Business Overview / Sources of Revenue

Agilysys Inc. is a developer and marketer of proprietary enterprise software and solutions specifically for the hospitality industry[2]. With over 40 years of experience in hospitality software[1], the company specializes in point of sale (POS) solutions, property management systems, inventory and procurement, document management, workforce management, and mobile and wireless products[2][5].

Agilysys generates revenue through its software services, professional services, and maintenance and support services[5]. The company serves a diverse clientele including casinos, hotels and resorts, cruise lines, healthcare facilities, stadiums, universities, corporate food service management, and restaurants[5].

Headquartered in Alpharetta, Georgia, Agilysys operates throughout North America, Europe, Asia, and the Pacific, with EMEA headquarters in Windsor, UK, and additional offices in Singapore, Hong Kong, Malaysia, and Chennai[2].

Revenue Growth Potential and Recurrence

Agilysys (AGYS) has a substantial recurring revenue base, with Q4 2025 recurring revenue accounting for 62.2% of total revenue[3]. Subscription revenue in particular has shown impressive growth, increasing by 42.7% year-over-year in Q4 2025 and now representing a record 64.4% of total recurring revenue[2].

For growth potential, Agilysys projects FY2026 revenue between $308-312 million[3], with subscription revenue expected to grow by 25%[1][3]. The company has demonstrated consistent performance with 13 consecutive record revenue quarters[2]. Long-term growth indicators include:

- Strong subscription model momentum (39.5% growth in FY2025)[3]
- Expanding sales and services teams[2]
- Modernized POS platform driving improved sales[2]
- International market opportunities, albeit with some volatility[2]

While some challenges exist in legacy migration timelines and operating leverage, Agilysys has established solid business fundamentals for sustained future revenue growth[1].

Economic Moat Factors

Agilysys (AGYS) demonstrates several elements of a developing economic moat. Its transition to a subscription-based, cloud-native software model in hospitality has led to strong recurring revenues—over 61% of total revenue in fiscal 2025—with high gross margins exceeding 62%[2][5]. These recurring revenues create moderate switching costs, as customers integrating AGYS solutions into their hospitality operations are less likely to undergo disruptive changes. The company’s successful cross-selling and significant international expansion (adding 100+ countries via acquisition) suggest growing network effects and enhanced brand reach[5]. Operational leverage and margin expansion signal emerging economies of scale. While AGYS lacks the overwhelming dominance of a true wide moat player, its sticky SaaS platform, expanding ecosystem, and improving profitability build barriers to entry and customer churn, supporting a narrow but strengthening moat in its niche[2][5].

Leadership

Agilysys (AGYS) is led by CEO and President Ramesh Srinivasan (65), who has served for 8.4 years[3][5]. While not a founder, Srinivasan maintains a substantial 2.93% ownership stake worth approximately $86.3 million[5]. The executive team also includes Dave Wood as SVP and CFO[1][3]. Recent leadership developments include the appointment of hospitality software veteran Dan Bell to a new sales leadership role in February 2025[2] and the addition of Lisa Pope to the Board of Directors in December 2024[4]. The company maintains an experienced board with an average tenure of 9.8 years[5].

Financial Health

Agilysys (AGYS) demonstrates strong financial health with impressive Q4 and FY2025 performance. The company reported Q4 EPS of $0.54, significantly beating estimates of $0.26 or $0.14[1][2]. Revenue reached record levels with $74.3M in Q4 and $275.6M for FY2025[2]. Operating income jumped 43% to $22.6M in FY2025, with operating margin expanding from 6.6% to 8.2%[3]. Adjusted EBITDA hit a record $53.8M, growing 45% year-over-year[3]. The company's business model is increasingly subscription-driven, with recurring revenue reaching $170.1M (61.7% of total revenue) in FY2025, a 39.5% increase[3]. However, the search results do not provide specific information about cash-to-debt ratio, free cash flow margin, or share repurchase activities.

Last updated Jun 2, 2025