Q1 2025 Agilysys Inc Earnings Call

Ladies and gentlemen, today's call will begin in about one minute. Thank you for your patience. Once again, today's call will begin in one minute. Thank you for your patience.

Operator: Again, today's call will begin in one minute. Thank you for your patience.

Operator: Again, today's call will begin in one minute. Thank you for your patience.

Operator: Good day, ladies and gentlemen. Welcome to the Agilisys 2025 first quarter conference call. As a reminder, today's conference may be recorded.

Operator: Good day, ladies and gentlemen, and welcome to the Agilysys 2025 first quarter conference call. As a reminder, today's conference may be recorded. I would like to turn the conference over to Jessica Hennessy, Senior Director of Corporate Strategy and Investor Relations at Agilysys. You may begin. Thank you, Victor. And good afternoon, everybody.

Jessica Hennessy: Good day, ladies and gentlemen, and welcome to the Agilysys 2025 First Quarter Conference Call. As a reminder, today's conference may be recorded. I would now like to turn the conference over to Jessica Hennessy, Senior Director of Corporate Strategy and Investor Relations at Agilysys. You may begin.

Jessica Hennessy: I would like to turn the conference over to Jessica Hennessy, Senior Director of Corporate Strategy and Investor Relations at Agilisys.

Jessica Hennessy: You may begin. Thank you, Victor, and good afternoon, everybody. Thank you for joining the Agilisys 2025 first quarter conference call.

Jessica Hennessy: Thank you for joining the Agilysys 2025 first quarter conference call. We will get started in just a minute with management's comments, but before doing so, let me read the Safe Harbor language.

Jessica Hennessy: Thank you, Victor, and good afternoon everybody. Thank you for joining the Agilysys 2025 first quarter conference call. We will get started in just a minute with management's comments, but before doing so, let me read the Safe Harbor language.

Jessica Hennessy: We will get started in just a minute with management's comments, but before doing so, let me read the Safe Harbor language. Some statements made on today's call will be predictive and are intended to be made as forward-looking within the Safe Harbor protection of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial guidance. Although the company believes that, as forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause results to differ materially. Important factors that could cause actual results to vary materially from these forward-looking statements include our ability to meet the provided guidance levels, our ability to increase sales and market share, our ability to maintain profitability levels, and the risks set forth in the company's reports on Form 10-K and 10-Q, and other reports filed with the Securities and Exchange Commission.

Jessica Hennessy: Some statements made on today's call will be predictive and are intended to be made as forward-looking within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. Including statements regarding our financial guidance. Although the company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause results to differ materially. Important factors that could cause actual results to vary materially from these forward-looking statements include our ability to meet the provided guidance levels, our ability to increase sales and market share, our ability to maintain profitability levels, and the risks set forth in the company's reports on Form 10-K and 10-Q and other reports filed with the Securities and Exchange Commission.

Jessica Hennessy: Some statements made on today's call will be predictive and are intended to be made as forward-looking within the safe harbor protections of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial guidance.

Speaker Change: Although the company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause results to differ materially.

Speaker Change: Important factors that could cause actual results to vary materially from these forward-looking statements include our ability to

Speaker Change: to meet the provided guidance levels.

Speaker Change: our ability to increase sales and market share, our ability to maintain profitability levels, and the risks set forth in the company's reports on Form 10-K and 10-Q, and other reports filed with the Securities and Exchange Commission.

Jessica Hennessy: As a reminder, any references to records, financial and business levels during this call refer only to the time period after Agilisys made the transformation to an entirely hospitality-focused software solutions company in fiscal year 2014.

Jessica Hennessy: As a reminder, any references to record financial and business levels during this call refer only to the time period after Agilysys made the transformation to an entirely hospitality focused software solutions company in fiscal year 2014. With that, I'd now like to turn the call over to Mr. Ramesh Srinivasan, President and CEO of Agilysys. Ramesh, please go ahead.

Speaker Change: As a reminder, any references to record financial and business levels during this call refer only to the time period after Agilysys made the transformation to an entirely hospitality-focused software solutions company in fiscal year 2014.

Jessica Hennessy: With that, I'd now like to turn the call over to Mr. Ramesh Sharini-Bosson, President and CEO of Agilisys.

Speaker Change: With that, I'd now like to turn the call over to Mr. Ramesh Srinivasan, President and CEO of Agilysys. Ramesh, please go ahead.

Ramesh Srinivasan: Ramesh, please go ahead. Thank you, Jess.

Ramesh Srinivasan: Thank you, Jess. Good evening. Welcome to our Fiscal 2025 First Quarter Earnings Call. Joining Jess and me on the call today is Dave Wood, CFO, at our Alphaleta Atlanta headquarters. Let me cover sales performance first before moving on to revenue, profitability, and other business details. All the sales numbers discussed in this call are measured in annual contract value terms. None of the sales numbers mentioned include anything from the Marriott Property Management System PMS project, including for service.

Ramesh Srinivasan: Good evening. Welcome to our Fiscal 2025 first quarter earnings call. Joining Jess and me on the call today is Dave Wood, CFO, at our Alphaneta Atlanta headquarters. Let me cover sales performance first before moving on to revenue, profitability, and other business details. All the sales numbers discussed in this call are measured in annual contract value terms. None of the sales numbers mentioned include anything from the Marriott Property Management System PMH project, including for services. The services and development work we are performing for the Marriott PMH project, which continues to progress according to plan, is reflected in our services revenue levels but is not counted in any of the sales numbers mentioned.

Ramesh Srinivasan: Thank you Jess. Good evening. Welcome to our fiscal 2025 first quarter earnings call. Joining Jess and me on the call today is Dave Wood, CFO at our Alphaleta Atlanta headquarters.

Speaker Change: Let me cover sales performance first, before moving on to revenue, profitability, and other business details.

Speaker Change: All the sales numbers discussed in this call are measured in annual contract value terms.

Speaker Change: None of the sales numbers mentioned include anything from the Marriott Property Management System PMS project, including for services.

Speaker Change: The services and development work we are performing for the Marriott PMS project.

Speaker Change: which continues to progress according to plan is reflected in our services revenue levels but is not counted in any of the sales numbers mentioned.

Ramesh Srinivasan: Q1 fiscal 2025 represented our best ever Q1 sales start to a fiscal year and was in line with the high level of sales success we have had over the past couple of years. With respect to sales pertaining to property management systems, PMS and PMS-related modules, Q1 was the best quarter during my seven and a half year tenure here and the fourth consecutive, sequentially increasing quarter. Our ongoing PMS sales success is indicative of the gradual build-up of improving sales momentum, aided by the recently created state-of-the-art cloud native PMS and related add-on modules. We've mentioned during previous calls that our extensive R&D investments during the past several years were focused on, among other things, two major objectives, both of which have now been achieved.

Ramesh Srinivasan: The services and development work we are performing for the Marriott PMS project, which continues to progress according to plan, is reflected in our services revenue level but is not counted in any of the sales numbers mentioned. Q1 Fiscal 2025 Representatives are the best ever. Queue and sales start to a fiscal year, and it was in line with the high level of sales success we've had over the past couple of years. With respect to sales pertaining to property management systems, PMS, and PMS-related modules. Q1 was the best quarter during my seven-and-a-half-year tenure here and the fourth consecutive sequentially increasing quarter.

Speaker Change: Q1 Fiscal 2025 represented our best ever Q1 sales start to a fiscal year and was in line with the high level of sales success we've had over the past couple of years.

Speaker Change: With respect to sales pertaining to property management systems, PMS, and PMS-related modules,

Speaker Change: Q1 was the best quarter during my seven and a half year tenure here and the fourth consecutive sequentially increasing quarter.

Ramesh Srinivasan: Our ongoing PMS sales success is indicative of the gradual buildup of improving sales momentum, aided by the recently created state-of-the-art cloud-native PMS and related add-on modules. We have mentioned during previous calls that our extensive R&D investments during the past several years were focused on, among other things, two major objectives, both of which have now been achieved. One objective was to completely revamp, from the ground up, the core point of sale POS Property Management Systems, PMS, and Inventory Procurement Products.

Speaker Change: Our ongoing PMS sales success is indicative of the gradual build-up of improving sales momentum aided by the recently created state-of-the-art cloud native PMS and related add-on modules.

Speaker Change: We've mentioned during previous calls that our extensive R&D investments during the past several years were focused on, among other things, two major objectives.

Ramesh Srinivasan: One objective was to completely revamp from the ground up the core point of sale (POS), property management systems (PMS), and inventory procurement products. By revamp from the ground up we mean to completely rewrite them as cloud native software solutions that can also work on premise when required by customers and simultaneously also unify aspects like start-facing and get-facing point-of-sale functions into one technology platform based. The second objective was to create add-on experience enhancers cloud native software modules integrated with the core solutions, thereby creating a compelling ecosystem of hospitality software solutions. Completing this objective has given us a distinct competitive advantage.

Speaker Change: both of which have now been achieved.

Speaker Change: One objective was to completely revamp from the ground up the core point-of-sale POS.

Speaker Change: Property Management Systems PMS and Inventory Procurement Products

Ramesh Srinivasan: By revamped from the ground up, we mean to completely rewrite them as cloud native software solutions that can also work on-premise when required by customers, and simultaneously also unify aspects like star facing and guest facing, point-of-sale functions into one technology platform base. The second objective was to create add-on experience enhancer cloud native software modules integrated with the core solution, thereby creating a compelling ecosystem of hospitality software solutions.

Speaker Change: By revamped from the ground up we mean to completely rewrite them as cloud native software solutions that can also work on-premise when required by customers.

Speaker Change: and simultaneously also unify aspects like staff-facing and guest-facing point-of-sale functions into one technology platform base.

Speaker Change: The second objective was to create add-on experience enhancer cloud native software modules integrated with the core solutions, thereby creating a compelling ecosystem of hospitality software solutions.

Ramesh Srinivasan: Completing this objective has given us a distinct competitive advantage. These 20 plus add-on software modules have given us many additional sales opportunities during the past few years. The first quarter of fiscal 2025 was our best sales quarter thus far for add-on modules and was more than twice as high as Q1 last year and about 20% higher than the previous best sales quarter for add-on modules, which was the sequentially preceding Q4 of fiscal 2021. Q1 Fiscal 2025 was also the second-highest quarter ever for America's Hotels and Resort Sales Voters.

Speaker Change: Completing this objective has given us a distinct competitive advantage.

Ramesh Srinivasan: These 20 plus add-on software modules have given us many additional sales opportunities during the past few years. The first quarter of fiscal 2025 was our best sales quarter thus far for add-on modules and was more than twice as high as Q1 last year and about 20 percent higher than the previous best sales quarter for add-on modules, which was the sequentially preceding Q4 of fiscal 2024. Q1 fiscal 2025 was also the second highest quarter ever for the America's hotels and the soft sales vertical. The previous highest sales quarter for this vertical occurred a little more than a year ago and featured one particularly large perpetual software license-based sales win.

Speaker Change: These 20 plus add-on software modules have given us many additional sales opportunities during the past few years.

Speaker Change: The first quarter of fiscal 2025 was our best sales quarter thus far for add-on modules.

Speaker Change: and was more than twice as high as Q1 last year and about 20% higher than the previous best sales quarter for add-on modules, which was the sequentially preceding Q4 of fiscal 2024.

Speaker Change: Q1 Fiscal 2025 was also the second highest quarter ever for the America's Hotels and Resort Sales vertical.

Ramesh Srinivasan: The previous highest sales quarter for this vertical occurred a little more than a year ago and featured one particularly large perpetual software license-based sales win. By contrast, sales during this quarter were more broad-based and featured multiple significant sales conversations, among these, several involve the licensing of multiple solutions, including one for 9 properties of DIVI resources, with operations across five countries, Aruba, Barbados, Bonaire, St. Croix, and St. Martins.

Speaker Change: The previous highest sales quarter for this vertical occurred a little more than a year ago and featured one particularly large perpetual software license-based sales win.

Ramesh Srinivasan: By contrast, sales during this quarter was more broad-based and featured multiple significant sales contracts. Among these several involved licensing of multiple solutions, including one for nine properties of DB results with operations across five countries. Aruba, Barbados, Bonet, St. Croix, and St. Martin. Given our current modest market share in the Americas, hotels, and the source vertical, we have huge potential here as we continue to improve the solutions, add more firepower to the sales team, and invest more in targeted marketing efforts. The gaming casino sales vertical continues to lead sales levels among our portfolio of verticals, including during Q1, achieving close to peak levels.

Speaker Change: By contrast, sales during this quarter was more broad-based and featured multiple significant sales contracts.

Speaker Change: among these

Speaker Change: Several involve licensing of multiple solutions, including one for 9 properties of Divi Resorts with operations across 5 countries – Aruba, Barbados, Bonaire, St. Croix and St. Martins.

Ramesh Srinivasan: Given our current modest market share in the Americas, hotels, and resorts vertical, we have huge potential here as we continue to improve the solutions, add more firepower to this sales team, and invest more in targeted marketing efforts. The gaming casino sales vertical continues to lead sales levels among our portfolio of verticals, including during Q1, achieving close to peak levels. This was the third best quarter for sales in the Asia-Pacific region since the pandemic.

Speaker Change: Given our current modest market share in the Americas, hotels and resorts vertical, we have huge potential here as we continue to improve the solutions, add more firepower to this sales team, and invest more in targeted marketing efforts.

Speaker Change: The gaming casino sales vertical continues to lead sales levels among our portfolio of verticals, including during Q1, achieving close to peak levels.

Ramesh Srinivasan: This was the third-best quarter for sales in the Asia-Pacific APEC region since the pandemic, highlighted by the win at Hamilton Island, Australia, featuring PMS and multiple add-on modules after a tough, long, and thorough competitive selection process that involved about 40-40 internal stakeholders across the property and seven competitors. Hamilton Island is the largest integrated island resort in the southern hemisphere, offering a range of accommodation options from self-catering holiday homes and apartments to luxury hotels, 20 casual and fine dining restaurant options, a couple of spas, a 300-plus-birth marina, and over 65 tours and activities. Hamilton Island had been a POF customer of Agilisys for several years.

Speaker Change: This was the third best quarter for sales in the Asia-Pacific APAC region since the pandemic.

Ramesh Srinivasan: Highlighted by the win at Hamilton Island, Australia, featuring PMS and multiple add-on modules. After a tough, long, and thorough competitive selection process that involved about 40 internal stakeholders across the property and 7 competitors. Hamilton Island is the largest integrated island resort in the Southern Hemisphere, offering a range of accommodation options, from self-catering holiday homes and apartments to luxury hotels.

Speaker Change: Highlighted by the win at Hamilton Island, Australia, featuring PMF and multiple add-on modules.

Speaker Change: After a tough, long and thorough competitive selection process that involved about 40 internal stakeholders across the property and 7 competitors.

Speaker Change: Hamilton Island is the largest integrated island resort in the Southern Hemisphere, offering a range of accommodation options.

Ramesh Srinivasan: 20 casual and fine dining restaurant options, a couple of spas, a 300-plus berth marina, and over 65 tours and activities. Hamilton Highland has been a POS customer of Agilysys for several years. Like Inspire Resort Korea, Hamilton Island should become another integrated hospitality solutions ecosystem showcase site for us in the Asia-Pacific region. With respect to sales deals won during Q1 Fiscal 2025 April to June, we added 16, that's one six, 16 new customers.

Speaker Change: From self-catering holiday homes and apartments to luxury hotels, 20 casual and fine dining restaurant options, a couple of spas, a 300-plus berth marina, and over 65 tours and activities.

Ramesh Srinivasan: Like Inspire Resort Korea, Hamilton Island should become another integrated hospitality solutions ecosystem showcase site for us in the Asia-Pacific region. With respect to sales days 1 during Q1, 6th, 2025, April to June, we added 16, that's 16 new customers, 15 of whom signed subscription license-based agreements. There was an average of three products or modules licensed per new customer during the quarter. We also added 72 new properties that did not have any of our solutions before, but the parent company was already our customer. Of the 88 new properties added during the quarter across new and current customers, about 95% were either partially or fully subscription software license-based.

Speaker Change: Hamilton Highland has been a POS customer of Agilysys for several years.

Speaker Change: Like Inspire Resort Korea, Hamilton Island should become another integrated hospitality solutions ecosystem showcase site for us in the Asia-Pacific region.

Ramesh Srinivasan: 15 of whom signed subscription license-based agreements. There was an average of 3 products or modules licensed per new customer during the quarter. We also added 72 new properties that did not have any of our solutions before, but the parent company was already our customer. Of the 88 new properties added during the quarter across new and current customers, about 95% were either partially or fully subscription software license bearers. In addition, there were 115 instances of selling at least one additional solution to properties that were already using one or more of our products. In total, these 115 deals accounted for the sale of 257 solutions.

Speaker Change: With respect to sales deals won during Q1 Fiscal 2025, April-June, we added 16 new customers, 15 of whom signed subscription license-based agreements.

Speaker Change: There was an average of three products or modules licensed per new customer during the quarter. We also added 72 new properties that did not have any of our solutions before, but the parent company was already our customer.

Speaker Change: Of the 88 new properties added during the quarter across new and current customers, about 95% were either partially or fully subscription software license based.

Ramesh Srinivasan: In addition, there were 115 that is 115 instances of selling at least one additional solution to properties which were already using one or more of our products. In total, these 115 deals accounted for the sale of 257 solutions. This quarter was the best sales quarter thus far with respect to the number of new product sales instances and the number of total new solutions sold across those instances.

Speaker Change: In addition, there were 115 instances of selling at least one additional solution to properties which were already using one or more of our products.

Speaker Change: In total, these 115 deals accounted for the sale of 257 solutions.

Ramesh Srinivasan: This quarter was the best sales quarter thus far with respect to the number of new product sales instances and the number of total new solutions sold across those instances. Moving on to revenue, Q1 Fiscal 2025 was the 10th consecutive record revenue quarter at $63.5 million, 13% higher than the comparable prior year quarter. One-time product revenue, which consists of perpetual software licenses and hardware revenue, was lower than expected at $9.9 million, with an increasing customer preference for subscription SaaS-based licenses. However, revenue from perpetual software licenses continues to be challenged and was at its lowest level in a couple of years this quarter. The other part of product revenue, hardware, was also lower than our expectations.

Speaker Change: This quarter was the best sales quarter thus far with respect to the number of new product sales instances and the number of total new solutions sold across those instances.

Ramesh Srinivasan: Moving on to revenue. Q1, 6th, 2025 was the 10th consecutive record revenue quarter at $63.5 million, 13%, 13% higher than the comparable prior year quarter. One-time product revenue, which consists of perpetual software licenses and hardware revenue, was lower than expected at $9.9 million. With an increasing customer preference for subscription SaaS-based licenses, revenue from perpetual software licenses continued to be challenged and was at its lowest level in a couple of years this quarter. The other part of product revenue hardware was also lower than our expectations. As we have noted previously, hardware attached to point of sale, POS sales agreement is now about 20% less because the modernized version of our POS terminal now supports all major operating systems, including iOS and Android.

Speaker Change: Moving on to revenue

Speaker Change: Q1 Fiscal 2025 was the 10th consecutive record revenue quarter at $63.5 million, 13% higher than the comparable prior year quarter.

Speaker Change: One-time product revenue, which consists of perpetual software licenses and hardware revenue, was lower than expected at $9.9 million.

Speaker Change: with an increasing customer preference for subscription SaaS-based licenses.

Speaker Change: Revenue from perpetual software licenses continues to be challenged and was at its lowest level in a couple of years this quarter.

Speaker Change: The other part of product revenue, hardware, was also lower than our expectations.

Ramesh Srinivasan: As we have noted previously, hardware attached to point-of-sale POS sales agreements is now about 20% less because the modernized version of our POS terminal now supports all major operating systems, including iOS and Android. This enables customers to use, for a portion of their terminal end-point needs, consumer-grade mobile devices like iPads and iPad Minis that they can purchase off-the-shelf, as well as modern all-in-one devices they can purchase directly from various payment gateway providers and manufacturers.

Speaker Change: As we have noted previously, hardware attached to point-of-sale POS sales agreements is now about 20% less because the modernized version of our POS terminal now supports all major operating systems, including iOS and Android.

Ramesh Srinivasan: This enables customers to use for a portion of their terminal endpoint needs, consume a great mobile devices like iPads and iPad minis that they can purchase off the shelves as well as modern all-in-one devices they can purchase directly from various payment and gateway providers and manufacturers. This flexibility is a positive for customers and for industry overall. Both these trends let sales of perpetual software licenses and less hardware in each unit of POS sales are expected and naturally evolving shifts caused by an increasing preference for cloud SaaS based solutions and technology improvements providing support for consumer great devices which give our POS solutions a competitive edge.

Speaker Change: This enables customers to use, for a portion of their terminal endpoint needs, consumer-grade mobile devices like iPads and iPad Minis that they can purchase off-the-shelf, as well as modern all-in-one devices they can purchase directly from various payment gateway providers and manufacturers.

Ramesh Srinivasan: This flexibility is positive for customers and for the industry overall. Both these trends, less sales of perpetual software licenses and less hardware in each unit of POS sales, are expected and naturally evolving shifts caused by an increasing preference for cloud SaaS-based solutions and technology improvements providing support for consumer grade devices, which give our POS solutions a competitive edge. The first of these trends, involving a shift to subscription-based licenses, is unlikely to be reversed in the future, apart from one or two big on-premise wins involving perpetual software licenses which could happen now and then. But the second one, affecting hardware sales, can be at least partially mitigated by increasing POS sales.

Speaker Change: This flexibility is a positive for customers and for the industry overall.

Speaker Change: Both these trends

Speaker Change: Less sales of perpetual software licenses, and less hardware in each unit of POS sales are expected, and naturally evolving shifts caused by an increasing preference for POS.

Speaker Change: for cloud SaaS-based solutions and technology improvements, providing support for consumer-grade devices, which give our POS solutions a competitive edge.

Ramesh Srinivasan: The first of these trends involving shift to subscription-based licenses is unlikely to be reversed in the future apart from one or two big on-premise wins involving perpetual software licenses, which could happen now and then. But the second one affecting hardware sales can be at least partially mitigated by increasing POS sales levels. The additional product revenue-related challenge we have faced during recent quarters has been caused by less than optimal POS sales. Our POS business has been going through a tough phase as it transforms itself from old technology to modernized and unified state-of-the-art cloud-native solutions. We've been working through this POS technology transformation in stages during the past couple of years.

Speaker Change: The first of these trends involving shift to subscription-based licenses is unlikely to be reversed in the future, apart from one or two big on-premise wins involving perpetual software licenses, which could happen now and then.

Speaker Change: But the second one affecting hardware sales can be at least partially mitigated by increasing POS sales levels.

Ramesh Srinivasan: The additional product revenue-related challenge we have faced during recent quarters has been caused by less than optimal POSA. Our POS business has been going through a tough phase as it transforms itself from old technology to modernized and unified state-of-the-art cloud-native solutions. We've been working through this POS technology transformation in stages during the past couple of years. The POS system consists of a few distinct parts, the Terminal, Endpoint, Front-end, middle configuration layers, and back-end server. We have modernized them one by one in a phased approach, and implementations during the past couple of years have involved complex permutation combinations of old and new technology, making implementations difficult.

Speaker Change: The additional product revenue related challenge we have faced during recent quarters has been caused by less than optimal POSAs.

Speaker Change: Our POS business has been going through a tough phase as it transforms itself from old technology to modernized and unified state-of-the-art cloud-native solutions.

Speaker Change: We've been working through this POS technology transformation in stages during the past couple of years. The POS system consists of a few distinct parts, the terminal endpoint frontend, middle configuration layers, and backend servers.

Ramesh Srinivasan: The POS systems consist of a few distinct parts: the terminal end point front end, middle configuration layers, and back end servers. We have modernized them one by one in a faced approach, and implementations during the past couple of years have involved complex permutation combinations of old and new technology, making implementations difficult. We have paid a business price for such difficulties. The good news is all the POS modernization and unification engineering work have now been completed, and the quality of recent new implementations involving new product versions have improved by leaps and bounds, becoming a lot less complex and much easier to handle.

Speaker Change: We have modernized them one by one in a phased approach, and implementations during the past couple of years have involved complex permutation combinations of old and new technology, making implementations difficult.

Ramesh Srinivasan: We have paid a business price for such difficulty. The good news is, All the POS modernization and unification engineering work has now been completed, and the quality of recent new implementations involving new product versions has improved by leaps and bounds, becoming a lot less complex and much easier to handle. Earlier this month, we successfully installed guest-facing food and beverage kiosks at one of the cafes at Disneyland Paris, a first-time achievement for that famous theme park.

Speaker Change: We have paid a business price for such difficulties.

Speaker Change: The good news is, all the POS modernization and unification engineering work has now been completed.

Speaker Change: and the quality of recent new implementations involving new product versions have improved by leaps and bounds, becoming a lot less complex and much easier to handle.

Ramesh Srinivasan: Earlier this month, we successfully installed get-facing food and beverage kiosks at one of the cafes at Disneyland Paris, making a first-time achievement for that famous team. This implementation involved all recent cloud native versions of our POS software modules and was carried out under a short, high-pressure project science schedule. The initial results with respect to guest adoption of the kiosk have been taught class and very encouraging. We expect a number of such kiosks installed at this park to expand significantly during the next few months. After our initial successes have been installing 100% mobility-based modernized POS systems on a couple of their ships, a major cruise ship company has expanded the use of our POS systems to several additional ships and have, in addition, recently adopted the use of integrated agilices, loyalty, and promotions modules to automate widely used cruise ship processes which used to be manual before.

Speaker Change: Earlier this month, we successfully installed guest-facing food and beverage kiosks at one of the cafes at Disneyland Paris, making a first-time achievement for that famous theme park.

Ramesh Srinivasan: This implementation involved all recent cloud-native versions of our POS software modules and was carried out under a short, high-pressure project time schedule. The initial results with respect to guest adoption of the kiosk have been top-class and very encouraging. We expect the number of such kiosks installed at this park to expand significantly during the next few months. After our initial successes with installing 100% mobility-based, modernized POS systems on a couple of their ships, a major cruise ship company has expanded the use of our POS systems to several additional ships and, in addition, recently adopted the use of integrated Agilysys loyalty and promotions modules to automate widely used crucial processes, which used to be manual.

Speaker Change: This implementation involved all recent cloud-native versions of our POS software modules and was carried out under a short, high-pressure project time schedule.

Speaker Change: The initial results with respect to guest adoption of the kiosk have been top class and very encouraging. We expect the number of such kiosks installed at this park to expand significantly during the next few months.

Speaker Change: After initial successes with installing 100% mobility-based modernized POS systems on a couple of their ships,

Speaker Change: A major cruise ship company has expanded the use of our POS systems to several additional ships and have, in addition, recently adopted the use of integrated Agilysys Loyalty and Promotions modules to automate widely used crucial processes which used to be manual before.

Ramesh Srinivasan: Other successful recent POS implementations involving the most recent modernized product versions include those completed for a famous international location in New York City. At a state-of-the-art premium airport lounge that was opened recently and had been in the news, and at a well-known botanical garden in Philadelphia. Resorts were Las Vegas, which was one of the very few Las Vegas-based properties not using an agilices solution recently successfully implemented. The most recent versions of InfoGenesis POS get-saving kiosks and a couple of other POS add-on modules at their famous foot court serving multiple foot outlets, replacing a competing system.

Ramesh Srinivasan: Other successful recent POS implementations involving the most recent modernized product versions include those completed for a famous international location in New York City, at a state-of-the-art premium airport lounge that was recently opened and has been in the news, and at a well-known botanical garden in Philadelphia. Resorts World Las Vegas, which was one of the very few Las Vegas-based properties not using an Agilysys solution, recently successfully implemented the most recent versions of Infogenesis POS, Get Facing Kiosk, and a couple of other POS add-on modules at their famous foot court, serving multiple foot outlets, replacing a competing system. Now that's not an adjective.

Speaker Change: Other successful recent POS implementations involving the most recent modernized product versions include those completed for a famous international location in New York City.

Speaker Change: at a state-of-the-art premium airport lounge that was opened recently and has been in the news

Speaker Change: and at a well-known botanical garden in Philadelphia.

Speaker Change: Resorts World Las Vegas

Speaker Change: which was one of the very few Las Vegas-based properties not using an Agilysys solution.

Speaker Change: recently successfully implemented the most recent versions of Infogenesis POS Get Facing Kiosk and a couple of other POS add-on modules at their famous food court serving multiple food outlets replacing a competing system

Ramesh Srinivasan: Now, that's not an objective; Famous Foot Court is the actual name of that foot court. We'll be implementing the most recent POS product versions at all Marriott properties who signed with us following our recent selection as one of the approved POS vendors. While on the subject of Marriott, our cloud-native modernized Agilices Gauss solution was recently chosen as the brand standard for Marriott properties and has already been successfully implemented along with membership, book, and digital marketing software modules at one property, with a couple of more implementations coming up in the next few weeks. In summary, a lot of good things are happening with our new cloud-native POS product versions in the field now.

Speaker Change: Now that's not an adjective. Famous foot quote is the actual name of that foot quote.

Ramesh Srinivasan: The famous foot quote is the actual name of that foot quote. We'll be implementing the most recent POS product versions at all Marriott properties who sign with us following our recent selection as one of the approved POS vendors. While on the subject of Marriott, our cloud-native, modernized Agilysys Gauze solution was recently chosen as the brand standard for Marriott Properties and has already been successfully implemented, along with membership, book, and digital marketing software modules at one property, with a couple of more implementations coming up in the next few weeks.

Speaker Change: We'll be implementing the most recent POS product versions at all Marriott properties who sign with us, following our recent selection as one of the approved POS vendors.

Speaker Change: While on the subject of Marriott

Speaker Change: Our cloud-native, modernized Agilysys Gold solution.

Speaker Change: was recently chosen as the brand standard for Marriott properties and has already been successfully implemented along with membership, book, and digital marketing software modules at one property with a couple of more implementations coming up in the next few weeks.

Ramesh Srinivasan: In summary, a lot of good things are happening with our new cloud-native POS product versions in the field now. We should be able to move past the old to the new transformation-related business challenges within a reasonable time frame. We expect our POS sales numbers to rebound soon and reach levels higher than ever before in the future, which, among other things, should also help improve hardware product revenue levels. Recurring revenue during Q1 fiscal 2025 grew to $38 million and 18.4 percent, that is a 1.8 percent increase over the comparable prior year quarter, driven by a 32% increase in subscription revenue.

Speaker Change: In summary, a lot of good things are happening with our new cloud-native POS product versions in the field now. We should be able to move past the old to new transformation-related business challenges within a reasonable timeframe.

Ramesh Srinivasan: We should be able to move past the old to new transformation-related business challenges within a reasonable time frame. We expect our POS sales numbers to rebound soon and reach levels higher than ever before in the future, which, among other things, should also help improve hardware product revenue levels. Reckoning revenue during Q1 fiscal 2025 grew to $38 million, and 18.4% that is 1.8, 18.4% over the comparable prior year quarter, driven by a 32% increase in subscription revenue. In absolute number terms, Q1 recurring revenue and within it subscription revenue grew by $5.9 million and $5.4 million, respectively, year-over-year, both of which are records for year-over-year growth.

Speaker Change: We expect our POS sales numbers to rebound soon and reach levels higher than ever before in the future, which, among other things, should also help improve hardware product revenue levels.

Speaker Change: Recurring revenue during Q1 Fiscal 2025 grew to $38 million, an 18.4% increase over the comparable prior year quarter, driven by a 32% increase in subscription revenue.

Ramesh Srinivasan: In absolute terms, Q1 recurring revenue, and within it, subscription revenue, grew by $5.9 million and $5.4 million, respectively, year-over-year, both of which are records for year-over-year growth. Subscription revenue constituted 58.1% of total recurring revenue, the highest level yet.

Speaker Change: In absolute number terms, Q1 recurring revenue, and within it, subscription revenue, grew by $5.9 million and $5.4 million, respectively, year over year, both of which are records for year over year growth.

Ramesh Srinivasan: Subscription revenue constituted 58.1% of total recurring revenue, the highest level yet. Reckoning revenue has now increased sequentially for 16.16 for 16 consecutive quarters. Subscription revenue from add-on experience enhancer software modules constituted 20.4% of total subscription revenue this quarter, compared to 17.4%, that is 17.4% during Q1 last year. Our ability to provide end-to-end solutions continues to be a significant competitive strength, keeping our sales win-loss ratios at impressive levels. The 32% year-over-year increase in total subscription revenue was, in turn, driven by a 46% year-over-year increase. In subscription revenue pertaining to property management systems, PMS and PMS-related software modules, and a 28% year-over-year increase in point-of-sale (POS) and POS-related modules.

Speaker Change: Subscription revenue constituted 58.1% of total recurring revenue, the highest level yet.

Ramesh Srinivasan: Recurring revenue has now increased sequentially for 16 consecutive quarters. Subscription revenue from add-on Experience Enhancer software modules constituted 20.4% of total subscription revenue this quarter compared to 17.4% during Q1 last quarter. Our ability to provide end-to-end solutions continues to be a significant competitive strength, keeping our sales win-loss ratios at impressive levels. The 32% year-over-year increase in total subscription revenue was, in turn, driven by a 46% year-over-year increase in subscription revenue pertaining to property management systems, PMS, and PMS-related software modules and a 28% year-over-year increase in point-of-sa Please let me repeat that.

Speaker Change: Recurring revenue has now increased sequentially for 16, 1-6, for 16 consecutive quarters.

Speaker Change: Subscription revenue from add-on Experience Enhancer software modules constituted 20.4% of total subscription revenue this quarter compared to 17.4% during Q1 last year.

Speaker Change: Our ability to provide end-to-end solutions continues to be a significant competitive strength, keeping our sales win-loss ratios at impressive levels.

Speaker Change: The 32% year-over-year increase in total subscription revenue was in turn

Speaker Change: driven by a 46% year-over-year increase.

Speaker Change: in subscription revenue pertaining to property management systems, PMS and PMS-related software modules and a 28% year-over-year increase in point-of-sale POS and POS-related modules.

Ramesh Srinivasan: Please let me repeat that. The PMS subscription revenue universe grew by 46% year-over-year, and the larger POS-1 grew by 28%. There are not many vertically focused enterprise software companies with a broad set of solutions, which can claim that kind of growth rates across their true two primary core solutions. With respect to subscription-based implementations, Q1 Sisql 2025 was the sixth consecutive record quarter for combined ARR value of subscription sales projects implemented, which obviously augers well for continued solid good future of subscription revenue growth. With respect to backlog levels, compared to the end of the sequential previous fiscal 2024 Q4, overall combined product services and recurring revenue backlog at the end of fiscal 2025 Q1 improved slightly and was at 89% of previous peak levels.

Ramesh Srinivasan: The PMF Subscription Revenue Universe grew by 46% year-over-year, and the larger POS-1 grew by 28%. There are not many vertically focused enterprise software companies with a broad set of solutions that can claim that kind of growth rate across their two primary core solutions. With respect to subscription-based implementations, Q1 Fiscal 2025 was the 6th consecutive record quarter for combined ARR value of subscription SAS projects implemented, which obviously augurs well for continued solid future subscription revenue, with respect to backlog levels.

Speaker Change: Please let me repeat that.

Speaker Change: The PMS Subscription Revenue Universe grew by 46% year-over-year, and the larger POS-1 grew by 28%.

Speaker Change: There are not many vertically focused enterprise software companies with a broad set of solutions which can claim that kind of growth rates across their two primary core solution sets.

Speaker Change: With respect to subscription-based implementations, Q1 Fiscal 2025 was the sixth consecutive record quarter for combined ARR value of subscription SAS projects implemented, which obviously augurs well for continued solid good future subscription revenue growth.

Ramesh Srinivasan: Compared to the end of the sequential previous fiscal 2024 Q4, overall combined product, services, and recurring revenue backlog at the end of fiscal 2025 Q1 improved slightly and was at 89% of the previous peak level. While product and services backlog levels improved thanks to good sales performance. Recurring revenue backlog decreased slightly due to increased implementation velocity. We are retaining all elements of the full fiscal year 2025 guidance that was provided a couple of months ago.

Speaker Change: with respect to backlog levels.

Speaker Change: Compared to the end of the sequential previous fiscal 2024 Q4, overall combined product, services, and recurring revenue backlog at the end of fiscal 2025 Q1 improved slightly and was at 89% of previous peak levels.

Ramesh Srinivasan: While product and services backlog levels improved thanks to good sales performance, the recurring revenue backlog decreased slightly due to increased implementation velocity.

Speaker Change: While product and services backlog levels improved, thanks to good sales performance,

Speaker Change: Recurring revenue backlog decreased slightly due to increased implementation velocity.

Ramesh Srinivasan: We are retaining all elements of the full fiscal year 2025 guidance that was provided a couple of months back. One-time product revenue challenges have created some top-line pressure. It is possible full fiscal year 2025 revenue will end up closer to the lower end of the 275-280 million revenue range. We expect revenue levels this fiscal year to be tilted more towards the second half of the year, compared to recent fiscal years, by about a percentage point. We are off to a good start with respect to subscription revenue growth and are confident in the at least 27% full year year-over-year growth guidance provided.

Speaker Change: We are retaining all elements of the full fiscal year 2025 guidance.

Ramesh Srinivasan: One-time product revenue challenges have created some top-line pressure. It is possible that full fiscal year 2025 revenue will end up closer to the lower end of the 275 to 280 million revenue range. We expect revenue levels this fiscal year to be tilted more towards the second half of the year compared to recent fiscal years by about a percentage point. We are off to a good start with respect to subscription revenue growth and are confident in the at least 27% full year, year-over-year growth guidance provided. Even given comparisons will become tougher during the upcoming quarters of fiscal 2025.

Speaker Change: that was provided a couple of months back.

Speaker Change: One-time product revenue challenges have created some top-line pressure.

Speaker Change: It is possible full fiscal year 2025 revenue will end up closer to the lower end of the 275-280 million revenue range.

Speaker Change: We expect revenue levels this fiscal year to be tilted more towards the second half of the year compared to recent fiscal years by about a percentage point.

Speaker Change: We are off to a good start with respect to subscription revenue growth and are confident in the at least 27% full year, year-over-year growth guidance provided. Even given comparisons will become tougher during the upcoming quarters of fiscal 2025.

Ramesh Srinivasan: Our business is performing well also with respect to profitability levels and we are confident with respect to the EBITDA by revenue 16%, 1, 6, 16% guidance level provided earlier.

Ramesh Srinivasan: Our business is performing well also with respect to profitability levels, and we are confident with respect to the EBITDA by revenue 16% 1-6, 16% guidance level provided earlier. With that, let me hand over the call to Dave for more color on financial and other business. Thank you, Ramesh. Taking a look at our financial results, beginning with the income statement, first quarter fiscal 2025 revenue was a quarterly record of $63.5 million, a 13.3% increase from total net revenue of $56.1 million in the comparable prior year period.

Speaker Change: Our business is performing well also with respect to profitability levels and we are confident with respect to the EBITDA by revenue 16%, 1-6, 16% guidance level provided earlier.

Operator: With that, let me hand over the call today for more colour on financial and other business details.

Speaker Change: With that, let me hand over the call to Dave for more color on financial and other business details.

Dave Wood: Thank you, Ramesh, for taking a look at our financial results, beginning with the income statement. First quarter fiscal 2025 revenue was a quarterly record of 63.5 million, a 13.3% increase from total net revenue of 56.1 million in the comparable prior year period. One-time revenue consisting of products and professional services was up 6.4% over the prior year quarter, while recurring revenue was up 18.4%. We continue to see significant positive momentum in the business. However, the product revenue challenges we began seeing in the second half of last fiscal year have continued during the first quarter. During Q1 fiscal 2025, compared to the previous year, product revenue decreased by 22.7%.

William David Wood: One-time revenue, consisting of product and professional services, was up 6.4% over the prior year quarter, while recurring revenue was up 18.4%. We continue to see significant positive momentum in the business. However, the product revenue challenges we began seeing in the second half of last fiscal year have continued during the first quarter. During Q1 Fiscal 2025, compared to the previous year, product revenue decreased by 22.7%. As we have discussed in the past, customers are choosing more consumer-grade devices, which is driving down hardware-related product revenue. In addition, Q1 FY25 had our lowest proprietary software revenue for on-premise deployments in the last two fiscal years.

William David Wood: Thank you, Ramesh. Taking a look at our financial results, beginning with the income statement, first quarter fiscal 2025 revenue was a quarterly record of $63.5 million.

William David Wood: A 13.3% increase from total net revenue of $56.1 million in the comparable prior year period.

William David Wood: One-time revenue, consisting of product and professional services, was up 6.4% over the prior year quarter, while recurring revenue was up 18.4%.

William David Wood: We continue to see significant positive momentum in the business.

William David Wood: However, the product revenue challenges we began seeing in the second half of last fiscal year have continued during the first quarter.

William David Wood: During Q1 Fiscal 2025 compared to the previous year, product revenue decreased by 22.7%.

Dave Wood: As we have discussed in the past, customers are choosing more consumer-grade devices, which is driving down hardware-related products revenue. In addition, Q1 FY25 had our lowest proprietary software revenue or on-premise deployments in the last two fiscal years. The lack of large on-premise deals slower POS sales and more customers choosing consumer grade devices led to product revenue that was lower than previously expected. Despite the lower than expected product looking, Q1 sales remained strong and was a record first quarter. Professional services increased 39.8% over the prior year quarter to a record 15.6 million. Services gross margin was 33.9%, and in line was a sequentially proceeding quarter.

William David Wood: As we have discussed in the past, customers are choosing more consumer-grade devices, which is driving down hardware-related product revenue.

William David Wood: In addition, Q1 FY25 had our lowest proprietary software revenue for on-premise deployments in the last two fiscal years.

William David Wood: The lack of large on-premise deals, slower POS sales, and more customers choosing consumer-grade devices led to product revenue that was lower than previously expected. Despite the lower-than-expected product booking, Q1 sales remained strong and were a record first quarter. Professional services revenue increased 39.8% over the prior year quarter to a record 15.6%.

William David Wood: The lack of large on-premise deals, slower POS sales, and more customers choosing consumer-grade devices led to product revenue that was lower than previously expected.

William David Wood: Despite the lower-than-expected product booking, Q1 sales remained strong and was a record first quarter.

William David Wood: Professional services increased 39.8% over the prior year quarter to a record $15.6 million.

William David Wood: Services gross margin was 33.9% and in line with the sequentially proceeding course. We expect services margins to remain in the high 20 or low 30% during the next few quarters. Professional services backlogs once again increased to record levels despite record professional services requirements.

William David Wood: Services gross margin was 33.9% and in line with the sequentially preceding quarter.

Dave Wood: We expect services margins to remain in the high 20 or low 30% during the next few quarters. Professional services backlogs once again increased the record level, despite record professional services revenue. Total recurring revenue represented 59.9% of total net revenue for the fiscal quarter compared to 57.3% of revenue in the first quarter of fiscal 2024. Subscription revenue grew at 32% for the first quarter of fiscal 2025. Subscription revenue comprised over 58.1% of total recurring revenue compared to 52.2% of total recurring revenue in the first quarter of fiscal 2024. Subscription revenue increased sequentially 1.3 million from the fourth quarter of fiscal 2024, which was on the top end of our quarter-over-quarter sequential growth expectations.

William David Wood: We expect services margins to remain in the high 20 or low 30% during the next few quarters.

William David Wood: Professional services backlogs once again increase the record levels despite record professional services revenue.

William David Wood: Total recurring revenue represented 59.9% of total net revenue for the fiscal quarter compared to 57.3% of revenue in the first quarter of fiscal 2020-21. Subscription revenue grew at 32% for the first quarter of fiscal 2020. Subscription revenue comprised over 58.1% of total recurring revenue compared to 52.2% of total recurring revenue in the first quarter of fiscal 2020. Subscription revenue increased sequentially $1.3 million from the fourth quarter of fiscal 2024, which was on the top end of our quarter-over-quarter sequential growth expectation. Moving down the income statement, gross profit was $39.9 million compared to $33.1 million in the comparable prior year quarter.

William David Wood: Total recurring revenue represented 59.9% of total net revenue for the fiscal quarter compared to 57.3% of revenue in the first quarter of fiscal 2024.

William David Wood: Subscription revenue grew at 32% for the first quarter of fiscal 2025. Subscription revenue comprised over 58.1% of total recurring revenue compared to 52.2% of total recurring revenue in the first quarter of fiscal 2024.

William David Wood: Subscription revenue increased sequentially $1.3 million from the fourth quarter of fiscal 2024, which was on the top end of our quarter-over-quarter sequential growth expectations.

Dave Wood: Moving down the income statement, gross profit was 39.9 million compared to 33.1 million in the comparable prior year quarter. Gross profit margin was 62.8% compared to 59% in the first quarter of fiscal 2020.

William David Wood: Moving down the income statement, gross profit was $39.9 million compared to $33.1 million in the comparable prior year quarter.

William David Wood: Gross profit margin was 62.8% compared to 59% in the first quarter of fiscal 2020. Overall, total gross margin should remain just north of 60% for the full bill. Combined, the three main operating expense line items, product development, sales and marketing, and general and administrative expenses, when excluding stock-based compensation, were 43.8% of revenue in fiscal 2025's first quarter compared to 47.8% of revenue in the prior year. Excluding stock-based compensation for the Q1 fiscal year 2025, product development decreased to 19% of revenue compared to 20.9% of revenue in the comparable prior fiscal year.

William David Wood: Gross profit margin was 62.8% compared to 59% in the first quarter of fiscal 2024.

Dave Wood: 24. Overall, total gross margin should remain just north of 60% for the full fiscal year. Combined, the three main operating expense line items, product development, sales and marketing, and general and administrative expenses, when excluding stock-based compensation, were 43.8% of revenue in fiscal 2025 first quarter, compared to 47.8% of revenue in the prior year quarters. Excluding stock-based compensation for the Q1 fiscal year 2025, product development decreased to 19% of revenue compared to 20.9% of revenue in the comparable prior fiscal year. General and administrative expenses remain steady at 14.2% compared to 14.3% of revenue last Q1, while sales and marketing decreased from 12.7% of revenue to 10.5% of revenue.

William David Wood: Overall, total gross margin should remain just north of 60% for the full fiscal year.

William David Wood: Combined, the three main operating expense line items, product development, sales and marketing, and general and administrative expenses, when excluding stock-based compensation,

William David Wood: were 43.8% of revenue in fiscal 2025 first quarter compared to 47.8% of revenue in the prior year quarter.

William David Wood: Excluding stock-based compensation for the Q1 FY 2025 product development decreased to 19% of revenue compared to 20.9% of revenue in the comparable prior fiscal year.

William David Wood: General and administrative expenses remained steady at 14.2% compared to 14.3% of revenue last Q1, while sales and marketing decreased from 12.7% of revenue to 10.5%. Operating income for the first quarter of $5.7 million, net income of $14.1 million, and gain per diluted share of $0.50 were each greater than the prior year first quarter gain of $1.1 million in force. Adjusted net income, normalizing for certain non-cash and non-recurring charges of $8.3 million, compared favorably to adjusted net income of $4.6 million in the prior year first quarter, and adjusted diluted earnings per share of $0.30 compared favorably.

Speaker Change: General and administrative expenses remain steady at 14.2% compared to 14.3% of revenue last Q1, while sales and marketing decreased from 12.7% of revenue to 10.5% of revenue.

Dave Wood: Operating income for the first quarter of 5.7 million, net income of 14.1 million, and gain per diluted share of 50 cents, were each greater than the prior year first quarter gain of 1 million, 1.1 million, and 4 cents. Adjust the net income, normalizing for certain non-cash and non-recurring charges of 8.3 million, compared favorably to adjusted net income of 4.6 million in the prior year first quarter, and adjusted diluted earnings per share of 30 cents compared favorably to 18 cents. For the 2025 first quarter, adjusted even it was 12.1 million compared to 6.3 million in the year-ago quarter.

Speaker Change: Operating income for the first quarter of $5.7 million, net income of $14.1 million, and gain per diluted share of $0.50 were each greater than the prior year first quarter gain of $1.0 million, $1.1 million, and $0.04 cents.

Speaker Change: Adjusted net income, normalizing for certain non-cash and non-recurring charges of $8.3 million, compared favorably to adjusted net income of $4.6 million in the prior year first quarter, and adjusted diluted earnings per share of $0.30 compared favorably to $0.18.

William David Wood: For the 2025 first quarter, adjusted EBITDA was $12.1 million compared to $6.3 million in the year-ago quarter. We are pleased to see our profitability levels being well ahead of our original FY25 plan, with adjusted EBITDA coming in at 19.1% of revenue. Moving to the balance sheet and cash flow, cash and marketable securities as of June 30th, 2024 were $144.1 million compared to $144.9 million as of March 31st, 2020. We remain comfortable with our current level. Free cash flow in the quarter was $0.2 million compared to a loss of $3 million in the comparable prior year quarter.

Speaker Change: For the 2025 first quarter, adjusted EBITDA was $12.1 million compared to $6.3 million in the year-ago quarter.

Dave Wood: We are pleased to see our profitability levels being well ahead of our original FY25 plan, with adjusted even of coming in at 19.1% of revenue. Moving to the balance sheet in cash flow statement, cash and marketable securities as of June 30th, 2024, was 144.1 million compared to 144.9 million as of March 31st, 2024. We remain comfortable with our current levels of cash. Free cash flow in the quarter was 0.2 million compared to a loss of 3 million in the comparable prior year quarter. As we have said in the past, adjusted EBITDA and free cash flow continue to be good proxies for the health of the business over the courses of fiscal year.

Speaker Change: We are pleased to see our profitability levels being well ahead of our original FY25 plan, with adjusted EBITDA coming in at 19.1% of revenue.

Speaker Change: Moving to the balance sheet and cash flow statement. Cash and marketable securities as of June 30th, 2024 was $144.1 million compared to $144.9 million as of March 31st, 2024.

Speaker Change: We remain comfortable with our current levels of cash.

Speaker Change: Free cash flow in the quarter was $0.2 million compared to a loss of $3 million in the comparable prior year quarter. As we have said in the past, adjusted EBITDA and free cash flow continue to be good proxies for the health of the business over the course of the fiscal year.

William David Wood: As we have said in the past, adjusted EBITDA and free cash flow continue to be good proxies for the health of the business over the course of. Due to working capital fluctuations, our free cash flow tends to be significantly better in the second half of the fiscal year compared to the first half of the fiscal year. During fiscal year 2025, product revenue will continue to be a challenge to top. However, professional services and subscription revenue are currently ahead of plan, keeping us at the lower end of the $275 to $280 million guidance, while assuming Q1 is the floor for product.

Dave Wood: Due to working capital fluctuations, our free cash flow tends to be significantly better in the second half of the fiscal year compared to the first half. During fiscal year 2025, product revenue will continue to be a challenge to top-line revenue. However, professional services and subscription revenue are currently ahead of plan, keeping us at the lower end of the $270,000 to $280 million guidance range. Assuming Q1 is the floor for product revenue. Despite the pressure on top-line revenue, our profitability levels are coming in comfortably above our plan and trending north of the 16% full-year guidance given last quarter.

Speaker Change: Due to working capital fluctuations, our free cash flow tends to be significantly better in the second half of the fiscal year compared to the first half.

Speaker Change: During fiscal year 2025, product revenue will continue to be a challenge to top-line revenue.

Speaker Change: However, professional services and subscription revenue are currently ahead of plan, keeping us at the lower end of the $275-$280 million guidance range, assuming Q1 is the floor for product revenue.

William David Wood: Despite the pressure on top-line revenue, our profitability levels are coming in comfortably above our plan and trending north of the 16% full year guidance given last. In closing, we are pleased with our Q1 fiscal year 2025 financial results and the solid business fundamentals for future revenue. With that, I will now turn the call back over to Ramesh.

Speaker Change: Despite the pressure on top-line revenue, our profitability levels are coming in comfortably above our plan and trending north of the 16% full-year guidance given last quarter.

Dave Wood: In closing, we are pleased with our Q1 fiscal year 2025 financial results and the solid business fundamentals for future revenue.

Speaker Change: In closing, we are pleased with our Q1 fiscal year 2025 financial results and the solid business fundamentals for future revenue growth.

Ramesh Srinivasan: With that, I will now turn the call back over to Ramesh.

Ramesh Srinivasan: In summary, looking back, it is gratifying that we have successfully conquered such a broad and deep technology transformation that has now positioned us to serve the hospitality industry meaningfully better than our competitors. Such a massive transformation of the business and underlying solution offerings is not without its challenges. Current and upcoming implementations involving only the new state-of-the-art product versions will become increasingly smoother and steadily reduce the need to enhance and support two distinct sets of products based on vastly different technologies. We are encouraged by the success we are seeing in our recent POAs implementations and expect to see a rebound in POAs sales levels during the second half of this fiscal year.

Speaker Change: With that, I will now turn the call back over to Ramesh.

Ramesh Srinivasan: It is gratifying that we have successfully conquered such a broad and deep technology transformation that has now positioned us to serve the hospitality industry meaningfully better than our competitors. However, such a massive transformation of the business and underlying solution offerings is not without its challenges. Current and Upcoming Implementation, involving only the new state-of-the-art product versions, will become increasingly smoother and steadily reduce the need to enhance and support two distinct sets of products based on vastly different technologies.

Speaker Change: In summary, looking back,

Ramesh Srinivasan: It is gratifying that we have successfully conquered such a broad and deep technology transformation that has now positioned us to serve the hospitality industry meaningfully better than our competitors.

Speaker Change: Such a massive transformation of the business and underlying solution offerings is not without its challenges.

Speaker Change: Current and Upcoming Implementations

Speaker Change: involving only the new state-of-the-art product versions will become increasingly smoother and steadily reduce the need to enhance and support two distinct sets of products based on vastly different technologies.

Ramesh Srinivasan: We are encouraged by the success we have seen in our recent POS implementations and expect to see a rebound in POS sales levels during the second half of this fiscal year. One quick note of interest about our POS solutions and how they perform during the global system outages that made recent headlines. We obviously wish system outages like this would never happen.

Speaker Change: We are encouraged by the success we are seeing in our recent POS implementations and expect to see a rebound in POS sales levels during the second half of this fiscal year.

Ramesh Srinivasan: One quick note of interest about our POAs solutions and how they perform during the global system outages that made recent headlines. We obviously wish system outages like this never happened. However, we could not help but feel some pride about the quality and robustness of our technology when we heard from several customers that the run offline until system connections come back feature of our InfoGenesis POAs system serves them well, preventing frontline business disruptions. Even with respect to the backend service which were down, we were among the first vendors to be back up and running.

Speaker Change: One quick note of interest about our POS solutions and how they perform during the global system outages that made recent headlines.

Ramesh Srinivasan: However, we could not help but feel some pride about the quality and robustness of our technology when we heard from several customers that the Run-Offline-Until-System-Connections-Come-Back feature of our Infogenesis POS system served them well, preventing frontline business disruption. Even with respect to the backend servers which were down, we were among the first vendors to be back up and running. Ultimately, better products, service, and support will always shine, and we are happy to be in a great position now with respect to both the technology and the support level.

Speaker Change: We obviously wish system outages like this never happen.

Speaker Change: However, we could not help but feel some pride about the quality and robustness of our technology when we heard from several customers.

Speaker Change: that the Run-Offline-Until-System-Connections-Come-Back feature of our Infogenesis POS system served them well, preventing frontline business disruptions.

Speaker Change: Even with respect to the backend servers which were down, we were among the first vendors to be back up and running.

Ramesh Srinivasan: Ultimately, better product service and support will always shine, and we are happy to be in a great position now with respect to both technology and support levels. Our PMF universe continues to make rapid progress forward, even while competing against well-entrenched major competitors. The superiority of our solution ecosystem, the ability to support multiple operating systems of one code base, the value of integrated systems that minimize the need to bring together multiple vendors, the advantages of each system being best of breed, whether operating alone or as part of our tightly integrated ecosystem, and the speed of innovation possible with such integrated systems will continue to accelerate our growth.

Speaker Change: Ultimately, better product, service and support will always shine, and we are happy to be in a great position now with respect to both technology and support levels.

Ramesh Srinivasan: Our PMS universe continues to make rapid progress forward, even while competing against well-entrenched major competitors. The superiority of our solution ecosystem, the ability to support multiple operating systems on one code base, the value of integrated systems that minimize the need to bring together multiple vendors, The advantages of each system being best of breed, whether operating alone or as part of our tightly integrated ecosystem, and the speed of innovation possible with such integrated systems will continue to accelerate our growth. One final note.

Speaker Change: Our PMS universe continues to make rapid progress forward, even while competing against well-entrenched major competitors.

Speaker Change: The superiority of our solution ecosystem, the ability to support multiple operating systems of one code base,

Speaker Change: The value of integrated systems that minimize the need to bring together multiple vendors.

Speaker Change: The advantages of each system being best-of-breed, whether operating alone or as part of our tightly integrated ecosystem, and the speed of innovation possible with such integrated systems, will continue to accelerate our growth.

Ramesh Srinivasan: One final note, our current global quota-cating sales personnel strength is about 30 percent 300, about 30 percent higher than last year around the same time. Our current global sales pipeline is significantly higher than it was at the same time last year, signaling increasing market awareness of agility as a top hospitality solution provider and of the value the solution ecosystem delivers.

Ramesh Srinivasan: Our current global quota carrying sales personnel strength is about 30%, 3-0, about 30% higher than last year around the same time. Our current global sales pipeline is significantly higher than it was at the same time last year, signaling increasing market awareness of Agilysys as a top hospitality solutions provider and of the value the solution ecosystem delivers. Our overall business remains in excellent shape, and we are positioned well for continued, disciplined, and profitable growth.

Speaker Change: One final note.

Speaker Change: Our current global quota carrying sales personnel strength is about 30%, 3-0, about 30% higher than last year around the same time.

Speaker Change: Our current global sales pipeline is significantly higher than it was at the same time last year, signaling increasing market awareness of Agilysys as a top hospitality solutions provider and of the value the solution ecosystem delivers.

Ramesh Srinivasan: Our overall business remains in excellent shape, and they are positioned well for continued, disciplined, and profitable growth.

Speaker Change: Our overall business remains in excellent shape and we are positioned well for continued, disciplined and profitable growth.

Operator: With that, Victor, let's open up the call for questions.

Ramesh Srinivasan: With that, Victor, let's open up the call for questions. Thank you, and at this time, we'll conduct a question and answer session. As a reminder, to ask a question, you need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Operator: Thank you, and at this time we'll conduct a question and intercession. As a reminder to ask a question, we need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker Change: With that, Victor, let's open up the call for questions.

Victor: Thank you and at this time we'll conduct a question and answer session. As a reminder to ask a question you need to press star 1 1 on your telephone and wait for a name to be announced. To withdraw your question please press star 1 1 again. Please stand by while we compile the Q&A roster.

Mayank Tandon: Ann, please sign by with me, Pauli Kunei-Rostre, one moment for first question, and our first question on conflina, Mayank Tandon from Needham, Elin is open.

Operator: Please stand by for the Q&A roster. One moment for the first question. And our first question will come from Mayank Tandon from Needham. Your line is open.

Speaker Change: One moment for a first question.

Speaker Change: And our first question will come from Mayank Tandon from Needham. Your line is open.

Mayank Tandon: Thank you, good evening Ramesh, Dave, and Jess. Ramesh, I wanted to, and maybe it's for Dave as well, I just wanted to understand the outlook a little bit. So you had a very strong performance on subscription revenue in the first quarter, as you said, 32% growth, and also a very strong EBITDA margin. That would obviously imply deceleration and growth for the rest of the year and also in terms of profitability. So could you just kind of walk through what the drivers are? Is it just being conservative at the beginning of the year, or is there something else going on that might also be driving the deceleration both in terms of growth and margin expansion? Hey Mayank,

Mayank Tandon: Thank you, good evening, Ramesh, Dave, and Jess. Ramesh, I wanted to, maybe it's for Dave as well, I just wanted to understand the outlook a little bit. So you had a very strong performance on subscription revenue in the first quarter, as you said, 32% growth, also a very strong EBITDA margins. That would imply, obviously, a deceleration growth in the rest of the year and also in terms of profitability. So could you just kind of walk through what the drivers are? Is it just being conservative at the beginning of the year, or is there something else going on that might also be driving the deceleration both in terms of growth and margin expansion?

Mayank Tandon: Thank you. Good evening, Ramesh, Dave, and Jess.

Mayank Tandon: Ramesh, I wanted to, and maybe it's for Dave as well, I just wanted to understand the outlook a little bit, so you had a very strong performance on subscription revenue in the first quarter, as you said, 32% growth, and also very strong EBITDA margins.

Speaker Change: That would imply obviously deceleration and growth in the rest of the year and also in terms of profitability. So could you just kind of walk through

Speaker Change: What the drivers are, is it just being conservative at the beginning of the year, or is there something else going on that might also be driving the deceleration, both in terms of growth and margin expansion?

Dave Wood: Hey, May, yeah, I think, you know, we certainly, we certainly got out to a strong start in the year. The 32% subscription growth is really strong. The product makes of what we sold, there was a little bit, like Ramesh talked about in the script, there was a little bit less point of sell and a little bit more property management than expected, which put a lot of pressure on the top line revenue in the product number. But yeah, we got out a lot faster than we would have expected on the subscription line.

William David Wood: Yeah, I think, you know, we certainly got out to a strong start in the year. The 32% subscription growth is really strong. The product mix of what we sold was a little bit, like Ramesh talked about in his script, there was a little bit less point of sale and a little bit more property management than expected, which put a lot of pressure on the top line revenue and the product numbers.

Speaker Change: Hey Mayank, yeah, I think...

Mike: You know, we certainly got out to a strong start in the year. The 32% subscription growth is really strong.

Mike: The product mix of what we sold, there was a little bit, like Ramesh talked about in his script, there was a little bit less point of sale and a little bit more property management than expected, which put a lot of pressure on the top line revenue and the product number.

William David Wood: But, yeah, we got out a lot faster than we would have expected on the subscription line. For us, I mean, I think we're trending north of 27%, but we're kind of holding the guidance where it is today and in professional services, where we're trending ahead of kind of the 30% guidance we gave last quarter. We're trending closer to the 35% growth and profitability, where, like we said in the script, we're certainly trending ahead of the profitability guidance.

Dave Wood: For us, I mean, I think we're trending north of the 27%, but we're kind of, we're holding the guidance where it is today, and in professional services, we're trending ahead of kind of the 30% guidance we gave last quarter, we're trending closer to the 35% growth and profitability, and profitability, where, you know, like we said in this script, we're certainly trending ahead of the profitability guidance. It's likely in the second half of the year, as product revenue comes back, the gross margin could decelerate a point or two, which pulls us back closer to the 16% than the 19% we're at today.

Speaker Change: But yeah, we got out a lot faster than we would have expected on the subscription line.

Speaker Change: For us, I mean, I think we're trending north of the 27%, but we're kind of, we're holding the guidance.

Speaker Change: where it is today. And in professional services where we're trending ahead of kind of the 30% guidance we gave last quarter, we're trending closer to the 35% growth.

Speaker Change: And profitability. And profitability where, like we said in the script, we're certainly...

William David Wood: It's likely in the second half of the year, as product revenue comes back, that gross margin could decelerate by a point or two, which pulls us back closer to 16% than the 19% we're at.

Speaker Change: Trending ahead of the profitability guidance. It's likely in the second half of the year, as product revenue comes back, that gross margin could decelerate a point or two, which pulls us back closer to the 16% than the 19% we're at today.

Mayank Tandon: Got it.

Ramesh Srinivasan: Okay, so I understand, makes sense, and then I just want to also ask you, Amy Ramesh globally, as you go out after deals in Asia and other parts of the market, what are the gating factors to driving the same type of adoption that you've seen in the Americas in terms of, you know, making sure your win rates are strong, and you're able to land some of these big opportunities, both on the PMS and on the POS side.

Mayank Tandon: Okay, I understand. It makes sense. And then I just want to also ask you, Amir Ramesh, globally, as you go out after deals in Asia and other parts of the market, what are the gating factors to driving the same type of adoption that you've seen in the Americas in terms of, you know, making sure your win rates are strong and you're able to land some of these big opportunities, both on the PMS and on the POS side?

Speaker Change: Got it. Okay.

Ramesh Srinivasan: Makes sense. And then I just want to also ask you, I mean, Ramesh, globally, as you go out after deals in Asia and other parts of the market, what are the gating factors to driving the same type of adoption that you've seen in the Americas in terms of, you know, making sure your win rates are strong and you're able to land some of these big opportunities, both on the PMS and on the POS side?

Ramesh Srinivasan: Yeah, so mine, it is, especially in international regions, and some other regions as well, it truly is a matter of settling down and establishing the new state-of-the-art versions of our products, right? These products are young, and like internationally, we have, you know, quite a few showcase sites now: Disneyland Paris, Inspire Korea, Hamilton Island, so we are building them up one by one by one, and there are some other big customer names that I'm not allowed to mention here. So it is a matter of establishing our products; the newer versions are quite young, and customers know that these products are quite young. So we have to get through that phase, right, where more and more residents' customers come up. It will get adopted faster and faster. And also, I should tell you, my aunt, as far as the competitor's world is concerned, they fight very hard business battles.

Mayank Tandon: Yeah, so Mayank, it is... especially in international regions and some other regions as well, it truly is a matter of settling down and establishing new, state-of-the-art versions of our products, right? These products are young, and like internationally, we have, you know, quite a few showcase sites now, Disneyland Paris, Inspire Korea, Hamilton Island, so we are building them up one by one by one, and there are some other big customer names that I'm not allowed to mention here.

Speaker Change: Yeah, so Mayank, it is...

Ramesh Srinivasan: especially in international regions and some other regions as well, it truly is a matter of settling down and establishing the new state-of-the-art versions of our products. These products are young

Speaker Change: and like internationally we have you know quite a few showcase sites now Disneyland Paris

Speaker Change: Inspire Korea, Hamilton Island, so we are building them up one by one by one and there are some other big customer names that I'm not allowed to mention here.

Mayank Tandon: So it is a matter of establishing our products. The newer versions are quite young, and customers know that these products are quite young, so we have to get through that phase, right, where more and more reference customers come along. It will get adopted faster and faster, and also, I should tell you, Mayank, as far as the competitor world is concerned, that they are fighting very hard business battles. We don't see any product innovation-related challenges in the marketplace.

Speaker Change: So, it is a matter of establishing our products. The newer versions are quite young.

Speaker Change: and customers know that these products are quite young so we have to get through that phase right where more and more reference customers come up it will get adopted faster and faster.

Speaker Change: And also I should tell you, Mayank, as far as the competitor...

Ramesh Srinivasan: We don't see any product innovation-related challenges in the marketplace; it is quite obvious that our product ecosystem is superior. But there are business challenges when, you know, competitors fight you. It's very low pricing and provide special renewal deals that are extremely low price. So those kinds of business competition challenges we have to get past, but fundamentally it is a matter of establishing our new product versions and getting more and more residents' customers under that.

Speaker Change: the competitor world is concerned, that they fight very hard business battles. We don't see any product innovation related challenges in the marketplace, it is quite obvious that our product ecosystem is superior. But there are business challenges, when competitors fight you with very low pricing.

Ramesh Srinivasan: It is quite obvious that our product ecosystem is superior, but there are business challenges when, you know, competitors fight you with very low pricing and provide special renewal deals that are extremely low priced, so those kinds of business competition challenges we have to get past, but fundamentally, it is a matter of establishing our new product versions and getting more and more reference customers under our belt. Just one housekeeping item: what is global sales today as a percentage of total or in terms of revenue?

Speaker Change: and provide special renewal deals that are extremely low price so those kinds of business competition challenges we have to get past but fundamentally it is a matter of establishing our new product versions and getting more and more reference customers under our belt.

Ramesh Srinivasan: What is global sales today as a percentage of total or in terms of revenue, any metric you can share around that? Our global sales; this was our, we don't share it as a percentage of revenue, but this was our best ever Q1. We've never had an April through June quarter better than this. So, very good start to the fiscal year, and it is sort of in line with the level of sales such as we've had for the last few quarters.

Speaker Change: One housekeeping item, what is global sales today as a percentage of total or in terms of revenue, any metric you can share around that?

Ramesh Srinivasan: Any metrics you can share around that? Our global sales, we don't share it as a percentage of revenue, Mayank, but this was our best ever Q1. We've never had an April through June quarter better than this.

Speaker Change: Our global sales, we don't share it as a percentage of revenue, Mayank, but this was our best ever Q1. We've never had an April through June quarter better than this. So very good start to the fiscal year, and it is sort of in line with the level of sales success we've had for the last few quarters.

Mayank Tandon: So, a very good start to the fiscal year, and it is sort of in line with the level of sales success we've had for the last few quarters. Thank you. I appreciate all the color.

Mayank Tandon: Thank you. Appreciate all the color. Thank you.

Operator: Thank you. Thank you. One moment for our next question. Our next question will come from Matt VanVliet from BTIG. Your line is open.

Speaker Change: Thank you. Appreciate all the color.

Mike: Thank you, Mayank.

Speaker Change: Thank you. One moment for our next question.

Matt VanVliet: Our next question will come from Matt VanVliet from BTIG. Your line is open.

Speaker Change: Our next question will come from Matt VanVliet from BTIG. Your line is open.

Matt VanVliet: Yeah, good afternoon. Thanks for taking the question. I guess you wanted to dive in a little deeper on some of the slower progress of the POS business that you mentioned.

Matthew David VanVliet: Yeah, good afternoon. Thanks for taking the time to ask the question. I guess, Ramesh, I wanted to dive in a little deeper on some of the slower progress of the POS business that you mentioned. Just wanted to maybe get a little time frame around when you saw maybe the biggest areas of struggles lately, and then it sounded like later in your prepared comments. I indicated that it seems to be turning around and that the newer products are showing better performance. So I'm just curious if you could give a little bit more on both timing parameters and then maybe any inflection point that you're seeing. Yeah. Hi Matt.

Matthew David VanVliet: Yeah, good afternoon. Thanks for taking the question.

Matthew David VanVliet: I guess Ramesh wanted to dive in a little deeper on on some of the slower progress of the POS business that you mentioned. Just wanted to maybe get a little time frame around

Matt VanVliet: Just wanted to maybe get a little time frame around when you saw maybe the biggest areas of struggles lately, and then it sounded like later in your prepared comments, you indicated that it seems to be turning around and that the newer products are showing better performance. So, just curious if you could put a little bit more, both timing parameters and then maybe any inflection point that you're seeing in more of like a bookings type mix.

Speaker Change: when you saw maybe the the biggest areas of struggles lately and then it sounded like later in your prepared comments.

Speaker Change: you indicated that it seems to be turning around and that the newer products are showing better performance. So I'm just curious if you could put a little bit more both timing parameters and then maybe any inflection point that you're seeing in more of like a bookings type mix.

Ramesh Srinivasan: Yeah, hi Matt. So, basically the POS business has gone through a massive transformation from old to new, and unlike PMS where you take a product and you replace it entirely with the new one, the POS transformation has gone through in stages because the POS systems are huge systems and they consist of multiple distinct paths: the terminal front end, the configuration server related layers in the middle, and then the backend. The only way you completely transform the technology of that kind of business is to do it stage by stage. So, you first do the terminal front end, and then you do the middle layer of the backend server, and sometimes in a rigorous order.

Ramesh Srinivasan: So basically, the POS... business has gone through a massive transformation from old to new. And unlike PMS, where you take a product and you replace it entirely with a new one, the POS transformation has gone on in stages because the POS systems are huge systems, and they consist of multiple distinct parts, the terminal front end, the configuration server-related layers in the middle, and then the back end. And the only way you completely transform the technology of that kind of business is to do it stage by stage. So you first do the terminal front end, and then you do the middle layer, and the back end server, sometimes in a reverse order.

Speaker Change: Yeah, hi Matt. So basically the POS business has gone through a massive transformation from old to new.

Speaker Change: And unlike PMS, where you take a product and you replace it entirely with a new one,

Speaker Change: The POS transformation has gone through in stages because the POS systems are huge systems.

Speaker Change: and they consist of multiple distinct parts the terminal front end

Speaker Change: The configuration

Speaker Change: server-related layers in the middle and then the back end.

Speaker Change: and the only way you completely transform the technology of that kind of business is to do it stage by stage.

Ramesh Srinivasan: So many of the implementations we've been doing in the last few quarters have involved a mix of both, because customers want part of the new and the other part of the new is not yet ready. So they go with the old. And that has cost us some implementation challenges, and that gives pause to certain customers before they invest in our new products. Now that phase is over. We have gone through that for the last few quarters.

Speaker Change: So you first do the terminal front end, and then you do the middle layer, the backend server, and sometimes in a reverse order. So many of the implementations we've been doing in the last few quarters have involved a mix of both, because customers want part of the new and...

Ramesh Srinivasan: So, many of the implementations we've been doing in the last few quarters have involved a mix of both because customers want part of the new, and the other part of the new is not yet ready. So, they go with the goal, and that has cost us some implementation challenges, and that gives POS to certain customers before they invest in our new products.

Speaker Change: The other part of the new is not yet ready, so they go with the old, and that has cost us some implementation challenges. And that gives pause to certain customers before they invest in our new products. Now that phase has now ended.

Ramesh Srinivasan: Now, that phase is now ended. We have gone through that for the last few quarters; that is ended because, like if you are a new customer now, Matt, and you sign with us, you're only going live with all the modern versions of all the three, the front end, the middle layer, and the backend server are all new. So, it's a lot simpler for us to handle. So, the new customers signing up now, and I gave you a few examples during my initial script where many big customers are adopting all the new ones to Excel addresses.

Ramesh Srinivasan: That is ending because, like, if you are a new customer now, Matt, and you sign with us, you're only going live with all the modern versions of all three; the front end, the middle layer, and the backend server are all new. So it's a lot simpler for us to handle. So the new customers are signing up now, and I gave you a few examples during my initial script where many big customers are adopting all the new ones with excellent results.

Speaker Change: We have gone through that for the last few quarters that is ended because

Matt: Like, if you are a new customer now, Matt, and you sign with us, you're only going live with all the modern versions of all the three. The front-end, the middle-layer, and the back-end server are all new, so it's a lot simpler for us to handle.

Matt: So the new customers signing up now, and I gave you a few examples during my initial

Ramesh Srinivasan: So, going forward, all the new customers will only be on the new modern versions, which makes it a lot easier, but we have to undergo a transformation of our current customers to carry them to the new. And once the current customer's implementation starts going well, it is simpler and starts producing great results. We will turn around with POS sales. In terms of timing, I think it is a second half of this fiscal year; there are few months away. It is not too far.

Ramesh Srinivasan: So going forward, all the new customers will only be on the new modern versions, which makes it a lot easier. But we have to undergo a transformation of our current customers to carry them to the new. And once the current customer's implementation starts going well, it is simpler, and starts producing great results, we will turn around with POS sales. In terms of timing, I think it is the second half of this fiscal year. We are only a few months away. It is not too far.

Matt: script where many big customers are adopting all the new ones to excellent results.

Matt: So, going forward, all the new customers will only be on the new modern versions, which makes it a lot easier, but we have to undergo a transformation of our current customers to carry them to the new.

Matt: And once the current customer's implementation starts going well, it is simpler, starts producing great results, we will turn around with POS sales. In terms of timing, I think it is the second half of this fiscal year. We are a few months away. It is not too far away.

Matthew David VanVliet: And then on some of the successes you've had on the PMS side, any breakdown that you can help us with in terms of the three PMS products that are out there? You know how much additional attention has been brought to the state product as Marriott has. In general, we don't break it down by PMS product; in general, our PMS successes have been quite broad. It is just not based on, of course, the Marriott PMS agreement is not counted in anything so far. It's not counted in sales or anything else, so...

Ramesh Srinivasan: And then on some of the successes you've had on the PMS side, any breakdown that you can help us with in terms of the three PMS products that are out there and how much additional attention has been brought to the state product as Mariett has selected that. In general, we don't break it down by PMS product. In general, our PMS successes have been quite broad-based. It is just not based on; of course, the Mariett PMS agreement is not counted in anything so far. It's not counted in sales or anything else. So the sales have been broad-based, many small and big customers signing up for the PMS products, and a lot of the progress has been with our cloud-native solutions now.

Speaker Change: Okay very helpful and then on some of the successes you've had on the the PMS side any any breakdown that you can help us with in terms of the three PMS products that are out there and you know how much additional attention has been brought to the the state product as Marriott has selected that?

Speaker Change: In general, we don't break it down by PMS product. In general, our PMS successes have been quite broad-based.

Speaker Change: It is just not based on, of course, the Marriott PMS agreement is not counted in anything so far. It's not counted in sales or anything else.

Ramesh Srinivasan: The sales have been broad-based, with many small and big customers signing up for the PMS products. And a lot of the progress has been with our cloud-native solutions now. And so across PMS. As customers look at the guest journey, the demos across multiple products, the adoption has been very encouraging and broad-based. It is just not based on one big deal we have won with PMS.

Speaker Change: The sales have been broad-based, many small and big customers signing up for the PMS products and a lot of the progress has been with our cloud native solutions now and so across PMS

Matt VanVliet: And so across PMS, as customers look at the guest journey, the demos across multiple products, the adoption has been very encouraging and broad-based. It is just not based on one big deal we have won with PMS. And it's very encouraging, and our PMS pipeline also is the best that has ever been now. So we continue to be very encouraged by how much progress we are making in the marketplace with PMS. Great, thank you.

Speaker Change: As customers look at the guest journey, the demos across multiple products

Speaker Change: The adoption has been...

Speaker Change: very encouraging and broad-based. It is just not based on one big deal we have won with PMS.

Matthew David VanVliet: And it's very encouraging. And our PMS pipeline is also at the best that it's ever been now. So we continue to be very encouraged by how much progress we are making in the marketplace with PMS. Thank you, Matthew.

Speaker Change: and it's very encouraging and our PMS pipeline also is the best that has ever been now. So we continue to be very encouraged by how much progress we are making in the marketplace with PMS.

Matt VanVliet: Thank you, Matt. Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from Stephen Sheldon on behalf of William Blair. Your line is open.

Speaker Change: Great, thank you.

Matt: Thank you, Matt.

Steven Sheldon: Our next question on offline is Steven Sheldon from William Blair. Your line is open.

Speaker Change: Our next question comes from Stephen Sheldon from William Blair. Your line is open.

Steven Sheldon: Hey, thanks. Appreciate you taking my questions.

Stephen Sheldon: Hey, thanks. Appreciate you taking my questions. A person here wanted to ask about the goal to get to 900,000 rooms operating under your property management software over the coming years. I think the last data point we had was 300,000 rooms live at Marriott. I think you've talked about adding another 450,000 as that goes live. So just want to get updated thoughts on where that other 150,000, and the strong sales momentum that you're seeing in the PMS category. Yeah, hi, welcome to Agilysys Steven. It's great to have you covering us.

Steven Sheldon: First of all, I wanted to ask about the goal to get to 900,000 rooms operating under your property management software over the coming years. And the last data point we had was 300,000 rooms live. Marriott, I think he talks about adding another 450,000 as that goes live. So just want to get updated to us and wear that other 150,000 different take rooms to come from. Especially to think about new customer wins, expansions with existing customers, etc.

Stephen Sheldon: Hey, thanks, appreciate you taking my questions.

Stephen Sheldon: First one here, I wanted to ask about the goal to get to 900,000 rooms operating under your property management software over the coming years. I think the last data point we had was 300,000 rooms live. Marriott, I think you've talked about adding another 450,000 as that goes live.

Speaker Change: So I just want to get updated thoughts on where that other $150,000...

Speaker Change: kind of give or take rooms could come from, you know, especially to think about new customer wins, expansions with existing customers, etc. And how confident are you about meeting or exceeding that now given

Steven Sheldon: And how confident are you about needing or receiving that now, given the strong sales momentum that you're seeing in the PMS category?

Ramesh Srinivasan: Yeah, hi.

Ramesh Srinivasan: Welcome to Agilis, Steven. It's great to have you cover us. So basically, yeah, so basically Steven, for the last say a couple of years or so, we've stopped putting too much accent on the number of rooms and the number of endpoints kind of thing because we have so many products yourself. So we've started measuring sales more in annual contract value terms, and we don't spend too much time with exactly spending our time on the number of rooms and all that. But I do understand it is of interest to you. So the way I would describe it is our current PMS universe is less than 300,000 rooms is what we have said before as well.

Speaker Change: the strong sales momentum that you're seeing in the PMS category.

Ramesh Srinivasan: So basically, yeah, so basically, Steven, for the last, say, couple of years or so, we've stopped putting too much emphasis on the number of rooms and the number of endpoints kind of thing because we have so many products to sell. So we've started measuring sales more in annual contract value terms, and we don't spend too much time exactly spending our time on the number of rooms and all that. But I do understand it is of interest to you.

Speaker Change: Hi, welcome to Agilysys, Stephen. It's great to have you cover us. So basically, Stephen,

Speaker Change: For the last couple of years or so, we've stopped

Speaker Change: accent on the number of rooms and the number of endpoints kind of thing because we have so many products to sell

Speaker Change: So we've started measuring sales more in annual contract value terms and we don't spend too much time

Speaker Change: with exactly spending our time on the number of rooms and all that but I do understand it is of interest to you so the way I would describe it is

Ramesh Srinivasan: So the way I would describe it is our current PMS universe is less than 300,000 rooms. That's what we have said before as well. And if you look up, and we've always said publicly that the Marriott PMS opportunity is for a majority of the U.S. and Canada properties. If you add up the U.S. and Canada properties, it adds up to about 950,000 rooms.

Speaker Change: Our current PMS universe is less than 300,000 rooms, is what we have said before as well.

Ramesh Srinivasan: And if you look up, and we've always said publicly that the Marriott PMS opportunity is for a majority of the US and Canada properties. You add up the US and Canada properties. It adds up to about 950,000 rooms. So you assume a majority of that is 450 or 500,000 rooms. So you add up the 500 to the less than 300,000 numbers we have. That gets you close to that. And of course, we have tremendous momentum with our PMS sales now. But our products are still new to the market. They are still young in the sense.

Speaker Change: and if you look up and we've always said publicly that the Marriott PMS opportunity is for a majority

Speaker Change: of the U.S. and Canada properties.

Speaker Change: You add up the U.S. and Canada properties, it adds up to what?

Ramesh Srinivasan: So you assume a majority of that is 450,000 or 500,000 rooms. So you add up the 500,000 to the less than 300,000 numbers we have, and that gets you close to that. And, of course, we have tremendous momentum with our PMS sales now. But our products are still new to the market. They are still young in the sense that the modernized, state-of-the-art solutions are young.

Speaker Change: 950,000 rooms

Speaker Change: So you assume a majority of that is 450 or 500,000 rooms.

Speaker Change: So, you add up the 500 to the less than 300,000 numbers we have, that gets you close to that. And of course, we have tremendous momentum with our PMS sales now, but our products are still new to the market. They are still young in the sense, the modernized state-of-the-art solutions are young.

Ramesh Srinivasan: The modernized state of the art solutions are young. But I think, Steven, if we put too much emphasis on the number of rooms, we are sort of missing the point, at least partially, because of the number of other products and modules we can sell with it. The price we get for per room per month, which is the typical metric they use in this industry, is quite high for us because the customer doesn't buy just the PMS, but they buy a few modules along with it, which are all very lucrative for a software modules. So the short answer is I wouldn't think of it all in terms of number of rooms. Having said that, you are not far off with your calculation, because with the Marriott PMS itself, if all goes well, should be 450,000 to 500,000 rooms. And there are a lot of new customers signing up with us now.

Ramesh Srinivasan: But I think, Stephen, if we put too much emphasis on the number of rooms, we are sort of missing the point, at least partially because of the number of other products and modules we can sell with it. The price we get per room per month, which is the typical metric they use in this industry, is quite high for us because the customer doesn't just buy the PMS, but they buy a few modules along with it, which are all very lucrative for us, software modules.

Speaker Change: But I think, Stephen, if we put too much emphasis on the number of rooms, we are sort of missing the point, at least partially, because of the number of other products and modules we can sell with it.

Speaker Change: The price we get for per room per month, which is the typical metric they use in this industry, is quite high for us because the customer doesn't buy just the PMS, but they buy a few modules along with it, which are all very lucrative for us, software modules.

Ramesh Srinivasan: So the short answer is I wouldn't think of it all in terms of the number of rooms. Having said that, you're not far off with your calculation because the Marriott PMS itself, if all goes well, should be 450,000 to 500,000 rooms, and there are a lot of new customers signing up with us now. So you're not far off with your calculation, but there's a lot more to that because every room is a lot more valuable to us than it would be to a typical PMS provider because we have many modules that we can sell along with it. That's really helpful.

Speaker Change: So the short answer is I wouldn't think of it all in terms of number of rooms

Speaker Change: Having said that, you are not far off with your calculations.

Speaker Change: because the Marriott PMS itself, if all goes well, should be...

Ramesh Srinivasan: So you are not far off with your calculation, but there's a lot more to that because every room is a lot more value to us than it would be to a typical PMS provider.

Speaker Change: [inaudible]

Speaker Change: But there's a lot more to that, because every room is a lot more value to us than it would be to a typical PMS provider, because we have many modules that we can sell along with it.

Ramesh Srinivasan: Because we have many modules that we can sell along, we got it, and that's really helpful. That kind of ties into my follow-up, which is just, you know, as you think about the product portfolio you have now beyond kind of core PMS, are there specific products that you're more optimistic than others about potential traction that could push monetization program higher? And I guess ask another way, where are you the most optimistic about your product portfolio from an add-on model perspective when you think about median-term incremental monetization?

Stephen Sheldon: And that kind of ties into my follow-up question, think about the product portfolio you have now beyond kind of core PMS. Are there specific products that you're more optimistic than others about potential traction that could push monetization per room higher? And I guess ask another way, where are you the most optimistic about your product portfolio from an add-on module perspective when you think about medium-term incremental monetization? Yeah, Stephen, so to start on the POS side, which has fewer add-on modules than the PMS side, the remote ordering tool on-demand, and we count the guest-facing kiosk as a core product, not as an add-on, but that product also has tremendous demand now There are other products, along with PMS as well, that we sell that are smaller.

Speaker Change: got it that's really helpful and that kind of ties into my follow-up which is just

Speaker Change: You know, if you think about the product portfolio you have now beyond kind of core PMS.

Speaker Change: Are there specific products that you're more optimistic than others about potential traction that could push monetization per room higher? And I guess ask another way, where are you the most optimistic about your product portfolio from an add-on module perspective when you think about medium-term, incremental monetization?

Ramesh Srinivasan: Stephen, so to start on the POS side, which has lesser add-on modules on the PMS side, the remote ordering tool on demand, and we count the guest-facing kiosk as a core product not as an add-on. But that product also has tremendous demand now and has been doing very well, and there are other products along with PMS as well that we sell that are smaller. But the big opportunities on the PMS side of it, and each of these add-on modules have tremendous potential, but some have a bigger market than the others.

Speaker Change: Yeah, Stephen, so to start on the POS side, which has lesser add-on modules than the PMS side, the remote ordering tool on-demand, and we count the guest-facing kiosk as a core product, not as an add-on, but that product also has tremendous demand now and has been doing very well, and

Ramesh Srinivasan: But the big opportunity is on the PMS side of it, and each of these add-on modules has tremendous potential, but some have a bigger market than the others. I wouldn't go into a list of all the products, but we'll do it privately for you, Stephen.

Speaker Change: There are other products along with PMS as well that we sell that are smaller, but the big opportunity is on the PMS side of it.

Speaker Change: And each of these add-on modules have tremendous potential, but some have a bigger market than the others.

Ramesh Srinivasan: I wouldn't go into a list of all the products, but we'll do it privately for you, Stephen. But one thing to realize is there are hospitality technology providers now whose business involves only a couple of these add-on modules, and their business is almost half our size, and in some cases almost our entire size. Like if you think of us as a 275 million annual revenue, you know, kind of hospitality technology provider, there are providers who are tens of millions of dollars, and in some case even 100 million, who are just based on one or two of the add-on modules. So all these add-on modules have enormous potential; some have a bigger market than the others.

Ramesh Srinivasan: But one thing to realize is there are hospitality technology providers now whose business involves only a couple of these add-on modules, and their business is almost half our size, and, in some cases, almost our entire size. Like if you think of us as a 275 million annual revenue kind of hospitality technology provider, there are providers who are tens of millions of dollars and, in some cases, even hundreds of millions who are just based on one or two of the add-on modules. So all these add-on modules have enormous potential; some have a bigger market than others. Great, thank you.

Speaker Change: I wouldn't go into a list of all the products, but we'll do it privately for you, Stephen. But one thing to realize is there are hospitality technology providers now.

Speaker Change: whose business involves only a couple of these add-on modules and their business is almost half our size, and in some cases almost our entire size. Like if you think of us as a $275 million annual revenue, you know, kind of hospitality technology provider.

Speaker Change: There are providers who are tens of millions of dollars, and in some cases even 100 million, who are just based on one or two of the add-on modules. So all these add-on modules have enormous potential. Some have a bigger market than the others.

Ramesh Srinivasan: Great, thank you.

Speaker Change: Great, thank you.

Speaker Change: Thank you.

Speaker Change: Thank you. One moment for our next question.

George Sutton: Our next question on the line of George F. Sutton from Craig Halem. Your line is open.

Stephen Sheldon: Thank you. One moment for our next question. Our next question comes from the line of George F. Sutton from Craighalem. Your line is open.

Speaker Change: Our next question comes to the line of George F. Sutton from Craighalem. Your line is open.

George Sutton: Thank you.

Operator: Thank you. Ramesh, I wonder if we can clarify something relative to your implementation challenges that you've had on the point-of-sale side, given the plethora of options on the hardware. You mentioned that it's getting better now, and you're saying that your point-of-sale business expects to rebound soon. So I wanted to put all that together and make sure that's exactly how you're kind of layering it out going forward. Yes, George, that is close.

George Sutton: Remesh, I wonder if we can clarify something relative to your implementation challenges that you've had on the point of sale side, given the plethora of options on the hardware. You mentioned that's getting better now, and you are saying that your point of sale business you expect to rebound soon. So I wanted to put all that together and make sure that's exactly how you're kind of layering it out, going forward.

Speaker Change: Thank you. Ramesh, I wonder if...

Speaker Change: We can clarify something relative to your implementation challenges that you've had on the point-of-sale side, given the plethora of options on the hardware.

Speaker Change: You mentioned that's getting better now and you are saying that your point of sale business you expect to rebound soon. So just I wanted to put all that together and make sure that's that's exactly how you're kind of layering it out going forward.

Ramesh Srinivasan: Yes, George, that is close, but the only thing is I wouldn't put it on hardware, in terms of the complications. It affects hardware revenue. I get that, but the complications were more pertaining to the software pieces of it. But there are three distinct pieces to the software. One of them involves hardware as well, which is the front-end terminal endpoints that you typically see in restaurants. But the back end of it is all software and contains various major pieces of software. And for the last year or so, we had to mix and match various pieces of that software, some that are completely modernized and state-of-the-art new, and some that are old because the corresponding pieces, the new ones, are not ready. But we are passed all that now.

George Sutton: But the only thing is, I wouldn't put it on hardware, though in terms of the complications, it affects hardware revenue. I get that. But the complications were more pertaining to the software pieces of it. But there are three distinct pieces to the software. One of them involves hardware as well, which is the front end terminal endpoints that you typically see in restaurants.

Speaker Change: Yes, George, that is close, but only thing is I wouldn't put it on hardware.

Speaker Change: Though it, in terms of the complications, it affects hardware revenue, I get that, but the complications were more pertaining to the software pieces of it.

Ramesh Srinivasan: But the back end of it is all software and contains various major pieces of software. And for the last year or so, we had to mix and match various pieces of that software, some that are completely modernized and state of the art new, and some that are old, because the corresponding pieces, the new ones, were not ready. But we have passed all that now. So now, if you own a major enterprise, a major restaurant, and a major enterprise, you will only go live when you sign up with us. You will only go live with the modern version. So you won't even be aware of the old versions.

Speaker Change: But there are three distinct pieces to the software. One of them involves hardware as well, which is the front-end terminal endpoints that you typically see in restaurants. But the back-end of it is all software and contains of various major pieces of software.

Speaker Change: And for the last year or so, we had to mix and match.

Speaker Change: Various pieces of that software, some that are completely modernized and state-of-the-art new and some that are old.

Ramesh Srinivasan: So now, if you own a major enterprise, a major restaurant, and a major enterprise, you will only go live; you sign up with us, you will only go live with the modern version. So you won't even be aware of the old versions. So those complications are behind us, but we did go through that complicated process of transforming the business for the past few quarters. And that has caused a little bit of pause among customers before they invest in us, but that is now getting into our past.

Speaker Change: because the corresponding pieces, the new ones are not ready. But we have passed all that now.

Speaker Change: So now, if you own a major enterprise, a major restaurant in a major enterprise, you will only go live, you sign up with us, you will only go live with the modern version. So you won't even be aware of the old versions. So those complications are behind us.

Ramesh Srinivasan: So those complications are behind us. But we did go through that complicated process of transforming the business for the past few quarters, and that caused a little bit of pause among customers before they invest in us. But that is now getting into our past. We should get over that phase very soon.

Speaker Change: But we did go through that complicated process of transforming the business for the past few quarters And that has cost a little bit of pause among customers before they invest in us But that is now getting into our past. We should get over that phase very soon

Ramesh Srinivasan: We should get over that phase very soon.

George Sutton: Gotcha. You mentioned adding firepower to your sales system and also increasing your marketing efforts, and this was sort of early in your script. I wanted to make sure I had some sense of quantification of that plan. Yeah, so...

Ramesh Srinivasan: You mentioned adding firepower to your sales system and also increasing your marketing efforts, and this was sort of early in your script.

Speaker Change: You mentioned adding firepower to your sales system and also increasing your marketing efforts, and this was sort of early in your script. I want to make sure I had some sense of quantification of that plan.

Ramesh Srinivasan: I want to make sure I had some sense of quantification of that plan. Yeah, so sometimes the sales and marketing number that you see in the PNL could involve one-time thing. So don't get too caught up in the comparisons between Q1 and Q1. There was certain timing of certain shows and certain consultants forums that we held in the last Q1 that was not there in this Q1. So let's leave that aside. So the quota carrying sales personnel are about 30% higher now. Today, then it was a year ago; that is 30, 30% higher, and a lot of this has been in increases in the hotels and resorts America's vertical and in international locations.

Ramesh Srinivasan: Sometimes the sales and marketing numbers that you see in the PNL could involve one-time things. So don't get too caught up in the comparisons between Q1 and Q2. There was certain timing of certain shows and certain consultant forums that we held in the last Q1 that were not there in this Q1. So let's leave that aside. So the quota-carrying sales personnel are about 30% higher now than they were a year ago. That is 3-0, 30% higher.

Speaker Change: Yeah, so sometimes the sales and marketing numbers that you see in the P&L

Speaker Change: could involve one-time things. So don't, you know, get too caught up in the comparisons between Q1 and Q1. There was certain timing of...

Speaker Change: certain shows and certain consultants forums that we held in the last Q1 that was not there in this Q1. So let's leave that aside. So the quota carrying sales personnel are about 30% higher now.

Ramesh Srinivasan: And a lot of this has been in increases in the hotels and resorts Americas vertical and in international locations. In Europe and Asia, we have expanded our sales teams, and in APAC, we are going through one more expansion of the sales team in the coming months. And a lot of the expansion internally here, sorry, in the U.S. has been in U.S. hotels and resorts.

Speaker Change: Today than it was a year ago that is three zero thirty percent higher

Speaker Change: and a lot of this has been in increases in the hotels and resorts America's vertical and in international locations.

Ramesh Srinivasan: In Europe and Asia, we have expanded our sales teams, and in APEC, we are going through one more expansion of the sales team in the next coming months. A lot of the expansion internally here, sorry, in the US, have been in the US hotels and resorts verticals. So we continue to expand our sales teams, and the marketing efforts are a lot more targeted now. As we get more successes, we are getting ready to invest more money in it.

Speaker Change: In Europe and Asia we have expanded our sales teams and in APAC we are going through one more expansion of the sales team in the next coming months and a lot of the expansion internally here sorry in the US have been in the US hotels and resorts verticals.

George Sutton: So we continue to expand our sales teams, and the marketing efforts are a lot more targeted now. And as we get more successes, we are getting ready to invest more money. Gotcha.

Speaker Change: So we continue to expand our sales teams and the marketing efforts are a lot more targeted now. And as we get more successes, we are getting ready to invest more money in that.

George Sutton: Gotcha, just one other thing: you mentioned that you were named the golf brand standard for Marriott.

Ramesh Srinivasan: Just one other thing. You mentioned that you were named the golf brand standard for Marriott. We haven't talked a lot about add-on module opportunities for Marriott, but can you just kind of put those two pieces together? Are we talking about golf being added to a number of Marriott properties, ultimately? Yes, that is true of Marriott and other customers as well, George. So Marriott did make Agilysys Golf the brand standard for their properties, and many of their managed properties should be adopting Golf during the short term, and then, of course, the franchise owners and all will make their own decisions as they go forward. But Agilysys Golf has been declared as the brand standard for that.

Speaker Change: Gotcha, just one other thing, you mentioned that you were named the golf brand standard for Marriott.

Ramesh Srinivasan: We haven't talked a lot about ad on module opportunities for Marriott, but can you just kind of put those two pieces together? Are we talking about that golf being added to a number of the Marriott properties ultimately? Yes, that is true of Marriott and other customers as well, George. So Marriott did make Agilis's golf the brand standard for their properties, and many of their managed properties should be adopting golf during the short term, and then, of course, the franchise owners and all will make their own decisions as they go forward. But Agilis's golf has been declared as the brand standard for that, and that is true of many of our other bigger customers as well.

Speaker Change: We haven't talked a lot about add-on module opportunities for Marriott, but can you just kind of put those two pieces together? Are we talking about that golf being added to a number of the Marriott properties ultimately?

Speaker Change: Yes, that is true of Marriott and other customers as well, George. So Marriott did make Agilysys Golf the brand standard for their properties.

Speaker Change: and many of their managed properties should be adopting golf.

Speaker Change: during the short term and then of course the franchise owners and all will make their own decisions as they go forward But Agilysys Golf has been declared as the brand standard for that

George Sutton: And that is true of many of our other bigger customers as well. They initially sign up for a couple of products, and then they see the benefits of the ecosystem, and they continue signing up for newer products. Like if you notice in our results what we mentioned. The number of new product instances of 115 sales in this quarter was a record, but it tied with the previous quarter, about one and a half years ago. But the number of product solutions that these 115 instances involved, 257, is an all-time record for us.

Ramesh Srinivasan: They initially sign up for a couple of products, and then they see the benefits of the ecosystem, and they continue signing up for newer products. Like if you notice in our results, what we mentioned, the number of new product instances of 115 sales in this quarter was a record, but it tied with a previous quarter about one and a half years ago. But the number of product solutions that these 115 instances involved, 257, is an all-time record for us. So more and more of the current customers that are adopting additional products that we have, and the Marriott golf piece is just one such example, George.

Speaker Change: And that is true of many of our other bigger customers as well. They initially sign up for a couple of products and then they see the benefits of the ecosystem and they continue signing up for newer products. Like, if you notice in our results what we mentioned...

Speaker Change: The number of new product instances of 115 sales in this quarter was a record, but it tied with the previous quarter about one and a half years ago. But the number of product solutions that these 115 instances involved, 257 is an all-time record for us.

George Sutton: So more and more of the current customers are adopting additional products that we have, and the Marriott Gold piece is just one such example. Gotcha. Okay.

Speaker Change: So, more and more of the current customers are adopting additional products that we have and the Marriott Gold piece is just one such example, George.

George Sutton: Okay, thank you. Thank you, George.

Operator: Thank you. Thank you, Joe. Thank you. One moment for our next question. And as a reminder, that's star 11 for questions, star 11. Our next question will come from Brian Schwartz from Oppenheimer. Your line is open.

George: Okay, thank you

Operator: One moment for our next question, and as a reminder, that's star 111 for questions star 111.

George: Thank you, Josh. Yeah.

Speaker Change: Thank you. One moment for our next question. And as a reminder, that's star 11 for questions, star 11.

Brian Schwartz: Our next question will come flying in a Brian Schwartz from Oppenheimer. Your line is open.

Speaker Change: Our next question will come from Brian Schwartz from Oppenheimer. Your line is open.

Brian Schwartz: Hi, Ramash, and now thank you very much for taking my questions this afternoon. Ramash, I wanted to ask you about the linearity on the business this quarter. I know it got off to a fast start. I'm just wondering how the deal activity trended in the latter part of fiscal 1Q compared to the earlier part? Yeah, I mean, the deal flow remained strong throughout the quarter. I mean, it was a record quarter, you know, record Q1 for us. So we felt good about where the sales booking, you know, where the sales booking by independent of the point of sale sales that we've talked about.

Brian Jeffrey Schwartz: Hi Ramesh, and thank you very much for taking my questions this afternoon. Ramesh, I wanted to ask you about the linearity of the business this quarter. I know it got off to a fast start.

Brian Jeffrey Schwartz: Hi, Ramesh. Thank you very much for taking my questions this afternoon. Ramesh, I wanted to ask you about the linearity on the business this quarter. I know it got off to a fast start.

Brian Jeffrey Schwartz: I'm just wondering how the deal activity trended in the latter part of Fiscal 1Q compared to the earlier part. Yeah, I mean, the deal flow remained strong throughout the quarter. I mean, it was a record quarter, you know, record Q1 for us.

Speaker Change: So I'm just wondering how the deal activity trended in the latter part of Fiscal 1Q, you know, compared to the earlier part.

Ramesh Srinivasan: The deal flow remained strong throughout the quarter. It was a record quarter, record Q1 for us. We felt good about where the sales bookings lie, independent of the point of sale.

William David Wood: So we felt good about where the sales booking, you know, where the sales booking is independent of the point of sale sales that we've talked about throughout the call, but overall, it was a good quarter; it was a record Q1. I mean, in the results, I think you can see where it sets us up nicely for the rest of the year, and the backlogs remain at record levels or near record levels. Services.

Ramesh Srinivasan: But overall, it was a good quarter; it was a record Q1. I mean, in the results, I think you can see where it sets us up nicely for the rest of the year as well. And the backlogs remain at record levels or near record levels for services and subscriptions.

Speaker Change: sales that we've talked about throughout the call. But overall, it was a good quarter. It was a record Q1. It's, I mean, in the results, I think you can see where it sets us up nicely for the rest of the year as well.

Speaker Change: And the backlogs remain at record levels or near record levels for services and subscriptions.

Ramesh Srinivasan: And then a final question just on the sales organization. I know this was the start of the new fiscal year in commentary here on your best sales star. You did talk about the sales capacity being up the year over year. But are you also making any changes to go to market that is having impact on your sales too? Our approach has not changed that much of a brine. Our sales personnel, some of them are more oriented towards farming, and some of them more oriented towards hunting. And that makes now I would say that a lot of the new sales personnel added, especially in international and in the hotels and the sorts vertical in America, are more oriented towards hunting than farming.

William David Wood: And then a question just on sales or mission. I know this was the start of the new fiscal year, but in commentary here on your best sales star. You did talk about the sales capacity being up there year over year, but are you also making any changes to go to market that is having an impact on your sales too? Our approach has not changed that much, Brian. Our sales personnel, some of them are more oriented towards farming, and some of them are more oriented towards hunting, and that makes now, I would say that a lot of the new sales personnel added, especially in international and in the hotels and resorts vertical in America, are more oriented towards hunting than farming.

Speaker Change: And then a final question just on the sales organization. I know this was the start of the new fiscal year.

Speaker Change: in commentary here on your best sales star. You did talk about the sales capacity being up year over year but are you also making any changes to go to market that is

Speaker Change: have an impact on your sales too.

Speaker Change: Our approach has not changed that much, Brian .

Speaker Change: Our sales personnel, some of them are more oriented towards farming and some of them more oriented towards hunting.

Speaker Change: And that makes, now, I would say that a lot of the new sales personnel added, especially in international and in the hotels and resorts vertical in America, are more oriented towards hunting than farming.

William David Wood: So many of the newer sales personnel who have been added are proportionally more interested in hunting than farming, but the way our sales teams are designed, they do both depending on what is required and what comes their way.

Ramesh Srinivasan: So many of the newer sales personnel who have been added are proportionally more hunting than farming. But the way our sales teams are designed, they do both depending on what is required and what comes their way. But I think the more important fact, brine, there is our marketing efforts are a lot more targeted. There are a lot of targeted efforts in terms of our PMS competitors, our POS competitors, and management companies. And for example, married POS, we now have a hunting license; targeted marketing efforts there. So our marketing efforts have become more, while they have become more wide ranging; there are also a lot more focused on certain areas where we feel we can get immediate benefit with our products.

Speaker Change: So many of the newer sales personnel who have been added.

Speaker Change: are proportionally more hunting than farming, but the way our sales teams are designed they do both, depending on what is required and what comes their way. But I think the more important fact, Brian , there is our marketing efforts.

Brian Jeffrey Schwartz: But I think the more important fact Brian there is that our marketing efforts are a lot more targeted. There are a lot of targeted efforts in terms of our PMS competitors, our POS competitors, and management companies. And for example, Marriott POS, we now have a hunting license for targeted marketing efforts there. So our marketing efforts have become more, while they have become more wide-ranging, they're also a lot more focused on certain areas where we feel we can get immediate benefit from us. Last question for me just on the POS business. Are you seeing any changes in terms of buying behavior, or purchase intent? Is it varying it at all, the gaming segment, or the food segment, or logic?

Brian Jeffrey Schwartz: are a lot more targeted, right? There are a lot of targeted efforts.

Brian Jeffrey Schwartz: in terms of our PMS competitors, our POS competitors, and management companies.

Brian Jeffrey Schwartz: and for example Marriott POS, we now have a hunting license, targeted marketing efforts there. So our marketing efforts have become more, while they have become more wide-ranging, they're also a lot more focused on certain areas where we feel we can get immediate benefit with our products.

Brian Schwartz: Last question for me, just on the POS business. Are you seeing any changes in terms of the buying behavior by men? Is it veering it at all the gaming segment, or the food segment, or logic, et cetera?

Brian Jeffrey Schwartz: Last question for me just on the POS business.

Speaker Change: Are you seeing any changes in terms of the buying behavior, buyment? Is it varying it at all the gaming segment or the food segment or logic?

Brian Jeffrey Schwartz: etc. Thanks again for taking my questions. Thank you, Brian. I wouldn't say buying behavior is changing that much. But our competitor behavior seems to be changing a bit where it's a lot more aggressive with respect to pricing and giving low-priced renewals so that they ward off the competition from Agilysys for a bit longer. Those kinds of short-term measures are what we are seeing more because as our product superiority gets higher.

Ramesh Srinivasan: Thanks again for taking my questions. Thank you, Brine. I wouldn't say the buying behavior is changing that much, but our competitor behavior seems to be changing a bit where it's a lot more aggressive with respect to pricing and giving low-priced renewal so that they walled off. The competition from Agilices for a bit longer; those kinds of short term measures we are seeing more because as our product superiority gets higher. Now, sometimes the only way you compete against us is by lowering the price. So that is there, but I'm not seeing any major buying behavior decisions. But, like we've said before, in international regions, the decision-making process still remains a bit slow compared to many of the segments.

Brian Jeffrey Schwartz: Now, sometimes the only way you compete against us is by lowering the price. So that is there. But I'm not seeing any major buying behavior decisions. But like we've said before, in international regions, the decision-making process still remains a bit slow, you know, compared to many of the segments.

Speaker Change: etc. Thanks again for taking my questions.

Speaker Change: Thank you Brian . I wouldn't say the buying behavior is changing that much but our competitor behavior seems to be changing a bit where it's a lot more aggressive with respect to pricing and giving low priced renewals so that they ward off

Speaker Change: Bye.

Speaker Change: The competition from Agilysys for a bit longer, those kinds of short-term measures we are seeing more because as our product superiority gets higher

Speaker Change: Now, sometimes the only way you compete against us is by lowering the price, so that is there. But I'm not seeing any major buying behavior decisions. But like we've said before, in international regions, the decision-making process still remains a bit slow, you know, compared to many of the segments in the U.S.

Operator: in the U.S.

Operator: Thank you, Brian. Thank you, and I'm not showing any questions in due.

Brian Jeffrey Schwartz: Thank you, Brian. Thank you, and I'm not asking any further questions. I would now like to turn the call back over to Ramesh Srinivasan for any closing remarks. Thank you, Victor. Thank you all for your interest and attention. Please enjoy the rest of the summer. We look forward to talking to you again in about three months from now when we will report on the fiscal 2025 second quarter results towards the end of October. Thank you. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.

Brian Jeffrey Schwartz: Thank you, Brian .

Ramesh Srinivasan: I want Alexey to call back over to Ramesh Srinivasan for any closing remarks.

Speaker Change: Thank you. And I'm not showing any further questions. I would now like to turn the call back over to Ramesh Srinivasan for any closing remarks.

Ramesh Srinivasan: Hey, thank you, Victor. Thank you all for your interest in attention. Please enjoy the rest of the summer.

Ramesh Srinivasan: Thank you, Victor. Thank you all for your interest and attention. Please enjoy the rest of the summer. We look forward to talking to you again in about three months from now when we will report on the fiscal 2025 second quarter results towards the end of October . Thank you.

Ramesh Srinivasan: We look forward to talking to you again in about three months from now. Then we will report on the fiscal 2025 second quarter results towards the end of October. Thank you.

Operator: Thank you for your participation in today's conference.

Operator: This does conclude the program. You may now disconnect. Everyone have a great day.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.