What Management Said
Read the full Q4 2026 transcript ↗Private Securities Litigation Reform Act of 1995, including statements regarding our financial guidance. Welcome to the fiscal 2026 4th quarter and full year earnings call. Fiscal 2026 Q4 was an excellent overall business quarter for Agilysys, including with respect to sales, revenue, and profitability, each of which set a new quarter record. We measure sales and selling success in Annual Contract Value terms, and fiscal 2026 fourth quarter was the highest sales quarter on record.
All sales and backlog values mentioned here for Q4 and full fiscal year 2026 do not include anything from the Marriott Property Management System, PMS project. Fiscal 2026, the year ending March 2026, was a record global sales year overall. It was a record best sales year and well more than double the previous year's sales level for the, managed food services, FSM vertical. It was a record high sales year for both point of sale, POS, and POS-related modules, and for property management systems, PMS and PMS-related modules.
There is no guarantee that each upcoming quarter will be a record. We can, however, state with a fair degree of certainty that next year, fiscal 2027, is well-positioned to be a record best year for sales, revenue, and profitability. This is a business that should be judged on annual results and full year guidance levels. Of the 105 new properties added during the quarter across new and current customers, excluding the 22 new customer properties who purchased Book4Time, 103 were either partially or fully subscription software license-based.
What went well
- Record Q4 for sales, revenue and profitability; Q4 revenue of $82.9M was up 11.7% year over year and full-year revenue grew 15.9%
- FY2026 was a record global sales year: managed food services (FSM) sales more than doubled, international sales hit a record, and subscription SaaS sales were 29% above the prior best year
- Q4 gross margin expanded to 64.4% from 60.7%, entering what management called the gross margin expansion part of the journey
- Full-year retained recurring bookings were a record, 43% above the prior best year, alongside better-than-world-class customer retention
- Profitability well ahead of plan: Q4 adjusted EBITDA $21.5M vs $14.8M, full-year adjusted EBITDA $67.7M (21.2% of revenue) vs $53.8M, and cash rose to $116.9M from $73M
What went wrong
- Product revenue expected to stay flat at ~$10M/quarter ($40M/year) as customers keep choosing consumer-grade devices
- Q1 FY2027 profitability guided lower at 16-17% due to the start of the large PMS rollout and user conference expense timing
- Professional services growth will slow to 5-10% with no significant benefit from large development projects now in rollout phase
- Marriott PMS rollout cadence uncertain; management cautioned against expecting a perfect cadence and said it is a multi-year (at least two years) rollout
- New CRS and Revenue Intelligence products are early-stage and will take time before moving the financial needle
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue | FY2027 | $365M-$370M |
| Product revenue | FY2027 | flat, ~$10M/quarter ($40M/year) |
| Professional services growth | FY2027 | 5-10% |
| Recurring revenue growth | FY2027 | ~20% |
| Subscription revenue growth | FY2027 | north of 30% (Q1 ~24%, rising through year) |
| Adjusted EBITDA margin | FY2027 | 24% (Q1 16-17%, exiting Q4 near 30%) |
| Stock-based compensation | FY2027 | 5-7% of revenue |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Q4 revenue | +11.7% | Quarterly record of $82.9M vs $74.3M, driven by continued business momentum |
| Full-year revenue | +15.9% | Record sales, backlog and operations across the business |
| Full-year recurring revenue | +21.1% | Subscription growth plus world-class retention; 64.5% of full-year net revenue vs 61.7% |
| Full-year subscription revenue | +30.2% | Better-than-expected sales and backlog conversion (large PMS rollout added only ~0.2%) |
| Q4 subscription revenue | +24.1% | Continued subscription sales momentum |
| Full-year professional services | +12.4% | Continued strong services performance; gross margin returned to slightly north of 30% |
| Q4 gross margin | 64.4% vs 60.7% | Product mix in the P&L catching up to sales |
| Q4 adjusted EBITDA | $21.5M vs $14.8M | Revenue growth plus operating leverage |
| Full-year adjusted EBITDA | $67.7M vs $53.8M | Profitability ahead of original FY2026 plan at 21.2% of revenue |
| Full-year free cash flow | $68.1M vs $52.3M | Strong profitability; a good proxy for business health after normalizing CapEx |
| Full-year diluted EPS | $1.37 vs $0.82 | Net income of $38.8M vs $23.2M; adjusted diluted EPS $1.79 vs $1.55 |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Large Marriott PMS rollout | Properties recently gone live (two-three months) | Progressing well but multi-year (2+ years); conservatively embedded in FY2027 guidance; putting Agilysys on the PMS map and into most major PMS RFPs | — |
| AI | Product ecosystem modernized/rewritten over prior years | 30+ AI features released or coming within 3-4 months plus two AI-native modules; shortening sales cycles rather than causing customer anxiety | — |
| Gross margin / profitability expansion | Full-year gross margin roughly flat at 62.6% | Q4 exit at 64.4%; FY2027 EBITDA margin to 24%, about half from gross margin (product mix) and half from operating leverage | — |
| New products (CRS and Revenue Intelligence) | Two long-standing gaps in the ecosystem | Well received at customer advisory board and Inspire; beta customers signed up; both expected live at a few sites before fiscal year end, initially targeted at existing ecosystem/PMS customers | — |
| POS recovery | Challenges over the previous couple of years | Best POS year in company history; back to being a strong POS player with a unified, modernized ecosystem | — |
Q&A Summary
How is the large PMS rollout progressing, what's embedded in guidance, and is it done in FY2027 or multi-year? (Needham)
Progressing well with the customer and vendors doing a great job, but don't expect a perfect cadence as properties convert from various legacy products. Conservatively embedded in FY2027 guidance; definitely not a single-year rollout, at least two years or possibly more.
If there's upside to FY2027 guidance, where would it come from? (Needham)
Guidance is based on realistic assumptions and current momentum. Upside would come from continued higher sales as the team focuses on bigger customers, the multi-amenity resort sweet spot, select-service smaller properties, and selling individual products standalone.
How is implementation capacity given another record bookings year? (Cantor)
In good shape for at least the rest of the fiscal year; AI and the maturing modernized products (in the field 1.5-4 years) are improving implementation speed and efficiency. Headcount across implementation, sales and R&D is adequate for FY2027.
How much of the step-up from 25% to 30%+ subscription growth is bookings momentum vs the Marriott PMS rollout? (Cantor)
Almost exclusively better-than-expected sales and operational efficiency plus better backlog conversion and world-class retention; not related to the large PMS rollout.
What drove the strong gross margin step-up and what's the FY2027 trajectory? (William Blair)
Mostly product mix. The path from 17% Q1 to ~30% Q4 EBITDA exit rate is about half gross margin (product mix) and half operating leverage; gross margin should exit the year in the mid-to-high 60% range.
Any early customer feedback on the new CRS and Revenue Intelligence products? (William Blair)
Positive feedback at the customer advisory board and Inspire, with customers volunteering as beta sites. Revenue Intelligence is only possible because Agilysys has the ecosystem data and can be real-time; initially targeted at existing ecosystem customers, both expected live at a few sites before fiscal year end.
Are you seeing AI anxiety in customer conversations and sales cycles? (BTIG)
No significant AI anxiety; customers are curious not anxious. Because Agilysys is an aggressive AI user with real features shipping in months not years, AI is actually shortening sales cycles.
Can you give guardrails on the Marriott revenue contribution within the 30%+ subscription guide? (BTIG)
Won't break out organic vs Marriott. The north-of-30% guide includes strong non-Marriott performance and a fairly conservative estimate of the Marriott rollout.
Will the PMS rollout unlock faster sales cycles with other hotels waiting for proof points? (Oppenheimer)
Not yet a visible halo effect since properties only went live two-three months ago, but the project has put Agilysys on the PMS map, into most major RFPs, and added credibility; direct effect will take more time.
What are the steps to a ~30% EBITDA margin while still investing in new products and AI? (Craig-Hallum)
FY2027 guided to 24% (Q1 16-17%, rising to ~30% Q4 exit); the exit rate is historically a good proxy for the next year. AI lets the existing R&D team build the two new modules efficiently, and product mix shifting toward recurring/subscription keeps lifting gross margin.
More on Agilysys Inc
Reported 2026-05-18 · figures from the Agilysys Inc Q4 2026 earnings call.
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