Big Story: Q3 Earnings Show Gov Techʼs Resilience Going Into 2026

Key Takeaways:

  • Gov tech revenue is still climbing: Tylerʼs Q3 revenue hit $595.9M (up 9.7% YoY), while Via posted $110M, up 32% with much of that driven by U.S. government customers.

  • Transit and student transportation are emerging as major growth engines, with Via touting big gains from on-demand microtransit and a fast-growing schools vertical.

  • Despite DOGE cuts and a federal shutdown, executives say demand for gov tech is holding steady, backed by pro-transit ballot wins that unlocked $11.8B in funding.

  • Vendors are pushing back on “AI bubbleˮ” fears, pointing instead to 30% productivity gains and up to 3x ROI from AI-backed tools in areas like document automation and budgeting.

Q3 earnings from Tyler Technologies and freshly public Via Transportation paint a surprisingly upbeat picture of the gov tech market heading into 2026. Both companies reported solid growth. Tylerʼs third-quarter revenue climbed to $595.9 million, up 9.7 percent year over year, while Via logged a 32 percent revenue jump to $110 million in its first post-IPO filing, with management noting that much of that momentum is coming from government customers.

Transit is one of the clearest growth stories. Via highlights microtransit and student transportation as core engines, pointing to Springfield, Ohio, as a proof point. There, an on-demand redesign using Viaʼs planning software expanded transit access to 40 percent more of the city without increasing the budget and cut average wait times by a factor of four. Its school's vertical is also “still nascentˮ but has already delivered 200 percent growth in customer subscriptions, positioning student transit as an emerging gov tech hot spot.

At the macro level, the feared drag from federal cuts and the Department of Government Efficiency hasnʼt materialized yet, according to both firms. Public safety continues to anchor much of the gov tech spending narrative. Tyler, which recently acquired Emergency Networking, reported fresh wins in that space, including a deal with the Colorado Department of Corrections. It reinforces the idea that emergency response, corrections, and law enforcement-adjacent platforms remain durable budget priorities even in more cautious funding climates.

Earnings commentary also pushes back on the idea that AI in gov tech is a speculative bubble. Tyler cites AI-backed tools like document automation and priority-based budgeting as already delivering up to 30 percent productivity gains and as much as 3x return on investment for public clients.

Taken together, Tyler and Viaʼs Q3 results suggest a gov tech sector that remains robust despite federal budget uncertainty and AI hype fatigue. Transit, student transportation, and public safety are emerging as particularly strong verticals, while AI is shifting from buzzword to measurable impact story for at least some large vendors. For agencies and investors watching the category, the signal heading into 2026 is less about slowdown and more about selective, efficiency- driven growth.

Quick Hit News:

  • Long Beach, Calif., is pausing its AI-powered chatbot “Ask Elbyˮ after pilot testing revealed issues with outdated data, missing links, and limited improvements over traditional search tools. Officials emphasized the importance of learning from the trial, focusing instead on strengthening core website functions while planning to revisit chatbot technology later with clearer performance measures and validated needs.

  • Researchers at the University of Illinois Urbana-Champaign and the University of Maryland are developing an AI strategy for rural K-12 schools, funded by a nearly $3 million U.S. Department of Education grant. This grant aims to build digital ecosystems, train educators, and address broadband and staffing gaps in underserved districts.

  • Volusia County Schools in Florida is one of three districts selected to pilot the Campus Guardian Angel drone program, starting early 2026, funded by a state allocation of roughly $557,000. The initiative will deploy non-lethal drones that can respond to emergency alerts in about 15 seconds, streaming real-time

    video to law enforcement and school officials.

For the Commute:

Cultivating Innovation and Industry Partnerships in Fort Worth (Fort Worth Innovates)

Fort Worthʼs innovation chief explains how the Fort Worth–Tarrant County Innovation Partnership is using Texas A&Mʼs new downtown campus to build a demand-driven innovation district, anchored by hubs in aerospace/defense, advanced agriculture, media/entertainment, and healthcare.

Resources & Events:

📅Beyond the Beltway 2026 (McLean, VA - February 19, 2026)

The event will gather sales, marketing, and public-sector leaders to explore shifting state and local government markets. Hear directly from CIOs, agency heads, and decision-makers on IT spending patterns, procurement priorities, and emerging technologies shaping service delivery.

📅Los Angeles IT Leadership Forum 2026 (Los Angeles, CA - March 5, 2026)

The Los Angeles IT Leadership Forum will convene state and local government IT executives, emerging leaders, and innovators for candid discussions on leadership development, digital transformation, and strategy. Sessions will highlight workforce modernization, innovation in public-sector technology, and building resilient, future-ready organizations.

📊 Report Spotlight: Using Reservation System Data to Justify a New Community Center (CivicPlus)

By analyzing registrations, facility utilization, peak demand, and waitlists, parks and recreation leaders can quantify unmet demand, forecast future usage, and frame new or expanded centers as answers to clearly documented needs. The report walks through how to turn operational metrics into charts, narratives, and ROI arguments that resonate with boards, funders, and voters.

Insight of the Week:

OpenAIʼs new “dollar-menuˮ deal to provide ChatGPT Enterprise to the federal government at $1 per user for the first year has big implications. It bypasses traditional competitive procurement, risks widespread but shallow adoption without training or clear use cases, and effectively hands a market-leading LLM a massive public-sector footprint at bargain rates. Instead of treating AI as a discounted, box-checking add-on, the government should use its buying power to drive real competition and innovation in areas like climate modeling, emergency management, and healthcare, or risk locking in the status quo at scale.

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