Agilysys Inc. (NASDAQ:AGYS) Q1 2021 Earnings Conference Call - Final Transcript
Jul 28, 2020 • 04:30 pm ET
license fees happen over time after the implementations are completed.
Q1 fiscal 2021 revenue was $29.8 million, a 22% decline compared to Q1 of fiscal 2020. This was likely the most challenging quarter ever faced by the hospitality industry and our business. Considering the extraordinarily tough circumstances, we are pleased that Q1 revenue turned out to be better than our earlier expectations.
Now looking back on the quarter, we think the fact we faced such tough circumstances and still came out of it reasonably well had a lot to do with our increasing pace of product improvements and innovation, our growing reputation as a world-class customer service organization and the strength of the backlog before the crisis. Apart from the tough business conditions affecting all our revenue areas, recurring revenue was additionally affected by various one-time COVID related financial relief provided to customers to help them during this time of need. Recurring revenue increased 2% year-over-year compared to Q1 of last fiscal year, despite this one-time COVID relief provided. We expect this relief to also affect future quarters of this fiscal year, but to a lesser extent in each quarter. We continue to do very well with customer retention. The recurring revenue challenges this quarter are only due to the one-time COVID relief and have nothing to do with any customer retention issues.
Product and services revenues were down 52% and 45%, respectively year-over-year compared to Q1 of last fiscal year, mainly due to delayed purchase and product receiving decisions caused by site closures. We announced special sales incentives during April for our new food and beverage online ordering software module called OnDemand. The incentives included a 90-day free SaaS trial and no services installation charges for the first food outlet at a property. By any measure, the offer was a big success and multiple hundreds of sites signed up for it. Assuming a majority of the customer sites who signed up for the free trial choose to continue using the product, this should help our SaaS fees growth starting around the September, October, November timeframe. Regarding services in general, after hitting a low in April, the number of product implementation projects has increased each month over the prior month during May, June and July.
Now about sales. The extent of sale agreements closed during the quarter was about 60, 6-0 -- was about 60% in value terms compared to the same quarter last year. Most of the decline has been due to postponed technology investment decisions. Our win loss ratio in deals where a competitive decision is reached, continues to be impressively high. As one would expect the sales deals won in value terms, hit a low during April. But since April each of the following three months has been an improvement over the previous month. We closed more deals in May in value terms than in April, more in June compared to May and July has been better than June even with a few more business days left