Tyler Technologies (NYSE: TYL) reported Q4 EPS of $1.07, $0.03 better than the analyst estimate of $1.04. Revenue for the quarter came in at $217.9 million versus the consensus estimate of $220.6 million.

Fourth Quarter 2017 Financial Highlights:

• Total revenues were $217.9 million, up 12.7 percent from $193.3 million for the fourth quarter of 2016.
• Recurring revenue from maintenance and subscriptions was $140.6 million, up 14.4 percent compared to the fourth quarter of 2016, and comprised 64.6 percent of fourth quarter 2017 revenue.
• Operating income was $44.3 million, up 25.0 percent from $35.4 million for the fourth quarter of 2016.
• Net income was $61.8 million, or $1.56 per diluted share, up 98.1 percent compared to $31.2 million, or $0.80 per diluted share, for the fourth quarter of 2016.
• Cash flows from operations were $53.4 million, up 3.0 percent compared to $51.8 million for the fourth quarter of 2016.
• Non-GAAP total revenues were $218.1 million, up 11.8 percent from $195.1 million for the fourth quarter of 2016.
• Non-GAAP operating income was $63.8 million, up 16.4 percent from $54.8 million for the fourth quarter of 2016.
• Non-GAAP net income was $42.1 million, or $1.07 per diluted share, up 19.5 percent compared to $35.2 million, or $0.90 per diluted share, for the fourth quarter of 2016.
• Adjusted EBITDA was $69.3 million, up 19.0 percent compared to $58.2 million for the fourth quarter of 2016.
• The company repurchased 2,600 shares of its common stock during the quarter at an average price of $169.93.

Guidance for 2018

As of February 21, 2018, Tyler Technologies is providing the guidance below for the full year 2018. This guidance reflects the preliminary estimated impact of ASC 606, which Tyler expects to adopt using the full retrospective method effective January 1, 2018.

• GAAP total revenues are expected to be in the range of $912 million to $928 million.
• Non-GAAP total revenues are expected to be in the range of $913 million to $929 million.
• GAAP diluted earnings per share are expected to be approximately between $3.65 and $3.75 and may vary significantly due to the impact of stock option exercises on the GAAP effective tax rate.
• Non-GAAP diluted earnings per share are expected to be approximately between $4.73 and $4.83.
• Pretax non-cash, share-based compensation expense is expected to be approximately $49 million.
• Research and development expense is expected to be between $58 million and $60 million.
• Fully diluted shares for the year are expected to be between 40.0 million and 40.5 million shares.
• GAAP earnings per share assumes an estimated effective tax rate of approximately 11 percent after discrete tax items and includes approximately $26 million of discrete tax benefits related to share-based compensation.
• The non-GAAP effective tax rate is expected to be 24 percent. This was adjusted from 35 percent in 2017 primarily because of the impact of the Tax Cuts and Jobs Act.
• Capital expenditures are expected to be between $22 million and $25 million, including approximately $1 million related to real estate. Total depreciation and amortization expense is expected to be approximately $59 million, including approximately $35 million of amortization of acquisition intangibles.

GUIDANCE:

Tyler Technologies sees FY2018 EPS of $4.73-$4.83, versus the consensus of $4.40. Tyler Technologies sees FY2018 revenue of $913-929 million, versus the consensus of $933.6 million.

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