Agilysys, Inc. (Nasdaq: AGYS), a global provider of next-generation hospitality software solutions and services, today reported operating results for its fiscal 2021 first quarter and period ended June 30, 2020.

Summary of Fiscal 2021 First Quarter Financial Results

• Total net revenue was $29.8 million, compared to total net revenue of $38.4 million in the comparable prior-year period for a 22.4% decrease in revenue.

• Recurring revenues (which are comprised of support, maintenance and subscription services) were $20.5 million, or 68.8% of total net revenue, compared to $20.1 million, or 52.3% of total net revenue, for the same period in fiscal 2020. Subscription revenues increased 8.6% year over year and comprised 37.2% of total recurring revenues, compared to 34.9% of total recurring revenues in the first quarter of fiscal 2020.

• Gross margin was 62.2% in the fiscal 2021 first quarter, compared to 52.1% in the comparable prior-year period.

• Net loss available to common shareholders in the fiscal 2021 first quarter was $(1.7) million, or $(0.07) per diluted share compared to a net loss of $(1.6) million, or $(0.07) per diluted share, in the comparable prior-year period.

• Adjusted EBITDA (non-GAAP) was $3.4 million, compared to $3.2 million in the comparable prior-year period (see reconciliation below).

• Adjusted diluted EPS (non-GAAP) was $0.08 per share compared to $0.08 per share in the comparable prior-year period.

• Free cash flow (non-GAAP) in the fiscal 2021 first quarter was $(5.2) million, compared to free cash flow of $(2.5) million in the fiscal 2020 first quarter (see reconciliation below). Ending cash balance was $74.6 million, compared to ending cash balance of $37.2 million in the comparable prior-year period.

Ramesh Srinivasan, President and CEO of Agilysys, commented, “This was likely the toughest quarter ever for the hospitality industry and our business. Given the extremely difficult circumstances, we are pleased with our top and bottom-line results. What is notable about the EBITDA level achieved is that we did not in any way compromise the pace of product innovation and customer service levels during the quarter. Our current velocity of product improvements and innovation is the best it has ever been and has helped create expanded market opportunities. Apart from the tough business conditions affecting all our revenue areas, recurring revenue was additionally affected by one-time COVID-19 related financial relief provided to customers to help them during this time of need. We expect this one-time COVID-19 relief to also affect future quarters of this fiscal year, albeit to a lesser extent. Services revenue this quarter was additionally affected by sales incentives given to customers to enable adoption of an innovative new online ordering F&B software application, which was successful in driving multifold increased use, thereby helping future SaaS fees growth potential.”

“We continue to be intensely focused on securing the safety and health of our employees, customers, and the communities we serve in. We are deeply grateful for all the sacrifices our team-members worldwide have made to secure the financial health of the company during the current crisis period.”

“As we work our way through the current business environment, significant marketplace uncertainties remain. This fiscal year will be a tale of four quarters for us. We will therefore continue to provide guidance one quarter at a time for the remainder of this fiscal year and switch to our normal annual guidance cadence starting the next fiscal year FY2022. After hitting a bottom in April, the extent of global sales deals won in value terms has improved month over month during each of the next three months. Our cash balance has improved further since June 30^th. We remain cautiously optimistic about our near-term future and bullish about our long-term growth and profitability improvement prospects. We have good reasons to believe our competitive advantage and overall business health will be better on the other side of this crisis than it was before.”

Fiscal 2021 Outlook
Agilysys continues to monitor the impact of COVID-19 on the hospitality industry with our primary focus being the safety of our employees and customers as we manage through these unprecedented times. Given the continued impact of COVID-19, we are still not releasing full fiscal year 2021 guidance at this time. We are expecting Q2 fiscal 2021 revenue to increase 15% over Q1 fiscal 2021 results with a corresponding 25% Adjusted EBITDA increase for the same period.

Dave Wood, Chief Financial Officer, commented, “I am very pleased with the work our teams have done during the quarter to manage through the COVID-19 pandemic while the hospitality industry was significantly impacted. During the first quarter we realized better than expected top-line results, along with healthy profitability levels. We remain more confident than ever in our long term financial strength and ability to execute on our plan to become a growing, profitable, product lead organization delivering mission critical solutions to customers and to do whatever it takes to support their ever changing business needs. The strength of our cash balance, along with our ability to deliver cost effective product innovation should allow us to pick back up with the business momentum we were achieving prior to the pandemic.”