Agilysys(US:AGYS)2019-10-25 10:30Financial Data and Key Metrics Changes - The company reported revenue of $40.7 million for Q2 2020, a 19% increase compared to $34.2 million in Q2 2019, marking the eighth consecutive quarter of sequential revenue growth [9][25] - Professional services revenue reached a record of over $8 million, indicating strong selling success and business activity [10] - Recurring revenue was a record $20.3 million, driven by a 16% year-over-year increase in subscription revenue [10][26] - The cash balance increased by $1.7 million during Q2 2020, contrasting with a cash loss of $2.2 million in the same period last year [11][32] - Adjusted EBITDA for Q2 2020 was $3 million, up from $2.6 million in the prior year [34] Business Line Data and Key Metrics Changes - Product revenue increased by 35.4% to $11.9 million, while professional services revenue grew by 29.5% to a record $8.5 million [26] - Total recurring revenue represented 49.9% of total net revenue, down from 55.1% in Q2 2019, with subscription revenue comprising approximately 36.1% of total recurring revenue [27] Market Data and Key Metrics Changes - The company continues to expand its presence in the gaming and casinos vertical, with significant partnerships established with Choctaw Casinos and Maverick Gaming [13][14] - The hospitality industry is experiencing growth, with increasing demand for the company's products and solutions [23] Company Strategy and Development Direction - The company plans to launch the Agilysys Customer Engagement Suite in fiscal Q3, aimed at enhancing customer loyalty programs and self-service solutions [21] - There is a focus on increasing R&D resources while maintaining costs as a percentage of revenue, with the R&D team growing from approximately 230 to 650 personnel since 2017 [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in raising revenue growth guidance for fiscal 2020 from 11% to 14%, citing increased business momentum [18][35] - The company anticipates that macroeconomic downturns may increase the demand for its software solutions, which enhance operational efficiencies [23] Other Important Information - The company has approximately 274,000 serviced rooms and 57,000 terminals, reflecting increases of 2% and 12% respectively compared to Q2 2019 [28] - The implementation of ASC 842, a new lease accounting standard, resulted in the recording of operating lease liabilities and right of use assets [33] Q&A Session Summary Question: What is the opportunity in the gaming market outside of Las Vegas? - Management indicated that there is significant opportunity in gaming both within and outside Las Vegas, with a focus on the non-gaming hospitality side of the business [40] Question: Any updates on international opportunities? - Management reported good progress in international markets, particularly in the APAC and EMEA regions, and plans to expand into Mexico and Latin America [43] Question: Update on the Indian Development Center? - The Indian Development Center currently has about 570 resources, with plans to continue hiring and expanding capacity [47][49]