v3.26.1
Debt
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt Debt
The following table summarizes our total outstanding borrowings:
RateMaturity DateJune 30, 2026December 31, 2025
Convertible Senior Notes due 20310.50%July 2031$1,437,500 $— 
Convertible Senior Notes due 20260.25%March 2026— 600,000 
Credit Agreement - Revolving credit facility
S + 1.125%
May 2031— — 
Total borrowings1,437,500 600,000 
Less: unamortized debt discount and debt issuance costs(28,809)(337)
Total borrowings, net1,408,691 599,663 
Current portion of convertible senior notes due 2026, net — 599,663 
Long Term - convertible senior notes due 2031, net 1,408,691 — 
Total Debt $1,408,691 $599,663 
Convertible Senior Notes due 2031
On May 14, 2026, we issued 0.50% Convertible Senior Notes due in 2031 for the aggregate principal amount of $1.44 billion (the “2031 Notes”). The 2031 Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of May 14, 2026, between the Company and U.S. Bank Trust Company, National Association, as trustee. The net proceeds from the issuance of the 2031 Notes were $1.41 billion, net of initial purchasers’ discounts of $25.2 million and debt issuance costs of $4.4 million.
On May 14, 2026, we used approximately $320.7 million of the net proceeds of the offering to repurchase 1,026,900 shares of our common stock. Including this repurchase, we repurchased approximately 2.4 million shares under our share repurchase program for the six months ended June 30, 2026.
The 2031 Notes are senior, unsecured obligations and are (i) equal in right of payment with any future senior, unsecured indebtedness; (ii) senior in right of payment to any future indebtedness that is expressly subordinated to the 2031 Notes; (iii) effectively subordinated to any future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of our subsidiaries.
The 2031 Notes accrue interest at a rate of 0.50% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2027. The 2031 Notes mature on July 15, 2031, unless earlier repurchased, redeemed or converted.
Under the terms of the indenture, before April 15, 2031, holders of the 2031 Notes have the right to convert their Convertible Senior Notes only upon the occurrence of certain events. Under the terms of indenture, the 2031 Notes are convertible into common stock of Tyler Technologies, Inc. (referred to as “our common stock” herein), only at the following times or circumstances:
•during any calendar quarter commencing after the calendar quarter ended on June 30, 2026, if the last reported sale price per share of our common stock exceeds 150% before July 15, 2030, and 130% on or after July 15, 2030, in each case, of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
•during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “Measurement Period”) if the trading price per $1,000 principal amount of Convertible Senior Notes, as determined following a request by their holder in accordance with the procedures in the indenture, for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day;
•if the Company calls any Notes for redemption;
•upon the occurrence of specified corporate events; or
•on or after April 15, 2031, until the close of business on the second scheduled trading day immediately preceding the maturity date, July 15, 2031.

As of June 30, 2026, none of the conditions allowing holders of the Convertible Senior Notes to convert have been met.
From and including April 15, 2031, holders of the 2031 Notes may convert their Convertible Senior Notes, in integral multiples of $1,000 principal amount, at any time and at their election, until the close of business on the second scheduled trading day immediately before the maturity date. We will settle any conversions of the Convertible Senior Notes either entirely in cash or in a combination of cash and shares of common stock, at our election. However, upon conversion of any Convertible Senior Notes, the conversion value, which will be determined over an “Observation Period” (as defined in the Indenture) consisting of 30 trading days, will be paid in cash up to at least the principal amount of the Notes being converted.
The Company may not redeem the 2031 Notes prior to July 20, 2029, after which, the Company may redeem for cash all or any portion of the 2031 Notes (subject to certain limitations described in the Indenture), at the Company’s option, on or after July 20, 2029, but only if: (1) the 2031 Notes are freely tradable (as defined in the Indenture) is satisfied, and (2) the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company redeems less than all of the outstanding Notes, at least $100 million aggregate principal amount of Notes must be outstanding and not subject to redemption as of, and after giving effect to, delivery of the relevant notice of redemption. No sinking fund is provided for the Notes.
The initial conversion rate is 2.4634 shares of common stock per $1,000 principal amount of Convertible Senior Notes, which represents an initial conversion price of approximately $405.94 per share of common stock. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.
If a “fundamental change” (as defined in the Indenture) occurs, then, subject to certain conditions, note holders may require us to repurchase their 2031 Notes for cash. The repurchase price will be equal to the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The 2031 Notes include customary covenants and certain events of default after which the Notes may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default after which the notes become automatically due and payable.
Capped Call Transactions
In connection with the issuance of the 2031 Notes, we entered into privately negotiated Capped Call transactions (the “Capped Calls”) with certain financial institutions at an aggregate cost of approximately $187.2 million. The Capped Calls initially cover, subject to anti-dilution adjustments, approximately 3.5 million shares of Common Stock underlying the 2031 Notes. The Capped Calls can be settled in cash or shares at our option and are expected generally to reduce the potential dilution to the Common Stock upon any conversion of the 2031 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the 2031 Notes. The Capped Calls have an initial strike price of approximately $405.94 per share and an initial cap price of $655.77 per share, which are subject to certain adjustments under the terms of the Capped Calls. The Capped Calls meet the criteria for classification in equity, are not remeasured each reporting period and are included as a reduction to additional paid-in-capital within shareholders’ equity in the accompanying unaudited condensed consolidated balance sheet.
In connection with the Capped Calls, we also recorded deferred tax assets of $46.7 million with respect to the 2031 Notes, which represent the tax benefit of these deductions with an offsetting entry to additional paid-in-capital within shareholders’ equity in the accompanying unaudited condensed consolidated balance sheet.
Convertible Senior Notes due 2026
On March 15, 2026, we repaid the $600.0 million aggregate principal amount of its 0.25% Convertible Senior Notes due 2026 (the “2026 Notes”) in cash at maturity. No conversions of the 2026 Notes occurred prior to or at maturity as the Company’s common stock price did not exceed the conversion price during the relevant periods for redemption, and no other conversion conditions were met. As a result, the entire principal amount was settled in cash, and no shares of common stock were issued upon settlement.
2026 Credit Agreement
On May 28, 2026, we entered into a $1.0 billion credit agreement (the “2026 Credit Agreement”) with the various lender parties thereto and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender, and Issuing Lender. The 2026 Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of up to $1.0 billion, including sub-facilities for standby letters of credit and swingline loans. The 2026 Credit Agreement matures on May 28, 2031, and loans may be prepaid at any time, without premium or penalty, subject to certain minimum amounts and payment of any SOFR breakage costs. We incurred fees of $2.2 million in connection with the 2026 Credit Agreement. The 2026 Credit Agreement replaced the Company’s existing $700.0 million unsecured credit facility under the 2024 Credit Agreement dated September 25, 2024, which was scheduled to mature September 25, 2029.
The 2026 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants, and defined events of defaults. The 2026 Credit Agreement requires us to maintain certain financial ratios and other financial conditions and limits us from making certain investments, advances, cash dividends or loans, and limits incurrence of additional indebtedness and liens. As of June 30, 2026, we had no outstanding borrowings, and we were in compliance with all covenants.
Loans under the revolving credit facility will bear interest, at our option, at a per annum rate of either (1) the Administrative Agent’s prime commercial lending rate (subject to certain higher rate determinations) plus a margin of 0.125% to 0.75% or (2) the one-, three-, or six-month SOFR rate plus a margin of 1.125% to 1.75%. The margin in each case is based upon the Company’s total net leverage ratio, as determined pursuant to the 2026 Credit Agreement. In addition to paying interest on the outstanding principal of loans under the revolving credit facility, the Company is required to pay a commitment fee initially in the amount of 0.125% per annum, which will subsequently range from 0.125% to 0.25% based upon the Company’s total net leverage ratio. Borrowings under the 2026 Credit Agreement may be used for general corporate purposes, including working capital requirements, acquisitions and capital expenditures.
Effective Interest Rate
For the six months ended June 30, 2026, the effective interest rate was 0.53% for the 2026 Notes and 0.89% for the 2031 Notes, respectively. The following table sets forth the interest expense recognized related to the borrowings and commitment fees for unused portions under the 2026 Credit Agreement and Convertible Senior Notes.
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Contractual interest expense - Revolving Credit Facility$(987)$(256)$(1,205)$(495)
Contractual interest expense - 2026 and 2031 Notes(958)(375)(1,271)(750)
Amortization of debt discount and debt issuance costs (1,029)(631)(1,564)(1,263)
Total $(2,974)$(1,262)$(4,040)$(2,508)
As of June 30, 2026, we had one outstanding letter of credit totaling $500,000. The letter of credit, which guarantees our performance under a client contract, automatically renews annually unless canceled in writing, and expires in the third quarter of 2026.