AGYS - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Agilysys Fiscal Year 2018 Second Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference, Mr. Relations. Investor Aja, Norberto begin. may you Sir,

Norberto Aja

the presentation Thank me you, of contains joining Litigation meaning Harbor disclosure. Call. Thank Safe for Reform Private Securities with afternoon, get before and Agilysys Fiscal good Harbor management's minute provision Act doing forward-looking the read a Today's Conference in everyone. comments. XXXX within XXXX. But statements so, Safe started let U.S. you of just the the conference operator of and the Second We'll Quarter

be operating regarding statements relating anticipate, other include growth adjusted we Examples Forward-looking should, future, revenue words intend, periods. revenue plan, identified market statements statements and could and profitability, by make others, likely, cash such goal, among cost results. guidance similar will such expect, financial results efficiencies balances, future and forward-looking as references as to believe, operations, to estimate, expected demand, and of earnings from may,

other forward-looking to future, uncertainties, of which statements are our conditions. economy of the Forward-looking based control. are of statements assumptions future are neither future inherent Instead, of future in trends, risks expectations subject predict relate to projections, events circumstances our changes and many the they and on that plans regarding and and current to only they and Because the anticipated business, difficult assurance beliefs, performance. future strategies, our and are historical facts nor are outside

from SEC to date the solutions a made. required, publicly financial new the that update obligation of over a most press of can a on call all others, could statements Form Any on in President whether measures developments on financial actual which When indicated filings today's and statements. as forward-looking us the Ramesh reconciliation undertake now to forward-looking found made result time-to-time risks on accordance the information and today financial and these currently cause non-GAAP forward-looking differ may of in results only XX-K as operational and any and indicated efficiencies ability Please meaning to and forward-looking turn in speaks rely no release, of that by include achieve as is the us or Company's differ forward-looking website. G. Exchange to GAAP the the in We well and made Ramesh. and calculated include, conditions in Therefore, the it Important of webcast With announcement conference news in measures to non-GAAP XX-Q. any call CEO measures results actual I from within Regulation Agilysys. with Our not that, to information, also as to Form the ahead, will from products including available our factors company's solely and among described materially financial reports statements. condition should our based Company's be and those may the Srinivasan, like directly in today's financial materially Today's today's demand with those be comparable call you in Securities of otherwise. for presented future meet customer statement Mr. go Commission, and statement is the

Ramesh Srinivasan

and review us quarter our results good fiscal our you, forward. you path joining XXXX for second and today on Thank Thank call the Norberto, everyone. afternoon, to

today call our Officer. is the on Chief me Joining Financial Pritchett, Tony

hardware million net four, or of made is of various $X.XX share, to net to progress a overview Let $X.X against results, revenue million the of year's of due Compared $X.XX discussing me decreased initiatives. our the a lower of or results, leading quarter to $X.X last revenue the third-party form were begin million, fiscal Notwithstanding XXXX $XX.X in loss strategic as GAAP quarter largely a zero, of one compared three to softness share in fiscal past loss per of $X.XX, pure-play a sales, per is QX. current earnings that hospitality in million, loss software our we so able $XX.X a to a years, four from terms ever total best achieve before our to second for with company quick second solutions adjusted the quarter, operations. loss X.X% or that

basis. close This As for discussed operations is on an measure earnings from flow improved sequential fiscal from of adjusted XX% first the cash on basis by proxy year. a measure a earlier, the also quarter this free annual

of areas and the have earnings despite structure lower overall to spend the for a in resulted significantly cost level initiatives as revenue lower operational significant reduce realign from operations, to revenue our continuing quarter. improvement adjusted percentage non-growth Our in in

the as percentage percentage revenue, our the fourth to began development-oriented. fiscal has This expenses, as end of to and aspects, perspective. of management expect is of fiscal software fiscal of our as significantly in through cash capital if planned, investments XXXX a revenue, many cost We to compared of software our talent level. realignment or in with XXXX. above total workforce flat as spite we this next development balance more a year cash engineering to year, slightly of that operating the things our far compared our been management flow a from than building mix including line were including QX a capitalized at And In were out significant quarter turn initiatives. items of as center, involved XXXX, be India fiscal fiscal a many well lower should better our current achieved implement make prudent of Most when expenditure, fiscal to XXXX of

statement. restructuring incurred in our current As income some quarter a expenses result, we

SaaS-based the pleased with of recurring are We growing. revenue increasing revenue with both levels and maintenance

grow recurring the our continue base expect We in future. revenue to to

us make difference it few the top-line As in the that real strategic results a take marketplace. being expected quarters various we quarter, the will reality progress to reflected despite second for in across acknowledge weaker-than the more the made initiatives, a

our million, prior the Despite therefore year as earnings full going million. this to for adjusted new guidance We million, $XXX one from our of a revenue with guidance between and of fourth to on the our that $XXX updating range million, XXXX particularly $XXX compared fiscal to quarter million are on forward, and three track zero remain to revenue growth improve operations during in. other guidance change, to achieve we to $XXX positive starts kick

software progress in Agilysys to a world-class, and organization. We transforming customer-centric engineering-driven continue make marked into

which to growth software will invest continue in infrastructure. and We international drive including will development future areas

may up to move areas investments areas as We as and quickly towards will remain positive help to which regarding to cash us ball possible. where move need decisions profitability tighten us we in more prudent the require help forward our flow and

our During fiscal XX%. engineering capacity the XX%, first five we zero, have development year, this six increased by about months of

so Our tasks India about site has at complete the more to product new XXX four XXX including already little fixes development employees center than and over development a enhancements and able pending been onboard, have far months. we in

India success the initiative, our employees. development the facility doubling of to center Given approved recently Board our XXX accommodate

of during and our well XXXX we be is including April our success happen We fiscal POS with product growth expect to to is respect flagship line the to move product product now. That The how level to forward well-established development June timeframe. will reach rGuest year product, our this that our products first and future quarter key to our acceleration beginning around roadmaps the next with of InfoGenesis. capacity

expect product those enhancements As our competitive we current and prospective and improvements our reach advantage. customers, strengthen to

group revenue services along and reenergized We enhancements and of with a motivated expect driver customer-centric and future product crucial growth to better-positioned sales be teams. a more marketing

focus and areas to few far. roadmap our customers align where our low we have and yielding on Asia significant the our the of professional and update teams are Some shares appreciated A good senior include ago team. for opportunities. customer represent The customers increased so growth the currently they us quite services product results attention management teams the executive getting made directly improved of service. from been our Europe by Many levels quick the market current to much noticed markets, changes a months requirements are and have

leading is enterprises a who of initiatives. security joined customers veteran, our remains and security a one a you services professional focused heading all best roadmap our my Laveti, the previous Agilysys' rGuest software to customer XX along systems, Tony we great ourselves veterans who delivery, this past Jacks, of the as with including speeding teams. product-line of years. intense and couple internal protect lead Badger was we the and cyber year us is ensure One. earlier multiple as was of the and InfoGenesis, can. prior products is calendar Larry our and colleague operations Rob Cyber to Tony, legal and in our been successful to who enterprise Kyle teams. CIO our know, us LMS possibly has on us leading focus Pritchett Larry HR of in and many as services SaaS are Steinberg, product joining and platform years a Sridhar areas successful long up is our of CTO with ago As time development had Visual Agilysys and technical CFO success our well-established endeavors, continues for have our year professional and Kyle couple

area to like we high next thumb, Bhat. and work is we our Sales world-class His do initiatives in spelled that our simple A boy, half teams. heads years is teams Marketing. marketing search is In just also us. positive as going high India ethic find And Prakash in center. our Reenergizing Head customers can focus a of executive is of with for H as much a leading current using get for better colleague With passionate firm Prakash our development our revenue better relatively engaged of focus with cross-selling. Bhat, priority customer a sales only of former also and products, a addition, leading T Sridhar customer our us XX%, support objectives our last and one growth B name around number to help recently, enthusiasm,

such and solutions the see development customer business the was tremendous world-class this can product this schemes a to and bookings Agilysys, at provide value-creation I sales all hungry year, possibilities. the current is be partner We have our targeted recently The moving great, world-class such technology summary, progress intend with our that around for new growth am solutions I opportunity. provider holds than when We both speed velocity, sales forward, even of joined who provider also software and software service. a shareholder simultaneously is clients. solutions revenue us to customer at compensation base I we calendar more introduced hospitality In of incentive market, convinced at beginning

$XXX stable to million solutions the revenue small As both POS advantage to focused drive agile large technology yet and only sweet provider our opportunity to enough this be employees, spot, PMS annual of nimble great value home space make a and be and generate fully intend million the and on the shareholders. in to customers for to in great partner, and this use enough $XXX we

this to that where to bumps As during it short-term. be we will transform business to needs some do there we understand continue be, the

However, technology a deter have we and pad software reaching us a medium at provider. became confident than goals. that our from we years pure-play will long-term the since other hospitality last today stronger time not four during launching solutions any I am

investing way well growth and all in over We revenue development towards efficiencies, on productivity, world, increasing product our talent attracting from areas. internal possible all improving the exceptional velocity sales increasing are

our addition, good our that, in over equivalents outlook. turn financial healthy and we cash the In nearly future that call and Tony? to to no results continue million includes will and it CFO, $XX sheet With cash a I now Pritchett, balance debt. enjoy on Tony is that

Anthony Pritchett

Ramesh, you, Thank afternoon, and everyone. good

from million – revenue revenue in quarter was products comparable decline sales. hardware to $XX.X base X.X% XX%, down first net proprietary last prior decrease revenue the a fiscal revenue software from of year, top-line of X%. was in third-party compared Our product equipment XX.X% XXXX year decline a $XX.X in significant of products Revenue XXXX from our on reflects in was QX quarter largely million, down total a fiscal period. decrease The back second the of just while

get won't forward, growth Going sales levels. to no we hardware historical see reason believe to back

a to within XX% was XX% this of software or hardware range to instead, much typical X.X%, compared as represented to in detail, at and to revenue million recurring by as products, quarter. by an XXXX, of on-premise revenue to Product The new in XX.X% second revenue and closer SaaS-based the revenue XX.X% XX% revenue not revenues, revenue quarter the total recurring decreased the XX.X% recurring a in XXXX. was increase recurring Looking product growth split quarter did Recurring compared increased the XX% of follow XX% driven our for with customers second well the quarter XX.X% largely greater $X.X in second revenue driven fiscal revenue. increase comprised or by million in during total software fiscal SaaS of $X.X the SaaS quarter. revenue. revenues XX.X% product revenues software total revenues million to of of $X.X using quarter hardware

of and We revenues of are Total revenue. to our XXXX. Professional fiscal tied approximately total sale the services pleased Support, X% reflecting revenue installations decreased the a total of revenues, SaaS-based revenue our total comprised fiscal than services quarter of overall net rGuest $X.X faster at and recurring revenue quarter XX.X% XX.X% of or to revenue. grow represented platform compared continues subscription-based related implementation recurring decreased to of subscription X.X, net volume maintenance projects million, second million to related that and in the $X.X customer second on-premise to solutions. XXXX revenue to X.X% impact pace

the or million XX.X% quarter decreased $X hardware down income result a year of goods versus period as lower cost second prior the the revenue. sold Moving of statement, in

while XXXX. profit approximately profit fiscal customers. services services to hosting gross million, to to and as range the of increase the software subscription gross were the of a impact profit functions services in margin on revenue, second for responsible that the decreased of revenue in a professional XXXX. gross previously scalable of versions of by X% of for leading compared total of Taking profit resulted internal gross XX.X% This customer redeployment slightly total products a margin for for converted decreased X.X% as product a were primarily decreased workforce to teams look, our resources increased gross or billable billable not the back back lower professional profit of XX.X% and Support, Our XXXX on named XX.X% prior part quarter stated to decreased services fiscal to total quarter fiscal of as gross profit of $X.X previously proprietary of margin gross accounts. our result maintenance restructuring into gross $X.X costs to the second QX increased with annual of to rGuest. the period XX% Professional X.X% be comparing development million the the increasing XX%, low first-generation closer revenue margin guidance margins in infrastructure with million line in $X our favorably software proportion XX% due nature and amortization year XX.X%, $X.X the to supporting for million a disclosed gross the of of into

period. $XX.X the second increase year to X.X% Looking saw expenses million, operating expenses, operating the prior at quarter a to in compared

expenses decreased or increased XXXX, the fiscal administrative as to areas. XXXX to Restructuring, and better second XX.X% and resources severance fiscal part to when to areas, non-revenue-generating internal fiscal $X.X on the XXXX and second that our X.X% our and compared X.X%, $X.X discussed settlements, our the crucial expenses, revenue million the marketing and by operating in general compared $X.X in increase charges initiatives executing However, efforts development and quarter Ramesh restructuring, QX quarter we excluding capacity. second other of charges in to allocate XX% X.X%. or legal expenses compared decreased for efficiencies development started million increasing by quarter increased and while other $X.X charges decreased of or severance Product of million earlier. expenses other of Sales fiscal engineering decreased the our growth despite ongoing strategic XXXX XX% of million

improvement million loss $X.X an compared As million a net quarter, diluted to the operating gain $X.X or the million million of second $X.X of Net of XXXX. of fiscal depreciation $X.X the EBITDA Adjusted and loss XXXX. for quarter of amortization $X.X quarter result, quarter, we a a for quarter $X of share-based $X.XX the for was in diluted share, of share $X.X loss million per second or versus in per gain includes $X.X second fiscal million compensation. the a in reported second was a million $X.XX which second approximately and million

full and cash in statement, of XXXX, software the the NOLs, reflects in our will liable proprietary of with in balance $XX.X XX, terms September XX, to help of for and as $X.X property software only foreign on taxes future. remain approximately in Moving XXXX. in was books, securities allowance paid taxes currently million certain state $X.X sheet million, development. for internal-use flow for $XXX we cash and decrease foreseeable and The invested purchase the And us our the minimal along compared to valuation equipment approximately at million March million carry approximately marketable of cash development $XX.X million which and jurisdictions

fiscal XXXX NOLs current Our between and expire XXXX. years

to it that quarterly free fiscal do on half earnings operations a and most That then first be it lagging ahead tends the collections. cash near adjusted it annual On As flow the cyclical with operations earnings from we has keep the half. timing during to one-time last mind quarter. restructuring billing from cash the relates fiscal the payments payments, we basis of years during free in in to getting this and the our an flow, annual cash our to of adjusted of exception revenue the recurring like expect of each and basis, other had any with closely measured

fiscal of XXXX the loss experienced on million cost loss the company. $X.X operational second of from in $X.X Looking to impact a operations, in are our second of having our and initiatives a comparing favorable the of structure that quarter, quarter positive earnings of at adjusted the we million reflecting

XXXX for we linear full to revenue come adjusted it income $XXX Stay range compared And technology from cost relates in forecast as to year mentioned, availability XX% to a prior fashion our and year. commence non-cash the fiscal balance and to operations full fiscal their sheet continue onto earnings to such this expect also in of range our revenue of the of guidance solutions to the Ramesh low be change updated $XXX in million, year we rGuest margins, quarter $XXX $XXX million. Notwithstanding expenses million general between margins as we a million positive developed the new guidance, reach to development continue fourth gross and expect generate to amortize statement. in to off As

As a mentioned of provide expected business. on revenue towards periodically based adjusted guidance our how ongoing on prior for and period also non-recurring assets, a or of charges, are including fixed earnings company a becoming good non-cash range and by our calls, tracking cash better metrics continue profitable as normalizing we and indication to in given non-GAAP developed needs on we from operations burn a for metric, cash will these provide therefore, annual believe and we approximating generation both software while update expenditures the the

operations revenue this including our of a our withholding software sales, the bookings benefit on operations tracking and percentage as to significant We that internally progress revenue. we the and not of the also adjusted free to in comments, are realign adjusted beginning will generate year-over-year initiatives echo business are generate areas are business fiscal from structure. or in measure of profitability. We development and our I towards monitor overall our from lower in confident based productive results, To cash remain reiterate we positive quarter overall cost also cost that manage generate fourth improvements investment earnings flow to opening point our year. the improvement and ability this from earnings as Ramesh's already do in our positive

however, are, and revenue can areas looking so manage for We business it profitable growth. to necessary, other is generate at investment allow of the cost where we

Agilysys ensure and in a hold, shareholder we drive sales, value Our are our beginning further that it resources engage leverage to overhead, and customers operations to growth a turn sustainable remain Agilysys existing of growth. EBITDA, efforts long-term to earnings ahead position to leverage reduce sustainable that are and to streamline ever the by let's better manner and made we making restore momentum operator confident our to the us new we towards to good become about further to closing, growing the progress our In the With and the we've remain company, plans. steps base, enter are steady taking we is feel than we necessary are strategic positioned questions. progress customer about growth for with our encouraged take pleased and we for the call new that, has and markets. opportunities been profitable over Danielle?

Operator

Allen our Sidoti. first Thank question line the Klee of comes you. And from [Operator Instructions] from

Your open. line is

Allen Klee

Hi, good afternoon.

happened you maybe the you For can sales? what that the going closing just to Or product think Or think to is a you forward? what sales, go all any we Thank into maybe change? about about, little quarter do have you. challenge should in how at and what in color

Ramesh Srinivasan

difference the quarter, Yes. delayed about Good you. is say the really and the respect pushing overall, quarter than improvements product improvements, to deals to that the we've just a Allen. reason. in just for thought working I that on, been had improvements, a pull would marketplace the us, strong that that of a quarter we realized would And more much talking to starts we enough got got more main number that, couple – in a quarter. reason that of services making creates that was Hi, take the right. it of the a before delayed close will secondary not out we lot it With the Allen, quarters expected talk

just difference the lot one, in that. two, number in on the quarter didn't competitive makes before a a out marketplace. of creating making the will time are of comments expect for deals it a of we bit the of pushed Number So a we advantage a those push were to take more improvements that number terms two ourselves main and

Allen Klee

thinking sales terms approach and team kind in Okay. of your sales of think any would And changes about you head see? to a then, of you you like new to that are the how what

Ramesh Srinivasan

lot change, without general, calendar this Yes, commenting on I year in since two, last right? some customer-centric, the the three We want Allen, to in driving and become enthusiasm, is of more any very lot and say customers we more generally, a working passionate, on culture been have quarters focused what a changes, energetic, would more beginning towards more innovation-oriented. execution particular more

Just lot the We of just the the want same together driving a and also the those more work page sales And want within company to more lot on energy company. R&D changes. to internal teamwork, be We right? services help customer. to and and

along our we as improvements well. well, all over competitive forward been that as So covering the there we team months to coverages. we concerned, And that last a are sales with moment, make a are more we do other during sales that. major the market we driving is the become the drive We have the to our we And far at will lot reps looking more invest of quota-carrying world. all more we of products And than energy. regional are and lot leadership at an advantage we so sure more more of all changes and sales and sales have no been the we'll the in the ten as and make towards done have as product sales But or company sure in terms in more our a changes team driving gradually the that with sales plan change. bit the our in marketplace, have little want

Allen Klee

the would them? you any Do Okay. grow and on rooms numbers you point-of-sale on the for do how to goals you And of have have devices number quarter? like hotel

Ramesh Srinivasan

rooms XXX,XXX goes, as end-points. as XX,XXX about far growth And as grows, and so do terminal It’s around end-points. our revenue

average should on trajectory. similar of grow So, similar on – a kind they

Allen Klee

Can extent a payment competitive talk you you little your that advantage? about to gateway you. think thank Okay, a the you that gives and

Ramesh Srinivasan

Yes.

a does our makes Our giving each product development in Instead products, modules Allen, our it effective. our advantage common makes we a is module, a in in it lot – so our a that That's payment us. lot quicker it than of what products. able it than do and it need point-of-sale, and And payment much management of competitive lot gateway to make gives both it otherwise. don't reaction higher efforts us are velocity a we developing to each it development more the to property the more in therefore, advantage, is of gateway-related main marketplace more

A Canada of the towards the are that's a gateways on that and and common and processes a markets the the quarters a various those end ready get including working pay getting of Xth, biggest would lot now. kind of for other of advantage inning Xth, U.S. various even the I few markets, in now, Xth we lot enhancements and last creating efforts have gone we whole over the and are lot So in say, with gateway pay-at-the-table EMV of and with

be we in next very our So respect fiscal payment year. should with the to good gateway going into shape

Allen Klee

what in and then, accelerating business with the key are think great. you And of there factors opportunity, Okay, are chain large that terms winning hotel adoption? the

Ramesh Srinivasan

sure. Yes,

of and couple left cycles progress with And work calendar to that major the selling is good there with, with align for making be year. So and still once a of vendors are as little done budget each are Allen, hotel a hotel chain, preferred their the there of to individual their named know, lot major a we of hotels as one franchises their chains you do still bit a of there. is we with

year, of So the our hotels fiscal with live we the solutions expect is year. last which next quarter going to beginning of calendar really towards accelerate our

forward. going expect keep to that So we

of other making are our cruises in already are reasonably signed we resorts making are hotel with. up We a good good that of vertical chains HRC with progress that size significant are And number couple opportunities hotel we progress with. the there and and

a there of coming forward lot So our terms of is promise the will as during quarters. vertical revenue in a drive how growth HRC

Allen Klee

expanding you are comments thinking on Any about Okay. internationally? sales how

Ramesh Srinivasan

Yes.

represents a international along for us. major cruise internationally, with vertical, So revenue our hotel, area growth resorts,

We development there. locally, can the our because And XXX are in help market center the a fact employees you significant positioned a better Asia, a more pretty presence have has lot, because India about the we well are. you helps off

opportunities So our and to going we Asia, much Asia, revenue are compared Europe, we the There in a couple are growth. we will growth and I are in staff grow opportunities. that think, with fuel Europe Europe. grow positioned is working growth will we are to along on of with well help to the along closer we sales

disciplined growth as effort. where we next with Latin the get be have America couple that an get started, will is concerned, quarters. we area to hope is And We during to of where started that far as

Allen Klee

the And how Okay. them that how happening? Any comment the on rollout rGuest various you the – see progress on of solutions?

Ramesh Srinivasan

Yes.

So product rGuest as well Stay in I progress, ahead. as especially is Buy couple limited limited is service install well. the with well. services expand And there other are going say, working is of planning hotels. now to And hotel to our well, we opportunities major major will is rGuest the big is one as Buy concerned, food customers. with making good service a far farthest management very customer

far with more as of concerned. Stay few are we Now the as is – a hotels as couple ready rGuest more need before quarters we full-service

Stay say Stay, is And common I making module. you farthest good progress limited hotels. as I a in ahead. is is So would well the Buy doing told services like

Allen Klee

how center, of Indian about in seeing you're and IT do the productivity you the feel now? that terms Okay, of out

Ramesh Srinivasan

much like say captive had creating center, managing And a managing development there increase been already for months continue – center, us. it's we you have We've exponentially remarkable will terms this go impact forward. of a expected. than and they've now in I and how only better quite experiences is development know, made about as plus that and with India couple four would I previous of going Yes, like to

Allen Klee

anything then, heard think I company little And is that Okay. the here you is different software makes company? past would the and it like some enterprise about, think think companies. can you I maybe margins you terms have business there of you in component here, a hardware if the know about to something I or don't – the that you run similar - about in large things could the about like there But in model say be how how the longer-term different? long or I've Could think – define anything

Anthony Pritchett

continue can what we where don't way, notwithstanding expect to we see grow we revenue XX% lower in there guidance. can to is get our we've that, current year Allen, point said what Yes. a and anything to XX%. We standing the is that

far be earnings those have to going go, to and that bottom-line XX% we the profitable to like based we XX% XX% some And really feel are revenue and able on somewhere to our software SaaS numbers bottomXline similar but being and between metric. as adjusted to companies, can revenue. can and the on XX% enterprise the from of companies. earn other earnings software our that – we companies indication we've reasonable road, margin we in are operations an us, rate on other We growth given And as should get that be bumps

the plenty modeling that of there profitable is revenue are what we're ourselves are in that's after. growing there and them So and out market

Operator

our the Instructions] question from & [Operator Phil of And line comes Bernard Eilers you. Thank from Krejcik. next

is open. line Your

Phil Bernard

Hi you guys. Thanks me? for I hear call. am can hearing, not taking my

Ramesh Srinivasan

you. Nice can We talk hear Phil. to you. to Yes,

Phil Bernard

we and What driving and terms looks to what in pretty product that what segment? of like revenues grow recurring continues It There well go. of is sequentially. customer year-over-year most

Ramesh Srinivasan

all recurring mean, And our could fall all that. drive our revenue. I All our software sales Yes, buckets. in products, involves they products two

and normally and a pay recurring which more they involves revenue. solutions, growing, SaaS the on-premise solutions maintenance where a SaaS a prefer prefer and more customers us customers license of customers Some lot

growth to our base. So the expand more both license revenue adding are buckets, recurring customer our will maintenance Every both license grow quarter, to we and revenue and continue we to revenue SaaS our and revenue, to customers and SaaS continue the maintenance recurring revenue. list those contributes customers that

Phil Bernard

okay. Okay,

there not the stronger hotels restaurants customer than as one pushing in So casino that's segment or is others? further or or

Ramesh Srinivasan

to growth, revenue growth more, we we next, expect Food A we from come Hotel, the Services to expect to recurring Resorts, as continue years, carry Cruise the all segments growth well. revenue In revenue it the are lot of Gaming and come revenue one of from we general, going And well. going as our the during from international describing, growth a call is as and two in to that innovate like more a was competent is our growth our segment. lot Tony

we are we growth because the So, every revenue. contributes a sale to company, make software of recurring

Phil Bernard

it. it. And... Got Got

Ramesh Srinivasan

we the solutions. our SaaS-based world faster expect is the because rate And that's grow cloud going towards SaaS and towards where recurring more revenue a to -- at

Phil Bernard

been have with And then, you guys time. sure. your very gracious Sure,

maintenance So, with looks a the sequentially within within forward? vertical bit margins one. It sequentially little I'll going look were you up How at came it leave like that and they do support subscription, back though year-over-year. margins business this

Anthony Pritchett

due and much, things the the not point when vary or of customers quarter-to-quarter have a time – capacity as vary a it's really we when balance sheet Phil. should they certain There deferred revenue and much to for pretty a GAAP Yes, certain We that's live grow, have That accounting we go scalable is They our reasons. entries of timing on incur grow because lot in to various over don't revenue. margin datacenters. line. as two cost

As we well the from pretty the team a more supports scalable team and this our as grows revenue that customers, and support calls point. that's SaaS customers have at phone installed

So, you over kind that should up see creep time. margin of

Phil Bernard

Got Thank guys. That’s me it. Great. for you. it

Anthony Pritchett

Thanks, Phil.

Ramesh Srinivasan

Thank you, Phil.

Operator

closing session. Thank CEO for Ramesh, back you. I Mr. today's the to concludes over turn This remarks. President now Q&A like call and would to

Ramesh Srinivasan

And all our in Danielle. you, us you with you placed to us We confidence Thank all look report you appreciate results. Thank you. with fiscal forward we again when thank and always, it. this your the We have speaking XXXX quarter investments. joining afternoon third for sincerely as

Operator

program participating does for today's Everyone, you in great thank gentlemen, you have conference. and day. all and conclude This Ladies disconnect. a may the

Agilysys (AGYS) 5 Nov 172018 Q2 Earnings call transcript