Tyler Technologies (NYSE: TYL) reported Q1 EPS of $1.13, $0.01 better than the analyst estimate of $1.12. Revenue for the quarter came in at $221.4 million versus the consensus estimate of $219.32 million.

First Quarter 2018 Financial Highlights:

• Effective January 1, 2018, Tyler adopted the requirements of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), utilizing the full retrospective method of transition. Prior year amounts have been restated from previously reported amounts to reflect the impact of the full retrospective adoption of Topic 606.
• Total revenues were $221.2 million, up 10.7 percent from $199.7 million for the first quarter of 2017.
• Recurring revenues from maintenance and subscriptions were $142.9 million, an increase of 13.3 percent compared to the first quarter of 2017, and comprised 64.6 percent of first quarter 2018 revenue.
• Operating income was $38.8 million, up 5.4 percent from $36.8 million for the first quarter of 2017.
• Net income was $37.8 million, or $0.95 per diluted share, up 15.4 percent compared to $32.8 million, or $0.84 per diluted share, for the first quarter of 2017.
• Cash flows from operations were $44.6 million, down 7.4 percent compared to $48.2 million for the first quarter of 2017.
• Non-GAAP total revenues were $221.4 million, up 10.7 percent from $200.0 million for the first quarter of 2017.
• Non-GAAP operating income was $58.6 million, up 6.7 percent from $54.9 million for the first quarter of 2017.
• Non-GAAP net income was $45.0 million, or $1.13 per diluted share, up 27.5 percent compared to $35.3 million, or $0.91 per diluted share, for the first quarter of 2017.
• Adjusted EBITDA was $64.4 million, up 9.7 percent compared to $58.7 million for the first quarter of 2017.
• Total backlog was $1.2 billion, up 16.8 percent from $1.0 billion at March 31, 2017.
• Software subscription bookings added $4.6 million in new annual recurring revenue, up 17.8 percent from $3.9 million for the first quarter of 2017.
• Subsequent to the end of the first quarter, on April 30, 2018, Tyler completed the acquisitions of Socrata, Inc. and Sage Data Security, LLC for approximately $150 million and $11.5 million in cash, respectively, subject to certain post-closing adjustments.

“We are pleased that our first quarter results provided a strong start to 2018,” said John S. Marr Jr., Tyler’s chairman and chief executive officer. “Total revenues grew nearly 11 percent, led by 23 percent growth in subscription revenues. Since the beginning of 2010, we\'ve achieved greater than 20 percent growth in subscription revenues in 31 of the last 33 quarters. Our operating margin was in line with expectations, as we began to ramp up our discretionary R&D spend on projects we believe will further strengthen our competitive position and drive new revenues.

“We are very excited about the acquisitions of Socrata, Inc. and Sage Data Security, LLC, both completed on April 30. These two additions bring to Tyler incredibly valuable expertise in areas that are top of mind with public sector entities - data and analytics and cybersecurity - and we welcome their clients and employees to the Tyler family. We\'ve updated our full-year guidance to include the operations of Socrata and Sage for the last eight months of 2018. While Socrata will be dilutive to earnings for the balance of 2018, we expect it will be accretive in 2019. Our current outlook for Tyler\'s core business is positive, and even with the acquisition dilution, our guidance for non-GAAP earnings per share for the year is unchanged,” said Marr.

Guidance for 2018

As of May 2, 2018, Tyler Technologies is providing the following guidance for the full year 2018:

• GAAP total revenues are expected to be in the range of $933 million to $949 million.
• Non-GAAP total revenues are expected to be in the range of $939 million to $955 million.
• GAAP diluted earnings per share are expected to be approximately $3.34 to $3.44 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 $4.73 to $4.83.
• Pretax non-cash, share-based compensation expense is expected to be approximately $55 million.
• Research and development expense is expected to be approximately $58 million to $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 annual effective tax rate of approximately 10 percent after discrete tax items, and includes approximately $26 million of assumed discrete tax benefits related to share-based compensation.
• The non-GAAP annual 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 $2 million related to real estate. Total depreciation and amortization expense is expected to be approximately $64 million, including approximately $41 million of amortization of acquisition intangibles.

GUIDANCE:

Tyler Technologies sees FY2018 EPS of $4.73-$4.83. Tyler Technologies sees FY2018 revenue of $933-949 million.

For earnings history and earnings-related data on Tyler Technologies (TYL) click here.