Plano’s Tyler Technologies suspends forecast amid ‘significant uncertainties’

PLANO, TX – Tyler Technologies has seen the effects of COVID-19 — and more is on tap.

The Plano software company (NYSE: TYL) serving government customers reported sales were $6 million less because of the pandemic during the first quarter. Overall revenue was $276.5 million, up 12 percent.

And it didn’t stop there.

“We anticipate a greater impact from COVID-19 in the second and third quarters,” the company said. “We have not seen meaningful cancellations, but continue to see delays in procurement processes and lengthening sales cycles, as public sector entities focus on issues related to the pandemic.”

Tyler yanked its forecast amid ‘significant uncertainties,’ as it tries to figure out what will happen with the company amid the coronavirus. It aims to have a better idea by the next quarterly report.

The company – like so many – is grappling with a pandemic that’s shaken up the very way people work and squeezed the economy. Yet the government sector may be less susceptible to some of the headwinds other sectors are facing – and there could be opportunities ahead.

“Tyler’s mission-critical software and services power essential functions of government, and the fundamental demand for our products will remain strong in the long term,” CEO Lynn Moore said in a statement. “This crisis is already highlighting the reliance on outdated technology by large segments of the public sector, and the need for and the benefits of connectivity and cloud services, which are priorities for Tyler.”

Shares of Tyler have climbed roughly 7 percent this year while the Standard & Poor’s 500 is down around 10 percent.

The company anticipates recurring revenue will not be significantly affected. That makes up about 70 percent of sales.

“We expect to continue to invest in product development and accelerating our move to the cloud at levels consistent with our initial plans for the year,” it said.

Tyler doesn’t expect to eliminate any positions, but anticipates incremental hiring to be less than original plans.

Net income in the first quarter was $47.6 million, up more than 70 percent from the year-ago period. Adjusted earnings climbed 6.7 percent.

“We had a solid first quarter with a great deal of momentum going into the second half of March, when we began to see the effects of the COVID-19 pandemic,” Moore said in the release.