Investor Presentation
August 2017
TECHNOLOGY | INNOVATION | SOLUTIONS
Forward-looking Statements & Non-GAAP
Financial Information
Forward-Looking Language
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend,"
"plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "initiative," "future," "likely," "may," "should," "will"
and similar references to future periods. Examples of forward-looking statements include, among others, statements we make
regarding guidance relating to revenue and adjusted earnings from operations, and expected results of strategic and operating
initiatives, such as improvements in cost management and lower spending rates. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and
assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the
economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent
uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our
actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore,
you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and
financial condition to differ materially from those indicated in the forward-looking statements include, among others, our ability
to achieve operational efficiencies and meet customer demand for products and services and the risks described in the
Company's filings with the Securities and Exchange Commission, including the Company's reports on Form 10-K and Form 10-Q.
Any forward-looking statement made by us in this press release is based only on information currently available to us and
speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement
that may be made from time to time, whether written or oral, whether as a result of new information, future developments or
otherwise.
Use of Non-GAAP Financial Information
To supplement the unaudited condensed consolidated financial statements presented in accordance with U.S. GAAP in this
press release, certain non-GAAP financial measures as defined by the SEC rules are used. These non-GAAP financial measures
include adjusted EBITDA and adjusted earnings from operations. Management believes that such information can enhance
investors' understanding of the company's ongoing operations. See the accompanying table below for a reconciliation of
adjusted EBITDA and adjusted earnings from operations to the most closely related GAAP measure.
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WHO WE ARE AND WHAT WE DO
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TECHNOLOGY | INNOVATION | SOLUTIONS
We Provide Leading Hospitality Solutions
Lodging Solutions
~251k rooms at 6/30/17,
+5% since 6/30/16
F&B Solutions
~41k end points at 6/30/17,
+13% since 6/30/16
WELL-ESTABLISHED
POINT-OF-SALE 58%
of Revenue
24%
of Revenue
DOCUMENT
MANAGEMENT
9%
of Revenue
INVENTORY &
PROCUREMENT
3%
of Revenue
6%
of Revenue
rGUEST PRODUCTS:
STAY, BUY, PAY, SEAT & ANALYZE
WELL-ESTABLISHED PROPERTY
MANAGEMENT
Note: Revenue contribution figures represent percentage for
the trailing twelve months ended June 30, 2017
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TECHNOLOGY | INNOVATION | SOLUTIONS
Gaming
Hotels, Resorts and Cruise
Food Service
Restaurants, Universities, Stadia and Healthcare
We Serve Leading Hospitality Brands
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Food Service
Restaurants, Universities, Stadia and Healthcare
TECHNOLOGY | INNOVATION | SOLUTIONS
Continuing Cycle of Demand for Agilysys Products
•Guests Increasingly Demand New Technology Enabled Access and Ease of Use
•Growing Competition for Guest Loyalty Requires New Guest Experience Solutions
• Few Vendors Focused Solely on Hospitality & Large Enough to Meet Enterprise Needs
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Dining Experience
Lodging Experience
HOTEL
Discover
Imagine
Book
Arrive
Depart
Reflect
and
Share
Enjoy
Pay
Consume
Inspire
Guest
TECHNOLOGY | INNOVATION | SOLUTIONS
Addressing the Guest Experience Lifecycle
Optimize Operations,
Reduce Costs
Personalized Service,
Increase Lifetime Value
Guest Recruitment,
Increase Sales
Wallet Share Growth,
Improve Profitability
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TECHNOLOGY | INNOVATION | SOLUTIONS
Agilysys Products
rGuest Well-Established Partner
Food &
Beverage
Lodging
Cross-
Functional
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TECHNOLOGY | INNOVATION | SOLUTIONS
Agilysys Competition
PMS
•Oracle/Micros
• Infor
•PAR/Brink
•Amadeus
•Sabre Hospitality
Solutions
•Constellation
•Northwind
POS
• Oracle/Micros
• NCR
• Nextep
• VivoNet
• Skywire
• Bypass
• Revel
• Appetize Technologies
• Lavu
• Dinnerware
• Clover
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TECHNOLOGY | INNOVATION | SOLUTIONS
What Makes Agilysys Different?
Market-leading hospitality knowledge
coupled with top technology talent
Competitive
Strengths
Scalability
Support deployments from a single
end-point operation to 100K+ room
enterprise on a single instance
Scalability &
Enterprise Structure
Scalability
Only industry we address; proven
service and satisfaction has led to
industry-leading average customer life
of over ten years
Hospitality Customer
Focused
Scalability
Successfully running mission critical
operations for high-profile accounts
with 99.9% uptime
Stability Scalability
Handle disconnected scenarios for
weeks at a time
Offline Capabilities
Scalability
Full-service platform that enables
enterprise integration and unfettered
data access
Integration & Access
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TECHNOLOGY | INNOVATION | SOLUTIONS
HELP OUR CUSTOMERS INCREASE
THEIR REVENUE AND PROFITABILITY
THROUGH IMPROVED GUEST
EXPERIENCE AND LOYALTY
USING ANY AGILYSYS PRODUCT AS
WELL AS INTEGRATIONS TO 3RD PARTY
SOLUTIONS,
WITH DEDICATION TO PAST, PRESENT &
FUTURE CUSTOMER INVESTMENTS IN
OUR PRODUCTS AND SERVICES.
Agilysys Vision
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TECHNOLOGY | INNOVATION | SOLUTIONS
OBSESSIVELY CUSTOMER CENTRIC
ENGINEERING DRIVEN COMPANY
IN EVERY MARKET WE SERVE
Go To Market Strategy
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TECHNOLOGY | INNOVATION | SOLUTIONS
Strategic Initiatives to Deliver the Vision
INCREASED PRODUCT DELIVERY VELOCITY
GREATER PROCESS EFFICIENCIES
EMPLOYEE & LEADERSHIP DEVELOPMENT
PROFITABLE REVENUE GROWTH
DIFFERENTIATING PRODUCT BREADTH
INTERNATIONAL EXPANSION
OBSESSIVE CUSTOMER CENTRICITY
INNOVATION AND EXECUTION
GOALS
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TECHNOLOGY | INNOVATION | SOLUTIONS
India Development Center
Delhi
Chennai
Kolkata Mumbai
Pune
Bengaluru
Hyderabad
Kanpur
Ahmedabad
IDC
• 17,000 Square Feet
• 160 Employee Capacity
• ~100 New Hires by August 31
• Full Capacity EOY FY18
• Other Tenants
• Amazon, Cisco, Citi, GE
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FINANCIAL OVERVIEW
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TECHNOLOGY | INNOVATION | SOLUTIONS
Evolving Business, Evolving P&L
Financial Metrics and Valuation (*TTM)
Share Price (8/14/17) $10.50
Diluted Shares Outstanding 22.7M
Diluted Market Capitalization $238.4M
Cash (as of 6/30/17) $43.4M
Debt (as of 6/30/17) $0.2M
Enterprise Value $195.2M
Revenue $130.6M
Gross Profit $64.3M
Adjusted EBITDA^ $5.7M
Adjusted Earnings from Operations^ ($11.8M)
Earnings per Share ($0.55)
EV/Revenue 1.5x
EV/Gross Profit 3.0x
Business Metrics (as of 6/30/17)
Direct POS End Points Managed
Y/Y Growth
~41k
13%
Direct Hotel Rooms Managed
Y/Y Growth
~251k
5%
Recurring Revenue*
As % of Total Revenue
50%
Subscription Revenue*
As % of Recurring Revenue
26%
Subscription Revenue Growth Y/Y 58%
rGuest as % of Total Revenue* 6%
New Customer Count* 108
^Non-GAAP measure, see reconciliation on slide 18.
*Trailing twelve months ended June 30, 2017.
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TECHNOLOGY | INNOVATION | SOLUTIONS
Diversified Revenue Base
53%
22%
18%
6%
Gaming Hotels & Resorts Food Service RUSH
37%
30%
20%
13%
Support and Maintenance Products Professional Services Subscription
94%
6%
Well-Established rGuest
Revenue by Market Vertical* Revenue by Type*
Revenue by Solution Type*
*Trailing twelve months ended June 30, 2017. 17
TECHNOLOGY | INNOVATION | SOLUTIONS
Strong Balance Sheet
Consolidated Balance Sheet (in thousands)
March 31, 2017 June 30, 2017
Cash, Cash Equivalents and Marketable Securities $49,255 $43,408
Other Current Assets 24,265 25,885
Long-Term Assets 93,785 94,952
Total Assets $167,305 $164,245
Current Liabilities $46,337 $45,031
Other Liabilities 7,299 7,299
Total Liabilities $53,636 $52,330
Shareholders’ Equity 113,669 111,915
Total Liabilities and Shareholders’ Equity $167,305 $164,245
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TECHNOLOGY | INNOVATION | SOLUTIONS
Historical Financial Results
All numbers in thousands, except per share data
*Trailing twelve months ended June 30, 2017.
^ Non-GAAP measure, see reconciliation on slide 20
$103,514
$120,366
$127,678 $130,591
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
FY15 FY16 FY17 TTM*
Revenue
($19,288)
($16,661)
($11,568) ($11,798)
($25,000)
($20,000)
($15,000)
($10,000)
($5,000)
$0
FY15 FY16 FY17 TTM*
Adjusted Earnings from Operations^
$1,174
$4,287 $4,478
$5,679
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
FY15 FY16 FY17 TTM*
Adjusted EBITDA^
($11,497)
($3,765)
($11,721) ($12,382) ($14,000)
($12,000)
($10,000)
($8,000)
($6,000)
($4,000)
($2,000)
$0
FY15 FY16 FY17 TTM*
Loss from Continuing Operations
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TECHNOLOGY | INNOVATION | SOLUTIONS
Non-GAAP Reconciliation
*Trailing twelve months ended June 30, 2017.
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TTM* 2017 2016 2015
Net loss (12,382)$ (11,721)$ (3,765)$ (11,497)$
Income tax expense (benefit) 273 236 6 (1,054)
Loss before taxes (12,109) (11,485) (3,759) (12,551)
Depreciation of fixed assets 2,422 2,409 2,199 2,225
Amortization of intangibles 1,541 1,392 1,243 3,461
Amortization of developed technology 9,053 8,012 1,022 1,294
Interest income (145) (147) (63) (62)
EBITDA (b) 762 181 642 (5,633)
Share-based compensation 3,300 2,427 3,405 3,141
Restructuring, severance and other charges 1,508 1,561 283 1,482
Asset write-offs and other fair value adjustments - - 180 1,836
Other non-operating (income) expense 24 224 (491) 146
Legal settlements 85 85 268 203
Adjusted EBITDA (a) 5,679$ 4,478$ 4,287$ 1,174$
Capital expenditures (5,465) (4,158) (5,900) (4,650)
Capitalized software development costs (12,012) (11,888) (15,048) (15,813)
Adjusted Earnings from Operations (c) (11,798)$ (11,568)$ (16,661)$ (19,288)$
(a) Adjusted EBITDA, a non-GAAP financial measure, is defined as income before income taxes, interest expense (net of interest income),
depreciation and amortization (including amortization of developed technology), and excluding charges relating to i) legal settlements,
ii) restructuring, severance, and other charges, iii) asset write-offs and other fair value adjustments, iv) share-based compensation, and
v) other non-operating (income) expense
(b) EBITDA is defined as net income before income taxes, interest expense, depreciation and amortization
(c) Adjusted Earnings from Operations, a non-GAAP financial measure, is defined as Adjusted EBITDA,
less capital expenditures and capitalized software development costs
AGILYSYS, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EARNINGS FROM OPERATIONS
(UNAUDITED)
(In thousands)
Twelve Months Ended
March 31
TECHNOLOGY | INNOVATION | SOLUTIONS
Spend and Spend as % of Revenue
$10,000
$15,000
$20,000
$25,000
$30,000
FY15 FY16 FY17 TTM*
Spend for PD, S&M, and G&A
(GAAP)
Product Development
Sales and Marketing
General and Administrative
10%
15%
20%
25%
30%
FY15 FY16 FY17 TTM*
Spend as a % of Revenue for PD,
S&M, and G&A (GAAP)
Product Development Sales and Marketing
General and Administrative
*Trailing twelve months ended June 30, 2017.
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TECHNOLOGY | INNOVATION | SOLUTIONS
Cash Flow
*Trailing twelve months ended June 30, 2017.
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TTM* FY17 FY16 FY15
Operating activities
Loss from continuing operations (12,382)$ (11,721)$ (3,765)$ (11,497)$
Non cash adjustments, restructuring, legal settlements 16,704 14,110 7,741 10,117
Changes in assets & liabilities (354) 1,044 3,242 (806)
Net cash provided by (used in) operating activities 3,968 3,433 7,218 (2,186)
Investing activities
Capital expenditures (5,465) (4,158) (5,900) (4,650)
Capitalized developed software (12,012) (11,888) (15,048) (15,813)
Investments 2,180 2,181 (65) 1,771
Acquistions - - - (2,941)
Net cash used in investing activities (15,297) (13,865) (21,013) (21,632)
Net cash used in financing activities (572) (847) (577) (401)
-
Effect of exchange rate (3) (74) (87) (280)
-
Decrease in cash & cash equivalents (11,904) (11,353) (14,459) (24,499)
Cash & cash equivalents - beginning of period 55,312 60,608 75,067 99,566
Cash & cash equivalents - end of period 43,408$ 49,255$ 60,608$ 75,067$
TECHNOLOGY | INNOVATION | SOLUTIONS
Hospitality Market
Agilysys Revenue ~ $130.6M*
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*Trailing twelve months ended June 30, 2017.
TECHNOLOGY | INNOVATION | SOLUTIONS
$128
$148
$168
$188
$208
$228
$248
$268
$288
FY17 FY18 FY19 FY20 FY21
Mill
io
n
s
Revenue Possibilities
20% CAGR 15% CAGR 10% CAGR
Estimated 10%-20% Four-Year Revenue Growth CAGR
Adjusted Earnings from
Operations 10%-15% of
Revenue in FY2020 is
Possible
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TECHNOLOGY | INNOVATION | SOLUTIONS
Fiscal 2018 Outlook
On August 3, 2017, Agilysys Reiterated Outlook for FY 2018
• Revenue of approximately $136 - $140 million compared to fiscal 2017 revenue of
$127.7 million
• Expect bookings will continue to favor subscription-type contracts
• Gross margin is expected to be in the low-50% range
• Reflects the impact of higher cost of goods sold related to the previously
announced general availability of early versions of rGuest Stay and Buy in FY17
• Expect to generate positive Adjusted Earnings from Operations (non-GAAP measure) in
the fourth quarter of fiscal 2018
• This would represent the first quarter with positive Adjusted Earnings from
Operation since prior to FY14, the year the Company became a pure play hospitality
company
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TECHNOLOGY | INNOVATION | SOLUTIONS
Thank You
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