Agilysys's profit is growing far faster than its sales, and that gap, not the quarter's earnings beat, is the signal worth reading into the Q2 2027 filings. Net income rose 82.1% over the trailing twelve months while revenue grew 14.9%, a widening that shows more of each extra dollar of revenue reaching the bottom line. The quarter itself produced revenue of $93.4 million, up 17.7% year on year, and adjusted earnings per share beat the analysts' average estimate by 21.5%. The shares fell 4.0% in the session that followed.
Source: SEC EDGAR XBRL company facts. Latest period shown: FY27 Q2.
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| Period | Revenue growth, TTM YoY | Operating margin (TTM) | FCF margin (TTM) |
|---|---|---|---|
| FY25 Q3 | 15.5% | 7.9% | 21.0% |
| FY25 Q4 | 16.1% | 8.2% | 19.0% |
| FY26 Q1 | 17.9% | 7.4% | 16.3% |
| FY26 Q2 | 17.8% | 10.5% | 18.7% |
| FY26 Q3 | 17.9% | 11.5% | 19.1% |
| FY26 Q4 | 15.8% | 13.5% | 21.3% |
| FY27 Q1 | 14.4% | 14.6% | 24.4% |
| FY27 Q2 | 14.9% | 14.3% | 23.3% |
How Agilysys' quarter compared with the analysts' estimate
The 21.5% beat is not unusual for Agilysys. The company has exceeded the analysts' average estimate in 3 of the last eight reported quarters, placing this result inside an established pattern rather than outside it. Revenue growth was faster in 2 of those same eight quarters than this quarter's 17.7%, so the top-line pace itself is not exceptional for the company.
Profit is outgrowing sales
The trailing operating margin of 14.3% is up 3.9 percentage points from a year earlier, and that expansion is the mechanism behind the gap between the 82.1% rise in net income and the 14.9% rise in revenue. At 23.3% of revenue, the free-cash-flow margin shows each dollar of sales converting into more cash than a year earlier. The trailing revenue growth rate of 14.9% itself is up 0.5 percentage points from the previous quarter's trailing figure, so the longer-term trend is edging higher.
What Agilysys now guides to
Agilysys raised its full fiscal year guidance for total annual revenue to a range of $374.0 million to $378.0 million. Subscription revenue growth guidance stands at 34%, and the adjusted EBITDA margin target is 25% of revenue.
The market looked past the quarter
The 4.0% fall in the session after the release came against a 1.3% rise in the S&P 500, and it was smaller than the stock's typical results-day move of 12.7% measured over previous reports. The 21.5% adjusted EPS beat did not move the price upward. The results release does not say why the shares moved.
The share price of $115.80 is above our model's value of $67.00 a share
Our model's base-case value is $67.00 per share, against a share price of $115.80 used on the release date. That is our model, not the company's. Growth 5 percentage points lower would lower the value by 23.1%, while growth 5 percentage points higher would raise it by 29.8%. A discount rate 1 percentage point higher would lower the value by 14.9%. The model is most sensitive to growth assumptions, the same variable the filings show widening.
What Agilysys' next report has to show
The next report will show whether the operating margin keeps widening or whether the 3.9 percentage-point gain was a one-time step. Free cash flow growth relative to revenue growth is the second trend to track. The guidance the company now carries will set the bar against which the following quarter's actuals are measured.
