36.6% Subscription Revenue Growth Inclusive
of Book4Time
Increases Full Year Fiscal 2025 Revenue
Guidance to $280M to $285M With at Least 38% Subscription Revenue
Growth and Adjusted EBITDA of 18%
Agilysys, Inc. (NASDAQ: AGYS), a leading global provider of
hospitality software solutions that deliver High Return
Hospitality, today reported results for its fiscal 2025 second
quarter ending September 30, 2024.
Summary of Fiscal 2025 Second Quarter Financial
Results
- Total net revenue increased 16.5% to a record $68.3 million
compared to total net revenue of $58.6 million in the comparable
prior-year period.
- Recurring revenue (comprised of subscription and maintenance
charges) was a record $41.4 million, or 60.7% of total net revenue,
compared to $34.2 million, or 58.4% of total net revenue for the
same period in fiscal 2024. Subscription revenue increased 36.6%
year over year and was 60.5% of total recurring revenue compared to
53.6% of total recurring revenue in the second quarter of fiscal
2024.
- Gross margin was 63.3% in the fiscal 2025 second quarter
compared to 59.9% in the comparable prior-year period.
- Net income attributable to common shareholders in the fiscal
2025 second quarter was $1.4 million, or $0.05 per diluted share,
compared to $4.1 million, or $0.16 per diluted share, in the
comparable prior-year period.
- Adjusted EBITDA (non-GAAP) was $12.2 million compared to $8.1
million in the comparable prior-year period (reconciliation
included in financial tables).
- Adjusted diluted EPS (non-GAAP) was $0.34 per share in the
fiscal 2025 second quarter compared to $0.25 per share in the
comparable prior-year period (reconciliation included in financial
tables).
- Free cash flow (non-GAAP) in the fiscal 2025 second quarter was
$5.9 million compared to free cash flow of $2.5 million in the
fiscal 2024 second quarter (reconciliation included in financial
tables). Ending cash balance was $54.9 million compared to ending
cash balance of $144.9 million as of fiscal 2024 year-end. During
the fiscal 2025 second quarter, cash paid for the acquisition of
Book4Time, net of cash acquired, was $144.9 million while cash
received from debt proceeds, net of issuance costs, was $49.7
million.
Ramesh Srinivasan, President and CEO of Agilysys, commented, “We
are pleased to report another set of excellent results with record
revenue for the 11th consecutive quarter at $68.3 million and 16.5%
higher than the comparable prior year quarter, 36.6% total
subscription revenue growth and Adjusted EBITDA of 17.9% of
revenue. Fiscal 2025 second quarter July to September sales,
measured in annual contract value terms, were the second highest in
the company’s history. We have also made good progress with
integrating Book4Time into the business and with the strides made
towards realizing anticipated synergies and added value.
"Our growing competitive strengths based on a solid foundation
of cloud-native state-of-the-art technology and a broad ecosystem
of hospitality-focused software products and modules continue to
yield good current results and create extensive potential for
increasing shareholder value. A strong selling success quarter
which drove cumulative recurring revenue, services and product
backlog close to peak levels, along with additional subscription
revenue from Book4Time increased our expectations for the second
half of fiscal 2025. As a result, we are raising full fiscal year
2025 revenue guidance to $280 million to $285 million including at
least 38% year-over-year subscription revenue growth. In addition,
we expect full year fiscal 2025 Adjusted EBITDA to be 18% of
revenue, higher than our previous guidance of 16%," he
concluded.
Fiscal 2025 Outlook
The Company raises full year fiscal 2025 revenue guidance to
$280 million to $285 million, including 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
with the business momentum through the first half of the fiscal
year and increased expectations for the second half. The Book4Time
acquisition expands our reach within hospitality and provides us an
expanded customer base to sell the Agilysys ecosystem of products
into. Our current and improving profitability levels and expanding
operating leverage creates flexibility for our business and gives
us confidence to continue to invest in future revenue growth
initiatives.”
2025 Second Quarter Conference Call and Webcast
Agilysys is hosting a conference call and webcast today, October
28, 2024, 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/BIfb8adfed26314ff8abe76f95460e6fde
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.
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.
- Financial tables follow -
AGILYSYS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended September
30,
Six Months Ended September
30,
(In thousands, except per share
data)
2024
2023
2024
2023
Net revenue:
Products
$
10,525
$
12,640
$
20,400
$
25,422
Subscription and maintenance
41,432
34,248
$
79,474
$
66,373
Professional services
16,322
11,728
$
31,917
$
22,881
Total net revenue
68,279
58,616
131,791
114,676
Cost of goods sold:
Products
5,206
6,751
10,432
13,317
Subscription and maintenance
8,827
7,804
16,935
15,441
Professional services
11,032
8,965
21,342
17,764
Total cost of goods sold
25,065
23,520
48,709
46,522
Gross profit
43,214
35,096
83,082
68,154
Gross profit margin
63.3
%
59.9
%
63.0
%
59.4
%
Operating expenses:
Product development
16,172
14,583
30,892
27,904
Sales and marketing
8,794
6,400
15,808
13,701
General and administrative
10,162
8,785
20,645
18,150
Depreciation of fixed assets
915
1,209
1,752
2,133
Amortization of internal-use software and
intangibles
904
347
1,155
776
Other charges, net
2,037
210
2,587
969
Legal settlements
104
—
369
—
Total operating expense
39,088
31,534
73,208
63,633
Operating income
4,126
3,562
9,874
4,521
Other income (expense):
Interest income
1,095
1,227
2,877
2,328
Interest expense
(458
)
—
(458
)
—
Other income (expense), net
383
51
226
(109
)
Income before taxes
5,146
4,840
12,519
6,740
Income tax (benefit) provision
3,782
295
(2,951
)
647
Net income
$
1,364
$
4,545
$
15,470
$
6,093
Series A convertible preferred stock
dividends
—
(459
)
—
(918
)
Net income attributable to common
shareholders
$
1,364
$
4,086
$
15,470
$
5,175
Weighted average shares outstanding -
basic
27,533
25,022
27,335
24,979
Net income per share - basic:
$
0.05
$
0.16
$
0.57
$
0.21
Weighted average shares outstanding -
diluted
28,257
26,117
28,202
26,148
Net income per share - diluted:
$
0.05
$
0.16
$
0.55
$
0.20
AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
September 30, 2024
(Unaudited)
March 31, 2024
ASSETS
Current assets:
Cash and cash equivalents
$
54,888
$
144,891
Accounts receivable, net of allowance for
expected credit losses of $755 and $974, respectively
31,614
29,441
Contract assets
4,537
2,287
Inventories
6,446
4,587
Prepaid expenses and other current
assets
11,216
7,731
Total current assets
108,701
188,937
Property and equipment, net
17,538
17,930
Operating lease right-of-use assets
18,120
18,384
Goodwill
135,426
32,791
Intangible assets, net
79,018
16,952
Deferred income taxes, non-current
74,898
67,373
Other non-current assets
8,309
8,063
Total assets
$
442,010
$
350,430
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
12,746
$
9,422
Contract liabilities
55,355
56,148
Accrued liabilities
22,315
19,522
Operating lease liabilities, current
5,473
4,279
Total current liabilities
95,889
89,371
Deferred income taxes, non-current
12,269
554
Operating lease liabilities,
non-current
18,662
19,613
Debt, non-current
50,000
—
Other non-current liabilities
4,928
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 27,940,004 and 27,376,862 shares outstanding at
September 30, 2024 and March 31, 2024, respectively
10,003
10,003
Treasury shares, 5,402,284 and 5,965,426
at September 30, 2024 and March 31, 2024, respectively
(1,622
)
(1,791
)
Capital in excess of stated value
102,275
94,680
Retained earnings
153,225
137,755
Accumulated other comprehensive loss
(3,619
)
(4,170
)
Total shareholders' equity
260,262
236,477
Total liabilities and shareholders'
equity
$
442,010
$
350,430
AGILYSYS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
September 30,
(In thousands)
2024
2023
Operating activities
Net income
$
15,470
$
6,093
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on asset disposals
21
—
Depreciation of fixed assets
1,752
2,133
Amortization of internal-use software and
intangibles
1,155
776
Deferred income taxes
(7,634
)
(389
)
Share-based compensation
8,438
5,851
Changes in operating assets and
liabilities
(11,514
)
(8,994
)
Net cash provided by operating
activities
7,688
5,470
Investing activities
Cash paid for business combination, net of
cash acquired
(144,945
)
—
Capital expenditures
(1,520
)
(6,002
)
Additional investments in corporate-owned
life insurance policies
—
(2
)
Net cash used in investing activities
(146,465
)
(6,004
)
Financing activities
Payment of preferred stock dividends
—
(918
)
Debt proceeds, net of issuance costs
49,655
—
Proceeds from Employee Stock Purchase Plan
purchases
453
—
Repurchase of common shares to satisfy
employee tax withholding
(1,428
)
(3,868
)
Principal payments under long-term
obligations
—
(2
)
Net cash provided by (used in) financing
activities
48,680
(4,788
)
Effect of exchange rate changes on
cash
94
(107
)
Net decrease in cash and cash
equivalents
(90,003
)
(5,429
)
Cash and cash equivalents at beginning of
period
144,891
112,842
Cash and cash equivalents at end of
period
$
54,888
$
107,413
AGILYSYS, INC.
RECONCILIATION OF NET INCOME
TO EBITDA AND ADJUSTED EBITDA
(UNAUDITED)
Three Months Ended
Six Months Ended
September 30,
September 30,
(In thousands)
2024
2023
2024
2023
Net income
$
1,364
$
4,545
$
15,470
$
6,093
Income tax (benefit) provision
3,782
295
(2,951
)
647
Income before taxes
5,146
4,840
12,519
6,740
Depreciation of fixed assets
915
1,209
1,752
2,133
Amortization of internal-use software and
intangibles
904
347
1,155
776
Amortization of developed technology
acquired
99
41
138
81
Interest (income), net
(637
)
(1,227
)
(2,419
)
(2,328
)
EBITDA (a)
6,427
5,210
13,145
7,402
Share-based compensation
4,009
2,684
8,438
5,851
Other charges, net
2,037
210
2,587
969
Other non-operating (income) expense
(383
)
(51
)
(226
)
109
Legal settlements
104
—
369
—
Adjusted EBITDA (b)
$
12,194
$
8,053
$
24,313
$
14,331
(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
income (net of interest expense), depreciation and amortization
(including amortization of developed technology), and excluding
charges relating to i) share-based compensation, ii) other (gains)
and charges, net, iii) other non-operating expense (income), and
iv) legal settlements
AGILYSYS, INC.
RECONCILIATION OF NET INCOME
TO ADJUSTED NET INCOME FOR ADJUSTED EARNINGS PER SHARE
(UNAUDITED)
Three Months Ended
Six Months Ended
September 30,
September 30,
(In thousands, except per share
data)
2024
2023
2024
2023
Net income attributable to common
shareholders
$
1,364
$
4,086
$
15,470
$
5,175
Amortization of developed technology
acquired
99
41
138
81
Amortization of internal-use software and
intangibles
904
347
1,155
776
Share-based compensation
4,009
2,684
8,438
5,851
Other charges, net
2,037
210
2,587
969
Legal settlements
104
—
369
—
Tax events (a)
2,251
—
(7,929
)
—
Income tax adjustments
(1,220
)
(742
)
(2,368
)
(1,620
)
Adjusted net income (b)
$
9,548
$
6,626
$
17,860
$
11,232
Basic weighted average shares
outstanding
27,533
25,022
27,335
24,979
Diluted weighted average shares
outstanding
28,257
26,117
28,202
26,148
Adjusted basic earnings per share
(c)
$
0.35
$
0.26
$
0.65
$
0.45
Adjusted diluted earnings per share
(c)
$
0.34
$
0.25
$
0.63
$
0.43
(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) and
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
Six Months Ended
September 30,
September 30,
(In thousands)
2024
2023
2024
2023
Net cash provided by operating
activities
$
6,590
$
5,448
$
7,688
$
5,470
Capital expenditures
(651
)
(2,937
)
(1,520
)
(6,002
)
Free cash flow (a)
$
5,939
$
2,511
$
6,168
$
(532
)
(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/20241028178512/en/
Investor Contact: Jessica Hennessy Senior Director
Corporate Strategy & Investor Relations Agilysys, Inc.
770-810-6116 or investorrelations@agilysys.com
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