Tyler Technologies, Inc. TYL is benefiting from growth in its Enterprise solutions,which include ERP, Appraisal and Tax, and Civic services. However, moderating growth within the Courts & Justice segment has been a dampener.Slower adoption of new solutions including re:Search, Modria, and redaction is a key challenge for the company. The company’s recently released third-quarter results bear testimony to the fact.In the third-quarter 2018, non-GAAP earnings per share grew 18.9% year over year to $1.23 and beat the Zacks Consensus Estimate by a penny.Revenues for the quarter came in at $237.6 million, marking a year-over-year jump of 10.5%. However, it missed the Zacks Consensus Estimate of $242 million. Acquisitions contributed $7 million to revenues. However, slower organic growth of 6.5% in the quarter compared with 11% in the previous quarter adversely impacted results.A Look at Q3 ResultsRecurring revenues, which include software maintenance and subscription revenues, increased14% year over year and comprised 66% of total revenues.Tyler’s subscription revenues for the quarter increased 32.3% to $58.7 million. Transaction-based revenues from e-filing and online payments, which are included in subscriptions, increased 16.4% to $17.9 million. The company’s e-filing revenues of $13.3 million increased 12.2% year over year.The company added 81 new SaaS deals and converted 31 existing on-premises clients accounting for $29.2 million of total contract value. In the year-ago quarter, the company added 94 new deals and had 15 on-premises conversions, representing approximately $42.5 million in total contract value.Tyler’s Software Services revenues of $48.2 million registered 5% growth on a year-over-year basis. Maintenance revenues of $96.2 million increased 4.8%. Hardware and other revenues rose 45.6% to $4.97 million.Appraisal services revenues were down 11.9% to $5.5 million. Software licenses and royalties of $22.4 million declined a marginal 1.4%.On the earnings call, management noted that the total value of new Public Safety contracts signed year to date grew 34% year over year. However, as the sales process of some of the deals took longer than expected, it impacted license revenues and the associated professional services and maintenance revenues as well.MarginsTyler’s non-GAAP gross profit increased 9.5% year over year to $122.9 million. However, non-GAAP gross margin contracted 50 basis points (bps) to 51.7%.The company’s non-GAAP operating income increased 2% year over year to $64.3 million, while operating margin contracted 240 bps to 27.1%.Tyler Technologies, Inc. Price, Consensus and EPS Surprise Tyler Technologies, Inc. Price, Consensus and EPS Surprise | Tyler Technologies, Inc. QuoteBalance Sheet and Cash FlowTyler exited the quarter with cash and cash equivalents of $219.45 million, up from $93.2 million at the end of the previous quarter.The company generated $112.1 million of cash flow from operational activities compared with $22.6 million in the previous quarter.GuidanceTyler lowered the midpoint of its outlook for 2018, factoring the impact of timing of large subscription deal, which will start in the latter half of the year, as well as new revenue recognition under ASC 606. Non-GAAP total revenues are expected to be in the range of $940 million to $950 million compared with $940 million to $954 million projected earlier.Tyler expects organic growth to pick up in the fourth quarter, resulting in 9% organic growth rate in full year.For 2018, the company continues to expect non-GAAP earnings per share to be in the range of $4.76 to $4.84.Management expects higher spend on research and development and the Socrata acquisition to weigh on margins.Zacks Rank and Stocks to ConsiderTyler currently carries a Zacks Rank #4 (Sell).A few better-ranked stocks in the broader technology sector are Intel Corp. INTC, Twitter, Inc. TWTR and CACI International CACI, each sporting a Zacks Rank #1 (Strong Buy). 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(TYL): Free Stock Analysis Report CACI International, Inc. (CACI): Free Stock Analysis Report Intel Corporation (INTC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research