Private Securities Litigation Reform Act of 1995, including statements regarding our financial guidance. Welcome to the fiscal 2026 4th quarter and full year earnings call. Fiscal 2026 Q4 was an excellent overall business quarter for Agilysys, including with respect to sales, revenue, and profitability, each of which set a new quarter record. We measure sales and selling success in Annual Contract Value terms, and fiscal 2026 fourth quarter was the highest sales quarter on record.
All sales and backlog values mentioned here for Q4 and full fiscal year 2026 do not include anything from the Marriott Property Management System, PMS project. Fiscal 2026, the year ending March 2026, was a record global sales year overall. It was a record best sales year and well more than double the previous year's sales level for the, managed food services, FSM vertical. It was a record high sales year for both point of sale, POS, and POS-related modules, and for property management systems, PMS and PMS-related modules.
There is no guarantee that each upcoming quarter will be a record. We can, however, state with a fair degree of certainty that next year, fiscal 2027, is well-positioned to be a record best year for sales, revenue, and profitability. This is a business that should be judged on annual results and full year guidance levels. Of the 105 new properties added during the quarter across new and current customers, excluding the 22 new customer properties who purchased Book4Time, 103 were either partially or fully subscription software license-based.
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue | FY2027 | $365M-$370M |
| Product revenue | FY2027 | flat, ~$10M/quarter ($40M/year) |
| Professional services growth | FY2027 | 5-10% |
| Recurring revenue growth | FY2027 | ~20% |
| Subscription revenue growth | FY2027 | north of 30% (Q1 ~24%, rising through year) |
| Adjusted EBITDA margin | FY2027 | 24% (Q1 16-17%, exiting Q4 near 30%) |
| Stock-based compensation | FY2027 | 5-7% of revenue |
| Metric | YoY | Note |
|---|---|---|
| Q4 revenue | +11.7% | Quarterly record of $82.9M vs $74.3M, driven by continued business momentum |
| Full-year revenue | +15.9% | Record sales, backlog and operations across the business |
| Full-year recurring revenue | +21.1% | Subscription growth plus world-class retention; 64.5% of full-year net revenue vs 61.7% |
| Full-year subscription revenue | +30.2% | Better-than-expected sales and backlog conversion (large PMS rollout added only ~0.2%) |
| Q4 subscription revenue | +24.1% | Continued subscription sales momentum |
| Full-year professional services | +12.4% | Continued strong services performance; gross margin returned to slightly north of 30% |
| Q4 gross margin | 64.4% vs 60.7% | Product mix in the P&L catching up to sales |
| Q4 adjusted EBITDA | $21.5M vs $14.8M | Revenue growth plus operating leverage |
| Full-year adjusted EBITDA | $67.7M vs $53.8M | Profitability ahead of original FY2026 plan at 21.2% of revenue |
| Full-year free cash flow | $68.1M vs $52.3M | Strong profitability; a good proxy for business health after normalizing CapEx |
| Full-year diluted EPS | $1.37 vs $0.82 | Net income of $38.8M vs $23.2M; adjusted diluted EPS $1.79 vs $1.55 |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Large Marriott PMS rollout | Properties recently gone live (two-three months) | Progressing well but multi-year (2+ years); conservatively embedded in FY2027 guidance; putting Agilysys on the PMS map and into most major PMS RFPs | — |
| AI | Product ecosystem modernized/rewritten over prior years | 30+ AI features released or coming within 3-4 months plus two AI-native modules; shortening sales cycles rather than causing customer anxiety | — |
| Gross margin / profitability expansion | Full-year gross margin roughly flat at 62.6% | Q4 exit at 64.4%; FY2027 EBITDA margin to 24%, about half from gross margin (product mix) and half from operating leverage | — |
| New products (CRS and Revenue Intelligence) | Two long-standing gaps in the ecosystem | Well received at customer advisory board and Inspire; beta customers signed up; both expected live at a few sites before fiscal year end, initially targeted at existing ecosystem/PMS customers | — |
| POS recovery | Challenges over the previous couple of years | Best POS year in company history; back to being a strong POS player with a unified, modernized ecosystem | — |