Annual Revenue Includes Recurring Revenue of
$138.1M and Subscription Revenue Growth of 29.6%
Annual Record Adjusted EBITDA of $37.1M and
Free Cash Flow of $40.1M
Annual Revenue Expected To Grow To $275M to
$280M In Fiscal 2025 With Full Year Adjusted EBITDA of 16%
Agilysys, Inc. (NASDAQ: AGYS), a leading global provider of
hospitality software solutions that deliver High Return
Hospitality, today reported results for its fiscal 2024 fourth
quarter and full year ending March 31, 2024.
Summary of Fiscal 2024 Fourth Quarter Financial
Results
- Total net revenue increased 17.6% to a record $62.2 million
compared to total net revenue of $52.9 million in the comparable
prior-year period.
- Recurring revenue (comprised of subscription and maintenance
charges) was a record $36.6 million, or 58.8% of total net revenue,
compared to $31.4 million, or 59.3% of total net revenue for the
same period in fiscal 2023. Subscription revenue increased 31.6%
year over year and was 57.0% of total recurring revenue compared to
50.6% of total recurring revenue in the fourth quarter of fiscal
2023.
- Gross margin was 61.5% in the fiscal 2024 fourth quarter
compared to 60.8% in the comparable prior-year period.
- Net income attributable to common shareholders in the fiscal
2024 fourth quarter was $3.0 million, or $0.11 per diluted share,
compared to $3.6 million, or $0.14 per diluted share, in the
comparable prior-year period.
- Adjusted EBITDA (non-GAAP) was $11.0 million compared to $8.1
million in the comparable prior-year period (reconciliation
included in financial tables).
- Adjusted diluted EPS (non-GAAP) was $0.32 per share in the
fiscal 2024 fourth quarter compared to $0.26 per share in the
comparable prior-year period (reconciliation included in financial
tables).
- Free cash flow (non-GAAP) in the fiscal 2024 fourth quarter was
$29.3 million compared to free cash flow of $13.2 million in the
fiscal 2023 fourth quarter (reconciliation included in financial
tables). Ending cash balance was $144.9 million compared to ending
cash balance of $112.8 million as of fiscal 2023 year-end.
Summary of Full Fiscal Year 2024 Financial Results
- Total net revenue increased 19.9% to a record $237.5 million
compared to total net revenue of $198.1 million in the comparable
prior-year period.
- Recurring revenue (comprised of subscription and maintenance
charges) was a record $138.1 million, or 58.1% of total net
revenue, compared to $118.3 million, or 59.7% of total net revenue,
for fiscal year 2023. Subscription revenue increased 29.6% year
over year and was 54.7% of total recurring revenue compared to
49.2% of total recurring revenue in fiscal year 2023.
- Gross margin was 60.7% in fiscal year 2024 compared to 61.0% in
the comparable prior-year period.
- Net income attributable to common shareholders in fiscal year
2024 was $85.0 million, or $3.17 per diluted share, compared to
$12.7 million, or $0.49 per diluted share, in the comparable
prior-year period.
- Adjusted EBITDA (non-GAAP) was a record $37.1 million compared
to $30.3 million in the comparable prior-year period
(reconciliation included in financial tables).
- Adjusted diluted EPS (non-GAAP) was $1.10 per share in fiscal
year 2024 compared to $0.97 per share in the comparable prior-year
period (reconciliation included in financial tables).
- Free cash flow (non-GAAP) in fiscal year 2024 was $40.1 million
compared to free cash flow of $27.2 million in fiscal year 2023
(reconciliation included in financial tables).
Ramesh Srinivasan, President and CEO of Agilysys, commented, “We
are pleased to report our ninth consecutive record revenue quarter
and another record fiscal year with respect to overall revenue and
profitability. The final fiscal year results were significantly
better than our expectations at the beginning of the year and at
the high end of revised increased expectations during the year.
“Fiscal 2024 fourth quarter revenue was a record $62.2 million,
17.6% higher than the comparable prior year quarter and included
subscription revenue growth of 31.6% and services revenue growth of
43.9% year-over-year. Full year fiscal 2024 revenue was a record
$237.5 million, 19.9% higher than the previous fiscal year, and
included subscription revenue growth of 29.6% and services revenue
growth of 39.2%.
Srinivasan continued, “Significant growth in subscription and
services revenue and improvements in services margins are good
indicators of our continuing progress as a world-class cloud-native
end-to-end technology provider fulfilling the growing need for such
high-grade software solutions in the hospitality industry. With the
completion of virtually all the product re-engineering and
modernization projects across POS, PMS, and Inventory-Procurement
on which we had been focused for the past several years, we now
have a heightened competitive advantage that positions us well for
continued sales success and revenue growth. We have made several
significant sales breakthroughs during the past few months.
“We expect fiscal year 2025 to mark the beginning of a great new
era with full year revenue in the $275 million to $280 million
range inclusive of at least 27% subscription revenue growth and
Adjusted EBITDA at 16% of revenue,” Srinivasan concluded.
Fiscal 2025 Outlook
The Company expects full year fiscal 2025 revenue to be $275
million to $280 million, including higher than 27% year-over-year
subscription revenue growth. Adjusted EBITDA is expected to be 16%
of revenue for the full fiscal year.
Dave Wood, Chief Financial Officer, commented, “We are pleased
with the results for the 2024 fiscal year. Our disciplined approach
throughout the year enabled us to execute well on our fiscal 2024
financial plan while positioning us for continued success and
growth into fiscal year 2025. Strong subscription revenue growth is
an indication of our expanding competitive product strength and
results of the increasing investments in sales and marketing
efforts. We continue to see growth opportunities in front of us and
remain focused on executing disciplined profitable growth.”
2024 Fourth Quarter Conference Call and Webcast
Agilysys is hosting a conference call and webcast today, May 13,
2024, 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/BI5c740825742e4b699d9ea8b050cd4a0b.
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 2025
fiscal 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
2025 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 exclusively delivers state-of-the-art software
solutions and services that help organizations achieve High Return
Hospitality™ by maximizing Return on Experience (ROE) through
interactions that make ‘personal’ profitable. Customers around the
world use Agilysys Property Management Systems (PMS), Point-of-Sale
(POS) solutions and Food & Beverage Inventory and Procurement
(I&P) systems to consistently delight guests, retain staff and
grow margins. Agilysys’ 100% hospitality customer base includes
branded and independent hotels; multi-amenity resorts; 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.
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.
- Financial tables follow -
AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
(UNAUDITED)
Three months ended March 31,
Year Ended March 31,
(In thousands, except per share data)
2024
2023
2024
2023
Net revenue:
Products
$
10,983
$
11,347
$
49,083
$
43,638
Subscription and maintenance
36,588
31,368
138,069
118,285
Professional services
14,650
10,182
50,312
36,142
Total net revenue
62,221
52,897
237,464
198,065
Cost of goods sold:
Products
6,294
6,312
26,318
22,994
Subscription and maintenance
8,059
7,039
30,870
26,262
Professional services
9,592
7,363
36,020
27,990
Total cost of goods sold
23,945
20,714
93,208
77,246
Gross profit
38,276
32,183
144,256
120,819
Gross profit margin
61.5
%
60.8
%
60.7
%
61.0
%
Operating expenses:
Product development
14,284
13,710
56,739
50,260
Sales and marketing
8,601
6,097
28,439
22,716
General and administrative
9,073
7,819
36,279
30,669
Depreciation of fixed assets
854
398
3,896
1,769
Amortization of internal-use software and
intangibles
246
417
1,366
1,743
Other charges, net
1,711
61
1,756
435
Legal settlements
28
248
28
352
Total operating expense
34,797
28,750
128,503
107,944
Operating income
3,479
3,433
15,753
12,875
Other income (expense):
Interest income
1,503
1,006
5,083
2,192
Other (expense) income, net
(136
)
(102
)
(152
)
697
Income before taxes
4,846
4,337
20,684
15,764
Income tax provision (benefit)
1,885
262
(65,511
)
1,182
Net income
$
2,961
$
4,075
$
86,195
$
14,582
Series A convertible preferred stock
dividends
—
(459
)
(1,204
)
(1,836
)
Net income attributable to common
shareholders
$
2,961
$
3,616
$
84,991
$
12,746
Weighted average shares outstanding -
basic
26,913
24,825
25,668
24,694
Net income per share - basic:
$
0.11
$
0.15
$
3.31
$
0.52
Weighted average shares outstanding -
diluted
28,019
26,262
26,842
25,929
Net income per share - diluted:
$
0.11
$
0.14
$
3.17
$
0.49
AGILYSYS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
March 31,
March 31,
(In thousands, except share data)
2024 (Unaudited)
2023
ASSETS
Current assets:
Cash and cash equivalents
$
144,891
$
112,842
Accounts receivable, net of allowance for
expected credit losses of $974 and $610, respectively
29,441
22,378
Contract assets
2,287
2,242
Inventories
4,587
9,774
Prepaid expenses and other current
assets
7,731
7,422
Total current assets
188,937
154,658
Property and equipment, net
17,930
14,576
Operating lease right-of-use assets
18,384
12,708
Goodwill
32,791
32,638
Intangible assets, net
16,952
18,140
Deferred income taxes, non-current
67,373
2,790
Other non-current assets
8,063
7,526
Total assets
$
350,430
$
243,036
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
9,422
$
9,418
Contract liabilities
56,148
52,124
Accrued liabilities
19,522
13,708
Operating lease liabilities, current
4,279
3,263
Finance lease obligations, current
—
2
Total current liabilities
89,371
78,515
Deferred income taxes, non-current
554
2,257
Operating lease liabilities,
non-current
19,613
13,477
Other non-current liabilities
4,415
4,018
Commitments and contingencies
Series A convertible preferred stock, no
par value
—
35,459
Shareholders' equity:
Common shares, without par value, at $0.30
stated value; 80,000,000 shares authorized; 33,342,288 shares
issued; and 27,376,862 and 25,326,626 shares outstanding at March
31, 2024 and March 31, 2023, respectively
10,003
9,482
Treasury shares, 5,965,426 and 6,280,205
at March 31, 2024 and March 31, 2023, respectively
(1,791
)
(1,884
)
Capital in excess of stated value
94,680
52,978
Retained earnings
137,755
52,764
Accumulated other comprehensive loss
(4,170
)
(4,030
)
Total shareholders' equity
236,477
109,310
Total liabilities and shareholders'
equity
$
350,430
$
243,036
AGILYSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(UNAUDITED)
Year Ended
March 31,
(In thousands)
2024
2023
Operating activities
Net income
$
86,195
$
14,582
Adjustments to reconcile net income to net
cash provided by operating activities:
(Gain) loss on asset disposals
(1,145
)
66
Depreciation of fixed assets
3,896
1,769
Amortization of internal-use software and
intangibles
1,366
1,743
Deferred income taxes
(66,353
)
(181
)
Share-based compensation
14,111
12,958
Changes in operating assets and
liabilities:
Accounts receivable
(6,996
)
2,537
Contract assets
(36
)
(590
)
Inventory
5,189
(2,897
)
Prepaids and other current assets
(291
)
(2,084
)
Accounts payable
973
(1,582
)
Contract liabilities
3,965
6,383
Accrued liabilities
5,659
2,711
Income taxes payable, net
(1,177
)
290
Other changes, net
2,830
(1,242
)
Net cash provided by operating
activities
48,186
34,463
Investing activities
Capital expenditures
(8,127
)
(7,238
)
Proceeds from sale of assets
552
—
Cash (paid for) business combinations, net
of cash acquired
—
395
Additional investments in corporate-owned
life insurance policies
(27
)
(27
)
Net cash used in investing activities
(7,602
)
(6,870
)
Financing activities
Payment of preferred stock dividends
(1,663
)
(1,836
)
Repurchase of common shares to satisfy
employee tax withholding
(6,893
)
(9,254
)
Principal payments under long-term
obligations
(2
)
(4
)
Net cash used in financing activities
(8,558
)
(11,094
)
Effect of exchange rate changes on
cash
23
(628
)
Net increase in cash and cash
equivalents
32,049
15,871
Cash and cash equivalents at beginning of
period
112,842
96,971
Cash and cash equivalents at end of
period
$
144,891
$
112,842
AGILYSYS, INC.
RECONCILIATION OF NET INCOME TO
EBITDA AND ADJUSTED EBITDA
(UNAUDITED)
Three months ended
Twelve months ended
March 31,
March 31,
(In thousands)
2024
2023
2024
2023
Net income
$
2,961
$
4,075
$
86,195
$
14,582
Income tax provision (benefit)
1,885
262
(65,511
)
1,182
Income before taxes
4,846
4,337
20,684
15,764
Depreciation of fixed assets
854
398
3,896
1,769
Amortization of internal-use software and
intangibles
246
417
1,366
1,743
Amortization of developed technology
acquired
40
39
159
159
Interest income, net
(1,503
)
(1,006
)
(5,083
)
(2,192
)
EBITDA (a)
4,483
4,185
21,022
17,243
Share-based compensation
4,622
3,548
14,111
12,958
Other charges, net
1,711
61
1,756
435
Other non-operating expense (income)
136
102
152
(697
)
Legal settlements
28
248
28
352
Adjusted EBITDA (b)
$
10,980
$
8,144
$
37,069
$
30,291
(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)
share-based compensation, ii) other (gains) and charges, net, iii)
other non-operating expense (income), and iv) legal settlements
AGILYSYS, INC.
RECONCILIATION OF NET INCOME TO
ADJUSTED NET INCOME FOR ADJUSTED EARNINGS PER SHARE
(UNAUDITED)
Three months ended
Twelve months ended
March 31,
March 31,
(In thousands, except per share data)
2024
2023
2024
2023
Net income attributable to common
shareholders
$
2,961
$
3,616
$
84,991
$
12,746
Amortization of developed technology
acquired
40
39
159
159
Amortization of internal-use software and
intangibles
246
417
1,366
1,743
Share-based compensation
4,622
3,548
14,111
12,958
Other charges, net
1,711
61
1,756
435
Legal settlements
28
248
28
352
Tax events (a)
577
—
(69,067
)
—
Income tax adjustments
(1,194
)
(994
)
(3,805
)
(3,274
)
Adjusted net income (b)
$
8,991
$
6,935
$
29,539
$
25,119
Basic weighted average shares
outstanding
26,913
24,825
25,668
24,694
Diluted weighted average shares
outstanding
28,019
26,262
26,842
25,929
Adjusted basic earnings per share
(c)
$
0.33
$
0.28
$
1.15
$
1.02
Adjusted diluted earnings per share
(c)
$
0.32
$
0.26
$
1.10
$
0.97
(a) Tax events include excess tax benefits or expense related to
share-based compensation, release of valuation allowances against
deferred income taxes, and changes in uncertain tax positions
(b) 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, other (gains) and charges,
net, 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 and, as defined under
(a) above, tax events
(c) 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
March 31,
March 31,
(In thousands)
2024
2023
2024
2023
Net cash provided by operating
activities
$
29,807
$
16,783
$
48,186
$
34,463
Capital expenditures
(469
)
(3,622
)
(8,127
)
(7,238
)
Free cash flow (a)
$
29,338
$
13,161
$
40,059
$
27,225
(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/20240513531700/en/
Investor Contact: Jessica Hennessy Senior Director
Corporate Strategy & Investor Relations Agilysys, Inc.
770-810-6116 or investorrelations@agilysys.com
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