MARKET WIRE NEWS

Agilysys Announces 16th Consecutive Record Revenue Quarter: $80.4M in Fiscal 2026 Q3

MWN-AI** Summary

Agilysys, Inc. (NASDAQ: AGYS) has achieved its 16th consecutive record revenue quarter, reporting total net revenue of $80.4 million for the third quarter of fiscal 2026, marking a 15.6% increase compared to $69.6 million in the same quarter of the previous fiscal year. The company noted that recurring revenue, including subscription and maintenance fees, reached a record $52 million, accounting for 64.7% of total revenue. Notably, subscription revenue grew by 23.1% year-over-year, underscoring the increasing demand for Agilysys’ offerings.

Gross margin for the quarter was reported at 62.5%, slightly down from 63% within the prior year. The highlighted net income was $9.9 million, translating to $0.35 per diluted share, a substantial increase from $3.8 million or $0.14 per diluted share in the prior year’s quarter. Furthermore, adjusted EBITDA was notably higher at $17.3 million compared to $14.7 million year-over-year, reflecting operational efficiency and profitability momentum.

In response to sustained business growth, Agilysys has raised its full-year total revenue guidance to $318 million while maintaining its adjusted EBITDA target of 20% of revenue. The company's confidence in achieving these targets stems from robust sales performance and an efficient backlog conversion process.

CEO Ramesh Srinivasan emphasized the favorable momentum and strong execution in the implementation of their solutions, which significantly contributed to the rise in professional services revenue by 22%. Looking forward, Agilysys appears well-positioned for ongoing growth in both subscription revenue and adjusted EBITDA as it continues to meet the needs of the hospitality sector.

MWN-AI** Analysis

Agilysys, Inc. (NASDAQ: AGYS) has announced a remarkable performance in its Fiscal 2026 Q3, marking the 16th consecutive record revenue quarter with total net revenue of $80.4 million, up 15.6% year-over-year. The growth was significantly bolstered by a 23% rise in subscription revenue, which now represents 67% of the recurring revenue. This trajectory indicates strong operational momentum and resilience within the hospitality software sector.

Given these impressive results, investors should consider a long position in Agilysys, particularly as the company has raised its full-year revenue guidance to $318 million. Such upward revisions usually suggest robust growth expectations and can instill investor confidence. The adjusted EBITDA margin of 20% also reflects operational efficiency, lending additional credibility to the growth narrative.

Despite a slight dip in gross margin from 63% to 62.5%, the overall financial health remains solid, with a significant net income increase from $3.8 million to $9.9 million year-over-year. The company reported a free cash flow of $22.7 million, further solidifying its capability to reinvest in growth opportunities or enhance shareholder returns through buybacks or dividends.

However, potential investors should be cautious of macroeconomic headwinds that could impact the hospitality sector, especially considering global uncertainties. It is essential to monitor how effectively Agilysys can convert its backlog into revenue, especially with ongoing projects.

In conclusion, Agilysys presents a compelling investment opportunity, fueled by impressive revenue growth, particularly from subscriptions, and a positive outlook. Nevertheless, adequate risk management and continuous monitoring of external economic factors are advisable as investors consider their positions in this stock.

**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.

Source: Business Wire

Includes Subscription Revenue Growth of 23%

Raises Full-Year Fiscal 2026 Total Revenue Guidance to $318M

Agilysys, Inc. (NASDAQ: AGYS), a leading global provider of hospitality software solutions and services, today reported results for its Fiscal 2026 third quarter ending December 31, 2025.

Summary of Fiscal 2026 Third Quarter Financial Results

  • Total net revenue increased 15.6% to a record $80.4 million compared to total net revenue of $69.6 million in the comparable prior-year period.
  • Recurring revenue (comprised of subscription and maintenance charges) was a record $52.0 million, or 64.7% of total net revenue, compared to $44.4 million, or 63.8% of total net revenue for the same period in Fiscal 2025. Subscription revenue increased 23.1% year-over-year and was 67.0% of total recurring revenue compared to 63.8% of total recurring revenue in the third quarter of Fiscal 2025.
  • Gross margin was 62.5% in the Fiscal 2026 third quarter compared to 63.0% in the comparable prior-year period.
  • Net income in the Fiscal 2026 third quarter was $9.9 million, or $0.35 per diluted share, compared to $3.8 million, or $0.14 per diluted share, in the comparable prior-year period.
  • Adjusted EBITDA (non-GAAP) was $17.3 million compared to $14.7 million in the comparable prior-year period (reconciliation included in financial tables).
  • Adjusted diluted EPS (non-GAAP) was $0.42 per share in the Fiscal 2026 third quarter compared to $0.38 per share in the comparable prior-year period (reconciliation included in financial tables).
  • Free cash flow (non-GAAP) in the Fiscal 2026 third quarter was $22.7 million compared to free cash flow of $19.7 million in the Fiscal 2025 third quarter (reconciliation included in financial tables). Ending cash balance was $81.5 million compared to ending cash balance of $73.0 million as of Fiscal 2025 year-end.

Ramesh Srinivasan, President and CEO of Agilysys, commented, “Q3 Fiscal 2026 revenue was a record $80.4 million, the 16th consecutive record revenue quarter, with 15.6% year-over-year total revenue growth driven by subscription revenue growth of 23.1%. We are pleased to see the business momentum surge that occurred during the first half of Fiscal 2026 carry into the second half.

Mr. Srinivasan continued, “We continue to achieve excellent implementation execution progress in the field, resulting in Q3 Fiscal 2026 professional services revenue growing 22.0% over the prior year despite the holiday season and reduction of paid R&D related services revenue with a couple such projects having advanced to the implementation phase. Total backlog levels reduced slightly during the quarter. The current backlog calculations continue to exclude the major PMS project we are making good progress with.”

“We remain comfortable with previous Fiscal 2026 full year guidance levels provided for year-over-year subscription revenue growth of 29%, excluding any subscription revenue contribution from the major PMS project, and Adjusted EBITDA of 20% of revenue. We are raising Fiscal 2026 total revenue guidance to $318 million, the higher end of the previous guidance range. Our visibility into the rest of this fiscal year and into Fiscal 2027 remains excellent,” Mr. Srinivasan concluded.

Fiscal 2026 Outlook

The Company is raising its full year total revenue guidance to $318 million while reiterating Adjusted EBITDA at 20% of revenue for the full fiscal year and year-over-year subscription revenue growth of 29%. Subscription revenue growth expectations exclude any material revenue from the large-scale PMS project currently in progress.

Dave Wood, Chief Financial Officer, commented, “We continue to execute well on our fiscal year plan with business momentum continuing into the third quarter of Fiscal 2026. Backlog deployment remained strong during the quarter as the pace of implementations has continued to match or exceed sales velocity. Given the visibility into sales and our current backlog levels, we are well positioned to achieve stated guidance levels.”

2026 Third Quarter Conference Call and Webcast

Agilysys is hosting a conference call and webcast today, January 26, 2026, 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-conf.media-server.com/register/BI4f6b805c6f4b423fa0acb895a2ff6bd4 . After registration, an email confirmation with a personalized PIN will be provided along with further access details. Please plan to register 15 minutes prior to the presentation to receive confirmation and further instruction in a timely manner.

Interested parties also can access the conference call live through the Events and Presentations section of the Investor Relations 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,” “outlook,” “forecast,” “preliminary,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “would,” “could,” “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 2026 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. 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 herein and in other filings and statements include, among others, the impact macroeconomic factors may have on the overall business environment, our ability to achieve our Fiscal 2026 guidance, maintaining sales momentum, the Company's ability to convert the backlog into revenue, and the Risk Factors 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, other (gains) and charges, net, and legal settlements, net, 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 tax events as defined in the accompanying tables 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 hospitality software solutions and services that help organizations go beyond what they can accomplish with traditional property management systems (PMS), point-of-sale (POS) solutions and food and beverage inventory and procurement systems (F&B I&P). Modern, state-of-the-art solutions work standalone to provide best-in-class capabilities, or together in a coordinated ecosystem that unifies data and workflows across and among properties, to equip staff members to delight guests, improve efficiency and grow margins. The 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 .

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended
December 31,

Nine Months Ended
December 31,

(In thousands, except per share data)

2025

2024

2025

2024

Net revenue:

Products

$

10,681

$

10,677

$

30,731

$

31,077

Subscription and maintenance

52,007

44,379

151,586

123,853

Professional services

17,702

14,505

54,049

46,422

Total net revenue

80,390

69,561

236,366

201,352

Cost of goods sold:

Products

5,946

5,550

18,182

15,982

Subscription and maintenance

10,909

9,531

31,742

26,466

Professional services

13,293

10,625

39,938

31,967

Total cost of goods sold

30,148

25,706

89,862

74,415

Gross profit

50,242

43,855

146,504

126,937

Gross profit margin

62.5

%

63.0

%

62.0

%

63.0

%

Operating expenses:

Product development

18,926

14,971

54,207

45,863

Sales and marketing

9,106

9,013

30,681

24,822

General and administrative

10,833

9,536

31,753

30,181

Depreciation of fixed assets

1,009

985

2,918

2,738

Amortization of internal-use software and intangibles

1,417

1,622

4,307

2,777

Other (gains) charges, net

(2,717

)

(12

)

(7,923

)

2,576

Legal settlements, net

(64

)

330

161

699

Total operating expense

38,510

36,445

116,104

109,656

Operating income

11,732

7,410

30,400

17,281

Other income (expense):

Interest income

485

416

1,278

3,293

Interest expense

(30

)

(657

)

(303

)

(1,116

)

Other income, net

696

574

2,068

804

Income before taxes

12,883

7,743

33,443

20,262

Income tax provision

2,986

3,913

6,946

962

Net income

$

9,897

$

3,830

$

26,497

$

19,300

Weighted average shares outstanding - basic

27,970

27,667

27,882

27,446

Net income per share - basic:

$

0.35

$

0.14

$

0.95

$

0.70

Weighted average shares outstanding - diluted

28,438

28,314

28,379

28,248

Net income per share - diluted:

$

0.35

$

0.14

$

0.93

$

0.68

AGILYSYS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

December 31,
2025
(Unaudited)

March 31,
2025

ASSETS

Current assets:

Cash and cash equivalents

$

81,453

$

73,041

Accounts receivable, net of allowance for expected credit losses of $780 and $627, respectively

63,699

31,529

Contract assets

3,420

4,523

Inventories

7,794

5,174

Prepaid expenses and other current assets

13,407

9,260

Total current assets

169,773

123,527

Property and equipment, net

14,692

16,718

Operating lease right-of-use assets

14,903

17,114

Goodwill

135,845

130,640

Intangible assets, net

68,785

70,802

Deferred income taxes, non-current

60,519

66,520

Other non-current assets

10,661

9,049

Total assets

$

475,178

$

434,370

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

12,504

$

12,388

Contract liabilities

92,502

70,654

Accrued liabilities

19,472

22,324

Operating lease liabilities, current

5,423

5,658

Total current liabilities

129,901

111,024

Deferred income taxes, non-current

11,501

10,986

Operating lease liabilities, non-current

14,881

17,304

Debt, non-current

24,000

Other non-current liabilities

5,772

5,170

Commitments and contingencies

Shareholders' equity:

Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 33,342,288 shares issued; and 28,097,684 and 28,015,775 shares outstanding at December 31, 2025 and March 31, 2025, respectively

10,003

10,003

Treasury shares, 5,244,604 and 5,326,513 at December 31, 2025 and March 31, 2025, respectively

(1,576

)

(1,600

)

Capital in excess of stated value

125,719

109,785

Retained earnings

187,477

160,980

Accumulated other comprehensive loss

(8,500

)

(13,282

)

Total shareholders' equity

313,123

265,886

Total liabilities and shareholders' equity

$

475,178

$

434,370

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended

December 31,

(In thousands)

2025

2024

Operating activities

Net income

$

26,497

$

19,300

Adjustments to reconcile net income to net cash provided by operating activities:

Loss on asset disposals

2

24

Depreciation of fixed assets

2,918

2,738

Amortization of internal-use software and intangibles

4,307

2,777

Amortization of developed technology acquired

498

301

Deferred income taxes

5,823

(980

)

Share-based compensation

15,798

12,656

Changes in operating assets and liabilities

(21,681

)

(8,840

)

Net cash provided by operating activities

34,162

27,976

Investing activities

Cash paid for business combination, net of cash acquired

(144,945

)

Capital expenditures

(1,424

)

(2,082

)

Additional investments in corporate-owned life insurance policies

(27

)

Net cash used in investing activities

(1,424

)

(147,054

)

Financing activities

Debt proceeds, net of issuance costs

49,646

Debt repayments

(24,000

)

(12,000

)

Proceeds from Employee Stock Purchase Plan purchases

777

453

Repurchase of common shares to satisfy employee tax withholding

(1,357

)

(2,848

)

Net cash (used in) provided by financing activities

(24,580

)

35,251

Effect of exchange rate changes on cash

254

(303

)

Net increase (decrease) in cash and cash equivalents

8,412

(84,130

)

Cash and cash equivalents at beginning of period

73,041

144,891

Cash and cash equivalents at end of period

$

81,453

$

60,761

AGILYSYS, INC.

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA

(UNAUDITED)

Three Months Ended

Nine Months Ended

December 31,

December 31,

(In thousands)

2025

2024

2025

2024

Net income

$

9,897

$

3,830

$

26,497

$

19,300

Income tax provision

2,986

3,913

6,946

962

Income before taxes

12,883

7,743

33,443

20,262

Depreciation of fixed assets

1,009

985

2,918

2,738

Amortization of internal-use software and intangibles

1,417

1,622

4,307

2,777

Amortization of developed technology acquired

165

163

498

301

Interest expense (income), net

(455

)

241

(975

)

(2,177

)

EBITDA (a)

15,019

10,754

40,191

23,901

Share-based compensation

5,769

4,218

15,798

12,656

Other (gains) charges, net

(2,717

)

(12

)

(7,923

)

2,576

Other non-operating (income) expense, net

(696

)

(574

)

(2,068

)

(804

)

Legal settlements, net

(64

)

330

161

699

Adjusted EBITDA (b)

$

17,311

$

14,716

$

46,159

$

39,028

(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, net

AGILYSYS, INC.

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME FOR ADJUSTED EARNINGS PER SHARE

(UNAUDITED)

Three Months Ended

Nine Months Ended

December 31,

December 31,

(In thousands, except per share data)

2025

2024

2025

2024

Net income

$

9,897

$

3,830

$

26,497

$

19,300

Amortization of developed technology acquired

165

163

498

301

Amortization of internal-use software and intangibles

1,417

1,622

4,307

2,777

Share-based compensation

5,769

4,218

15,798

12,656

Other (gains) charges, net

(2,717

)

(12

)

(7,923

)

2,576

Legal settlements, net

(64

)

330

161

699

Tax events (a)

(625

)

1,964

(1,575

)

(5,965

)

Income tax adjustments

(1,770

)

(1,461

)

(4,962

)

(3,828

)

Adjusted net income (b)

$

12,072

$

10,654

$

32,801

$

28,516

Basic weighted average shares outstanding

27,970

27,667

27,882

27,446

Diluted weighted average shares outstanding

28,438

28,314

28,379

28,248

Adjusted basic earnings per share (c)

$

0.43

$

0.39

$

1.18

$

1.04

Adjusted diluted earnings per share (c)

$

0.42

$

0.38

$

1.16

$

1.01

(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 before amortization expense (including amortization of developed technology), share-based compensation, other (gains) and charges, net, and legal settlements, net, 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

Nine Months Ended

December 31,

December 31,

(In thousands)

2025

2024

2025

2024

Net cash provided by operating activities

$

23,295

$

20,288

$

34,162

$

27,976

Capital expenditures

(574

)

(562

)

(1,424

)

(2,082

)

Free cash flow (a)

$

22,721

$

19,726

$

32,738

$

25,894

(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/20260126433617/en/

Investor Contact:
Jessica Hennessy
Vice President Operations & Investor Relations
Agilysys, Inc.
770-810-6116 or investorrelations@agilysys.com

FAQ**

What factors contributed to the 23.year-over-year subscription revenue growth reported by Agilysys Inc. (AGYS) in the third quarter of Fiscal 2026, and how sustainable is this growth expected to be in the coming quarters?

Agilysys Inc.'s 23.1% year-over-year subscription revenue growth in Q3 Fiscal 2026 was driven by increased demand for its hospitality software, successful product enhancements, and expanding customer base, with sustainability projected due to ongoing industry recovery and strategic initiatives.

With Agilysys Inc. (AGYS) raising its full-year Fiscal 20total revenue guidance to $318 million, what specific drivers or market conditions support this optimistic outlook compared to previous fiscal projections?

Agilysys Inc.'s optimistic revenue outlook for Fiscal 2026 is driven by increased demand for its hospitality management solutions, expansion into new markets, strategic partnerships, and an overall recovery in the travel and leisure industry post-pandemic.

Given the reported increases in free cash flow to $22.7 million and ending cash balance to $81.5 million for Agilysys Inc. (AGYS), how does management plan to utilize these resources to further enhance shareholder value?

Agilysys Inc. management likely plans to enhance shareholder value by investing the increased free cash flow in strategic growth initiatives, research and development, potential acquisitions, or returning capital through dividends and share buybacks, though specific plans should be confirmed from official communications.

How does Agilysys Inc. (AGYS) intend to manage its backlog in relation to the ongoing major PMS project, and what impact could this have on future revenue recognition and overall business performance?

Agilysys Inc. (AGYS) plans to manage its backlog related to the major PMS project by prioritizing resource allocation and project timelines, which could enhance revenue recognition and improve overall business performance by ensuring timely delivery of services and solutions.

**MWN-AI FAQ is based on asking OpenAI questions about Agilysys Inc. (NASDAQ: AGYS).

Agilysys Inc.

NASDAQ: AGYS

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AGYS Latest News

February 17, 2026 10:15:03 am
Buy Recommendation Issued On AGYS By Needham

AGYS Stock Data

$2,461,439,190
25,690,938
0.12%
107
N/A
Software & IT Services
Technology
US
Alpharetta

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