Agilysys(US:AGYS)2026-01-26 22:15Revenue 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]