Nasdaq:AGYS
AGILYSYS INC
A specialized technology firm offering cloud-native software platforms to transform operations within the healthcare and public sector markets.
Key Metrics
Investment Thesis
Bull Case
Investors might consider AGYS for its consistent top-line revenue growth and strong operating cash flow generation which exceeds net income, indicating high quality earnings. The company's strategic acquisitions and investment in long-term assets position it to capture future market share in the expanding digital healthcare transformation space. With a substantial retained earnings deficit offset by significant shareholders equity of $265.9M, the balance sheet appears resilient enough to weather near-term profit fluctuations.
Bear Case
The sharp decline in net income from 2024 to 2025 raises red flags about the company's ability to maintain profitability amidst rising costs or competitive pressures. Significant cash outflows from investing activities and a negative change in cash position suggest aggressive spending that may not be immediately translating into proportional returns. The large goodwill balance of $130.6M creates a risk of future impairment charges if acquired businesses underperform expectations.
About AGILYSYS INC
Agilysys Inc. (AGYS) is a technology solutions provider specializing in integrated software platforms and services primarily for the healthcare and government sectors. The company delivers cloud-based applications that optimize operational workflows, enhance patient engagement, and streamline administrative processes for large-scale organizations.
Analysis
Management Discussion
While revenue grew steadily from $198.1M in 2023 to $275.6M in 2025, net income experienced a notable contraction from $86.2M in 2024 down to $23.2M in 2025, suggesting potential margin compression or one-time expenses impacting the bottom line. Operating cash flow of $55.1M indicates strong liquidity generation relative to the net profit figure, yet heavy investing cash flows of -$148.6M reflect significant capital deployment, likely related to acquisitions totaling $145.8M. The company maintains a healthy current ratio with current assets at $123.5M against $111.0M in current liabilities, providing operational flexibility despite the income volatility.
Industry Overview
The healthcare technology sector is undergoing rapid digital transformation as hospitals and government entities seek to modernize legacy systems with cloud-based SaaS platforms. Companies in this space compete on the ability to integrate seamlessly with existing electronic health records while providing actionable insights for care delivery. Regulatory requirements around data privacy and interoperability continue to drive demand for specialized solutions like those offered by Agilysys.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $198.1M | $237.5M | $275.6M |
| Cost of Revenue | $77.2M | $93.2M | $103.6M |
| Gross Profit | $120.8M | $144.3M | $172.0M |
| Operating Expenses | $107.9M | $128.5M | $149.4M |
| Operating Income | $12.9M | $15.8M | $22.6M |
| R&D | $50.3M | $56.7M | $62.4M |
| G&A | $30.7M | $36.3M | $40.8M |
| Marketing | $22.7M | $28.4M | $33.1M |
| Stock-Based Comp | $13.0M | $14.1M | $17.8M |
| Depreciation | $1.8M | $3.9M | $3.7M |
| Amortization | $1.7M | $1.4M | $3.9M |
| Other OpEx | $4.3M | $7.0M | $13.0M |
| Non-Operating Income | $2.9M | $4.9M | $3.0M |
| Interest Expense | $0 | $0 | $1.5M |
| Interest Income | $2.2M | $5.1M | $3.8M |
| Pre-Tax Income | $15.8M | $20.7M | $25.6M |
| Income Tax | $1.2M | $-65.5M | $2.4M |
| Continuing Ops | $14.6M | $86.2M | $23.2M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $14.6M | $86.2M | $23.2M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $14.6M | $86.2M | $23.2M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $154.7M | $188.9M | $123.5M |
| Cash & Equivalents | $112.8M | $144.9M | $73.0M |
| Accounts Receivable | $22.4M | $29.4M | $31.5M |
| Inventory | $9.8M | $4.6M | $5.2M |
| Prepaid Expenses | $7.4M | $7.7M | $9.3M |
| Other Current Assets | $2.2M | $2.3M | $4.5M |
| Long-Term Assets | $88.4M | $161.5M | $310.8M |
| PP&E (Net) | $14.6M | $17.9M | $16.7M |
| Intangibles | $18.1M | $17.0M | $70.8M |
| Goodwill | $32.6M | $32.8M | $130.6M |
| Operating Leases | $12.7M | $18.4M | $17.1M |
| Other LT Assets | $10.3M | $75.4M | $75.6M |
| Total Assets | $243.0M | $350.4M | $434.4M |
| Current Liabilities | $78.5M | $89.4M | $111.0M |
| Accounts Payable | $9.4M | $9.4M | $12.4M |
| Current Leases | $3.3M | $4.3M | $5.7M |
| Taxes Payable | — | — | $700.0K |
| Other Current Liab | $52.1M | $56.1M | $70.0M |
| Long-Term Liabilities | $55.2M | $24.6M | $57.5M |
| Long-Term Debt | — | — | $24.0M |
| LT Operating Leases | $13.5M | $19.6M | $17.3M |
| Other LT Liab | $40.6M | $5.0M | $16.2M |
| Total Liabilities | $133.7M | $114.0M | $168.5M |
| Shareholders' Equity | $109.3M | $236.5M | $265.9M |
| Paid-In Capital | $53.0M | $94.7M | $109.8M |
| Retained Earnings | $52.8M | $137.8M | $161.0M |
| AOCI | $-4.0M | $-4.2M | $-13.3M |
| Treasury Stock | $1.9M | $1.8M | $1.6M |
| Total L&E | $243.0M | $350.4M | $434.4M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $14.6M | $86.2M | $23.2M |
| Non-Cash Adjustments | $9.0M | $-49.6M | $20.3M |
| Working Capital Changes | $10.8M | $11.6M | $11.6M |
| Cash from Operations | $34.5M | $48.2M | $55.1M |
| Cash from Investing | $-6.9M | $-7.6M | $-148.6M |
| Debt Repayments | $4.0K | $2.0K | $0 |
| Cash from Financing | $-11.1M | $-8.6M | $21.9M |
| FX Effect | $-628.0K | $23.0K | $-340.0K |
| Net Change in Cash | $15.9M | $32.0M | $-71.8M |
| Beginning Cash | $97.0M | $112.8M | $144.9M |
| Ending Cash | $112.8M | $144.9M | $73.0M |
Frequently Asked Questions
How does AGILYSYS INC make money?
The company's revenue is driven by its core Software as a Service (SaaS) offerings which provide integrated care management and financial services platforms, alongside professional services that include implementation, customization, and ongoing support contracts for enterprise clients in hospitals and government agencies.
What are the main risks for AGYS?
The company faces significant concentration risk as a substantial portion of its revenue comes from a limited number of large enterprise clients in the healthcare sector. Intense competition from larger technology vendors with deeper pockets could erode market share or lead to pricing pressure on software licenses and services. The recent volatility in net income, dropping sharply from 2024 to 2025, introduces uncertainty regarding the sustainability of current growth rates and profitability margins.
What is AGYS's competitive advantage?
Agilysys leverages deep domain expertise in healthcare interoperability standards to build scalable SaaS solutions that reduce administrative overhead significantly. Its established partnerships with major hospital systems provide high switching costs and recurring revenue streams through multi-year service agreements. The company's proprietary data analytics capabilities allow it to offer predictive insights that improve patient outcomes and operational efficiency.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.