Agilysys Posts Record Revenue of $93.4 Million; Shares Fall 5% After Hours
Key Facts
Agilysys shares fell 5% in after-hours trading on Monday, October 26, after the company reported record quarterly revenue of $93.4 million in the second quarter of fiscal 2027. The decline came despite earnings and revenue topping analyst estimates and the company raising its annual outlook. Revenue was $93.4 million, up 17.7% from $79.3 million in the same period of fiscal 2026. The company said this was its 19th consecutive quarter of record revenue. Its shares had closed at $120.69 on October 23, according to EL7 data.
Adjusted earnings were $0.67 per share, above the analyst estimate of $0.55, while revenue of $93.4 million exceeded consensus of $90.92 million. On a net income basis, the company reported $13.2 million, or $0.46 per diluted share, compared with $11.7 million and $0.41 per share a year earlier. Gross margin rose to 64.6% from 61.7% in the year-earlier period. Adjusted EBITDA was also $24.1 million, equal to 25.9% of revenue, versus $16.4 million a year earlier. These indicators point to improved profitability alongside sales growth.
Recurring revenue, which includes subscription and maintenance fees, totaled $62.2 million, or 66.6% of total revenue, in the quarter. Subscription revenue increased 32.6% year over year and was the driver the CEO credited for the 19th consecutive quarterly revenue record. In the first quarter of fiscal 2027, recurring revenue had reached $57.7 million, or 65.9% of the total, with subscriptions growing 26.1%. The comparison between the two quarters shows an increase in both the value and share of recurring revenue, alongside an acceleration in subscription growth. In July, the company pointed to continued strong hospitality-sector demand for modern technology solutions and a record backlog following strong sales.
Management said one-time product revenue came in above expectations, as the hospitality sector increased investment in modern point-of-sale solutions, and the quarter set another sales record. In July, Agilysys raised its fiscal 2027 revenue outlook to a range of $368–373 million, driven by expected subscription revenue growth of at least 32%, and kept its forecast for adjusted EBITDA margin at 24% of revenue. The annual guidance increase came before the second-quarter results, while actual results showed subscription growth of 32.6%. The available excerpt from the second-quarter announcement did not include a new annual guidance figure following the July increase.
Not all cash metrics moved in line with revenue and profitability growth: free cash flow was $14.8 million in the second quarter, compared with $15.0 million a year earlier. The company ended the period through September 30 with cash of $137.6 million. The company had announced it would release its second-quarter results after the market close on October 26, followed by a conference call and public webcast at 4:30 p.m. Eastern Time the same day.