Agilysys, Inc.

Good day, ladies and gentlemen, and welcome to the Agilisys Fiscal 2022 First Quarter Conference Call. As a reminder, today's conference call may be recorded. I would now like to turn the conference over to Jessica Hennessy, Director of Corporate Strategy and Investor Relations at Agilisys. You may begin.

Thank you, Cherry, and good afternoon, everybody. Thank you for joining the Agilisys Fiscal 2022 First Quarter Conference Call. We will get started in just a minute with management's comments, but before doing so, let me read the Safe Harbor language. Some statements made on today's call will be predictive and are intended to be made as forward-looking within the Safe Harbor protections of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial guidance. Although the company believes that its forward-looking statements are based on reasonable assumptions, Such statements are subject to risks and uncertainties that could cause results to differ materially. Important factors that could cause actual results to vary materially from these in the forward-looking statements include the continued effects of the COVID-19 pandemic on our business and the hospitality industry, the timing and extent of the recovery phase of the hospitality industry, and the risks set forth in the company's reports on Form 10-K and 10-Q, and other reports filed with the Securities and Exchange Commission. With that, I'd now like to turn the call over to Mr. Ramesh Srinivasan, President and Chief Executive Officer of Agilisys. Ramesh, please go ahead.

Thank you, Jessica. Good evening. Welcome to our fiscal 2022 first quarter earnings call. Joining Jessica and me on the call today in our Atlanta office is Dave Wood, our CFO. We hope all of you and your families are fully vaccinated, doing well, and staying safe and healthy. We continue to treat the good health, happiness, and well-being of our Agilisys teammates, customer and partner personnel as our top priority. The productivity and quality of execution levels of our global workforce remain at high levels despite The personal and family challenges the virus has posed for many of us. We are deeply grateful to all our employees for everything they continue to do for Agilisys under challenging circumstances. During narratives such as this earnings call for the remainder of this fiscal year, we will do our best to offer comparisons to two historical quarters One with the comparable quarter from a year ago and one with the comparable quarter from two years ago. Fiscal 2021, the period from calendar April 2020 to March 2021 was obviously not a normal year. Providing comparisons with both last year and the year before that when there were no pandemic-related challenges should give you a better idea From the standpoint of sales success, from around the February-end-March timeframe of this calendar year, we have seen good recovery in the gaming and resort market verticals in the U.S., and a partial recovery in the hotel and cruise ships verticals, while managed food services and international regions remain significantly affected by pandemic-related closures. Both the APAC and EMEA regions continue to be impacted heavily by lockdowns and other severe restrictions. Despite the lack of recovery in multiple verticals and geographic market areas, this was our best Q1 April to June quarter with respect to sales success and revenue level and many more. In sales agreements won, signed, and closed. Most of these SaaS projects won during the quarter are yet to be implemented and will contribute to future subscription revenue growth. Our product innovation and increased competitive advantage levels have made up for the pandemic-related market challenges in several verticals and regions when we compare the current Q1 quarter results With respect to financial results for the quarter, which Dave will cover in a lot more detail, revenue for the quarter was $38.7 million, a 30% increase over Q1 of last year, and a slight 1% increase over the pre-pandemic Q1 from two years ago. Combined, Product and services revenue levels improved by about 67% over Q1 of last year, but remained 15% below Q1 from two years ago. Recurring revenue was a record 23.2 million, 13% higher than Q1 last year, and nearly 16% higher than Thank you. Thank you. and the increased availability of cloud-based software applications. Operating net income of $1.5 million and gap EPS of $0.06 were solid improvements over both Q1 of last fiscal year and Q1 two years ago. Adjusted EBITDA was $6.9 million About 18, 18, 18% of revenue. Revenue level this quarter was negatively impacted by implementation delays which drove our combined backlog across product, services, and recurring revenue to record levels. The two major reasons for these delays were, one, and by far the main reason, lack of resources, and many customer sites. And two, implementations of some of our recently developed and modernized software applications are taking a few more weeks than usual to get all the technical implementation details sorted out. Both these challenges are short-term issues which should get cleared up soon, enabling better backlog conversion to revenue during future quarters. During Q1, April to June, we signed sales agreements which added 15 new customers, 69 new properties which did not have any of our products before, but the parent company was already our customer. And there were 100 instances of selling at least one additional product to sites which already had at least one of our other products. More than 90% of the 15 new customers and 69 new properties added during the quarter were subscription license-based. This quarter was among our strongest with respect to cash collections, helping us edge past the $100 million cash balance mark for the first time in many years. Despite all the challenges which remain in large swaths of the hospitality industry, our cash collection trend has been encouraging and indicative of our customers seeing improvements in their revenue streams and also needing enhanced technology solutions. We continue to remain disciplined with our expense levels and use of cash. Our modernized products are beginning to gain good traction in the field. We are now seriously competitive in the property management system PMS ecosystem marketplace with the cloud-native StayPMS leading the way. The completely modernized Visual One PMS product is on track to be released for customer deployments in a few weeks from now, giving us a second world-class cloud-native PMS option. With several PMS add-on modules like spa, golf, sales and catering, book, express mobile, service, and engage already implemented at various customer sites, we are now in a good position to execute on our vision of providing a complete, modular, and integrated open API architecture-based modern technology cloud-native set of applications which will help our customers manage the entire guest journey. from a direct channel commission-free booking engine which enables bookings not just for rooms but across all amenities offered by a resort in a single booking interaction all the way till the last guest touchpoint and even beyond with promotions and other loyalty points management tools. This reduces the need for hospitality customers to depend on too many different technology providers and carry the burden themselves of system integration challenges. We have now reached the competitive positioning stage in the PMS software space we have been working diligently towards during the past few years. We are now being included and are seriously competitive in PMS RFPs which would not have had our participation a couple of years ago. We have also made good progress with follow-up releases of the modernized InfoGenesis POS terminal which we discussed with you before. These follow-up releases have included additional required payment gateway integration approvals and other third-party system integrations to make modernized InfoGenesis POS available across multiple hospitality verticals. All UI aspects have been re-engineered in this modernized version, making it a lot easier to operate a food outlet and serve guests. We have now given ourselves the capability of combining the advantages of many sleek, all-in-one devices available today with the complexities of robust enterprise requirements wherein customers need not sacrifice one need in search of the other. They need not be tied down to the traditional heavy-duty terminals and also not give up on all their crucial and extensive enterprise management requirements. Additional POS software modules like the remote ordering tool OnDemand and the easy contactless pay option QuickPay have been very successful during the past year across hundreds of food outlet profit centers and continue to drive demand for our POS solutions. As the modernization of the inventory and procurement products E-Tech and Straten Warren continue to make good progress, We are seeing more sales success for those two products as well. Q1 fiscal 2022 was our best quarter of inventory procurement sales in about two and a half years. This is another growing business area, which all these years has been hampered by lack of modern technology, despite these products having robust and complete functionality and feature sense. With the product sets reaching the stage we have been building towards during the past few years, we are now beginning to steadily increase our investments in sales and marketing. Our participation in trade shows is beginning to pick up pace again. We have participated in person at a couple of them during recent weeks with reasonable success. Customer foot traffic at these shows were not back to pre-pandemic levels, but were reasonable and created multiple new leads. We are now looking forward to participating in person at the high-tech and G2E shows during coming months. In addition, we have a virtual customer user conference, a next-gen hospitality event going on this week as we speak with hundreds of customer users attending. We are excited to have all these opportunities to relaunch Agilisys, a company which has always been known for trusted and solid hospitality software solutions and great customer service. Now, also having the most modern cloud technology available, those trusted solutions are now based on. Our current marketing tagline, trusted solutions, modern technology, summarizes it very well. Getting started on this new Agilisys 2.0 journey is a great feeling. We recently added Justin Reynolds, a strong sales leader in Australia, to head business development efforts in the Australia and New Zealand regions where we have had Infogenesis POs implemented at several sites for many years but was only represented through a reseller. We ended that reseller relationship in Australia and in fact another one in the UK as well, end of calendar 2020, and have started building direct relationships with all customers. Justin has deep relationships within the hospitality industry in Australia and New Zealand and will help us grow our business across all our product offerings, not just POS. In addition, we have added three quota-carrying sales personnel during recent months in the U.S. We will continue expanding our sales and marketing staffing levels as our revenue levels improve. With that, let me hand the call over to Dave for further color on our business progress and a more detailed commentary on our financial list.