Agilysys delivered a strong third quarter, supported by a broad-based acceleration in subscription software sales and notable gains across its hospitality-focused product ecosystem. Management attributed the positive results to sustained improvements in its cloud-native solutions and efficiencies in project implementation, especially within key verticals like gaming casinos and foodservice management. CEO Ramesh Srinivasan emphasized that “the product ecosystem is getting better,” and highlighted significant contributions from newly modernized software modules and a more effective sales organization. The company also benefited from higher international sales and expanding customer adoption of its unified hospitality platform.
Is now the time to buy AGYS? Find out in our full research report (it’s free for active Edge members).
Agilysys (AGYS) Q3 CY2025 Highlights:
- Revenue: $79.3 million vs analyst estimates of $76.94 million (16.1% year-on-year growth, 3.1% beat)
- Adjusted EPS: $0.40 vs analyst estimates of $0.38 (4.3% beat)
- Adjusted Operating Income: $16.2 million vs analyst estimates of $7.70 million (20.4% margin, significant beat)
- The company lifted its revenue guidance for the full year to $316.5 million at the midpoint from $310 million, a 2.1% increase
- Operating Margin: 17.8%, up from 6% in the same quarter last year
- Market Capitalization: $3.50 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Agilysys’s Q3 Earnings Call
- Mayank Tandon (Needham): Asked whether recent sales momentum was driven more by market adoption of cloud-based solutions or by Agilysys’ improved product ecosystem. CEO Ramesh Srinivasan said product modernization and a unified platform were the primary drivers, supported by an expanded sales team.
- Mayank Tandon (Needham): Inquired about the margin impact of the Marriott rollout. CFO Dave Wood responded that the project should be margin accretive over time, with most revenue coming from higher-margin subscriptions.
- Matthew VanVliet (Cantor): Sought detail on international performance and whether recent wins were linked to the Marriott deal. Srinivasan emphasized product-led growth but noted that large global customers like Marriott would increase international momentum as deployments scale up.
- Brian Schwartz (Oppenheimer): Questioned efficiency gains from recent investments in sales and service capacity. Srinivasan highlighted ongoing improvements due to AI and staff training, with further efficiency expected as products and teams mature.
- Stephen Sheldon (William Blair): Asked if guidance increases were related to Marriott or broad-based sales. Wood clarified that the updated outlook excluded Marriott PMS revenue and was driven by general sales momentum across verticals.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be tracking (1) the pace at which Agilysys converts its record backlog into subscription revenue, (2) the adoption and impact of new AI-powered features within its hospitality software ecosystem, and (3) expansion into international and large enterprise accounts, especially as more global hospitality chains evaluate the unified Agilysys platform. Progress in raising brand visibility and continued operational efficiency will also be key areas of focus.
Agilysys currently trades at $121.11, up from $114.96 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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