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Mar 31, 2020
Agilysys Q4 2020 Earnings Report
Agilysys' Q4 2020 earnings were impacted by the COVID-19 pandemic, but the company still achieved revenue growth and improved its cash balance.
Key Takeaways
Agilysys reported Q4 2020 revenue of $39.7 million, an 8% increase year-over-year, despite challenges from COVID-19. The company's recurring revenue reached a record $22.3 million, driven by a 30% increase in subscription revenue. However, the company reported a net loss of $27.0 million, impacted by one-time capitalized software related impairment charges, but adjusted EPS was $0.05. The company's cash balance increased to $46.7 million.
Total net revenue increased to $39.7 million from $36.6 million in the prior year.
Recurring revenues reached a record $22.3 million, accounting for 56% of total net revenue.
Subscription revenues increased by 30% year-over-year and comprised 39% of total recurring revenues.
Free cash flow was $4.9 million, compared to $3.9 million in the prior year.
Agilysys
Agilysys
Agilysys Revenue by Segment
Revenue by Segment
Products Revenue
CapyFin.comSubscription & maintenance Revenue
CapyFin.comProfessional Services Revenue
CapyFin.com Forward Guidance
Agilysys expects a challenging first quarter in fiscal year 2021 with a potential 35% year-over-year decline in revenue and approximately break-even Adjusted EBITDA due to the pandemic and customer concessions. However, they anticipate business levels will improve from that low point and remain positive on their medium and long-term growth prospects.
Positive Outlook
- The company is well-positioned to serve the increased and changing technology demands of the hospitality industry due to product innovation.
- They are seeing good sales activity with an increased need for technology solutions to secure the safety and comfort of guests.
- Newer products are expected to play a major role in the recovery phase and beyond.
- A $35 million convertible investment from MAK Capital will strengthen the balance sheet and allow for financial flexibility.
- The company is navigating through the crisis from a position of relative strength and expects to come out of it even stronger in terms of competitive differentiation.
Challenges Ahead
- The current April-June fiscal 2021 first quarter is expected to be challenging.
- A possible 35% year-over-year decline in revenue is anticipated due to the general business downturn.
- Various one-time recurring revenue related and other concessions have been given to customers.
- The short term remains uncertain.
- Full fiscal year 2021 guidance is not being released at this time due to the rapidly changing environment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income