Agilysys(AGYS) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q2 fiscal 2022 was $37.9 million, a 10.3$34.4 million in the comparable prior year period [19] - Recurring revenue increased by 7.7% year-over-year, representing 63.4% of total net revenue [20] - Adjusted EBITDA for the quarter was $6.3 million, down from$8.6 million in the prior year second quarter [23] Business Line Data and Key Metrics Changes - Subscription revenue reached a record $11.1 million, a 21.7$160 million to $170 million for fiscal 2022, expecting the second half to be significantly better than the first half [16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about medium and long-term prospects due to record backlog levels and improving market conditions [16] - The company is seeing improvements in supply chain issues, which are expected to enhance product delivery in the second half of the fiscal year [27] - Labor shortages at customer sites are impacting project implementations, but management anticipates these challenges will ease [36] Other Important Information - Cash and marketable securities improved by$2.5 million to $106.4 million, with cash collections remaining strong [24] - The company reported a net income of$0.5 million, a decrease from the prior quarter [23] Q&A Session Summary Question: What data points give confidence in a stronger fiscal second half? - Management noted record backlogs and improvements in supply chain issues as key indicators for confidence in the second half [27] Question: How is the competitive position after recent shows? - Management indicated an improved competitive position in the PMS area, with increased recognition and participation in deals [29] Question: Are hardware supply issues accelerating the adoption of off-the-shelf hardware? - Management clarified that while there are hardware delivery issues, the PMS and software solutions are not significantly affected [39] Question: What are the emerging strengths in sales verticals? - Management highlighted strong performance in gaming and resort sectors, while hotel chains and cruise ships are recovering more slowly [43] Question: How does the company defend its pricing in the market? - Management stated that they remain disciplined with pricing, supported by superior product features and technology [46] Question: What are the subscription sales levels compared to previous years? - Management indicated that subscription sales are substantially up compared to two years ago, driven by customer preference for cloud-native applications [50]