Conestoga Capital Defends Tyler Technologies Growth Outlook

Conestoga Capital Advisors defended the long-term growth prospects of Tyler Technologies in its second-quarter 2026 investor letter. The asset management firm argued that investor fears regarding artificial intelligence disrupting the software sector are overstated in the case of the public sector software provider.

Tyler Technologies underperformed during the quarter, although it met its financial guidance. Conestoga Capital Advisors attributed the company's resilience to its deep domain expertise and a highly recurring revenue base derived from government customers providing mission-critical software.

The analysis arrives during a broader market trend where high-beta small-cap stocks have outperformed quality growth businesses.