Tyler Technologies (TYL) to Report Q3 Earnings: What's in Store?
Tyler Technologies TYL is slated to report third-quarter 2023 results after market close on Nov 1.
The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.97 per share, down 4.4% from the year-ago quarter’s earnings of $2.06. The consensus mark for revenues stands at $495.5 million, calling for a 4.7% increase from the year-ago quarter.
Tyler surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 4.1%.
In the last reported quarter, TYL’s non-GAAP earnings of $2.01 per share surpassed the Zacks Consensus Estimate by 15 cents. Moreover, revenues of $504.3 million surpassed the consensus mark of $490.7 million.
Let’s see how things have shaped up for the upcoming announcement.
Tyler Technologies, Inc. Price and EPS Surprise
Tyler Technologies, Inc. price-eps-surprise | Tyler Technologies, Inc. Quote
Factors to Consider
Tyler’s third-quarter top line is likely to have benefited from the demand for its subscription-based software-as-a-service (SaaS) solutions as the public sector continued to transition from on-premise and outdated systems to scalable cloud-based systems. Our estimate for the company’s third-quarter Subscription segment revenues is pegged at $291.9 million, implying a year-over-year increase of 14.8%.
However, public sector entities’ continued shift to SaaS at an accelerated pace is likely to have negatively impacted Tyler’s Software Licenses and Royalties segment revenues. Our estimate suggests the segment’s revenues to decline 40.1% year over year to $12.1 million.
The completion of COVID-19 initiatives is likely to have hurt the Professional Services segment’s top line. Our estimate for Professional Services revenues stands at $65.2 million, indicating a year-over-year decline of 9.2%. Our estimate of $115.4 million for the Maintenance segment’s third-quarter revenues indicates a year-over-year decline of 1.7%.
Overall, our estimate for the company’s Total Subscriptions, Professional Services and Maintenance revenues, which include all the four abovementioned segments, is pegged at $472.5 million. This calls for a year-over-year increase of 6.5%.
In addition, Tyler’s closed acquisitions over the past 12 months are anticipated to have brought incremental revenues during the quarter under review. TYL bought three businesses in the last 12 months, namely Computing System Innovations or CSI, Safeground Analytics and Rapid Financial Solutions.
However, ongoing macroeconomic and geopolitical issues might have disrupted Tyler’s business during the period in discussion. Inflationary pressures might have led public sector entities to delay procurement processes and lengthen sales cycles, which could have hurt Tyler’s revenues in the quarter under review.
Additionally, the acceleration in the shift to the cloud in the new business and the related decline in license revenues are likely to have weighed on operating margins. Also, higher operating expenses are expected to have clipped TYL’s profitability during the quarter to be reported.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Tyler this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though Tyler currently carries a Zacks Rank of #3, it has an Earnings ESP of -0.17%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Palantir Technologies PLTR, ON Semiconductor ON and Synaptics SYNA have the right combination of elements to post an earnings beat in their upcoming releases.
Palantir carries a Zacks Rank #2 and has an Earnings ESP of +4.35%. The company is scheduled to report third-quarter 2023 results on Nov 2. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, with the average surprise being 2.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Palantir’s third-quarter earnings stands at 6 cents per share, indicating a year-over-year improvement of 500%. It is estimated to report revenues of $555 million, which suggests an increase of approximately 16.1% from the year-ago quarter.
ON carries a Zacks Rank #2 and has an Earnings ESP of +1.00%. The company is scheduled to report third-quarter 2022 results on Oct 30. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.7%.
The Zacks Consensus Estimate for ON’s third-quarter earnings is pegged at $1.35 per share, indicating a year-over-year decrease of 6.9%. The consensus mark for revenues stands at $2.15 billion, suggesting a year-over-year decline of 2.1%.
Synaptics is slated to report first-quarter fiscal 2024 results on Nov 9. The company has a Zacks Rank #2 and an Earnings ESP of +3.54% at present. Synaptics’ earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 3.6%.
The Zacks Consensus Estimate for first-quarter earnings is pegged at 38 cents per share, suggesting a decrease of 89.2% from the year-ago quarter’s earnings of $3.52. Synaptics’ quarterly revenues are estimated to decline 48.2% year over year to $232 million.
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Synaptics Incorporated (SYNA) : Free Stock Analysis Report
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