Agilysys (AGYS) Q2 2027 earnings summary

Executive summary

• Q2 FY2027 revenue reached a record $93.4M, up 17.7% YoY; the quarter marked the 19th consecutive record-revenue quarter and best-ever Q2 sales period.

• Record sales, strong bookings and faster backlog deployments supported higher FY2027 revenue, subscription growth and Adjusted EBITDA guidance.

• Subscription revenue grew 32.6% YoY, supported by broad-based deployments, cross-selling, product innovation and AI development.

Financial highlights

• Q2 gross profit was $60.3M, up 23.2% YoY; gross margin increased to 64.6% from 61.7%.

• Operating income was $15.248M versus $14.147M; net income was $13.2M versus $11.7M, and diluted EPS was $0.46 versus $0.41.

• Adjusted EBITDA was a record $24.1M, or 25.9% of revenue, versus $16.4M; adjusted diluted EPS was $0.67 versus $0.40.

• H1 revenue rose 16.1% to $181.0M; operating income increased 33.8% to $25.0M, and net income was $22.2M versus $16.6M.

Outlook and guidance

• FY2027 revenue guidance increased to $374M-$378M; subscription revenue growth guidance rose to at least 34% YoY.

• FY2027 Adjusted EBITDA guidance increased to 25% of revenue from 24%; Q3 is expected slightly above 22% and Q4 to approach 30%.

• Subscription go-lives are expected to add $3.5M-$3.7M sequentially in each remaining quarter, implying a 38%-39% subscription growth exit rate.

• H2 product revenue is expected at $20M-$22M and professional services growth at 5%-10%; services gross margin is expected above 30% for FY2027.