to the cloud from our on-premises courts clients. Another key driver of our long-term growth is our transactions and payments business. As I mentioned earlier, better than expected transaction volumes contributed to first quarter revenues that exceeded our expectations. In the first quarter, we signed 288 new payments deals across Tyler, representing approximately $9 million in projected ARR. In our state enterprise portal business, we signed a new three-year enterprise contract with the state of Mississippi, extending our existing 14-year relationship. Our enterprise agreement with the state of Idaho was also renewed for two years in a rebid through the NASPO citizen engagement agreement. We're also very pleased to see early traction and growing demand for the solutions we added to our portfolio through our 2023 acquisitions of CSI, AR Inspect, and Resource X, each of which brought us expanded AI capabilities. With CSI, we signed a contract with our existing course client in Dallas County, Texas, adding approximately $900,000 of ARR. We've seen demo activity double over pre-acquisition levels for our augmented field operations solution, formerly AR Inspect, with first quarter wins that included the City of Newark manhole inspections and an expansion contract with the New Jersey Department of Environmental Protection. For our priority-based budgeting solution, powered by Resource X, we signed contracts with Collier County, Florida, and Fort Worth, Texas, that added almost $600,000 of ARR. Now I'd like Brian to provide more detail on the results for the quarter and our updated annual guidance for 2024.