Tyler Technologies Inc (TYL)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	299,526	275,588	256,696	240,535	218,537	211,500	208,478	203,361	214,249	221,590	216,861	198,395	180,735	180,719	174,191	177,241	172,926	170,047	160,444	155,769
Interest expense (ttm)	US$ in thousands	5,931	8,422	12,995	18,129	23,629	27,982	31,432	31,259	28,379	25,263	21,401	27,625	22,904	17,917	12,521	334	502	2,252	4,002	4,460
Interest coverage		50.50	32.72	19.75	13.27	9.25	7.56	6.63	6.51	7.55	8.77	10.13	7.18	7.89	10.09	13.91	530.66	344.47	75.51	40.09	34.93

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $299,526K ÷ $5,931K
= 50.50

Tyler Technologies Inc's interest coverage ratio has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio measures the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).

The trend indicates that Tyler Technologies Inc had a strong interest coverage ratio in the beginning, with the ratio peaking at 530.66 on March 31, 2021. This high ratio suggests that the company had significant earnings relative to its interest expenses, indicating a strong ability to cover its interest payments.

However, there was a significant decline in the interest coverage ratio in the subsequent quarters, dropping to 6.51 on March 31, 2023. This sharp decrease may raise concerns about the company's ability to meet its interest payments using its current earnings.

The interest coverage ratio improved slightly in the following quarters but remained below the levels seen in the earlier periods. It increased to 19.75 on June 30, 2024, indicating a better ability to cover interest expenses compared to the lows in 2023.

Overall, the fluctuating trend in the interest coverage ratio for Tyler Technologies Inc suggests varying levels of financial risk and capacity to meet interest obligations. Investors and stakeholders should closely monitor this ratio to assess the company's financial health and debt servicing capabilities.