AGYS

Sales Performance

• Q1 FY27 was the best Q1 sales period in company history, and the second-best sales quarter (only trailing historical Q4 results). The prior two quarters combined represent the best six-month sales period in AGILISIS history.
• This quarter set an all-time sales record for the Asia-Pacific region, and the highest Q1 sales for all major domestic verticals: casino gaming, hotels, resorts, cruise lines, HRC, and food service management.
• Won three large seven-figure multi-product ecosystem deals: two in U.S. casino gaming, and one large nine-property resort group in Australia (added to the RFP process at the last minute via customer referral). All three deals were won against the company's primary competitor.
• Added 15 new customers (average 6 products per customer) and 102 total new properties, 101 of which are fully or partially subscription-based. 106 incremental add-on product sales to existing customers accounted for 206 additional product sales, showing continued strong cross-sell performance.
• The large Marriott PMS transformation project remains on schedule and continues to progress well.

Product and AI Development

• 30+ planned AI-based features are on track for rollout: several are already deployed at pilot customer properties, with the remainder nearing completion of development and testing.
• A central AI orchestration layer has been built to route LLM requests, optimize token usage, and enforce security, privacy, and responsible AI governance. This layer also supports cost control and future monetization of AI features.
• Development of two fully AI-native modules (CRS and revenue intelligence) is progressing on plan, with initial beta deployments at customer sites planned for later this fiscal year. Both modules are designed to integrate natively with AGILISIS's existing product ecosystem.

Profitability and Operational Efficiency

• Gross profit hit a record $55.7 million, with a gross margin of 63.5% (up from 61.7% YoY).
• Adjusted EBITDA was $18.3 million, equal to 20.8% of revenue, making this the most profitable Q1 in company history, above management's prior expectations.
• Implementation efficiency has improved significantly: modernized solutions are easier to deploy, and AI tools have further reduced implementation work, leading to faster backlog conversion. The company now generates more software revenue per dollar of services revenue, a sign of a maturing enterprise software business.

• Full-year FY27 total revenue guidance was raised from prior levels to a range of $368 to $373 million, driven by stronger-than-expected subscription sales and faster backlog conversion.
• Full-year subscription revenue growth guidance was raised from a minimum of 30% to at least 32% YoY. Subscription growth is expected to hit ~30% in Q2, then accelerate through Q3 and Q4.
• One-time product revenue is expected to remain flat year-over-year, at ~$10 million per quarter ($40 million for the full year).
• Professional services revenue is expected to grow 5% to 10% for the full year, in line with prior guidance.
• Full-year adjusted EBITDA margin guidance is maintained at 24% of revenue, even after accounting for potential incremental strategic investments. The adjusted EBITDA exit rate for Q4 FY27 is still expected to be close to 30% of revenue.
• Stock-based compensation is expected to remain in the 5% to 7% of revenue range for the full year.

Total Q1 FY27 revenue was $87.7 million, a 14.3% year-over-year (YoY) increase.

• Subscription Revenue: $40.2 million, 26.1% YoY growth, 45.8% of total revenue, and 69.7% of total recurring revenue. For the first time in company history, PMS (Property Management System) and related modules subscription revenue exceeded POS (Point of Sale) ecosystem subscription revenue: PMS and related modules grew 39.7% YoY, while POS and related modules grew 18.5% YoY. Add-on modules across both PMS and POS made up 36% of total subscription revenue.
• Annual Maintenance Recurring Revenue: $17.4 million, near record high levels, 19.8% of total revenue.
• One-Time Product Revenue: $10.3 million, in line with expectations, 11.7% of total revenue. This segment includes perpetual software licenses and third-party hardware; hardware revenue remains stable despite strong POS sales, as modern POS solutions have a lower hardware attach rate.
• Professional Services Revenue: $19.6 million, 8.3% YoY growth (a new record), 22.3% of total revenue. Gross margin for professional services held at 35.4%, above 30% for the second consecutive quarter.
• Total Recurring Revenue: $57.7 million, 18.8% YoY growth, accounting for 65.9% of total revenue.

• The company's primary sales challenge is being excluded from initial RFP processes for PMS deals, particularly in European and Asia-Pacific markets. While this rate is declining, it remains higher than management prefers, limiting sales opportunities.
• While the Marriott PMS project is progressing on plan, upcoming implementations at large full-service premium properties are expected to bring additional unforeseen challenges, and the full rollout is still expected to take 18 to 24 months.
• Pricing is the most common reason for lost deals, particularly in large price-sensitive segments that make up at least half of the company's $16 billion total addressable market, mostly in international regions.
• Forward-looking statements, including guidance, are subject to risks and uncertainties that could cause actual results to differ materially, including the ability to hit increased guidance targets, maintain sales momentum, and successfully scale AI adoption, as detailed in prior SEC filings.

Q: AGILISIS has won deals after being added late to RFP processes. How common is exclusion from initial RFP lists, and how is the company addressing this? / A: Exclusion is very rare for POS products, but remains common for PMS, especially in Europe and APAC. The rate of exclusion has fallen sharply in North America, and is declining gradually internationally as more positive customer case studies for AGILISIS PMS spread, but remains higher than management would like.

Q: Does the mention of potential strategic investments in guidance signal accelerated spending on CRS or revenue intelligence, or other major new investments? / A: No specific large new investments are planned. Cost growth will only be incremental across sales, services, and R&D, no large step-change increases in spending are expected. Guidance for 24% full-year adjusted EBITDA margin already accounts for any potential unplanned incremental spending, so the target will hold regardless of small investment needs.

Q: How much of the PMS subscription revenue milestone (surpassing POS) and guidance increase comes from the Marriott project versus core business growth? / A: The Marriott project did contribute to the milestone, but PMS subscription growth has been accelerating for multiple quarters, driven by broader market momentum. PMS supports 15-20 add-on modules versus 4-5 for POS, and AGILISIS started from a very low PMS market share, so the growth trend is broad-based, not just tied to Marriott.

Q: With strong win rates and the main bottleneck being access to more RFPs, will the company add more sales capacity this year? / A: Management is fully open to adding sales capacity as needed, and will approve increases quickly when requested. Current sales capacity matches existing demand, as the priority is to first spread positive customer success stories to generate more demand. Capacity will be added incrementally as demand grows, with no hesitation to increase sales and marketing spend when appropriate.

Q: Is there a risk that enterprise hospitality customers will insource custom software development, enabled by AI, rather than outsourcing to AGILISIS? / A: Management has not seen any signals of increased insourcing, and does not expect meaningful insourcing in the foreseeable future. Even with AI, building and maintaining a full suite of integrated hospitality software is far more costly for a single customer than paying for AGILISIS's solution, which leverages tens of millions of dollars of development and industry-wide innovation. To date, AGILISIS has seen the opposite effect: AI-enabled innovation is accelerating customer purchasing decisions.