Agilysys(AGYS) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Fiscal 2024 fourth quarter revenue reached a record $62.2 million, a 17.6% increase from$ 52.9 million in the prior year quarter [14] - Full fiscal year 2024 revenue was a record $237.5 million, up 19.9% from the previous year [11][15] - Adjusted EBITDA for Q4 was$ 11 million, compared to $8.1 million in the prior year quarter, with full fiscal year adjusted EBITDA at$ 37.1 million [18] Business Line Data and Key Metrics Changes - Subscription software and services sales in fiscal 2024 were both records, growing by 29.6% and 39.2% respectively from the previous year [11][15] - Professional services revenue increased by 43.9% year-over-year to a record $14.7 million in Q4 [16] - The average number of products per customer property increased to 2.2 from 2.0 in FY23 [15] Market Data and Key Metrics Changes - Sales to gaming casinos in the US remained the top vertical, while sales in the Americas Hotels and Resorts vertical grew by 16% over fiscal 2023 [7] - APAC sales were about 45% higher than the previous year, although not yet at record levels [7] - Subscription revenue from PMS and related modules increased by more than 90% over the past two years [12] Company Strategy and Development Direction - The company has completed the modernization of core products and is focused on creating high value for customers through integrated solutions [6] - The company aims to expand its market share in international regions and establish itself as a modern provider [28] - The management emphasized the importance of building reference customers to drive growth in international markets [28] Management Comments on Operating Environment and Future Outlook - Management expects fiscal 2025 revenue to grow between 16% and 18%, driven by subscription revenue growth of at least 27% [13] - The company is optimistic about its competitive position and the potential for future revenue growth due to ongoing investments [21] - Management noted that the turnaround phase is over, and the company is entering a new growth phase [21] Other Important Information - The company reported a cash and marketable securities balance of$ 144.9 million as of March 31, 2024, compared to $112.8 million a year earlier [19] - Free cash flow for the full fiscal year was$ 40.1 million, up from $27.2 million in the prior year [19] Q&A Session Summary Question: Margin trajectory outlook for the coming year - Management expects margins to remain similar to FY24, with slight increases anticipated [24] Question: Investments in APAC and Europe - The company has established a full sales team in APAC and is focused on building its reputation and reference customers [28] Question: Property management side pipeline and deal sizes - The company has multiple avenues for growth, with increasing deal sizes and a focus on establishing more marquee implementations [30] Question: Sustainability of service margins - Management indicated that service margins are expected to stabilize in the high 20s, with potential for improvement as product quality increases [39][40] Question: Success of the ResortSuite acquisition - The acquisition has been successful, retaining and growing recurring revenue while integrating valuable personnel into the company [54]