UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File Number 1-10485

TYLER TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	75-2303920
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification no.)

5949 SHERRY LANE, SUITE 1400
DALLAS, TEXAS
75225
(Address of principal executive offices)
(Zip code)

(972) 713-3700
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

(Check one): Large accelerated filer o       Accelerated filer þ       Non-accelerated filer o

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes o No þ

Number of shares of common stock of registrant outstanding at July 23, 2007: 38,442,076

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
	ITEM 1. Financial Statements
	ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
	ITEM 4. Evaluation of Disclosure Controls and Procedures
Part II. OTHER INFORMATION
	ITEM 1. Legal Proceedings
	ITEM 1A. Risk Factors
	ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
	ITEM 3. Defaults Upon Senior Securities
	ITEM 4. Submission of Matters to a Vote of Security Holders
	ITEM 5. Other Information
	ITEM 6. Exhibits
SIGNATURES
Certification Pursuant to Section 302
Certification Pursuant to Section 302
Certifications Pursuant to Section 906

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
	2007		2006		2007		2006
Revenues:
Software licenses	$	8,393	$	9,824	$	16,364	$	17,395
Software services		17,728		15,061		32,792		28,181
Maintenance		20,455		17,716		40,394		35,373
Appraisal services		6,007		5,108		11,587		9,807
Hardware and other		1,529		1,442		3,307		3,253
Total revenues		54,112		49,151		104,444		94,009
Cost of revenues:
Software licenses		1,975		2,416		3,935		5,092
Acquired software		427		353		821		654
Software services and maintenance		26,180		22,949		50,768		44,694
Appraisal services		4,096		3,454		8,092		6,860
Hardware and other		1,097		1,033		2,469		2,301
Total cost of revenues		33,775		30,205		66,085		59,601
Gross profit		20,337		18,946		38,359		34,408
Selling, general and administrative expenses		12,781		12,181		25,757		23,157
Research and development expense		1,404		812		2,627		1,714
Amortization of customer and trade name intangibles		356		325		703		647
Operating income		5,796		5,628		9,272		8,890
Other income, net		364		200		811		297
Income before income taxes		6,160		5,828		10,083		9,187
Income tax provision		2,410		2,068		3,932		3,415
Net income	$	3,750	$	3,760	$	6,151	$	5,772
Earnings per common share:
Basic	$	0.10	$	0.10	$	0.16	$	0.15
Diluted	$	0.09	$	0.09	$	0.15	$	0.14
Basic weighted average common shares outstanding		38,540		39,026		38,571		39,070
Diluted weighted average common shares outstanding		41,448		41,946		41,651		41,920

See accompanying notes.

1

TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share amounts)

	June 30,
	2007			December 31,
	(Unaudited)			2006
ASSETS
Current assets:
Cash and cash equivalents	$	8,925		$	17,212
Restricted cash equivalents		4,462			4,962
Short-term investments available-for-sale		21,326			19,543
Accounts receivable (less allowance for losses of $1,699 in 2007 and $2,971 in 2006)		61,611			58,188
Prepaid expenses		6,407			6,864
Other current assets		2,047			2,326
Deferred income taxes		2,579			2,579
Total current assets		107,357			111,674
Accounts receivable, long-term portion		1,121			1,675
Property and equipment, net		8,747			7,390
Other assets:
Goodwill		68,490			66,127
Customer related intangibles, net		17,494			17,502
Software, net		13,271			14,554
Trade name, net		1,131			1,188
Sundry		149			166
	$	217,760		$	220,276
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,639		$	5,063
Accrued liabilities		15,862			17,735
Deferred revenue		64,872			62,387
Income taxes payable		715			—
Total current liabilities		85,088			85,185
Deferred income taxes		8,492			9,216
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $10.00 par value; 1,000,000 shares authorized, none issued		—			—
Common stock, $0.01 par value; 100,000,000 shares authorized; 48,147,969 shares issued in 2007 and 2006		481			481
Additional paid-in capital		149,615			151,627
Accumulated other comprehensive loss, net of tax		(18	)		(10	)
Retained earnings		24,282			18,131
Treasury stock, at cost; 9,734,470 and 9,255,783 shares in 2007 and 2006, respectively		(50,180	)		(44,354	)
Total shareholders’ equity		124,180			125,875
	$	217,760		$	220,276

See accompanying notes.

2

TYLER TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Six months ended June 30,
	2007			2006
Cash flows from operating activities:
Net income	$	6,151		$	5,772
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,154			5,121
Share-based compensation expense		1,073			975
Purchased in-process research and development charge		—			140
Non-cash interest and other charges		—			287
Deferred income taxes		—			(141	)
Changes in operating assets and liabilities, exclusive of effects of acquired companies:
Accounts receivable		(2,585	)		(1,498	)
Income tax payable		455			(1,292	)
Prepaid expenses and other current assets		374			(33	)
Accounts payable		(1,590	)		189
Accrued liabilities		(2,112	)		(2,283	)
Deferred revenue		1,861			3,392
Net cash provided by operating activities		8,781			10,629
Cash flows from investing activities:
Proceeds from sale of short-term investments		7,806			11,930
Purchases of short-term investments		(9,600	)		(10,650	)
Cost of acquisitions, net of cash acquired		(5,086	)		(11,653	)
Investment in software development costs		(105	)		(113	)
Additions to property and equipment		(1,598	)		(2,320	)
Reduction in restricted investments		500			—
Other		43			(15	)
Net cash used by investing activities		(8,040	)		(12,821	)
Cash flows from financing activities:
Purchase of treasury shares		(11,131	)		(8,261	)
Contributions from employee stock purchase plan		570			480
Proceeds from exercise of stock options		1,268			1,083
Excess tax benefits from share-based compensation expense		265			131
Net cash used by financing activities		(9,028	)		(6,567	)
Net decrease in cash and cash equivalents		(8,287	)		(8,759	)
Cash and cash equivalents at beginning of period		17,212			20,733
Cash and cash equivalents at end of period	$	8,925		$	11,974

See accompanying notes.

3

Tyler Technologies, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(Tables in thousands, except per share data)

(1)	Basis of Presentation
	We prepared the accompanying condensed consolidated financial statements following the requirements of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States, or GAAP, for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted for interim periods. Balance sheet amounts are as of June 30, 2007 and December 31, 2006 and operating result amounts are for the three and six months ended June 30, 2007 and 2006, and include all normal and recurring adjustments that we considered necessary for the fair summarized presentation of our financial position and operating results. As these are condensed financial statements, one should also read the financial statements and notes included in our latest Form 10-K for the year ended December 31, 2006. Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year.
	Although we have a number of divisions, separate segment data has not been presented as they meet the criteria set forth in Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures About Segments of an Enterprise and Related Information” to be presented as one segment.
	In addition, certain other amounts for the previous year have been reclassified to conform to the current year presentation.
(2)	Revenue Recognition
	We recognize revenue related to our software arrangements pursuant to the provisions of Statement of Position (“SOP”) 97-2, “Software Revenue Recognition,” as amended by SOP 98-4 and SOP 98-9, and related interpretations, as well as the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 104, “Revenue Recognition.” We recognize revenue on our appraisal services contracts using the proportionate performance method of accounting, with considerations for the provisions of Emerging Issues Task Force (“EITF”) No. 00-21, “Revenue Arrangements with Multiple Deliverables.”
	Software Arrangements:
	We earn revenue from software licenses, post-contract customer support (“PCS” or “maintenance”), software related services and hardware. PCS includes telephone support, bug fixes, and rights to upgrades on a when-and-if available basis. We provide services that range from installation, training, and basic consulting to software modification and customization to meet specific customer needs. In software arrangements that include rights to multiple software products, specified upgrades, PCS, and/or other services, we allocate the total arrangement fee among each deliverable based on the relative fair value of each.
	We typically enter into multiple element arrangements, which include software licenses, software services, PCS and occasionally hardware. The majority of our software arrangements are multiple element arrangements, but for those arrangements that involve significant production, modification or customization of the software, or where software services are otherwise considered essential to the functionality of the software in the customer’s environment, we use contract accounting and apply the provisions of SOP 81-1 “Accounting for Performance of Construction – Type and Certain Production – Type Contracts.”
	If the arrangement does not require significant production, modification or customization or where the software services are not considered essential to the functionality of the software, revenue is recognized when all of the following conditions are met:

i.	persuasive evidence of an arrangement exists;
ii.	delivery has occurred;
iii.	our fee is fixed or determinable; and
iv.	collectibility is probable.

4

For multiple element arrangements, each element of the arrangement is analyzed and we allocate a portion of the total arrangement fee to the elements based on the fair value of the element using vendor-specific objective evidence of fair value (“VSOE”), regardless of any separate prices stated within the contract for each element. Fair value is considered the price a customer would be required to pay if the element was sold separately based on our historical experience of stand-alone sales of these elements to third parties. For PCS, we use renewal rates for continued support arrangements to determine fair value. For software services, we use the fair value we charge our customers when those services are sold separately. We monitor our transactions to insure we maintain and periodically revise VSOE to reflect fair value. In software arrangements in which we have the fair value of all undelivered elements but not of a delivered element, we apply the “residual method” as allowed under SOP 98-9 in accounting for any element of a multiple element arrangement involving software that remains undelivered such that any discount inherent in a contract is allocated to the delivered element. Under the residual method, if the fair value of all undelivered elements is determinable, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element(s) and is recognized as revenue assuming the other revenue recognition criteria are met. In software arrangements in which we do not have VSOE for all undelivered elements, revenue is deferred until fair value is determined or all elements for which we do not have VSOE have been delivered. Alternatively, if sufficient VSOE does not exist and the only undelivered element is services that do not involve significant modification or customization of the software, the entire fee is recognized over the period during which the services are expected to be performed.

Software Licenses

We recognize the revenue allocable to software licenses and specified upgrades upon delivery of the software product or upgrade to the customer, unless the fee is not fixed or determinable or collectibility is not probable. If the fee is not fixed or determinable, including new customers whose payment terms are three months or more from shipment, revenue is generally recognized as payments become due from the customer. If collectibility is not considered probable, revenue is recognized when the fee is collected. Arrangements that include software services, such as training or installation, are evaluated to determine whether those services are essential to the product’s functionality.

A majority of our software arrangements involve “off-the-shelf” software. We consider software to be off-the-shelf software if it can be added to an arrangement with minor changes in the underlying code and it can be used by the customer for the customer’s purpose upon installation. For off-the-shelf software arrangements, we recognize the software license fee as revenue after delivery has occurred, customer acceptance is reasonably assured, that portion of the fee represents a non-refundable enforceable claim and is probable of collection, and the remaining services such as training are not considered essential to the product’s functionality.

For arrangements that involve significant production, modification or customization of the software, or where software services are otherwise considered essential, we recognize revenue using contract accounting. We generally use the percentage-of-completion method to recognize revenue from these arrangements. We measure progress-to-completion primarily using labor hours incurred, or value added. The percentage-of-completion method generally results in the recognition of reasonably consistent profit margins over the life of a contract since we have the ability to produce reasonably dependable estimates of contract billings and contract costs. We use the level of profit margin that is most likely to occur on a contract. If the most likely profit margin cannot be precisely determined, the lowest probable level of profit in the range of estimates is used until the results can be estimated more precisely. These arrangements are often implemented over an extended time period and occasionally require us to revise total cost estimates. Amounts recognized in revenue are calculated using the progress-to-completion measurement after giving effect to any changes in our cost estimates. Changes to total estimated contract costs, if any, are recorded in the period they are determined. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent.

For arrangements that include new product releases for which it is difficult to estimate final profitability except to assume that no loss will ultimately be incurred, we recognize revenue under the completed contract method. Under the completed contract method, revenue is recognized only when a contract is completed or substantially complete. Historically these amounts have been immaterial.

Software Services

Some of our software arrangements include services considered essential for the customer to use the software for the customer’s purposes. For these software arrangements, both the software license revenue and the services revenue are recognized as the services are performed using the percentage-of-completion contract accounting method. When software services are not considered essential, the fee allocable to the service element is recognized as revenue as we perform the services.

5

	Computer Hardware Equipment
	Revenue allocable to computer hardware equipment, which is based on VSOE, is recognized when we deliver the equipment and collection is probable.
	Postcontract Customer Support
	Our customers generally enter into PCS agreements when they purchase our software licenses. Our PCS agreements are typically renewable annually. Revenue allocated to PCS is recognized on a straight-line basis over the period the PCS is provided. All significant costs and expenses associated with PCS are expensed as incurred. Fair value for the maintenance and support obligations for software licenses is based upon the specific sale renewals to customers.
	Appraisal Services:
	For our property appraisal projects, we recognize revenue using the proportionate performance method of revenue recognition since many of these projects are implemented over one to three year periods and consist of various unique activities. Under this method of revenue recognition, we identify each activity for the appraisal project, with a typical project generally calling for bonding, office set up, training, routing of map information, data entry, data collection, data verification, informal hearings, appeals and project management. Each activity or act is specifically identified and assigned an estimated cost. Costs which are considered to be associated with indirect activities, such as bonding costs and office set up, are expensed as incurred. These costs are typically billed as incurred and are recognized as revenue equal to cost. Direct contract fulfillment activities and related supervisory costs such as data collection, data entry and verification are expensed as incurred. The direct costs for these activities are determined and the total contract value is then allocated to each activity based on a consistent profit margin. Each activity is assigned a consistent unit of measure to determine progress towards completion and revenue is recognized for each activity based upon the percentage complete as applied to the estimated revenue for that activity. Progress for the fulfillment activities is typically based on labor hours or an output measure such as the number of parcel counts completed for that activity. Estimated losses on uncompleted contracts are recorded in the period in which we first determine that a loss is apparent.
	Other:
	The majority of deferred revenue consists of unearned support and maintenance revenue that has been billed based on contractual terms in the underlying arrangement with the remaining balance consisting of payments received in advance of revenue being earned under software licensing, software and appraisal services and hardware installation. Unbilled revenue is not billable at the balance sheet date but is recoverable over the remaining life of the contract through billings made in accordance with contractual agreements. The termination clauses in most of our contracts provide for the payment for the fair value of products delivered and services performed in the event of an early termination.
	Prepaid expenses and other current assets include direct and incremental costs, consisting primarily of commissions associated with arrangements for which revenue recognition has been deferred and third party subcontractor payments. Such costs are expensed at the time the related revenue is recognized.
(3)	Acquisitions
	In February 2007 we completed the acquisition of all of the capital stock of Advanced Data Systems, Inc. (“ADS”), which develops and sells fund accounting solutions, primarily in New England. The total purchase price, including transaction costs along with an office building used in the business, was approximately $4.2 million in cash. In January 2007 we also purchased certain software assets to enhance our courts and justice product line for approximately $756,000 in cash, including transaction costs. The operating results of these acquisitions are included in our results of operations since their respective dates of acquisition.
	We believe these acquisitions will complement our business model by broadening our customer base and will give us additional opportunities to provide our customers with solutions tailored specifically for local governments.
	In connection with these two transactions we acquired total assets of approximately $1.4 million and assumed total liabilities of approximately $1.0 million. We recorded goodwill of $2.3 million, all of which is expected to be deductible for tax purposes, and other intangible assets of $2.4 million. The $2.4 million of intangible assets is attributable to acquired software and customer relationships that will be amortized over a weighted average period of approximately 7 years. Our consolidated balance sheet as of June 30, 2007 reflects the allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition.

6

(4)	Shareholders’ Equity
	The following table details activity in our common stock:

	Six months ended June 30,
	2007						2006
	Shares			Amount			Shares			Amount
Purchases of common stock		(889	)	$	(11,131	)		(833	)	$	(8,261	)
Stock option exercises		362			1,268			295			1,083
Employee stock plan purchases		49			551			53			443
Shares issued for acquisitions		—			—			325			2,891

	On May 17, 2007 our board of directors authorized the repurchase of up to an additional 2.0 million shares of Tyler common stock. As of June 30, 2007 we have authorization from our board of directors to repurchase up to 2.1 million shares of Tyler common stock.
(5)	Income Tax Provision
	The following table sets forth a comparison of our income tax provision for the following periods:

	Three months ended						Six months ended
	June 30,						June 30,
	2007			2006			2007			2006
Income tax provision	$	2,410		$	2,068		$	3,932		$	3,415
Effective income tax rate		39.1	%		35.5	%		39.0	%		37.2	%

The effective income tax rates for the periods presented were different from the statutory United States federal income tax rate of 35% primarily due to state income taxes, non-deductible share-based compensation expense, the qualified manufacturing activities deduction and non-deductible meals and entertainment costs. The tax rate in 2006 was unusually low mainly due to changes in the Texas franchise tax law and related rates enacted in the second quarter of 2006.

We made federal and state income tax payments, net of refunds, of $3.3 million in the six months ended June 30, 2007, compared to $4.9 million in net payments for the same period of the prior year.

We adopted the provisions of Financial Standards Accounting Board Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes,” on January 1, 2007. As a result of the implementation of FIN 48, we recognized no material adjustments in the liability for unrecognized income tax benefits. At the adoption date we did not have any unrecognized tax benefits and did not have any interest or penalties accrued.

We are subject to U.S. federal tax as well as income tax of multiple state and local jurisdictions. We are no longer subject to U. S. Federal income tax examinations for years before 2004 and are no longer subject to state and local income tax examinations by tax authorities for the years before 2002. The Internal Revenue Service commenced examination of our U. S. Federal tax return for 2005 in the first quarter of 2007. To date, there are no proposed adjustments that will have a material impact on our financial position or results of operations.

7

(6)	Earnings Per Share
	The following table details the reconciliation of basic earnings per share to diluted earnings per share:

	Three months ended				Six months ended
	June 30,				June 30,
	2007		2006		2007		2006
Numerator for basic and diluted earnings per share:
Net income	$	3,750	$	3,760	$	6,151	$	5,772
Denominator:
Weighted-average basic common shares outstanding		38,540		39,026		38,571		39,070
Assumed conversion of dilutive securities:
Stock options		1,631		1,691		1,787		1,641
Warrants		1,277		1,229		1,293		1,209
Potentially dilutive common shares		2,908		2,920		3,080		2,850
Denominator for diluted earnings per share — Adjusted weighted-average shares		41,448		41,946		41,651		41,920
Earnings per common share:
Basic	$	0.10	$	0.10	$	0.16	$	0.15
Diluted	$	0.09	$	0.09	$	0.15	$	0.14

(7)	Share-Based Compensation
	Share-based compensation plan
	We have a stock option plan that provides for the grant of stock options to key employees, directors and non-employee consultants. Stock options vest after three to five years of continuous service from the date of grant and have a contractual term of ten years. Once options become exercisable, the employee can purchase shares of our common stock at the market price on the date we granted the option. Effective January 1, 2006, we adopted the provisions of SFAS No. 123R, “Share-Based Payment,” which establishes accounting for share-based awards exchanged for employee services, using the modified prospective application transition method. Under this transition method, compensation cost recognized in 2006 and 2007 includes the applicable amounts of: (a) compensation cost of all share-based payments granted prior to, but not yet vested as of, January 1, 2006 (based on the grant-date fair value estimated in accordance with the original provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” and previously presented in the pro forma footnote disclosures), and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006 (based on the grant-date fair value estimated in accordance with the new provisions of SFAS No. 123R).
	Determining Fair Value Under SFAS No. 123R
	Valuation and Amortization Method. We estimate the fair value of share-based awards granted using the Black-Scholes option valuation model. We amortize the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods.
	Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. We determine the expected life using the “simplified method” in accordance with Staff Accounting Bulletin No. 107.
	Expected Volatility. Using the Black-Scholes option valuation model, we estimate the volatility of our common stock at the date of grant based on the historical volatility of our common stock.

8

Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.

Expected Dividend Yield. We have not paid any cash dividends on our common stock in the last ten years and we do not anticipate paying any cash dividends in the foreseeable future. Consequently, we use an expected dividend yield of zero in the Black-Scholes option valuation model.

Expected Forfeitures. We use historical data to estimate pre-vesting option forfeitures. We record stock-based compensation only for those awards that are expected to vest.

We granted options for 280,750 shares and 97,590 shares for the three months ended June 30, 2007 and 2006, respectively.

The following weighted average assumptions were used for options granted:

	Three months ended						Six months ended
	June 30,						June 30,
	2007			2006			2007			2006
Expected life (in years)		6.5			5.0			6.5			5.0
Expected volatility		42.6	%		45.3	%		42.8	%		45.4	%
Risk-free interest rate		5.1	%		4.9	%		4.8	%		4.8	%
Expected forfeiture rate		3	%		3	%		3	%		3	%

Share-Based Compensation Under SFAS No. 123R

The following table summarizes share-based compensation expense related to share-based awards under SFAS No. 123R recorded in the statements of operations:

	Three months ended				Six months ended
	June 30,				June 30,
	2007		2006		2007		2006
Cost of software services and maintenance	$	56	$	42	$	99	$	73
Selling, general and administrative expense		519		462		974		902
Total share-based compensation expense	$	575	$	504	$	1,073	$	975

(8)	Commitments and Contingencies
	Other than routine litigation incidental to our business, there are no material legal proceedings pending to which we are party or to which any of our properties are subject.
(9)	Recent Accounting Pronouncements
	In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, with earlier application encouraged. Any amounts recognized upon adoption as a cumulative effect adjustment will be recorded to the opening balance of retained earnings in the year of adoption. We have not yet determined the impact of SFAS No. 157 on our financial condition and results of operations.

9

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

The statements in this discussion that are not historical statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements about our business, financial condition, business strategy, plans and the objectives of our management, and future prospects. In addition, we have made in the past and may make in the future other written or oral forward-looking statements, including statements regarding future operating performance, short- and long-term revenue and earnings growth, the timing of the revenue and earnings impact for new contracts, backlog, the value of new contract signings, business pipeline, and industry growth rates and our performance relative thereto. Any forward-looking statements may rely on a number of assumptions concerning future events and be subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual results to differ materially from such statements. These include, but are not limited to: our ability to improve productivity and achieve synergies from acquired businesses; technological risks associated with the development of new products and the enhancement of existing products; changes in the budgets and regulating environments of our government customers; competition in the industry in which we conduct business and the impact of competition on pricing, revenues and margins; with respect to customer contracts accounted for under the percentage-of-completion method of accounting, the performance of such contracts in accordance with our cost and revenue estimates; our ability to maintain health and other insurance coverage and capacity due to changes in the insurance market and the impact of increasing insurance costs on the results of operations; the costs to attract and retain qualified personnel, changes in product demand, the availability of products, economic conditions, costs of compliance with corporate governance and public disclosure requirements as issued by the Sarbanes-Oxley Act of 2002 and New York Stock Exchange rules, changes in tax risks and other risks indicated in our filings with the Securities and Exchange Commission. The factors described in this paragraph and other factors that may affect Tyler, its management or future financial results, as and when applicable, are discussed in Tyler’s filings with the Securities and Exchange Commission, on its Form 10-K for the year ended December 31, 2006. Except to the extent required by law, we are not obligated to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. When used in this Quarterly Report, the words “believes,” “plans,” “estimates,” “expects,” “anticipates,” “intends,” “continue,” “may,” “will,” “should,” “projects,” “forecast,” “might,” “could” or the negative of such terms and similar expressions as they relate to Tyler or our management are intended to identify forward-looking statements.

GENERAL

We provide integrated information management solutions and services for local governments. We develop and market a broad line of software solutions and services to address the information technology (IT) needs of cities, counties, schools and other local government entities. In addition, we provide professional IT services to our customers, including software and hardware installation, data conversion, training and for certain customers, product modifications, along with continuing maintenance and support for customers using our systems. We also provide property appraisal outsourcing services for taxing jurisdictions.

In the first quarter of 2007, we acquired one company, Advanced Data Systems, Inc. (“ADS”), as well as certain software assets to enhance our courts and justice product line. The combined purchase price for ADS and the software assets was approximately $5.1 million in cash and we assumed liabilities of approximately $1.0 million. See Note 3 in the Notes to the Unaudited Condensed Consolidated Financial Statements.

As of June 30, 2007, our total full-time equivalent employees increased to 1,594 from 1,408 at June 30, 2006. Our implementation and support staff provided the majority of the increase as we added to our capacity to deliver our backlog, particularly for our Odyssey courts and justice solutions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements. These condensed consolidated financial statements have been prepared following the requirements of accounting principles generally accepted in the United States (“GAAP”) for interim periods and require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition and amortization and potential impairment of intangible assets and goodwill. As these are condensed financial statements, one should also read expanded information about our critical accounting policies and estimates provided in Item 7, “Management’s Discussion and

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Analysis of Financial Condition and Results of Operations,” included in our Form 10-K for the year ended December 31, 2006. There have been no material changes to our critical accounting policies and estimates from the information provided in our 10-K for the year ended December 31, 2006, except as follows:

We account for uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” an interpretation of FASB Statement No. 109. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations change over time. Changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of income. See Note 5 in the Notes to the Unaudited Condensed Consolidated Financial Statements for additional detail.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, with earlier application encouraged. Any amounts recognized upon adoption as a cumulative effect adjustment will be recorded to the opening balance of retained earnings in the year of adoption. We have not yet determined the impact of SFAS No. 157 on our financial condition and results of operations.

ANALYSIS OF RESULTS OF OPERATIONS

Revenues

The following table sets forth the key components of our revenues for the periods presented as of June 30:

	Second Quarter										%			Six Months										%
			% of					% of			Increase/					% of					% of			Increase/
($ in thousands)	2007		Total			2006		Total			(Decrease)			2007		Total			2006		Total			(Decrease)
Software licenses	$	8,393		15	%	$	9,824		20	%		(15	)%	$	16,364		16	%	$	17,395		19	%		(6	)%
Software services		17,728		33			15,061		31			18			32,792		31			28,181		30			16
Maintenance		20,455		38			17,716		36			15			40,394		39			35,373		38			14
Appraisal services		6,007		11			5,108		10			18			11,587		11			9,807		10			18
Hardware and other		1,529		3			1,442		3			6			3,307		3			3,253		3			2
Total revenues	$	54,112		100	%	$	49,151		100	%		10	%	$	104,444		100	%	$	94,009		100	%		11	%

Software licenses. Software license revenues consist of the following components:

	Second Quarter										%			Six Months										%
			% of					% of			Increase/					% of					% of			Increase/
($ in thousands)	2007		Total			2006		Total			(Decrease)			2007		Total			2006		Total			(Decrease)
Financial	$	6,197		74	%	$	7,522		77	%		(18	)%	$	11,367		69	%	$	13,197		76	%		(14	)%
Courts and justice		1,592		19			1,221		12			30			3,074		19			2,177		12			41
Appraisal and other		604		7			1,081		11			(44	)		1,923		12			2,021		12			(5	)
Total software license revenues	$	8,393		100	%	$	9,824		100	%		(15	)%	$	16,364		100	%	$	17,395		100	%		(6	)%

In the three months ended June 30, 2007 we signed 17 material new contracts with average software license fees of approximately $696,000 compared to 18 material new contracts signed in the three months ended June 30, 2006 with average software license fees of approximately $532,000. In the six months ended June 30, 2007 we signed 33 material new contracts with average software license fees of approximately $548,000 compared to 41 material new contracts signed in the six months ended June 30, 2006 with average software license fees of approximately $353,000. We consider contracts with a license fee component of $100,000 or more to be material. Although a contract is signed in a particular quarter, the period in which the revenue is

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recognized may be different because we recognize revenue according to our revenue recognition policy as described in Note 2 in the Unaudited Condensed Consolidated Financial Statements.

Changes in software license revenues consist of the following components:

• Software license revenue related to our financial solutions for the three and six months ended June 30, 2007 decreased 18% and 14%, respectively compared to the prior year periods. These declines were mainly due to a large installation of our MUNIS financial application in the United States Virgin Islands in the second quarter of 2006 and a product mix in 2007 that required less third party software than in the prior year period. In addition we continue to see a trend toward more application service provider hosting type service arrangements that result in more revenue being recognized as service fees versus license fees. For the remainder of the year we anticipate software license revenue related to financial solutions to be slightly higher than 2006.

• Software license revenue related to our courts and justice software solutions for the three and six months ended June 30, 2007 increased significantly compared to the prior year periods. In late 2003 we implemented our first installation of Odyssey courts and justice solution and our revenue increases are the result of Odyssey maturing following successful early implementations and leveraging our existing customer base.

Software services. Changes in software services revenues consist of the following components:

• Software services revenue related to financial solutions, which comprises more than half of our software services revenue in the periods presented, increased significantly compared to the three and six months ended June 30, 2006. This increase was substantially driven by new customers for our application service provider hosting and disaster recovery services as a result of geographic expansion, primarily in the South in the aftermath of Hurricane Katrina. We have also added to our implementation staff over the last twelve months, which has enabled us to deliver our backlog at a faster rate.

• Software services revenue related to Odyssey courts and justice solutions experienced substantial increases compared to the three and six months ended June 30, 2006, reflecting increased contract volume. We had approximately 30 Odyssey contracts in the first six months of 2007 compared to approximately 20 Odyssey contracts in the first six months of 2006.

• Software services revenue related to appraisal and other solutions, which comprise approximately 25% of our software services revenue in the periods presented, had strong increases for the three and six months ended June 30, 2007 compared to the prior year periods. In the three months ended June 30, 2007, we completed a significant phase in a contract with Montana for our Orion appraisal solutions, which provided most of the increase.

Maintenance. We provide maintenance and support services for our software products and third party software. Maintenance revenues increased over the prior year periods due to growth in our installed customer base and slightly higher maintenance rates on most of our solutions.

Appraisal services. Appraisal services are project-oriented and are driven in part by revaluation cycles in various states. Appraisal services increased over the three and six months ended June 30, 2006 due to activity related to Ohio’s revaluation cycle, which occurs every six years, and a $4.0 million contract with Fulton County, Georgia which began late in 2006. The Ohio revaluation projects began with smaller counties late in the first quarter of 2006 and expanded to larger counties by the third quarter of 2006. We currently expect the Ohio revaluation projects to be substantially complete by the end of 2007. The level of appraisal services revenues for 2008 will depend on our ability to replace the appraisal services revenues associated with the Ohio revaluation.

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Cost of Revenues and Gross Margins

The following table sets forth a comparison of the key components of our cost of revenues, and those components stated as a percentage of related revenues for the periods presented as of June 30:

	Second Quarter										Six Months
			% of					% of					% of					% of
			Related					Related					Related					Related
($ in thousands)	2007		Revenues			2006		Revenues			2007		Revenues			2006		Revenues
Software licenses	$	1,975		24	%	$	2,416		25	%	$	3,935		24	%	$	5,092		29	%
Acquired software		427		5			353		4			821		5			654		4
Software services and maintenance		26,180		69			22,949		70			50,768		69			44,694		70
Appraisal services		4,096		68			3,454		68			8,092		70			6,860		70
Hardware and other		1,097		72			1,033		72			2,469		75			2,301		71
Total cost of revenue	$	33,775		62	%	$	30,205		61	%	$	66,085		63	%	$	59,601		63	%

The following table sets forth a comparison of gross margin percentage by revenue type for the periods presented as of June 30:

	Second Quarter									Six Months
Gross Margin percentages	2007			2006			Change			2007			2006			Change
Software licenses & acquired software		71.4	%		71.8	%		(0.4	)%		70.9	%		67.0	%		3.9	%
Software services and maintenance		31.4			30.0			1.4			30.6			29.7			0.9
Appraisal services		31.8			32.4			(0.6	)		30.2			30.0			0.2
Hardware and other		28.3			28.4			(0.1	)		25.3			29.3			(4.0	)
Overall gross margin		37.6	%		38.5	%		(0.9	)%		36.7	%		36.6	%		0.1	%

Software license revenues. The main component of our cost of software license revenues is amortization expense for capitalized development costs on certain software products, with third party software costs making up the balance. Once a product is released, we begin to amortize, over the estimated useful life of the product, the costs associated with its development. Amortization expense is determined on a product-by-product basis at an annual rate not less than straight-line basis over the product’s estimated life, which is generally five years. Development costs consist mainly of personnel costs, such as salary and benefits paid to our developers and rent for related office space.

For the six months ended June 30, 2007, our software license gross margin percentage increased compared to the prior year period due to lower amortization expense of software development costs because some products became fully amortized during the first quarter of 2006. Additionally our product mix in the first six months of 2007 included less third party software, which has higher associated costs than proprietary software.

Software services and maintenance revenues. Cost of software services and maintenance primarily consists of personnel costs related to installation of our software, conversion of customer data, training customer personnel and support activities. For the three months and six months ended June 30, 2007, the software services and maintenance gross margin percentage was slightly higher than the comparable prior year periods because maintenance costs typically grow at a slower rate than related revenues due to leverage in the utilization of our support and maintenance staff and economies of scale. We have increased our implementation and support staff by 110 full-time equivalent employees since June 30, 2006 to increase our capacity to train and deliver our contract backlog, particularly for our Odyssey courts and justice solutions.

Our blended gross margin for the three months ended June 30, 2007 declined to 37.6% compared to 38.5% in the prior year period due to a revenue mix that included less software license. Software license revenue inherently has higher gross margins than other revenues such as professional services and hardware. Although the revenue mix for the six months ended June 30, 2007 also

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included less software license than the prior year period the negative impact on the gross margin was offset by lower amortization expense of software development costs described above.

Selling, General and Administrative Expenses

The following table sets forth a comparison of our selling, general and administrative expenses (SG&A) for the periods presented as of June 30:

	Second Quarter						Change					Six Months						Change
($ in thousands)	2007			2006			$		%			2007			2006			$		%
Selling, general and administrative expenses	$	12,781		$	12,181		$	600		5	%	$	25,757		$	23,157		$	2,600		11	%
Percent of revenues		23.6	%		24.8	%							24.7	%		24.6	%

For the three months ended June 30, 2007, SG&A costs grew at a slower rate than revenues due to leverage in the utilization of our administrative and sales staff. SG&A costs for the six months ending June 30, 2007 included significantly higher claims from our self-insured employee health plan incurred in the first quarter compared to the prior year period.

Research and Development Expense

The following table sets forth a comparison of our research and development expense for the periods presented as of June 30:

	Second Quarter						Change					Six Months						Change
($ in thousands)	2007			2006			$		%			2007			2006			$		%
Research and development expense	$	1,404		$	812		$	592		73	%	$	2,627		$	1,714		$	913		53	%
Percent of revenues		2.6	%		1.7	%							2.5	%		1.8	%

For the three and six months ended June 30, 2007, research and development expense included costs associated with the Microsoft Dynamics AX project, in addition to costs associated with other new product development efforts. In January 2007 we entered into a strategic alliance with Microsoft Corporation to jointly develop core public sector functionality for Microsoft Dynamics AX to address the accounting needs of public sector organizations worldwide. We anticipate these costs will continue into 2009; however, the actual amount and timing of those costs and whether they are capitalized or expensed may vary.

    Amortization of Customer and Trade Name Intangibles

Acquisition intangibles are comprised of the excess of the purchase price over the fair value of net tangible assets acquired that is allocated to acquired software and customer and trade name intangibles. The remaining excess purchase price is allocated to goodwill that is not subject to amortization. Amortization expense related to acquired software is included with cost of revenues while amortization expense of customer and trade name intangibles is recorded as a non-operating expense. The following table sets forth a comparison of amortization of customer and trade name for the periods presented as of June 30:

	Second Quarter				Change					Six Months				Change
($ in thousands)	2007		2006		$		%			2007		2006		$		%
Amortization of customer and trade name intangibles	$	356	$	325	$	31		10	%	$	703	$	647	$	56		9	%

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In the first quarter of 2007 we completed two acquisitions which increased amortizable customer intangibles by $638,000. This amount will be amortized over 7 years.

          Income Tax Provision

The following table sets forth comparison of our income tax provision for the periods presented as of June 30:

	Second Quarter						Change					Six Months						Change
($ in thousands)	2007			2006			$		%			2007			2006			$		%
Income tax provision	$	2,410		$	2,068		$	342		17	%	$	3,932		$	3,415		$	517		15	%
Effective income tax rate		39.1	%		35.5	%							39.0	%		37.2	%

The effective income tax rates for the three and six months ended June 30, 2007 and 2006 were different from the statutory United States federal income tax rate of 35% primarily due to state income taxes, non-deductible share-based compensation expense, the qualified manufacturing activities deduction, and non-deductible meals and entertainment costs. The tax rate in 2006 was unusually low mainly due to changes in the Texas franchise tax law and related rates enacted in the second quarter of 2006.

FINANCIAL CONDITION AND LIQUIDITY

As of June 30, 2007, we had cash and cash equivalents (including restricted cash equivalents) of $13.4 million and we had short-term investments of $21.3 million, compared to cash and cash equivalents (including restricted cash equivalents) of $22.2 million and short-term investments of $19.5 million at December 31, 2006. As of June 30, 2007 we had outstanding letters of credit totaling $4.5 million to secure surety bonds required by some of our customer contracts. These letters of credit expire during 2007 and mid-2008.

The following table sets forth a summary of cash flows for the periods presented as of June 30:

Six Months Ended June 30,	2007			2006
Cash flows provided by (used by):
Operating activities	$	8,781		$	10,629
Investing activities		(8,040	)		(12,821	)
Financing activities		(9,028	)		(6,567	)
Net decrease in cash and cash equivalents	$	(8,287	)	$	(8,759	)

Operating Activities

Net cash provided by operating activities continues to be our primary source of funds to finance operating needs and capital expenditures. Other capital resources include cash on hand and access to the capital markets. For the six months ended June 30, 2007, operating activities provided net cash of $8.8 million, primarily generated from net income of $6.2 million, non-cash depreciation and amortization charges of $5.2 million, and non-cash share-based compensation expense of $1.1 million, offset by a net decrease in operating assets and liabilities of $3.6 million. The operating asset decline relates to the timing of annual incentive compensation payments in the first quarter of each year and annual maintenance renewals that are billed near the end of the June.

Our days sales outstanding (“DSO”) was 102 days at June 30, 2007 and December 31, 2006. DSO is calculated based on total accounts receivable divided by the quotient of annualized quarterly revenues divided by 360 days.

For the six months ended June 30, 2006 operating activities provided net cash of $10.6 million, primarily generated from net income of $5.8 million, non-cash depreciation and amortization charges of $5.1 million, and non-cash share-based compensation expense of $1.0 million, offset by a net increase in operating assets and liabilities of $1.5 million. The net increase in operating assets and liabilities consists of timing of cash payments and receipts offset somewhat by higher deferred revenue due to additional maintenance customers and new contract signings.

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For the six months ended June 30, 2007, net cash used by investing activities of $8.0 million includes cash payments of $5.1 million for the acquisition of Advanced Data Systems, Inc. and certain software assets to enhance our courts and justice product line. In addition, investing activities includes $1.8 million, net of sales, to purchase short-term investments and $1.6 million in property and equipment. The property and equipment increase was due to expenditures related to computer hardware and software and other asset additions to support internal growth.

For the six months ended June 30, 2006 net cash used by investing activities of $12.8 million includes cash payments of $11.7 million for two acquisitions, MazikUSA Inc. and TACS, Inc. In addition, we spent $2.3 million for property and equipment related to computer hardware and software, including a new enterprise-wide customer relationship management system, and other asset additions to support internal growth. These cash payments were offset somewhat by a net reduction of $1.3 million in short-term investments.

For the six months ended June 30, 2007 and 2006, net cash used in financing activities was $9.0 million and $6.6 million, respectively, and was attributable to purchases of treasury shares, net of proceeds from stock option exercises and employee stock purchase plan activity.

During the six months ended June 30, 2007, we purchased 889,000 shares of our common stock for an aggregate purchase price of $11.1 million. A summary of the repurchase activity during the six months ended June 30, 2007 is as follows:

			Additional number				Maximum number of
	Total number		of shares authorized				shares that may be
	of shares		that may be		Average price		repurchased under
Period	repurchased		repurchased		paid per share		current authorization
January 1 through January 31		131		—	$	13.92		900
February 1 through February 28		92		—		13.63		808
March 1 through March 31		67		—		13.05		741
April 1 through April 30		60		—		12.01		681
Additional authorization by the board of directors		—		2,000		—		2,681
May 1 through May 31		539		—		11.99		2,142
June 1 through June 30		—		—		—		2,142
Total six months ended June 30, 2007		889		2,000	$	12.52

The repurchase program, which was approved by our board of directors, was announced in October 2002, and was amended in April and July 2003, October 2004, October 2005 and May 2007. On May 17, 2007, our board of directors authorized the repurchase of an additional 2.0 million shares for a total authorization to repurchase of 2.3 million shares of our common stock. As of June 30, 2007 we had remaining authorization to repurchase up to 2.1 million additional shares of our common stock. There is no expiration date specified for the authorization and we intend to repurchase stock under the plan from time to time in the future.

We made federal and state income tax payments, net of refunds of $3.3 million in the six months ended June 30, 2007 compared to $4.9 million in the comparable prior year.

From time to time we engage in discussions with potential acquisition candidates. In order to consummate any such opportunities, which could require significant commitments of capital, we may be required to incur debt or issue additional potentially dilutive securities in the future. No assurance can be given as to our future acquisitions and how such acquisitions may be financed. In the absence of future acquisitions, we believe our current cash balances and expected future cash flows from operations will be sufficient to meet our anticipated cash needs for working capital, capital expenditures and other activities through the next twelve months. If operating cash flows are not sufficient to meet our needs, we believe that credit would be available to us.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may affect us due to adverse changes in financial market prices and interest rates. As of June 30, 2007, we had funds invested in auction rate municipal securities and state and municipal bonds, which were accounted for in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” These investments were

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treated as available-for-sale under SFAS No. 115. The carrying value of these investments approximates fair market value. Due to the nature of these investments, we are not subject to significant market rate risk.

We have no outstanding debt at June 30, 2007, and are therefore not subject to any interest rate risk.

ITEM 4. Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that we are able to collect the information we are required to disclose in the reports we file with the Securities and Exchange Commission (“SEC”), and to process, summarize and disclose this information within the time periods specified in the rules of the SEC. Based on an evaluation of our disclosure controls and procedures as of the end of the period covered by this report conducted by our management, with the participation of the Chief Executive Officer and the Chief Financial Officer, the Chief Executive Officer and Chief Financial Officer believe that these controls and procedures are effective to ensure that we are able to collect, process and disclose the information we are required to disclose in the reports we file with the SEC within the required time periods.

Part II. OTHER INFORMATION

ITEM 1. Legal Proceedings

Other than routine litigation incidental to our business, there are no material legal proceedings pending to which we are party or to which any of our properties are subject.

ITEM 1A. Risk Factors

     No material changes.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

     None

ITEM 3. Defaults Upon Senior Securities

     None

ITEM 4. Submission of Matters to a Vote of Security Holders

We held our annual meeting of stockholders on May 17, 2007. The results of the matters voted on at the meeting are as follows:

          With respect to the election of directors, shares were voted as follows:

	Number of		Number of Votes
Nominee	Votes For		Withheld
Donald R. Brattain		36,563,019		476,785
J. Luther King, Jr.		36,560,067		479,737
John S. Marr, Jr.		36,064,651		975,153
G. Stuart Reeves		36,561,569		478,235
Michael D. Richards		36,554,540		485,264
Dustin R. Womble		35,991,430		1,048,374
John M. Yeaman		34,365,110		2,674,694

With respect to the ratification of Ernst & Young LLP as our independent auditors for fiscal year 2007, votes were as follows:

For	Against	Abstain
36,681,320	67,826	290,654

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ITEM 5. Other Information

     None

ITEM 6. Exhibits

Exhibit 31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	Certifications Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TYLER TECHNOLOGIES, INC.
By:	/s/ Brian K. Miller
Brian K. Miller
Senior Vice President and Chief Financial Officer
(principal financial officer and an authorized signatory)

Date: July 24, 2007

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