45.1% Subscription Revenue Growth Including
Book4Time
Quarter Adjusted EBITDA of $14.7M and
Adjusted EPS of $0.38
Revises Full Fiscal Year Total Revenue
Guidance To $273M, While Reiterating Previous Subscription Growth
Guidance
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250121556475/en/
Investor Contact: Jessica Hennessy Senior Director
Corporate Strategy & Investor Relations Agilysys, Inc.
770-810-6116 or investorrelations@agilysys.com
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