Summary
Agilysys closed fiscal 2022 with fourth-quarter revenue of $46.56 million, up 28.1% from the prior-year quarter. Full-year revenue reached $162.64 million, up 18.6%. Management described the quarter as the best ever revenue quarter and said it was 11% above the previous best mark. Gross profit was $27.69 million in the quarter, up 17.9%, while full-year gross profit was $101.53 million, up 13.6%. Gross margin slipped to 59.5% in the quarter, down 5.1 percentage points, and full-year gross margin was 62.4%, down 2.7 percentage points. The company said higher variable costs and a mix shift in revenue weighed on margin.
Profitability swung to a profit. Operating income was $1.54 million in the quarter, up from an operating loss in the prior-year quarter. Full-year operating income was $6.32 million, up from a prior-year operating loss. Net income was $1.98 million in the quarter, up from a prior-year net loss, and full-year net income was $6.48 million, up from a prior-year net loss. Full-year diluted EPS was $0.18, up from a prior-year loss per share. Operating margin was 3.3% in the quarter, up 71.5 percentage points from the prior-year quarter, and full-year operating margin was 3.9%, up 19.2 percentage points. On a non-GAAP basis, adjusted EBITDA was $7.5 million in the quarter, compared with $7.1 million in the prior-year quarter. Non-GAAP adjusted net income was $6.13 million in the quarter, and adjusted diluted EPS was $0.24.
Cash generation was mixed. Operating cash flow was $6.66 million in the quarter, down 50.0% from the prior-year quarter. Full-year operating cash flow was $28.48 million, essentially flat. Capital expenditures were $0.12 million in the quarter, down 62.0%, and $1.20 million for the full year, down 13.8%. Free cash flow, a non-GAAP measure, was $6.5 million in the quarter, compared with $13.0 million in the prior-year quarter. Deferred revenue was $46.10 million, up 20.1% from the prior-year quarter. The company closed the ResortSuite acquisition during the quarter for approximately $25 million in cash.
Recurring revenue, which includes support, maintenance and subscription services, represented 57.1% of total net revenue, compared with 63.1% in the prior-year quarter. Subscription revenue increased 32.8% year over year. Subscription revenue made up 48.1% of total recurring revenue, compared with 42.0% in the prior-year quarter. Management said combined product, recurring revenue and services backlog remained close to record levels, at about 98% of where it ended the previous quarter. The company said an overwhelming majority of new customers and properties are choosing cloud implementations.
For full fiscal 2023, Agilysys expects revenue of $190 million to $195 million, which represents 17% to 20% growth over fiscal 2022, and approximately 30% subscription revenue growth. The company also expects adjusted EBITDA to remain greater than 15% of revenue for the full fiscal year. Risks include lingering pandemic-related and business environment challenges in Asia, Europe, and managed food services, along with supply chain management and broader macroeconomic factors. The company also carries a valuation allowance against substantially all deferred tax assets, which reflects uncertainty about future taxable income.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $46.6M | $39.5M | +18.0% | $36.3M | +28.1% |
| Gross profit | $27.7M | $24.7M | +12.0% | $23.5M | +17.9% |
| Gross margin | 59.5% | 62.6% | -3.2 pp | 64.6% | -5.1 pp |
| Research & development | $12.3M | $11.2M | +9.3% | $26.4M | -53.6% |
| Sales & marketing | $4.3M | $3.9M | +9.4% | $5.9M | -27.1% |
| General & administrative | $7.4M | $6.8M | +8.8% | $14.8M | -50.1% |
| Operating income (loss) | $1.5M | $1.6M | -4.2% | -$24.8M | +106.2% |
| Operating margin | 3.3% | 4.1% | -0.8 pp | -68.2% | +71.5 pp |
| Net income (loss) | $2.0M | $1.5M | +28.5% | -$24.3M | +108.2% |
| Net margin | 4.3% | 3.9% | +0.3 pp | -66.8% | +71.1 pp |
| Diluted EPS | $0.06 | $0.04 | +$0.02 | — | — |
Risks
The Company's customer base is concentrated in the hospitality industry, and COVID-19 significantly reduced demand for gaming, hotels, resorts, cruises, corporate foodservice, restaurants, universities and stadiums; customer closures also hurt revenue recognition. MD&A states COVID-19 had a significant impact in FY2022 and the ultimate impact cannot be predicted, while FY2022 revenue rose 18.6% year to date but Q4 gross margin fell 5.1 pp.
The filing says the labor market has become even tighter in recent quarters, increasing the difficulty and lead time to fill open positions, and ongoing labor shortages or rising labor costs could hurt financial condition, results, or cash flows. MD&A also notes payroll and operating expense increases as the Company manages market compensation pressures.
The Company depends on third-party manufacturers and suppliers outside the United States, including China, for hardware and components, and has no long-term agreements with many suppliers. Increased US tariffs or additional protectionist trade measures could raise supply costs and adversely affect gross margins and liquidity.
The Company faces extensive competition and may need to reduce prices to match competitors, which would likely reduce margins; failure to reduce prices may limit customer retention or growth. FY2022 gross profit margin decreased from 65.2% to 62.4% year to date and Q4 gross margin decreased 5.1 pp.
For certain products and services, including cloud hosting, the Company relies on third-party providers and entrusts them with its own and customer sensitive data. Service disruptions, cyber-attacks, data breaches or migration to alternative providers could increase costs, create liability, and harm revenue.
As of March 31, 2022, the Company had $32.8 million of goodwill and $20.2 million of intangible assets, net, and it previously recorded a $22.0 million impairment for rGuest intangible assets. Future write-downs could materially adversely affect operating results and the stock price.
The Company paid $24.5 million in cash for business combinations, net of cash acquired, in FY2022 and may continue pursuing acquisitions. Integration may involve unforeseen difficulties and require disproportionate resources and management attention.
The Company sold $35 million of preferred stock with a 5.25% cumulative dividend convertible at $20.1676 per share, and future conversion could dilute common shareholders and negatively impact the stock price. Common stock was volatile in FY2022, with a high close of $58.45 and a low close of $35.31.
Ameranth, Inc. filed a patent infringement suit over hospitality menu configuration and synchronization, and although judgment was entered for the Company on May 11, 2022, Ameranth has pending appeals. Adverse outcomes could result in substantial expenses, management distraction, and delays in new services.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Recurring Revenue
Recurring Revenue % of Total Net Revenue
Subscription Revenue Growth
Summary, forecast, risks and KPIs are extracted from AGILYSYS INC's SEC filings for Q4 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.