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Hospitality industry software provider Agilysys (NASDAQ:AGYS) fell short of the market’s revenue expectations in Q1 CY2025, but sales rose 19.4% year on year to $74.27 million. Its non-GAAP EPS of $0.54 per share was 88.8% above analysts’ consensus estimates.
Is now the time to buy AGYS? Find out in our full research report (it’s free).
Agilysys’ first quarter results were shaped by continued momentum in its subscription software and services business, alongside a recovery in point-of-sale (POS) sales. Management highlighted the successful transition to its modernized, unified POS platform, now deployed at over 150 customer properties, which contributed to record sales in the quarter. CEO Ramesh Srinivasan cited strong demand for add-on modules—particularly in property management—and a growing ecosystem effect, with more customers choosing integrated solutions over piecemeal purchases. The company also achieved record levels in professional services revenue and backlog, reflecting higher implementation activity. Srinivasan acknowledged lingering operational challenges as Agilysys navigated a multi-year technology transformation, but emphasized that the company has now “turned the corner” on prior sales volatility.
Looking ahead, Agilysys expects subscription revenue growth to remain a central driver, supported by ongoing investments in product innovation, sales expansion, and cloud infrastructure. Management projects recurring revenue growth of approximately 15% and subscription growth of 25% for the upcoming year, with adjusted EBITDA targeted at 20% of revenue. Srinivasan noted that the guidance does not include any material contribution from the large-scale Marriott property management system rollout, which remains in pilot phase and is described as “transformational” but complex. CFO Dave Wood indicated operating expenses will rise to support future growth, but expects operating leverage in general and administrative costs, while R&D and sales and marketing investments continue. Srinivasan added, “We are not going to sacrifice any of our medium-term and long-term revenue growth possibilities for the sake of short-term profitability increases.”
Management attributed the quarter’s profitability beat to strong subscription growth, improved POS sales execution, and increasing customer adoption of integrated product suites.
Management’s outlook centers on sustained subscription growth, expanded product adoption, and the scaling of recent acquisitions, while maintaining disciplined investment.
In upcoming quarters, the StockStory team will be watching (1) whether subscription and add-on module sales can sustain current growth rates, (2) the pace and impact of customer migrations to the unified POS and PMS platforms, and (3) the progression of the Marriott PMS rollout from pilot to broader adoption. Execution of cross-selling initiatives stemming from the Book4Time acquisition and expansion into international markets will also be key areas to monitor.
Agilysys currently trades at a forward price-to-sales ratio of 9.7×. Should you double down or take your chips? Find out in our full research report (it’s free).
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