v3.26.1
Debt
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Debt Debt
The following table summarizes our total outstanding borrowings:
RateMaturity DateMarch 31, 2026December 31, 2025
2024 Credit Agreement - Revolving credit facility
S + 1.125%
September 2029$— $— 
Convertible Senior Notes due 20260.25%March 2026— 600,000 
Total borrowings— 600,000 
Less: unamortized debt discount and debt issuance costs— (337)
Total borrowings, net— 599,663 
Current portion of convertible senior notes due 2026, net — 599,663 
Total Debt $— $599,663 
2024 Credit Agreement
On September 25, 2024, the Company entered into a $700.0 million credit agreement with the various lender parties thereto and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender, and Issuing Lender (the “2024 Credit Agreement”). The 2024 Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of up to $700.0 million, including sub-facilities for standby letters of credit and swingline loans. The 2024 Credit Agreement matures on September 25, 2029, and loans may be prepaid at any time, without premium or penalty, subject to certain minimum amounts and payment of any SOFR breakage costs.
The 2024 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants, and defined events of defaults. The 2024 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 March 31, 2026, we had no outstanding borrowings, and we were in compliance with all covenants.
Loans under the revolving credit facility will bear interest, at the Company’s 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 Tyler’s total net leverage ratio, as determined pursuant to the 2024 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 2024 Credit Agreement may be used for general corporate purposes, including working capital requirements, acquisitions and capital expenditures.
Convertible Senior Notes due 2026
On March 15, 2026, the Company repaid the $600.0 million aggregate principal amount of its 0.25% Convertible Senior Notes due 2026 (the “Notes”) in cash at maturity. No conversions of the Notes occurred prior to or at maturity as the Company’s common stock price did not exceed the conversion price during the relevant periods for redemption, and no other conversion conditions were met. As a result, the entire principal amount was settled in cash, and no shares of common stock were issued upon settlement.
Effective Interest Rate
For the three months ended March 31, 2026, the effective interest rate was 0.53% for the Convertible Senior Notes. The following sets forth the interest expense recognized related to the borrowings and commitment fees for unused portions under the 2024 Credit Agreement and Convertible Senior Notes and is included in interest expense in the accompanying condensed consolidated statements of income:
Three Months Ended March 31,
20262025
Contractual interest expense - Revolving Credit Facility$(218)$(239)
Contractual interest expense - Convertible Senior Notes(313)(375)
Amortization of debt discount and debt issuance costs (535)(632)
Total $(1,066)$(1,246)
As of March 31, 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.