Agilysys, Inc.

What they do

Agilysys has sold hospitality software for more than 45 years and operates as one reportable segment serving the global hospitality industry. Products span point-of-sale (POS), property management (PMS), inventory and procurement, payments and related guest-journey applications. Revenue is classified as subscription and maintenance, professional services, and products (software licenses plus third-party hardware). The company has development operations in Chennai, India and is headquartered in Alpharetta, Georgia, selling across the Americas, Europe, the Middle East, Africa, Asia-Pacific and India.

Revenue drivers

• Subscription and maintenance — Recurring revenue from software subscriptions, updates, technical support and transaction-based fees; was $57.7M, or 65.9% of total net revenue, in the fiscal 2027 first quarter, with subscription revenue up 26.1% year-over-year.
• Professional services — Implementation and related services revenue, reported at a record $19.6M in the fiscal 2027 first quarter according to the earnings release.
• Products — Software license sales and third-party hardware and operating systems, recognized as products revenue in the consolidated statements of operations.
• Book4Time spa management — Spa management SaaS business acquired August 20, 2024 for $145.8M in net cash, expanding the product set sold into the hospitality customer base.

Recent performance

Fiscal 2027 first quarter (ended June 30, 2026) total net revenue rose 14.3% to a record $87.7M from $76.7M a year earlier. Recurring revenue was a record $57.7M, or 65.9% of total net revenue, up from $48.6M, or 63.4%, and subscription revenue grew 26.1% year-over-year. Gross margin was 63.5% versus 61.7%; net income was $9.0M, or $0.32 per diluted share, versus $4.9M, or $0.17. Adjusted EBITDA was $18.3M (20.8% of revenue) and adjusted diluted EPS was $0.49; free cash flow was $7.3M versus $(5.0)M a year earlier, and cash ended at $123.7M.

Strategy

Management's stated plan centers on putting the customer first, product innovation and development, improving liquidity, organizational efficiency, and developing employees and leaders. It aims to grow revenue by broadening the point-of-sale and property management product set and by international expansion, while increasing the share of revenue from subscription, cloud, support and maintenance, and professional services. The company says it will invest cash on hand to enhance existing software, develop and market new software, and expand customer breadth vertically and geographically. It also cites AI-powered feature sets as contributing to recent sales and adoption results.

Risks

• Macroeconomic and geopolitical pressure — The company states that tariff and trade policy changes, conflicts, currency fluctuations, labor shortages and natural disasters are negatively influencing customer spending and provider pricing, with decreased demand and reduced margins particularly outside the United States.
• Hospitality and travel demand sensitivity — Agilysys' business, markets and growth prospects may be hurt by declines in travel and leisure activity from weak economic conditions, higher energy prices, tariff and currency changes, political instability, travel advisories, air travel disruption, disease concerns, violence or terrorism.
• Product development and market acceptance — The business faces rapid technology change and evolving standards, and failure to anticipate customer needs or complete new products and upgrades on time would harm results, with development requiring significant financial resources.
• IT budget cuts by customers — A weakening global economy or reduced corporate confidence could lead hospitality customers to cut IT budgets, delay or cancel purchases, or delay payment for products and services already sold.

Outlook

Management raised fiscal 2027 total revenue guidance to $368M to $373M from $365M to $370M, and raised full-year subscription revenue growth guidance to at least 32% from at least 30%. Adjusted EBITDA expectations remain at 24% of revenue for the full fiscal year. The CEO said the fiscal 2027 first quarter was the best ever first-quarter sales period, driving backlog to record levels, and the CFO said business plan execution is slightly ahead of target on sales velocity and project implementation progress.