Agilysys(AGYS) - 2022 Q3 - Quarterly Report

Revenue Recognition - Revenue recognized at a point in time totaled $8.1 million and$ 24.2 million for the three and nine months ended December 31, 2021, compared to $7.6 million and$ 19.4 million for the same periods in 2020[42]. - Revenue recognized over time totaled $31.4 million and$ 91.8 million for the three and nine months ended December 31, 2021, compared to $29.1 million and$ 81.4 million for the same periods in 2020[42]. - Total net revenue for the three months ended December 31, 2021, was $39.46 million, an increase of 7.6% compared to$ 36.68 million for the same period in 2020[89]. - Total net revenue increased by $15.2 million, or 15.1%, during the first nine months of fiscal 2022 compared to the same period in fiscal 2021[106]. Income and Expenses - Net income for the three months ended December 31, 2021, was$ 1,542,000, compared to a net loss of $2,070,000 for the same period in 2020[61]. - For the nine months ended December 31, 2021, net income was$ 4,496,000, an increase from $3,280,000 in the prior year[61]. - Operating income for the three months ended December 31, 2021, was$ 1.61 million, a significant improvement from an operating loss of $1.81 million in the same period of 2020[89]. - Operating income for the first nine months of fiscal 2022 was$ 4.8 million, representing an operating income percentage of 4.1%[104]. - Total gross profit increased by $7.9 million, or 12.1%, for the first nine months of fiscal 2022, while gross profit margin decreased from 65.3% to 63.6%[108]. Tax and Legal Matters - The effective tax rate for the three months ended December 31, 2021, was 1.5%, compared to (9.6)% for the same period in 2020[54]. - The effective tax rate for the nine months ended December 31, 2021, was 5.6%, down from 8.7% in the same period of fiscal 2020[114]. - Legal settlements increased by$ 0.3 million in the first nine months of fiscal 2022 due to a lawsuit settlement involving a former employee[111]. Share-Based Compensation - Total share-based compensation expense for the three months ended December 31, 2021, was $3,839,000, down from$ 6,630,000 in the same period of 2020[66]. - As of December 31, 2021, total unrecognized share-based compensation expense related to non-vested service condition SSARs was $6.3 million, expected to be recognized over a weighted-average vesting period of 1.2 years[68]. - As of December 31, 2021, total unrecognized share-based compensation expense related to unvested restricted stock was$ 5.4 million, expected to be recognized over 2.3 years[71]. Operating Costs and Liabilities - Total accrued liabilities decreased from $11.233 million as of March 31, 2021, to$ 8.385 million as of December 31, 2021[49]. - The company recorded cash payments for operating leases of $3,676,000 for the nine months ended December 31, 2021, down from$ 4,039,000 in the same period of 2020[51]. - Operating expenses increased by $8.2 million, or 13.9%, in the first nine months of fiscal 2022 compared to the same period in fiscal 2021[109]. Revenue Streams - Products revenue increased by 6.6% to$ 8.10 million from $7.60 million year-over-year[89]. - Support, maintenance, and subscription services revenue rose by 10.0% to$ 25.14 million from $22.85 million year-over-year[89]. - Subscription revenue increased by$ 2.3 million, or 10.0%, during the third quarter of fiscal 2022, driven by sales of newer cloud-native add-on modules[102]. - Professional services revenue increased by $3.7 million, or 23.2%, as customers resumed service activity[106]. Investments and Acquisitions - The company completed the acquisition of ResortSuite Inc. for approximately$ 25 million, enhancing its offerings in the multi-amenity and resort market[75]. - The company expects to acquire ResortSuite for approximately $25 million, with$ 22.7 million already paid in January 2022[117]. - The company plans to invest a portion of its cash on hand to enhance existing software products and develop new ones, focusing on customer-first strategies and international expansion[84]. Cash Flow and Debt - Cash flow from operating activities was $21.8 million in the first nine months of fiscal 2022, up from$ 15.1 million in the same period of fiscal 2021[118]. - Total debt remained approximately $0.1 million as of December 31, 2021, primarily consisting of finance lease obligations[117].