Agilysys shares tumble as Q1 earnings miss estimates despite revenue beat

Investing.com -- Agilysys , Inc. (NASDAQ:AGYS) reported first quarter fiscal 2026 earnings that fell short of analyst expectations, sending shares down 5.7% despite posting record revenue that exceeded forecasts.

The hospitality software provider reported adjusted earnings per share of $0.33 for the quarter ending June 30, 2025, missing the analyst estimate of $0.36. Revenue came in at $76.7 million, surpassing the consensus estimate of $74.35 million and representing a 20.7% increase YoY.

Investors appeared disappointed by the earnings miss and the company’s outlook, despite Agilysys raising its subscription revenue growth guidance to 27% YoY from the previous 25%. The company maintained its full-year fiscal 2026 revenue guidance of $308-312 million, in line with the consensus estimate of $310 million.

"We are pleased to report our 14th consecutive record revenue quarter representing an approximate 21% year-over-year top line growth driven by 44% growth in subscription revenue including Book4Time and 16% growth in professional services revenue," said Ramesh Srinivasan, President and CEO of Agilysys.

Recurring revenue, which includes subscription and maintenance charges, reached a record $48.6 million, representing 63.4% of total net revenue compared to 59.9% in the same period last year. Subscription revenue now accounts for 65.6% of total recurring revenue, up from 58.1% in the first quarter of fiscal 2025.

The company’s gross margin decreased slightly to 61.7% from 62.8% in the comparable prior-year period. Free cash flow was -$5.0 million compared to $0.2 million in the first quarter of fiscal 2025.

Dave Wood, Chief Financial Officer, added, "We are very pleased with the continued business momentum during Q1, especially with increasing sales and faster deployment of subscription revenue projects causing us to raise expectations to 27% growth over the prior fiscal year."

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