Tyler Technologies, Inc.

and answer session, and instructions will follow at that time. In order to address your questions 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. As a reminder, this conference is being recorded today, July 31st, 2025. I would like to turn the call over to Hala El-Sherbini, Tyler's Senior Director of Investor Relations. Please go ahead.

Thank you, Abby, 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 State Harbor Statement, Lynn will have some initial comments on our quarter, and then Brian will review the details of our results and updates on our annual guidance for 2025. Lynn will end with some additional comments, and then we'll take your questions. During this 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 these projections. We would refer you to our Form 10-K and other SEC filings for more information on those risks. Also in our earnings relief, 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 relief. We have also posted on the Investor Relations section of our website, under the Financials tab, a schedule with supplemental information, including information about our quarterly recurring revenues and bookings. On the Events and Presentations tab, We posted an earnings summary result 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, Hollis. Our second quarter results again exceeded expectations and reflect continued momentum with double-digit total revenue growth, strong profitability, and exceptional free cash flow. Our performance continues to be supported by stable market demand and strong execution as we advance our cloud-first strategy. SAS revenues grew 21.5%, marking our 18th consecutive quarter of SAS growth of 20% or more. Transaction-based revenue growth was especially robust and ahead of plan of 21.3%, as quarterly transaction revenue surpassed $200 million for the first time. Our non-GAAP operating margin expanded 200 basis points to 26.5%. In addition, free cash flow grew 80.9% to $88 million, significantly exceeding expectations. As we discussed on prior calls, we operate in a market defined by inherently long sales cycles, particularly for larger deals, which can create quarterly variability, but ultimately support long-term growth. While we still are seeing some scattered delays or cancellations of procurement processes related to the macro environment and noise around federal funding, they are not material. Many of the sales processes that were delayed in Q1 were signed in Q2, and we saw a solid sequential improvement in SAS bookings in Q2. We're seeing no fundamental change in public sector demand or purchasing behavior, and our sales pipeline remains strong, supported by generally stable and healthy budgets, with funding priorities increasingly aligned to technology investments that drive long-term efficiencies through digital modernization. In addition, client conversations at our recent Connect conference reinforced that the vast majority of Tyler clients do not expect federal funding, Doge, or other macro factors to impact their spend with Tyler. Our cloud-first strategy is the foundation of our success and is anchored by unifying principles that drive toward a single release stream to better scale, innovate, and deliver improved time to value for our clients. By closely aligning our cloud strategy and client success efforts with our deliberate AI approach, we're unlocking the full potential of the cloud while creating deeper client connections through a unified experience that we believe will enhance cross-sell and up-sell opportunities. Our team continues to execute at a high level against our strategic roadmap, reinforcing our leadership position in the public sector and advancing our four key growth pillars. completing our cloud transition, leveraging our large client base, growing our payments business, and expanding into new markets. I'd like to highlight a few second quarter wins that illustrate progress against our growth objectives, with a broader list of key deals included in our quarterly earnings deck. Our largest SaaS deal of the quarter was an $11 million contract that expands our relationship with the Arizona Supreme Court for our enterprise supervision solution. We signed a contract for full enterprise justice on premises to cloud migration with the Superior Court in Santa Clara County, California, the sixth most populous county in the state. This is our first California court flip and represents more than $1 million in SAS ARR. It was another strong sales quarter in public safety, including a multi-jurisdictional, multi-product, competitive SAS win with the West Suburban Consolidated Dispatch in the Chicago area. and a full public safety suite SASWIN in Anoka County, Minnesota, worth more than $1 million in ARR. The City of Dallas, Texas expanded its contract for our priority-based budgeting solution. The city desired an accelerated deployment to leverage our AI-powered application to identify and prioritize the highest value budget initiatives for the city and its constituents. The State of Alabama Department of Revenue selected our AI-driven resident assistance solution This wind builds on our resident assistant projects currently in deployment in four other states, including Hawaii, Indiana, Mississippi, and South Carolina. We see a strong pipeline behind these winds as we build upon these successes. We were recently recognized as a leader and visionary in the first ever Gartner Magic Quadrant for cloud-based ERP for U.S. local government. We believe this represents a clear testament to the strength of our competitive position, innovation, and the differentiated value of our uniquely integrated suite of public sector solutions. Before I turn the call over to Brian, I'd like to highlight the acquisition of Emergency Networking earlier this week. Emergency Networking, a Tyler partner since 2023, is a leading provider of cloud native software for fire departments and emergency medical services agencies, including fire records management and patient care reporting with advanced analytics. The addition of emergency networking solutions expands our TAM and adds an important piece to Tyler's public safety portfolio, solidifying our position as a market leader in compliant fire and EMS records management, including the National Emergency Response Information System, or NIRISS. We believe Tyler now has the most comprehensive suite of solutions for public safety agencies, from law enforcement to first responders to EMS agencies. Now I'd like for Brian to provide more detail on results for the quarter and our updated annual guidance for 2025.