Agilysys Announces Record Revenue of $68.3M in Second Quarter Fiscal 2025
36.6% Subscription Revenue Growth Inclusive of Book4Time
Increases Full Year Fiscal 2025 Revenue Guidance to
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 .
"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
Fiscal 2025 Outlook
The Company raises full year fiscal 2025 revenue guidance to
2025 Second Quarter Conference Call and Webcast
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
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
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
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
- Financial tables follow -
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
||||||||||||||||
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
||||||||||
(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 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
(In thousands, except share data) |
|
|
|
|
||||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
54,888 |
|
|
$ |
144,891 |
|
Accounts receivable, net of allowance for expected credit losses
|
|
|
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 |
|
|
|
|
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 |
|
|
10,003 |
|
|
|
10,003 |
|
|
|
|
(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 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
||||||||
|
|
Six Months Ended |
|
|||||
|
|
|
|
|||||
(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 |
|
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (UNAUDITED)
|
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
(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 |
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME FOR ADJUSTED EARNINGS PER SHARE (UNAUDITED)
|
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
(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 |
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED)
|
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
(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:
Senior Director Corporate Strategy & Investor Relations
770-810-6116 or investorrelations@agilysys.com
Source: