How Agilysys’ (AGYS) Upgraded Subscription Revenue Outlook Could Shape Its Long-Term Investment Story

• Agilysys reported its second-quarter fiscal 2026 results in late October, posting revenue of US$79.3 million and net income of US$11.71 million, both increasing compared to the same period last year, and raised its full-year revenue guidance to US$315 million to US$318 million, with subscription revenue growth expectations at 29% year-over-year.
• An interesting aspect of this announcement is the company's strengthened outlook for its recurring subscription revenue, underscoring Agilysys' focus on higher-value, predictable income streams.
• We’ll take a look at how Agilysys’ upgraded subscription revenue outlook could affect the company’s long-term investment narrative.

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Agilysys Investment Narrative Recap

To be a shareholder in Agilysys, you need conviction in the continued shift of the hospitality industry toward cloud-native, subscription-based software, a trend fueling the company's push for higher, more predictable recurring revenues. The recent news of raised revenue guidance and stronger subscription growth expectations reinforces the main short-term catalyst: accelerating adoption of Agilysys’ SaaS platform. However, it does little to reduce the company's biggest risk right now, which is vulnerability to a cyclical downturn in travel and leisure if global economic weakness emerges.

Among recent announcements, Agilysys' significant SaaS contract with Boyd Gaming stands out as directly relevant. This agreement strengthens the recurring revenue pipeline and shows the tangible impact of subscription growth, supporting the company's focus on stable income streams, which aligns with its updated fiscal guidance and growing backlog of implementations.

Yet in contrast to rising subscription momentum, investors should be aware that with such concentrated exposure to the hospitality sector, any slowdown in travel trends could quickly impact...

Read the full narrative on Agilysys (it's free!)

Agilysys' outlook anticipates $425.1 million in revenue and $60.4 million in earnings by 2028. This implies a 13.8% annual revenue growth rate and a $46.4 million increase in earnings from the current $14.0 million.

Uncover how Agilysys' forecasts yield a $140.00 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Fair value estimates from the Simply Wall St Community span from as low as US$29.52 to US$152, based on three distinctly different analyses. While these outlooks range widely, the company’s increasing focus on SaaS revenue and large client wins highlight why views on future performance can diverge so much.

Explore 3 other fair value estimates on Agilysys - why the stock might be worth as much as 21% more than the current price!

Build Your Own Agilysys Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Agilysys research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Agilysys research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Agilysys' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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