Oct 26, 2026 earnings call — Record revenue and higher guidance from subscription growth
Raised full-year revenue guidance to $374 million to $378 million and subscription revenue growth to at least 34%.
Revenue $0.1B (est $0.1B) · EPS $0.67 (est $0.55) · Next-quarter revenue outlook $0.4B–$0.4B
Key quotes
"During Q2 fiscal 2027, July to September, we added 14 new customers, excluding Book4Time Spa, and 24 including Book4Time, and all of them were subscription-based sales agreements."
"But we can tell you that well more than 2,000 properties are live."
"The most crucial AI-related development project completed during the quarter was the AI common framework, which provides a control center for AI governance, privacy through tokenization of personal information, security, appropriate LLM model selection, value-based usage for each task, monitoring and auditing."
Analyst Q&A 7
Marriott rollout progress
Q (Mayank Tandon · Needham): The analyst asked how many Marriott properties and rooms are live and where the rollout stands. He also asked whether add-on modules are being sold yet and how big that opportunity might be.
A: Management said they cannot share all details because this is Marriott's project with multiple vendors. They said well more than 2,000 properties are live, select-service implementations are virtually complete, and they are not yet halfway done by properties, rooms, or revenue. They added that add-on modules like POS and Book4Time Spa are progressing well but they cannot put a number on the opportunity.
"But we can tell you that well more than 2,000 properties are live." — Ramesh Srinivasan (CEO)
Subscription growth assumptions and CRS beta
Q (Stephen Sheldon · William Blair): He asked what sequential subscription revenue growth the company assumes for the rest of the year and what exit growth rate is assumed for 4Q. He also asked for updates on CRS customer interest and its role in direct bookings and future AI features.
A: Dave said Q1 saw about $3.3 million sequential growth and Q2 about $4 million, and they expect go-lives of about $3.5 million to $3.7 million for the remainder of the year, supporting at least 34% subscription growth and a 38%–39% exit rate. Ramesh said the CRS is being built in the AI age and is focused to work with their product ecosystem, there is reasonable customer interest, and several customers have offered to be beta sites.
"Currently, our CRS is only focused to work with our ecosystem, especially our PMS products." — Ramesh Srinivasan (CEO)
HRC momentum and AI use
Q (Matthew VanVliet · Cantor Fitzgerald): The analyst asked whether HRC momentum comes from more marketing and better sales leadership or from the market spending more. He also asked how product-specific data on the platform helps sell AI modules versus customers building their own.
A: Management said they started with low market share and have increased both marketing and sales headcount and leadership, which gave them more and better "shots on goal," while product ecosystem improvements also helped. They said AI features are helping sales: customers use AI internally for workflows, and they expect vendors like Agilysys to add AI to core systems to improve operations and guest experience. They see AI as two buckets: customer internal projects and vendor-provided AI in products.
"We have expanded the sales team, not only in terms of quantity, but also in terms of quality of leadership." — Ramesh Srinivasan (CEO)
AI leadership and product revenue gains
Q (George Sutton · Craig-Hallum): He asked what management hears at industry roundtables about their AI advantage and how customers respond, and whether that explains more sales. He also asked why product revenue surprised to the upside.
A: Management said their marketing and strategy leaders represent them at roundtables and that customers increasingly look to Agilysys for AI leadership, which is helping sales in HRC and FSM. On product revenue, they said hardware attach rates per POS sale are lower because solutions are more open, but overall POS sales have grown strongly since the unified release and that growth lifted product revenue despite the lower attach rate.
"So overall POS sales has increased so much that even with the reduced hardware attach rate, the hardware product -- related product revenues also increased for us beyond our expectations." — Ramesh Srinivasan (CEO)
Drivers of subscription acceleration and backlog
Q (Nehal Chokshi · Northland): He asked if the subscription growth acceleration is mainly from Marriott and whether bookings year-to-date are ahead or just faster deployment from backlog. He also asked if deploying 2,000 of ~6,000 Marriott properties means ~33% complete.
A: Dave said the acceleration is broad-based across Marriott and non-Marriott customers, with record sales levels. Ramesh said sales bookings have also been better than expected and the backlog at the end of Q2 was very close to record highs despite faster implementations. He would not provide a percentage complete for Marriott, saying the number varies by properties, rooms, and revenue, but they are not close to the halfway point.
"So while the implementation, execution delivery has increased driving revenue up, the backlog remains at a very close to a decimal point less of the record level." — Ramesh Srinivasan (CEO)
Select vs full-service and AI pricing
Q (William Fitzsimmons · Piper Sandler): He asked how the select-service SKU is ramping versus full-service and where each is in the rollout. He also asked early customer willingness to pay for the 30 AI features and how that helps cross-sell to the existing base.
A: Management said the project started with select-service implementations, which are almost complete, and the rollout is now moving to full-service properties. They said new product sales to current customers are at record levels and that initial AI features are in beta at no charge with positive feedback. They added that monetization will vary: some AI will be included as product enhancements while some features may be charged via higher SaaS or usage/transaction fees, but it's too early to be specific.
"The initial AI-based features that are in production use are in beta properties, and we are not charging customers for that." — Ramesh Srinivasan (CEO)
Marriott halo and sales productivity
Q (Brian Schwartz · Oppenheimer): He asked whether Marriott implementations are already creating a halo effect that wins new hotel logos or if that effect will wait for other factors and implementation successes. He also asked how much record sales reflect higher rep productivity versus more reps or shorter cycles.
A: Ramesh said big hotel brands make decisions on their own technology cycles and RFPs; successes help reputation but will not automatically win deals—Agilysys will be a major participant when cycles come. Dave said the sales performance reflects both: they increased quota-carrying reps years ago and this is the first year those reps are carrying full quotas, so productivity and added capacity both helped, and they expect more ramp but no major new hiring planned.
"This is the first year where we're really starting to see them carry full quotas." — Dave Wood (CFO)