Agilysys(AGYS)2022-01-26 02:25Financial Data and Key Metrics Changes - Total revenue for Q3 fiscal 2022 was 36.7 million in the same period last year [28] - Recurring revenue increased by 10% year-over-year, reaching 11.7 million, comprising about 46% of total recurring revenue [29] Business Line Data and Key Metrics Changes - Sales in the gaming and destination resort markets, which constitute over 70% of overall sales, have seen record highs [7][10] - Managed food services sales were at only around 60% of pre-pandemic levels, while hotel chains and cruise ships showed partial recovery [10][12] - Total sales of property management systems (PMS) products surpassed pre-pandemic levels during the first three quarters of fiscal 2022 [15] Market Data and Key Metrics Changes - Sales levels in the APAC region were about 40% of pre-pandemic levels, while EMEA performed better, operating at pre-pandemic levels [12] - Overall global sales across all verticals during the first three quarters of fiscal 2022 were at more than 90% of the levels seen during pre-pandemic fiscal 2020 [12] Company Strategy and Development Direction - The company is focusing on cloud SaaS solutions, with over 90% of new customers preferring this model, leading to a reduction in perpetual license sales [8][14] - The acquisition of ResortSuite is expected to enhance the company's product offerings and create revenue synergies by upselling to ResortSuite's customer base [25][27] Management's Comments on Operating Environment and Future Outlook - Management described the current business environment as a "rollercoaster recovery," with expectations for Q4 to be the best revenue quarter yet [6][35] - The company anticipates continued sequential improvement in subscription recurring revenue and overall recurring revenue, with services revenue expected to improve [35] Other Important Information - Adjusted EBITDA for the quarter was $6.6 million, about 17% of revenue, and cash collections have increased significantly, marking the best nine-month cash collection period in history [24][34] - The company has increased its sales capacity by about 20% over the past year and plans to continue hiring in sales and marketing [68] Q&A Session Summary Question: Commentary on delayed project backlog and project initiation - Management noted positive signs in January with services staff booked for implementation projects, indicating a pickup in project activity [39][40] Question: Competitive positioning of PMS products - Management expressed confidence in the competitiveness of their PMS products, highlighting modernization efforts and integration capabilities [43][45] Question: Future business outlook and the "flywheel effect" - Management expects improvements in other business segments over the next two to three quarters as the market recovers, with a virtuous cycle of product installations and increased sales [49][51] Question: Revenue synergies from the ResortSuite acquisition - Management confirmed that the acquisition is primarily about revenue synergies, with significant opportunities to upsell Agilysys products to ResortSuite's customer base [57][64] Question: Sales capacity and performance metrics - Management indicated that sales capacity has increased significantly, with expectations for continued growth in sales per representative due to improved product offerings [71][72]