Key Stats for Agilysys Stock
- Price Change for Agilysys stock: 22.6%
- Current Share Price as of Oct. 28: $141
- 52-Week High: $145
- $AGYS Stock Price Target: $136
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What Happened?
Agilysys (AGYS) stock surged over 22% after the hospitality software company crushed earnings expectations and raised its full-year guidance. Agilysys posted adjusted earnings of $0.40 per share for its fiscal second quarter, beating analyst estimates of $0.38 per share
Revenue hit a record $79.3 million, up 16% from the same period last year and above consensus estimates of $76.86 million. This marks the company’s 15th consecutive quarter of record revenue.
More importantly, subscription revenue grew 33% year over year, demonstrating that the business is successfully shifting to a higher-margin recurring revenue model.
The quarter was also Agilysys’s second-best sales period ever. CEO Ramesh Srinivasan said the company’s “current business momentum is excellent” as it is seeing strong demand across all its verticals, especially in gaming casinos, international markets, and food service management.
Based on the strong first-half performance, Agilysys raised its fiscal 2026 revenue guidance to $315 million to $318 million, up from its previous forecast of $308 million to $312 million.
The company also increased its subscription revenue growth target to 29% from 27% for the full year.
Management kept its adjusted EBITDA margin guidance at 20% of revenue, showing it can scale profitably while investing in growth.
AGYS added that it’s now debt-free after paying down $24 million on its credit line during the first half of the year.
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What the Market Is Telling Us About AGYS Stock
The 20% jump in AGYS stock reflects investor excitement about several key trends. First, the company’s shift to subscription software is working. Subscription revenue now accounts for 65.5% of total recurring revenue, up from 60.5% a year ago. That’s a big deal because subscription revenue is stickier and more predictable than one-time software licenses.
Second, customers are buying more products per deal as new customers during the quarter purchased an average of seven products each, a new high for Agilysys.
When property management systems were included in the sale, customers bought an average of 14 products, indicating that the company’s ecosystem strategy is paying off.
Third, a modernized software platform is resonating in the market. Agilysys has spent the past 6 to 7 years reengineering its entire product line to be cloud-native.
Those products have now been in the field for 1 to 3 years, and customers are seeing real results, driving new sales and expansion among existing customers.
For AGYS stock, the international growth is encouraging as sales outside the U.S. jumped 36% in the first half of the fiscal year.
The company won deals in the U.K., Canada, and other markets where it’s been investing in local teams. One recent win was Rudding Park, a luxury resort in England, which selected 21 Agilysys software products.
The food service management vertical also had a breakout quarter, with sales doubling compared to the same period last year.
This segment had been struggling during the transition to new software, but the modernized platform is now fully deployed, and implementations are going smoothly.
AI is an integral part of the Agilysys story. The company launched its GetSense.ai brand about 18 months ago to group its AI initiatives.
It’s now rolling out AI-powered features for dynamic pricing, revenue management, and invoice automation. CEO Srinivasan said AI tools are helping the company innovate faster and widen its competitive lead.
Importantly, Agilysys structures its licensing by rooms, terminals, and locations rather than by user counts. That means when customers use AI to become more efficient and reduce staff, it doesn’t hurt Agilysys’s revenue. In fact, it often frees up budget for customers to buy more software modules.
The company is also making progress on its largest project ever—building a new property management system for Marriott. Management said the project is proceeding on schedule and is currently in beta testing. This deal could be a major validation point if it goes well, potentially opening doors with other large hotel chains.
For AGYS stock, the backlog numbers are equally impressive. The subscription backlog sits at record levels, 26% higher than a year ago. Product backlog jumped 49% during the quarter alone, providing the company with strong visibility into the rest of the fiscal year and supporting confidence in the raised guidance.
Agilysys is also investing heavily in capacity, increasing its sales team by 16% compared to last year and growing its professional services team by 23%. These investments are starting to pay off, as it implemented more projects during the quarter than it added to backlog—a sign that it’s catching up on deployments.
Management emphasized that Agilysys operates in a market that’s orders of magnitude larger than its current size. Technology providers have underserved the hospitality industry, and there’s limited innovation happening elsewhere in the sector. That creates a long runway for growth as more hotels, resorts, and casinos modernize their software infrastructure.
Agilysys is scaling quickly, and maintaining service quality during rapid growth can be challenging. The combination of strong sales, growing subscription revenue, rising profitability, and a debt-free balance sheet has investors excited.
The 20% gain today pushes AGYS stock to within 3.5% of its all-time high. With guidance raised and backlog at record levels, the company is setting itself up for continued strong performance through the rest of the fiscal year.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
