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    AGYS
    Earnings call· Jun 2026(Q1 FY27)

    AGILYSYS Q1 FY27 earnings call AGYS

    Jul 27, 2026 Source

    Executive summary

    Agilysys Q1 FY27 — Record Sales, Revenue, and Profitability with Raised Full-Year Outlook

    Agilysys delivered a record-setting Q1 FY27, driven by strong sales performance, particularly in subscription revenue, and improved implementation efficiencies. The company raised its full-year revenue and subscription growth guidance, reflecting increased confidence in its business health and the successful execution of its AI adoption strategy. The Marriott PMS project continues on plan, and the company is seeing increasing customer value from its modern, interconnected hospitality software ecosystem.

    Highlights

    5

    • Q1 FY27 overall revenue was a record $87.7 million, a 14.3% YoY increase.

    • Subscription revenue grew 26.1% YoY, marking the 19th consecutive quarter of over 23% YoY growth.

    • Adjusted EBITDA reached $18.3 million, or 20.8% of revenue, the most profitable Q1 in history.

    • Full-year revenue guidance was raised to $368 million to $373 million, implying 15% to 17% growth.

    • Full-year subscription revenue growth guidance was raised to at least 32% from 30%.

    Concerns

    3

    • Hardware revenue remains flat around $10.3 million despite strong POS sales, due to reduced hardware attach rates with modernized solutions.

    • Sales win-loss ratio is high, but getting included in RFPs remains a challenge, particularly in Europe and APAC.

    • A significant portion of the $16 billion TAM is price-sensitive, especially in international regions, where pricing is the primary reason for lost deals.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full fiscal year revenue
    $368 million to $373 million
    high materiality
    High
    Overall revenue growth
    15% to 17%
    high materiality
    High
    Full year subscription revenue growth
    at least 32%
    high materiality
    High
    Adjusted EBITDA by revenue
    24%
    high materiality
    High
    Adjusted EBITDA by revenue exit rate
    close to 30%
    high materiality
    High
    Product revenue
    around $10 million per quarter or $40 million for the year
    medium materiality
    High
    Professional services revenue growth
    5% to 10% range
    medium materiality
    High
    Subscription revenue growth
    close to 30% growth range
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    PMS and PMS-related modules
    Subscription revenue growth. First quarter where total subscription revenue for PMS products was higher than POS ecosystem.
    		—39.7%——
    POS and POS-related modules
    Subscription revenue growth. Expected to remain in high teens, low 20s percentage levels for the foreseeable future.
    		—18.5%——

    Operational metrics

    25
    Overall revenue
    $87.7 million14.3% higher YoY
    Q1 FY27

    Record for the 18th consecutive quarter.

    Overall recurring revenue
    $57.7 million18.8% higher YoY
    Q1 FY27

    Record recurring revenue.

    Subscription revenue
    $40.2 million26.1% YoY growth
    Q1 FY27

    Record subscription revenue, driven by PMS and POS related modules.

    Subscription revenue from add-on modules
    36%
    Q1 FY27

    Contribution to total subscription revenue across both PMS and POS.

    Annual maintenance-related recurring revenue
    $17.4 million
    Q1 FY27

    Very close to record high levels.

    Onetime product revenue
    $10.3 million
    Q1 FY27

    In line with expectations, expected to stay around this range for the remainder of the fiscal year.

    Professional services revenue
    $19.6 million8.3% YoY increase
    Q1 FY27

    Record professional services revenue despite drop-off in customer paid product development-related services revenue.

    Professional services gross margin
    35.4%
    Q1 FY27

    Above 30% for the second consecutive quarter.

    Gross profit
    $55.7 million
    Q1 FY27

    Record for any quarter in absolute dollar terms.

    Gross profit margin
    63.5%
    Q1 FY27

    Product mix will continue to drive gross margin to the mid- to high 60% range.

    Combined operating expenses (excluding stock-based compensation)
    42.8%
    Q1 FY27

    Improved efficiency compared to prior year.

    Operating income
    $9.7 million
    Q1 FY27

    Well above prior year gains.

    Net income
    $9 million
    Q1 FY27

    Well above prior year gains.

    Diluted EPS
    $0.32
    Q1 FY27

    Well above prior year gains.

    Adjusted net income
    $14 million
    Q1 FY27

    Compares favorably to prior year period, normalizing for certain noncash and nonrecurring charges.

    Adjusted diluted EPS
    $0.49
    Q1 FY27

    Compares favorably to prior year period.

    Adjusted EBITDA
    $18.3 million
    Q1 FY27

    Performed very strongly on the back of higher-than-anticipated recurring revenue levels.

    Adjusted EBITDA margin
    20.8%
    Q1 FY27

    Most profitable Q1 April to June period in history, well ahead of original FY '27 plan.

    Cash and marketable securities balance
    $123.7 million
    June 30, 2026

    Comfortable with current levels of cash.

    New customers added
    15
    Q1 FY27

    Number was on the lower end, but deal sizes were larger.

    New properties added (not using any software)
    87
    Q1 FY27

    Parent company was already a customer.

    Total new properties added (across new and current customers)
    102
    Q1 FY27

    101 were either partially or fully subscription licenses-based.

    Instances of selling software solutions to existing product users
    106
    Q1 FY27

    Additional product adoption by existing customers continues to be a big contributor to sales and revenue growth.

    Stock-based compensation
    5% to 7%
    FY27

    Expected range for the full year.

    Price-sensitive market portion of TAM
    at least half
    Ongoing

    A large part of the $16 billion total addressable market is quite price sensitive.

    Industry KPIs

    8
    MetricValueDetails
    Revenue growth$87.7 millionUSD
    Rpo current rporecord levels
    Bookings billingsBest sales quarter in history outside of Q4
    Customer account count15customers
    Large deal new logo metrics3deals
    Multi product platform attach106deals
    Operating FCF margin rule of 4020.8%%
    Ai product adoption monetization30+features

    Orderbook & backlog

    1
    Total backlog (excluding large PMS rollout)record levelsQ1 FY27

    combined product services and recurring revenue backlog

    Product announcements

    3
    ProductTypeDetails
    30+ AI-based featuresmilestone
    CRS (Central Reservation System)roadmap
    Revenue Intelligenceroadmap

    Deals & partnerships

    3
    Major casino resort (Las Vegas Strip)New customer win for multi-product ecosystem7-figure

    Chose Agilysys for point-of-sale (POS), Property Management System (PMS), and several other software modules for a casino resort under construction.

    Major casino resort (Arizona)Customer switch from main competitor for multi-product ecosystem7-figure

    Switched to Agilysys across POS, PMS, and other software modules after being a customer of the main competitor for about two decades.

    9-property resort group (Australia)Customer switch from main competitor for multi-product ecosystem7-figure

    Decided to switch to Agilysys PMS and other related supporting modules after being with the main competitor for more than two decades. Agilysys was originally not included in the RFP process.

    Risks & headwinds

    3
    RFP Inclusion ChallengeOngoing

    uncomfortably high in Europe and APAC for PMS

    Mitigation: Dedicated and persistent efforts by sales team, growing number of positive reference customers, spreading success stories.

    Price Sensitivity in TAMOngoing

    at least half of the $16 billion total addressable market is price-sensitive

    Mitigation: Improved services implementation efficiencies making the company more competitive, maintaining pricing discipline without 'running to the bottom.'

    Marriott PMS Rollout ComplexityNext 18-24 months

    still expecting the timeline to be somewhere in the next 18 to 24 months sort of completion time

    Mitigation: Learning lessons in change management and data migration, focusing on integration strengths among ecosystem products, better customer user training, use of AI tools for implementation.

    What to watch in Q2 FY27

    5

    PMS RFP inclusion rate in Europe and APAC

    Next quarter
    Currentuncomfortably high
    TargetReduction in exclusion rate

    Why it matters

    Improving RFP inclusion is key to expanding market share, especially for PMS in international markets.

    So that percentage -- George, that percentage of us not getting included in RFPs is very low with POS, like we already know. But with respect to PMS, I would say that percentage is going really down in domestic regions, U.S., Canada, but still remains uncomfortably high in Europe and APAC.

    Q&A highlights

    7

    How common is it for Agilysys to be excluded from RFPs, and what is the strategy to improve inclusion rates, especially given recent wins where they were initially excluded?

    Exclusion from POS RFPs is very low, but remains uncomfortably high in Europe and APAC for PMS. This percentage is decreasing due to positive customer references and the value created by their PMS solutions. The company is becoming more persistent in getting included in selection processes.

    “So that percentage -- George, that percentage of us not getting included in RFPs is very low with POS, like we already know. But with respect to PMS, I would say that percentage is going really down in domestic regions, U.S., Canada, but still remains uncomfortably high in Europe and APAC.”

    asked by George Sutton · answered by Ramesh Srinivasan

    2 min read6 chapters

    Detailed Narrative

    01

    Sales Momentum and Strategic Wins

    Agilysys achieved its best-ever Q1 sales period, with the last two quarters marking the strongest six-month sales period in company history. This success was highlighted by three major 7-figure multi-product ecosystem wins, including a significant casino resort in Las Vegas, another in Arizona switching from a competitor, and a 9-property resort group in Australia. The company's ability to secure these deals, even when initially excluded from RFPs, underscores the strength of its modernized solutions and ecosystem.

    02

    AI Adoption and Ecosystem Development

    The company's AI adoption strategy is progressing as planned, with over 30 AI-based features announced and several being deployed at pilot customer properties. Agilysys has built a central orchestration layer for AI processing to manage costs, optimize token usage, and ensure adherence to governance principles. Development of fully AI-native modules, CRS and revenue intelligence, is on track for initial beta implementations later this fiscal year, designed to work within the existing product ecosystem.

    03

    Subscription Revenue Dominance and PMS Growth

    Q1 FY27 marked the first time subscription revenue from PMS and related modules surpassed that of the POS ecosystem, driven by 39.7% growth in PMS subscription revenue. This shift reflects the broader range of add-on modules available with PMS and the company's low market share in this area, indicating significant growth potential. Overall recurring revenue reached a record $57.7 million, representing 65.9% of total revenue.

    04

    Implementation Efficiency and Product Quality

    Improvements in project implementation levels and record professional services revenue are attributed to the modernized solutions becoming easier to implement and increased use of AI tools. The company is now selling more software for every dollar of services, indicating a maturing, technology-based enterprise software business. Management emphasized that product quality and the strength of the integrated ecosystem are the primary drivers of these efficiencies.

    05

    Marriott PMS Project Progress

    The large-scale Marriott PMS project continues to make good progress and remains on plan, with all technical aspects proven out. While the company acknowledges the complexity of upcoming full-service property implementations, the project is expected to take another 18 to 24 months for completion, with valuable lessons learned in change management and data migration. The project is going well, but the company is not expecting a super-fast implementation timeline.

    06

    Competitive Positioning and Market Opportunity

    Agilysys maintains a strong competitive position, with its modern AI-enriched interconnected ecosystem of hospitality solutions proving difficult for competitors to replicate. The company's focus solely on the hospitality market's $16 billion total addressable market is seen as a significant competitive advantage, driving disciplined revenue and profitability growth. Management noted that the last six months have been the best sales period in company history, with sales decisions getting sped up due to AI-based innovations.

    AI-generated summary of the company’s earnings call. Not investment advice.