Agilysys shares plunged more than 10% in the session following the release of its Q4 results, despite the company delivering a beat-and-raise quarter. This pullback has wiped out roughly 30% of the stock’s value since the earnings announcement, setting up what many analysts view as a compelling buying opportunity. Institutional investors, who have been underweight in hospitality software amid broader tech market volatility, may see this as a chance to initiate or add to positions in a company that continues to outpace its own guidance.

While hotels remain Agilysys’s largest vertical, management highlighted accelerating adoption in cruise ships and casinos during the earnings call. The firm is also capitalizing on cross-sell opportunities for its Book4Time spa-and-wellness module and recently enhanced foodservice solutions. These cross-sell initiatives contributed to a 25% year-over-year increase in average deal value, according to commentary from Jessica Hennessy, Vice President of Investor Relations and Operations, who stressed that complex, multi-product implementations are generating stickier customer relationships.

Approximately two-thirds of Agilysys’s revenue is now recurring, driven by subscription fees and long-term support contracts. Management reiterated that the company’s complex implementations, which typically span six to nine months, underpin high renewal rates and strong attach rates in new deals. During the Q3 call, the team noted that backlog conversion remained a key focus: while execution efficiencies are improving, converting the existing backlog into revenue at the guidance-level pace will be critical to meeting full-year targets.