Agilysys (AGYS) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 revenue of $79.3M, up 16.1% year-over-year, marking the 15th consecutive record revenue quarter, with subscription revenue up 33.1% and net income rising to $11.7M ($0.41 per diluted share).

• Strong sales momentum across all verticals, with international and food service management segments delivering standout growth and the Book4Time acquisition expanding SaaS offerings.

• Subscription sales and backlog at record levels, with 18 new customers added in Q2, all on subscription agreements.

• AI-driven innovation and a modernized product ecosystem are driving competitive advantages and operational efficiencies.

• Raised full-year FY26 revenue guidance to $315M–$318M and subscription revenue growth to 29%.

Financial highlights

• Q2 revenue: $79.3M (+16.1% YoY); first half FY26 revenue: $156M (+18.4% YoY); trailing twelve months revenue: $299.8M.

• Recurring revenue grew 23% YoY to $51M; subscription revenue up 33.1% YoY, now 65.5% of recurring revenue.

• Adjusted EBITDA for Q2: $16.4M (20% of revenue), up from $12.2M YoY; trailing twelve months adjusted EBITDA: $58.4M.

• Net income: $11.7M; adjusted net income: $11.4M; EPS: $0.41; adjusted EPS: $0.40.

• Free cash flow: $15M in Q2, up from $5.9M YoY; trailing twelve months free cash flow: $58.3M; cash and equivalents at $59.3M as of September 30, 2025.

Outlook and guidance

• FY26 revenue guidance raised to $315M–$318M (from $308M–$312M); subscription revenue growth guidance increased to 29% (from 27%), excluding Marriott PMS project.

• Adjusted EBITDA margin target remains at 20% of revenue.

• Professional services revenue expected to dip >5% sequentially in Q3 due to seasonality, then normalize in Q4.

• Management expects continued growth in subscription-based revenue, supported by the integration of Book4Time and ongoing product innovation.

• The company anticipates future cash tax savings from recent U.S. tax law changes, including immediate expensing of R&D.