Summary
Agilysys reported fiscal 2021 fourth quarter revenue of $36.3 million, down 8.4% from the prior-year quarter. Full-year revenue was $137.2 million, down 14.7%. COVID-19 kept the top line under pressure, but recurring revenue, which includes support, maintenance and subscription services, was 63.1% of total net revenue in the quarter, up from 56.2% a year earlier. Subscription revenue rose 11.6% year over year and made up 42.0% of recurring revenue, against 38.7% in the prior-year quarter. Fiscal 2021 was a record year for subscription software sales, led by point-of-sale and property management add-on modules.
Profitability improved. Fourth-quarter gross profit was $23.5 million, up 19.4%, and gross margin was 64.6%, up 15.0 percentage points. Full-year gross profit was $89.4 million, up 10.4%, with gross margin of 65.2%, up 14.8 percentage points. The fourth-quarter operating loss was $24.8 million, narrower than the prior-year quarter. The net loss was $24.3 million, also narrower. For the full year, the operating loss was $21.0 million, narrower by 38.5%, and the net loss was $21.0 million, narrower by 38.4%. Diluted loss per share for the full year was $1.01, narrower by 31.3%. Full-year operating margin was negative 15.3%, up 5.9 percentage points.
Cash generation was the brightest part of the release. Operating cash flow was $13.3 million in the quarter, up 151.3%, and $28.4 million for the full year, up 168.6%. Capital expenditures were $0.3 million in the quarter, down 23.8%, and $1.4 million for the full year, down 59.4%. Deferred revenue stood at $38.4 million on March 31, 2021, down 9.1% from a year earlier. Non-GAAP free cash flow was $13.0 million in the quarter, compared with $4.9 million in the prior-year quarter. Adjusted EBITDA was $7.1 million, versus $3.6 million. Adjusted diluted EPS was $0.21, against $0.05, and adjusted net income was $5.2 million, compared with $1.3 million.
Management said fourth-quarter revenue landed slightly below original expectations because pandemic-related challenges persisted until about the last week of February. Purchasing decisions have picked up since then. In annual contract value terms, global sales over the past 12 weeks reached about 85% of the best 12-week stretch of the past 5 years. That momentum is concentrated in the gaming and resort segments of the U.S. domestic market. A backlog of sold software implementations and product shipments has not yet converted to revenue.
Guidance covers the full fiscal year. Agilysys expects fiscal 2022 to grow 16% to 24%, with an adjusted EBITDA margin slightly better than 15%. Management expects the second half of fiscal 2022 to be stronger than the first half and plans to raise sales and marketing investment. Risks include the pandemic, its effect on customers, partners and vendors, delayed implementations, collection risk on receivables, and uncertain demand. The company also carries a valuation allowance against substantially all of its deferred tax assets and holds sizeable net operating loss carryforwards.
During fiscal 2021, Agilysys cut discretionary costs through hiring freezes, layoffs, furloughs, limits on retirement benefits and salary reductions for executives and certain employees. Some of those measures have been eased. Management believes operating cash flow, cash on hand and access to capital markets will cover short- and long-term liquidity needs.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $36.3M | $36.7M | -0.9% | $39.7M | -8.4% |
| Gross profit | $23.5M | $24.2M | -3.0% | $19.7M | +19.4% |
| Gross margin | 64.6% | 66.0% | -1.4 pp | 49.6% | +15.0 pp |
| Research & development | $26.4M | $12.4M | +113.7% | $9.3M | +183.3% |
| Sales & marketing | $5.9M | $3.3M | +77.9% | $5.6M | +6.5% |
| General & administrative | $14.8M | $7.5M | +97.5% | $6.4M | +132.5% |
| Operating income (loss) | -$24.8M | -$1.8M | -1267.8% | -$26.9M | +8.0% |
| Operating margin | -68.2% | -4.9% | -63.2 pp | -67.9% | -0.2 pp |
| Net income (loss) | -$24.3M | -$2.1M | -1073.0% | -$27.0M | +10.0% |
| Net margin | -66.8% | -5.6% | -61.2 pp | -68.1% | +1.2 pp |
Risks
COVID-19 significantly reduced demand across the hospitality industries Agilysys serves, causing customer closures, delayed implementations and revenue recognition. Total net revenue decreased 14.7% for fiscal 2021 versus fiscal 2020, and MD&A states the duration and ongoing impact cannot be predicted.
Hospitality customers and prospects have substantially curtailed new technology purchases, and some may delay, terminate or not proceed with projects. Products revenue decreased 39.6% and professional services revenue decreased 33.3% for fiscal 2021 versus fiscal 2020 due to delayed customer purchasing and implementation delays.
The customer base is concentrated in the hospitality industry, and insolvencies could leave customers unable to pay unpaid fees or reimbursements. The filing states most customers have been significantly affected by COVID-19, which could adversely affect revenue and liquidity.
Agilysys furloughed approximately 24% of employees in the United States, APAC and EMEA during fiscal 2021 and took other cost actions, including layoffs and salary reductions. These measures may hurt its ability to attract or retain employees and create operational challenges or loss of market share.
Product development expense increased 33.5% in fiscal 2021 versus fiscal 2020 due to R&D team expansion and significant share-based compensation from accelerated SSAR vesting. The company expects continuing significant investment in software R&D, with uncertain timing of significant revenues from those investments.
As of March 31, 2021, Agilysys had $19.6 million of goodwill and $8.4 million of intangible assets, net. It recorded $22.0 million of non-cash impairment charges in fiscal 2020 for certain rGuest capitalized software, and future write-downs could adversely affect operating results and stock price.
The company depends on third-party manufacturers and suppliers outside the United States, including China, for certain hardware products and components. Increased tariffs or additional protectionist trade measures could raise supply costs and harm business, financial results and liquidity.
Agilysys relies on a concentrated number of vendors for the majority of its hardware and certain software and related services needs, often without long-term agreements. If these suppliers cannot be replaced on reasonable terms, future operating results and gross margins could be materially adversely impacted.
In May 2020, Agilysys sold $35 million of preferred stock with a 5.25% cumulative dividend convertible at $20.1676 per share. Until converted, the preferred stock may impede stock price increases above the conversion price, and concentrated ownership may increase share price volatility.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Recurring Revenue
Recurring Revenue % of Total Net Revenue
Subscription Revenue Growth YoY
Summary, forecast, risks and KPIs are extracted from AGILYSYS INC's SEC filings for Q4 FY2021 (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.