Agilysys — Fiscal 2027 Second Quarter Earnings Summary

Financial Performance:

• Total net revenue reached a record $93.4 million, a 17.7% increase year-over-year from $79.3 million in the prior-year period.
• Recurring revenue (subscription and maintenance) hit a record $62.2 million, representing 66.6% of total net revenue, up from $51.0 million (64.3%) in the prior year.
• Subscription revenue grew 32.6% year-over-year and comprised 71.2% of total recurring revenue, compared to 65.5% in the prior year.
• Gross margin improved to 64.6% from 61.7% in the comparable prior-year period.
• Net income was $13.2 million ($0.46 per diluted share), compared to $11.7 million ($0.41 per diluted share) in the prior year.
• Adjusted EBITDA (non-GAAP) was $24.1 million, up from $16.4 million in the prior year.
• Adjusted diluted EPS (non-GAAP) was $0.67 per share, compared to $0.40 per share in the prior year.
• Free cash flow (non-GAAP) was $14.8 million, compared to $15.0 million in the prior year.
• Ending cash balance was $137.6 million, up from $116.9 million as of fiscal 2026 year-end.
• Contract liabilities (deferred revenue) were $69.6 million as of September 30, 2026, down from $83.0 million as of March 31, 2026.

Guidance and Future Outlook:

• Raised full-year fiscal 2027 total revenue guidance to a range of $374 million to $378 million.
• Raised full-year fiscal 2027 subscription revenue growth guidance to at least 34% year-over-year (previously at least 32%).
• Increased full-year fiscal 2027 Adjusted EBITDA expectation to 25% of revenue, up from a prior expectation of 24%.

Business Segments and Product Lines:

• Q2 Fiscal 2027 one-time product revenue was higher than expected, driven by increased industry investments in modern point of sale (POS) technology solutions.
• The company noted strong implementation and delivery results contributing to record backlog levels.
• The business serves a 100% hospitality customer base including hotels, resorts, casinos, cruise lines, corporate/campus dining, healthcare, senior living, and entertainment venues.

Market and Competitive Landscape:

• The hospitality industry continues to invest in modern POS technology and is moving toward a modern, cloud-native ecosystem of software solutions to improve operational efficiencies and guest experiences.
• Agilysys reported its 19th consecutive record revenue quarter.
• Q2 Fiscal 2027 represented the best-ever July to September sales period.

Risks and Challenges:

• Forward-looking statements are subject to uncertainties including macroeconomic factors, the ability to achieve fiscal 2027 guidance, maintaining sales momentum, and converting backlog into revenue.
• Actual results may differ materially from forward-looking statements due to risks described in the Company's filings with the Securities and Exchange Commission.

Management Commentary and Tone:

• Ramesh Srinivasan, President and CEO, stated the business continues to grow ahead of previous expectations, driven by 32.6% subscription growth.
• Dave Wood, CFO, commented that teams are executing at elevated levels with sustained high sales demand and project implementation velocity, positioning the company to execute against the forecasted plan for the second half of the fiscal year.

Other Key Points:

• The company hosted a conference call and webcast on October 26, 2026, at 4:30 p.m. ET.
• Agilysys operates across the Americas, Europe, the Middle East, Africa, Asia-Pacific, and India, with headquarters in Alpharetta, GA.
• The company utilizes a unified data model with a single set of APIs to create shared operational memory across systems, powered by intelligent guest profiles and embedded AI.
• Non-GAAP financial measures including EBITDA, Adjusted EBITDA, adjusted net income, adjusted EPS, and free cash flow are provided with reconciliations in the accompanying tables.