Agilysys Inc (AGYS) Q2 2025 Earnings Call Highlights: Record Revenue and Strategic Growth Amid …

• Revenue: Record $68.3 million, 16.5% increase year-over-year.

• Recurring Revenue: $41.4 million, 21% year-over-year growth.

• Subscription Revenue: $25.1 million, 36.6% increase year-over-year.

• Gross Profit Margin: 63.3%, up from 59.9% in the prior year quarter.

• Operating Income: $4.1 million.

• Net Income: $1.4 million, with earnings per diluted share of 5.

• Adjusted EBITDA: $12.2 million, 17.9% of revenue.

• Cash and Marketable Securities: $54.9 million as of September 30, 2024.

• Free Cash Flow: $5.9 million, compared to $2.5 million in the prior year quarter.

• New Customers: 18 new customers added, mostly subscription-based.

• Guidance: Full-year revenue expected to be $280-$285 million, with subscription revenue growth of at least 38%.

Release Date: October 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Agilysys Inc (NASDAQ:AGYS) reported a record revenue of $68.3 million for fiscal 2025 Q2, marking the 11th consecutive record revenue quarter.

• The acquisition of Book4Time has increased the number of customer properties using at least one Agilysys product by 30%.

• Subscription revenue grew by 36.6% year over year, with a significant portion attributed to the Book4Time acquisition.

• The company added 18 new customers in Q2, with an average of 5.4 products per deal, indicating strong cross-selling opportunities.

• Agilysys Inc (NASDAQ:AGYS) raised its full-year revenue guidance to $280-$285 million, with subscription revenue growth expected to exceed 38%.

• Product revenue decreased by 16.7% year over year, posing a challenge for the company.

• The APAC region experienced a challenging quarter, with deals taking longer to close.

• The transition phase for the point of sale (POS) business has been tough, affecting sales and product revenue.

• Despite the acquisition, the company’s market share remains low in most sales verticals.

• The services backlog is increasing, which may indicate potential delays in project implementations.

Q: Can you clarify the subscription revenue guidance increase and the contribution from Book4Time? A: The guidance includes about $10 million from Book4Time, resulting in a 38% increase, with over 25% being organic growth. The property management segment is expected to grow faster than the overall subscription guidance, while POS should also see growth. – William Wood, CFO

Q: Why might margins not scale faster in the second half despite business leverage? A: Margins are expected to remain consistent due to product revenue returning, which will lower gross margins slightly from the current 63%. Operating leverage is evident in OpEx and subscription revenue, but product revenue’s slow start affects the overall margin. – William Wood, CFO

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