Earnings call transcript Q3 2023

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Operator

Good day, ladies and gentlemen, and welcome to the Agilysys Fiscal 2023 Third Quarter Conference Call.

As a reminder, today's conference may be recorded.

I would now like to turn the conference over to Jessica Hennessy, Senior Director of Corporate Strategy and Investor Relations at Agilysys.

You may begin.

Jessica Hennessy

Thank you, Josh, and good afternoon everybody. the XXXX joining conference for you Agilysys third-quarter fiscal call. Thank

language. a get let management's Safe-Harbor started will minute me in the so, We doing just with before comments. read But

be Some statements financial predictive made statements regarding forward-looking Safe Securities our the the guidance. protections within today's of Litigation made call Reform as and intended Act to on are be of Private Harbor will XXXX, including

risks statements and statements forward-looking that Although, the are based reasonable to subject assumptions, that to results company cause are such uncertainties on could its materially. believes differ

development cause Important factors of PMS our results that our continue execute from materially be and these can factors system product our economic statements could business, to effects other actual the deliverables growth, Marriott. to ability to to profitable vary before include our rolled-out on forward-looking ability global required

Securities and Our risks filed Form and ability XX-Q the and reports set forth the Exchange PMS to reports on expand the company's XX-K and otherwise, other Commission. market-share in within

As references to time or fiscal refer made this company financial a entirely software reminder, during the solutions only the Agilysys after XXXX. hospitality-focused period in any to business call an to year levels transformation record

to Srinivasan, call Agilysys. turn now to Mr. over Ramesh I'd that, please go With President like of CEO and the Ramesh, ahead.

Ramesh Srinivasan

evening. Thank XXXX third the Good to you, quarter Jess. fiscal Welcome earnings call.

is Joining Jess and our Wood, Dave headquarters at the CFO. call Atlanta me on our today

announced sales Marriott We that the a today. major discussed, numbers have value we being benefit this do and me will is our discussing the of and not Let announcement, details. note PMS signed. and success that backlog part measure sales backlog a agreements of Please bit of ago, in Marriott numbers weeks sales the commentary. I later to selection and from being any come not discussed before win. based any All first cover annual the sales sales selling few other recent on that contract revenue

the about six that turning quarter. so We great fiscal reported our team mentioned remained time. started sales even quarters, That September since better. what was good was five best last call, quarter had after a since of sales five to current through consecutive earnings of of the Well, to December, time of last around sales reported positive January we years the has company August. this we July That's sales month the our QX trends XXXX trend ago. was the During QX picked-up significantly XXXX consistent even to solid October QX beginning management last fiscal far. that

the sales January more coming sales standpoint. And verticals short good a pre-pandemic remaining, month well normally levels. better December, with The despite by is a month sales that operating high a success one all out-of-the EMEA peak From and week for of holiday normally is our previous managed of which sales APAC gaming food services resorts, us. exceptionally and being casinos, at were slowest And levels. already verticals our Even best year than January is of fair distance. this selling even the season.

purchase requests be yet. results Asia, good prospective due of activities levels, to product greatly at Mainly In and the to number to sales not have demo meetings delayed customer translated good such positive but technology continue decision-making.

and continue but travel software need are Many upcoming solution for looking surge future, today the to sets and to be purchase hesitant decisions. current they for expected various prospective and in Asia, customers are the finalize preparing at

Asia three during soon. started the come steam years the Given will business with our pandemic in Asia, since last up think the seriously way, our solutions business long in software affecting we we have pick levels

This provider Industry-focused long. solutions, world-class required. far fallen recent software significant on-premise view, innovation which been able the is industry a also short with our when has hospitality can and in a who industry work integrated respect has for guest any invest product seen too have to long-time. lacked expectations cloud-native to We state-of-the-art of end-to-end of willing operator underserved and macroeconomic has solutions In not negative the effects environment. technology for software

space across of wherein the On-top get of integrated of to that also they self-service technology well. mobile escalating service technology-enabled seeing are areas increasingly who many channels, hospitality. across their the They as and piece of the times. systems, guests enter facing from now the operators are in this from are benefits the hospitality pressure expect They modern don't the outside data, enjoying including and need devices multiple all same benefits same

well, better both for above faced are guests. to experiences their properties. and their for it integrated It loyalty to easy-to-use. guests experiences, within for guest and and offered now staff, increasing make are and serve superior great operators for staff across now this, guest requires a Creating integrated also all Over creating need hospitality is with easier from amenities staff systems their their culture get about service which and solutions, the returns, can technology operators the all

and their them headwinds. breadth much offer relevant and integrated operate those the and get demos of product and the how they products now help to should today better efficiently, hospitality discuss to and Once future. seem customers pleasantly surprised industry solutions and end-to-end urgent with our viewpoint, vision product many can overcome software and see imperative our what more are From us, future needs in in guests plans any the serve macroeconomic depth now by and have we

continue we in current addressable operate our enormous to an to Further, market total relative size.

the what to remain do news benefits selling say in success headlines yards, done around each August of have solutions, entirely on continue R&D been our set we focus keeping required have while Now state-of-the-art seeing one think investments that we Journal industry, well-positioned are end-to-end and our We no year. Wall have we we hard optimistic made last an expectations Street and matter the well, day. to to create the starting the cautiously

was new XX, X-X, we XX% the QX higher, X-X. XX%, and added XXXX, the to of sales was During that we've seen XX quarter. quarter QX more of were sequentially preceding customer which XX which highest per the than size than is deal December, subscription-based. October -- more The fiscal than agreement We fully X-X, customers added XX, was during new

reducing buy ago, lower of deployment immediate who opportunity Compared of of them with years more number complexity. us sign-up the same partner from to new now, needs. with interfaces us lot future could the to they are vendor have couple license customers they and vendors their thereby to using and work potentially the of from a cost have this many products And which a meet more and

in years, respect total annual with contract customers. best six signed our was new agreements to of value This sales quarter with

XXX but We XX any parent either bigger current customers the are also which of not levels. products Of the customers customers. the parent the our have company our properties levels not XX%, across subscription of already more was pace to of among improving, and properties, than new before, Business and back during but added partially technology pre-pandemic or quarter multi-property fully did were still customers based. new new properties added current new investments

surpassing sum for sites sales, of XX.X%, in competitive customers, instances about respect best XXX, properties total which least QX total least best new was products. sites for which is of products by to quarter sales were customer product is X-X-X, annual to terms. X-X% additional competitive X%. new a a involved the also during of our had new to quarter to one This of wins, deal XXX XX win use. at the quarter in current respect already new of far. sales at nearly and we selling product of products that our the seen of by value highest overall sales total With average there next other of size a one have instances contract XX currently previous The and so sold With These current customers value in was new

have runway only There We customer of improved per property but growth PMS of to long still wins products quarter. available during our us the seven base installed were product it's property The customer at core within existing system, a now. about two additional continue number new the quarter, sales. during management through to

increasing the of shortlist, RFP our during We've years, in And product been processes. RFPs credible past true a We guest the an PMS-RFP most are POS, in presence with a end-to-end point-of-sale, not most that's presence now journey in in but solid presence chances had included PMS our PMS PMS space. increase winning Once projects. exponentially. presentations,

available software compared will there also In addition, on system more are recent such help credible of modules, products core property has newer software about additional customers additional modules us and during increased months. state-of-the-art modules to POS. PMS sell management sales number more because times PMS for the Increasing PMS four the reference

together in sales, QX to success fiscal in subscription to October December, has services quarter categories, The drove recurring sales revenue and software was and been general, to and highest-ever of quarter quarter our six-Month period back sales combined sales backlog record subscription services of taken best services fiscal respect this across sales sales the software product, level high sales. and QX also for our to With product QX of levels. XXXX software XXXX, particular.

revenue, quick announcement. and financial to the note recent during the a quarter performance selection Marriott Before PMS moving on

PMS. for our a select-service global premium the We participation U.S. property and for properties. in and release. Marriott's press Across mentioned of systems a on that luxury based management selected As RFP is were majority Canada in

rooms PMS expect, went the part through and across these analysis scrutiny being many have in use culture, possible and in the people, other strength majority level proprietary and Marriott's aspects, been organizational financial would we systems, which before for select as service and the of processes, premium implementation replacing, most highest a luxury one across other the and plus support, XXX,XXX As of for product, selected in properties the for years. U.S. at Canada, providers all several properties

The most current of We but the of the to work think execute and was will and one also overall years features and next other and our operators offering, needs and our a general product one needs. future a include commentary not well mix just so biggest a with half selection innovative ability during specific hospitality vision. on specific of this and their PMS of effort the state integration development Marriott's industry or

our PMS our adds we been have enormous these advancements the in reporting transformational This to and to player strengths making related point-of-sale, PMS and and to for area. compelling traditional the what us investments in credibility in R&D space you to an us increased years modules, POS about is increasingly add immense win all a

all expand As months PMS along we or in have with the during and mentioned rooms XXX,XXX XX are so should to this next that well to about success there the products rooms our a we If involved expect years. Agilysys execute others achieve, to Marriott three the other approximately PMS expansion project we of think probability, next is number currently. before, current the PMS products times all connected to connected during three market-share size our high

the before with in cannot be is of win get substantial the this teams lot by that possible. will and Marriott right. of PMS revenue working approximately that a are can us. any during from lot Everyone I at have real development there other In system subscription and X.X third-party on fact, and go there and to required be a done summary, before get get the diligence rolled-out other the is well, overemphasize it level is done, the And topic, partners involved to for can on of translated that planned properties, services greatest product years, focused the this involved our next selection execution Marriott by to will project

goes for project XXXX. fiscal drive sometime to all us beginning major growth revenue we during this Assuming expect well, subscription

this expand to do infrastructure customer revenue levels could help quarters, short-term. next revenue few percentage project recognize expect desk, during extent could phase support ahead three reduce revenue major profitability two monitoring the of that's of we systems cloud next tools, attributable investment by timeline, happen internal increased information subscription our possible operations, the our during to the the other support it revenue by points required to or which to percentage of and growth security, services engineering While directly software increases is the EBITDA

year profitability. QX a sequentially, revenue prior XXXX QX. and comparable Fiscal was and fourth XX.X% than quarters onto than consecutive record $XX.X higher revenue Now record million. revenue X.X% quarter. The higher, the

at guidance We of the full-year on -- to year full-fiscal our beginning revenue year. provided track are the exceed

of revenue, combined, revenue We between million product million. comparable million, higher full annual XX% that and higher $XXX now end year X.X% XXXX One-time compared than prior second-quarter up services $XX.X fiscal the year $XX.X the million, preceding $XXX fiscal XXXX. expect period to and and to sequentially was is

for the the XX.X% the record for services comparable now $XX.X XXXX million, mark levels added increase. X.X%, quarters, revenue $XX.X crossed grew five is revenue during to optimistic and revenue and about past $X time. sequentially future been that $X QX, Services and to close of the cautiously was couple first had a recurring Services to revenue million quarter, QX, levels. margin higher at than revenue making consecutive Fiscal compared million us Overall, record higher revenue year-over-year sales recurring booking driven quarter-over-quarter prior-year than by more quarter. sequentially We've million quarters. XX% subscription recurring or

Subscription and add-on the ground-up year with of driving total new properties. years new customers most These previous core PMS, compared during quarter fiscal few becoming revenue modules, deal subscription modules, constituted inventory sizes additional during and past were revenue full experience, additional better systems X-X, this sales are the POS, internally XX%, generated and integrated are XX% to from enhanced existing XXXX. software software the innovative developed expanding which with from of customers procurement which increasingly XX%

levels, Based from where next We've feels run-rates now. on smart reach it getting reaching XXX million are XXXX were fiscal overall five now stage revenue million ago years worked and respectively. XXX only ways in to on recurring and we started the good and hard and QX are many revenue this annual phase total to six numbers growth the that

of we our for EBITDA XX%, and bit Like margin remain the is across cloud internal I in-line There as while support mentioned will quarters remain before, year compression resources annual few various by than guidance a better of confident increased next possibility XXXX a than information we XX%, that provided. over revenue with X-X, systems, areas. infrastructure better full-fiscal security,

for revenue cloud other future well-prepared major and ourselves growth. subscription Getting

does EBITDA Our by or few previously may delayed a quarters. towards should compression progress than levels Such X% And adjusted more happen. increased it revenue. not get not even a planned X% be happen margin by EBITDA may could if to

a in XXs, revenue delay the the than Though of EBITDA there reality to be that of ability few adjusted get could greater far kind before. profitability a our into certainty percentage level quarters of as a current a level makes

probably medium-term, levels far So higher the significantly yes of but delayed profitability in higher. probability yes,

profitability and around fiscal end will We our call XXXX during to earnings provide fiscal fiscal May. revenue XXXX guidance and mid beginning XXXX-year late

the hand call Dave. that, over With to let me Dave?

Dave Wood

Ramesh. Thank you,

product quarterly fiscal period. $XX.X income from our professional revenue prior increased year of increase at million net compared XXXX over of beginning with lines XX% a quarter. up revenue, look comparable a with in results, up Taking subscription up three-product $XX.X to prior-year up financial revenue also All prior over revenue year total with XX.X% was and XX%, the services periods statement, third-quarter XX.X% a the was record the million year prior Recurring the XX.X% revenue the period.

year of FY The million decreased is sequentially slightly last subscription Sales by revenue level consisting increased another over of QX, backlog QX record professional XX% momentum 'XX. QX levels. $XX.X XXXX highest record increased product Professional up including well quarter. the sales sales north over but to record over services $X.X continued of million into six and our fiscal sales at quarter, sequentially services to by in 'XX to for with single XX% quarter with and levels. product at backlog and compared and a years, XX% FY Onetime revenue prior

to revenue prior into drove represented revenue revenue Increased XX.X% quarter coming compared change to in the revenue recurring professional the fiscal revenue quarter Total third XXXX. net year. of XX.X% of product services third the the mix the of net and fiscal for in business implementations, fiscal total back revenue, compared total

the grew XX.X% during continued are happy our XXXX. subscription We of fiscal revenue growth, with third-quarter which also

total XX% contributor and revenue of comprised be continue in revenue Add-on the the close XX.X% revenue. XX.X% compared to about revenue software to XXXX XXXX. of subscription XX% to fiscal quarterly of total Subscription recurring meaningful year quarter recurring compared subscription prior of in fiscal on year QX a third-quarter revenue to comparative to comprised modules

of significant room our the base. still mentioned, modules levels software growth penetration customer previously add-on within has As for existing

compared million income to the to the primarily was professional XX.X% the in revenue in services the $XX.X product fiscal into third profit business, XXXX. margin back to shift mix. Gross a of statement. The third-quarter million gross margin profit XX.X% fiscal in XXXX. decreased down of compared due was decrease $XX.X to coming profit Gross quarter and Moving causing revenue

three XX.X% in-line and stock-based product the and main to administrative year 'XX compensation, revenue -- in expense sales of quarter the Combined, plan. XX.X% operating operating general excluding the prior line-item with and marketing compared was items, of and our line expenses, FY revenue development,

to XX.X% administrative investments. of increased to revenue XX% while XX.X% revenue as and Product compared X.X% from to a and development FY of reduced XX.X% marketing Stock-based have reduced sales in QX from of XX.X% from in QX our percentage General compensation FY of revenue revenue of X.X% is of has recent revenue. our due revenue expenses revenue, 'XX to 'XX. X.X% of to has

of per Operating to of $X.X all million, diluted share, year for gain favorably share per gain the prior $X.X compared million, net respectively. the million third-quarter $X.XX of income $X.X third-quarter and $X.XX million, and income $X.X of diluted

$X.X income per compared non-cash EBITDA in-line 'XX in income favorably and million will was the adjusted earnings $X.X EBITDA was the million adjusted FY per year our to of quarter. $X.XX to share with XX.X% Fiscal in revenue adjusted compared for prior year-ago charges and adjusted of and net $X.X third-quarter. share of XXXX, million QX net third-quarter million plans. Adjusted diluted $X.X earnings nonrecurring of $X.XX certain diluted normalizing of and

to XXst, generated XXXX $X.X December cash XXst, fiscal Moving marketable in quarter prior and million Free-cash quarter. was as flow-in the in statements. $XXX.X cash sheet was third compared balance the million flow $XX.X million quarter. to and We million March during to $X.X compared million on year the of $XX securities the XXXX. Cash

increase mostly from Las expense in dollars, free-cash build-out. operating into CapEx office new increase in that The new continue QX. the driven the our is Vegas year cash million activities, flow from in capital several partially will related by change the fiscal expenditures office by of the to prior offset the build-out

trending are million stated third-quarter of million. with revenue $XXX our to we above are results financial closing, $XXX guidance and In pleased our

revenue slightly million EBITDA expect XXXX. us in the revenue $XXX and We XX% above QX of our to million was range the $XXX results for full-fiscal put to adjusted year for

call-back will Ramesh. With over turn I that, now to the

Ramesh Srinivasan

Dave. Thank you,

breakthrough In does during have inflection we point That towards reality been five-plus summary, second point building inflection becoming past like the years. the a during the breakthrough last started year. of half feel

We hear We do run Agilysys to remain self-confidence reasons a future. Among have Despite feel we to naturally and reasons about. optimism are sobering -- our to our about of all despite we cautious paranoia and cautious with with healthy the bullish read conservative nature, the our following. with have macroeconomic and optimism decision-making. the dose the manage continue now our all bullish outlook for headlines cautious many

a hospitality is environment the operating long-time addressable hungry current regardless is we has industry relative for we challenging in of technology think solutions are sites. Two, such needs underserved which a One, for our huge how gets. total to with macroeconomic respect to market the been clearly its and

good success chains to Those verticals improvement signs pace not current hotel food a peak and to of is are the despite reality providers pre-pandemic few sales being verticals back now. of also service show like selling beginning levels. Asia our Three, managed record

Four, multiple path growth created the for we've future.

continues to family a quarters of first to expansion the properties add fiscal to first about recent sales the Our customers quarters XX%, the of and customer each new marketing XXXX Operating stream and three three of by of fiscal compared attributable quarter. expenses sales new Agilysys during to XXXX. and increased steady marketing

area bag election-related Corporation modules PMS property, average more XX about only big high-value current opportunities a with customers of software The our growth major couple possible hospitality years state-of-the-art selling now, for created us. software the to products recent another gives customer more world's partnership and cloud-native revenue us biggest in With of customers for which growth subscription presence in current each now. two from our create in remains modules than such

with the management PMS our first deal or driven possibility Five, PMS only is software of by systems, property add-on And high in wins availability these journey its inning of second the come models. many now. sizes,

opportunities sizes. of revenue Six, our overall levels ensure recurring areas us. research backlog of to the the are good are we back we strength process now Seven, take advantage across growth front product in services and record in adding of again various to outsized

at innovation. given cloud-native better been few competitive isolated for it become has serious worst us. same at solutions, of best end-to-end past and development fairly we has anything, how the up. investments Eight, possibly Seems remain our investments software years like the for environment hospitality-focused cost-effective remains the as in are current a R&D efforts our underestimated, example If

possible And the nine, with debt solid open helps significant balance no door growth appropriate a keep and relevant other sheet for options.

across So we kind all that one with growth current just software great together, years. state-of-the the of revenue terms multiple we visibility is day overall ask across growth business unit, all Despite business not more. brings the could future comes challenges disciplined have, unit. future not and a transformation remain enterprise this to the prospects, pressure, for all in every It in anything of

to the partnerships on on foundation and forward a customer great focused will the members compelling team remain across products globe customer all service. based solid of around customers world-class drive We business

open With call questions, let the up that, for me Josh?

Operator

[Operator VanVliet Instructions] Matt BTIG. Our first with comes question from

You may proceed.

Matthew VanVliet

there. wonder question. components if clarifying and for expected. you a it presumably And potentially the should much the project the a more build-out of of all headcount along guess much A that in taking Marriott the more maybe longer-term of the way? be sort bit gave as component? is from color of job that thanks the other sort services to probably Nice little you how comments or deliver leveraged R&D related near-term dive How potential Hi, just the on structural and afternoon, first and for I could appreciate on margin headwinds. quarter. more question, deal some good I couple

Ramesh Srinivasan

Hi, Matt.

three think deal in of major Matt, blocks. the of So sort Marriott

The a high-speed, the first And lot additional stronger will is conversion work services block once live. make product that or of which at XX the a so a the first of lot preparing of over property the involves goes is which work, work and next that needs. will months Marriott-specific also within development lot for happen

So the should block Meaning of it of and a first paid development that for us. make work work for of be us. services that the for work services should profitable gets revenue, part profitable

there that So block no margin compression with of work.

The second block and of course, the live. of And the grows project There, after revenue two with increase the the or is call subscription it that. when will Phase significantly. start going property rapidly along company

that part profitable. So also is

SaaS in company get three help for in systems, software preparing done monitoring customer is much lot infrastructure buildup whole operating has internal company. block So support, tools. to cloud bigger in of being a that a in There's the desk,

margin we So could be XX just next much months compressing. That higher-level are so. a work or in the going to now

of to there quarters that's rest happen some of but EBITDA compression, cloud growth much not that that going are happen buildups, other provide the to get nothing and more for larger-scale may warning we prepared enough six well during company. revenue that infrastructure that, two margin due SaaS compression, you, the revenue, next to as a X% could the to be be we to should as than Now margin the and, X% by say just provision

blocks. three of it think as So

development an more that's be That's work paid, services or of issue. block not less profitable. so will first The

go-live work starts, subscription revenue the will phase is substantially. of once grow second The up

So no issues there.

have before getting it starts cloud larger-scale is work the starts of company be block through. done clicking may coming be third the revenue -- a earlier, to costs to work company, that The incurred earlier far

or X% So that's a compression. what cause X% could margin

Matthew VanVliet

look you And of you couple rooms next do the gain Agilysys helpful. system from rooms what you're then today further have I expect to network you -- much guess, to maybe moving over and their at the when some quarters? at that XXX,XXX how versus plus exclude looking those of very would Okay, across what visibility

Ramesh Srinivasan

a we and But of properties don't important selected this. for in it's Matt, a ahead premium far select-service get we in This think luxury majority a skis U.S. global were product. Canada. the selecting I Yes, too for of process was our in PMS

what So the rooms. that's we of a selected were majority XXX,XXX-plus for

So want focus has and any for. been about as that's have we keep focus executed that. and on make project That's heads to sure selected our our been focused we perfectly and as where down, we keep what software is our execute

these big every day Now, happen of partnerships don't kinds customer Matt.

You better than know that do. I

we on to So currently are will on selected deliver go. But where the for. well going have customer all see focus as the us, we given that on partnerships, we delivering our possible, is been like steps next to focus and as task on well what

Matthew VanVliet

reliant of that space impacts travel areas it's is negative if the macro maybe pent-up gaming finally of and the continued then, still Okay, the strength, especially the And business I some the system swing business momentum -- demand highlighted impacting as in the that's maybe its working is of travel, the could just of where back through in do understood. recovery I this way guess on way on. What terms of or this sort the of is rest you really resort guess -- and where you further? like kind feel not

Ramesh Srinivasan

and looking to in to travel solutions us product story our Yes, that. it pandemic-related a larger is there. more we with demos back. as opinion, the more always temporary Not been Matt coming is it's more so in technology and much pent-up fact pent-up way customers a coming the or back do This the not react the we a integrated see how of industry needed has from comes from demand demand kind related this just that is to underserved

back invested center. we think, gap. in in is much happier this That's did their have and that lot companies, the We comes development stay, larger of goes a it's or They of where have this created of I we saw just the keep demand all demand think and integrated travel that lot for a That whether Then, and the R&D, the so saw, that. we offshore decades is experience. kind to forward the whether travel need which that, to sort because much desperately don't provide not long-term. little tools an is here a that of on for innovation it pent-up ball guest to why I is industry, of down bit much and carried dominated that and who the goes think vendors related staff regardless is that up space of down, The question. we better gap pent-up

relative addressable our size, addressable also, to And market. huge Matt, total it's our it's Relative big size, a a to market. total

So is that seeing, these total are is what that of for addressable is part market huge not There parts us. the technology that now where big considered, enough decisions seeing the we are for that It's part the are we could we seeing being for of market probably are of but the a not solutions. be us. hungry market

we hospitality our the seeing can created, opportunities, software solutions, cater demand to improved coming products, where driven now So We like we that's is increasing to-end-to-end modules. are have the by XX fact pent-up we mostly from. have XX

Matthew VanVliet

Thank great. All you. right,

Operator

Thank moment questions. for you. One

question Craig-Hallum. comes next Our with from George Sutton

proceed. may You

George Sutton

which believe another or number you the gave number you addition PMS a you, relative in to room. addition, our that XXX,XXX rooms currently that of Marriott We very triple, around will you assume math to compelling the touch. suggests could you Thank touch size Ramesh, outlook would Marriott by

Marriott, there terms the that those are with to? talking outside we conscious in targets all the are have proprietary that of pretty are the to particular anything of you're I talk context, criticized could that you other and hotels been in of as of pipeline heavily systems the large capabilities, having with kinds you has that with are fact operators if changed discussions wondered So relative about

Ramesh Srinivasan

Hi George.

products. that areas considering now. to lot XXX,XXX. number rooms, in of expect now is are to a strongly PMS so we our portion So gaming good but you three And years in be of traditional we on portion win PMS the resorts, deals or said strength probably based the PMS them seriously there A considered of that, beginning like of also many that of is triple deal current whole our being Marriott good casinos, we expect and like and our next are to a or have

many of Those they been using remember, they were our is also is products with, a other choose can they moving it PMS are happen to conversions world-class And whether more from who own beginning to there products, for also products that old products our current that old old long-time. customers have are the PMS or now from. see

own we RFP Now technology been the probability concerned, underserved news is the a probability when have there those. far ago, we are a not will will there now good be there very-high operators up long-time and was large for with high is a I years as processes, as included. included and come Couple they other their for think in as of be

operators come as when So be replacements, cycle It unlikely large up next be that. those in that would and with to there, we now not very right. the included we expect a of software have player

quite take based to PMS now That the of next on we Those three now, running will high. is years of not operator and included connected calculation another possibility only fancy any impressive in are. to our are account this number rooms similar largely calculation Marriott. tripling how those working additions our does on Marriott we we Because the the And is opportunity. products the state-of-the But of a course be large deals chance the of of demos are RFP. huge into plus once

George Sutton

to to in curious we wanted and Block you're base and larger capability basis? your be customers particular referred to effectively we X I to you into are a Understand. and serve hone to saying kind much need build to expense on organization, the an that and spend gives cross-sell also modules meet you other I'm Marriott it with what in to that. spend other specifically of this based ability, going

Ramesh Srinivasan

X is far Yes, so we for about, SaaS spend being than that today. make ready bigger us cloud to company are a we this talked Block

tools, operating security, going and of terminal of subscription-driven is lot of is that number all a rooms CapEx combination revenue. infrastructure-level takes monitoring increase is that the department. going POS That of our systems connected taking SaaS So expenses. a our requires That connected that those beefing on system, them to as to support. cloud example. business it for endpoints be the and subscription to Cloud our to up tools make to in a operation towards the be an going internal number to most sure with enormous Information of PMS,

you this and to It To rooms other only are also of level take for at Those transformation business also expenses, the I'm the and going prepares rest kind jump-in of a cloud finally live of Marriott operators entirely cloud company. order big company the hundreds to not us to company our looking large that talking magnitude of like for software becoming us the mentioned. an a thousands that prepares SaaS true about possibly requires the of infrastructure. of SaaS-based go an for different

second partnership, were and of we Like nothing selected service to your it's select saying, luxury, part that Canada premium, and more got has is selling the a our George that. on big for a in it's For do question, U.S. with are we to huge focus partnership. Marriott. And entire

So an be the well culture working seems two to together. far excellent companies of fit there

concern focus have future, no now. is what selected that the not to Our that our what executing is in idea we leads and have on for been we well,

George Sutton

on All right. Congrats execution. the

Ramesh Srinivasan

Josh. Thank you,

Operator

Thank you. for One moment questions.

Chokshi with next question Our from comes Northland. Nehal

may proceed. You

Nehal Chokshi

this validation the Marriott, thank halo that Yes, deal. on any the already effect quarter you strong incredible. are to That's congrats from and a should you, Marriott With respect bring? and one seeing

Ramesh Srinivasan

you, in fact because to now, Yes, in Nehal. have we now possibly mean election. question, simple as included that select have those and are the getting we been PMS may PMS-RFPs that asked you world's transformational, not when be we a PMS before nothing hospitality RFPs announcement, do the but the them in not the innovative space taken when I well, we seriously we can how include most operators largest the included

before. are inquiries of more getting it than are those we that kinds was So

Nehal Chokshi

to here. pipeline how increase materially, going your your opening that's impact spend, presumably, does to, OpEx going because So that

increase had Q-over-Q on quarter, only up was Q-over-Q. X% and You marketing December albeit, your sales OpEx XX% here your the in

think from So just how that should perspective then? that we about

Dave Wood

Nehal. sales of Hey don't spend. in and a increase expect marketing We our much

revenue it is a the increased stay-in XX% the we'll to and marketing revenue. is halo in XX% the don't about of change as to so the way will number going percentage the I XX% keep bookings think looking absolute businesses, the think mean, effect If obviously, to mean, range. that. go XX%. dollars going through at to the up, I up, you're we'll We sales the but

increase major there. no So

Nehal Chokshi

by demand that on hiring worry table then? impressively you be might leaving not you the more Do

Dave Wood

to year, we XX%, level X% Yes, thing capacity mean. I mind at and I to this XX% more to than of just Good. No, team, point. feel in expansion up keep about. have that one mean, where lot in sales is marketing the going from kind we incremental any with this capacity talked hit we sales we haven't a of still necessary our hiring of

Jessica Hennessy

are the like. contributing very going But we The that expand we sales Because now. but do of are range we will don't percentage table, and that, Nehal, leaving need much demand for think that And stay-in it continue -- how if if clear and is I we think are expand and it Nehal. watching, that, seems to right. to to the we marketing, and need That's that capacity current we teams we'll sales not to a expand it's to as hesitate level revenue, how Nehal. on much constantly

Nehal Chokshi

modules not? if the contract does why Marriott the And great. not Okay, add-on and include

Jessica Hennessy

in was. This And And already Nehal PMS all we got RFP, for for therefore PMS. plan. our it. that that's selected process was set for product selected of the That's described. a this was properties And RFP, that global that RFP we

Nehal Chokshi

a and a opportunity opportunity does would coming be included it per-property basis your exist? would through corporate or Got it, that what add-on is the modules mandate to get it on be

Ramesh Srinivasan

no I question, know well it. We way PMS, and we all I no have product Nehal. That's particular like extremely participated moment. said, for at this we of selection did that it a the idea, process was have mean, particular answering with we a in

Nehal Chokshi

of when some to on for no then the deal properties won and systems that properties not think guys in-house built for you or Marriott and that portion the they back come a up for -- in system Okay on on as does an presumably the with XXXX, well. are the proprietary renewal I are third-party micros, portion of a that build therefore Marriott RFP

Ramesh Srinivasan

and we're of moment. select thousands that's Nehal, And all know know hundreds We across for Canada. on don't We right. luxury, of again, the at rooms don't selected we U.S. premium, in focused were and service

Nehal Chokshi

again. well, congratulations right, all great, Okay,

Ramesh Srinivasan

you, Nehal. Thank it. Appreciate

Operator

would to And at over Ramesh you. showing remarks. Thank to call-back not further turn closing I any any like this time. I'm for questions now the

Ramesh Srinivasan

Thank you, in Josh. interest Thank you continued progress. all our your for

and guidance Until be to May will from months call four happy. in healthy, results, middle Thank now then earnings full-fiscal also and and when around year next please XXXX reporting we you. the safe, Our XXXX. end provide will of for about fiscal be QX be

Operator

Thank conference for today's concludes you This you. call. participating. Thank

disconnect. now may You

Agilysys (AGYS) 24 Jan 232023 Q3 Earnings call transcript