UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 000-5734 AGILYSYS, INC. Identification No.) Alpharetta, Georgia 30022 (Address of principal executive offices) (Zip Code) ...

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For the quarter ended June 2025, Agilysys (AGYS) reported revenue of $76.68 million, up 20.7% over the same period last year. EPS came in at $0.33, compared to $0.30 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $74.47 million, representing a surprise of +2.96%. The company delivered an EPS surprise of -15.38%, with the consensus EPS estimate being $0.39.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street exp ...

Agilysys (AGYS) came out with quarterly earnings of $0.33 per share, missing the Zacks Consensus Estimate of $0.39 per share. This compares to earnings of $0.3 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -15.38%. A quarter ago, it was expected that this software provider for the lodging and leisure sectors would post earnings of $0.26 per share when it actually produced earnings of $0.54, delivering a surprise of +107.69%. ...

Financial Data and Key Metrics Changes - Q1 fiscal 2026 revenue reached a record $76.7 million, a 20.7% increase from $63.5 million in the prior year [25][16] - Subscription revenue grew by 44% year over year, with organic subscription revenue increasing by 24% [17][27] - Recurring revenue, including subscription and annual maintenance, reached $48.6 million, 28% higher than the prior year, representing 63.4% of total revenue [17][27] - Adjusted EBITDA for Q1 was $12.5 million, slightly higher than $12.1 million in the previous year [30] Business Line Data and Key Metrics Changes - Subscription software sales were up 79% year over year, marking the fourth consecutive record sales quarter for subscription sales [26][17] - Professional services revenue increased by 16% year over year, reaching a record $18.1 million [27][16] - Foodservice Management (FSM) vertical saw a significant turnaround, achieving the best sales quarter in two and a half years [6][9] Market Data and Key Metrics Changes - International sales were the second highest on record, indicating strong momentum in the international market [8][9] - The casino gaming sales vertical had its best Q1 period on record, 15% higher than the previous best [8][9] - The company added 24 new customers in Q1, with an average of six products purchased per customer [11][15] Company Strategy and Development Direction - The company is focused on expanding its integrated ecosystem of hospitality software solutions, which is seen as a competitive advantage [12][44] - There is a strong emphasis on AI integration within product offerings to enhance customer experience and operational efficiency [13][80] - The company plans to maintain a disciplined approach to M&A, focusing on opportunities that complement its product set or expand market share [90][92] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the annual revenue guidance of $308 million to $312 million for fiscal 2026 [21][32] - The company anticipates continued growth in subscription revenue, raising its guidance from 25% to 27% for the fiscal year [19][32] - Management noted that operational challenges from the previous fiscal year have been largely resolved, leading to improved sales visibility [72][26] Other Important Information - The company remains debt-free after paying off its credit revolver [31] - The user conference in Q1 was a significant cost driver, impacting sales and marketing expenses [47][30] Q&A Session Summary Question: Sales capacity and productivity trends - Management indicated that sales capacity has increased by 45% year over year, with a focus on hotel and resort verticals [36][38] Question: International market momentum - Management noted that the product ecosystem is strong, and the focus is on installing new projects to create reference customers [42][46] Question: Cost impact of the user conference - The user conference significantly impacted sales and marketing expenses, accounting for most of the increase in that line item [47][50] Question: Sales organization improvements - Management confirmed that the sales structure is in a good place, with ongoing investments in marketing to enhance presence [56][57] Question: Subscription revenue visibility - Management expressed strong visibility into subscription revenue backlog and ongoing sales momentum [85][86] Question: M&A strategy - Management remains patient and conservative regarding M&A, focusing on opportunities that complement existing products or expand market share [90][92]

Financial Data and Key Metrics Changes - Q1 fiscal 2026 revenue reached a record $76.7 million, a 20.7% increase from $63.5 million in the prior year [15][24] - Subscription revenue grew by 44% year over year, with organic subscription revenue increasing by 24% [16][26] - Recurring revenue, including subscription and annual maintenance, reached $48.6 million, up 28% from the prior year [16][26] - Adjusted net income for Q1 was $9.3 million, compared to $8.3 million in the prior year [29] Business Line Data and Key Metrics Changes - Subscription software sales were up 79% year over year, marking a record quarter [25][26] - Professional services revenue increased by 16% year over year, reaching a record $18.1 million [26] - Food Service Management (FSM) vertical saw a significant turnaround, achieving the best sales quarter in two and a half years [8][9] Market Data and Key Metrics Changes - International sales were the second highest for Q1, indicating strong momentum in the international market [8][9] - Casino gaming sales vertical had its best Q1 period on record, up 15% from the previous best [9] Company Strategy and Development Direction - The company is focused on expanding its integrated ecosystem of hospitality software solutions, which is seen as a competitive advantage [12][44] - There is a strong emphasis on AI integration into products to enhance customer experience and operational efficiency [13][80] - The company plans to maintain a disciplined approach to M&A, focusing on opportunities that complement its product set or expand market share [92][95] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the annual revenue guidance of $308 million to $312 million for fiscal 2026 [20][32] - The company anticipates continued growth in subscription revenue, raising its guidance from 25% to 27% for the fiscal year [18][32] - Management noted that operational challenges from the previous fiscal year are largely behind them, contributing to improved sales visibility [73][88] Other Important Information - The company remains debt-free after paying off its credit revolver [30] - The user conference in Q1 significantly impacted sales and marketing expenses, which are expected to normalize throughout the year [28][47] Q&A Session Summary Question: Sales capacity and productivity trends - Management indicated that sales capacity has increased by 45% year over year, with a focus on hotel resorts and the establishment of an inside sales team [36][38] Question: International market momentum - Management noted that the international business is gaining traction, primarily through larger deals, and emphasized the importance of creating reference customers [42][46] Question: User conference costs impact on profit margins - The user conference was a significant contributor to increased sales and marketing expenses, with costs estimated to be around $3 million [47][49] Question: Subscription revenue visibility and growth potential - Management confirmed strong visibility in subscription revenue backlog and highlighted the potential for growth from faster go-lives and better cross-sales [85][88] Question: M&A strategy - Management remains patient and conservative regarding M&A opportunities, focusing on complementary products or market share gains [92][95]

Exhibit 99.1 AGILYSYS ANNOUNCES RECORD REVENUE OF $76.7M IN FISCAL 2026 FIRST QUARTER Includes Subscription Revenue Growth of 44% The Company is raising full year subscription revenue growth guidance to 27% year-over-year while maintaining full year fiscal 2026 total revenue to be $308 million to $312 million. Adjusted EBITDA expectations remain at 20% of revenue for the full fiscal year. Subscription revenue growth expectations exclude any material revenue from the large scale PMS project currently in prog ...

Summary of Agilysys (AGYS) FY Conference Call - June 03, 2025 Company Overview - Agilysys is a leading software provider for the hospitality industry, specializing in POS solutions and property management systems (PMS) [2][5] - The company has a global presence in approximately 118 countries, with major offices in Alpharetta, Atlanta, and Las Vegas [10][12] Core Business and Market Segments - Casino gaming constitutes about 50% of Agilysys' revenue, making it the largest vertical for the company [13] - Other significant verticals include hotels, resorts, cruise ships, and food service management (FSM) [14][18] - Agilysys has established relationships with major clients such as Royal Caribbean and Carnival UK in the cruise sector [15] Product Offerings - The company has developed a modern cloud-native hospitality ecosystem that includes POS, PMS, and inventory procurement systems [7][24] - Agilysys emphasizes customer-centric solutions, allowing for both cloud and on-premise installations [33][35] - The product suite includes loyalty promotions, digital marketing, and guest-facing kiosks, enhancing guest experiences [50][51] Financial Performance - Agilysys reported a revenue of $275.6 million for the fiscal year ending March 2025, with guidance for $308 million to $312 million for the next fiscal year [72][74] - Subscription revenue has grown by 27% annually over the last four years, with a projected growth of 25% for the upcoming year [36][74] - Recurring revenue constitutes approximately 62% of total revenue, with subscription revenue being a significant driver [71][72] Growth Opportunities - The company has identified international markets as a significant growth area, currently representing only 8% of total revenue [25][22] - Agilysys aims to increase its market share in PMS, currently connected to less than 300,000 rooms, with potential to triple this through new contracts like the one with Marriott [63][64] Challenges and Strategic Focus - Agilysys faces challenges in brand recognition and market presence, as it is perceived as an older company [77][78] - The company is focused on product innovation and customer satisfaction, with a strong emphasis on R&D, employing 1,500 out of 2,300 employees in this area [41][43] - The management is committed to maintaining a hospitality-focused strategy, avoiding distractions from other markets [39][40] Technological Advancements - Agilysys is integrating AI into its products to enhance efficiency and improve customer interactions, such as in booking systems and image generation for menus [55][57] - The company has modernized its product offerings, ensuring that all core products are cloud-native and capable of on-premise deployment [34][46] Conclusion - Agilysys is positioned for significant growth within the hospitality technology sector, leveraging its innovative product suite and expanding into international markets while addressing brand recognition challenges [66][70]

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment returns Company Summaries - **PVH (PVH)**: Specializes in designing and marketing branded apparel, with a Zacks Consensus Estimate for current year earnings increasing by 8.3% over the last 60 days [1] - **Maximus (MMS)**: Operates global government health and human services programs, with a Zacks Consensus Estimate for current year earnings increasing by 6.7% over the last 60 days [2] - **Allianz (ALIZY)**: Provides property-casualty insurance, life/health insurance, and asset management services, with a Zacks Consensus Estimate for current year earnings increasing by 6.3% over the last 60 days [2] - **Popular (BPOP)**: Offers a comprehensive suite of banking and financial services, with a Zacks Consensus Estimate for current year earnings increasing by 4.8% over the last 60 days [3] - **Agilysys (AGYS)**: A leading provider of IT solutions for corporate and public-sector customers, with a Zacks Consensus Estimate for current year earnings increasing by 4.4% over the last 60 days [4]

Revenue Growth - Total net revenue increased by $38.2 million, or 16.1%, in fiscal 2025 compared to fiscal 2024, reaching $275.6 million[192] - Subscription and maintenance revenue grew by $32.0 million, or 23.2%, driven by continued growth in subscription-based revenue, including service to Book4Time customers[192] - Professional services revenue increased by $13.9 million, or 27.7%, due to higher sales and service activity[192] - Total net revenue for fiscal 2024 was $237.5 million, an increase of $39.4 million or 19.9% compared to fiscal 2023[206] - Subscription and maintenance revenue grew by $19.8 million or 16.7%, driven by a 29.6% increase in subscription-based revenue[207] - Professional services revenue increased by $14.2 million or 39.2%, reflecting higher sales and service activity[207] - Revenue from international operations constituted 10% of total revenue in fiscal 2025, compared to 6% in fiscal 2024 and 7% in fiscal 2023[251] Profitability - Gross profit increased by $27.7 million, or 19.2%, with gross profit margin rising from 60.7% to 62.4%[194] - Operating income rose to $22.6 million, an increase of $6.8 million or 43.4%, with operating income percentage improving from 6.6% to 8.2%[192] - Gross profit rose by $23.4 million or 19.4%, while gross profit margin slightly decreased from 61.0% to 60.7%[208] - Operating expenses increased by $19.6 million or 18.3%, but as a percentage of total revenue, they decreased by 0.7%[209] Expenses - Product development expenses increased by $5.7 million, or 10.0%, due to hiring and increased compensation rates[196] - Sales and marketing expenses rose by $4.7 million, or 16.5%, attributed to hiring and expanded marketing activities[197] - Product development expenses rose by $6.5 million or 12.9% due to increased hiring and compensation rates[210] Cash Flow - Cash flow from operating activities for fiscal 2025 was $55.1 million, up from $48.2 million in fiscal 2024[226][227] - Cash flows used in investing activities for fiscal 2025 were $148.6 million, primarily due to $145.8 million for business combinations and property and equipment purchases[229] - Cash flows used in financing activities for fiscal 2025 were $21.9 million, driven by $49.6 million in debt proceeds and $26.0 million in debt repayments[232] - Cash flows used in financing activities for fiscal 2024 were $8.6 million, primarily due to share repurchases of $6.9 million[233] - Cash flows used in investing activities for fiscal 2024 were $7.6 million, mainly from $8.1 million in property and equipment purchases[230] - Cash flows used in investing activities for fiscal 2023 were $6.9 million, primarily due to $7.3 million in property and equipment purchases[231] Acquisitions - The company acquired Book4Time for $145.8 million, enhancing its position in the spa management SaaS market[183] - The company completed the acquisition of Book4Time for $145.8 million in net cash during the year ended March 31, 2025[224] Tax and Interest - Effective tax rate for fiscal 2025 was 9.4%, influenced by U.S. R&D credits and the release of valuation allowances against foreign deferred tax assets[203] - Interest income decreased by $1.3 million, or 25.6%, to $3.8 million, while total other income, net fell by $1.9 million, or 38.3%, to $3.0 million[201] - Interest income increased to $5.1 million in fiscal 2024, up from $2.2 million in fiscal 2023[216] Other Financial Information - The company had $78.5 million of federal net operating loss carryforwards expiring between fiscal years 2033 to 2039[220] - The cash surrender value of corporate-owned life insurance policies was $1.1 million, recorded under "Other non-current assets" as of the balance sheet date[234] - The present value of future proceeds owed to designated beneficiaries of corporate-owned life insurance policies was $0.1 million, recorded within "Other non-current liabilities"[234] - Share repurchases in fiscal 2025 amounted to $2.7 million to satisfy employee tax withholding on share-based compensation[232] - The company has not entered into any off-balance sheet arrangements that could affect its financial condition[235]