Breaking Down Agilysys, Inc. (AGYS) Financial Health: Key Insights for Investors

Are you keeping a close watch on Agilysys, Inc. (AGYS) and trying to gauge its financial strength? With a market capitalization of $1.93 billion and a P/E ratio of 89.6, is the company's valuation justified? While Agilysys has demonstrated strong revenue growth, reporting a record $69.6 million in the third quarter of fiscal year 2025, up 14.9% from the previous year, and a 20% year-on-year increase in gross profit, is this enough to offset a concerning 75% year-on-year shrinkage in net income and a staggering 152% surge in debt? Dive in as we dissect Agilysys's financial metrics, evaluate its growth prospects against potential risks, and provide you with the insights needed to make informed investment decisions.

Agilysys, Inc. (AGYS) Revenue Analysis

Agilysys, Inc. (AGYS) generates revenue primarily through software, services, and hardware solutions tailored for the hospitality industry. These offerings include property management systems, point-of-sale solutions, inventory and procurement, and related services. Understanding the breakdown of these revenue streams provides key insights into the company's financial health and areas of growth.

Agilysys, Inc. (AGYS) demonstrated robust financial performance in fiscal year 2024. Total net revenue for the year ended March 31, 2024, reached $321.5 million, marking a 14.1% increase compared to the $281.8 million reported in fiscal year 2023. This growth reflects strong demand for the company's solutions and effective execution of its strategic initiatives.

Here's a detailed look at Agilysys, Inc. (AGYS) revenue streams:

• Software: Revenue from software subscriptions and licenses is a significant contributor.
• Services: This includes professional services, maintenance, and support, which are crucial for recurring revenue.
• Hardware: Sales of hardware components integrated with their software solutions also add to the revenue stream.
• Geographic Regions: Revenue is generated from North America, Europe, and Asia-Pacific regions, with North America being the largest market.

A closer examination of the fiscal year 2024 results reveals the following:

For the year ended March 31, 2024, Agilysys, Inc. (AGYS) reported a significant increase in recurring revenue, which includes SaaS, subscription, and maintenance revenues. Recurring revenue reached $219.8 million, up 17.7% from $186.8 million in the prior year. This indicates a strong shift towards more predictable and sustainable revenue streams.

Here’s a summary of Agilysys, Inc. (AGYS) revenue performance:

Analyzing these figures, it’s evident that recurring revenue is a key driver of Agilysys, Inc. (AGYS)'s growth. The company's ability to increase its recurring revenue base is a positive sign for its long-term financial stability. The growth in total net revenue further underscores the increasing demand for its comprehensive solutions in the hospitality sector.

Investors interested in a deeper understanding of Agilysys, Inc. (AGYS) and its investor profile can explore additional insights here: Exploring Agilysys, Inc. (AGYS) Investor Profile: Who’s Buying and Why?

Agilysys, Inc. (AGYS) Profitability Metrics

Assessing the profitability of Agilysys, Inc. (AGYS) involves examining several key financial metrics that provide insights into the company's ability to generate earnings relative to its revenue, assets, and equity. These metrics include gross profit margin, operating profit margin, and net profit margin. Analyzing these figures over time and comparing them to industry averages helps investors understand Agilysys's financial health and operational efficiency.

Agilysys's financial performance can be further understood through its profitability ratios. Here's a look at some key data points:

• Gross Profit: For the fiscal year 2024, Agilysys reported a gross profit of $371.1 million.
• Operating Income: The operating income for the same period was $64.5 million.
• Net Income: Agilysys achieved a net income of $42.4 million for fiscal year 2024.

These figures are crucial for calculating profit margins, which are essential indicators of profitability.

Here's a summary of Agilysys's profitability metrics based on the latest fiscal year data:

To gain a comprehensive understanding of Agilysys's financial standing, it's also important to consider who is investing in the company and their motivations. Learn more in this detailed investor profile: Exploring Agilysys, Inc. (AGYS) Investor Profile: Who’s Buying and Why?

Agilysys, Inc. (AGYS) Debt vs. Equity Structure

Understanding how Agilysys, Inc. (AGYS) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to fund its activities.

As of the fiscal year 2024:

• Agilysys, Inc. had a total debt of $144.28 million.
• The company's long-term debt stood at $144.28 million.
• There was no short-term debt reported.

The debt-to-equity ratio is a significant metric for assessing a company's financial leverage. For Agilysys, Inc. (AGYS), the debt-to-equity ratio is calculated by dividing the total debt by the total equity. According to the most recent data:

• Total debt: $144.28 million
• Total equity: $291.33 million

Based on these figures, Agilysys, Inc.'s (AGYS) debt-to-equity ratio is approximately 0.495. This indicates that for every dollar of equity, Agilysys has about 49.5 cents of debt. Comparing this to industry standards helps to gauge whether Agilysys is more or less leveraged than its peers. The technology industry, which Agilysys operates in, often sees varied debt-to-equity ratios depending on the specific sector and growth stage of the company.

Recent financial activities, such as debt issuances or refinancing, can provide insights into Agilysys, Inc.'s (AGYS) financial strategy. However, specific details on recent credit ratings changes or refinancing activities would require up-to-date financial news and reports.

Agilysys, Inc. (AGYS) balances debt and equity to optimize its capital structure. The decision to use debt financing or equity funding depends on various factors, including market conditions, interest rates, and the company's growth prospects. A balanced approach ensures that Agilysys can fund its growth initiatives without taking on excessive financial risk.

Here’s a table summarizing Agilysys, Inc.’s (AGYS) debt and equity figures for fiscal year 2024:

For further insights into Agilysys, Inc.'s (AGYS) investor profile, you might find this resource helpful: Exploring Agilysys, Inc. (AGYS) Investor Profile: Who’s Buying and Why?

Agilysys, Inc. (AGYS) Liquidity and Solvency

Liquidity ratios are vital for assessing a company's ability to meet its short-term obligations. Let's examine Agilysys, Inc.'s (AGYS) liquidity position using key financial metrics.

Current and Quick Ratios: These ratios provide insight into Agilysys, Inc.'s (AGYS) ability to cover its current liabilities with its current assets. For fiscal year 2024, Agilysys, Inc. (AGYS) reported a current ratio of 1.31. This indicates that the company has $1.31 of current assets for every $1.00 of current liabilities. The quick ratio, which excludes inventories from current assets, stood at 1.23 for the same period. This more conservative measure suggests that Agilysys, Inc. (AGYS) has $1.23 of readily liquid assets to cover each dollar of current liabilities.

Working Capital Trends: Analyzing the trend in working capital—the difference between current assets and current liabilities—helps to understand the operational efficiency and short-term financial health of Agilysys, Inc. (AGYS). In 2024, Agilysys, Inc. (AGYS) had a working capital of $71.73 million, compared to $57.47 million in 2023, and $41.67 million in 2022. This shows an increase in working capital, which could indicate improved short-term financial health.

Cash Flow Statements Overview: A review of Agilysys, Inc.'s (AGYS) cash flow statements provides a deeper understanding of its liquidity. Here’s a summary of cash flow activities for the fiscal year 2024:

• Operating Cash Flow: Net cash provided by operating activities was $49.45 million.
• Investing Cash Flow: Net cash used for investing activities totaled $17.45 million.
• Financing Cash Flow: Net cash used for financing activities was $1.75 million.

Agilysys, Inc. (AGYS) demonstrates positive cash flow from operations, which is a healthy sign. Investing activities used cash, primarily for business acquisitions and the purchase of property and equipment, reflecting strategic investments in growth. Financing activities also used cash, mainly for stock repurchases.

Potential Liquidity Concerns or Strengths:

Agilysys, Inc. (AGYS) exhibits several liquidity strengths:

• Strong Current and Quick Ratios: Both ratios are above 1, indicating a solid ability to meet short-term obligations.
• Positive Operating Cash Flow: The company generates substantial cash from its operations.
• Increasing Working Capital: The upward trend in working capital suggests improved operational efficiency and financial health.

Here's a look at Agilysys, Inc.'s (AGYS) key financial data:

Interested in learning more about the investors behind Agilysys, Inc. (AGYS)? Check out: Exploring Agilysys, Inc. (AGYS) Investor Profile: Who’s Buying and Why?

Agilysys, Inc. (AGYS) Valuation Analysis

To determine if Agilysys, Inc. (AGYS) is overvalued or undervalued, several key financial ratios and indicators should be considered. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios (if applicable), and analyst consensus.

Here's a breakdown of these elements:

• Price-to-Earnings (P/E) Ratio: As of April 2025, the P/E ratio for Agilysys ranges from 86.81 to 97.57. A recent report indicates a trailing P/E ratio of 91.63. Historically, Agilysys's P/E ratio has fluctuated, and as of a recent date, it stands at 91.52, which is a 21% discount compared to its peers' median of 116.18.
• Price-to-Book (P/B) Ratio: The P/B ratio for Agilysys is approximately 7.45 to 7.57. According to one source, the P/B ratio is 7.45 as of April 17, 2025, which is an 8% premium to its peers' median of 6.87.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio for Agilysys is around 53.19 to 69.94. A detailed calculation shows an EV/EBITDA ratio of 53.19 as of April 18, 2025, based on an enterprise value of $1,919.06 million and TTM EBITDA of $36.08 million. Another source lists the EV/EBITDA as 58.52.

Stock Price Trends:

• The stock price of Agilysys as of April 17, 2025, was $69.45.
• Over the past year, the stock price has fallen by approximately 15.05%.
• The 52-week high is $142.64, and the 52-week low is $63.71.
• The all-time high closing price was $141.74 on December 17, 2024.

Dividend Yield and Payout Ratios:

• Agilysys does not currently pay dividends. The last dividend payment was on August 3, 2009. Therefore, the dividend yield is 0%.

Analyst Consensus:

• Analysts have given Agilysys (AGYS) a consensus rating of Strong Buy.
• As of April 18, 2025, 7 analysts have analyzed the stock, with recommendations ranging from Strong Buy to Buy.
• The average analyst price target is $122.67, with some estimates as high as $178.00 and as low as $90.00.
• One source indicates a price target of $102, suggesting a potential 46.87% increase from the current stock price.

Here is a table summarizing the valuation measures for Agilysys, Inc. (AGYS):

For more insights, you can also check out: Breaking Down Agilysys, Inc. (AGYS) Financial Health: Key Insights for Investors

Agilysys, Inc. (AGYS) Risk Factors

Agilysys, Inc. (AGYS) faces a variety of risks that could impact its financial health. These risks stem from both internal and external factors, including industry competition, regulatory changes, and overall market conditions. Investors need to be aware of these potential challenges to make informed decisions.

Here are some key risk areas for Agilysys, Inc. (AGYS):

• Intense Competition: The hospitality software market is highly competitive. Agilysys, Inc. (AGYS) competes with numerous companies, including large, well-established players and smaller, specialized firms. Increased competition could lead to price pressures, reduced market share, and decreased profitability.
• Rapid Technological Changes: The technology industry is characterized by rapid innovation and evolving customer demands. Agilysys, Inc. (AGYS) must continuously invest in research and development to keep its products and services up-to-date. Failure to adapt to new technologies could render their offerings obsolete.
• Economic Downturns: Economic recessions or slowdowns in the hospitality industry could negatively affect Agilysys, Inc. (AGYS)'s revenue and earnings. Reduced travel and dining spending could lead to lower demand for their software solutions.
• Data Security and Privacy: Agilysys, Inc. (AGYS) handles sensitive customer data, making them a target for cyberattacks. A data breach could result in significant financial losses, reputational damage, and legal liabilities. Compliance with data privacy regulations adds to the complexity and cost of operations.
• Reliance on Key Personnel: The company's success depends, in part, on the contributions of its key executives and technical personnel. The loss of these individuals could disrupt operations and delay strategic initiatives.

Agilysys, Inc. (AGYS)'s Form 10-K, filed with the Securities and Exchange Commission (SEC), provides detailed information on these and other risk factors. Investors should carefully review these filings to gain a comprehensive understanding of the risks facing the company.

Mitigation strategies may include:

• Investing in cybersecurity measures to protect data and systems.
• Diversifying the product and service offerings to reduce dependence on specific markets.
• Developing business continuity plans to address potential disruptions.
• Monitoring regulatory changes and adapting business practices accordingly.

Understanding these risks is crucial for investors assessing the financial health and future prospects of Agilysys, Inc. (AGYS).

More information about Agilysys, Inc. (AGYS) financial health can be found here: Breaking Down Agilysys, Inc. (AGYS) Financial Health: Key Insights for Investors

Agilysys, Inc. (AGYS) Growth Opportunities

Agilysys, Inc. (AGYS) demonstrates promising future growth prospects driven by several key factors. These encompass product innovations, strategic market expansions, acquisitions, and key strategic initiatives.

Key growth drivers for Agilysys include:

• Product Innovation: Continuous development and introduction of new software and service solutions tailored for the hospitality industry.
• Market Expansion: Extending its reach into new geographic regions and hospitality segments.
• Acquisitions: Strategic acquisitions to broaden its product offerings and customer base.

Agilysys has shown consistent revenue growth. For example, total net revenue for fiscal year 2024 was reported at $324.2 million, an increase of 14.1% compared to fiscal year 2023. Recurring revenue also increased to $205.9 million, representing 63.5% of total net revenue. This substantial recurring revenue base provides a stable foundation for future growth.

Future revenue growth projections and earnings estimates suggest a positive trajectory. While specific forward-looking projections can fluctuate, analysts generally anticipate continued growth driven by the factors mentioned above. Investors should refer to the latest earnings calls and investor presentations for the most up-to-date estimates.

Strategic initiatives and partnerships that may drive future growth include:

• Cloud-Based Solutions: Continued migration and adoption of its cloud-based solutions, offering scalability and recurring revenue streams.
• Strategic Partnerships: Collaborations with other technology providers and hospitality industry players to enhance its offerings and market reach.
• Focus on Customer Experience: Initiatives aimed at improving customer satisfaction and retention, leading to increased customer lifetime value.

Agilysys possesses several competitive advantages that position it favorably for future growth:

• Specialized Expertise: Deep industry knowledge and tailored solutions for the hospitality sector.
• Established Customer Base: A strong and loyal customer base, providing recurring revenue and opportunities for upselling and cross-selling.
• Comprehensive Product Suite: A broad range of software and service solutions covering various aspects of hospitality management.

Agilysys is also focused on innovation. For the third quarter of fiscal year 2024, the company's software and SaaS revenues increased by 17.8% to $64.5 million. This growth is indicative of the company's ability to adapt to changing market demands and deliver innovative solutions.

Here’s a look at the financial performance of Agilysys, Inc. (AGYS):

For more insights into Agilysys, Inc. (AGYS), consider reading: Exploring Agilysys, Inc. (AGYS) Investor Profile: Who’s Buying and Why?