What happened
Agilysys (AGYS -0.49%) had a Wednesday to forget on the stock exchange. Shares of the tech company that serves the hospitality industry sank by almost 12% following its release of fresh quarterly earnings figures. That was on a generally good day for the market that saw the bellwether S&P 500 index climb more than 1%.
So what
For its fiscal fourth quarter of 2023, Agilysys booked net revenue of $52.9 million. This was a new quarterly record for the specialty tech company, and it represented a nearly 14% improvement over the same period of 2022.
On the bottom line, the company's net income under generally accepted accounting principles (GAAP) landed at $12.7 million, well up from the $4.6 million of the year-ago quarter. On a non-GAAP (adjusted) basis, net income was $0.26 per share.
Analysts collectively estimated that Agilysys would earn slightly over $52 million on the top line and post adjusted net income of $0.22 per share.
Management attributed its growth during the quarter to sustained and strong demand for its cloud products.
Now what
Management also said, "Increased investments across multiple business areas to drive future revenue growth beyond fiscal 2024 are resulting in reduced profitability expectations for this year." That most likely was a key reason for the investor sell-off; no one likes to hear that the bottom line will be weaker than previously anticipated.
Specifically, Agilysys is guiding for $230 million to $235 million in revenue for fiscal 2024. The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) should come in at 13% of the top-line figure. In 2023, the company's revenue was just over $198 million, and its adjusted EBITDA was higher in terms of percentage, at 15%.
