Annualized Recurring Revenue (ARR) was $1.95 billion, up 13% YoY. This increase is primarily due to an increase in subscription revenue resulting from an ongoing shift toward SaaS arrangements and expansion in transaction-based fee arrangements.

Tyler Technologies acquired MyGov, a provider of SaaS platform solutions for community development, for approximately $18.2 million. This acquisition expands Tyler's offerings in the Enterprise Software segment.

New software contract value mix is now 96% subscription-based, compared to 93% in the prior year. This shift impacts revenue recognition, with lower initial software license revenue but higher overall revenue over the contract term.

Total employee count increased to 7,462, including 12 employees from acquisitions completed since March 31, 2024. This indicates continued investment in personnel to support growth initiatives.

The company redeployed resources to research and development due to the continued migration of clients to SaaS products and consolidation of versions of on-premises software products with support obligations.

A lawsuit related to a contract termination with a state government client was reinitiated after negotiations failed. The company is seeking approximately $15 million in owed fees, but the outcome remains uncertain.

The filing states that there were no material changes in the information regarding risk factors contained in the Annual Report on Form 10-K for the year ended December 31, 2024.

The outcome of the lawsuit regarding the termination for convenience under a contractual arrangement with a state government client remains unresolved. There is no assurance that additional costs will not be incurred as the company pursues its rights and remedies under the contract.

SaaS fees grew 21% YoY, attributable to new SaaS clients and existing on-premises clients converting to the SaaS model. The company added 672 new SaaS clients and converted 431 existing on-premises clients.

General and administrative expense increased 9% YoY, primarily attributed to increases in amortization of software development for internal use and higher share-based compensation expense.

Research and development expense increased 63% YoY, primarily due to the redeployment of resources from support activities and a shift in new product development initiatives.

The company anticipates $19.0 million of its 2025 capital spending to be allocated to software development, indicating continued investment in new products and features.

The company has authorization to repurchase up to 2.1 million additional shares of common stock, indicating a commitment to returning capital to shareholders.

Investing activities used cash of $96.2 million, primarily due to the acquisition of MyGov and investments in investment grade corporate bonds, U.S. Treasuries, and asset-backed securities.

The filing does not contain a specific section dedicated to the market environment. However, the discussion of SaaS growth and government spending provides some insight.