Agilysys, Inc. (AGYS) Tops Q4 EPS by 6c; Offers FY22 Revenues Guidance Above Consensus

Agilysys, Inc. (NASDAQ: AGYS) reported Q4 EPS of $0.21, $0.06 better than the analyst estimate of $0.15. Revenue for the quarter came in at $36.34 million versus the consensus estimate of $36.7 million.

Summary of Fiscal 2021 Fourth Quarter Financial Results

• Total net revenue was $36.3 million, compared to total net revenue of $39.7 million in the comparable prior-year period for an 8% decrease in revenue.
• Recurring revenues (which are comprised of support, maintenance and subscription services) were $22.9 million, or 63.1% of total net revenue, compared to $22.3 million, or 56.2% of total net revenue, for the same period in fiscal 2020. Subscription revenues increased 11.6% year over year and comprised 42.0% of total recurring revenues, compared to 38.7% of total recurring revenues in the fourth quarter of fiscal 2020.
• Gross margin was 64.6% in the fiscal 2021 fourth quarter, compared to 49.6% in the comparable prior-year period.
• Net loss attributable to common shareholders in the fiscal 2021 fourth quarter was $(24.7) million, or $(1.05) per diluted share compared to a net loss of $(27.0) million, or $(1.16) per diluted share, in the comparable prior-year period.
• Adjusted diluted EPS (non-GAAP) was $0.21 per share compared to $0.05 per share in the comparable prior-year period (see reconciliation below).
• Adjusted EBITDA (non-GAAP) was $7.1 million, compared to $3.6 million in the comparable prior-year period (see reconciliation below).
• Free cash flow (non-GAAP) in the fiscal 2021 fourth quarter was $13.0 million, compared to free cash flow of $4.9 million in the fiscal 2020 fourth quarter (see reconciliation below). Ending cash balance was $99.2 million, compared to ending cash balance of $46.7 million as of fiscal 2020 year-end.

Ramesh Srinivasan, President and CEO of Agilysys, commented, “Q4 fiscal 2021 (January – March 2021) revenue levels were slightly less than our original expectations due to continued pandemic related tough business environment challenges which were prevalent till around the last week of February.”

“We are encouraged by the significant consistent pick up in technology purchasing decisions by hospitality customers since February-end. The past 12-week period has been one of our best periods of selling success. In annual contract value terms, global sales during the past 12 weeks increased to about 85% of the best 12-week period during the past 5 years. That selling success momentum, currently concentrated mainly in the gaming and resort segments of the U.S. domestic market, and the remaining backlog of already sold software implementations and product shipments not yet converted to revenue, give us solid confidence going into the new fiscal year. We expect fiscal 2022 annual revenue to range between $160 and $170 million and be a record revenue year, with an adjusted EBITDA level of slightly better than 15% of revenue. We expect the pent-up demand for superior guest centric hospitality technology solutions to grow throughout the current fiscal year, making the second half of the fiscal year better than the first.”

“Our continued unwavering focus on product innovation manifested by our decision to significantly increase R&D strength even during the most challenging days of the pandemic, has placed us at a distinct competitive advantage. Despite all the pandemic related challenges faced throughout, fiscal 2021 was a record year with respect to subscription software sales, led by the POS and PMS add-on software modules, many of which were created during the past couple of years. Overall, we like our current competitive position. We currently go into every product sale discussion with a high degree of confidence. We look forward to entering a new era of progressively increasing sales and marketing investments during this fiscal year.”

“Words are not enough to express our admiration and gratitude for our global teams across the U.S., United Kingdom, Asia and the India Development Center for the exceptional courage, determination, fortitude and absolute doggedness with which they have helped us navigate through an extraordinary fiscal year, keeping their steadfast focus on product innovation and world class customer service no matter how tough the odds were stacked against them and how much sadness there was all around. Our 950-person strong India Development Center continues to perform at a high level despite all the pandemic related challenges. The productivity levels and quality of execution of our global workforce has been an inspiration for all of us. Ensuring the happiness and good health of all our Agilysys teammates and customer and partner personnel remains our top priority.”

GUIDANCE:

Agilysys, Inc. sees FY2022 revenue of $160-170 million, versus the consensus of $137.55 million.

Agilysys continues to monitor the impact of COVID-19 on the hospitality industry with our primary focus being the safety of our employees and customers as we manage through these unprecedented times. We are expecting full year fiscal 2022 revenue to be $160 to $170 million, a 16-24% growth over fiscal 2021 results. Fiscal 2022 adjusted EBITDA is expected to be slightly better than 15% of revenue.

Dave Wood, Chief Financial Officer, commented, “The hospitality industry is entering the beginning phases of reopening and recovery. We believe we have positioned the company to cultivate growth during this phase and beyond, while maintaining profitability and executing on our long-term strategic plan.”

For earnings history and earnings-related data on Agilysys, Inc. (AGYS) click here.

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