AGILYSYS INC Q2 FY2025 earnings call

• Acquired Book4Time, a leading spa management software provider, with its high-talent team and strong market position in hospitality spas.
• Q2 was the best July-Sept sales quarter ever, with PMS and related add-on sales nearly doubling YOY.
• Added Joe Youssef as Chief Commercial Officer, bringing extensive hospitality technology experience.
• Added 18 new customers (mostly subscription-based) and 85 new properties of current parent customers during the quarter.
• Services revenue at record levels, indicating future subscription growth potential.

Fiscal 2025 second quarter revenue was a record $68.3 million, 16.5% higher than the comparable prior year quarter. Recurring revenue grew 21% YOY to $41.4 million, with subscription revenue at $25.1 million, up 36.6% YOY (including $2.1 million from Book4Time acquisition). Product revenue was $10.5 million, down 16.7% YOY. Services revenue was a record $16.3 million, up 39.2% YOY. Subscription revenue constituted 60.5% of total recurring revenue.

• Raised full-year revenue guidance to $280 million to $285 million.
• Expect subscription revenue growth to be better than 38%, with Book4Time contributing a significant portion.
• EBITDA as a percentage of revenue expected to be 18%, higher than the initial 16% plan.

• POS transformation challenges continuing to impact product revenue.
• APAC market facing longer sales cycles and up-and-down performance.
• Dependence on customer readiness for complex multiproduct installations affecting services backlog levels.

Q: Clarify the breakdown of subscription revenue guidance between Book4Time and organic growth.

A: The guidance has about $10 million in subscription revenue, with ~25% organic growth and the remainder from the Book4Time acquisition.

Q: How does the Book4Time acquisition impact M&A strategy going forward?

A: The company will remain conservative, patient, and opportunistic, focusing on market expansion and filling product gaps while maintaining a careful approach to acquisitions.

Q: What's the status of the POS business and its impact on revenue?

A: POS bookings are improving, up 17% over the prior quarter, but product revenue remains a challenge due to the POS transformation process.