Shares of Tyler Technologies (NYSE: TYL) climbed on Thursday after the software company reported financial results for the third quarter of 2023. While headline numbers only showed modest growth, Wall Street seemed to like other results beneath the surface. As of noon ET, Tyler Technologies stock was up 10%.

Tyler Technologies has a range of software products that are used in the public sector. In Q3, the company's revenue was up a modest 4.5% year over year to $495 million. And its operating income was only up 5% to $64 million. But there's better growth beneath the surface that Wall Street is happy about.

Tyler Technologies is transitioning to a software-as-a-service (SaaS) model. As such, certain revenue categories fell as the company's customers shifted how they buy the software. Encouragingly, SaaS revenue was up 26% year over year, which is better than its 20% growth in the second quarter.

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Source Fool.com