Agilysys(AGYS)2022-10-25 23:53Financial Data and Key Metrics Changes - Fiscal 2023 Q2 revenue reached a record 37.9 million in the prior year [25][18] - Adjusted EBITDA for the quarter was 2.3 million, down from 29 million, driven by a 29% year-over-year increase in subscription revenue [21] - Subscription revenue constituted 49% of total recurring revenue, with add-on software modules making up 16% of subscription revenue [28][21] Market Data and Key Metrics Changes - Sales in the gaming casinos and EMEA verticals set new quarterly sales records, while Asia sales remained slow but showed increased prospective customer meetings [6][7] - The company is expanding its presence in the Middle East, hiring a local sales leader in Dubai to tap into the growing hospitality market [9] Company Strategy and Development Direction - The company is focused on increasing sales and marketing investments, with a 55% year-over-year increase in sales and marketing expenses [9] - The launch of the Versa PMS platform is progressing well, with seven customer resorts already live [37][39] - The company aims to maintain and improve current sales momentum despite macroeconomic challenges [8][6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about maintaining sales momentum, citing the hospitality industry's growing demand for technology solutions [8] - The company expects fiscal 2023 annual revenue to be in the range of 195 million, driven by approximately 30% year-over-year subscription revenue growth [33] - Management acknowledged challenges in services revenue and margins but expects gradual improvement as the transition to a subscription model continues [19][20] Other Important Information - The company is undergoing a transformation from an older technology provider to a subscription-based model, which is challenging but necessary for long-term growth [19] - The number of properties using four or more software modules has more than doubled in the last 1.5 years, indicating strong customer engagement [15] Q&A Session Summary Question: Progress on the Versa PMS platform - Management confirmed that Versa is ahead of schedule, with seven customer resorts live and positive reception [37][39] Question: Performance of chain hotels post-pandemic - Management noted that while not back to pre-pandemic levels, chain hotel business has improved significantly [41] Question: Impact of new marketing team on visibility - Management reported that the new marketing team has made a significant positive impact, with increased sales and marketing expenses leading to better visibility [43][44] Question: Sales rep quotas and win rates - Management indicated that while exact numbers were not available, win rates remain strong, particularly at the demo stage [50] Question: Improvement in Asia sales - Management highlighted improvements in the Asia sales team and increased activity levels, with several promising opportunities emerging [53] Question: Service business performance - Management explained that delays in multi-product implementations contributed to lower-than-expected service revenue, but they expect improvements moving forward [58] Question: Guidance reiteration - Management reiterated that fiscal year guidance remains on track, with confidence in achieving set targets [60] Question: Sales productivity of new reps - Management stated that while new sales reps are contributing well, there is still room for improvement in closing rates as more reference customers are established [65]