Agilysys, Inc. (NASDAQ: AGYS) stock fell over 4.4% on 19th May, 2021 (as of 10:40:06 UTC-4 · USD; Source: Google finance) after the company posted mixed results for the fourth quarter of FY 21. Product and services revenue declined sequentially by about 3% compared to Q3, and are at 78% and 76% of Q4 fiscal 2020 levels, respectively. Recurring revenue grew slightly over Q3 and by 3%, compared to the comparable prior year Q4 to a record $22.9 million.
Within recurring revenue, subscription revenue rose by 11.6% compared to Q4 of last year, and comprised 42% of total recurring revenues. The consistent growth in subscription-based recurring revenue, all through the pandemic affected year, is a big testament to the pace of product innovation and the availability of an increasing number of software modules, which are cloud native compared to a year or two ago. Further, the sales measured in annual contract value of customer purchase agreements won, signed and closed during the quarter grew to just over 75% of sales levels during the comparable Q4 fiscal 2020. This was an improvement compared to the entire fiscal year, where sales were at approximately two-thirds of the level seen in fiscal 2020. During the January through March quarter, the company has signed sales agreements which added 21 new customers to the family and 41 new properties.
AGYS in the fourth quarter of FY 21 has reported the adjusted earnings per share of 21 cents, beating the analysts’ estimates for the adjusted earnings per share of 19 cents. The company had reported 8 percent fall in the adjusted revenue to $36.3 million in the fourth quarter of FY 21, missing the analysts’ estimates for revenue of $36.7 million. Q4 GAAP gross profit increased by 19% compared to Q4 of fiscal 2020. Consistent with the rest of the fiscal year, $3.1 million of previously capitalized software amortization costs present in fiscal 2020 did not impact the current quarter, resulting in a comparative increase of approximately $700,000 in gross profit on $3.3 million less revenue. The growth of gross profit percentage is driven by the continued growth of recurring revenue as a proportion of total revenue. Adjusted EBITDA was $7.1 million, which is slightly lower than Q3 fiscal 2021, and 98% higher than Q4 of last fiscal year
The company expects fiscal 2022 revenue to be in the range of $160 million to $170 million, while the analysts were expecting $165.4 million. The company expects adjusted EBITDA during fiscal 2022 to be slightly better than 15%, better than 15% of revenue