Financial Performance - Total net revenue for the six months ended September 30, 2024, was $131.791 million, an increase of 14.9% compared to $114.676 million for the same period in 2023[9] - Subscription and maintenance revenue increased to $79.474 million for the six months ended September 30, 2024, up 19.8% from $66.373 million in the prior year[9] - Gross profit margin improved to 63.0% for the six months ended September 30, 2024, compared to 59.4% for the same period in 2023[9] - Net income for the six months ended September 30, 2024, was $15.470 million, a significant increase from $6.093 million in the same period of 2023[9] - Operating income for the six months ended September 30, 2024, was $9.874 million, compared to $4.521 million in the same period of 2023[9] - The company reported a gross profit of $83.082 million for the six months ended September 30, 2024, up from $68.154 million in the prior year[9] - Total revenue for the six months ended September 30, 2024, was $111.4 million, compared to $89.3 million for the same period in 2023, reflecting a growth of approximately 24.8%[37] - Total net income for the six months ended September 30, 2024, was $15,470,000, compared to $6,093,000 for the same period in 2023, reflecting an increase of 154.5%[53] Cash and Assets - Cash and cash equivalents decreased to $54.888 million as of September 30, 2024, down from $144.891 million as of March 31, 2024[6] - Total assets increased to $442.010 million as of September 30, 2024, compared to $350.430 million as of March 31, 2024[6] - Total current liabilities increased to $95.889 million as of September 30, 2024, compared to $89.371 million as of March 31, 2024[6] - The company reported a net cash used in investing activities of $146,465,000 for the six months ended September 30, 2024, compared to $6,004,000 in the prior year[12] - The company’s retained earnings increased to $153,225,000 as of September 30, 2024, from $137,755,000 as of March 31, 2024[6] Share-Based Compensation - Share-based compensation for the six months ended September 30, 2024, was $8,438,000, compared to $5,851,000 in the same period of 2023, an increase of 44%[12] - Total share-based compensation expense for the three months ended September 30, 2024, was $4,009,000, an increase of 49.3% from $2,684,000 in the same period of 2023[62] - The company recorded a total of $11.6 million in unrecognized share-based compensation expense related to unvested restricted shares, expected to be recognized over a weighted-average vesting period of 2.0 years[65] Tax and Liabilities - The effective tax rate for the three months ended September 30, 2024, was 6.1%, compared to 9.6% for the same period in 2023, indicating a decrease of approximately 36.5%[46] - Total accrued liabilities as of September 30, 2024, were $22.315 million, compared to $19.522 million as of March 31, 2024, indicating an increase of approximately 14.5%[44] Business Operations - The company operates in a single reportable segment serving the global hospitality industry, providing cloud-native SaaS and on-premise solutions[17][18] - Agilysys has been a leader in hospitality software for over 45 years, focusing on enhancing the guest journey through various software solutions[17] Acquisition and Revenue Recognition - The acquisition of Book4Time was completed for a total cash consideration of $147.2 million, resulting in net cash consideration of $144.9 million after accounting for cash acquired[78] - Revenue attributable to Book4Time for the three months ended September 30, 2024, was $2.2 million, with net income (loss) not material[84] - The company recognized acquisition costs of $2.0 million related to the acquisition of Book4Time during the three months ended September 30, 2024[84] - Pro forma revenue for the three months ended September 30, 2024, was $70.8 million, compared to $62.5 million for the same period in 2023, reflecting a year-over-year increase of approximately 20.5%[86] Debt and Financing - The company entered into a revolving credit facility with an initial maximum principal amount of $75 million, drawing $50 million to fund a business combination[71] - The revolving credit facility matures on August 16, 2027, with no repayments required before that date[72] - The initial revolving loan bears interest at the SOFR Daily Floating Rate plus an initial margin of 1.625%[74]

Financial Performance - Total net revenue for Q2 fiscal 2025 reached a record $68.3 million, a 16.5% increase from $58.6 million in the same period last year[3]. - Recurring revenue was a record $41.4 million, accounting for 60.7% of total net revenue, with subscription revenue growing 36.6% year over year[3]. - Gross margin improved to 63.3% in Q2 fiscal 2025, up from 59.9% in the prior year[3]. - Net income attributable to common shareholders was $1.4 million, or $0.05 per diluted share, compared to $4.1 million, or $0.16 per diluted share, in the same quarter last year[3]. - Adjusted EBITDA for Q2 fiscal 2025 was $12.2 million, representing 17.9% of revenue, compared to $8.1 million in the prior year[3][4]. - Total net revenue for the three months ended September 30, 2024, was $68,279,000, an increase of 16.5% compared to $58,616,000 for the same period in 2023[18]. - Subscription and maintenance revenue rose to $41,432,000, up 21% from $34,248,000 year-over-year[18]. - Operating income increased to $4,126,000, reflecting a 15.8% rise from $3,562,000 in the prior year[18]. - Net income for the six months ended September 30, 2024, was $15,470,000, significantly higher than $6,093,000 for the same period in 2023[20]. - Net income for the three months ended September 2024 was $1,364,000, a decrease of 66.6% compared to $4,086,000 for the same period in 2023[22]. - Adjusted net income for the six months ended September 2024 was $17,860,000, a 59.5% increase from $11,232,000 for the same period in 2023[22]. Cash Flow and Balance Sheet - Free cash flow for Q2 fiscal 2025 was $5.9 million, up from $2.5 million in the same quarter last year[3]. - Ending cash balance was $54.9 million, down from $144.9 million at the end of fiscal 2024, influenced by the cash paid for the Book4Time acquisition[3]. - Cash and cash equivalents decreased to $54,888,000 as of September 30, 2024, down from $144,891,000 at the beginning of the period[19]. - The company reported a net cash provided by operating activities of $7,688,000 for the six months ended September 30, 2024, compared to $5,470,000 in the prior year[20]. - The company incurred $144,945,000 in cash paid for business combinations during the six months ended September 30, 2024[20]. Guidance and Future Outlook - The company raised its full-year fiscal 2025 revenue guidance to $280 million to $285 million, with at least 38% year-over-year subscription revenue growth expected[5][6]. - The acquisition of Book4Time is anticipated to expand the customer base and enhance the company's product ecosystem within the hospitality sector[7]. Expenses and Shareholder Metrics - Total operating expenses for the three months ended September 30, 2024, were $39,088,000, up from $31,534,000 in the same period last year[18]. - Share-based compensation expenses increased to $4,009,000 for the three months ended September 2024, up from $2,684,000 in the same period last year, reflecting a 49.3% rise[22]. - Basic weighted average shares outstanding increased to 27,533,000 for the three months ended September 2024, compared to 25,022,000 for the same period in 2023[22]. Earnings Per Share - Adjusted diluted EPS for Q2 fiscal 2025 was $0.34 per share, compared to $0.25 per share in the same quarter last year[3]. - Adjusted diluted earnings per share for the three months ended September 2024 was $0.34, up from $0.25 in the same period last year, reflecting a 36% increase[22].

Core Viewpoint - Wall Street analysts forecast a quarterly earnings per share (EPS) of $0.26 for Agilysys, indicating a year-over-year increase of 4% and anticipated revenues of $66.66 million, reflecting a 13.7% increase compared to the previous year [1] Group 1: Earnings and Revenue Estimates - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a collective reevaluation by analysts [1] - Analysts project 'Net revenue- Products' to be $10.42 million, suggesting a year-over-year decline of 17.6% [2] - The estimate for 'Net revenue- Subscription and maintenance' is $39.60 million, indicating a year-over-year increase of 15.6% [2] - 'Net revenue- Professional services' is estimated at $16.31 million, reflecting a significant year-over-year increase of 39.1% [2] Group 2: Stock Performance and Market Position - Over the past month, Agilysys shares have recorded a return of +0.9%, compared to the Zacks S&P 500 composite's +2.7% change [2] - Agilysys holds a Zacks Rank 3 (Hold), suggesting that its performance is likely to align with the overall market in the upcoming period [2]

Industry Overview - The Zacks Computer – Integrated Systems industry is facing persistent supply-chain bottlenecks and a challenging macroeconomic climate characterized by rising inflation and higher interest rates, leading to significant order backlogs [1][5] - Companies are ramping up investments in data modernization, cybersecurity, remote work enablement, and supply chain modernization to accelerate digital transformation services for enterprise customers [2] Industry Trends - There is a surge in demand for integrated solutions driven by investments in IoT, big data analytics, AI, and blockchain, with opportunities in business analytics, cloud computing, and security solutions [3] - The multi-cloud model is being robustly adopted as enterprises seek better scalability and resource optimization, with emerging economies expected to play a crucial role in driving future growth [4] Challenges - The industry is grappling with supply constraints, softening demand for servers, and delays in customer acceptance, contributing to consistent backlog levels [5] - The ongoing semiconductor chip shortage is posing significant challenges, affecting spending across datacenter systems and leading to operational complexities [6] Industry Performance - The Zacks Computer – Integrated Systems industry ranks 194, placing it in the bottom 23% of over 250 Zacks industries, indicating underperformance in the near term [7][8] - The industry's earnings estimate for 2024 has decreased by 6.1% since March 31, 2023, reflecting a negative earnings outlook [8] Stock Performance - The industry has returned 25.4% over the past year, underperforming the S&P 500 and the broader Computer and Technology sector, which returned 27% and 36.5% respectively [9] - The industry is currently trading at a trailing 12-month P/S ratio of 2.06X, below the S&P 500's 5.56X and the sector's 7.5X [10] Key Companies - **International Business Machines (IBM)**: Experiencing solid net sales growth in the software segment, with a focus on hybrid cloud adoption and a recent acquisition of HashiCorp for $6.4 billion to enhance its hybrid cloud platform [11][12][13] - **Hewlett Packard Enterprise (HPE)**: Benefiting from strong execution in clearing backlogs and a multi-billion-dollar investment plan to expand networking capabilities, with a focus on AI and distributed computing [15][16] - **Agilysys**: Seeing steady demand for cloud-native products and record high service revenues, with a focus on vertical markets like retail and hospitality [18]

Financial Performance - Total net revenue for the three months ended June 30, 2024, was $63,512,000, representing an increase of 13.0% compared to $56,059,000 for the same period in 2023[11] - Gross profit for the same period was $39,868,000, with a gross profit margin of 62.8%, up from 59.0% in the prior year[11] - Net income for the three months ended June 30, 2024, was $14,106,000, significantly higher than $1,548,000 in the same period last year[13] - The company reported a basic net income per share of $0.52 for the three months ended June 30, 2024, compared to $0.04 for the same period in 2023[11] - Operating income for the three months ended June 30, 2024, was $5,747,000, compared to $958,000 in the same period last year[11] - For the three months ended June 30, 2024, net income was $14.106 million, compared to $1.548 million for the same period in 2023, representing an increase of 810%[18] - Total comprehensive income for the same period in 2024 was $13,948,000, compared to $2,071,000 in 2023, indicating a year-over-year increase of 573%[13] - Basic income per share rose to $0.52 for Q2 2024, compared to $0.04 in Q2 2023, indicating a substantial increase of 1,200%[57] Revenue Breakdown - The company experienced a decrease in product revenue to $9,874,000 from $12,781,000 year-over-year, while subscription and maintenance revenue increased to $38,043,000 from $32,125,000[11] - Revenue from product sales for the three months ended June 30, 2024, was $9.9 million, a decrease of 22.5% from $12.8 million in the same period of 2023[42] - Subscription and maintenance revenue increased to $53.6 million for the three months ended June 30, 2024, up 23.5% from $43.3 million in 2023[42] - Revenue recognized from contract liabilities at the beginning of the period was $26.8 million for Q2 2024, compared to $22.1 million in Q2 2023, reflecting a growth of 21.2%[44] - Subscription, maintenance, and professional services revenue recognized over time amounted to $53.6 million for the three months ended June 30, 2024, up from $43.3 million in 2023, representing a growth of approximately 24.5%[42] Assets and Equity - Cash and cash equivalents at the end of the period were $144,111,000, slightly down from $144,891,000 at the end of the previous quarter[9] - Total assets increased to $355,698,000 as of June 30, 2024, compared to $350,430,000 as of March 31, 2024[9] - Total shareholders' equity rose to $254,171,000, up from $236,477,000 in the previous quarter[9] - The total shareholders' equity as of June 30, 2024, was $254.171 million, up from $111.686 million as of June 30, 2023, indicating a year-over-year increase of 127.6%[18] Operating Expenses - Operating expenses totaled $34,121,000 for the three months ended June 30, 2024, compared to $32,099,000 for the same period in 2023[11] - Total share-based compensation expense for the three months ended June 30, 2024, was $4.4 million, an increase of 39.9% from $3.2 million in 2023[66] - Share-based compensation for the three months ended June 30, 2024, amounted to $4,850,000, compared to $3,377,000 in the same period of 2023, representing a 43.7% increase[18] Cash Flow and Liquidity - Cash receipts for interest, net, were $1.4 million for Q2 2024, compared to $893,000 in Q2 2023, reflecting a growth of 59.4%[49] - Net cash provided by operating activities for the three months ended June 30, 2024, was $1,098,000, compared to $22,000 in the same period of 2023[16] - The company reported a net decrease in cash and cash equivalents of $(780,000) for the three months ended June 30, 2024, compared to $(5,749,000) in the same period of 2023[16] - Total current liabilities decreased to $77.4 million from $89.4 million, indicating improved liquidity[9] Company Overview - Agilysys operates in the global hospitality industry, providing software solutions for hotels, resorts, casinos, and other sectors, with a focus on enhancing guest experiences and operational efficiencies[21] - The company has been a leader in hospitality software for over 45 years, emphasizing cloud-native SaaS and on-premise solutions[21] - Agilysys has a single reportable segment serving the global hospitality industry, consolidating accounts with wholly-owned subsidiaries[22] - The fiscal year for Agilysys ends on March 31, with references to specific years indicating the fiscal year ending in March of that year[23] Stock and Compensation - The company issued 498 shares upon exercise of stock-settled stock appreciation rights (SSARs) during the three months ended June 30, 2024[18] - The balance of common shares issued increased from 31,607 thousand shares at March 31, 2023, to 33,342 thousand shares at June 30, 2024[18] - The company granted 6,098 performance shares to the CEO in May 2024, which vested immediately for a total value of $0.6 million[72] - The Employee Stock Purchase Plan (ESPP) allows participants to purchase stock at a discount of up to 15%, with a fair value of $81.60 per share as of June 30, 2024[74] - The outstanding Stock-Settled Appreciation Rights (SSARs) as of June 30, 2024, were 560,203 with an average exercise price of $19.94 and an intrinsic value of $47.169 million[68] Other Financial Metrics - The effective tax rate for the three months ended June 30, 2024, was not meaningful due to the impact of discrete excess tax benefits associated with Share-Based Compensation[50] - Capitalized sales incentive costs as of June 30, 2024, were $4.8 million, up from $4.0 million in 2023, representing a 20% increase[47] - Total accrued liabilities decreased from $19.5 million as of March 31, 2024, to $13.1 million as of June 30, 2024, a reduction of approximately 32.8%[48]

Financial Data and Key Metrics Changes - Q1 fiscal 2025 revenue reached a record $63.5 million, a 13.3% increase from $56.1 million in the prior year [26] - Recurring revenue grew to $38 million, an 18.4% increase year-over-year, driven by a 32% increase in subscription revenue [21][28] - Operating income for Q1 was $5.7 million, net income was $14.1 million, and adjusted net income was $8.3 million, all showing significant improvement from the previous year [30] Business Line Data and Key Metrics Changes - Sales for Property Management System (PMS) and related modules were the best in the company's history for Q1, marking the fourth consecutive quarter of growth [8] - Add-on experience enhancer software modules saw sales more than double compared to Q1 last year, indicating strong demand [10] - Professional services revenue increased by 39.8% year-over-year to a record $15.6 million [27] Market Data and Key Metrics Changes - The Americas hotels and resorts sales vertical had its second-highest sales quarter ever, with multiple significant contracts signed [11] - The gaming casino sales vertical continued to lead sales levels, achieving close to peak levels in Q1 [12] - The Asia-Pacific region saw its third-best quarter for sales since the pandemic, highlighted by a significant win at Hamilton Island, Australia [12] Company Strategy and Development Direction - The company has successfully transformed its core products into cloud-native solutions, providing a competitive advantage in the hospitality software market [9][10] - The focus on subscription-based revenue models is expected to continue, with a shift away from perpetual software licenses [15][21] - The company aims to expand its market share in the Americas hotels and resorts vertical, leveraging improved solutions and targeted marketing efforts [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving at least 27% year-over-year growth in subscription revenue for the full fiscal year [25] - The company anticipates a rebound in POS sales during the second half of the fiscal year as implementation challenges are resolved [33][50] - Management noted that the competitive landscape is becoming more aggressive, particularly with pricing strategies from competitors [79] Other Important Information - The company has a strong sales pipeline, with a 30% increase in global quota-carrying sales personnel compared to the previous year [36] - The backlog for recurring revenue decreased slightly due to increased implementation velocity, but overall product and services backlog improved [24] Q&A Session Summary Question: Outlook on subscription revenue growth and profitability - Management acknowledged strong subscription growth but indicated potential deceleration in the latter part of the year due to product mix and competitive pressures [38][39] Question: Challenges in international markets - Management highlighted the need to establish new product versions in international markets and the competitive pricing pressures faced [41][43] Question: POS business struggles and turnaround expectations - Management explained that the POS transformation has been complex but expects improvements as new customers adopt modern versions [46][49] Question: Progress on PMS product adoption - Management noted broad-based success in PMS sales, with significant momentum and a strong pipeline [50][56] Question: Implementation challenges and sales strategy - Management clarified that recent implementation challenges were primarily software-related, and emphasized targeted marketing efforts to enhance sales [64][67]

Core Insights - Agilysys reported revenue of $63.51 million for the quarter ended June 2024, reflecting a 13.3% increase year-over-year, with EPS at $0.30 compared to $0.18 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $64.57 million by 1.64%, while the EPS exceeded the consensus estimate of $0.22 by 36.36% [1] Revenue Breakdown - Net revenue from Products was $9.87 million, which is 22.7% lower than the year-ago quarter and below the average estimate of $11.17 million [2] - Net revenue from Subscription and Maintenance was $38.04 million, slightly below the average estimate of $38.06 million, but represents an 18.4% increase year-over-year [2] - Net revenue from Professional Services was $15.60 million, exceeding the average estimate of $15.35 million, with a significant year-over-year increase of 39.8% [2] Stock Performance - Agilysys shares have returned 9.6% over the past month, outperforming the Zacks S&P 500 composite, which saw a 0.4% change [2] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [2]

Revenue Performance - Agilysys reported record revenue of $63.5 million for Q1 fiscal 2025, a 13.3% increase year-over-year from $56.1 million[4]. - Subscription revenue grew by 32.0% year-over-year, contributing $22.1 million, which is 58.1% of total recurring revenue[8]. - Recurring revenue, which includes subscription and maintenance charges, reached a record $38.0 million, or 59.9% of total net revenue[8]. - The company expects full-year fiscal 2025 revenue to be between $275 million and $280 million, with subscription revenue growth projected to exceed 27% year-over-year[7]. Profitability Metrics - Adjusted EBITDA for the quarter was $12.1 million, representing 19% of total revenue, slightly above expectations[4]. - Net income attributable to common shareholders was $14.1 million, or $0.50 per diluted share, compared to $1.1 million, or $0.04 per diluted share in the prior year[8]. - Adjusted EBITDA for the same period was $12,118,000, up from $6,276,000 in 2023, indicating a year-over-year increase of 93%[27]. - Net income for the three months ended June 30, 2024, was $14,106,000, a significant increase from $1,548,000 in the same period last year, representing a growth of 810%[26]. Cash Flow and Capital Expenditures - Free cash flow for Q1 fiscal 2025 was $0.2 million, a significant improvement from $(3.0) million in Q1 fiscal 2024[8]. - Free cash flow for the three months ended June 30, 2024, was $229,000, compared to a negative free cash flow of $(3,043,000) in 2023, showing a turnaround in cash generation[29]. - Capital expenditures for the quarter were $869,000, down from $3,065,000 in the prior year, indicating a reduction of 71.6%[29]. Balance Sheet Highlights - Total assets increased to $355,698,000 as of June 30, 2024, compared to $350,430,000 at the end of March 2024, reflecting a growth of 1%[24]. - Total shareholders' equity rose to $254,171,000, up from $236,477,000 in the previous quarter, marking an increase of 7.5%[24]. - Cash and cash equivalents at the end of the period were $144,111,000, slightly down from $144,891,000 at the end of March 2024, a decrease of 0.5%[26]. - The company reported a net cash provided by operating activities of $1,098,000 for the quarter, a substantial increase from $22,000 in the same quarter last year[29]. - The company’s retained earnings increased to $151,861,000 as of June 30, 2024, compared to $137,755,000 at the end of March 2024, an increase of 10.2%[24]. Shareholder Information - The diluted weighted average shares outstanding increased to 28,127,000 from 26,177,000 in the previous year, reflecting a growth of 7.5%[28]. Business Outlook and Challenges - The company continues to face challenges with product revenue due to a shift in customer preference towards subscription licenses[5]. - Agilysys aims to maintain and improve its business momentum throughout the fiscal year, supported by strong subscription and services revenue growth[6].

Core Thesis - Agilysys, Inc. is focusing on cloud-based hospitality software products for future growth, but faces recurring challenges despite strong financial performance and strategic initiatives [1] Company Overview - Agilysys, Inc. (NASDAQ:AGYS) is a leading supplier of hospitality system software, providing cloud-based applications for hotels, resorts, and gaming establishments, emphasizing customer service and innovation [2] Financial Performance - Agilysys has achieved record revenue growth, increasing from $52.9 million in March 2023 to $62.2 million in March 2024, a rise of 17.6% driven by software subscriptions and professional services [4] - Gross profit rose from $32.2 million to $38.3 million, indicating effective cost management despite higher expenses [4] - The company experienced a fluctuating operating margin, peaking at 11.27% in December 2023, influenced by increased sales and controlled SG&A expenses [4] Opportunities - The launch of an improved product subscription service aims to expand the platform with new cloud-based software, particularly through collaboration with Marriott for POS solutions, which is expected to enhance subscription revenue [5] - The Americas Hotels and Resorts line saw a 16% sales increase, providing opportunities for new clients through advanced property management system (PMS) products [5] - The total worldwide hotel management system market is projected to reach $10.5 billion by 2025, with Agilysys potentially generating an additional $525 million in income by capturing 5% of the market [5] Challenges - Agilysys faces competitive pressure in global markets, particularly in APAC and EMEA regions, despite a 45% sales increase in Asia Pacific [6] - The transition from service to product revenue poses challenges, as hardware sales decline while software subscriptions become more critical [6] - Dependence on a few major customers, such as Marriott, raises risks for financial projections, necessitating a broader customer base for sustainable growth [6] Valuation - Agilysys boasts a gross margin of 60.75%, significantly above the sector median of 49.19%, indicating strong cost management and pricing power [7] - The company has a P/S ratio of 11.13 and a P/E ratio of 32.48, both exceeding industry medians, reflecting investor confidence in its growth potential [7] - Projected revenue growth rate of 19.35% and earnings growth rate of 33.08% suggest potential for improved valuations as profits increase [7] Conclusion - Agilysys Inc. shows promising prospects due to its strategic focus on cloud computing solutions and strong financial performance, despite competitive pressures and revenue fluctuations [8]

Industry Overview - The Zacks Computer – Integrated Systems industry includes companies like IBM, HPE, Agilysys, and PAR Technology, benefiting from trends such as advancements in data management, integrated deployment techniques, and demand for modern application development [1][2] - Companies are investing in data modernization, cybersecurity, remote work enablement, and supply chain modernization to accelerate digital transformation for enterprise customers [2] Industry Trends - There is a surge in demand for integrated solutions driven by investments in IoT, big data analytics, AI, and blockchain, with expectations of recovering global IT spending [3] - The multi-cloud model is being robustly adopted, allowing enterprises to optimize resource utilization and scalability, with emerging economies playing a crucial role in future growth [4] Challenges - Industry participants face supply chain bottlenecks, softening demand for servers, and delays in customer acceptance, leading to significant order backlogs [5] - The ongoing semiconductor chip shortage is impacting the industry, complicating the transition to cloud computing and affecting spending across Data-Center Systems [6] Performance Metrics - The Zacks Computer – Integrated Systems industry ranks 77, placing it in the top 31% of over 250 Zacks industries, indicating a positive earnings outlook [7] - The industry has underperformed compared to the broader Computer and Technology sector and the S&P 500, returning 17.9% over the past year compared to 23.3% and 32.4% respectively [8] Valuation - The industry is currently trading at a trailing 12-month Price-to-Sales (P/S) ratio of 1.82X, below the S&P 500's 4.04X and the sector's 5.25X [9] Company Highlights - **PAR Technology**: Focuses on microprocessor-based transaction processing systems, with a growing software business and recent acquisitions to expand its offerings [10][11] - **IBM**: Experiencing growth in its software segment due to hybrid cloud adoption, with significant acquisitions to enhance its capabilities [13][14][15] - **Hewlett Packard Enterprise (HPE)**: Benefiting from backlog clearance and investments in networking capabilities, with a strategic acquisition of Juniper Networks [17][18] - **Agilysys**: Gaining from demand for cloud-native products and record high services revenues, although shares have declined year to date [20]