Agilysys Inc

We decided to add to software with a position in Agilysys, a high-quality business with durable recurring revenue, high switching costs, and significant margin expansion potential. It is a cloud software company that provides mission-critical software for hotels, resorts, casinos, cruise lines, and other hospitality operators, including property management, guest reservations, point-of-sale, and guest engagement solutions. The company is differentiated by its integrated, cloud-native platform that spans multiple operational workflows, allowing customers to consolidate vendors, while leveraging AI to automate workflows and improve the guest experience.

Agilysys, Inc. (AGYS) bucked the trend and posted significant gains, indicating strong underlying performance despite broader market challenges. The company is positioned well within the software sector, which has shown improvement in the second quarter. We believe Agilysys has durable growth characteristics and a strong competitive position, making it a valuable addition to our portfolio as we focus on high-quality businesses capable of creating long-term value.

Agilysys, Inc. (AGYS) is a provider of property management and point-of-sale software for the hospitality industry. We believe the business model is more resilient than market participants anticipate. Property management systems are difficult to replace, and contracts are often long term, frequently extending 10 years or more. Given this contract stickiness and Agilysys’ niche expertise, we believe customers will look to the company to incorporate AI functionality into its existing platform rather than develop solutions independently. We also believe Agilysys is positioned to accelerate earnings and free cash flow growth from the implementation of its contract with Marriott International, Inc.

Agilysys, Inc. (AGYS) provides property management systems and point-of-sale solutions to the hospitality industry. We see Agilysys as a company with an extraordinarily favorable competitive position and a large market opportunity that is just getting underway. The company has delivered seven consecutive quarters of 30% or greater subscription revenue growth. In its recent FQ2 2026 report, management raised FY26 subscription guidance from 27% to 29%. We believe this deal could contribute $130 million to subscription revenue, nearly doubling the current base. We expect other potential customers will want to upgrade their systems and this will further accelerate growth.

Agilysys, Inc. (AGYS), a provider of property management and point-of-sale software for the hospitality industry, saw its stock rebound after it dipped in the prior quarter on disappointing results. We met with the CEO to try to better understand the company’s challenges and came away convinced that the market had overreacted to short-term execution issues in migrating customers to a new product platform and to timing delays caused by a holiday. We took the opportunity to add to our holdings of a high-quality company and were rewarded as Agilysys posted strong earnings in the most recent quarter. We view the company as well positioned to continue to take market share going forward.

Agilysys, Inc. (AGYS), a provider of software services to the hospitality industry, provided notable positive stock selection effects after reporting better-than-expected revenue and earnings growth. The company reported strong revenue growth and EBITDA growth, with subscription revenue growth up 22% organically and professional services revenue also bouncing back with 22% growth. This solid performance quelled investors’ fears after a challenging previous quarter, indicating a strong operational recovery and growth potential.

Agilysys, Inc. has been a strong contributor to our portfolio, reflecting our belief in its potential. The company is well-positioned to benefit from improving economic sentiment and firming demand indicators. We are optimistic about its earnings visibility and resilience against macroeconomic factors, which supports our decision to increase our exposure. The stock's performance aligns with our strategy of focusing on higher-quality companies that can navigate complex environments effectively.

Agilysys, Inc. (AGYS) was a top contributor for the strategy, with the stock up sharply after the firm released its latest quarterly operating results. Fundamentals for the business remain encouraging, with Agilysys reporting record quarterly revenue growth of $74.3 million, up 19.4% from the same period last year. Going forward, we continue to like Agilysys’ growth potential as its niche software takes market share across the hospitality industry.

Agilysys, Inc. (AGYS) was a detractor due to lighter-than-expected earnings and reduced revenue guidance, primarily from its hardware segment. However, the manager emphasizes the strong growth of Agilysys' software business, which is expected to become a larger part of the company's earnings and revenues over time. The focus on improving the hardware segment indicates management's commitment to enhancing overall performance. The long-term outlook for the software business remains positive, suggesting potential for significant growth.

Agilysys, Inc. has faced significant challenges, particularly with lower-than-expected fiscal third-quarter revenues attributed to weaker POS software sales in the Managed Food Service segment and softer international sales. Management has lowered their full-year revenue guidance, citing near-term challenges associated with transitioning their POS product to a new version. This has raised concerns about the company's growth trajectory and overall performance.