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AGILYSYS INC (AGYS)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered record revenue of $74.3M and adjusted diluted EPS of $0.54; GAAP diluted EPS was $0.14 and gross margin was 60.7% .
  • Results beat Wall Street consensus: revenue $74.3M vs $71.4M consensus*, and adjusted EPS $0.54 vs $0.29 consensus*; FY2025 revenue $275.6M vs $272.8M consensus* .
  • FY2026 guidance: revenue $308–$312M, subscription revenue growth 25% YoY, and adjusted EBITDA at 20% of revenue; guidance excludes any material subscription revenue from the large PMS rollout currently in progress .
  • Management cited record sales momentum, expanding backlog, POS modernization “turning the corner,” and accelerating adoption of PMS add-on modules as catalysts; Boyd Gaming selected InfoGenesis SaaS across 28 properties, reinforcing POS ecosystem momentum .

Values retrieved from S&P Global*

What Went Well and What Went Wrong

What Went Well

  • Subscription strength and mix shift: Q4 subscription revenue grew 42.7% YoY and reached 64.4% of recurring revenue; recurring revenue was 62.2% of total, supporting a higher gross margin profile .
  • Record services execution and sales: Q4 services revenue hit $17.8M (+21.7% YoY) with hiring progress enabling improved deployments; backlog across product, recurring, and services reached record levels .
  • POS modernization progress and bookings momentum: “We have turned the corner and are now past the recent POS sales challenges,” with over 150 properties on the unified platform and sequential POS bookings recovery in Q4; Boyd Gaming standardized on InfoGenesis SaaS .
  • CEO quote: “Customer demand for the cloud-native state-of-the-art hospitality focused software solution ecosystem… has continued to accelerate” .

What Went Wrong

  • Product revenue headwinds tied to POS transition and lower hardware attach rates: product revenue declined YoY through the year, and management expects limited growth in FY2026 onetime product revenue .
  • Services timing and hiring gaps: Q3 services revenue was below expectations due to holiday timing and hiring delays; while Q4 rebounded, management flagged normalized growth rates ahead .
  • International sales still reliant on “home runs”: progress remained uneven with dependence on large deals, though pipeline is improving; management continues to invest for more consistent growth .

Financial Results

Quarterly Summary (Actuals vs prior periods)

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$68.279 $69.561 $74.272
Gross Margin (%)63.3% 63.0% 60.7%
GAAP Diluted EPS ($)$0.05 $0.14 $0.14
Adjusted Diluted EPS ($)$0.34 $0.38 $0.54
Adjusted EBITDA ($USD Millions)$12.194 $14.716 $14.789
Free Cash Flow ($USD Millions)$5.939 $19.726 $26.451

Segment Breakdown (Revenue by line item)

Segment ($USD Millions)Q2 2025Q3 2025Q4 2025
Products$10.525 $10.677 $10.247
Subscription & Maintenance$41.432 $44.379 $46.198
Professional Services$16.322 $14.505 $17.827
Total Net Revenue$68.279 $69.561 $74.272

KPIs and Mix

KPIQ2 2025Q3 2025Q4 2025
Recurring Revenue ($)$41.4M $44.4M $46.2M
Recurring Revenue (% of total)60.7% 63.8% 62.2%
Subscription (% of Recurring)60.5% 63.8% 64.4%
Subscription Revenue YoY Growth36.6% 45.1% 42.7%
Services Revenue YoY Growth39.2% 13.5% 21.7%

Results vs Estimates

MetricQ2 2025Q3 2025Q4 2025
Revenue Actual ($USD Millions)$68.279 $69.561 $74.272
Revenue Consensus Mean ($USD Millions)*$67.505*$73.149*$71.425*
Adjusted Diluted EPS Actual ($)$0.34 $0.38 $0.54
Primary EPS Consensus Mean ($)*$0.296*$0.343*$0.286*

Values retrieved from S&P Global*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY2025$280–$285M (Q2) ~$273M (Q3) Lowered
Adjusted EBITDA (% of revenue)FY202518% (Q2) 18% (Q3) Maintained
Subscription Revenue GrowthFY2025≥38% (Q2) ≥38% (Q3) Maintained
Total RevenueFY2026N/A$308–$312M New
Adjusted EBITDA (% of revenue)FY2026N/A20% New
Subscription Revenue GrowthFY2026N/A25% New
Product Revenue GrowthFY2026N/A+5% to +10% (vs FY2024) New
Professional Services GrowthFY2026N/A+5% to +10% New
Recurring Revenue GrowthFY2026N/A~15%; Subscription +25% New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
POS modernization & bookingsQ3: POS bookings below expectations; challenges in managed food services; unified platform ramping; demo+ pipeline POS +22% YoY Q4: “turned the corner,” best POS quarter of FY; >150 properties on unified platform; Boyd Gaming standardizes on InfoGenesis SaaS Improving
PMS momentum & add-on modulesQ3: PMS bookings +70% YoY excl. Book4Time; strong attach of ~8 modules per deal Q4: record selling success; accelerating demand for PMS ecosystem; backlog at highs Strong, accelerating
International expansionQ3: dependent on “home runs”; building references Q4: “beginning to show positive signs of consistent growth,” still reliant on big wins Gradual improvement
Large PMS rollout (Marriott)Q3: development largely complete; testing and pilots planned H2 CY2025 Q4: testing “going well”; guidance excludes material revenue Progressing; cautious
AI/technology innovationQ3: expanded TAM via best-of-breed add-ons Q4: AI-based upsell, conversational ordering, intelligent guest profiles highlighted in demos Feature velocity increasing
Mix shift & marginsQ2: recurring mix up; raised FY25 guidance Q4: recurring 62.2% of total; FY26 EBITDA margin target 20% Margin trajectory intact

Management Commentary

  • Strategic focus on ecosystem and backlog: “Customer demand for the cloud-native… software solution ecosystem… has continued to accelerate, driving the sum of product, recurring revenue and services backlog to the highest levels we have seen thus far” .
  • Investment stance: “We are not going to sacrifice any of our medium-term and long-term revenue growth possibilities for the sake of short-term profitability increases” .
  • POS inflection: “We have turned the corner and are now past the recent POS sales challenges… hands down, these are the best POS platform out in the field now” .
  • CFO on FY2026 cadence: Sequential recurring revenue increase of ~$1.3M–$1.6M per quarter; limited operating leverage in FY26 as investments continue; G&A leverage to be offset by sales & marketing timing .

Q&A Highlights

  • POS bookings and managed food services: Momentum attributed to unified, modernized platform; expectation for continued improvement; managed food services was the primary headwind earlier .
  • Implementation mix: Complex implementations largely handled by internal teams; services growth guided at +5–10% reflecting normalization (customer-paid R&D is less predictable quarterly) .
  • Subscription growth (organic vs total): FY26 subscription growth guided 25%, implying ~22–23% organic excluding ~4 months of Book4Time contribution .
  • Large PMS rollout: Deep ecosystem testing proceeding; beta properties nearing; exclusion from FY26 guidance due to immaterial near-term P&L impact and timing uncertainty .
  • Pipeline growth: Demo+ pipeline at record; ~20% growth currently with optimism for further improvement driven by international resorts and expanded sales coverage (Book4Time team cross-selling) .

Estimates Context

  • Q4 FY2025 vs consensus: Revenue $74.3M vs $71.4M consensus*; adjusted diluted EPS $0.54 vs $0.29 consensus* .
  • FY2025 vs consensus: Revenue $275.6M vs $272.8M consensus*; adjusted diluted EPS $1.55 vs $1.30 consensus* .
  • Forward: FY2026 revenue consensus ~$316.5M*, above company guidance $308–$312M, implying potential upward pressure if subscription growth and implementations exceed plan .

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Mix shift continues: Recurring revenue at 62.2% and subscription growth 42.7% YoY in Q4 underpin structurally higher gross margins and durability .
  • Execution signals: Record sales, record backlog, POS turning the corner, and services hiring progress reduce near-term transition risk and support FY26 targets .
  • Guidance implies disciplined growth: FY2026 revenue $308–$312M and adjusted EBITDA 20%; management prioritizes product innovation, AI features, security, and cloud infrastructure to sustain momentum .
  • Marriott PMS project is a call option: Testing is “going well” but excluded from FY26 guidance, suggesting upside optionality with timing uncertainty—monitor pilot progress in H2 CY2025 .
  • POS ecosystem validation: Boyd Gaming’s InfoGenesis SaaS standardization at 28 properties showcases competitive wins in gaming and cross-solution adoption .
  • Estimate resets likely: Street models should reflect higher Q4 beat, normalized services growth, lower hardware attach rates, and sequential recurring revenue cadence ($1.3M–$1.6M/quarter) .
  • Near-term trading: Positive beat-and-raise setup on subscription metrics and margin resilience; watch international deal timing and continued POS bookings strength as catalysts .