Company Performance - Agilysys (AGYS) has returned approximately 62.8% year-to-date, significantly outperforming the average gain of 36.1% in the Computer and Technology sector [3] - Within the Computer - Integrated Systems industry, Agilysys ranks 40 and has outperformed the industry average gain of 7.5% this year [4] Industry Context - The Computer and Technology sector includes 618 companies and currently holds the 1 position in the Zacks Sector Rank [2] - The Computer - Integrated Systems industry consists of 10 companies, with Agilysys being a notable performer [4] Analyst Sentiment - The Zacks Consensus Estimate for Agilysys' full-year earnings has increased by 31.5% in the past quarter, indicating a positive shift in analyst sentiment [7] - Agilysys holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook for the stock [6]

Core Viewpoint - Agilysys (AGYS) has experienced a significant share price increase of 56.6% year-to-date, outperforming both the Zacks Computer & Technology sector and the Zacks Computer – Integrated Systems industry, attributed to strong top-line growth from innovative solutions, strategic acquisitions, and an expanding market presence [1]. Group 1: Growth Drivers - Agilysys is benefiting from a strong growth trajectory, driven by record sales in property management systems and related add-ons that enhance customer operations [2]. - The company has seen increasing subscription revenues, reflecting higher adoption of its solutions, supported by effective sales strategies and an expanding market footprint [2]. - AGYS' InfoGenesis Point-of-Sale solutions are enhancing operational efficiency and guest experiences, particularly in gaming, resorts, and EMEA verticals [3]. Group 2: Recent Developments - Lajitas Golf Resort has adopted 14 solutions from Agilysys to modernize its property, automating tasks and improving services such as check-ins, reservations, and payments [4]. - The recent acquisition of Book4Time, a leading spa management software provider, has been a key growth catalyst, aligning well with Agilysys' nearly 100% subscription-based revenue model [5]. - This acquisition has expanded AGYS' customer base by 30% with minimal overlap and contributed significantly to revenue growth, adding $2.2 million in revenues in the second quarter of fiscal 2025 [6]. Group 3: Financial Outlook - Agilysys expects fiscal 2025 revenues to be between $280 million and $285 million, with subscription revenue growth anticipated to exceed 38% [7]. - The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is $73.02 million, indicating a year-over-year growth of 20.55%, while the earnings consensus is pegged at 34 cents per share, reflecting a year-over-year decline of 2.86% [8]. - For fiscal 2025, the revenue consensus is $281.56 million, indicating year-over-year growth of 18.57%, with earnings expected to grow by 19.09% year-over-year [9]. Group 4: Investment Considerations - Agilysys benefits from a robust portfolio of innovative solutions and strategic acquisitions, positioning it well for continued expansion and market leadership [11]. - The company currently holds a Zacks Rank 2 (Buy), suggesting it may be a favorable time for investors to accumulate the stock [11].

Company Performance - Agilysys (AGYS) has returned 53% year-to-date, outperforming the average return of 33% for Computer and Technology companies [4] - The Zacks Consensus Estimate for AGYS' full-year earnings has increased by 31.5% in the past quarter, indicating stronger analyst sentiment and an improving earnings outlook [4] - Agilysys is currently ranked 2 (Buy) in the Zacks Rank, which highlights stocks with characteristics to outperform the market over the next one to three months [3] Industry Context - Agilysys is part of the Computer - Integrated Systems industry, which includes 10 companies and is currently ranked 65 in the Zacks Industry Rank [6] - The Computer - Integrated Systems industry has gained approximately 10.8% year-to-date, with Agilysys performing better than this group [6] - Another notable stock in the Computer and Technology sector is C3.ai, Inc. (AI), which has returned 45.4% year-to-date and is ranked 2 (Buy) [5]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: Agilysys (AGYS) - Agilysys currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance [3][4]. - The company operates in the lodging and leisure sectors, providing software solutions [5]. Price Performance - Over the past week, AGYS shares have increased by 13.44%, outperforming the Zacks Computer - Integrated Systems industry, which rose by 5.71% [7]. - In the last month, AGYS shares have surged by 34.35%, compared to the industry's 4.83% [7]. - Over the past quarter, AGYS shares have gained 28.92%, and over the last year, they have increased by 60.4%, while the S&P 500 has only moved 7.52% and 33.61%, respectively [8]. Trading Volume - The average 20-day trading volume for AGYS is 249,466 shares, which serves as a bullish indicator when combined with rising stock prices [9]. Earnings Outlook - In the past two months, two earnings estimates for AGYS have been revised upwards, increasing the consensus estimate from $1.20 to $1.31 [11]. - For the next fiscal year, two estimates have also moved higher, with no downward revisions [11]. Conclusion - Given the positive price trends, strong earnings outlook, and favorable momentum indicators, AGYS is positioned as a solid momentum pick for investors [12].

Company Overview - Agilysys (AGYS) is currently ranked 2 (Buy) in the Zacks Rank, indicating a strong potential for outperforming the market in the near term [3] - The stock has shown a year-to-date return of approximately 62.1%, significantly higher than the average return of 28.1% for the Computer and Technology sector [4] Earnings Outlook - Over the past three months, the Zacks Consensus Estimate for Agilysys' full-year earnings has increased by 31.5%, reflecting improved analyst sentiment and earnings outlook [4] Industry Performance - Agilysys operates within the Computer - Integrated Systems industry, which consists of 9 companies and is currently ranked 81 in the Zacks Industry Rank [6] - The industry has seen an average gain of about 13.2% year-to-date, indicating that Agilysys is outperforming its peers within this specific industry [6] Comparative Analysis - Another notable stock in the Computer and Technology sector is C3.ai, Inc. (AI), which has returned 30.3% year-to-date and is also ranked 2 (Buy) [5] - C3.ai operates in the Computers - IT Services industry, which has 40 stocks and is ranked 61, with a year-to-date gain of 17.1% [7]

Industry Overview - The Zacks Computer – Integrated Systems industry includes companies like Seagate Technology, Agilysys, and PAR Technology, benefiting from trends such as advancements in data management, a shift to integrated systems, and increased demand for modern application development [1][2] - Companies are investing in data modernization, cybersecurity, remote work enablement, and supply chain modernization to accelerate digital transformation for enterprise customers [2] Industry Trends - There is a surge in demand for integrated solutions driven by investments in IoT, big data analytics, AI, and blockchain, with opportunities in business analytics, cloud computing, and security solutions [3] - The multi-cloud model is being adopted robustly, allowing enterprises to optimize resource utilization and scalability, with emerging economies expected to drive future growth [4] Challenges - The industry faces supply chain bottlenecks, softening demand for servers, and delays in customer acceptance, leading to significant order backlogs [5] - The ongoing semiconductor chip shortage is impacting the industry, complicating the transition to cloud computing and affecting spending on datacenter systems [6] Market Performance - The Zacks Computer – Integrated Systems industry ranks 79, placing it in the top 32% of over 250 Zacks industries, indicating potential outperformance in the near term [7][8] - The industry's earnings estimate for 2024 has increased by 14.9% since November 30, 2023, reflecting a positive earnings outlook [9] Stock Performance - The industry has underperformed compared to the broader Computer and Technology sector and the S&P 500, returning 25.3% over the past year, while the S&P 500 and sector returned 30% and 32%, respectively [11] - The industry is currently trading at a trailing 12-month P/S ratio of 4.01X, below the S&P 500's 5.63X and the sector's 7.59X [13] Company Highlights - **Seagate Technology**: Positioned as a leader in mass-capacity storage solutions, benefiting from growth in data storage demands driven by AI and cloud computing, with a 14.6% return year to date [14][17] - **Agilysys**: A leading provider of hospitality and retail software solutions, achieving record-high service revenues and a 45.2% return year to date [19][23] - **PAR Technology**: Focused on cloud-based restaurant management solutions, with significant market presence and a 72.1% return year to date [25][27]

Core Viewpoint - Agilysys (AGYS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that upward revisions can lead to higher stock valuations [4][6]. - Agilysys is projected to earn $1.31 per share for the fiscal year ending March 2025, reflecting a year-over-year increase of 19.1% [8]. - Over the past three months, the Zacks Consensus Estimate for Agilysys has risen by 31.5%, indicating a strong upward trend in earnings expectations [8]. Zacks Rating System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, highlighting Agilysys' superior earnings estimate revision feature [9][10].

Financial Data and Key Metrics Changes - Fiscal 2025 Q2 revenue reached a record $68.3 million, a 16.5% increase from $58.6 million in the prior year [27][40] - Recurring revenue grew 21% year-over-year to a record $41.4 million, with subscription revenue increasing 36.6% to $25.1 million [28][44] - Adjusted EBITDA for Q2 was $12.2 million, compared to $8.1 million in the previous year, representing 17.9% of revenue [47] Business Line Data and Key Metrics Changes - Sales in property management systems (PMS) and related products nearly doubled year-over-year, with significant growth in the PMS category [18][20] - Book4Time acquisition added $2.2 million in revenue, increasing the number of customer properties using Agilysys products by 30% [27][52] - Professional services revenue reached a record $16.3 million, up 39.2% from the prior year [36][42] Market Data and Key Metrics Changes - Sales in the U.S. gaming casinos, resorts, and hotel verticals were strong, while the U.S. food service management vertical continued to underperform [17][20] - APAC faced challenges following a strong Q1, impacting overall sales performance [17][20] - The company noted low market share in most sales verticals, indicating significant growth potential [21] Company Strategy and Development Direction - The company aims to expand its ecosystem of hospitality-focused products, leveraging cloud-native technology [21][54] - Increased investments in sales and marketing are planned to enhance market presence and drive growth [21][53] - The integration of Book4Time is expected to enhance competitive positioning within the hospitality sector [12][52] Management Comments on Operating Environment and Future Outlook - Management expressed confidence that external factors like economic conditions would increase the demand for technology that enhances operational efficiency [23] - The company anticipates continued growth in subscription revenue and has raised its full-year revenue guidance to $280 million to $285 million [49][38] - Management remains optimistic about the POS business recovering from previous challenges [51][59] Other Important Information - The company added 18 new customers in Q2, with an average of 5.4 products sold per deal, indicating strong cross-selling opportunities [24][26] - Cash and marketable securities decreased to $54.9 million due to the Book4Time acquisition, with a current debt balance of $38 million [48][49] Q&A Session Summary Question: Clarification on subscription revenue guidance - Management indicated that approximately $10 million of the subscription revenue guidance increase is attributed to Book4Time, with over 25% being organic growth [56] Question: Margins and operating leverage - Management expects margins to remain consistent, with product revenue impacting overall gross margins [58][59] Question: Market size and opportunities from Book4Time - Management highlighted significant opportunities to sell additional products to Book4Time's existing customer base, with a focus on the spa market [62][66] Question: Integration of sales forces post-acquisition - The company plans to unify the sales forces of Agilysys and Book4Time over the next six months to leverage the combined product ecosystem [83][84] Question: Services capacity and backlog management - Management is confident in their services capacity, having increased personnel by 20% and continuing to hire [86][89] Question: EBITDA guidance and Book4Time's impact - Book4Time is expected to be EBITDA accretive, with profitability levels similar to Agilysys [92] Question: Organic subscription revenue expectations - Management noted that the slowdown in POS sales and transformation challenges have impacted organic subscription revenue expectations [95][96]

Core Insights - Agilysys reported revenue of $68.28 million for the quarter ended September 2024, marking a year-over-year increase of 16.5% and exceeding the Zacks Consensus Estimate by 2.44% [1] - The company's EPS for the same period was $0.34, up from $0.25 a year ago, representing a surprise of 30.77% over the consensus estimate of $0.26 [1] Revenue Breakdown - Net revenue from Products was $10.53 million, slightly above the average estimate of $10.42 million, but reflecting a year-over-year decline of 16.7% [3] - Subscription and maintenance revenue reached $41.43 million, surpassing the two-analyst average estimate of $39.60 million, with a year-over-year increase of 21% [3] - Professional services revenue was reported at $16.32 million, in line with the average estimate of $16.31 million, showing a significant year-over-year growth of 39.2% [3] Stock Performance - Over the past month, Agilysys shares have returned +2.1%, slightly outperforming the Zacks S&P 500 composite's +2% change [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [4]

Group 1: Earnings Performance - Agilysys reported quarterly earnings of $0.34 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, and up from $0.25 per share a year ago, representing an earnings surprise of 30.77% [1] - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - Agilysys posted revenues of $68.28 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.44%, compared to $58.62 million in the same quarter last year [2] Group 2: Stock Performance and Outlook - Agilysys shares have increased approximately 29.9% since the beginning of the year, outperforming the S&P 500's gain of 21.8% [3] - The future performance of the stock will depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.33 on revenues of $70.57 million, and for the current fiscal year, it is $1.20 on revenues of $275.02 million [7] Group 3: Industry Context - The Computer - Integrated Systems industry, to which Agilysys belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][8]