Hospitality software provider Agilysys (NASDAQ:AGYS) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 16.1% year on year to $79.3 million. The company’s full-year revenue guidance of $316.5 million at the midpoint came in 1.8% above analysts’ estimates. Its non-GAAP profit of $0.40 per share was 4.3% above analysts’ consensus estimates.
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Agilysys (AGYS) Q3 CY2025 Highlights:
- Revenue: $79.3 million vs analyst estimates of $76.94 million (16.1% year-on-year growth, 3.1% beat)
- Adjusted EPS: $0.40 vs analyst estimates of $0.38 (4.3% beat)
- Adjusted EBITDA: $16.36 million vs analyst estimates of $14.94 million (20.6% margin, 9.5% beat)
- The company lifted its revenue guidance for the full year to $316.5 million at the midpoint from $310 million, a 2.1% increase
- Operating Margin: 17.8%, up from 6% in the same quarter last year
- Free Cash Flow was $15 million, up from -$4.98 million in the previous quarter
- Market Capitalization: $3.25 billion
Company Overview
With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ:AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Agilysys grew its sales at a 15.5% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the software sector, which enjoys a number of secular tailwinds.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Agilysys’s annualized revenue growth of 17.4% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, Agilysys reported year-on-year revenue growth of 16.1%, and its $79.3 million of revenue exceeded Wall Street’s estimates by 3.1%.
Looking ahead, sell-side analysts expect revenue to grow 11.5% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
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Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Agilysys is extremely efficient at acquiring new customers, and its CAC payback period checked in at 20.2 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Agilysys more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.
Key Takeaways from Agilysys’s Q3 Results
We were impressed by how significantly Agilysys blew past analysts’ EBITDA expectations this quarter. We were also glad its full-year revenue guidance exceeded Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 5.3% to $121 immediately following the results.
Agilysys had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.