Slide 1: 2016 Analyst Day
2016 Analyst Day August 31, 2016
Slide 2: Forward-Looking Statements
TECHNOLOGY | INNOVATION | SOLUTIONS Forward-Looking Statements Forward-Looking Language This presentation and all publicly available documents, including the documents incorporated herein and therein by reference, contain, and our officers and representatives may from time to time make, "forward-loo
Slide 3: 2016 Analyst Day: Agenda
TECHNOLOGY | INNOVATION | SOLUTIONS 2016 Analyst Day: Agenda •9:00am – 9:40am •Jim Dennedy, CEO Business Overview & Market Update •9:45am – 10:10am •Rehan Jaddi, SVP Customer Support & Service Solutions Product Solution Strategy •10:15am – 10:30am •Jim Dennedy, CEO Go to Market Strategy •10:35am – 1
Slide 4: Business Overview & Market Update
JIM DENNEDY Business Overview & Market Update 4
Slide 5: We Provide Leading Hospitality Solutions
TECHNOLOGY | INNOVATION | SOLUTIONS We Provide Leading Hospitality Solutions 5 Lodging Solution 240,000+ rooms at 6/30/16, +11,400 since 3/31/15 (+5%) F&B Solution 36,000 end points at 6/30/16, +8,600 since 3/31/15 (+31%) POINT-OF-SALE 58% of Revenue 23% of Revenue DOCUMENT MANAGEMENT 9% of Revenue
Slide 6: We Serve Leading Hospitality Brands
TECHNOLOGY | INNOVATION | SOLUTIONS Gaming Hotels, Resorts and Cruise Food Service Restaurants, Universities, Stadia and Healthcare We Serve Leading Hospitality Brands 51% 23% 16% 10% Revenue Mix by Market (*TTM) Gaming Hotels/Resorts/Cruise Food Service RUSH 6 Note: Revenue contribution figures rep
Slide 7: Transforming the Guest Service Experience
TECHNOLOGY | INNOVATION | SOLUTIONS Transforming the Guest Service Experience 7 Technology and cultural drivers Participatory, data-based marketing Predictive analytics Optimization strategies at every level New brand value and guest relationships New techniques to manage relationships Primacy of th
Slide 8: Memorable Experiences Matter
TECHNOLOGY | INNOVATION | SOLUTIONS Memorable Experiences Matter 8 A thrilled guest returns & promotes • Memorable experience promotes sharing • Positive reviews builds reputation • Inspires repeat visits and recruits new guests Reputation Score Impact 1% increase 1.4% higher REVPAR 1 point increase
Slide 9: End to End Guest Experience
TECHNOLOGY | INNOVATION | SOLUTIONS End to End Guest Experience 9 Dining Experience Lodging Experience HOTEL Discover Imagine Book Arrive Depart Reflect and Share Enjoy Pay Consume Inspire Guest Customers are shopping for memorable experiences When expectations are met, a virtuous cycle begins, with
Slide 10: Addressing the Guest Experience Lifecycle
TECHNOLOGY | INNOVATION | SOLUTIONS Addressing the Guest Experience Lifecycle Optimize Operations, Reduce Costs 10 Personalized Service, Increase Lifetime Value Guest Recruitment, Increase Sales Wallet Share Growth, Improved Profitability
Slide 11: Agilysys is Competitively Positioned
TECHNOLOGY | INNOVATION | SOLUTIONS Agilysys is Competitively Positioned / So ft w ar e -c e n tri c Ha rd w ar e -c e n tri c Point of Sale Solutions Hospitality Suite 11
Slide 12: Product Solution Strategy
REHAN JADDI Product Solution Strategy 12
Slide 13: Vision: From Products to Solution Ecosystem
TECHNOLOGY | INNOVATION | SOLUTIONS Vision: From Products to Solution Ecosystem 13
Slide 14: InfoGenesis Trajectory
TECHNOLOGY | INNOVATION | SOLUTIONS InfoGenesis Trajectory 14 Standalone application with a rich and varied set of integration points rGuest: Buy, Analyze, Seat, Pay Phase 1 2014 and earlier Integrating rGuest applications, adding value and increasing scope Retaining best of breed POS and offering a
Slide 15: Self-Service Point of Sale
TECHNOLOGY | INNOVATION | SOLUTIONS Self-Service Point of Sale 15
Slide 16: rGuest Buy
TECHNOLOGY | INNOVATION | SOLUTIONS rGuest Buy Innovative POS platform that integrates with existing InfoGenesis POS Extend POS Reach • Self-service, guest facing kiosk reduces the time it takes for guests to get what they want, whenever they want it • Improve profitability with suggestive selling a
Slide 17: Lodging Solutions Trajectory
TECHNOLOGY | INNOVATION | SOLUTIONS Lodging Solutions Trajectory 17 rGuest: Stay, Pay, Analyze Carefully managed series of upgrades and enhancements over 18 - 24 months Lodging Lifecycle Mgt. Business Intelligence Guest Enablement Loyalty & Marketing Business Operations Demand Management Revenue Man
Slide 18: rGuest Stay
TECHNOLOGY | INNOVATION | SOLUTIONS rGuest Stay SaaS-Based Property Management System Future of Property Management • Guest-centric property management system enables a superior guest experience • rGuest Stay achieves a level of product integration unsurpassed in the industry today allowing users to
Slide 19: Key Objectives of the rGuest Pay Strategy
TECHNOLOGY | INNOVATION | SOLUTIONS Key Objectives of the rGuest Pay Strategy 19 Offer multiple gateway options Prevent customers from being locked into one gateway Protect HW investments; simplify the key injection process Minimize customer in- house development efforts Expand platform to include o
Slide 20: Specifically Designed for Hospitality EMV
TECHNOLOGY | INNOVATION | SOLUTIONS Specifically Designed for Hospitality 20 EMV Forms and Workflows tailored to front desk operations and complex F&B processes rGuest Pay Agent offers tested, hardened, hospitality-specific workflows Ability to leverage the Pay Agent for rich, targeted marketing thr
Slide 21: One Size Can Fit All
TECHNOLOGY | INNOVATION | SOLUTIONS One Size Can Fit All… 21 …enabling a comprehensive, long term, hospitality-centric approach to payments Third-Party In-House Platform Agilysys Applications Payment Gateway Gift Cards Loyalty
Slide 22: rGuest Pay
TECHNOLOGY | INNOVATION | SOLUTIONS rGuest Pay Enterprise-grade payment gateway used by other Agilysys applications and third parties Guest Convenience • Supports credit card devices for every scenario, including counter service, mobile and signature capture Reduce Operational Risk • Point-to-point
Slide 23: rGuest Future Expansion
TECHNOLOGY | INNOVATION | SOLUTIONS rGuest Future Expansion 2016 2017 2018 2019+ Convenience Store Fast Casual Grab-n-Go Cafeteria Limited Service Cafeteria Fine Dining Limited Service Hotel Resorts Casino Higher Education Lodging Food and Beverage Full Service Hotel Fe atu re Com p le xi ty 23
Slide 24: rGuest is the Only Hospitality Specific Platform
TECHNOLOGY | INNOVATION | SOLUTIONS rGuest is the Only Hospitality Specific Platform rGuest is for hospitality what Apple was for personal computing 24
Slide 25: What Makes Agilysys Different?
TECHNOLOGY | INNOVATION | SOLUTIONS What Makes Agilysys Different? 25 Market-leading hospitality knowledge coupled with top technology talent Competitive Strengths Scalability Support deployments from single lane café (POS) to 100K+ room enterprise (PMS) on a single instance Scalability & Enterprise
Slide 26: Go to Market Strategy
JIM DENNEDY Go to Market Strategy 26
Slide 27: Go to Market Strategy
TECHNOLOGY | INNOVATION | SOLUTIONS Go to Market Strategy 27 Dominate Gaming Expand Core Hotels Dominate FSM International • Competitive take-outs • Focus on guest lifecycle • Harvest value of non- gaming guests • Drive subscription adoption • New logos in corporate and tribal gaming • Cross-sell an
Slide 28: Dominate Gaming
TECHNOLOGY | INNOVATION | SOLUTIONS Dominate Gaming 28 • 4-6 competitve take-outs closed per quarter • $2.5 million increase in competitive take-out wins Y/Y* Competitive Take-Outs • rGuest Seat, rGuest Analytics, 3rd party integration Guest Lifecycle Focus Value of Non-Gaming Guests • Significant i
Slide 29: Expand Core Hotels
TECHNOLOGY | INNOVATION | SOLUTIONS Expand Core Hotels 29 • 10-12 large chain hotel opportunities in pipeline Growth in Flag Opportunities • 75 new customer deals closed TTM* • $2.6 million Y/Y* increase in new deals New Customer Growth rGuest Adoption • Transition for existing Visual One on-premise
Slide 30: Dominate FSM
TECHNOLOGY | INNOVATION | SOLUTIONS Dominate FSM 30 • Over 40 sites live • Significant growth opportunities rGuest Buy Kiosk at Compass • Expanding footprint into multiple large food service chains rGuest Buy New FSM Opportunities InfoGenesis Flex • 8 new customer deals closed TTM* • $560,000 Y/Y* i
Slide 31: International Market Growth
TECHNOLOGY | INNOVATION | SOLUTIONS International Market Growth 31 • Large chain infrastructure Commitement to Growth • Experienced international executive • Channel growth strategy New MD in EMEA New Channel Partners • 220 property Northern Europe chain EMEA Hotel Chain Opportunities • Belgium • Mi
Slide 32: Q&A
Q&A 32
Slide 33: Break
BREAK 33
Slide 34: Financial Update & Strategic Vision
JANINE SEEBECK Financial Update & Strategic Vision 34
Slide 35: Evolving Business, Evolving P&L
TECHNOLOGY | INNOVATION | SOLUTIONS Evolving Business, Evolving P&L Financial Metrics and Valuation (TTM*) Share Price (8/26/16) $10.63 Diluted Shares Outstanding 22.6M Diluted Market Capitalization $240M Cash (as of 6/30/16) $55.3M Debt (as of 6/30/16) $0.3M Enterprise Value $185M Revenue $123.8M G
Slide 36: Diversified Revenue Base
TECHNOLOGY | INNOVATION | SOLUTIONS Diversified Revenue Base 51% 23% 16% 10% Gaming Hotels & Resorts Food Service RUSH 40% 34% 17% 9% Support Products Professional Services Subscription 36 95% 5% Iconic rGuest 63% 37% Food & Beverage Lodging Revenue by Market Vertical* Revenue by Type* Revenue by So
Slide 37: Revenue Evolution
TECHNOLOGY | INNOVATION | SOLUTIONS Revenue Evolution $53.2 $56.0 $60.1 $60.2 $48.1 $47.5 $60.3 $63.7 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 F2014 F2015 F2016 TTM F1Q17* Recurring Non-Recurring 37 Product Type Recurring vs. Non-Recurring** Industry Vertical $34.6 $31.8 $41.5 $42.2 $13.5 $
Slide 38: Gross Margin Evolution
TECHNOLOGY | INNOVATION | SOLUTIONS Gross Margin Evolution • Consolidated margin impacted by product margin: • Shift from proprietary license sales to subscription bookings • As initial rGuest products reach general availability, expenses shift to Income Statement in form of Amortization • rGuest St
Slide 39: Driving Operational Spending Efficiency
TECHNOLOGY | INNOVATION | SOLUTIONS Driving Operational Spending Efficiency $25.2 $25.2 $27.0 $27.3 $14.1 $16.4 $20.0 $20.9 $20.8 $21.7 $22.0 $21.5 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 F2014 F2015 F2016 TTM F1Q17* Product Development Sales & Marketing General & Administrative 39 Comp
Slide 40: Capital Expense Normalization
TECHNOLOGY | INNOVATION | SOLUTIONS Capital Expense Normalization $12.2 $15.8 $16.1 $13.8 $4.0 $4.7 $4.8 $4.0 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 F2014 F2015 F2016 TTM F1Q17* Capitalized Software Property, Plant & Equipment 40 Expected total capital spend of $10-$15 million in F2017 Expenses as % of R
Slide 41: Managing Cash Expenses
TECHNOLOGY | INNOVATION | SOLUTIONS Managing Cash Expenses 41 18.1% 16.0% 13.0% General & Administrative Sales & Marketing Product Development F2016 Actual Expected F2020 Range 16.4% 15.5% 15.0% F2016 Actual Expected F2020 Range 22.2% 20.9% 19.5% F2016 Actual Expected F2020 Range Fiscal year ended M
Slide 42: Free Cash Flow Focus
TECHNOLOGY | INNOVATION | SOLUTIONS Free Cash Flow Focus •Agilysys is exiting heavy investment cycle on rGuest platform as solutions begin to reach general availability •Capital spending run rate should return to normalized levels in F2018 42 $1.4 ($2.2) $7.2 $8.1 $17.7 ($21.6) ($21.0) ($17.9) ($0.8
Slide 43: Fiscal 2017 Outlook
TECHNOLOGY | INNOVATION | SOLUTIONS Fiscal 2017 Outlook* •The Company expects full year revenue of approximately $132 - $136 million •Gross margin for fiscal 2017 is expected to be in the low-50% range, which reflects the impact of higher cost of goods sold related to the recently announced general
Slide 44: Long-Term Goals & Closing Remarks
JIM DENNEDY Long-Term Goals & Closing Remarks 44
Slide 45: Key Objectives and Business Strategies
TECHNOLOGY | INNOVATION | SOLUTIONS Key Objectives and Business Strategies 45 Objectives 2X INCREASE SAAS PORTION OF REVENUE TO 50% DOUBLE MARKET SHARE RETAIN KEY EXISTING CUSTOMERS $ • Dominate gaming and food service management • Market leader in the large hotel chain and luxury resort segments •
Slide 46: Estimated 10%-20% Four-Year Revenue Growth CAGR
TECHNOLOGY | INNOVATION | SOLUTIONS Estimated 10%-20% Four-Year Revenue Growth CAGR 46 Assumes: • Base case budget (10% CAGR) • 2 -3X increase in POS end points and rooms under management • rGuest Pay modest adoption Assumes 15% CAGR • 3-5 chain hotels • 3-4x increase in POS end points and rooms und
Slide 47: Break
BREAK 47
Slide 48: WUTTTVELLAAN
WUTTTVELLAAN
Slide 49: Appendix
APPENDIX 49
Slide 50: Non-GAAP Reconciliation
TECHNOLOGY | INNOVATION | SOLUTIONS Non-GAAP Reconciliation 50 2014 2015 2016 TTM* Net income (loss) 17,097$ (11,497)$ (3,765)$ (5,877)$ Income from discontinued operations, net of taxes 19,992 - - - Loss from continuing operations (2,895) (11,497) (3,765) (5,877) Income tax (benefit) expense (2,491
Slide 51: Non-GAAP Reconciliation
TECHNOLOGY | INNOVATION | SOLUTIONS Non-GAAP Reconciliation 51 *TTM for twelve month period ended June 30, 2016 2015 2016 TTM* Operating activities: Net cash provided by (used in) operating activities from continuing operations (2,186)$ 7,218$ 8,064$ Non-recurring cash items: Payments for restructur