Agilysys Announces Record Revenue of $69.6M in Third Quarter Fiscal 2025

ALPHARETTA, Ga,--(BUSINESS WIRE)--Agilysys, Inc. (NASDAQ: AGYS), a leading global provider of hospitality software solutions that deliver High Return Hospitality, today reported results for its fiscal 2025 third quarter ending December 31, 2024. Summary of Fiscal 2025 Third Quarter Financial Results Total net revenue increased 14.9% to a record $69.6 million compared to total net revenue of $60.6 million in the comparable prior-year period. Recurring revenue (comprised of subscription and maintenance charges) was a record $44.4 million, or 63.8% of total net revenue, compared to $35.1 million, or 58.0% of total net revenue, for the same period in fiscal 2024. Subscription revenue increased 45.1% year-over-year and was 63.8% of total recurring revenue compared to 55.6% of total recurring revenue in the third quarter of fiscal 2024. Gross margin was 63.0% in the fiscal 2025 third quarter compared to 62.5% in the comparable prior-year period. Net income attributable to common shareholders in the fiscal 2025 third quarter was $3.8 million, or $0.14 per diluted share, compared to $76.9 million, or $2.85 per diluted share, in the comparable prior-year period. Net income during prior-year fiscal 2024 third quarter included discrete tax events such as a release of valuation allowances against certain deferred tax assets. Adjusted EBITDA (non-GAAP) was $14.7 million compared to $11.8 million in the comparable prior-year period (reconciliation included in financial tables). Adjusted diluted EPS (non-GAAP) was $0.38 per share in the fiscal 2025 third quarter compared to $0.35 per share in the comparable prior-year period (reconciliation included in financial tables). Free cash flow (non-GAAP) in the fiscal 2025 third quarter was $19.7 million compared to free cash flow of $11.3 million in the fiscal 2024 third quarter (reconciliation included in financial tables). Ending cash balance was $60.8 million compared to ending cash balance of $144.9 million as of fiscal 2024 year-end. Ramesh Srinivasan, President and CEO of Agilysys, commented, “Subscription revenue continues to grow at a healthy pace and we are pleased with the integration progress of the Book4Time acquisition. However, revenue levels, especially one-time product revenue, continue to be impacted by recent sales challenges with point-of-sale products, mainly in the managed food services vertical, caused by our final modernization transition phase. While we expect fiscal 2025 to end up as a good year for subscription revenue growth of at least 38%, product revenue including hardware revenue, will remain challenged. Professional services revenue has returned to more realistic levels as we have completed most of the development phase of a large project. We are therefore revising fiscal 2025 annual total revenue guidance to $273 million. "We are confident the overall structural strengths of the business, increasing competitive advantages and growing product innovation capabilities will continue to fuel strong growth, which will accelerate as we move past these short-term transition challenges," he concluded. Fiscal 2025 Outlook The Company revises full year fiscal 2025 total revenue guidance to approximately $273 million while maintaining at least 38% year-over-year subscription revenue growth. Adjusted EBITDA is expected to be 18% of revenue for the full fiscal year. Dave Wood, Chief Financial Officer, commented, “We are pleased to report strong subscription revenue growth results for the quarter. One time revenue remains challenged as we see continued impacts from our slow point-of-sales bookings during the first half of the year and wind down the heavy lift of significant development efforts related to large projects. While we are disappointed with the short-term headwinds leading to the reduction in our annual total revenue guidance, we remain confident in the strength of our product ecosystem and future revenue growth opportunities.” 2025 Third Quarter Conference Call and Webcast Agilysys is hosting a conference call and webcast today, January 21, 2025, at 4:30 p.m. ET. Both the call and the webcast are open to the public. Please register at https://register.vevent.com/register/BId9a48404836f4457a5b8630114e30243 15 minutes prior to the call to receive confirmation and further instruction in a timely manner. After registration, an email confirmation with a personalized PIN will be provided along with further access details. Interested parties also can access the conference call live on the Investor Relations page of Agilysys.com under the Events and Presentations headline. Approximately two hours after the call has concluded, an archived version of the webcast will be available for replay at the same location. Forward-Looking Language This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, our revenue, subscription revenue and Adjusted EBITDA guidance for the 2025 fiscal year and statements made about future revenue growth. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the impact macroeconomic factors may have on the overall business environment, our ability to achieve our fiscal 2025 guidance, future revenue growth, the company's ability maintain sales levels, the Company's ability to integrate Book4Time and realize future synergies, and the risks described in the Company’s filings with the Securities and Exchange Commission, including the Company’s reports on Form 10-K and Form 10-Q. Additionally, references to "record" financial and business levels in this document refer only to the time period after Agilysys made the transformation to an entirely hospitality focused software solutions company in FY2014. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement that may be made from time to time, whether written or oral, whether as a result of new information, future developments or otherwise. Use of Non-GAAP Financial Information To supplement the unaudited consolidated financial statements presented in accordance with U.S. GAAP in this press release, certain non-GAAP financial measures as defined by the SEC rules are used. These non-GAAP financial measures include EBITDA, Adjusted EBITDA, adjusted net income, adjusted basic earnings per share, adjusted diluted earnings per share and free cash flow. Management believes that such information can enhance investors’ understanding of the Company’s ongoing operations. The Company has included the following non-GAAP financial measures in this press release: adjusted net income, adjusted basic earnings per share and adjusted diluted earnings per share. The Company believes these non-GAAP financial measures provide valuable insight into the Company’s overall profitability from core operations before certain non-cash and non-recurring charges. The Company defines adjusted net income as net income before amortization expense (including amortization of developed technology), share-based compensation, other charges, and legal settlements, less the related income tax effect of these adjustments, as applicable, and tax events and defines adjusted earnings per share as adjusted net income divided by basic and diluted weighted average shares outstanding. See the accompanying tables below for the definitions and reconciliation of these non-GAAP measures to the most closely related GAAP measures. About Agilysys Agilysys exclusively delivers state-of-the-art software solutions and services that help organizations achieve High Return Hospitality™ by maximizing Return on Experience (ROE) through interactions that make ‘personal’ profitable. Customers around the world use Agilysys Property Management Systems (PMS), Point-of-Sale (POS) solutions and Food & Beverage Inventory and Procurement (I&P) systems to consistently delight guests, retain staff and grow margins. Agilysys’ 100% hospitality customer base includes branded and independent hotels; multi-amenity resorts; casinos; property, hotel and resort management companies; cruise lines; corporate dining providers; higher education campus dining providers; food service management companies; hospitals; lifestyle communities; senior living facilities; stadiums; and theme parks. Agilysys operates across the Americas, Europe, the Middle East, Africa, Asia-Pacific, and India with headquarters located in Alpharetta, GA. For more information visit Agilysys.com. AGILYSYS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended December 31, Nine Months Ended December 31, (In thousands, except per share data) 2024 2023 2024 2023 Net revenue: Products $ 10,677 $ 12,678 $ 31,077 $ 38,100 Subscription and maintenance 44,379 35,107 123,853 101,481 Professional services 14,505 12,781 46,422 35,662 Total net revenue 69,561 60,566 201,352 175,243 Cost of goods sold: Products 5,550 6,707 15,982 20,023 Subscription and maintenance 9,531 7,371 26,466 22,812 Professional services 10,625 8,664 31,967 26,428 Total cost of goods sold 25,706 22,742 74,415 69,263 Gross profit 43,855 37,824 126,937 105,980 Gross profit margin 63.0 % 62.5 % 63.0 % 60.5 % Operating expenses: Product development 14,971 14,551 45,863 42,455 Sales and marketing 9,013 6,137 24,822 19,838 General and administrative 9,536 9,057 30,181 27,207 Depreciation of fixed assets 985 909 2,738 3,042 Amortization of internal-use software and intangibles 1,622 343 2,777 1,120 Other (gains) charges, net (12 ) (924 ) 2,576 45 Legal settlements 330 — 699 — Total operating expense 36,445 30,073 109,656 93,707 Operating income 7,410 7,751 17,281 12,273 Other income (expense): Interest income 416 1,252 3,293 3,580 Interest expense (657 ) — (1,116 ) — Other income (expense), net 574 95 804 (15 ) Income before taxes 7,743 9,098 20,262 15,838 Income tax provision (benefit) 3,913 (68,043 ) 962 (67,396 ) Net income $ 3,830 $ 77,141 $ 19,300 $ 83,234 Series A convertible preferred stock dividends — (286 ) — (1,204 ) Net income attributable to common shareholders $ 3,830 $ 76,855 $ 19,300 $ 82,030 Weighted average shares outstanding - basic 27,667 25,808 27,446 25,256 Net income per share - basic: $ 0.14 $ 2.98 $ 0.70 $ 3.25 Weighted average shares outstanding - diluted 28,314 26,979 28,248 26,463 Net income per share - diluted: $ 0.14 $ 2.85 $ 0.68 $ 3.10 AGILYSYS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) December 31, 2024 (Unaudited) March 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 60,761 $ 144,891 Accounts receivable, net of allowance for expected credit losses of $937 and $974, respectively 49,275 29,441 Contract assets 4,016 2,287 Inventories 6,360 4,587 Prepaid expenses and other current assets 10,798 7,731 Total current assets 131,210 188,937 Property and equipment, net 16,872 17,930 Operating lease right-of-use assets 17,017 18,384 Goodwill 128,544 32,791 Intangible assets, net 73,539 16,952 Deferred income taxes, non-current 68,041 67,373 Other non-current assets 8,638 8,063 Total assets $ 443,861 $ 350,430 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 11,684 $ 9,422 Contract liabilities 80,338 56,148 Accrued liabilities 17,497 19,522 Operating lease liabilities, current 5,431 4,279 Total current liabilities 114,950 89,371 Deferred income taxes, non-current 11,540 554 Operating lease liabilities, non-current 17,469 19,613 Debt, non-current 38,000 — Other non-current liabilities 5,111 4,415 Commitments and contingencies Shareholders' equity: Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 33,342,288 shares issued; and 27,961,890 and 27,376,862 shares outstanding at December 31, 2024 and March 31, 2024, respectively 10,003 10,003 Treasury shares, 5,380,398 and 5,965,426 at December 31, 2024 and March 31, 2024, respectively (1,616 ) (1,791 ) Capital in excess of stated value 105,017 94,680 Retained earnings 157,055 137,755 Accumulated other comprehensive loss (13,668 ) (4,170 ) Total shareholders' equity 256,791 236,477 Total liabilities and shareholders' equity $ 443,861 $ 350,430 AGILYSYS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended December 31, (In thousands) 2024 2023 Operating activities Net income $ 19,300 $ 83,234 Adjustments to reconcile net income to net cash provided by operating activities: Loss (gain) on asset disposals 24 (1,145 ) Depreciation of fixed assets 2,738 3,042 Amortization of internal-use software and intangibles 2,777 1,120 Deferred income taxes (980 ) (66,506 ) Share-based compensation 12,656 9,489 Changes in operating assets and liabilities (8,539 ) (10,855 ) Net cash provided by operating activities 27,976 18,379 Investing activities Cash paid for business combination, net of cash acquired (144,945 ) — Capital expenditures (2,082 ) (7,658 ) Additional investments in corporate-owned life insurance policies (27 ) (2 ) Net cash used in investing activities (147,054 ) (7,660 ) Financing activities Payment of preferred stock dividends — (1,663 ) Debt proceeds, net of issuance costs 49,646 — Debt repayments (12,000 ) — Proceeds from Employee Stock Purchase Plan purchases 453 — Repurchase of common shares to satisfy employee tax withholding (2,848 ) (5,734 ) Principal payments under long-term obligations — (2 ) Net cash provided by (used in) financing activities 35,251 (7,399 ) Effect of exchange rate changes on cash (303 ) 38 Net (decrease) increase in cash and cash equivalents (84,130 ) 3,358 Cash and cash equivalents at beginning of period 144,891 112,842 Cash and cash equivalents at end of period $ 60,761 $ 116,200 AGILYSYS, INC. RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (UNAUDITED) Three Months Ended Nine Months Ended December 31, December 31, (In thousands) 2024 2023 2024 2023 Net income $ 3,830 $ 77,141 $ 19,300 $ 83,234 Income tax provision (benefit) 3,913 (68,043 ) 962 (67,396 ) Income before taxes 7,743 9,098 20,262 15,838 Depreciation of fixed assets 985 909 2,738 3,042 Amortization of internal-use software and intangibles 1,622 343 2,777 1,120 Amortization of developed technology acquired 163 39 301 119 Interest expense (income), net 241 (1,252 ) (2,177 ) (3,580 ) EBITDA (a) 10,754 9,137 23,901 16,539 Share-based compensation 4,218 3,638 12,656 9,489 Other (gains) charges, net (12 ) (924 ) 2,576 45 Other non-operating (income) expense, net (574 ) (95 ) (804 ) 15 Legal settlements 330 — 699 — Adjusted EBITDA (b) $ 14,716 $ 11,756 $ 39,028 $ 26,088 (a) EBITDA, a non-GAAP financial measure, is defined as net income before income taxes, interest income (net of interest expense), depreciation and amortization (including amortization of developed technology) (b) Adjusted EBITDA, a non-GAAP financial measure, is defined as net income before income taxes, interest expense (income), net, depreciation and amortization (including amortization of developed technology), and excluding charges relating to i) share-based compensation, ii) other (gains) charges, net, iii) other non-operating (income) expense, net, and iv) legal settlements AGILYSYS, INC. RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME FOR ADJUSTED EARNINGS PER SHARE (UNAUDITED) Three Months Ended Nine Months Ended December 31, December 31, (In thousands, except per share data) 2024 2023 2024 2023 Net income attributable to common shareholders $ 3,830 $ 76,855 $ 19,300 $ 82,030 Amortization of developed technology acquired 163 39 301 119 Amortization of internal-use software and intangibles 1,622 343 2,777 1,120 Share-based compensation 4,218 3,638 12,656 9,489 Other (gains) charges, net (12 ) (924 ) 2,576 45 Legal settlements 330 — 699 — Tax events (a) 1,964 (69,644 ) (5,965 ) (69,644 ) Income tax adjustments (1,461 ) (978 ) (3,828 ) (2,610 ) Adjusted net income (b) $ 10,654 $ 9,329 $ 28,516 $ 20,549 Basic weighted average shares outstanding 27,667 25,808 27,446 25,256 Diluted weighted average shares outstanding 28,314 26,979 28,248 26,463 Adjusted basic earnings per share (c) $ 0.39 $ 0.36 $ 1.04 $ 0.81 Adjusted diluted earnings per share (c) $ 0.38 $ 0.35 $ 1.01 $ 0.78 (a) Tax events include excess tax benefits or expense related to share-based compensation, release of valuation allowances against deferred income taxes, and changes in uncertain tax positions (b) Adjusted net income, a non-GAAP financial measure, is defined as net income attributable to common shareholders before amortization expense (including amortization of developed technology), share-based compensation, other (gains) charges, net, and legal settlements, less the related income tax effect of these adjustments, as applicable, at the Company’s current combined federal and state income statutory tax rate and, as defined under (a) above, tax events (c) Adjusted earnings per share, a non-GAAP financial measure, is defined as adjusted net income divided by basic and diluted weighted average shares outstanding AGILYSYS, INC. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED) Three Months Ended Nine Months Ended December 31, December 31, (In thousands) 2024 2023 2024 2023 Net cash provided by operating activities $ 20,288 $ 12,909 $ 27,976 $ 18,379 Capital expenditures (562 ) (1,656 ) (2,082 ) (7,658 ) Free cash flow (a) $ 19,726 $ 11,253 $ 25,894 $ 10,721 (a) Free cash flow, a non-GAAP financial measure, is defined as net cash provided by operating activities, less capital expenditures

Agilysys Announces Record Revenue of $69.6M in Third Quarter Fiscal 2025

FAQ

Why Bullish?

How important is it?

Why Short Term?

Related Companies

Related News