Agilysys(AGYS) - 2026 Q2 - Quarterly Report

Revenue Growth - Total net revenue increased by $11.0 million, or 16.1%, during the second quarter of fiscal 2026 compared to the same period in fiscal 2025, reaching $79.3 million[105] - Total net revenue increased by $24.2 million, or 18.4%, during the first half of fiscal 2026 compared to the first half of fiscal 2025, reaching $155.976 million[120] - Subscription and maintenance revenue rose by $9.5 million, or 23.0%, driven by growth in subscription-based services, including $5.3 million from Book4Time[106] - Subscription and maintenance revenue grew by $20.1 million, or 25.3%, driven by a significant increase in subscription-based service revenue, including $10.4 million from Book4Time[120] Profitability - Operating income surged to $14.1 million, a 242.9% increase compared to the prior year, with an operating income percentage of 17.8%[105] - Operating income rose to $18.668 million, an increase of $8.794 million or 89.1%, with an operating income percentage of 12.0% compared to 7.5% in the prior year[120] - Gross profit increased by $5.8 million, or 13.3%, while gross profit margin decreased from 63.3% to 61.7%[107] - Gross profit increased by $13.2 million, or 15.9%, while the gross profit margin decreased from 63.0% to 61.7% due to changes in revenue composition[122] Operating Expenses - Operating expenses, excluding other charges and legal settlements, rose by $3.2 million, or 8.7%, during the second quarter of fiscal 2026[108] - Operating expenses, excluding other charges and legal settlements, increased by $12.3 million, or 17.5%, during the first half of fiscal 2026[123] - Product development expenses increased by $1.7 million, or 10.2%, due to hiring and increased compensation rates[109] - Product development expenses increased by $4.4 million, or 14.2%, due to hiring and increased compensation rates across development teams[123] - Sales and marketing expenses surged by $5.8 million, or 36.5%, attributed to hiring and increased compensation rates, as well as marketing activities related to the Book4Time acquisition[124] Cash Flow and Financial Position - As of September 30, 2025, the company had cash and cash equivalents of $59.3 million, with 88% located in the United States[140] - The company has access to a revolving credit facility of $75 million, which was partially drawn to fund business acquisitions, including $145.8 million for Book4Time[138] - Net cash provided by operating activities increased to $10.867 million in the six months ended September 30, 2025, compared to $7.688 million in 2024, driven by cash-based earnings of $35.0 million[142] - Cash flow used in investing activities was $(850,000) primarily for property and equipment purchases, a significant decrease from $(146.465 million) in the previous year[143] - Financing activities resulted in a cash outflow of $(23.965 million) due to debt repayments and share repurchases[143] - The total decrease in cash for the six months ended September 30, 2025, was $(13.705 million), an improvement from $(90.003 million) in 2024[142] Tax and Other Financial Information - The effective tax rate for the quarter was 25.5%, with an income tax provision of $4.0 million[115] - The company recorded $6.1 million in employee retention credits during the six months ended September 30, 2025, as part of the CARES Act[135] - There were no significant changes to contractual obligations as of September 30, 2025, compared to the Annual Report for the year ended March 31, 2025[144] - The company has not entered into any off-balance sheet arrangements that could impact its financial condition[145] - There have been no material changes in significant accounting policies since March 31, 2025[146] - Forward-looking statements indicate management's expectations and are subject to risks and uncertainties that could cause actual results to differ materially[147] - There have been no material changes in market risk exposures since March 31, 2025[148] Acquisition - The company acquired Book4Time for $145.8 million, enhancing its position in the spa management SaaS market[97]