Core Viewpoint - Agilysis reported strong quarterly results that significantly exceeded analyst expectations, leading to a 22% increase in share price on the day of the announcement [1]. Financial Performance - In the fiscal fourth quarter of 2025, Agilysis achieved net revenue of over $74 million, a 19% increase compared to the same period last year, driven by a nearly 43% rise in subscription revenue [2]. - The company reported GAAP net income of $3.9 million, up from $3 million year-over-year, while non-GAAP net income per share rose to $0.54 from $0.32 in the fourth quarter of fiscal 2024 [4]. - The reported revenue surpassed analyst expectations, which were slightly under $71.6 million, and adjusted net income estimates were at $0.35 per share [4]. Management Commentary - CEO Ramesh Srinivasan highlighted the accelerating customer demand for their cloud-native hospitality software solutions, noting that product, recurring revenue, and services backlog reached all-time highs [5]. Future Guidance - For fiscal 2026, Agilysis is guiding for revenue between $308 million and $312 million, with adjusted EBITDA expected to be 20% of revenue [5].

Core Insights - The stock market is currently near year-to-date highs, recovering from previous declines related to tariffs, despite potential recession indicators emerging [1] Group 1: Market Conditions - The stock market has erased all declines that occurred post-tariff announcements, indicating a strong recovery [1] - There are signs that the economy may be entering a recession, as various indicators have begun to decline [1] Group 2: Analyst Background - Gary Alexander has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and has advised several seed-round startups [1] - He has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications, with his articles reaching audiences through popular trading apps like Robinhood [1]

Core Insights - Agilysys reported revenue of $74.27 million for the quarter ended March 2025, reflecting a year-over-year increase of 19.4% and surpassing the Zacks Consensus Estimate by 4.20% [1] - The company's EPS for the quarter was $0.54, significantly higher than the $0.32 reported in the same quarter last year, resulting in an EPS surprise of 107.69% compared to the consensus estimate of $0.26 [1] Revenue Breakdown - Net revenue from Products was $10.25 million, slightly above the average estimate of $10.03 million, but down 6.7% year-over-year [4] - Subscription and maintenance revenue reached $46.20 million, exceeding the average estimate of $45.39 million, with a year-over-year increase of 26.3% [4] - Professional services revenue was reported at $17.83 million, surpassing the estimated $15.85 million, marking a 21.7% increase compared to the previous year [4] Stock Performance - Agilysys shares have returned 23.8% over the past month, outperforming the Zacks S&P 500 composite, which saw a 13.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1 - Agilysys reported quarterly earnings of $0.54 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, and showing an increase from $0.32 per share a year ago, resulting in an earnings surprise of 107.69% [1] - The company achieved revenues of $74.27 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.20%, and up from $62.22 million year-over-year [2] - Agilysys has outperformed consensus EPS estimates in all four of the last quarters [2] Group 2 - The stock has underperformed the market, losing approximately 34.7% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $73.98 million, and for the current fiscal year, it is $1.63 on revenues of $317.63 million [7] - The Computer - Integrated Systems industry, to which Agilysys belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Financial Data and Key Metrics Changes - Fiscal year 2025 revenue reached a record $275.6 million, a 16% increase from the previous year, despite a 16% decline in one-time product revenue [18][24][29] - Q4 revenue was a record $74.3 million, up 19.4% from $62.2 million in the prior year quarter [15][23] - Subscription revenue for Q4 was $29.8 million, growing by 42.7% year-over-year, representing 64.4% of total recurring revenue [16][26] - Full fiscal year 2025 adjusted EBITDA was $53.8 million, compared to $37.1 million in the prior year [29] Business Line Data and Key Metrics Changes - Subscription SaaS software and services had a record sales year, with PMS and related add-on modules sales up 58% compared to the previous best year [7][8] - Managed food services (FSM) sales in Q4 were the best of the year, with sales in the second half of fiscal 2025 nearly double that of the first half [9][10] - POS sales in Q4 were 27% higher than Q3 and 16% higher than the previous highest Q2 quarter [8][24] Market Data and Key Metrics Changes - International sales showed positive signs of consistent growth, although still dependent on significant wins [10] - The current global demo plus stage sales pipeline is at a record level, 18% higher than the previous year [13] Company Strategy and Development Direction - The company is focused on maintaining investments in various areas, including cybersecurity, product innovation, and customer support, to fuel future revenue growth [21] - The modernization of the POS platform has been completed, enhancing adaptability and supply chain management [20] - The company aims to achieve subscription revenue growth of 25% in fiscal year 2026, with total revenue expected to be in the range of $308 million to $312 million [31][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future prospects despite macroeconomic challenges, citing a strong position in the hospitality technology market [20][35] - The company has seen significant growth in annual revenue and subscription revenue over the past three years, indicating a successful transformation [34] Other Important Information - The company has expanded its sales teams significantly, particularly in the hotels and resorts vertical, to enhance market presence [35] - The Book for Time acquisition has been successful, contributing positively to the company's product offerings and sales capabilities [96][97] Q&A Session Summary Question: What attributed to the success in POS bookings this quarter? - Management attributed the improvement to the installation of a fully modernized and unified POS platform, which has enhanced implementation ease and customer demand [39][40] Question: Can you update on the mix of customers using Agilysys implementation teams versus third-party support? - Most implementations are done by Agilysys teams due to the complexity of the software, and the growth in professional services revenue is expected to be normal [42][44] Question: What does the 2026 guidance for subscription revenue imply for organic growth? - The 25% growth includes benefits from the Book for Time acquisition, with organic growth expected to be in the 22-23% range [46] Question: Can you discuss the momentum in add-on sales? - Add-on modules are driving improvement, particularly on the PMS side, due to their value and integration into a unified ecosystem [50][52] Question: How is the beta testing with Marriott progressing? - The testing is going well, with positive feedback from property personnel, although it remains a complex transformational project [67][70] Question: What is the rationale for excluding the Marriott project from fiscal year 2026 guidance? - The project is still in the pilot phase, and its impact on the P&L is not expected to be material until mass rollout [83][84] Question: What is the outlook for international growth? - International markets present a significant growth opportunity, with current customers increasing their spending [92][93]

Financial Data and Key Metrics Changes - Fiscal year 2025 revenue reached a record $275.6 million, a 16% increase from the previous year, despite a 16% decline in one-time product revenue [18][22][28] - Q4 revenue was a record $74.3 million, up 19.4% from $62.2 million in the prior year quarter [22][28] - Subscription revenue for Q4 was $29.8 million, growing by 42.7% year-over-year, representing 64.4% of total recurring revenue [15][22] - Full fiscal year 2025 subscription revenue increased by 39.5% compared to the previous year [18][25] Business Line Data and Key Metrics Changes - Subscription SaaS software and services had a record sales year, with PMS and related add-on modules sales up 58% from the previous best year [6][7] - Managed food services (FSM) sales in Q4 were the best of the year, with sales in the second half of fiscal 2025 nearly double that of the first half [8][10] - POS sales in Q4 were 27% higher than Q3 and 16% higher than the previous highest Q2 quarter [7][10] Market Data and Key Metrics Changes - International sales showed positive signs of consistent growth, although still dependent on large wins [10] - The current global demo plus stage sales pipeline is at a record level, 18% higher than the previous year [13] Company Strategy and Development Direction - The company is focused on maintaining investments in various areas, including cybersecurity, product innovation, and customer support, to fuel future revenue growth [21] - The modernization of the POS platform has been completed, enhancing adaptability and supply chain management [20] - The company aims to continue its transformation into a cloud and subscription-based enterprise software entity [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth despite macroeconomic uncertainties, citing a strong position in the hospitality technology market [20][32] - The company expects full year fiscal 2026 revenue to be in the range of $308 million to $312 million, driven by a 25% year-over-year subscription revenue growth [21][30] Other Important Information - The company has seen a significant increase in professional services revenue, which was up 27.7% year-over-year [23][28] - The cash and marketable securities as of March 31, 2025, were $73 million, down from $144.9 million a year prior, primarily due to the acquisition of Book for Time [28] Q&A Session Summary Question: What drove the improvement in POS bookings? - Management attributed the improvement to the installation of a fully modernized and unified POS platform, which has enhanced their status as a premium provider [36][37] Question: What is the mix of customers using Agilysys implementation teams versus third-party support? - Most implementations are done by Agilysys teams due to the complexity of the software, and the expected growth in professional services is based on normal services revenue [39][40] Question: What does the 2026 guidance imply for organic subscription revenue growth? - The guidance includes about four months of benefit from the Book for Time acquisition, with organic growth expected to be in the 22-23% range [41][42] Question: What is driving the momentum in add-on sales? - The add-on modules provide significant value to the core product, with more customers opting for a unified ecosystem from a single vendor [46][50] Question: How is the Book for Time acquisition performing? - The acquisition is performing well, with strong sales and implementation of the Book for Time product, contributing positively to the overall business [91][93]

Revenue Growth - Fiscal 2025 fourth quarter total net revenue increased 19.4% to a record $74.3 million compared to $62.2 million in the prior-year period[4] - Fiscal 2025 full year total net revenue increased 16.1% to a record $275.6 million compared to $237.5 million in the prior-year period[4] - Total net revenue for the three months ended March 31, 2025, was $74,272,000, an increase of 19.4% compared to $62,221,000 for the same period in 2024[22] Recurring Revenue - Recurring revenue reached a record $46.2 million, accounting for 62.2% of total net revenue, with subscription revenue growing 42.7% year-over-year[4] - Full year recurring revenue was $170.1 million, or 61.7% of total net revenue, with subscription revenue increasing 39.5% year-over-year[4] - Subscription and maintenance revenue grew to $46,198,000, up 26.3% from $36,588,000 year-over-year[22] Profitability - Adjusted EBITDA for fiscal 2025 was a record $53.8 million, compared to $37.1 million in the prior-year period[4] - Operating income for the year ended March 31, 2025, increased to $22,591,000, a 43.5% rise from $15,753,000 in 2024[22] - The company reported an adjusted EBITDA of $53,839,000 for the year ended March 31, 2025, up from $37,069,000 in 2024[27] Net Income - Net income attributable to common shareholders for fiscal 2025 was $23.2 million, or $0.82 per diluted share, down from $85.0 million, or $3.17 per diluted share, in the prior-year period[4] - Net income attributable to common shareholders for the year ended March 31, 2025, was $23,225,000, down from $84,991,000 in 2024 due to a one-time tax benefit in the previous year[22] - Net income attributable to common shareholders for Q1 2025 was $3,925,000, compared to $2,961,000 in Q1 2024, representing a year-over-year increase of 32.4%[28] Cash Flow - Free cash flow for fiscal 2025 was $52.3 million, compared to $40.1 million in fiscal 2024[4] - Free cash flow for Q1 2025 was $26,451,000, slightly down from $29,338,000 in Q1 2024, indicating a decrease of 6.0%[29] - Net cash provided by operating activities for the twelve months ended March 31, 2025, was $55,128,000, an increase from $48,186,000 in the previous year, showing a growth of 14.4%[29] Expenses and Investments - Total operating expenses for the year ended March 31, 2025, were $149,397,000, compared to $128,503,000 in 2024, reflecting increased investment in product development and sales[22] - The company incurred $145,756,000 in cash paid for business combinations during the year ended March 31, 2025[26] Future Outlook - The company expects fiscal 2026 revenue to be between $308 million and $312 million, with 25% subscription revenue growth[8][9] Shareholder Information - The basic weighted average shares outstanding for Q1 2025 were 27,740,000, up from 26,913,000 in Q1 2024, indicating a growth of 3.1%[28] - Adjusted diluted earnings per share for Q1 2025 was $0.54, compared to $0.32 in Q1 2024, marking an increase of 68.8%[28] Asset Management - Cash and cash equivalents decreased to $73,041,000 as of March 31, 2025, from $144,891,000 a year earlier[24] - Total assets increased to $434,370,000 as of March 31, 2025, compared to $350,430,000 in 2024[24] Compensation and Tax Management - The company reported a significant increase in share-based compensation, totaling $5,121,000 in Q1 2025, compared to $4,622,000 in Q1 2024, which is an increase of 10.8%[28] - Tax events resulted in a net tax benefit of $4,296,000 in Q1 2025, compared to a benefit of $577,000 in Q1 2024, indicating a significant improvement in tax management[28]

Core Viewpoint - Analysts project that Agilysys (AGYS) will report quarterly earnings of $0.26 per share, reflecting an 18.8% decline year over year, while revenues are expected to reach $71.28 million, marking a 14.6% increase from the same quarter last year [1] Group 1: Earnings and Revenue Estimates - The consensus EPS estimate for Agilysys has remained unchanged over the last 30 days, indicating a reevaluation of initial estimates by analysts [1] - The consensus estimate for 'Net revenue- Products' is projected at $10.03 million, showing a decline of 8.7% from the prior-year quarter [4] - 'Net revenue- Subscription and maintenance' is expected to reach $45.39 million, reflecting a growth of 24.1% from the prior-year quarter [4] - 'Net revenue- Professional services' is anticipated to be $15.85 million, indicating an increase of 8.2% from the prior-year quarter [5] Group 2: Market Performance - Agilysys shares have shown a return of 23.7% over the past month, outperforming the Zacks S&P 500 composite, which increased by 9.9% [5] - Agilysys holds a Zacks Rank 4 (Sell), suggesting it may underperform the overall market in the near future [5]

Company Overview - Agilysys (AGYS) is expected to report a year-over-year decline in earnings of 18.8%, with projected earnings of $0.26 per share for the quarter ended March 2025, while revenues are anticipated to increase by 14.6% to $71.28 million [3][12] Earnings Expectations - The consensus EPS estimate for Agilysys has been revised down by 6.82% over the last 30 days, indicating a reassessment by analysts [4] - A positive Earnings ESP of +1.30% suggests that analysts have recently become more optimistic about Agilysys' earnings prospects, despite the stock carrying a Zacks Rank of 4, which complicates predictions of an earnings beat [10][11] Historical Performance - Agilysys has a history of beating consensus EPS estimates, having surpassed expectations in the last four quarters, including a +11.76% surprise in the most recent quarter [12][13] Market Sentiment - The upcoming earnings report is crucial for Agilysys' stock price movement, with potential for an increase if results exceed expectations, while a miss could lead to a decline [2][14] - Investors are advised to consider other factors beyond earnings results when making investment decisions regarding Agilysys [16] Industry Context - NCR Voyix, another player in the Zacks Computer - Integrated Systems industry, is expected to report a significant year-over-year decline in earnings of 84.6%, with a projected EPS of $0.02 and revenues down 30.1% to $603 million [17] - NCR Voyix has seen a substantial revision of its EPS estimate, up 83.3% over the last 30 days, resulting in a positive Earnings ESP of 50.00%, indicating a likelihood of beating the consensus EPS estimate [18]

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud and unlawful business practices involving Agilysys, Inc. and its executives, following disappointing financial results and a significant stock price drop [1][3]. Financial Performance - On January 21, 2025, Agilysys reported third quarter revenue that was below market expectations and the company's own guidance, leading to a downward revision of its full-year 2025 revenue outlook [3]. - The CEO acknowledged underestimating sales challenges related to the point-of-sale (POS) segment and noted that the year "could have been a lot better" [3]. - Following the announcement, Agilysys's stock price fell by $25.23 per share, or 20.04%, closing at $100.67 per share on January 22, 2025 [3]. Legal Investigation - Pomerantz LLP is actively investigating claims on behalf of Agilysys investors regarding possible securities fraud or other unlawful practices by the company and its officers [1].