Summary
Agilysys reported total net revenue of $39.5 million for fiscal 2022 third quarter, up 7.6% from $36.7 million a year earlier. The quarter swung back to a GAAP profit. Operating income was $1.6 million against an operating loss of $1.8 million in the prior-year quarter. Net income was $1.5 million compared with a net loss of $2.1 million. Diluted EPS was $0.04, up from negative $0.11. Gross profit rose 2.1% to $24.7 million, yet gross margin dropped to 62.6% from 66.0% as the revenue mix changed.
Recurring revenue, which the company defines as support, maintenance and subscription services, reached 63.7% of total net revenue, up from 62.3% in last year's third quarter. Subscription revenue grew 24.9% to a record level. Management said the company crossed a $100 million total annual recurring revenue exit run-rate milestone and that fiscal 2022 is already a record year for subscription-fee bookings measured in Annual Contract Value terms. Professional services saw delays as customers dealt with labor availability and complex implementations took longer to finish. The gross margin decline came from mix, with more third-party product revenue and higher implementation costs as the company hired and trained staff.
Operating expenses, excluding legal settlements, severance and other charges, decreased. Product development and general and administrative expenses fell, largely because the prior-year period included unusually high share-based and other incentive compensation that did not repeat. Sales and marketing rose as travel and trade show activity returned.
Cash generation stood out. Operating cash flow was $10.1 million in the quarter, up 20.1%. Non-GAAP free cash flow was $9.9 million against $7.8 million a year earlier. Capital expenditures were $0.3 million in the quarter, down 51.7%. Deferred revenue rose 9.7% to $43.2 million.
On a year-to-date basis, revenue was $116.1 million, up 15.1% from $100.8 million, and net income rose 37.1% to $4.5 million. Operating cash flow for the nine months was $21.8 million, up 44.6%. Capital expenditures for the nine months were flat at $1.1 million. Non-GAAP adjusted EBITDA was $6.6 million, down from $7.6 million, and adjusted diluted EPS was $0.19 against $0.23.
For the fourth quarter of fiscal 2022, management expects record overall total revenue and Adjusted EBITDA slightly above 15% of revenue. For the full fiscal year 2022, revenue is expected at the low end of the company's prior guidance, with Adjusted EBITDA slightly better than 15% of revenue.
The risks are familiar. Supply chain and labor shortages continue to pressure revenue. An accelerating shift from on-premise to SaaS solutions is dragging on the top line sooner than anticipated, even as the company frames the trend as positive for long-term health. Delayed projects have built up services and subscription backlog. COVID-19 still clouds visibility, and a valuation allowance offsets substantially all U.S. deferred tax assets. The ResortSuite acquisition closed in early January 2022, a deal expected to total roughly $25 million, of which $22.7 million was paid in January 2022.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $39.5M | $37.9M | +4.1% | $36.7M | +7.6% |
| Gross profit | $24.7M | $24.3M | +1.9% | $24.2M | +2.1% |
| Gross margin | 62.6% | 64.0% | -1.4 pp | 66.0% | -3.3 pp |
| Research & development | $11.2M | $11.4M | -1.5% | $12.4M | -9.4% |
| Sales & marketing | $3.9M | $3.4M | +15.2% | $3.3M | +18.5% |
| General & administrative | $6.8M | $6.5M | +4.3% | $7.5M | -9.4% |
| Operating income (loss) | $1.6M | $1.1M | +43.9% | -$1.8M | +189.0% |
| Operating margin | 4.1% | 3.0% | +1.1 pp | -4.9% | +9.0 pp |
| Net income (loss) | $1.5M | $982.0K | +57.0% | -$2.1M | +174.5% |
| Net margin | 3.9% | 2.6% | +1.3 pp | -5.6% | +9.6 pp |
| Diluted EPS | $0.04 | $0.02 | +$0.02 | -$0.11 | +$0.15 |
Risks
The filing states the full extent of COVID-19 impact cannot be predicted and may continue to adversely affect results. It notes remote sales, implementation, and support modifications may delay or reduce sales, and that the pandemic has impacted the ability to complete certain implementations timely, negatively impacting revenue recognition.
MD&A says customers continue to struggle with labor availability, causing delay in certain projects during the quarter while complex implementations require additional time. This contributed to professional services revenue being flat and professional services gross profit decreasing $0.8 million with gross profit margin down from 33.2% to 20.9%.
Total gross profit margin decreased from 66.0% to 62.6% in the quarter and from 65.3% to 63.6% in the first nine months of fiscal 2022. Products gross profit margin decreased from 51.8% to 45.7% due to a higher proportion of third-party products, and support, maintenance and subscription services gross profit margin decreased from 79.6% to 78.4% as variable costs increased ahead of related revenue.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Recurring Revenue
Recurring Revenue as % of Total Net Revenue
Summary, forecast, risks and KPIs are extracted from AGILYSYS INC's SEC filings for Q3 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.