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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Agilysys Inc | NASDAQ:AGYS | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -24.94 | -19.81% | 100.96 | 100.80 | 101.10 | 104.65 | 94.60 | 94.60 | 1,267,367 | 20:42:19 |
Wednesday 22 January 2025
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
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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