Agilysys (AGYS) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 net revenue of $76.7M, up 20.7% year-over-year, marking the 14th consecutive record quarter, with strong growth in subscription and maintenance revenue and the impact of the Book4Time acquisition.

• Subscription revenue grew 44.3% year-over-year, now 65.6% of recurring revenue, with strong momentum across all major sales verticals.

• Professional services revenue reached a record $18.1M, up 16% year-over-year, with backlog at record levels.

• Net income for the quarter was $4.9M ($0.17 per diluted share), down from $14.1M ($0.50 per diluted share) in the prior year, reflecting higher operating expenses.

• Sales capacity and professional services headcount increased 45% and 38% year-over-year, respectively, driving broader territory coverage and improved execution.

Financial highlights

• Recurring revenue grew 27.8% year-over-year to $48.6M, representing 63.4% of total revenue; subscription revenue was 65.6% of total revenue.

• Gross profit was $47.3M (61.7% margin), down from 62.8% margin last year due to revenue mix and ramp-up costs.

• Adjusted EBITDA was $12.5M, up from $12.1M year-over-year; adjusted net income rose to $9.3M, with adjusted EPS at $0.33.

• Free cash flow was negative $5M for the quarter, reflecting typical Q1 working capital seasonality and debt repayment.

• Ending cash balance was $55.6M, down from $73.0M at fiscal year-end.

Outlook and guidance

• Raised FY26 subscription revenue growth guidance from 25% to 27% due to strong backlog and sales momentum.

• Maintained full-year revenue guidance of $308M–$312M and adjusted EBITDA margin target of 20%.

• Guidance excludes any significant subscription revenue from the Marriott PMS project in FY26.

• Management expects continued investment in product innovation, international expansion, and operational efficiency to drive long-term growth.

• Cash flow from operations, cash on hand, and access to capital markets are expected to meet liquidity needs.