Agilysys, Inc. (AGYS) Tops Q2 EPS by 18c

Agilysys, Inc. (NASDAQ: AGYS) reported Q2 EPS of $0.29, $0.18 better than the analyst estimate of $0.11. Revenue for the quarter came in at $34.4 million versus the consensus estimate of $34.28 million.

Ramesh Srinivasan, President and CEO of Agilysys, commented, “The hospitality industry business conditions continue to be challenging. Product and services revenue this quarter were affected more than previously anticipated due to a greater extent of postponed customer technology investment decisions. We expect the hospitality business climate to remain tough for a few more quarters and be particularly uncertain during the current October to December third quarter due to various factors. We expect the sequential revenue increase from Q2 to Q3 of this fiscal year to be a modest 5%. We will continue to provide guidance sequentially one quarter at a time for the remainder of this fiscal year.”

“We are deeply grateful to the Agilysys global team for all of their sacrifices and hard work which has enabled us to successfully manage through the past two quarters, undoubtedly the toughest ever faced by our industry. While our revenues have been negatively impacted in the short term, we expect a robust recovery to begin sometime in calendar 2021. Between the recent convertible investment and our ability to generate cash since April, we have strengthened and improved our balance sheet to its best position in many years. During the fiscal second quarter, we achieved record profitability levels while simultaneously maintaining our steadfast focus on world class customer service and expanding R&D resource strength further enhancing the pace of product innovation. The add-on cloud native SaaS applications developed during the past couple of years, including contactless enabling products, have provided high quality support for the reopening efforts of our customers while helping us maintain subscription recurring revenue growth.”

“We remain confident that we are positioning Agilysys for accelerating top line growth and enhanced bottom line profitability on the other side of the pandemic. We are firm in our belief that the global hospitality industry will make a solid comeback in the not-too-distant future with an enhanced need for technology solutions which help improve guest service and Agilysys will be in a good position to provide the most comprehensive and cutting-edge software portfolio to help them succeed.”

GUIDANCE:

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. Given the continued impact of COVID-19, we are still not releasing full fiscal year 2021 guidance. We are expecting Q3 fiscal 2021 revenue to increase 5% over Q2 fiscal 2021 results with an Adjusted EBITDA of approximately $7.0 million for the same period. We expect to see the reduction of Adjusted EBITDA as a result of cessation of one-time cost actions such as salary reductions, which were in place during the first six months of the fiscal year, continued hiring in R&D, and several additional cost elements such as virtual trade shows coming back into the business.

Dave Wood, Chief Financial Officer, commented, “Although the impact of the COVID-19 pandemic continues to affect our customers and therefore slow down our short term progress, we are pleased with the profitability levels we have been able to achieve through one of the most challenging times for the hospitality industry. Our balance sheet remains strong and should continue to meet the liquidity demands for continued investment in our products along with other strategic initiatives as we manage through the current environment. We remain more confident than ever in our financial strength and ability to execute on our long-term strategic plan.”

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

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