Agilysys beats Q2 profit estimates on subscription revenue growth; hikes forecast

Overview

• US hospitality software provider's fiscal Q2 revenue rose 18%, beating analyst expectations

• Adjusted EPS for fiscal Q2 beat consensus, rising to $0.67

• Company raised full-year revenue and subscription growth guidance on strong sales momentum

Outlook

• Agilysys raises full-year 2027 revenue guidance to $374 mln-$378 mln

• Company now expects full-year subscription revenue growth of at least 34%

• Agilysys expects full-year adjusted EBITDA to be 25% of revenue, up from 24% previously

Result Drivers

• SUBSCRIPTION REVENUE - Co said Q2 revenue was driven by 32.6% year-over-year growth in subscription revenue

• ONE-TIME PRODUCT SALES - Co said Q2 product revenue was higher than expected as hospitality industry increased investments in modern POS technology

• SALES MOMENTUM - Co said record sales in Q2 kept total backlog at record levels despite strong implementation and delivery results

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Agilysys Inc is $135.00, about 11.9% above its October 23 closing price of $120.69

• The stock recently traded at 42 times the next 12-month earnings vs. a P/E of 40 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)