Agilysys (NASDAQ:AGYS) beats Q3 CY2026 sales expectations but stock drops
Hospitality software provider Agilysys (NASDAQ:AGYS) reported revenue ahead of Wall Street’s expectations in calendar Q3 2026 (fiscal Q2 2027), with revenue up 17.7% year on year to $93.36 million. The company’s full-year revenue guidance of $376 million at the midpoint came in 1.4% above analysts’ consensus estimates. Its non-GAAP profit of $0.67 per share was 21.5% above analysts’ consensus estimates.
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Agilysys (AGYS) Q3 CY2026 highlights:
- Revenue $93.36 million vs S&P analysts’ consensus estimates of $90.97 million (17.7% year-on-year growth, 2.6% beat)
- Adjusted EPS $0.67 vs S&P analysts’ consensus estimates of $0.55 (21.5% beat)
- Adjusted EBITDA $24.15 million vs analysts’ consensus estimates of $20.1 million (25.9% margin, 20.1% beat)
- Revenue guidance The company lifted its revenue guidance for the full year to $376 million at the midpoint from $370.5 million, a 1.5% increase
- Operating margin 16.3%, down from 17.8% in the same quarter last year
- Free cash flow margin 15.9%, up from 8.3% in the previous quarter
- Market capitalization $3.40 billion
Dave Wood, Chief Financial Officer, commented, “The second quarter of the fiscal year has continued to yield strong results. The teams are continuing to execute at elevated levels across the board, driven by a sustained high level of sales demand and project implementation velocity. We are pleased to be in a position once again to increase our full year expectations as a result of this continued momentum. The company is well positioned to continue to execute against the current forecasted plan during the second half of the fiscal year.”
Revenue growth
A company’s long-term revenue performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones sustain growth for years. Agilysys’s 18.1% annualized revenue growth over the last five years was decent. Its growth was slightly above the average software company and shows its offerings resonate with customers.
Long-term growth matters most, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Agilysys’s annualized revenue growth of 16.3% over the last two years is below its five-year trend, but the results were still respectable. 
This quarter, Agilysys reported year-on-year revenue growth of 17.7%, and its $93.36 million of revenue exceeded Wall Street’s consensus estimates by 2.6%.
Looking ahead, sell-side analysts expect revenue to grow 16.8% over the next 12 months, according to S&P, similar to its two-year rate. This projection is above the sector average and implies its newer products and services will help sustain its recent top-line performance.
Customer acquisition efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Agilysys is efficient at acquiring new customers, with a CAC payback period of 19.7 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Agilysys more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.
Key takeaways from Agilysys’s Q3 results
Agilysys delivered some key positives this quarter: Revenue beat analysts’ consensus estimates, and full-year revenue guidance came in slightly above Wall Street’s consensus. Investors were likely hoping for more, however, as shares tumbled 8.7% to $112.60 immediately after the results.
Should you invest in Agilysys? When making that decision, it’s important to consider its valuation, business qualities and latest quarterly results. For more on Agilysys, read the full research report here (it’s free).