Agilysys, Inc. ((AGYS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Agilysys, Inc. recently held its earnings call, revealing a robust financial performance characterized by record revenue growth and a significant increase in subscription sales. The integration of AI into their product offerings is enhancing their competitive edge, and international sales are thriving. Despite minor challenges such as seasonal impacts and customer delays, the overall business momentum and increased guidance reflect a positive outlook.
Record Revenue and Growth
Agilysys reported a record revenue of $79.3 million for fiscal 2026 Q2, marking the 15th consecutive quarter of record revenue. This represents a 16.1% growth compared to the same period last year. The first half of fiscal 2026 saw total revenue of $156 million, an 18.4% increase from the previous year, underscoring the company’s strong growth trajectory.
Significant Subscription Sales Increase
The company experienced a remarkable 59% increase in subscription sales year-to-date compared to the previous year. Recurring revenue grew by 23% year-over-year, with subscription revenue rising by 33.1%, marking the seventh consecutive quarter of over 30% subscription growth. This highlights Agilysys’s successful shift towards a subscription-based model.
Strong International Sales and New Customer Wins
International sales surged by 36%, with notable customer wins including Rudding Park in England and Naturally Pacific Resort in Canada. These wins involved multiple Agilysys product implementations, demonstrating the company’s expanding global footprint and appeal.
AI-Driven Competitive Advantages
The integration of AI into Agilysys’s products is significantly enhancing both product development and customer operational efficiencies. This is creating sustainable competitive advantages and accelerating the pace of innovation, positioning the company favorably in the market.
Increased Guidance and Financial Health
Agilysys raised its full-year revenue guidance to $315-$318 million, with a subscription revenue growth expectation of 29%. The company remains on track to achieve an adjusted EBITDA of 20% of revenue, reflecting its strong financial health and strategic focus.
Seasonal Impact on Services Revenue
The company anticipates a more than 5% sequential decrease in professional services revenue in Q3 due to fewer billable days around the holidays. This seasonal impact is a minor challenge amidst the broader positive financial performance.
Customer Implementation Delays
Agilysys is experiencing ongoing delays in project implementations due to customer readiness. However, the company has made internal capacity improvements to mitigate these delays, ensuring continued progress in customer projects.
Forward-Looking Guidance
During the earnings call, Agilysys provided updated guidance reflecting strong sales momentum and product performance. The total revenue guidance for the fiscal year was increased to $315 million to $318 million, up from the previous range. Subscription revenue growth expectations were also raised to 29%, excluding contributions from the Marriott PMS project. The company remains on track to meet its adjusted EBITDA target of 20% of revenue for the fiscal year.
In summary, Agilysys’s earnings call reflected a positive sentiment with strong financial performance and strategic growth initiatives. The company’s record revenue, significant subscription sales increase, and robust international sales underscore its successful business strategies. Despite minor challenges, the increased guidance and AI-driven innovations highlight Agilysys’s promising future.