Agilysys Set to Release Q1 Earnings: Here's What to Expect

Agilysys has a mixed earnings surprise history. The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed in the remaining quarters, with an average surprise of 0.5%.

Price Performance

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AGYS stock has declined 14.5% in the past year against the Computer-Integrated Systems industry’s growth of 217%. The S&P 500 composite and the Zacks Computer and Technology sector have risen 20.5% and 28.8%, respectively, in the same time frame.

Factors Shaping AGYS’ Q1 Results

Agilysys delivers hospitality software solutions and services. The company reported fiscal 2026 revenues of $319.3 million, up 15.9% from fiscal 2025. Management on the last earnings call noted that fiscal 2027 is positioned for record sales and profitability. Record bookings, strong customer retention and backlog are expected to support expansion.

Subscription revenues are likely to have remained the primary focus. The metric rose 30.2% year over year and represented 66.6% of total recurring revenues in fiscal 2026. For the fiscal first quarter, management expects growth to be similar to the fourth quarter 2026 growth rate of 24% before improving throughout the year as the large property management system (“PMS”) deployment ramps tied to the Marriott project. Management has guided to subscription revenue growth of at least 30% for the third consecutive year in fiscal 2027.

Ongoing AI innovation positions the company for sustained growth and margin expansion. Earlier in the year, the company introduced two AI-driven modules — Revenue Intelligence and CRS (Central Reservation System) — with beta implementations anticipated later in the fiscal year.

These solutions are currently being deployed only among existing customers and are not expected to contribute to near-term revenues. However, they are expected to drive the company’s long-term growth, particularly as it targets scaling from a $500 million to $1 billion annual revenue run rate, noted management.

Management noted that the fiscal first quarter is typically a heavy cost period due to one-time expenses like annual user conferences and initial phases of project rollouts. As a result, adjusted EBITDA margin is expected to be in the range of 16% to 17%, significantly lower than the fiscal year target. For full year, AGYS expects adjusted EBITDA exiting above the annual expectation of 24%.

Investors will be closely watching updates for the Marriott PMS rollout, adoption trends of new AI modules and subscription revenue acceleration.

Earnings Whispers for AGYS

Our proven model does not predict an earnings beat for Agilysys this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

AGYS currently has a Zacks Rank #1 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Celestica CLS currently has an Earnings ESP of +1.86% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Celestica is scheduled to report quarterly earnings on July 27. The Zacks Consensus Estimate for CLS’ to-be-reported quarter’s earnings and revenues stands at $2.29 per share and $4.35 billion, respectively. Shares of Celestica have gained 104.6% in the past year.

Seagate Technology Holdings plc STX has an Earnings ESP of +1.75% and a Zacks Rank #1 at present. STX is scheduled to report quarterly figures on July 28. The Zacks Consensus Estimate for Seagate Technology’s to-be-reported quarter’s earnings and revenues is pinned at $5.10 per share and $3.49 billion, respectively. Shares of Seagate Technology are up 494.6% in the past year.

Teradyne TER has an Earnings ESP of +0.59% and a Zacks Rank #2 at present. The company is scheduled to report quarterly figures on July 28. The Zacks Consensus Estimate for Teradyne’s to-be-reported quarter’s earnings and revenues is pinned at $2.04 per share and $1.22 billion, respectively. Shares of Teradyne are up 310.3% in the past year. 

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This article originally published on Zacks Investment Research (zacks.com).

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