Core Insights - Agilysys, Inc. is a leading provider of software solutions for the hospitality industry, focusing on enhancing guest experiences and streamlining operations for hotels and resorts [1] Investment Activity - Director Melvin L. Keating purchased 60 shares at $83.83 each, increasing his total ownership to 34,807 shares, reflecting confidence in the company's future despite a current stock price of $82.58, which has decreased by 7.47% or $6.67 [2][6] - Brown Capital Management LLC reduced its stake in Agilysys by 25.3%, selling 163,516 shares, yet it still represents 2.1% of their portfolio, valued at approximately $50.7 million [3][6] - Wasatch Advisors LP increased its stake by 5.3%, now owning over one million shares valued at $115.2 million, while Geneva Capital Management LLC raised its stake by 6.7%, indicating strategic interest in Agilysys despite stock price fluctuations [4][6] Stock Performance - The stock has fluctuated between a low of $80.90 and a high of $89.22 today, with a yearly range of $63.71 to $145.25, and the company's market capitalization is approximately $2.32 billion, with a trading volume of 374,318 shares on NASDAQ [5]

So far, the Q4 earnings season is kicking off on a rather sour note, as investors look for any and all excuses to sell off expensive tech stocks amid additional geopolitical and macroeconomic woes. Agilysis ( AGYS ), the hospitality softwareWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular c ...

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Core Insights - Agilysys reported revenue of $80.39 million for the quarter ended December 2025, marking a year-over-year increase of 15.6% and exceeding the Zacks Consensus Estimate by 1.83% [1] - The company's EPS for the same period was $0.42, which is an increase from $0.38 a year ago, but fell short of the consensus estimate of $0.46, resulting in an EPS surprise of -8.04% [1] Revenue Breakdown - Net revenue from Products was $10.68 million, slightly above the estimated $10.22 million, showing no change compared to the previous year [4] - Net revenue from Subscription and Maintenance reached $52.01 million, surpassing the average estimate of $51.03 million, with a year-over-year increase of 17.2% [4] - Net revenue from Professional Services was reported at $17.7 million, close to the estimated $17.77 million, reflecting a significant year-over-year increase of 22% [4] Stock Performance - Over the past month, Agilysys shares have returned -11.4%, contrasting with a +0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

分组1 - Agilysys reported quarterly earnings of $0.42 per share, missing the Zacks Consensus Estimate of $0.46 per share, but showing an increase from $0.38 per share a year ago, resulting in an earnings surprise of -8.04% [1] - The company posted revenues of $80.39 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 1.83% and increasing from $69.56 million year-over-year [2] - Agilysys has surpassed consensus revenue estimates four times over the last four quarters, indicating a positive trend in revenue performance [2] 分组2 - The stock has underperformed the market, losing about 9.4% since the beginning of the year compared to the S&P 500's gain of 1% [3] - The current consensus EPS estimate for the coming quarter is $0.47 on revenues of $81.59 million, and for the current fiscal year, it is $1.66 on revenues of $316.53 million [7] - The Computer - Integrated Systems industry, to which Agilysys belongs, is currently in the top 27% of Zacks industries, suggesting a favorable industry outlook [8]

Management highlighted momentum in Food Service Management (FSM), saying year-to-date FSM sales through the first three quarters of fiscal 2026 had already exceeded full-year sales in each of the prior two years, with fiscal 2026 potentially shaping up as a best-ever or near-best year for the vertical.Casino gaming, which management described as its strongest sales vertical for several years, experienced a “relative sales slowdown” in October and November but “recovered well” in December. Srinivasan said De ...

Agilysys (NasdaqGS:AGYS) Q3 2026 Earnings call January 26, 2026 04:30 PM ET Company ParticipantsBrian Schwartz - Managing DirectorDave Wood - CFOGeorge Sutton - Managing DirectorJessica Hennessy - VP of Investor Relations and OperationsMatthew Filek - Senior Equity Research AssociateMatthew VanVliet - Managing Director, Equity ResearchMayank Tandon - Managing DirectorRamesh Srinivasan - President and CEOConference Call ParticipantsAllan Verkhovski - Director and Application Software AnalystNehal Chokshi - M ...

Financial Data and Key Metrics Changes - Fiscal 2026 Q3 revenue reached a record $80.4 million, a 15.6% increase from $69.6 million in the prior year [19][12] - Recurring revenue was $52 million, up 17.2% year-over-year, representing 64.7% of total revenue [13][22] - Subscription revenue was a record $34.9 million, 23.1% higher than the prior year [14][19] - Adjusted EBITDA was $17.3 million, compared to $14.7 million in the year-ago quarter, maintaining a 20% of revenue guidance [24][25] Business Line Data and Key Metrics Changes - The Hotels, Resorts, and Cruise Ships (HRC) sales vertical had the best Q3 sales quarter on record, with significant new customer wins [6][7] - Food Service Management (FSM) sales for the first three quarters of fiscal 2026 are already higher than the full year sales of the previous two years [8] - Subscription SaaS sales are up 37% year-over-year, with cumulative sales nearing 95% of the previous best full year [9][19] Market Data and Key Metrics Changes - International sales were somewhat lackluster in Q3 but are expected to improve as the company establishes its reputation globally [9] - The cumulative international sales for the first three quarters are close to making fiscal 2026 the second-best international sales year [9] Company Strategy and Development Direction - The company is focused on modernizing its product ecosystem and leveraging AI tools to improve operational efficiencies and implementation services [16][27] - The management emphasized the importance of a solid foundation of a world-class product set and an ecosystem of hospitality software solutions [27][28] - The company is optimistic about future growth opportunities, particularly in the PMS segment, which is entirely software-based [28][32] Management's Comments on Operating Environment and Future Outlook - Management noted a temporary slowdown in casino gaming sales during October and November, but sales rebounded in December [8][36] - The company expects fiscal 2026 full-year revenue to reach $318 million, with subscription revenue growth guidance raised to 29% [18][25] - Management expressed confidence in the business's ability to drive top-line growth while improving profitability levels [32] Other Important Information - The company has paid down its credit revolver by $24 million, leaving it debt-free [25] - The implementation of the Marriott PMS project is progressing well, with successful pilot property implementations completed [11][39] Q&A Session Summary Question: Insights on gaming and casino space weakness - Management noted the slowdown was temporary and attributed it to various factors, but December sales rebounded [36] Question: Marriott PMS rollout expectations - The pilot phase was successful, and implementation waves are expected to increase in size over the coming months [38][39] Question: International performance specifics - Management stated there are no sales capacity issues and emphasized the focus on larger deals internationally [45] Question: AI capabilities impact on competition - AI is being integrated across the platform, enhancing competitive advantages, but no significant competitive responses have been observed [54][56] Question: Subscription revenue growth guidance - The implied growth for Q4 is slightly above 20%, influenced by the Book4Time acquisition [58] Question: POS business improvement drivers - The modernization of the POS system has settled well, leading to improved win rates and competitive advantages [64][66] Question: Future demand in the gaming segment - Management indicated there is still catch-up demand in the gaming segment beyond December [68][69] Question: Reference customer situation - The volume of customers willing to take reference calls has increased significantly, particularly for modernized solutions [75][78]

Financial Data and Key Metrics Changes - Fiscal 2026 Q3 revenue reached a record $80.4 million, a 15.6% increase from $69.6 million in the prior year quarter, marking the 16th consecutive record revenue quarter [11][18] - Recurring revenue was $52 million, up 17.2% year-over-year, representing 64.7% of total revenue for the quarter [12][20] - Subscription revenue hit a record $34.9 million, a 23.1% increase compared to the prior year quarter, with subscription bookings up 37% year-over-year [12][18] Business Line Data and Key Metrics Changes - The Hotels, Resorts, and Cruise Ships (HRC) sales vertical had its best Q3 sales quarter on record, driven by significant new customer wins [5] - Food Service Management (FSM) sales for the first three quarters of fiscal 2026 surpassed full-year sales from the previous two years, indicating strong growth potential [6] - Casino gaming experienced a sales slowdown in October and November but rebounded in December, marking the best December month in the company's history [6][11] Market Data and Key Metrics Changes - Cumulative international sales for the first three quarters are close to making fiscal 2026 the second-best international sales year, although Q3 international sales were described as lackluster [7] - Subscription SaaS sales for the first three quarters reached 95% of the previous best full-year sales, with a year-over-year increase of 37% [8] Company Strategy and Development Direction - The company is focused on leveraging AI tools to improve implementation efficiencies and reduce customer delays, which is expected to enhance sales and profitability [15][16] - The management emphasized the competitive advantage gained from a modernized cloud-native product ecosystem, which is difficult for competitors to replicate [26][27] - The company is optimistic about future growth opportunities, particularly in the PMS segment, which is entirely software-based [27][32] Management's Comments on Operating Environment and Future Outlook - Management noted that the total addressable market remains large relative to the company's size, with significant growth possibilities ahead, especially in the PMS business [27] - The company expects fiscal 2026 full-year revenue to reach $318 million, with subscription revenue growth guidance maintained at 29% [17][24] - Management expressed confidence in the business's ability to drive top-line growth while improving profitability levels, anticipating exciting growth in the next couple of fiscal years [32] Other Important Information - The company reported a free cash flow of $22.7 million for the quarter, compared to $19.7 million in the prior year quarter, indicating strong financial health [24] - The company has maintained a debt-free status after paying down its credit revolver by $24 million in the first half of the fiscal year [24] Q&A Session Summary Question: Insights on gaming and casino space weakness - Management noted the sales slowdown in October and November was temporary, with a strong recovery in December, and did not speculate on specific causes [34][35] Question: Marriott PMS rollout expectations - The pilot phase for the Marriott PMS project was successful, and implementation waves are expected to increase in size and scope in the coming months [36][38] Question: International performance and sales capacity - Management confirmed no sales capacity issues and highlighted ongoing efforts to secure larger deals internationally, despite some quarter-to-quarter fluctuations [44][46] Question: AI capabilities and competition - AI is being integrated across the platform, enhancing operational efficiency and competitive advantage, although no significant competitive responses have been observed [53][55] Question: Professional services gross margins - Margins were impacted by seasonal factors and lower utilization during the holiday period, with no reliance on third-party labor for implementations [87][88] Question: Product development spend and AI impact - While AI is improving product development speed, the demand for innovation remains high, and operational leverage may materialize in FY27 and beyond [90]

Revenue Growth - Total net revenue increased by $10.8 million, or 15.6%, during the third quarter of fiscal 2026 compared to the same period in fiscal 2025, reaching $80.39 million[107] - Total net revenue increased by $35.0 million, or 17.4%, during the first nine months of fiscal 2026 compared to the same period in fiscal 2025[123] - Subscription and maintenance revenue rose by $7.6 million, or 17.2%, driven by continued growth in subscription-based service revenue, totaling $52.01 million[107] - Subscription and maintenance revenue rose by $27.7 million, or 22.4%, driven by growth in subscription-based services, including a 32.6% increase in total subscription revenue[124] Profitability - Gross profit increased by $6.4 million, or 14.6%, totaling $50.24 million, while gross profit margin slightly decreased from 63.0% to 62.5%[109] - Gross profit increased by $19.6 million, or 15.4%, while the gross profit margin decreased from 63.0% to 62.0%[125] - Operating income rose by $4.3 million, or 58.3%, reaching $11.73 million, with an operating income percentage of 14.6%[107] - Operating income increased by $13.1 million, or 75.9%, with an operating income percentage of 12.9% compared to 8.6% in the prior year[123] Expenses - Product development expenses increased by $4.0 million, or 26.4%, due to hiring and increased compensation rates, totaling $18.93 million[110] - Product development expenses rose by $8.3 million, or 18.2%, due to increased hiring and compensation rates[126] - Sales and marketing expenses increased by $5.9 million, or 23.6%, attributed to higher compensation rates and increased marketing activities[127] Tax and Interest - The effective tax rate improved to 23.2% from 50.5%, with the income tax provision decreasing by $927, or 23.7%, totaling $2.99 million[118] - The effective tax rate for the nine months ended December 31, 2025, was 20.8%, significantly higher than 4.7% in the prior year[133] - Interest income increased by $69, or 16.6%, totaling $485, while interest expense decreased by $627, or 95.4%, totaling $(30)[115] - Interest income decreased by $2.0 million, or 61.2%, to $1.3 million for the nine months ended December 31, 2025[131] Cash Flow and Liquidity - As of December 31, 2025, cash and cash equivalents totaled $81.5 million, with 92% located in the United States[142] - Net cash provided by operating activities for the nine months ended December 31, 2025, was $34.2 million, an increase from $28.0 million in 2024[143] - Cash-based earnings were reported at $55.9 million, with net income of $26.5 million and $29.4 million in non-cash adjustments[143] - Cash flow used in investing activities amounted to $(1.4) million, primarily for property and equipment purchases[144] - Financing activities included $24.0 million in debt repayments during the nine months ended December 31, 2025[144] - The company believes that cash flow from operating activities and access to capital markets will meet its liquidity requirements[142] Acquisitions and Investments - The company acquired Book4Time for $145.8 million, partially funded by a credit agreement[99] - The company aims to improve shareholder value by investing in product enhancements and expanding customer reach both vertically and geographically[103] - The company completed no business combinations during the nine months ended December 31, 2025, after acquiring Book4Time for $145.8 million in the previous year[140] Accounting and Risk - There have been no material changes in significant accounting policies since March 31, 2025[147] - There have been no material changes in market risk exposures since March 31, 2025[149] - The company has not entered into any off-balance sheet arrangements that could affect its financial condition[146] - Forward-looking statements indicate management's expectations and are subject to risks and uncertainties that could cause actual results to differ[148]