AGILYSYS INC — Call Transcript 2026

All right. We'll get started here. Thank you for joining for the Agilysys session. I'm Stephen Sheldon, and I'm a Research Analyst in the tech group at William Blair, specializing in vertical technology, and also cover Agilysys. Please visit our website at williamblair.com for a complete list of disclosures and potential conflicts of interest. We're thrilled to have the Agilysys team back at our conference again this year. My team initiated coverage on Agilysys, I think, roughly two years ago. As most probably know, it's one of the leading software providers to the broader hospitality industry for both POS solutions and property management solutions, and has some marquee wins in recent years that I'm sure they'll discuss more. We're happy to have Ramesh Srinivasan here, who's the President and CEO at Agilysys, and then we also have Jess Hennessy from the IR team sitting here in the front row in the audience. With that, I'll quickly turn it over to Ramesh. If we have any time remaining, we'll do some quick Q&A. Sure. Thank you. Thank you again for your interest in Agilysys. Thank you for coming down. I won't waste too much time going through the introductions. One quick introduction about myself. I've been in enterprise software for about 30 years, was very lucky to work under tremendous mentors. Spent about seven years at Manhattan Associates in supply chain execution, 1998-2005, when that company went from $40 million annual revenue to about $260 million. The CEO I worked there for for five years took me to a company called Bally Technologies in gaming, which was a really struggling company at that time. A $10 stock went all the way up to $83. I've been with Agilysys now for nine and a half years as its CEO. We went up to 131, but now we are about 85 or so with the current software challenges and all that. If you had invested money in 1998 in Manhattan when I joined, pulled it out 2005 when I left, put that money in Bally, pulled it out in 2014, put it in Agilysys, and now it would be about 22% or so compounded annual growth rate, share price over 25 and a half years. Very lucky. I learned the trade of B2B software and it has worked out fairly well. Again, thank you, Agilysys, and you know the forward-looking statements. We may be making forward-looking statements that you have to be careful about and all that. I don't even know how to word that according to the safe harbor or whatever that is. Okay. The quick history of Agilysys. Been public for a very long time, like multiple decades, but the current history starts from 2013. 2013, this company decided to sell off all its other businesses and focus only on hospitality focus software. They had acquired a few old products between 2003 and 2010 or so, sold off all the other businesses, put $100 million in the bank and said, "This is all we are going to do." That's where it started in 2013. The company kind of fumbled its way till 2018. Didn't improve the products much, tried to put all the money into a couple of products that didn't work out well. 2017, January, I was hired to turn this around, and we went through a process till 2023 of completely rewriting all our products. We completely modernized all our solutions and built an ecosystem of hospitality solutions around POS and PMS. That went to about 2023, and now we are in Agilysys 3.0, where modernized solutions, all cloud-native products, and now of course, we are adding AI features on top of it. We've also introduced, we just announced a couple of AI native modules we've added to the ecosystem. That's sort of our history, what we have gone through. You can think of this company, we just finished our year. Our year is April through March. We finished it at about $319 million annual revenue. The best way to think of Agilysys is about a $320 million annual revenue. The next year, we have guided to $365 million-$370 million. Think of us as a $365 million-$370 million annual revenue startup that is about four years old. All the products we implement and all that now is about four years old, anywhere from one and a half to four years old. This startup was funded by our old products. We didn't go to PE firm or VC firm to fund us. We got funded by our old products, and we completely recreated ourselves into a modern hospitality-focused technology company. We are 100% hospitality focused. It's a POS, PMS, inventory procurement for food and beverage, and everything around it, and we don't do anything else. There is no reason for us to do anything else because it's a huge total addressable market that is orders of magnitude bigger than us that we are focused on. There's no need to distract ourselves. We are obsessively customer-centric. We could be more profitable than we are now if we are less customer-centric. Everything that we do is state-of-the-art cloud-native. We make the modern versions also work on premises because many hospitality customers want to be on-premise. We don't want to force them to the cloud. 90% of our new installs are all cloud anyway. We provide an end-to-end comprehensive solution offering, which I'll talk about. Very product-focused, innovation-driven company. About 2/3 of our company is in R&D. We are firm believers if the product works well, everything else we can do well. Our mission is to make things easier for hospitality employee users. They are dealing with disparate systems. If a hospitality resort offers you 10 amenities, chances are they are using seven products. We decided to fix that and make it easy for the employee users with integrated innovative systems, and through that, to really improve guest experience. I'll give you a little bit of flavor of that. Global presence, about 118 countries. In the U.S., the two main offices are Atlanta, which is our headquarters, and Las Vegas. We have a big office in Las Vegas, which is where I'm based at, because almost every property in Las Vegas is our customer, either POS or PMS or both, with the exception of two that only uses our spa product. Otherwise, every property there is our customer, so we have a big office there. We also have about 100 people in Toronto. We have only done two acquisitions in the last 10 years, fairly small acquisitions. 100 people there. We have a very big development center in Chennai, India, which drives a good portion of our R&D. We also have significant R&D in the U.S. and Canada as well. All the customers you can think of across the globe, we serve virtually every big customer you can think of in hospitality all across the globe. They are divided into four major verticals. We are big players in the gaming casino. We have just had a DNA in this industry. More than 50% of our revenue comes from casino gaming. We also serve managed food service, is a major vertical for us. Some of the biggest cafeterias in the world are run by a handful of food service providers. They use our technology. Like Marriott, Microsoft's entire compound in Redmond, 34 cafes use our POS technology. Marriott's headquarters in Bethesda, Maryland, when their executives go to order their food and all, that runs our POS technology. A good portion of the Ivy League universities. We are in higher education, in hospitals, healthcare. Those are all the different verticals we serve with our POS product. Hotel and cruise ships, that's probably our sweet spot. Multi-unit restaurants is our sweet spot. We are also a significant player in cruise ships. Carnival UK, 11 of their ships have replaced competing products with us. International. We treat that as a separate vertical. Our market share in international regions are very low. We are just beginning to make an impact in international regions, mostly APAC and EMEA. We don't have much of a presence yet in South America. In Mexico, South America, we don't have much of a presence. Those are all major growth areas. Gaming, we have reasonable market share, more in POS than in PMS. In all the other verticals, our market share is extremely low, single digits, and international probably goes to the decimal place. There are many different growth paths ahead of this business. Revenue growth, to just give you an idea, we started turning the company around March 2017 or so, nine consecutive quarters record revenue growth. COVID hit. We recovered quickly from COVID because of all the innovations we had done before. Now we are on a streak of 17 consecutive record revenue quarters, sequentially increasing record revenue quarters for 17 quarters now. That includes subscription revenue growth. That's how our subscription revenue growth has gone over the years. If you look at it carefully, you will see we have doubled it in about two and a half years. In the last two and a half years, our subscription revenue has doubled, and before that, the doubling took about three years. During the last four years, coming out of COVID, our fiscal year ends in March, fiscal 2021, which ended March 2021, was our COVID pandemic year. The year after that, our revenue was about $160 million. In the last four years, we have doubled our revenue, and we have tripled our subscription revenue. That's sort of the rate of growth the company has been in the last four years or so. FY 2026 that we just announced results mid-May, that is end of our year, March 2026. That's where we ended FY 2026. We are now in FY 2027. The year has just started for us. Grew 16% revenue year-over-year growth. That's a little bit misleading because that includes perpetual license and hardware revenue, which is not growing much for us. We call it product revenue because most of the customers are choosing the cloud subscription, so they don't buy much perpetual licenses, which is good for us. Our POS product pulls less and less hardware now because the recent versions in the last three, four years, we opened it up to support all operating systems. If you're running a restaurant and you used 10 terminals before, today you can run it with six terminals and four iPads, we are good with you buying iPads yourself. We've opened up the system, so we are attaching less and less hardware, which we don't mind. Despite the product revenue bucket not growing at all and services revenue growing at about 5%-10%, I will explain that, the overall revenue is still growing by 16%. That's mostly because of subscription revenue growth rate. We guided this year, FY 2027, to at least 30% subscription revenue growth. That will make it the third consecutive year it has grown by more than 30% subscription revenue. We have grown subscription revenue year-over-year by at least 23% for 18 consecutive quarters. For four and a half years now, quarter, year-over-year, each quarter has grown by at least 23%. That's the rate at which we are growing our subscription revenue now that we have modernized our products and all that. Now, if you think of this company now, about 2/3 of our total revenue is recurring, which is subscription plus annual maintenance, and growing. Two-thirds of our business now is recurring, and 2/3 of that recurring is subscription revenue. Two-thirds times two-thirds, about four by nine. You think of we are reaching a stage, one of the quarters this fiscal year we'll be crossing, where more than half of our revenue is subscription revenue. A few years ago, it was a much smaller percentage. Subscription revenue is what is driving our growth. POS is still about 50%+ of our business. It used to be more than 60%, and PMS is fast catching up. Now, property management system is all software. There is no attached hardware or anything like that, and property management system is our fastest-growing segment, and I'm sure many of you know December 2022, Marriott chose us for thousands of their properties for PMS, and we were not even part of the original RFP. They were running the RFP for 10 months. We were not even part of it. Someone told Marriott about us, and the single biggest deal we have ever won in our company's history was an incoming 800 call from a small company called Marriott that was interested in our PMS. We first thought it was a prank call. We literally thought it was a prank call. They didn't even call one of our executives. We called them, they said, "No, we are serious. We've been looking at it for 10 months. We don't like the other products we saw. We have not liked it great. Somebody told us about you, can you show us your product next week?" They gave all the other vendors three months to prepare. We showed them the products, they are blown away, and now we are in the process of going live. If you listen to Marriott's earnings call a few weeks ago, more than 1,000 properties are already live, and that process is going on, and that's PMS. This year, we expect this fiscal year PMS recurring revenue to cross POS for the first time. Recurring revenue. This is total revenue. We have a few other products as well. We have inventory procurement only for food and beverage. If you're running a restaurant to manage your inventory and when you order a hamburger, the inventory of buns and burger goes down. When it goes below a certain level, it automatically kicks off procurement and all that process. That's about 4% or 5% of our business. The good news and bad news about this business is only 9% is international. We really started focusing on international a few years ago after our products are modernized, and we have a huge growth path ahead of us. We have not made a major impact in APAC and EMEA yet. Many big customers have signed up with us, and Marriott, Hilton, and IHG and all that are also going to carry us into that international agency. The total addressable market is $16 billion, depending on which numbers you believe, $14 billion, $18 billion. I've seen different numbers. We don't bother to measure it too accurately. Our current annual recurring revenue is $217 million last year, trailing 12 months. We are a small player in a huge total addressable market. We have a long growth path ahead of us, hence our focus only on this. The history of this industry is there were two, three major dominating players who dominated this technology pace for 20 years when we were struggling, and they have stopped innovating. They have focuses in other areas. They do much other different businesses. We found an innovation gap, and we are bridging that gap. We are a fast-growing company operating in a huge pond. Anybody you talk to will tell you it is somewhere between $14 billion and $20 billion, and we are only like $200 million. We have a massive growth path ahead of us. We built an ecosystem. This is our biggest strength. You see there InfoGenesis, that's our POS product. Around the POS product on your far right corner, we created a whole bunch of modules that work with POS. When you think of a restaurant, we don't operate in retail restaurants, we are only in enterprise software. We don't compete with Toast on the retail restaurants and all that. We only operate for enterprises, hotels, resorts, cruise ships, and resorts and all that. There you have staff-facing functionality for POS, and you have guest-facing. Guest-facing where you can order the food yourself, where you can use a kiosk to go order your food. Like if you go to Aria in Las Vegas, how many of you have been there? There you will see there is a food outlet mall with about nine outlets where there is no human being manning any terminals. You either scan a QR code and order the food on your phone across nine of the outlets. There is ice cream for my kids and steak for my wife and pizza for myself. You order it, and when the food is ready, it comes to you. Either you order it on your phone or you go to a kiosk and order it. There's nobody manning anything unless there's some refund involved and all that. Those kinds of automations we have done. Aria runs our POS product. That's because everything is on one system now. On-Demand is you sit in your room and order through your phone. With AI, we have enabled voice ordering, where an AI agent will take down your order. Kiosk, IG Fly is a handheld device where the waiter can just manage everything that you need just on a small handheld device. All that is integrated in one unified system. There is no other POS that can truly claim that. As far as PMS is concerned, we modernized the system and built everything you need around it. A service optimization tool, which optimizes all the tasks in a resort or a hotel. An ability to do sales and catering, which is group bookings. By the way, for Amadeus, just those two products alone is more than $150 million annual revenue business. That is how big this industry is. Just those two products, service and sales and catering alone, is more than $150 million. That's how big this industry is and growth path for us. We also built golf, spa, ability to check in with your phone, with a kiosk, a web booking engine where a guest can go and book multiple amenities in one shot. You can book your room, a golf tee time, a spa appointment, a dining reservation, a yoga lesson for tomorrow. All that you can book in one shot. Loyalty promotions. Many of us in this company now are from gaming. We have gaming experience, and they do loyalty promotions very well. We introduced that model as well, and that's one of our fastest-growing products. We built an entire ecosystem of products surrounding POS and PMS, and we are the only player who provides that now. The benefit that brings you is pace of integration. It's easier to integrate when the two R&D teams are sitting together, when the spa and the PMS teams are sitting next to each other. More important is the pace of innovation. Our innovation is driven by customers. There is massive demand for innovation in this industry, and they keep coming to us because there is nobody else of our size who is capable of innovating now. A lot of that innovation requires changes to four products at the same time. There are many water parks we have automated where you just have a wristband that manages everything. We are able to do a lot of innovations now, and this ecosystem, the fact we have that, is our single biggest strength. Now with AI, we are building a whole lot of features based on this ecosystem. This is just an email, just to give you, it is just a fun email we got recently from one of our customers who just moved to our product. They spoke in our user conference as well. In the first 15 minutes of using that web booking engine, they booked over $1.4 million of revenue. In the previous years, we have blanked out our competitor names because we don't want this to get ugly. They could not handle the volumes and crashed. These kinds of stories are more than modern hospitality. Nobody else has a web booking engine that connects to so many of their amenities in one shot. They were about last two user conferences, we have had eight major customers, including Marriott twice, who spoke from main stage and told about 700 other customer users what they have gained from moving to Agilysys systems, and this was one of the customers. Existing customers' average products per property is about 2.3 now. If you count all our properties running our systems and you average out how many products they are using, it's only 2.3. If you go back to this ecosystem I showed you and you count about 20, 25 modules, let's say eight or nine of them will apply to every property. Not every product applies to every property. Like if you don't have golf doesn't apply. If you don't do group booking, sales and catering doesn't apply. It's about eight or nine will apply to every property. They are now only at 2.3. If we don't sell one new customer, we can still grow our revenue. We have enough selling room to just our own customers, even if you don't go sell to a new customer, which of course we are trying to do. AI now, very quickly for a few minutes. We are disciplined about AI. There are about 35+ AI features that we are introducing before the end of July. Many of them are already in place. Many of them are being introduced. They fall into four major categories. One is hyper-personalization. Because we have the ecosystem, we can identify you as a guest across all the amenities, and there are AI-generated guest insights that people who are serving you are getting now that otherwise wouldn't be possible. For that, you need deep domain expertise, you need an ecosystem built, and on top of that, AI is adding a lot of value. Multimodal user experience. A lot of voice chat-based features are being introduced in managing food and beverage, both with the guest and internally within the resort. Agentic AI. There are agents that are working across all the systems that make a lot of workflows easier for you. We are introducing a product called Revenue Intelligence, which is a lot more than the normal revenue management that you have heard of in this industry, which takes into account the guest, their spend, not just in the room, but across all the other variables, everything else that you spend, and really optimizes revenue for you. We expect the first customer to go live on this product before the end of this calendar year. That's an entirely AI-native module. Given we have the ecosystem, we have an intelligent guest profile that connects all the products together. The resorts now understand you as a guest all across the resort, not just in room reservation. Above that, we are building this intelligence layer. This is all unique to us because building this requires a combination of AI. AI is useful for that. It requires an ecosystem. No one else has that. It requires domain expertise built over decades of work. The more important thing about AI is we are building the guardrails around it. That's the first job we did. We are not going to use AI as a crutch to report lowering of profitability for you. All the guardrails around it, controlling development costs, controlling cloud costs, all that has been built in. More important than that, we have to protect our customer interests. For example, we will not be training any LLMs using customer data. We have to take care of PII leakage, personally identifiable information, GDPR in Europe, we have to take care of all that. We are not out of control with AI, but AI is being used both within the company and in our products in a controlled fashion. The first thing we did was we built all these governing guardrails. Within that context, AI is of tremendous use to us. It is really fueling our innovation without having to increase R&D a lot. A lot of things we had to do for customers, now we are able to do at a much faster rate, but all grounded. We are not losing control with AI. Both gross margin and our overall operating margin is expected to improve this year with increased use of AI. AI is not cheap. AI is, number one, not free, number two, it's not cheap. We have all the guardrails in place and it is tightly controlled. I'm given a certain budget of how much AI I can use, and if I cross that budget this month, I'm shut down. DevOps comes and talks to me and borrows money from somebody else and gives it to me, and we have all those procedures in place. We are not going to use it as an excuse for reduced profitability. Only we can build it because we have the full stack, the guest profiles have already been built, and it is cross-silo. It cuts across all the different amenities that you use in a resort. I'll give you one small example, AI guest insights. We have built the intelligent guest profile. What that means is, every one of our products has a guest profile screen. You go, you check in, the reception desk person knows about you. This person has stayed for 50 days and the 50 nights in the last two years, had a bad spa experience, plays golf, does this in dining, all that is there. That data is there, the intelligent guest profile. That screen, that window that you see there in every product looks the same. In the spa, the person who's serving you in the spa, the person who's serving you arranging a golf tee time, the person who's reserving activities for you, the person if you're a member in that resort, all of them have that screen, this layer that pops up that tells you who that guest is. Now with AI, we are able to pop up that two-line description of you. That two line is generated by AI. It cannot do that unless you have the ecosystem of data. It walks through the data and shows you. Visual One is our PMS product. In our PMS, it tells you something about that user. You go to golf, it gives you the same kind of data, but it gives you more golf-specific data. Prefers two scorecards, is allergic to seafood. You go to spa, it gives you, again, data about the guest. It is easy for the person serving you to quickly know who you are and the problems you have had. It tells you last time you came, there was spa dissatisfaction. You can do something about that right now. AI is very helpful when you build it on top of the products you already have. That is just one example. I could show you a lot of examples like that. This is our EBITDA graph, very approximately. Now, in the far right-hand corner of the graph, it was positive because we were capitalizing R&D, and we were showing a bigger EBITDA than we had. It is actually a lot worse than that. We continued to improve it, and then during COVID, it increased because a lot of us were working without salaries for a few months. It steadied, and in the last couple of years, our adjusted EBITDA is really picking up. Because we had to do a lot of the hard work rebuilding our products. We have done that work, and now operating leverage is clicking in. Also, as far as the gross margin is concerned, recurring revenue is now 2/3 of our revenue. It used to be much lower percentage before. Gross margin improvements and below the line improvements are possible for us because we are in a good stage. Now we are going to start behaving like a normal enterprise software company. Now, one other thing you should notice is it took us a few years to go from 15% EBITDA by revenue to 21%. It took us about four years. This year, we have guided from 21% to 24%. We expect that pace to accelerate now. Now there is no excuse. Now we have all the products created. Now we have to behave like a good enterprise software company, and a good enterprise software company is supposed to be in the 30s%. That's what my mentors have taught me. There is no excuse for it being below. Now, we had to rebuild the company, so it was low. Next year we have guided to 24%. Our guidance next year is 24%. We expect revenue to grow from $319 million to $365 million-$370 million, is what we expect, and at least 30% subscription growth. It will be the third consecutive year of at least 30% subscription growth. This 24%. Normally, Q1 is a low profitability quarter for us. Our user conference happens in the month of April. It's a very high-cost conference. There are a lot of things, annual costs, audit costs. Q1, we expect only to be around 16-ish%. We expect the year to be 24%. It's important to judge this business on annual results, not on quarterly results. To start from 16% and end up the whole year at 24%, we expect Q4 to be getting pretty close to 30%. We expect it to be much higher than 24%. If you go look up our results for the last four years, you will see what we exit a year at EBITDA, typically tends to be close to the full year next year profitability. For the last four years, if you take our Q4 profitability and then go look up the next year, it's about the same, ±1% or 2%. We are getting close to becoming, close to a 30% or thereabouts EBITDA by revenue. The journey from 15%-21% took us four years. We don't expect the journey from 21%-30% to take anywhere close to that. That's a very quick overview as fast as I could. Yeah. That's great. Is that on? Yep. I think we just got a couple minutes here. I guess you talked about the user conference Inspire, in April, which was a great event. You guys did- He was there. ... a fantastic job with it. Last two years, we have invited the analyst to attend that. Yep. Maybe just talk about the customer conversations. If we think about these big hospitality owners, operators, where are they focusing right now? What are their bigger pain points, and what does that mean in terms of their, I guess, both propensity to spend on solutions like this and the type of solutions that you're seeing higher interest in? This industry has been hungry for innovation for quite a long time. The major players who dominated this industry from the provider side kind of stopped innovating. They really, the corporations, cruise ships, resorts, hotel chains, are all looking for modernizing their solutions, and it has been quite difficult for them. They are looking to modernize. Now that with AI, they are looking for AI-based features that will make their operations more efficient. More than anything else, they are looking for better guest satisfaction. They are looking to serve their guests better. For that, they need to know the guest better. Know the guest better, not just in terms of rooms, but in terms of everything that they offer. Some offer more amenities than the other, but they want to know their guest better. They don't want to deal with dealing with seven vendors. Some of the biggest success stories we have had is when they see and they come and see. They come for one product, they see our ecosystem, and it solves so many of their problems. They don't want to fight the battle between vendors. These vendors have widely ranging technology levels. It is not easy to connect the systems. I would say they're looking for innovation. They're looking to serve their guests better, they're looking to reduce their integration issues, and they're looking to speed up innovation. The fact that they have 10 amenities should not be slowing down their innovation because they're using seven different products. That's what is at least driving as far as we are concerned, right? Of course, they look for better customer service. Some of the big players here have just not supported customers too well. Those stories are pretty well known. Yeah. That's great. Well, I think we're out of time here. Thank you so much, Ramesh. The breakout is going to be upstairs in the Adler Room for those who want to dig in more with the team. Thank you so much for being here. Thank you.

Speaker 2: All right. We'll get started here. Thank you for joining for the Agilysys session. I'm Stephen Sheldon, and I'm a Research Analyst in the tech group at William Blair, specializing in vertical technology, and also cover Agilysys. Please visit our website at williamblair.com for a complete list of disclosures and potential conflicts of interest. We're thrilled to have the Agilysys team back at our conference again this year. My team initiated coverage on Agilysys, I think, roughly two years ago. All right. all right We'll get started here. we'll get started here Thank you for joining for the Agilysys session. thank you for joining for the agilysys session I'm Stephen Sheldon, and I'm a Research Analyst in the tech group at William Blair, specializing in vertical technology, and also cover Agilysys. i'm stephen sheldon and i'm a research analyst in the tech group at william blair specializing in vertical technology and also cover agilysys Please visit our website at williamblair.com for a complete list of disclosures and potential conflicts of interest. please visit our website at williamblair.com for a complete list of disclosures and potential conflicts of interest We're thrilled to have the Agilysys team back at our conference again this year. we're thrilled to have the agilysys team back at our conference again this year My team initiated coverage on Agilysys, I think, roughly two years ago. my team initiated coverage on agilysys i think roughly two years ago As most probably know, it's one of the leading software providers to the broader hospitality industry for both POS solutions and property management solutions, and has some marquee wins in recent years that I'm sure they'll discuss more. We're happy to have Ramesh Srinivasan here, who's the President and CEO at Agilysys, and then we also have Jess Hennessy from the IR team sitting here in the front row in the audience. With that, I'll quickly turn it over to Ramesh. If we have any time remaining, we'll do some quick Q&A. As most probably know, it's one of the leading software providers to the broader hospitality industry for both POS solutions and property management solutions, and has some marquee wins in recent years that I'm sure they'll discuss more. as most probably know it's one of the leading software providers to the broader hospitality industry for both pos solutions and property management solutions and has some marquee wins in recent years that i'm sure they'll discuss more We're happy to have Ramesh Srinivasan here, who's the President and CEO at Agilysys, and then we also have Jess Hennessy from the IR team sitting here in the front row in the audience. we're happy to have ramesh srinivasan here who's the president and ceo at agilysys and then we also have jess hennessy from the ir team sitting here in the front row in the audience With that, I'll quickly turn it over to Ramesh. with that i'll quickly turn it over to ramesh If we have any time remaining, we'll do some quick Q&A. if we have any time remaining we'll do some quick q&a

Speaker 1: Sure. Thank you. Thank you again for your interest in Agilysys. Thank you for coming down. I won't waste too much time going through the introductions. One quick introduction about myself. I've been in enterprise software for about 30 years, was very lucky to work under tremendous mentors. Spent about seven years at Manhattan Associates in supply chain execution, 1998-2005, when that company went from $40 million annual revenue to about $260 million. The CEO I worked there for for five years took me to a company called Bally Technologies in gaming, which was a really struggling company at that time. A $10 stock went all the way up to $83. I've been with Agilysys now for nine and a half years as its CEO. Sure. sure Thank you. thank you Thank you again for your interest in Agilysys. thank you again for your interest in agilysys Thank you for coming down. thank you for coming down I won't waste too much time going through the introductions. i won't waste too much time going through the introductions One quick introduction about myself. one quick introduction about myself I've been in enterprise software for about 30 years, was very lucky to work under tremendous mentors. i've been in enterprise software for about 30 years was very lucky to work under tremendous mentors Spent about seven years at Manhattan Associates in supply chain execution, 1998 - 2005, when that company went from $40 million annual revenue to about $260 million. spent about seven years at manhattan associates in supply chain execution 1998 - 2005 when that company went from $40 million annual revenue to about $260 million The CEO I worked there for for five years took me to a company called Bally Technologies in gaming, which was a really struggling company at that time. the ceo i worked there for for five years took me to a company called bally technologies in gaming which was a really struggling company at that time A $10 stock went all the way up to $83. a $10 stock went all the way up to $83 I've been with Agilysys now for nine and a half years as its CEO. i've been with agilysys now for nine and a half years as its ceo We went up to 131, but now we are about 85 or so with the current software challenges and all that. If you had invested money in 1998 in Manhattan when I joined, pulled it out 2005 when I left, put that money in Bally, pulled it out in 2014, put it in Agilysys, and now it would be about 22% or so compounded annual growth rate, share price over 25 and a half years. Very lucky. I learned the trade of B2B software and it has worked out fairly well. Again, thank you, Agilysys, and you know the forward-looking statements. We may be making forward-looking statements that you have to be careful about and all that. I don't even know how to word that according to the safe harbor or whatever that is. Okay. The quick history of Agilysys. We went up to 131, but now we are about 85 or so with the current software challenges and all that. we went up to 131 but now we are about 85 or so with the current software challenges and all that If you had invested money in 1998 in Manhattan when I joined, pulled it out 2005 when I left, put that money in Bally, pulled it out in 2014, put it in Agilysys, and now it would be about 22% or so compounded annual growth rate, share price over 25 and a half years. if you had invested money in 1998 in manhattan when i joined pulled it out 2005 when i left put that money in bally pulled it out in 2014 put it in agilysys and now it would be about 22% or so compounded annual growth rate share price over 25 and a half years Very lucky. very lucky I learned the trade of B2B software and it has worked out fairly well. i learned the trade of b2b software and it has worked out fairly well Again, thank you, Agilysys, and you know the forward-looking statements. again thank you agilysys and you know the forward-looking statements We may be making forward-looking statements that you have to be careful about and all that. we may be making forward-looking statements that you have to be careful about and all that I don't even know how to word that according to the safe harbor or whatever that is. i don't even know how to word that according to the safe harbor or whatever that is Okay. okay The quick history of Agilysys. the quick history of agilysys Been public for a very long time, like multiple decades, but the current history starts from 2013. 2013, this company decided to sell off all its other businesses and focus only on hospitality focus software. They had acquired a few old products between 2003 and 2010 or so, sold off all the other businesses, put $100 million in the bank and said, "This is all we are going to do." That's where it started in 2013. The company kind of fumbled its way till 2018. Didn't improve the products much, tried to put all the money into a couple of products that didn't work out well. 2017, January, I was hired to turn this around, and we went through a process till 2023 of completely rewriting all our products. We completely modernized all our solutions and built an ecosystem of hospitality solutions around POS and PMS. Been public for a very long time, like multiple decades, but the current history starts from 2013. 2013, this company decided to sell off all its other businesses and focus only on hospitality focus software. been public for a very long time like multiple decades but the current history starts from 2013 2013 this company decided to sell off all its other businesses and focus only on hospitality focus software They had acquired a few old products between 2003 and 2010 or so, sold off all the other businesses, put $100 million in the bank and said, "This is all we are going to do." That's where it started in 2013. they had acquired a few old products between 2003 and 2010 or so sold off all the other businesses put $100 million in the bank and said "this is all we are going to do." that's where it started in 2013 The company kind of fumbled its way till 2018. the company kind of fumbled its way till 2018 Didn't improve the products much, tried to put all the money into a couple of products that didn't work out well. 2017, January, I was hired to turn this around, and we went through a process till 2023 of completely rewriting all our products. didn't improve the products much tried to put all the money into a couple of products that didn't work out well 2017 january i was hired to turn this around and we went through a process till 2023 of completely rewriting all our products We completely modernized all our solutions and built an ecosystem of hospitality solutions around POS and PMS. we completely modernized all our solutions and built an ecosystem of hospitality solutions around pos and pms That went to about 2023, and now we are in Agilysys 3.0, where modernized solutions, all cloud-native products, and now of course, we are adding AI features on top of it. We've also introduced, we just announced a couple of AI native modules we've added to the ecosystem. That's sort of our history, what we have gone through. You can think of this company, we just finished our year. Our year is April through March. We finished it at about $319 million annual revenue. The best way to think of Agilysys is about a $320 million annual revenue. The next year, we have guided to $365 million-$370 million. Think of us as a $365 million-$370 million annual revenue startup that is about four years old. That went to about 2023, and now we are in Agilysys 3.0, where modernized solutions, all cloud-native products, and now of course, we are adding AI features on top of it. that went to about 2023 and now we are in agilysys 3.0 where modernized solutions all cloud-native products and now of course we are adding ai features on top of it We've also introduced, we just announced a couple of AI native modules we've added to the ecosystem. we've also introduced we just announced a couple of ai native modules we've added to the ecosystem That's sort of our history, what we have gone through. that's sort of our history what we have gone through You can think of this company, we just finished our year. you can think of this company we just finished our year Our year is April through March. our year is april through march We finished it at about $319 million annual revenue. we finished it at about $319 million annual revenue The best way to think of Agilysys is about a $320 million annual revenue. the best way to think of agilysys is about a $320 million annual revenue The next year, we have guided to $365 million-$370 million. the next year we have guided to $365 million-$370 million Think of us as a $365 million-$370 million annual revenue startup that is about four years old. think of us as a $365 million-$370 million annual revenue startup that is about four years old All the products we implement and all that now is about four years old, anywhere from one and a half to four years old. This startup was funded by our old products. We didn't go to PE firm or VC firm to fund us. We got funded by our old products, and we completely recreated ourselves into a modern hospitality-focused technology company. We are 100% hospitality focused. It's a POS, PMS, inventory procurement for food and beverage, and everything around it, and we don't do anything else. There is no reason for us to do anything else because it's a huge total addressable market that is orders of magnitude bigger than us that we are focused on. There's no need to distract ourselves. We are obsessively customer-centric. We could be more profitable than we are now if we are less customer-centric. All the products we implement and all that now is about four years old, anywhere from one and a half to four years old. all the products we implement and all that now is about four years old anywhere from one and a half to four years old This startup was funded by our old products. this startup was funded by our old products We didn't go to PE firm or VC firm to fund us. we didn't go to pe firm or vc firm to fund us We got funded by our old products, and we completely recreated ourselves into a modern hospitality-focused technology company. we got funded by our old products and we completely recreated ourselves into a modern hospitality-focused technology company We are 100% hospitality focused. we are 100% hospitality focused It's a POS, PMS, inventory procurement for food and beverage, and everything around it, and we don't do anything else. it's a pos pms inventory procurement for food and beverage and everything around it and we don't do anything else There is no reason for us to do anything else because it's a huge total addressable market that is orders of magnitude bigger than us that we are focused on. there is no reason for us to do anything else because it's a huge total addressable market that is orders of magnitude bigger than us that we are focused on There's no need to distract ourselves. there's no need to distract ourselves We are obsessively customer-centric. we are obsessively customer-centric We could be more profitable than we are now if we are less customer-centric. we could be more profitable than we are now if we are less customer-centric Everything that we do is state-of-the-art cloud-native. We make the modern versions also work on premises because many hospitality customers want to be on-premise. We don't want to force them to the cloud. 90% of our new installs are all cloud anyway. We provide an end-to-end comprehensive solution offering, which I'll talk about. Very product-focused, innovation-driven company. About 2/3 of our company is in R&D. We are firm believers if the product works well, everything else we can do well. Our mission is to make things easier for hospitality employee users. They are dealing with disparate systems. If a hospitality resort offers you 10 amenities, chances are they are using seven products. We decided to fix that and make it easy for the employee users with integrated innovative systems, and through that, to really improve guest experience. Everything that we do is state-of-the-art cloud-native. everything that we do is state-of-the-art cloud-native We make the modern versions also work on premises because many hospitality customers want to be on-premise. we make the modern versions also work on premises because many hospitality customers want to be on-premise We don't want to force them to the cloud. 90% of our new installs are all cloud anyway. we don't want to force them to the cloud 90% of our new installs are all cloud anyway We provide an end-to-end comprehensive solution offering, which I'll talk about. we provide an end-to-end comprehensive solution offering which i'll talk about Very product-focused, innovation-driven company. very product-focused innovation-driven company About 2/3 of our company is in R&D. about 2/3 of our company is in r&d We are firm believers if the product works well, everything else we can do well. we are firm believers if the product works well everything else we can do well Our mission is to make things easier for hospitality employee users. our mission is to make things easier for hospitality employee users They are dealing with disparate systems. they are dealing with disparate systems If a hospitality resort offers you 10 amenities, chances are they are using seven products. if a hospitality resort offers you 10 amenities chances are they are using seven products We decided to fix that and make it easy for the employee users with integrated innovative systems, and through that, to really improve guest experience. we decided to fix that and make it easy for the employee users with integrated innovative systems and through that to really improve guest experience I'll give you a little bit of flavor of that. Global presence, about 118 countries. In the U.S., the two main offices are Atlanta, which is our headquarters, and Las Vegas. We have a big office in Las Vegas, which is where I'm based at, because almost every property in Las Vegas is our customer, either POS or PMS or both, with the exception of two that only uses our spa product. Otherwise, every property there is our customer, so we have a big office there. We also have about 100 people in Toronto. We have only done two acquisitions in the last 10 years, fairly small acquisitions. 100 people there. We have a very big development center in Chennai, India, which drives a good portion of our R&D. We also have significant R&D in the U.S. and Canada as well. I'll give you a little bit of flavor of that. i'll give you a little bit of flavor of that Global presence, about 118 countries. global presence about 118 countries In the U.S., the two main offices are Atlanta, which is our headquarters, and Las Vegas. in the u.s the two main offices are atlanta which is our headquarters and las vegas We have a big office in Las Vegas, which is where I'm based at, because almost every property in Las Vegas is our customer, either POS or PMS or both, with the exception of two that only uses our spa product. we have a big office in las vegas which is where i'm based at because almost every property in las vegas is our customer either pos or pms or both with the exception of two that only uses our spa product Otherwise, every property there is our customer, so we have a big office there. otherwise every property there is our customer so we have a big office there We also have about 100 people in Toronto. we also have about 100 people in toronto We have only done two acquisitions in the last 10 years, fairly small acquisitions. 100 people there. we have only done two acquisitions in the last 10 years fairly small acquisitions 100 people there We have a very big development center in Chennai, India, which drives a good portion of our R&D. we have a very big development center in chennai india which drives a good portion of our r&d We also have significant R&D in the U.S. and Canada as well. we also have significant r&d in the u.s and canada as well All the customers you can think of across the globe, we serve virtually every big customer you can think of in hospitality all across the globe. They are divided into four major verticals. We are big players in the gaming casino. We have just had a DNA in this industry. More than 50% of our revenue comes from casino gaming. We also serve managed food service, is a major vertical for us. Some of the biggest cafeterias in the world are run by a handful of food service providers. They use our technology. Like Marriott, Microsoft's entire compound in Redmond, 34 cafes use our POS technology. Marriott's headquarters in Bethesda, Maryland, when their executives go to order their food and all, that runs our POS technology. A good portion of the Ivy League universities. We are in higher education, in hospitals, healthcare. All the customers you can think of across the globe, we serve virtually every big customer you can think of in hospitality all across the globe. all the customers you can think of across the globe we serve virtually every big customer you can think of in hospitality all across the globe They are divided into four major verticals. they are divided into four major verticals We are big players in the gaming casino. we are big players in the gaming casino We have just had a DNA in this industry. we have just had a dna in this industry More than 50% of our revenue comes from casino gaming. more than 50% of our revenue comes from casino gaming We also serve managed food service, is a major vertical for us. we also serve managed food service is a major vertical for us Some of the biggest cafeterias in the world are run by a handful of food service providers. some of the biggest cafeterias in the world are run by a handful of food service providers They use our technology. they use our technology Like Marriott, Microsoft's entire compound in Redmond, 34 cafes use our POS technology. like marriott microsoft's entire compound in redmond 34 cafes use our pos technology Marriott's headquarters in Bethesda, Maryland, when their executives go to order their food and all, that runs our POS technology. marriott's headquarters in bethesda maryland when their executives go to order their food and all that runs our pos technology A good portion of the Ivy League universities. a good portion of the ivy league universities We are in higher education, in hospitals, healthcare. we are in higher education in hospitals healthcare Those are all the different verticals we serve with our POS product. Hotel and cruise ships, that's probably our sweet spot. Multi-unit restaurants is our sweet spot. We are also a significant player in cruise ships. Carnival UK, 11 of their ships have replaced competing products with us. International. We treat that as a separate vertical. Our market share in international regions are very low. We are just beginning to make an impact in international regions, mostly APAC and EMEA. We don't have much of a presence yet in South America. In Mexico, South America, we don't have much of a presence. Those are all major growth areas. Gaming, we have reasonable market share, more in POS than in PMS. In all the other verticals, our market share is extremely low, single digits, and international probably goes to the decimal place. Those are all the different verticals we serve with our POS product. those are all the different verticals we serve with our pos product Hotel and cruise ships, that's probably our sweet spot. product hotel and cruise ships that's probably our sweet spot Multi-unit restaurants is our sweet spot. multi-unit restaurants is our sweet spot We are also a significant player in cruise ships. we are also a significant player in cruise ships Carnival UK, 11 of their ships have replaced competing products with us. carnival uk 11 of their ships have replaced competing products with us International. international We treat that as a separate vertical. we treat that as a separate vertical Our market share in international regions are very low. our market share in international regions are very low We are just beginning to make an impact in international regions, mostly APAC and EMEA. we are just beginning to make an impact in international regions mostly apac and emea We don't have much of a presence yet in South America. we don't have much of a presence yet in south america In Mexico, South America, we don't have much of a presence. in mexico south america we don't have much of a presence Those are all major growth areas. those are all major growth areas Gaming, we have reasonable market share, more in POS than in PMS. gaming we have reasonable market share more in pos than in pms In all the other verticals, our market share is extremely low, single digits, and international probably goes to the decimal place. in all the other verticals our market share is extremely low single digits and international probably goes to the decimal place There are many different growth paths ahead of this business. Revenue growth, to just give you an idea, we started turning the company around March 2017 or so, nine consecutive quarters record revenue growth. COVID hit. We recovered quickly from COVID because of all the innovations we had done before. Now we are on a streak of 17 consecutive record revenue quarters, sequentially increasing record revenue quarters for 17 quarters now. That includes subscription revenue growth. That's how our subscription revenue growth has gone over the years. If you look at it carefully, you will see we have doubled it in about two and a half years. In the last two and a half years, our subscription revenue has doubled, and before that, the doubling took about three years. There are many different growth paths ahead of this business. there are many different growth paths ahead of this business Revenue growth, to just give you an idea, we started turning the company around March 2017 or so, nine consecutive quarters record revenue growth. revenue growth to just give you an idea we started turning the company around march 2017 or so nine consecutive quarters record revenue growth COVID hit. covid hit We recovered quickly from COVID because of all the innovations we had done before. we recovered quickly from covid because of all the innovations we had done before Now we are on a streak of 17 consecutive record revenue quarters, sequentially increasing record revenue quarters for 17 quarters now. now we are on a streak of 17 consecutive record revenue quarters sequentially increasing record revenue quarters for 17 quarters now That includes subscription revenue growth. that includes subscription revenue growth That's how our subscription revenue growth has gone over the years. that's how our subscription revenue growth has gone over the years If you look at it carefully, you will see we have doubled it in about two and a half years. if you look at it carefully you will see we have doubled it in about two and a half years In the last two and a half years, our subscription revenue has doubled, and before that, the doubling took about three years. in the last two and a half years our subscription revenue has doubled and before that the doubling took about three years During the last four years, coming out of COVID, our fiscal year ends in March, fiscal 2021, which ended March 2021, was our COVID pandemic year. The year after that, our revenue was about $160 million. In the last four years, we have doubled our revenue, and we have tripled our subscription revenue. That's sort of the rate of growth the company has been in the last four years or so. FY 2026 that we just announced results mid-May, that is end of our year, March 2026. That's where we ended FY 2026. We are now in FY 2027. The year has just started for us. Grew 16% revenue year-over-year growth. That's a little bit misleading because that includes perpetual license and hardware revenue, which is not growing much for us. During the last four years, coming out of COVID, our fiscal year ends in March, fiscal 2021, which ended March 2021, was our COVID pandemic year. during the last four years coming out of covid our fiscal year ends in march fiscal 2021 which ended march 2021 was our covid pandemic year The year after that, our revenue was about $160 million. the year after that our revenue was about $160 million In the last four years, we have doubled our revenue, and we have tripled our subscription revenue. in the last four years we have doubled our revenue and we have tripled our subscription revenue That's sort of the rate of growth the company has been in the last four years or so. that's sort of the rate of growth the company has been in the last four years or so FY 2026 that we just announced results mid-May, that is end of our year, March 2026. fy 2026 that we just announced results mid-may that is end of our year march 2026 That's where we ended FY 2026. that's where we ended fy 2026 We are now in FY 2027. we are now in fy 2027 The year has just started for us. the year has just started for us Grew 16% revenue year-over-year growth. grew 16% revenue year-over-year growth That's a little bit misleading because that includes perpetual license and hardware revenue, which is not growing much for us. that's a little bit misleading because that includes perpetual license and hardware revenue which is not growing much for us We call it product revenue because most of the customers are choosing the cloud subscription, so they don't buy much perpetual licenses, which is good for us. Our POS product pulls less and less hardware now because the recent versions in the last three, four years, we opened it up to support all operating systems. If you're running a restaurant and you used 10 terminals before, today you can run it with six terminals and four iPads, we are good with you buying iPads yourself. We've opened up the system, so we are attaching less and less hardware, which we don't mind. Despite the product revenue bucket not growing at all and services revenue growing at about 5%-10%, I will explain that, the overall revenue is still growing by 16%. That's mostly because of subscription revenue growth rate. We call it product revenue because most of the customers are choosing the cloud subscription, so they don't buy much perpetual licenses, which is good for us. we call it product revenue because most of the customers are choosing the cloud subscription so they don't buy much perpetual licenses which is good for us Our POS product pulls less and less hardware now because the recent versions in the last three, four years, we opened it up to support all operating systems. our pos product pulls less and less hardware now because the recent versions in the last three four years we opened it up to support all operating systems If you're running a restaurant and you used 10 terminals before, today you can run it with six terminals and four iPads, we are good with you buying iPads yourself. if you're running a restaurant and you used 10 terminals before today you can run it with six terminals and four ipads we are good with you buying ipads yourself We've opened up the system, so we are attaching less and less hardware, which we don't mind. we've opened up the system so we are attaching less and less hardware which we don't mind Despite the product revenue bucket not growing at all and services revenue growing at about 5%-10%, I will explain that, the overall revenue is still growing by 16%. despite the product revenue bucket not growing at all and services revenue growing at about 5%-10% i will explain that the overall revenue is still growing by 16% That's mostly because of subscription revenue growth rate. that's mostly because of subscription revenue growth rate We guided this year, FY 2027, to at least 30% subscription revenue growth. That will make it the third consecutive year it has grown by more than 30% subscription revenue. We have grown subscription revenue year-over-year by at least 23% for 18 consecutive quarters. For four and a half years now, quarter, year-over-year, each quarter has grown by at least 23%. That's the rate at which we are growing our subscription revenue now that we have modernized our products and all that. Now, if you think of this company now, about 2/3 of our total revenue is recurring, which is subscription plus annual maintenance, and growing. Two-thirds of our business now is recurring, and 2/3 of that recurring is subscription revenue. Two-thirds times two-thirds, about four by nine. We guided this year, FY 2027, to at least 30% subscription revenue growth. we guided this year fy 2027 to at least 30% subscription revenue growth That will make it the third consecutive year it has grown by more than 30% subscription revenue. that will make it the third consecutive year it has grown by more than 30% subscription revenue We have grown subscription revenue year-over-year by at least 23% for 18 consecutive quarters. we have grown subscription revenue year-over-year by at least 23% for 18 consecutive quarters For four and a half years now, quarter, year-over-year, each quarter has grown by at least 23%. for four and a half years now quarter year-over-year each quarter has grown by at least 23% That's the rate at which we are growing our subscription revenue now that we have modernized our products and all that. that's the rate at which we are growing our subscription revenue now that we have modernized our products and all that Now, if you think of this company now, about 2/3 of our total revenue is recurring, which is subscription plus annual maintenance, and growing. now if you think of this company now about 2/3 of our total revenue is recurring which is subscription plus annual maintenance and growing Two-thirds of our business now is recurring, and 2/3 of that recurring is subscription revenue. two-thirds of our business now is recurring and 2/3 of that recurring is subscription revenue Two-thirds times two-thirds, about four by nine . two-thirds times two-thirds about four by nine You think of we are reaching a stage, one of the quarters this fiscal year we'll be crossing, where more than half of our revenue is subscription revenue. A few years ago, it was a much smaller percentage. Subscription revenue is what is driving our growth. POS is still about 50%+ of our business. It used to be more than 60%, and PMS is fast catching up. Now, property management system is all software. There is no attached hardware or anything like that, and property management system is our fastest-growing segment, and I'm sure many of you know December 2022, Marriott chose us for thousands of their properties for PMS, and we were not even part of the original RFP. They were running the RFP for 10 months. We were not even part of it. You think of we are reaching a stage, one of the quarters this fiscal year we'll be crossing, where more than half of our revenue is subscription revenue. you think of we are reaching a stage one of the quarters this fiscal year we'll be crossing where more than half of our revenue is subscription revenue A few years ago, it was a much smaller percentage. a few years ago it was a much smaller percentage Subscription revenue is what is driving our growth. subscription revenue is what is driving our growth POS is still about 50% + of our business. pos is still about 50% + of our business It used to be more than 60%, and PMS is fast catching up. it used to be more than 60% and pms is fast catching up Now, property management system is all software. now property management system is all software There is no attached hardware or anything like that, and property management system is our fastest-growing segment, and I'm sure many of you know December 2022, Marriott chose us for thousands of their properties for PMS, and we were not even part of the original RFP. there is no attached hardware or anything like that and property management system is our fastest-growing segment and i'm sure many of you know december 2022 marriott chose us for thousands of their properties for pms and we were not even part of the original rfp They were running the RFP for 10 months. they were running the rfp for 10 months We were not even part of it. we were not even part of it Someone told Marriott about us, and the single biggest deal we have ever won in our company's history was an incoming 800 call from a small company called Marriott that was interested in our PMS. We first thought it was a prank call. We literally thought it was a prank call. They didn't even call one of our executives. We called them, they said, "No, we are serious. We've been looking at it for 10 months. We don't like the other products we saw. We have not liked it great. Somebody told us about you, can you show us your product next week?" They gave all the other vendors three months to prepare. We showed them the products, they are blown away, and now we are in the process of going live. Someone told Marriott about us, and the single biggest deal we have ever won in our company's history was an incoming 800 call from a small company called Marriott that was interested in our PMS. someone told marriott about us and the single biggest deal we have ever won in our company's history was an incoming 800 call from a small company called marriott that was interested in our pms We first thought it was a prank call. we first thought it was a prank call We literally thought it was a prank call. we literally thought it was a prank call They didn't even call one of our executives. they didn't even call one of our executives We called them, they said, "No, we are serious. we called them they said "no we are serious We've been looking at it for 10 months. we've been looking at it for 10 months We don't like the other products we saw. we don't like the other products we saw We have not liked it great. we have not liked it great Somebody told us about you, can you show us your product next week?" They gave all the other vendors three months to prepare. somebody told us about you can you show us your product next week?" they gave all the other vendors three months to prepare We showed them the products, they are blown away, and now we are in the process of going live. we showed them the products they are blown away and now we are in the process of going live If you listen to Marriott's earnings call a few weeks ago, more than 1,000 properties are already live, and that process is going on, and that's PMS. This year, we expect this fiscal year PMS recurring revenue to cross POS for the first time. Recurring revenue. This is total revenue. We have a few other products as well. We have inventory procurement only for food and beverage. If you're running a restaurant to manage your inventory and when you order a hamburger, the inventory of buns and burger goes down. When it goes below a certain level, it automatically kicks off procurement and all that process. That's about 4% or 5% of our business. The good news and bad news about this business is only 9% is international. If you listen to Marriott's earnings call a few weeks ago, more than 1,000 properties are already live, and that process is going on, and that's PMS. if you listen to marriott's earnings call a few weeks ago more than 1,000 properties are already live and that process is going on and that's pms This year, we expect this fiscal year PMS recurring revenue to cross POS for the first time. this year we expect this fiscal year pms recurring revenue to cross pos for the first time Recurring revenue. recurring revenue This is total revenue. this is total revenue We have a few other products as well. we have a few other products as well We have inventory procurement only for food and beverage. we have inventory procurement only for food and beverage If you're running a restaurant to manage your inventory and when you order a hamburger, the inventory of buns and burger goes down. if you're running a restaurant to manage your inventory and when you order a hamburger the inventory of buns and burger goes down When it goes below a certain level, it automatically kicks off procurement and all that process. when it goes below a certain level it automatically kicks off procurement and all that process That's about 4% or 5% of our business. that's about 4% or 5% of our business The good news and bad news about this business is only 9% is international. the good news and bad news about this business is only 9% is international We really started focusing on international a few years ago after our products are modernized, and we have a huge growth path ahead of us. We have not made a major impact in APAC and EMEA yet. Many big customers have signed up with us, and Marriott, Hilton, and IHG and all that are also going to carry us into that international agency. The total addressable market is $16 billion, depending on which numbers you believe, $14 billion, $18 billion. I've seen different numbers. We don't bother to measure it too accurately. Our current annual recurring revenue is $217 million last year, trailing 12 months. We are a small player in a huge total addressable market. We have a long growth path ahead of us, hence our focus only on this. We really started focusing on international a few years ago after our products are modernized, and we have a huge growth path ahead of us. we really started focusing on international a few years ago after our products are modernized and we have a huge growth path ahead of us We have not made a major impact in APAC and EMEA yet. we have not made a major impact in apac and emea yet Many big customers have signed up with us, and Marriott, Hilton, and IHG and all that are also going to carry us into that international agency. many big customers have signed up with us and marriott hilton and ihg and all that are also going to carry us into that international agency The total addressable market is $16 billion, depending on which numbers you believe, $14 billion, $18 billion. the total addressable market is $16 billion depending on which numbers you believe $14 billion $18 billion I've seen different numbers. i've seen different numbers We don't bother to measure it too accurately. we don't bother to measure it too accurately Our current annual recurring revenue is $217 million last year, trailing 12 months. our current annual recurring revenue is $217 million last year trailing 12 months We are a small player in a huge total addressable market. we are a small player in a huge total addressable market We have a long growth path ahead of us, hence our focus only on this. we have a long growth path ahead of us hence our focus only on this The history of this industry is there were two, three major dominating players who dominated this technology pace for 20 years when we were struggling, and they have stopped innovating. They have focuses in other areas. They do much other different businesses. We found an innovation gap, and we are bridging that gap. We are a fast-growing company operating in a huge pond. Anybody you talk to will tell you it is somewhere between $14 billion and $20 billion, and we are only like $200 million. We have a massive growth path ahead of us. We built an ecosystem. This is our biggest strength. You see there InfoGenesis, that's our POS product. Around the POS product on your far right corner, we created a whole bunch of modules that work with POS. The history of this industry is there were two, three major dominating players who dominated this technology pace for 20 years when we were struggling, and they have stopped innovating. the history of this industry is there were two three major dominating players who dominated this technology pace for 20 years when we were struggling and they have stopped innovating They have focuses in other areas. they have focuses in other areas They do much other different businesses. they do much other different businesses We found an innovation gap, and we are bridging that gap. we found an innovation gap and we are bridging that gap We are a fast-growing company operating in a huge pond. we are a fast-growing company operating in a huge pond Anybody you talk to will tell you it is somewhere between $14 billion and $20 billion, and we are only like $200 million. anybody you talk to will tell you it is somewhere between $14 billion and $20 billion and we are only like $200 million We have a massive growth path ahead of us. we have a massive growth path ahead of us We built an ecosystem. we built an ecosystem This is our biggest strength. this is our biggest strength You see there InfoGenesis, that's our POS product. you see there infogenesis that's our pos product Around the POS product on your far right corner, we created a whole bunch of modules that work with POS. around the pos product on your far right corner we created a whole bunch of modules that work with pos When you think of a restaurant, we don't operate in retail restaurants, we are only in enterprise software. We don't compete with Toast on the retail restaurants and all that. We only operate for enterprises, hotels, resorts, cruise ships, and resorts and all that. There you have staff-facing functionality for POS, and you have guest-facing. Guest-facing where you can order the food yourself, where you can use a kiosk to go order your food. Like if you go to Aria in Las Vegas, how many of you have been there? There you will see there is a food outlet mall with about nine outlets where there is no human being manning any terminals. You either scan a QR code and order the food on your phone across nine of the outlets. There is ice cream for my kids and steak for my wife and pizza for myself. When you think of a restaurant, we don't operate in retail restaurants, we are only in enterprise software. when you think of a restaurant we don't operate in retail restaurants we are only in enterprise software We don't compete with Toast on the retail restaurants and all that. we don't compete with toast on the retail restaurants and all that We only operate for enterprises, hotels, resorts, cruise ships, and resorts and all that. we only operate for enterprises hotels resorts cruise ships and resorts and all that There you have staff-facing functionality for POS, and you have guest-facing. there you have staff-facing functionality for pos and you have guest-facing Guest-facing where you can order the food yourself, where you can use a kiosk to go order your food. guest-facing where you can order the food yourself where you can use a kiosk to go order your food Like if you go to Aria in Las Vegas, how many of you have been there? like if you go to aria in las vegas how many of you have been there There you will see there is a food outlet mall with about nine outlets where there is no human being manning any terminals. there you will see there is a food outlet mall with about nine outlets where there is no human being manning any terminals You either scan a QR code and order the food on your phone across nine of the outlets. you either scan a qr code and order the food on your phone across nine of the outlets There is ice cream for my kids and steak for my wife and pizza for myself. there is ice cream for my kids and steak for my wife and pizza for myself You order it, and when the food is ready, it comes to you. Either you order it on your phone or you go to a kiosk and order it. There's nobody manning anything unless there's some refund involved and all that. Those kinds of automations we have done. Aria runs our POS product. That's because everything is on one system now. On-Demand is you sit in your room and order through your phone. With AI, we have enabled voice ordering, where an AI agent will take down your order. Kiosk, IG Fly is a handheld device where the waiter can just manage everything that you need just on a small handheld device. All that is integrated in one unified system. There is no other POS that can truly claim that. As far as PMS is concerned, we modernized the system and built everything you need around it. You order it, and when the food is ready, it comes to you. you order it and when the food is ready it comes to you Either you order it on your phone or you go to a kiosk and order it. either you order it on your phone or you go to a kiosk and order it There's nobody manning anything unless there's some refund involved and all that. there's nobody manning anything unless there's some refund involved and all that Those kinds of automations we have done. those kinds of automations we have done Aria runs our POS product. aria runs our pos product That's because everything is on one system now. that's because everything is on one system now On-Demand is you sit in your room and order through your phone. on-demand is you sit in your room and order through your phone With AI, we have enabled voice ordering, where an AI agent will take down your order. with ai we have enabled voice ordering where an ai agent will take down your order Kiosk, IG Fly is a handheld device where the waiter can just manage everything that you need just on a small handheld device. kiosk ig fly is a handheld device where the waiter can just manage everything that you need just on a small handheld device All that is integrated in one unified system. all that is integrated in one unified system There is no other POS that can truly claim that. there is no other pos that can truly claim that As far as PMS is concerned, we modernized the system and built everything you need around it. as far as pms is concerned we modernized the system and built everything you need around it A service optimization tool, which optimizes all the tasks in a resort or a hotel. An ability to do sales and catering, which is group bookings. By the way, for Amadeus, just those two products alone is more than $150 million annual revenue business. That is how big this industry is. Just those two products, service and sales and catering alone, is more than $150 million. That's how big this industry is and growth path for us. We also built golf, spa, ability to check in with your phone, with a kiosk, a web booking engine where a guest can go and book multiple amenities in one shot. You can book your room, a golf tee time, a spa appointment, a dining reservation, a yoga lesson for tomorrow. All that you can book in one shot. Loyalty promotions. Many of us in this company now are from gaming. A service optimization tool, which optimizes all the tasks in a resort or a hotel. a service optimization tool which optimizes all the tasks in a resort or a hotel An ability to do sales and catering, which is group bookings. an ability to do sales and catering which is group bookings By the way, for Amadeus, just those two products alone is more than $150 million annual revenue business. by the way for amadeus just those two products alone is more than $150 million annual revenue business That is how big this industry is. that is how big this industry is Just those two products, service and sales and catering alone, is more than $150 million. just those two products service and sales and catering alone is more than $150 million That's how big this industry is and growth path for us. that's how big this industry is and growth path for us We also built golf, spa, ability to check in with your phone, with a kiosk, a web booking engine where a guest can go and book multiple amenities in one shot. we also built golf spa ability to check in with your phone with a kiosk a web booking engine where a guest can go and book multiple amenities in one shot You can book your room, a golf tee time, a spa appointment, a dining reservation, a yoga lesson for tomorrow. you can book your room a golf tee time a spa appointment a dining reservation a yoga lesson for tomorrow All that you can book in one shot. all that you can book in one shot Loyalty promotions. loyalty promotions Many of us in this company now are from gaming. many of us in this company now are from gaming We have gaming experience, and they do loyalty promotions very well. We introduced that model as well, and that's one of our fastest-growing products. We built an entire ecosystem of products surrounding POS and PMS, and we are the only player who provides that now. The benefit that brings you is pace of integration. It's easier to integrate when the two R&D teams are sitting together, when the spa and the PMS teams are sitting next to each other. More important is the pace of innovation. Our innovation is driven by customers. There is massive demand for innovation in this industry, and they keep coming to us because there is nobody else of our size who is capable of innovating now. A lot of that innovation requires changes to four products at the same time. We have gaming experience, and they do loyalty promotions very well. we have gaming experience and they do loyalty promotions very well We introduced that model as well, and that's one of our fastest-growing products. we introduced that model as well and that's one of our fastest-growing products We built an entire ecosystem of products surrounding POS and PMS, and we are the only player who provides that now. we built an entire ecosystem of products surrounding pos and pms and we are the only player who provides that now The benefit that brings you is pace of integration. the benefit that brings you is pace of integration It's easier to integrate when the two R&D teams are sitting together, when the spa and the PMS teams are sitting next to each other. it's easier to integrate when the two r&d teams are sitting together when the spa and the pms teams are sitting next to each other More important is the pace of innovation. more important is the pace of innovation Our innovation is driven by customers. our innovation is driven by customers There is massive demand for innovation in this industry, and they keep coming to us because there is nobody else of our size who is capable of innovating now. there is massive demand for innovation in this industry and they keep coming to us because there is nobody else of our size who is capable of innovating now A lot of that innovation requires changes to four products at the same time. a lot of that innovation requires changes to four products at the same time There are many water parks we have automated where you just have a wristband that manages everything. We are able to do a lot of innovations now, and this ecosystem, the fact we have that, is our single biggest strength. Now with AI, we are building a whole lot of features based on this ecosystem. This is just an email, just to give you, it is just a fun email we got recently from one of our customers who just moved to our product. They spoke in our user conference as well. In the first 15 minutes of using that web booking engine, they booked over $1.4 million of revenue. In the previous years, we have blanked out our competitor names because we don't want this to get ugly. They could not handle the volumes and crashed. These kinds of stories are more than modern hospitality. There are many water parks we have automated where you just have a wristband that manages everything. there are many water parks we have automated where you just have a wristband that manages everything We are able to do a lot of innovations now, and this ecosystem, the fact we have that, is our single biggest strength. we are able to do a lot of innovations now and this ecosystem the fact we have that is our single biggest strength Now with AI, we are building a whole lot of features based on this ecosystem. now with ai we are building a whole lot of features based on this ecosystem This is just an email, just to give you, it is just a fun email we got recently from one of our customers who just moved to our product. this is just an email just to give you it is just a fun email we got recently from one of our customers who just moved to our product They spoke in our user conference as well. they spoke in our user conference as well In the first 15 minutes of using that web booking engine, they booked over $1.4 million of revenue. in the first 15 minutes of using that web booking engine they booked over $1.4 million of revenue In the previous years, we have blanked out our competitor names because we don't want this to get ugly. in the previous years we have blanked out our competitor names because we don't want this to get ugly They could not handle the volumes and crashed. These kinds of stories are more than modern hospitality. they could not handle the volumes and crashed. these kinds of stories are more than modern hospitality Nobody else has a web booking engine that connects to so many of their amenities in one shot. They were about last two user conferences, we have had eight major customers, including Marriott twice, who spoke from main stage and told about 700 other customer users what they have gained from moving to Agilysys systems, and this was one of the customers. Existing customers' average products per property is about 2.3 now. If you count all our properties running our systems and you average out how many products they are using, it's only 2.3. If you go back to this ecosystem I showed you and you count about 20, 25 modules, let's say eight or nine of them will apply to every property. Not every product applies to every property. Like if you don't have golf doesn't apply. Nobody else has a web booking engine that connects to so many of their amenities in one shot. nobody else has a web booking engine that connects to so many of their amenities in one shot They were about last two user conferences, we have had eight major customers, including Marriott twice, who spoke from main stage and told about 700 other customer users what they have gained from moving to Agilysys systems, and this was one of the customers. they were about last two user conferences we have had eight major customers including marriott twice who spoke from main stage and told about 700 other customer users what they have gained from moving to agilysys systems and this was one of the customers Existing customers' average products per property is about 2.3 now. existing customers' average products per property is about 2.3 now If you count all our properties running our systems and you average out how many products they are using, it's only 2.3. if you count all our properties running our systems and you average out how many products they are using it's only 2.3 If you go back to this ecosystem I showed you and you count about 20, 25 modules, let's say eight or nine of them will apply to every property. if you go back to this ecosystem i showed you and you count about 20 25 modules let's say eight or nine of them will apply to every property Not every product applies to every property. not every product applies to every property Like if you don't have golf doesn't apply. like if you don't have golf doesn't apply If you don't do group booking, sales and catering doesn't apply. It's about eight or nine will apply to every property. They are now only at 2.3. If we don't sell one new customer, we can still grow our revenue. We have enough selling room to just our own customers, even if you don't go sell to a new customer, which of course we are trying to do. AI now, very quickly for a few minutes. We are disciplined about AI. There are about 35+ AI features that we are introducing before the end of July. Many of them are already in place. Many of them are being introduced. They fall into four major categories. One is hyper-personalization. If you don't do group booking, sales and catering doesn't apply. if you don't do group booking sales and catering doesn't apply It's about eight or nine will apply to every property. it's about eight or nine will apply to every property They are now only at 2.3. they are now only at 2.3 If we don't sell one new customer, we can still grow our revenue. if we don't sell one new customer we can still grow our revenue We have enough selling room to just our own customers, even if you don't go sell to a new customer, which of course we are trying to do. we have enough selling room to just our own customers even if you don't go sell to a new customer which of course we are trying to do AI now, very quickly for a few minutes. ai now very quickly for a few minutes We are disciplined about AI. we are disciplined about ai There are about 35 + AI features that we are introducing before the end of July. there are about 35 + ai features that we are introducing before the end of july Many of them are already in place. many of them are already in place Many of them are being introduced. many of them are being introduced They fall into four major categories. they fall into four major categories One is hyper-personalization. one is hyper-personalization Because we have the ecosystem, we can identify you as a guest across all the amenities, and there are AI-generated guest insights that people who are serving you are getting now that otherwise wouldn't be possible. For that, you need deep domain expertise, you need an ecosystem built, and on top of that, AI is adding a lot of value. Multimodal user experience. A lot of voice chat-based features are being introduced in managing food and beverage, both with the guest and internally within the resort. Agentic AI. There are agents that are working across all the systems that make a lot of workflows easier for you. Because we have the ecosystem, we can identify you as a guest across all the amenities, and there are AI-generated guest insights that people who are serving you are getting now that otherwise wouldn't be possible. because we have the ecosystem we can identify you as a guest across all the amenities and there are ai-generated guest insights that people who are serving you are getting now that otherwise wouldn't be possible For that, you need deep domain expertise, you need an ecosystem built, and on top of that, AI is adding a lot of value. for that you need deep domain expertise you need an ecosystem built and on top of that ai is adding a lot of value Multimodal user experience. multimodal user experience A lot of voice chat-based features are being introduced in managing food and beverage, both with the guest and internally within the resort. a lot of voice chat-based features are being introduced in managing food and beverage both with the guest and internally within the resort Agentic AI. agentic ai There are agents that are working across all the systems that make a lot of workflows easier for you. there are agents that are working across all the systems that make a lot of workflows easier for you We are introducing a product called Revenue Intelligence, which is a lot more than the normal revenue management that you have heard of in this industry, which takes into account the guest, their spend, not just in the room, but across all the other variables, everything else that you spend, and really optimizes revenue for you. We expect the first customer to go live on this product before the end of this calendar year. That's an entirely AI-native module. Given we have the ecosystem, we have an intelligent guest profile that connects all the products together. The resorts now understand you as a guest all across the resort, not just in room reservation. Above that, we are building this intelligence layer. This is all unique to us because building this requires a combination of AI. AI is useful for that. It requires an ecosystem. We are introducing a product called Revenue Intelligence, which is a lot more than the normal revenue management that you have heard of in this industry, which takes into account the guest, their spend, not just in the room, but across all the other variables, everything else that you spend, and really optimizes revenue for you. we are introducing a product called revenue intelligence which is a lot more than the normal revenue management that you have heard of in this industry which takes into account the guest their spend not just in the room but across all the other variables everything else that you spend and really optimizes revenue for you We expect the first customer to go live on this product before the end of this calendar year. we expect the first customer to go live on this product before the end of this calendar year That's an entirely AI-native module. that's an entirely ai-native module Given we have the ecosystem, we have an intelligent guest profile that connects all the products together. given we have the ecosystem we have an intelligent guest profile that connects all the products together The resorts now understand you as a guest all across the resort, not just in room reservation. the resorts now understand you as a guest all across the resort not just in room reservation Above that, we are building this intelligence layer. above that we are building this intelligence layer This is all unique to us because building this requires a combination of AI. this is all unique to us because building this requires a combination of ai AI is useful for that. ai is useful for that It requires an ecosystem. it requires an ecosystem No one else has that. It requires domain expertise built over decades of work. The more important thing about AI is we are building the guardrails around it. That's the first job we did. We are not going to use AI as a crutch to report lowering of profitability for you. All the guardrails around it, controlling development costs, controlling cloud costs, all that has been built in. More important than that, we have to protect our customer interests. For example, we will not be training any LLMs using customer data. We have to take care of PII leakage, personally identifiable information, GDPR in Europe, we have to take care of all that. We are not out of control with AI, but AI is being used both within the company and in our products in a controlled fashion. No one else has that. no one else has that It requires domain expertise built over decades of work. it requires domain expertise built over decades of work The more important thing about AI is we are building the guardrails around it. the more important thing about ai is we are building the guardrails around it That's the first job we did. that's the first job we did We are not going to use AI as a crutch to report lowering of profitability for you. we are not going to use ai as a crutch to report lowering of profitability for you All the guardrails around it, controlling development costs, controlling cloud costs, all that has been built in. all the guardrails around it controlling development costs controlling cloud costs all that has been built in More important than that, we have to protect our customer interests. more important than that we have to protect our customer interests For example, we will not be training any LLMs using customer data. for example we will not be training any llms using customer data We have to take care of PII leakage, personally identifiable information, GDPR in Europe, we have to take care of all that. we have to take care of pii leakage personally identifiable information gdpr in europe we have to take care of all that We are not out of control with AI, but AI is being used both within the company and in our products in a controlled fashion. we are not out of control with ai but ai is being used both within the company and in our products in a controlled fashion The first thing we did was we built all these governing guardrails. Within that context, AI is of tremendous use to us. It is really fueling our innovation without having to increase R&D a lot. A lot of things we had to do for customers, now we are able to do at a much faster rate, but all grounded. We are not losing control with AI. Both gross margin and our overall operating margin is expected to improve this year with increased use of AI. AI is not cheap. AI is, number one, not free, number two, it's not cheap. We have all the guardrails in place and it is tightly controlled. I'm given a certain budget of how much AI I can use, and if I cross that budget this month, I'm shut down. The first thing we did was we built all these governing guardrails. the first thing we did was we built all these governing guardrails Within that context, AI is of tremendous use to us. within that context ai is of tremendous use to us It is really fueling our innovation without having to increase R&D a lot. it is really fueling our innovation without having to increase r&d a lot A lot of things we had to do for customers, now we are able to do at a much faster rate, but all grounded. a lot of things we had to do for customers now we are able to do at a much faster rate but all grounded We are not losing control with AI. we are not losing control with ai Both gross margin and our overall operating margin is expected to improve this year with increased use of AI. both gross margin and our overall operating margin is expected to improve this year with increased use of ai AI is not cheap. ai is not cheap AI is, number one, not free, number two, it's not cheap. ai is number one not free number two it's not cheap We have all the guardrails in place and it is tightly controlled. we have all the guardrails in place and it is tightly controlled I'm given a certain budget of how much AI I can use, and if I cross that budget this month, I'm shut down. i'm given a certain budget of how much ai i can use and if i cross that budget this month i'm shut down DevOps comes and talks to me and borrows money from somebody else and gives it to me, and we have all those procedures in place. We are not going to use it as an excuse for reduced profitability. Only we can build it because we have the full stack, the guest profiles have already been built, and it is cross-silo. It cuts across all the different amenities that you use in a resort. I'll give you one small example, AI guest insights. We have built the intelligent guest profile. What that means is, every one of our products has a guest profile screen. You go, you check in, the reception desk person knows about you. DevOps comes and talks to me and borrows money from somebody else and gives it to me, and we have all those procedures in place. devops comes and talks to me and borrows money from somebody else and gives it to me and we have all those procedures in place We are not going to use it as an excuse for reduced profitability. we are not going to use it as an excuse for reduced profitability Only we can build it because we have the full stack, the guest profiles have already been built, and it is cross-silo. only we can build it because we have the full stack the guest profiles have already been built and it is cross-silo It cuts across all the different amenities that you use in a resort. it cuts across all the different amenities that you use in a resort I'll give you one small example, AI guest insights. i'll give you one small example ai guest insights We have built the intelligent guest profile. we have built the intelligent guest profile What that means is, every one of our products has a guest profile screen. what that means is every one of our products has a guest profile screen You go, you check in, the reception desk person knows about you. you go you check in the reception desk person knows about you This person has stayed for 50 days and the 50 nights in the last two years, had a bad spa experience, plays golf, does this in dining, all that is there. That data is there, the intelligent guest profile. That screen, that window that you see there in every product looks the same. In the spa, the person who's serving you in the spa, the person who's serving you arranging a golf tee time, the person who's reserving activities for you, the person if you're a member in that resort, all of them have that screen, this layer that pops up that tells you who that guest is. Now with AI, we are able to pop up that two-line description of you. That two line is generated by AI. This person has stayed for 50 days and the 50 nights in the last two years, had a bad spa experience, plays golf, does this in dining, all that is there. this person has stayed for 50 days and the 50 nights in the last two years had a bad spa experience plays golf does this in dining all that is there That data is there, the intelligent guest profile. that data is there the intelligent guest profile That screen, that window that you see there in every product looks the same. that screen that window that you see there in every product looks the same In the spa, the person who's serving you in the spa, the person who's serving you arranging a golf tee time, the person who's reserving activities for you, the person if you're a member in that resort, all of them have that screen, this layer that pops up that tells you who that guest is. in the spa the person who's serving you in the spa the person who's serving you arranging a golf tee time the person who's reserving activities for you the person if you're a member in that resort all of them have that screen this layer that pops up that tells you who that guest is Now with AI, we are able to pop up that two-line description of you. now with ai we are able to pop up that two-line description of you That two line is generated by AI. that two line is generated by ai It cannot do that unless you have the ecosystem of data. It walks through the data and shows you. Visual One is our PMS product. In our PMS, it tells you something about that user. You go to golf, it gives you the same kind of data, but it gives you more golf-specific data. Prefers two scorecards, is allergic to seafood. You go to spa, it gives you, again, data about the guest. It is easy for the person serving you to quickly know who you are and the problems you have had. It tells you last time you came, there was spa dissatisfaction. You can do something about that right now. AI is very helpful when you build it on top of the products you already have. That is just one example. I could show you a lot of examples like that. It cannot do that unless you have the ecosystem of data. It walks through the data and shows you. it cannot do that unless you have the ecosystem of data. it walks through the data and shows you Visual One is our PMS product. visual one is our pms product In our PMS, it tells you something about that user. in our pms it tells you something about that user You go to golf, it gives you the same kind of data, but it gives you more golf-specific data. you go to golf it gives you the same kind of data but it gives you more golf-specific data Prefers two scorecards, is allergic to seafood. prefers two scorecards is allergic to seafood You go to spa, it gives you, again, data about the guest. you go to spa it gives you again data about the guest It is easy for the person serving you to quickly know who you are and the problems you have had. it is easy for the person serving you to quickly know who you are and the problems you have had It tells you last time you came, there was spa dissatisfaction. it tells you last time you came there was spa dissatisfaction You can do something about that right now. you can do something about that right now AI is very helpful when you build it on top of the products you already have. ai is very helpful when you build it on top of the products you already have That is just one example. that is just one example I could show you a lot of examples like that. i could show you a lot of examples like that This is our EBITDA graph, very approximately. Now, in the far right-hand corner of the graph, it was positive because we were capitalizing R&D, and we were showing a bigger EBITDA than we had. It is actually a lot worse than that. We continued to improve it, and then during COVID, it increased because a lot of us were working without salaries for a few months. It steadied, and in the last couple of years, our adjusted EBITDA is really picking up. Because we had to do a lot of the hard work rebuilding our products. We have done that work, and now operating leverage is clicking in. Also, as far as the gross margin is concerned, recurring revenue is now 2/3 of our revenue. It used to be much lower percentage before. This is our EBITDA graph, very approximately. this is our ebitda graph very approximately Now, in the far right-hand corner of the graph, it was positive because we were capitalizing R&D, and we were showing a bigger EBITDA than we had. now in the far right-hand corner of the graph it was positive because we were capitalizing r&d and we were showing a bigger ebitda than we had It is actually a lot worse than that. it is actually a lot worse than that We continued to improve it, and then during COVID, it increased because a lot of us were working without salaries for a few months. we continued to improve it and then during covid it increased because a lot of us were working without salaries for a few months It steadied, and in the last couple of years, our adjusted EBITDA is really picking up. it steadied and in the last couple of years our adjusted ebitda is really picking up Because we had to do a lot of the hard work rebuilding our products. because we had to do a lot of the hard work rebuilding our products We have done that work, and now operating leverage is clicking in. we have done that work and now operating leverage is clicking in Also, as far as the gross margin is concerned, recurring revenue is now 2/3 of our revenue. also as far as the gross margin is concerned recurring revenue is now 2/3 of our revenue It used to be much lower percentage before. it used to be much lower percentage before Gross margin improvements and below the line improvements are possible for us because we are in a good stage. Now we are going to start behaving like a normal enterprise software company. Now, one other thing you should notice is it took us a few years to go from 15% EBITDA by revenue to 21%. It took us about four years. This year, we have guided from 21% to 24%. We expect that pace to accelerate now. Now there is no excuse. Now we have all the products created. Now we have to behave like a good enterprise software company, and a good enterprise software company is supposed to be in the 30s%. That's what my mentors have taught me. There is no excuse for it being below. Now, we had to rebuild the company, so it was low. Next year we have guided to 24%. Gross margin improvements and below the line improvements are possible for us because we are in a good stage. gross margin improvements and below the line improvements are possible for us because we are in a good stage Now we are going to start behaving like a normal enterprise software company. now we are going to start behaving like a normal enterprise software company Now, one other thing you should notice is it took us a few years to go from 15% EBITDA by revenue to 21%. now one other thing you should notice is it took us a few years to go from 15% ebitda by revenue to 21% It took us about four years. it took us about four years This year, we have guided from 21% to 24%. this year we have guided from 21% to 24% We expect that pace to accelerate now. we expect that pace to accelerate now Now there is no excuse. now there is no excuse Now we have all the products created. now we have all the products created Now we have to behave like a good enterprise software company, and a good enterprise software company is supposed to be in the 30s%. now we have to behave like a good enterprise software company and a good enterprise software company is supposed to be in the 30s% That's what my mentors have taught me. that's what my mentors have taught me There is no excuse for it being below. there is no excuse for it being below Now, we had to rebuild the company, so it was low. now we had to rebuild the company so it was low Next year we have guided to 24%. next year we have guided to 24% Our guidance next year is 24%. We expect revenue to grow from $319 million to $365 million-$370 million, is what we expect, and at least 30% subscription growth. It will be the third consecutive year of at least 30% subscription growth. This 24%. Normally, Q1 is a low profitability quarter for us. Our user conference happens in the month of April. It's a very high-cost conference. There are a lot of things, annual costs, audit costs. Q1, we expect only to be around 16-ish%. We expect the year to be 24%. It's important to judge this business on annual results, not on quarterly results. To start from 16% and end up the whole year at 24%, we expect Q4 to be getting pretty close to 30%. We expect it to be much higher than 24%. Our guidance next year is 24%. our guidance next year is 24% We expect revenue to grow from $319 million to $365 million-$370 million, is what we expect, and at least 30% subscription growth. we expect revenue to grow from $319 million to $365 million-$370 million is what we expect and at least 30% subscription growth It will be the third consecutive year of at least 30% subscription growth. it will be the third consecutive year of at least 30% subscription growth This 24%. this 24% Normally, Q1 is a low profitability quarter for us. normally q1 is a low profitability quarter for us Our user conference happens in the month of April. our user conference happens in the month of april It's a very high-cost conference. it's a very high-cost conference There are a lot of things, annual costs, audit costs. there are a lot of things annual costs audit costs Q1, we expect only to be around 16-ish%. q1 we expect only to be around 16-ish% We expect the year to be 24%. we expect the year to be 24% It's important to judge this business on annual results, not on quarterly results. it's important to judge this business on annual results not on quarterly results To start from 16% and end up the whole year at 24%, we expect Q4 to be getting pretty close to 30%. to start from 16% and end up the whole year at 24% we expect q4 to be getting pretty close to 30% We expect it to be much higher than 24%. we expect it to be much higher than 24% If you go look up our results for the last four years, you will see what we exit a year at EBITDA, typically tends to be close to the full year next year profitability. For the last four years, if you take our Q4 profitability and then go look up the next year, it's about the same, ±1% or 2%. We are getting close to becoming, close to a 30% or thereabouts EBITDA by revenue. The journey from 15%-21% took us four years. We don't expect the journey from 21%-30% to take anywhere close to that. That's a very quick overview as fast as I could. Yeah. If you go look up our results for the last four years, you will see what we exit a year at EBITDA, typically tends to be close to the full year next year profitability. if you go look up our results for the last four years you will see what we exit a year at ebitda typically tends to be close to the full year next year profitability For the last four years, if you take our Q4 profitability and then go look up the next year, it's about the same, ±1% or 2%. for the last four years if you take our q4 profitability and then go look up the next year it's about the same ±1% or 2% We are getting close to becoming, close to a 30% or thereabouts EBITDA by revenue. we are getting close to becoming close to a 30% or thereabouts ebitda by revenue The journey from 15%-21% took us four years. the journey from 15%-21% took us four years We don't expect the journey from 21%-30% to take anywhere close to that. we don't expect the journey from 21%-30% to take anywhere close to that That's a very quick overview as fast as I could. that's a very quick overview as fast as i could Yeah. yeah

Speaker 2: That's great. Is that on? Yep. I think we just got a couple minutes here. I guess you talked about the user conference Inspire, in April, which was a great event. You guys did- That's great. that's great Is that on? is that on Yep. yep I think we just got a couple minutes here. i think we just got a couple minutes here I guess you talked about the user conference Inspire, in April, which was a great event. i guess you talked about the user conference inspire in april which was a great event You guys did- you guys did-

Speaker 1: He was there. He was there. he was there

Speaker 2: ... a fantastic job with it. ... a fantastic job with it. ... a fantastic job with it

Speaker 1: Last two years, we have invited the analyst to attend that. Last two years, we have invited the analyst to attend that. last two years we have invited the analyst to attend that

Speaker 2: Yep. Maybe just talk about the customer conversations. If we think about these big hospitality owners, operators, where are they focusing right now? What are their bigger pain points, and what does that mean in terms of their, I guess, both propensity to spend on solutions like this and the type of solutions that you're seeing higher interest in? Yep. yep Maybe just talk about the customer conversations. maybe just talk about the customer conversations If we think about these big hospitality owners, operators, where are they focusing right now? if we think about these big hospitality owners operators where are they focusing right now What are their bigger pain points, and what does that mean in terms of their, I guess, both propensity to spend on solutions like this and the type of solutions that you're seeing higher interest in? what are their bigger pain points and what does that mean in terms of their i guess both propensity to spend on solutions like this and the type of solutions that you're seeing higher interest in

Speaker 1: This industry has been hungry for innovation for quite a long time. The major players who dominated this industry from the provider side kind of stopped innovating. They really, the corporations, cruise ships, resorts, hotel chains, are all looking for modernizing their solutions, and it has been quite difficult for them. They are looking to modernize. Now that with AI, they are looking for AI-based features that will make their operations more efficient. More than anything else, they are looking for better guest satisfaction. They are looking to serve their guests better. For that, they need to know the guest better. Know the guest better, not just in terms of rooms, but in terms of everything that they offer. Some offer more amenities than the other, but they want to know their guest better. They don't want to deal with dealing with seven vendors. This industry has been hungry for innovation for quite a long time. this industry has been hungry for innovation for quite a long time The major players who dominated this industry from the provider side kind of stopped innovating. the major players who dominated this industry from the provider side kind of stopped innovating They really, the corporations, cruise ships, resorts, hotel chains, are all looking for modernizing their solutions, and it has been quite difficult for them. they really the corporations cruise ships resorts hotel chains are all looking for modernizing their solutions and it has been quite difficult for them They are looking to modernize. they are looking to modernize Now that with AI, they are looking for AI-based features that will make their operations more efficient. now that with ai they are looking for ai-based features that will make their operations more efficient More than anything else, they are looking for better guest satisfaction. more than anything else they are looking for better guest satisfaction They are looking to serve their guests better. they are looking to serve their guests better For that, they need to know the guest better. for that they need to know the guest better Know the guest better, not just in terms of rooms, but in terms of everything that they offer. know the guest better not just in terms of rooms but in terms of everything that they offer Some offer more amenities than the other, but they want to know their guest better. some offer more amenities than the other but they want to know their guest better They don't want to deal with dealing with seven vendors. they don't want to deal with dealing with seven vendors Some of the biggest success stories we have had is when they see and they come and see. They come for one product, they see our ecosystem, and it solves so many of their problems. They don't want to fight the battle between vendors. These vendors have widely ranging technology levels. It is not easy to connect the systems. I would say they're looking for innovation. They're looking to serve their guests better, they're looking to reduce their integration issues, and they're looking to speed up innovation. The fact that they have 10 amenities should not be slowing down their innovation because they're using seven different products. That's what is at least driving as far as we are concerned, right? Of course, they look for better customer service. Some of the big players here have just not supported customers too well. Those stories are pretty well known. Some of the biggest success stories we have had is when they see and they come and see. some of the biggest success stories we have had is when they see and they come and see They come for one product, they see our ecosystem, and it solves so many of their problems. they come for one product they see our ecosystem and it solves so many of their problems They don't want to fight the battle between vendors. they don't want to fight the battle between vendors These vendors have widely ranging technology levels. these vendors have widely ranging technology levels It is not easy to connect the systems. it is not easy to connect the systems I would say they're looking for innovation. i would say they're looking for innovation They're looking to serve their guests better, they're looking to reduce their integration issues, and they're looking to speed up innovation. they're looking to serve their guests better they're looking to reduce their integration issues and they're looking to speed up innovation The fact that they have 10 amenities should not be slowing down their innovation because they're using seven different products. the fact that they have 10 amenities should not be slowing down their innovation because they're using seven different products That's what is at least driving as far as we are concerned, right? that's what is at least driving as far as we are concerned right Of course, they look for better customer service. of course they look for better customer service Some of the big players here have just not supported customers too well. some of the big players here have just not supported customers too well Those stories are pretty well known. those stories are pretty well known

Speaker 2: Yeah. That's great. Well, I think we're out of time here. Thank you so much, Ramesh. The breakout is going to be upstairs in the Adler Room for those who want to dig in more with the team. Thank you so much for being here. Yeah. yeah That's great. that's great Well, I think we're out of time here. well i think we're out of time here Thank you so much, Ramesh. thank you so much ramesh The breakout is going to be upstairs in the Adler Room for those who want to dig in more with the team. the breakout is going to be upstairs in the adler room for those who want to dig in more with the team Thank you so much for being here. thank you so much for being here

Speaker 1: Thank you. Thank you. thank you