What Happened?
Shares of hospitality software provider Agilysys (NASDAQ: AGYS) jumped 24.1% in the morning session after the company reported strong third-quarter 2025 results that surpassed revenue and profit expectations, and it raised its full-year forecast.
The hospitality software provider's revenue grew 16.1% year-over-year to $79.3 million, beating analysts' estimates, while its adjusted earnings per share of $0.40 also topped consensus. Profitability saw a major boost, with the company's operating margin expanding to 17.8% from just 6% in the same quarter last year. Based on the strong quarter, Agilysys lifted its full-year revenue guidance to a midpoint of $316.5 million, above Wall Street's projections.
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What Is The Market Telling Us
Agilysys’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for Agilysys and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 23.4% on the news that the company reported impressive first quarter 2025 results which exceeded analysts' sales and EBITDA estimates. The main story here was subscription revenue, which grew more than 40% accounting for the bulk of recurring sales and giving the business more stability and visibility. Margins held up well too, with gross margin steady for the quarter and slightly higher for the year, which helped push adjusted EBITDA by over 40% and gave EPS a similar lift. That kind of performance would normally spark a cheer, but guidance for next year brought things back down to earth. Management expects just 12% revenue growth in fiscal 2026, which is slower than the pace seen during the fiscal year (2025), and it doesn't include any big gains from the PMS project still in the pipeline. Overall, this print was mixed but still had some key positives.
Agilysys is up 7.3% since the beginning of the year, and at $138.71 per share, it is trading close to its 52-week high of $141.74 from December 2024. Investors who bought $1,000 worth of Agilysys’s shares 5 years ago would now be looking at an investment worth $5,159.
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