Executive Summary

Q2 FY2025 revenue was $25.3M, down 2% YoY, with subscription fees up 9% YoY to $14.5M while maintenance and services declined; GAAP diluted EPS from continuing operations was $0.05, and adjusted diluted EPS was $0.11 .
Management lowered full‑year total revenue guidance to $101–$105M but maintained recurring revenue ($87–$89M) and adjusted EBITDA ($15.0–$16.4M), citing delayed start dates and slower services activity; secular mix continues to shift toward SaaS subscriptions .
Mix improvements supported gross margin stability at 65% and operating profit of $1.0M, but services utilization and maintenance attrition weighed on growth; EBITDA was $2.2M and adjusted EBITDA was $3.8M for the quarter .
Strategic narrative centers on AI‑first supply chain planning, rebranding to Logility Supply Chain Solutions, and leadership recognitions (Gartner, IDC) positioning for subscription growth despite macro evaluation cycles and outsourcing of services to SIs .

What Went Well and What Went Wrong

What Went Well

Subscription revenue growth: “Subscription revenues continued to grow, up nine percent year over year… we remain confident in our ability to grow subscription fees and maintain strong margins.” — Allan Dow, President & CEO .
Gross margin resilience: Total gross margin held at 65% YoY, supported by higher margins on license and stable maintenance margin, despite lower services revenue .
Adjusted profitability improved: Adjusted net earnings rose to $3.8M ($0.11 per diluted share), and adjusted EBITDA was $3.8M, with recurring revenue representing 85% of Q2 revenue, underscoring mix stability .

What Went Wrong

Services and maintenance softness: Professional services decreased 10% YoY and maintenance declined 13% YoY due to outsourcing to systems integrators, lower project work, and client conversions from on‑premise to cloud .
Guidance cut on total revenue: Full‑year total revenue guidance was revised lower to $101–$105M, reflecting reduced professional services activity and delayed project starts, even as recurring revenue and adjusted EBITDA guidance were maintained .
Cash generation pressure: Six‑month operating cash flow was negative $7.3M (vs +$8.1M prior year), driven by higher securities purchases, lower deferred revenue, and timing effects; deferred revenue fell to $38.1M from $47.6M at fiscal‑year start .

Financial Results

Consolidated performance (Q2 FY2025 vs prior periods and estimates)

Metric	Q2 2024	Q1 2025	Q2 2025	Consensus (Q2 2025)
Total Revenue ($USD Millions)	$25.7	$26.2 (derived from $51.5 six months − $25.3 Q2)	$25.3	N/A – SPGI mapping unavailable
Subscription Fees ($USD Millions)	$13.4	$14.8 (derived $29.3 − $14.5)	$14.5	N/A
Professional Services & Other ($USD Millions)	$4.0	$3.9 (derived $7.5 − $3.6)	$3.6	N/A
Maintenance ($USD Millions)	$8.1	$7.3 (derived $14.4 − $7.1)	$7.1	N/A
License ($USD Millions)	$0.2	$0.24 (derived $0.31 − $0.07)	$0.07	N/A
Gross Margin ($USD Millions)	$16.4	$17.5 (derived $34.0 − $16.5)	$16.5	N/A
Gross Margin %	64%	—	65%	N/A
Operating Income ($USD Millions)	$1.2	$1.8 (derived $2.88 − $1.04)	$1.0	N/A
GAAP Diluted EPS – Continuing Ops ($USD)	$0.02	N/A	$0.05	N/A
GAAP Diluted EPS – Total ($USD)	$0.07	—	$(0.06) (reclassification effect)	N/A
Adjusted Diluted EPS ($USD)	$0.08	$0.13 (derived $0.24 six months − $0.11 Q2)	$0.11	N/A
EBITDA ($USD Millions)	$2.5	$3.0 (derived $5.24 − $2.20)	$2.2	N/A
Adjusted EBITDA ($USD Millions)	$4.1	$4.6 (derived $8.43 − $3.81)	$3.8	N/A

Note: Consensus comparisons are unavailable because S&P Global mapping for LGTY could not be retrieved via SPGI/Capital IQ; we attempted but mapping was missing (consensus N/A).

Segment breakdown (Q2 FY2025 vs prior year)

Segment	Q2 2024 Revenue ($M)	Q2 2025 Revenue ($M)	Q2 2024 Operating Income ($M)	Q2 2025 Operating Income ($M)
Supply Chain Management (SCM)	$24.83	$24.51	$5.60	$6.14
Other (ERP + Corporate)	$0.86	$0.78	$(4.37)	$(5.11)

KPIs and operating metrics

KPI	Q2 FY2025	Prior Reference
Recurring Revenue (% of revenue)	85% of total (Maintenance + Subscription)	84% in prior year’s six months
International Revenue Mix	22% of total	22% prior year
Remaining Performance Obligations (RPO)	~$120.0M; ~52% to be recognized in next 12 months	—
Deferred Revenue	$38.06M	$47.62M at April 30, 2024
Cash & Investments	$84.22M ($44.59M cash + $39.63M investments)	$77.78M at April 30, 2024
Days Sales Outstanding (DSO)	61 days	72 days prior year

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenues	FY2025	Not specified (prior guide revised)	$101.0–$105.0M	Lowered
Total Recurring Revenues	FY2025	$87.0–$89.0M (unchanged)	$87.0–$89.0M	Maintained
Adjusted EBITDA	FY2025	$15.0–$16.4M (unchanged)	$15.0–$16.4M	Maintained
Dividend	Quarterly	$0.11/share declared Nov 20, 2024	$0.11/share payable Feb 21, 2025	Maintained

Rationale: Guidance reduction reflects lower professional services activity and delayed project start dates; recurring and adjusted EBITDA maintained on confidence in subscription growth and margin structure .

Earnings Call Themes & Trends

(Company did not file a transcript in the document catalog; a webcast link was provided. We synthesized themes using the Q2 press release and 10‑Q commentary.)

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 FY2025)	Trend
AI/Technology initiatives	Embedded Demand AI+; platform recognized by Gartner/IDC; continued AI-first messaging	Reaffirmed AI‑first positioning and rebranding; Decision Command Center launch highlighted in media mentions	Strengthening brand and thought leadership
Services utilization/outsourcing	Services revenue lagging bookings; outsourcing to SIs noted	10% YoY decline in services; explicitly citing outsourcing and lower internal project work	Pressure persists near term
Maintenance/Cloud conversion	Declines due to attrition and shift to cloud; transportation divestiture impact	13% YoY decline; continued conversions to cloud	Ongoing mix shift
Macro/customer evaluation cycles	Longer discretionary software evaluations; irregular revenue pattern	Delayed start dates and pushouts cited impacting near-term revenue	Cautious macro filtering into timing
Recurring revenue mix	84–85% of revenue; stability	85% of Q2 revenue; guidance maintained	Stable/positive mix

Management Commentary

“Subscription revenues continued to grow, up nine percent year over year… we are revising our revenue guidance to reflect the impact of lower professional services revenue. Our prior guidance for recurring revenue and adjusted EBITDA is unchanged…” — Allan Dow, President & CEO .
Strategic rebrand: The company aligned corporate identity with its core product brand, changing the ticker to LGTY, reinforcing AI‑first supply chain planning positioning .
Mix and margin: Gross margins remained solid (65%), supported by margin improvements in license and stable maintenance margins, even as services margin declined on lower utilization .

Q&A Highlights

The company hosted a webcast for Q2 results (Nov 21, 2024) with replay access, but no transcript was filed in the catalog; key clarifications focused on delayed project starts, professional services outsourcing, and confidence in subscriptions/margins based on management remarks in the press release .

Estimates Context

We attempted to fetch S&P Global consensus revenue and EPS for Q2 FY2025 but could not due to missing SPGI mapping for LGTY; therefore, consensus comparisons are unavailable (estimates N/A).
Implication: Without consensus, market reaction hinges on the guidance reset (total revenue lowered) versus stable recurring and adjusted EBITDA ranges .

Key Takeaways for Investors

Recurring revenue durability and 65% GM provide a buffer against near‑term services softness; adjusted EBITDA guidance maintained suggests margin resilience despite lower services and maintenance .
The revised total revenue guide to $101–$105M sets a lower bar; execution against delayed starts and SI‑outsourced services is the near‑term swing factor for top‑line trajectory .
Subscription growth (+9% YoY) and 85% recurring mix reinforce the compounding effect of SaaS, with RPO at ~$120M and ~52% recognized within 12 months supporting forward revenue visibility .
Watch utilization/PS margin recovery and maintenance attrition from on‑prem to cloud; improvements here drive incremental operating leverage beyond subscription growth .
Liquidity remains strong ($84.2M cash & investments) with no debt; DSO improved to 61 days, offering flexibility through macro cycles and project timing variability .
Brand strategy and AI differentiation (Demand AI+, Decision Command Center) plus industry recognitions may aid pipeline conversion as evaluation cycles normalize .

Appendix: Source Documents Read

Q2 FY2025 8‑K Item 2.02 and press release (Nov 21, 2024) including detailed financial tables and guidance .
Q2 FY2025 Form 10‑Q (period ended Oct 31, 2024) with full financial statements and MD&A .
Q3 FY2025 Form 10‑Q (period ended Jan 31, 2025) for sequential context and segment trends .

(Consensus estimates were unavailable due to missing S&P Global mapping; we attempted retrieval but no data could be returned.)

LOGILITY SUPPLY CHAIN SOLUTIONS, INC (LGTY)·Q2 2025 Earnings Summary