Tyler Technologies, Inc. (NYSE:TYL) Q3 2023 Earnings Call Transcript

Lynn Moore: Well, yes, I mean, security is always an issue and particularly in our business and our clients. I think the thing about what’s been going on with cybersecurity is it really highlights the need for our clients to move away from their traditional on-prem type environments, move to the cloud, move to the modernization and digitization efforts. And I think it contributes to that. We’ve seen clients where — I talked about it, I think, a couple of quarters ago, we had a client that we were trying to move to a SaaS flip for — out in Arizona for quite a long time. And unfortunately, they had a ransomware attack, and it was surely after that that we were able to flip them to the cloud. It was a triggering point for their decision.

So it’s a reality that we all have to live with, and our clients are acutely aware of it because a lot of the public sector clients are targets. But I do think it does help with the sales and understanding about where we need to go in the future together with our clients.

Helen Smith: Great. Thank you so much.

Operator: Thank you for your quarter. Our next question is from the line of Saket Kalia with Barclays. Your line is live.

Saket Kalia: Okay. Great. Hey, guys. Thanks for taking the follow-up question here. Brian, one follow-up question for you, if I may. Can we just talk a little bit about the blended duration on SaaS bookings this quarter a little bit, putting aside the re-class. I think if we look at SaaS bookings ARR, that expectedly faced the tough comp that we were talking about earlier. So that was down year-over-year pretty decently. But SaaS TCV was actually pretty decent in terms of total bookings. I just wondered if duration was anything to consider there and how you thought about that?

Brian Miller: Not really. Actually, the average term of our new SaaS contracts this quarter was exactly the same as third quarter of last year at 3.8 years. We’ve said we generally tried to bring that down over recent years and generally lead with a three-year initial term. We certainly have some clients who want a longer term. And so that blended term or that average duration has generally been in that kind of 3.5% to 4% over the last couple of years. But this quarter, yes, that wasn’t a factor at all.

Saket Kalia: Got it. Very helpful. Thanks.

Operator: Thank you for your follow-up. Ladies and gentlemen, that does conclude our question-and-answer session. I would like to turn it back over to Lynn Moore, President and CEO, for closing comments.

Lynn Moore: Thanks, Aaron, and thanks, everybody, for joining us today. If you have any further questions, please feel free to reach out to Brian Miller or myself. Have a great day.

Operator: Thank you. Ladies and gentlemen, that does conclude today’s Tyler Technologies Third Quarter 2023 Conference Call. Have a great rest of your day.