Annual Revenue Includes Recurring Revenue of
$118.3M and Subscription Revenue Growth of 27.5%
Annual Record Adjusted EBITDA of $30.3M,
Free Cash Flow of $27.2M and GAAP EPS of $0.49
Fiscal 2024 Annual Revenue Expected To Grow
To $230M to $235M With Full Year Adjusted EBITDA of 13%
Agilysys, Inc. (NASDAQ: AGYS), a leading global provider of
hospitality software solutions that deliver High Return
Hospitality, today reported operating results for its fiscal 2023
fourth quarter and full year ending March 31, 2023.
Summary of Fiscal 2023 Fourth Quarter Financial
Results
- Total net revenue increased 13.6% to a record $52.9 million,
compared to total net revenue of $46.6 million in the comparable
prior-year period.
- Recurring revenue (comprised of subscription and maintenance
charges) was a record $31.4 million, or 59.3% of total net revenue
compared to $26.6 million, or 57.1% of total net revenue for the
same period in fiscal 2022. Subscription revenue increased 23.9%
year over year and was 50.6% of total recurring revenue compared to
48.1% of total recurring revenue in the fourth quarter of fiscal
2022.
- Gross margin was 60.8% in the fiscal 2023 fourth quarter
compared to 59.5% in the comparable prior-year period.
- Net income attributable to common shareholders in the fiscal
2023 fourth quarter was $3.6 million, or $0.14 per diluted share
compared to $1.5 million, or $0.06 per diluted share in the
comparable prior-year period.
- Adjusted EBITDA (non-GAAP) was $8.1 million compared to $7.5
million in the comparable prior-year period (reconciliation
included in financial tables).
- Adjusted diluted EPS (non-GAAP) was $0.26 per share in the
fiscal 2023 fourth quarter compared to $0.24 per share in the
comparable prior-year period (reconciliation included in financial
tables).
- Free cash flow (non-GAAP) in the fiscal 2023 fourth quarter was
$13.2 million compared to free cash flow of $6.5 million in the
fiscal 2022 fourth quarter (reconciliation included in financial
tables). Ending cash balance was $112.8 million, compared to ending
cash balance of $97.0 million as of fiscal 2022 year-end.
Summary of Full Fiscal Year 2023 Financial Results
- Total net revenue increased 21.8% to a record $198.1 million,
compared to total net revenue of $162.6 million in the comparable
prior-year period.
- Recurring revenue (comprised of subscription and maintenance
charges) was a record $118.3 million, or 59.7% of total net revenue
compared to $99.0 million, or 60.8% of total net revenue for fiscal
year 2022. Subscription revenue increased 27.5% year over year and
was 49.2% of total recurring revenue compared to 46.1% of total
recurring revenue in fiscal year 2022.
- Gross margin was 61.0% in fiscal year 2023 compared to 62.4% in
the comparable prior-year period.
- Net income attributable to common shareholders in fiscal year
2023 was $12.7 million, or $0.49 per diluted share compared to $4.6
million, or $0.18 per diluted share in the comparable prior-year
period.
- Adjusted EBITDA (non-GAAP) was a record $30.3 million compared
to $27.3 million in the comparable prior-year period
(reconciliation included in financial tables).
- Adjusted diluted EPS (non-GAAP) was $0.97 per share in fiscal
year 2023 compared to $0.82 per share in the comparable prior-year
period (reconciliation included in financial tables).
- Free cash flow (non-GAAP) in fiscal year 2023 was $27.2 million
compared to free cash flow of $27.3 million in fiscal year 2022
(reconciliation included in financial tables).
Ramesh Srinivasan, President and CEO of Agilysys, commented,
“Despite macroeconomic volatility, we are pleased to have exceeded
$50M in revenue during a quarter for the first time in our history
thanks to the growing strength and competitive advantages of our
products and services.
Subscription revenue grew 23.9% year-over-year during the fourth
quarter, while one-time revenue, consisting of product and services
revenue, was 7.8% higher. Adjusted EBITDA was 15.3% of revenue for
the full fiscal year.
Demand for our state-of-the-art cloud native products has
remained strong during each of the past three quarters. Full year
fiscal 2023 was our best sales year and the January through March
fourth quarter was our best sales quarter, both by a fair distance,
measured in annual contract value terms. This selling success has
driven backlog across all three revenue lines - recurring revenue,
product and services - to record levels. We are well positioned to
achieve a revenue level of $230 to $235 million during fiscal year
2024. Increased investments across multiple business areas to drive
future revenue growth beyond fiscal 2024 are resulting in reduced
profitability expectations for this year with Adjusted EBITDA
expected to be 13% of revenue for the full fiscal year, with
profitability levels increasing throughout.”
Fiscal 2024 Outlook
We are expecting full year fiscal 2024 revenue to be $230 to
$235 million, inclusive of 25% year-over-year subscription revenue
growth. Adjusted EBITDA is expected to be 13% of revenue for the
full fiscal year.
Dave Wood, Chief Financial Officer, commented, “We continue to
show strong results across all aspects of our business. The record
sales and revenue quarter and full fiscal year are further
validation of the investments made during the past few years in our
new cloud native solutions and the success of recent, increased
investments in sales and marketing. Subscription revenue continues
to grow faster than total revenue and now makes up more than 50% of
total recurring revenue. Record backlog levels have us well
positioned to achieve our fiscal 2024 plan. We will remain
dedicated to executing on disciplined profitable growth while
increasing investments in various areas to drive the next growth
phase of our business.”
2023 Fourth Quarter Conference Call and Webcast
Agilysys is hosting a conference call and webcast today, May 16,
2023, at 4:30 p.m. ET. Both the call and the webcast are open to
the public. Interested parties can register for the call at
https://register.vevent.com/register/BI888ad98921bd4d3eb0c57a910cde707f.
After registration, an email confirmation with a personalized PIN
will be provided along with further access details. Please plan to
register fifteen minutes prior to the presentation to receive
confirmation and further instruction in a timely manner.
Interested parties can also access the conference call live on
the Events and Presentations page of Agilysys.com. Approximately
two hours after the call has concluded, an archived version of the
webcast will be available for replay at the same location.
Forward-Looking Language
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: “anticipate,”
“intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,”
“expect,” “strategy,” “future,” “likely,” “may,” “should,” “will”
and similar references to future periods. Examples of
forward-looking statements include, among others, our revenue,
subscription revenue and Adjusted EBITDA guidance for the 2024
fiscal year and statements we make regarding future revenue growth
and profitability levels increasing throughout the year.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the impact macroeconomic factors may have on
the overall business environment, our ability to achieve our fiscal
2024 guidance, future revenue growth, the company's ability to
convert the backlog into revenue, and the risks described in the
Company’s filings with the Securities and Exchange Commission,
including the Company’s reports on Form 10-K and Form 10-Q.
Additionally, references to "record" financial and business levels
in this document refer only to the time period after Agilysys made
the transformation to an entirely hospitality focused software
solutions company in FY2014.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. We undertake no obligation
to publicly update any forward-looking statement that may be made
from time to time, whether written or oral, whether as a result of
new information, future developments or otherwise.
Use of Non-GAAP Financial Information
To supplement the unaudited consolidated financial statements
presented in accordance with U.S. GAAP in this press release,
certain non-GAAP financial measures as defined by the SEC rules are
used. These non-GAAP financial measures include EBITDA, Adjusted
EBITDA, adjusted net income, adjusted basic earnings per share,
adjusted diluted earnings per share and free cash flow. Management
believes that such information can enhance investors’ understanding
of the Company’s ongoing operations.
The Company has included the following non-GAAP financial
measures in this press release: adjusted net income, adjusted basic
earnings per share and adjusted diluted earnings per share. The
Company believes these non-GAAP financial measures provide valuable
insight into the Company’s overall profitability from core
operations before certain non-cash and non-recurring charges. The
Company defines adjusted net income as net income before
amortization expense (including amortization of developed
technology), share-based compensation, convertible preferred stock
issuance costs, and one-time charges including severance and other
charges, impairments and legal settlements, less the related income
tax effect of these adjustments, as applicable, and defines
adjusted earnings per share as adjusted net income divided by basic
and diluted weighted average shares outstanding.
See the accompanying tables below for the definitions and
reconciliation of these non-GAAP measures to the most closely
related GAAP measures.
About Agilysys
Agilysys is well known for its long heritage of
hospitality-focused technology innovation. The Company delivers
modular and integrated software solutions and expertise to
businesses seeking to maximize Return on Experience (ROE) through
hospitality encounters that are both personal and profitable. Over
time, customers achieve High Return Hospitality by consistently
delighting guests, retaining staff and growing margins. Customers
around the world include: branded and independent hotels;
multi-amenity resort properties; casinos; property, hotel and
resort management companies; cruise lines; corporate dining
providers; higher education campus dining providers; food service
management companies; hospitals; lifestyle communities; senior
living facilities; stadiums; and theme parks. The Agilysys
Hospitality Cloud™ combines core operational systems for property
management (PMS), point-of-sale (POS) and Inventory and Procurement
(I&P) with Experience Enhancers™ that meaningfully improve
interactions for guests and for employees across dimensions such as
digital access, mobile convenience, self-service control, personal
choice, payment options, service coverage and real-time insights to
improve decisions. Core solutions and Experience Enhancers are
selectively combined in Hospitality Solution Studios™ tailored to
specific hospitality settings and business needs. Agilysys operates
across the Americas, Europe, the Middle East, Africa, Asia-Pacific,
and India with headquarters located in Alpharetta, GA. For more
information visit Agilysys.com.
AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
(UNAUDITED)
Three months ended March 31,
Year Ended March 31,
(In thousands, except per share data)
2023
2022
2023
2022
Net revenue:
Products
$
11,347
$
11,712
$
43,638
$
35,956
Subscription and maintenance
31,368
26,588
118,285
98,958
Professional services
10,182
8,259
36,142
27,722
Total net revenue
52,897
46,559
198,065
162,636
Cost of goods sold:
Products
6,312
6,830
22,994
19,251
Subscription and maintenance
7,039
5,957
26,262
21,141
Professional services
7,363
6,078
27,990
20,712
Total cost of goods sold
20,714
18,865
77,246
61,104
Gross profit
32,183
27,694
120,819
101,532
Gross profit margin
60.8
%
59.5
%
61.0
%
62.4
%
Operating expenses:
Product development
13,710
12,258
50,260
46,332
Sales and marketing
6,097
4,312
22,716
14,730
General and administrative
7,819
7,404
30,669
27,734
Depreciation of fixed assets
398
602
1,769
2,210
Amortization of internal-use software and
intangibles
417
577
1,743
1,654
Other charges
61
398
435
1,584
Legal settlements
248
598
352
969
Total operating expense
28,750
26,149
107,944
95,213
Operating income
3,433
1,545
12,875
6,319
Other income (expense):
Interest income
1,006
14
2,192
59
Interest expense
—
(6
)
—
(12
)
Other (expense) income, net
(102
)
197
697
145
Income before taxes
4,337
1,750
15,764
6,511
Income tax expense (benefit)
262
(232
)
1,182
33
Net income
$
4,075
$
1,982
$
14,582
$
6,478
Series A convertible preferred stock
dividends
(459
)
(459
)
(1,836
)
(1,836
)
Net income attributable to common
shareholders
$
3,616
$
1,523
$
12,746
$
4,642
Weighted average shares outstanding -
basic
24,825
24,484
24,694
24,357
Net income per share - basic:
$
0.15
$
0.06
$
0.52
$
0.19
Weighted average shares outstanding -
diluted
26,262
25,317
25,929
25,483
Net income per share - diluted:
$
0.14
$
0.06
$
0.49
$
0.18
AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
As of March 31,
(In thousands, except share data)
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
112,842
$
96,971
Accounts receivable, net of allowance for
expected credit losses of $610 and $318, respectively
22,378
25,175
Contract assets
2,242
1,669
Inventories
9,774
6,940
Prepaid expenses and other current
assets
7,422
5,418
Total current assets
154,658
136,173
Property and equipment, net
14,576
6,345
Operating lease right-of-use assets
12,708
9,889
Goodwill
32,638
32,759
Intangible assets, net
18,140
20,178
Deferred income taxes, non-current
2,790
2,664
Other non-current assets
7,526
6,154
Total assets
$
243,036
$
214,162
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
9,418
$
9,766
Contract liabilities
52,124
46,095
Accrued liabilities
13,708
10,552
Operating lease liabilities, current
3,263
5,049
Finance lease obligations, current
2
4
Total current liabilities
78,515
71,466
Deferred income taxes, non-current
2,257
938
Operating lease liabilities,
non-current
13,477
5,649
Finance lease obligations, non-current
—
2
Other non-current liabilities
4,018
3,304
Commitments and contingencies
Series A convertible preferred stock, no
par value
35,459
35,459
Shareholders' equity:
Common shares, without par value, at $0.30
stated value; 80,000,000 shares authorized; 31,606,831 shares
issued; and 25,326,626 and 24,728,532 shares outstanding at March
31, 2023 and March 31, 2022, respectively
9,482
9,482
Treasury shares, 6,280,205 and 6,878,299
at March 31, 2023 and March 31, 2022, respectively
(1,884
)
(2,063
)
Capital in excess of stated value
52,978
49,963
Retained earnings
52,764
40,018
Accumulated other comprehensive (loss)
(4,030
)
(56
)
Total shareholders' equity
109,310
97,344
Total liabilities and shareholders'
equity
$
243,036
$
214,162
AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(UNAUDITED)
Year Ended
March 31,
(In thousands)
2023
2022
Operating activities
Net income
$
14,582
$
6,478
Adjustments to reconcile net loss to net
cash provided by operating activities:
Loss on disposal of property &
equipment
66
195
Depreciation of fixed assets
1,769
2,210
Amortization of internal-use software and
intangibles
1,743
1,654
Deferred income taxes
(181
)
(925
)
Share-based compensation
12,958
14,549
Changes in operating assets and
liabilities:
Accounts receivable
2,537
2,551
Contract assets
(590
)
684
Inventories
(2,897
)
(5,764
)
Prepaid expense and other current
assets
(2,084
)
(484
)
Accounts payable
(1,582
)
3,417
Contract liabilities
6,383
4,902
Accrued liabilities
2,711
146
Income taxes payable
290
50
Other changes, net
(1,242
)
(1,188
)
Net cash provided by operating
activities
34,463
28,475
Investing activities
Capital expenditures
(7,238
)
(1,197
)
Cash (paid for) business combinations, net
of cash acquired
395
(24,455
)
Additional investments in corporate-owned
life insurance policies
(27
)
(27
)
Net cash used in investing activities
(6,870
)
(25,679
)
Financing activities
Payment of preferred stock dividends
(1,836
)
(1,836
)
Repurchase of common shares to satisfy
employee tax withholding
(9,254
)
(3,046
)
Principal payments under long-term
obligations
(4
)
(19
)
Net cash used in financing activities
(11,094
)
(4,901
)
Effect of exchange rate changes on
cash
(628
)
(104
)
Net increase (decrease) in cash and cash
equivalents
15,871
(2,209
)
Cash and cash equivalents at beginning of
period
96,971
99,180
Cash and cash equivalents at end of
period
$
112,842
$
96,971
AGILYSYS, INC.
RECONCILIATION OF NET INCOME TO
EBITDA AND ADJUSTED EBITDA
(UNAUDITED)
Three months ended
Twelve months ended
(In thousands)
March 31,
March 31,
2023
2022
2023
2022
Net income
$
4,075
$
1,982
$
14,582
$
6,478
Income tax expense (benefit)
262
(232
)
1,182
33
Income before taxes
4,337
1,750
15,764
6,511
Depreciation of fixed assets
398
602
1,769
2,210
Amortization of internal-use software and
intangibles
417
577
1,743
1,654
Amortization of developed technology
acquired
39
42
159
42
Interest income, net
(1,006
)
(8
)
(2,192
)
(47
)
EBITDA (a)
4,185
2,963
17,243
10,370
Share-based compensation
3,548
3,747
12,958
14,549
Other charges
61
398
435
1,584
Other non-operating expense (income)
102
(197
)
(697
)
(145
)
Legal settlements
248
598
352
969
Adjusted EBITDA (b)
$
8,144
$
7,509
$
30,291
$
27,327
(a) EBITDA, a non-GAAP financial measure,
is defined as net income before income taxes, interest income (net
of interest expense), depreciation and amortization (including
amortization of developed technology)
(b) Adjusted EBITDA, a non-GAAP financial
measure, is defined as net income before income taxes, interest
income (net of interest expense), depreciation and amortization
(including amortization of developed technology), and excluding
charges relating to i) legal settlements, ii) other charges, iii)
share-based compensation, and iv) other non-operating (income)
expense
AGILYSYS, INC.
RECONCILIATION OF NET INCOME TO
ADJUSTED NET INCOME FOR ADJUSTED EARNINGS PER SHARE
(UNAUDITED)
Three months ended
Twelve months ended
(In thousands, except per share data)
March 31,
March 31,
2023
2022
2023
2022
Net income attributable to common
shareholders
$
3,616
$
1,523
$
12,746
$
4,642
Amortization of developed technology
acquired
39
42
159
42
Amortization of internal-use software and
intangibles
417
577
1,743
1,654
Share-based compensation
3,548
3,747
12,958
14,549
Other charges
61
398
435
1,584
Legal settlements
248
598
352
969
Income tax adjustments
(994
)
(727
)
(3,274
)
(2,594
)
Adjusted net income (a)
$
6,935
$
6,158
$
25,119
$
20,846
Basic weighted average shares
outstanding
24,825
24,484
24,694
24,357
Diluted weighted average shares
outstanding
26,262
25,317
25,929
25,483
Adjusted basic earnings per share
(b)
$
0.28
$
0.25
$
1.02
$
0.86
Adjusted diluted earnings per share
(b)
$
0.26
$
0.24
$
0.97
$
0.82
(a) Adjusted net income, a non-GAAP
financial measure, is defined as net income attributable to common
shareholders before amortization expense (including amortization of
developed technology), share-based compensation, and one-time
charges including other charges and legal settlements, less the
related income tax effect of these adjustments, as applicable, at
the Company’s current combined federal and state income statutory
tax rate. No income tax effect applies to one-time charges when a
valuation allowance offsets their related deferred tax assets
(b) Adjusted earnings per share, a
non-GAAP financial measure, is defined as adjusted net income
divided by basic and diluted weighted average shares
outstanding
AGILYSYS, INC.
RECONCILIATION OF NET CASH
PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(UNAUDITED)
Three months ended
Twelve months ended
(In thousands)
March 31,
March 31,
2023
2022
2023
2022
Net cash provided by operating
activities
$
16,783
$
6,660
$
34,463
$
28,475
Capital expenditures
(3,622
)
(119
)
(7,238
)
(1,197
)
Free cash flow (a)
$
13,161
$
6,541
$
27,225
$
27,278
(a) Free cash flow, a non-GAAP financial
measure, is defined as net cash provided by operating activities,
less capital expenditures
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230516005989/en/
Investor Contact: Jessica Hennessy Senior Director
Corporate Strategy & Investor Relations Agilysys, Inc.
770-810-6116 or investorrelations@agilysys.com
Agilysys (NASDAQ:AGYS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Agilysys (NASDAQ:AGYS)
Historical Stock Chart
From Jul 2023 to Jul 2024