UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~December 3031, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 000-5734

AGILYSYS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	34-0907152
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3655 Brookside Parkway, Suite 300 Alpharetta, Georgia	30022
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (770) 810-7800

Securities registered pursuant to Section 12(b) of the Act:

     
Title of each class

     Trading
Symbol(s)

Name of each exchange on which registered

     Common Stock, without par value

     AGYS

     Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated filer	☒	Accelerated filer	☐
Non-Accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October~~January 1716, ~~2025~~2026, the registrant had 28,~~042~~108,~~508~~247 shares of common stock outstanding.

AGILYSYS, INC.

TABLE OF CONTENTS

Part I. Financial Information
	Item 1	Financial Statements (Unaudited)	3
		Condensed Consolidated Balance Sheets – September 30, 2025 (Unaudited) and March 31, 2025	3
		Condensed Consolidated Balance Sheets – December 31, 2025 (Unaudited) and March 31, 2025	3
		Condensed Consolidated Statements of Operations (Unaudited) – Three and Six Months Ended September 30, 2025 and September 30, 2024	4
		Condensed Consolidated Statements of Operations (Unaudited) – Three and Nine Months Ended December 31, 2025 and December 31, 2024	4
		Condensed Consolidated Statements of Comprehensive Income (Unaudited) – Three and Six Months Ended September 30, 2025 and September 30, 2024	5
		Condensed Consolidated Statements of Comprehensive Income (Unaudited) – Three and Nine Months Ended December 31, 2025 and December 31, 2024	5
		Condensed Consolidated Statements of Cash Flows (Unaudited) – Six Months Ended September 30, 2025 and September 30, 2024	6
		Condensed Consolidated Statements of Cash Flows (Unaudited) – Nine Months Ended December 31, 2025 and December 31, 2024	6
		Condensed Consolidated Statements of Shareholders' Equity (Unaudited) – Three and Six Months Ended September 30, 2025 and September 30, 2024	7
		Condensed Consolidated Statements of Shareholders' Equity (Unaudited) – Three and Nine Months Ended December 31, 2025 and December 31, 2024	7
		Notes to Condensed Consolidated Financial Statements (Unaudited)	8
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2122
	Item 3	Quantitative and Qualitative Disclosures About Market Risk	3031
	Item 4	Controls and Procedures	3032
Part II. Other Information
	Item 1	Legal Proceedings	3233
	Item 1A	Risk Factors	3233
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	3233
	Item 3	Defaults Upon Senior Securities	3233
	Item 4	Mine Safety Disclosures	3233
	Item 5	Other Information	3233
	Item 6	Exhibits	3334
Signatures			3435

AGILYSYS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)	~~September~~December 3031,2025 (Unaudited)			March 31,2025
ASSETS
Current assets:
Cash and cash equivalents	$	5981,~~336~~453		$	73,041
Accounts receivable, net of allowance for expected credit losses of $1,202 and $627, respectively		36,796			31,529
Accounts receivable, net of allowance for expected credit losses of $780 and $627, respectively		63,699			31,529
Contract assets		43,~~048~~420			4,523
Inventories		7,~~714~~794			5,174
Prepaid expenses and other current assets		1013,~~067~~407			9,260
Total current assets		~~117~~169,~~961~~773			123,527
Property and equipment, net		1514,~~268~~692			16,718
Operating lease right-of-use assets		1514,~~111~~903			17,114
Goodwill		~~134~~135,~~130~~845			130,640
Intangible assets, net		6968,~~500~~785			70,802
Deferred income taxes, non-current		6360,~~204~~519			66,520
Other non-current assets		10,~~394~~661			9,049
Total assets	$	~~425~~475,~~568~~178		$	434,370
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	12,~~764~~504		$	12,388
Contract liabilities		6292,~~886~~502			70,654
Accrued liabilities		1519,~~649~~472			22,324
Operating lease liabilities, current		5,~~449~~423			5,658
Total current liabilities		96129,~~748~~901			111,024
Deferred income taxes, non-current		11,~~331~~501			10,986
Operating lease liabilities, non-current		1514,~~194~~881			17,304
Debt, non-current		—			24,000
Other non-current liabilities		5,~~548~~772			5,170
Commitments and contingencies
Shareholders' equity:
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 33,342,288 shares issued; and 28,042,618 and 28,015,775 shares outstanding at September 30, 2025 and March 31, 2025, respectively		10,003			10,003
Common shares, without par value, at $0.30 stated value; 80,000,000 shares authorized; 33,342,288 shares issued; and 28,097,684 and 28,015,775 shares outstanding at December 31, 2025 and March 31, 2025, respectively		10,003			10,003
Treasury shares, 5,299,670 and 5,326,513 at September 30, 2025 and March 31, 2025, respectively		(1,593	)		(1,600	)
Treasury shares, 5,244,604 and 5,326,513 at December 31, 2025 and March 31, 2025, respectively		(1,576	)		(1,600	)
Capital in excess of stated value		~~120~~125,~~854~~719			109,785
Retained earnings		~~177~~187,~~580~~477			160,980
Accumulated other comprehensive loss		(108,~~097~~500	)		(13,282	)
Total shareholders' equity		~~296~~313,~~747~~123			265,886
Total liabilities and shareholders' equity	$	~~425~~475,~~568~~178		$	434,370

See accompanying notes to unaudited condensed consolidated financial statements.

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months EndedSeptember 30,

Six Months EndedSeptember 30,

Three Months EndedDecember 31,

Nine Months EndedDecember 31,

(In thousands, except per share data)

2025

2024

2025

2024

Net revenue:

Products

10,~~095~~681

10,~~525~~677

2030,~~050~~731

2031,~~400~~077

Subscription and maintenance

5052,~~955~~007

4144,~~432~~379

99151,~~579~~586

79123,~~474~~853

Professional services

1817,~~249~~702

1614,~~322~~505

3654,~~347~~049

3146,~~917~~422

Total net revenue

7980,~~299~~390

6869,~~279~~561

~~155~~236,~~976~~366

~~131~~201,~~791~~352

Cost of goods sold:

Products

65,~~037~~946

5,~~206~~550

1218,~~236~~182

1015,~~432~~982

Subscription and maintenance

10,~~850~~909

89,~~827~~531

2031,~~833~~742

1626,~~935~~466

Professional services

13,~~445~~293

1110,~~032~~625

2639,~~645~~938

2131,~~342~~967

Total cost of goods sold

30,~~332~~148

25,~~065~~706

5989,~~714~~862

4874,~~709~~415

Gross profit

4850,~~967~~242

43,~~214~~855

96146,~~262~~504

83126,~~082~~937

Gross profit margin

6162.75

63.30

6162.70

63.0

Operating expenses:

Product development

1718,~~825~~926

1614,~~172~~971

3554,~~280~~207

3045,~~892~~863

Sales and marketing

9,~~781~~106

89,~~794~~013

2130,~~574~~681

1524,~~808~~822

General and administrative

10,~~164~~833

109,~~162~~536

2031,~~920~~753

2030,~~645~~181

Depreciation of fixed assets

~~964~~1,009

~~915~~985

12,~~908~~918

12,~~752~~738

Amortization of internal-use software and intangibles

1,~~432~~417

~~904~~1,622

24,~~890~~307

12,~~155~~777

Other (gains) charges, net

(52,~~456~~717

)

~~2,037~~(12

)

(57,~~203~~923

)

2,~~587~~576

Legal settlements

110

104

225

369

Legal settlements, net

(64

)

330

161

699

Total operating expense

3438,~~820~~510

3936,~~088~~445

77116,~~594~~104

73109,~~208~~656

Operating income

1411,~~147~~732

47,~~126~~410

1830,~~668~~400

917,~~874~~281

Other income (expense):

Interest income

~~346~~485

~~1,095~~416

~~793~~1,278

23,~~877~~293

Interest expense

(5630

)

(~~458~~657

)

(~~273~~303

)

(~~458~~1,116

)

Other income, net

~~1,274~~696

~~383~~574

12,~~372~~068

~~226~~804

Income before taxes

1512,~~711~~883

57,~~146~~743

2033,~~560~~443

1220,~~519~~262

Income tax provision (benefit)

4,001

3,782

3,960

(2,951

)

Income tax provision

2,986

3,913

6,946

962

Net income

119,~~710~~897

13,~~364~~830

1626,~~600~~497

1519,~~470~~300

Weighted average shares outstanding - basic

27,~~882~~970

27,~~533~~667

27,~~838~~882

27,~~335~~446

Net income per share - basic:

0.4235

0.0514

0.6095

0.5770

Weighted average shares outstanding - diluted

28,~~397~~438

28,~~257~~314

28,~~348~~379

28,~~202~~248

Net income per share - diluted:

0.4135

0.0514

0.5993

0.5568

See accompanying notes to unaudited condensed consolidated financial statements.

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						~~Six~~Nine Months Ended
	September 30,						September 30,
	December 31,						December 31,
(In thousands)	2025			2024			2025		2024
Net income	$	119,~~710~~897		$	13,~~364~~830		$	1626,~~600~~497	$	1519,~~470~~300
Other comprehensive income (loss):
Unrealized foreign currency translation adjustments		(41,~~042~~597	)		~~709~~(10,049	)		34,~~185~~782		~~551~~(9,498	)
Total comprehensive income	$	711,~~668~~494		$	2(6,~~073~~219	)	$	1931,~~785~~279	$	169,~~021~~802

See accompanying notes to unaudited condensed consolidated financial statements.

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	Nine Months Ended
	September 30,
	December 31,
(In thousands)	2025			2024
Operating activities
Net income	$	1626,~~600~~497		$	1519,~~470~~300
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on asset disposals		2			2124
Depreciation of fixed assets		12,~~908~~918			12,~~752~~738
Amortization of internal-use software and intangibles		24,~~890~~307			12,~~155~~777
Amortization of developed technology acquired		~~333~~498			~~138~~301
Deferred income taxes		35,~~188~~823			(~~7,634~~980	)
Share-based compensation		1015,~~029~~798			812,~~438~~656
Changes in operating assets and liabilities		(2421,~~083~~681	)		(118,~~652~~840	)
Net cash provided by operating activities		1034,~~867~~162			727,~~688~~976
Investing activities
Cash paid for business combination, net of cash acquired		—			(144,945	)
Capital expenditures		(~~850~~1,424	)		(12,~~520~~082	)
Net cash used in investing activities		(850	)		(146,465	)
Additional investments in corporate-owned life insurance policies		—			(27	)
Net cash used in investing activities		(1,424	)		(147,054	)
Financing activities
Debt proceeds, net of issuance costs		—			49,~~655~~646
Debt repayments		(24,000	)		—(12,000	)
Proceeds from Employee Stock Purchase Plan purchases		777			453
Repurchase of common shares to satisfy employee tax withholding		(~~742~~1,357	)		(12,~~428~~848	)
Net cash (used in) provided by financing activities		(2324,~~965~~580	)		4835,~~680~~251
Effect of exchange rate changes on cash		~~243~~254			94(303	)
Net decrease in cash and cash equivalents		(13,705	)		(90,003	)
Net increase (decrease) in cash and cash equivalents		8,412			(84,130	)
Cash and cash equivalents at beginning of period		73,041			144,891
Cash and cash equivalents at end of period	$	5981,~~336~~453		$	5460,~~888~~761

See accompanying notes to unaudited condensed consolidated financial statements.

AGILYSYS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

	Three Months Ended September 30, 2025
	Three Months Ended December 31, 2025
	Common Shares
	Issued				In Treasury						Capital inexcess of					Accumulatedother
(In thousands, except share data)	Shares		Statedvalue		Shares			Statedvalue			Statedvalue			Retainedearnings		comprehensiveincome (loss)			Total
Balance at June 30, 2025		33,342	$	10,003		(5,307	)	$	(1,595	)	$	114,996		$	165,870	$	(6,055	)	$	283,219
Share-based compensation		—		—		—			—			4,848			—		—			4,848
Shares issued upon exercise of SSARs		—		—		1			—			—			—		—			—
Shares withheld for taxes upon exercise of SSARs or vesting of other grants		—		—		(1	)		—			235			—		—			235
Other common stock issuances, net		—		—		7			2			775			—		—			777
Net income		—		—		—			—			—			11,710		—			11,710
Unrealized translation adjustments		—		—		—			—			—			—		(4,042	)		(4,042	)
Balance at September 30, 2025		33,342	$	10,003		(5,300	)	$	(1,593	)	$	120,854		$	177,580	$	(10,097	)	$	296,747
	Three Months Ended September 30, 2024
Share-based compensation		—		—		—			—			5,579			—		—			5,579
Shares issued upon exercise of SSARs		—		—		18			6			(6	)		—		—			—
Shares withheld for taxes upon exercise of SSARs or vesting of other grants		—		—		(5	)		(2	)		(695	)		—		—			(697	)
Other common stock issuances, net		—		—		42			13			(13	)		—		—			—
Net income		—		—		—			—			—			9,897		—			9,897
Unrealized translation adjustments		—		—		—			—			—			—		1,597			1,597
Balance at December 31, 2025		33,342	$	10,003		(5,245	)	$	(1,576	)	$	125,719		$	187,477	$	(8,500	)	$	313,123
	Three Months Ended December 31, 2024
	Common Shares
	Issued				In Treasury						Capital inexcess of					Accumulatedother
(In thousands, except share data)	Shares		Statedvalue		Shares			Statedvalue			Statedvalue			Retainedearnings		comprehensiveincome (loss)			Total
Balance at June 30, 2024		33,342	$	10,003		(5,470	)	$	(1,642	)	$	98,277		$	151,861	$	(4,328	)	$	254,171
Balance at September 30, 2024		33,342	$	10,003		(5,402	)	$	(1,622	)	$	102,275		$	153,225	$	(3,619	)	$	260,262
Share-based compensation		—		—		—			—			34,~~877~~173			—		—			34,~~877~~173
Shares issued upon exercise of SSARs		—		—		4736			1411			(1411	)		—		—			—
Shares withheld for taxes upon exercise of SSARs or vesting of other grants		—		—		(212	)		(14	)		(~~311~~1,421	)		—		—			(~~312~~1,425	)
Other common stock issuances, net		—		—		23(2	)		7(1	)		~~446~~1			—		—			~~453~~—
Net income		—		—		—			—			—			13,~~364~~830		—			13,~~364~~830
Unrealized translation adjustments		—		—		—			—			—			—		~~709~~(10,049	)		~~709~~(10,049	)
Balance at September 30, 2024		33,342		10,003		(5,402	)		(1,622	)		102,275			153,225		(3,619	)		260,262
Balance at December 31, 2024		33,342		10,003		(5,380	)		(1,616	)		105,017			157,055		(13,668	)		256,791
	Six Months Ended September 30, 2025
	Nine Months Ended December 31, 2025
	Common Shares
	Issued				In Treasury						Capital inexcess of					Accumulatedother
(In thousands, except share data)	Shares		Statedvalue		Shares			Statedvalue			Statedvalue			Retainedearnings		comprehensiveincome (loss)			Total
Balance at March 31, 2025		33,342	$	10,003		(5,327	)	$	(1,600	)	$	109,785		$	160,980	$	(13,282	)	$	265,886
Share-based compensation		—		—		—			—			1015,~~224~~803			—		—			1015,~~224~~803
Shares issued upon exercise of SSARs		—		—		1937			511			(511	)		—		—			—
Shares withheld for taxes upon exercise of SSARs or vesting of other grants		—		—		(27	)		(13	)		76(619	)		—		—			75(622	)
Other common stock issuances, net		—		—		1052			316			~~774~~761			—		—			777
Net income		—		—		—			—			—			1626,~~600~~497		—			1626,~~600~~497
Unrealized translation adjustments		—		—		—			—			—			—		34,~~185~~782			34,~~185~~782
Balance at September 30, 2025		33,342	$	10,003		(5,300	)	$	(1,593	)	$	120,854		$	177,580	$	(10,097	)	$	296,747
Balance at December 31, 2025		33,342	$	10,003		(5,245	)	$	(1,576	)	$	125,719		$	187,477	$	(8,500	)	$	313,123
	Six Months Ended September 30, 2024
	Nine Months Ended December 31, 2024
	Common Shares
	Issued				In Treasury						Capital inexcess of					Accumulatedother
(In thousands, except share data)	Shares		Statedvalue		Shares			Statedvalue			Statedvalue			Retainedearnings		comprehensiveincome (loss)			Total
Balance at March 31, 2024		33,342	$	10,003		(5,965	)	$	(1,791	)	$	94,680		$	137,755	$	(4,170	)	$	236,477
Share-based compensation		—		—		—			—			812,~~727~~900			—		—			812,~~727~~900
Shares issued upon exercise of SSARs		—		—		~~545~~581			~~164~~175			(~~164~~175	)		—		—			—
Shares withheld for taxes upon exercise of SSARs or vesting of other grants		—		—		(1628	)		(59	)		(12,~~411~~832	)		—		—			(12,~~416~~841	)
Other common stock issuances, net		—		—		3432			109			~~443~~444			—		—			453
Net income		—		—		—			—			—			1519,~~470~~300		—			1519,~~470~~300
Unrealized translation adjustments		—		—		—			—			—			—		~~551~~(9,498	)		~~551~~(9,498	)
Balance at September 30, 2024		33,342		10,003		(5,402	)		(1,622	)		102,275			153,225		(3,619	)		260,262
Balance at December 31, 2024		33,342		10,003		(5,380	)		(1,616	)		105,017			157,055		(13,668	)		256,791

See accompanying notes to unaudited condensed consolidated financial statements.

AGILYSYS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations and Financial Statement Presentation

Nature of Operations

Agilysys has been a leader in hospitality software for more than 45 years, delivering innovative cloud-native SaaS and on-premise solutions for hotels, resorts, cruise lines, casinos, corporate foodservice management, restaurants, universities, stadiums, and healthcare facilities. The Company’s software solutions include point-of-sale (POS), property management (PMS), inventory and procurement, payments, and related applications that manage and enhance the entire guest journey. Agilysys also is known for its world-class customer-centric service. Many of the top hospitality companies around the world use Agilysys solutions to improve guest loyalty, drive revenue growth, and increase operational efficiencies. Agilysys operates across ~~North~~the ~~America~~Americas, Europe, the Middle East, Africa, Asia-Pacific, and India, with headquarters located in Alpharetta, GA.

The Company has one reportable segment serving the global hospitality industry.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include our accounts consolidated with our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Our fiscal year ends on March 31st. References to a particular year refer to the fiscal year ending in March of that year. For example, fiscal 2026 refers to the fiscal year ending March 31, 2026.

Our unaudited interim financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information, the instructions to the Quarterly Report on Form 10-Q (Quarterly Report) under the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10-01 of Regulation S-X under the Exchange Act. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements.

The Condensed Consolidated Balance Sheet as of ~~September~~December 3031, 2025, as well as the Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Income, and Condensed Consolidated Statements of ~~Cash~~Shareholders’ ~~Flows~~Equity for the three and nine months ended December 31, 2025 and 2024 and the Condensed Consolidated ~~Statements~~Statement of ~~Shareholders’~~Cash ~~Equity~~Flows for the ~~three~~nine ~~and six~~ months ended ~~September~~December 3031, 2025 and 2024, are unaudited. However, these financial statements have been prepared on the same basis as those in the audited annual financial statements. In the opinion of management, all adjustments of a recurring nature necessary to fairly state the results of operations, financial position, and cash flows have been made.

These unaudited interim financial statements should be read together with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended March 31, 2025, filed with the Securities and Exchange Commission (SEC) on May 23, 2025.

Use of estimates

Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

2. Summary of Significant Accounting Policies

A detailed description of our significant accounting policies can be found in the audited financial statements for the fiscal year ended March 31, 2025, included in our Annual Report on Form 10-K. There have been no material changes to our significant accounting policies from those disclosed therein.

Recently Adopted and Issued Accounting Pronouncements

In ~~September~~December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-0611, ~~Intangibles-Goodwill~~Interim ~~and~~Reporting ~~Other-Internal~~(Topic ~~Use~~270): ~~Software~~Narrow-Scope Improvements (~~Subtopic~~“ASU ~~350~~2025-4011”): ~~Targeted~~to ~~Improvements~~clarify tocurrent ~~the~~interim ~~Accounting~~disclosure ~~for~~requirements ~~Internal-Use~~and ~~Software,~~create ~~which~~a ~~removes~~comprehensive ~~all~~list ~~references~~of tointerim ~~software~~disclosures ~~development~~required ~~stages~~under ~~and~~U.S. ~~clarifies~~GAAP. ~~the~~The ~~threshold~~ASU ~~entities~~also ~~apply~~incorporates toa ~~begin~~disclosure ~~capitalizing~~principle ~~costs.~~that ~~ASU~~requires ~~No.~~interim ~~2025-06~~period isdisclosures ~~effective~~of ~~for~~material ~~annual~~events ~~periods~~or ~~beginning~~changes ~~after~~that ~~December~~have ~~15,~~occurred ~~2027,~~since orthe ~~our~~previous ~~fiscal~~year-end. ~~2029,~~ASU ~~and~~2025-11 is effective for interim reporting periods within ~~those~~ annual reporting periods, ~~The~~beginning ~~ASU~~after ~~may~~December be15, ~~applied prospectively~~2027, ~~retrospectively~~ or ~~through~~our afiscal ~~modified~~2029, ~~transition approach~~ with early adoption permitted. We are currently ~~evaluating~~assessing the ~~potential~~ impact ~~the ASU may have~~ on our Condensed Consolidated Financial Statements ~~upon adoption~~.

In December 2025, the Financial Accounting Standards Board FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”) to establish authoritative guidance on how to recognize, measure, and present government grants received by business entities. ASU 2025-10 is effective for annual periods beginning after December 15, 2028, or our fiscal 2030, and interim reporting periods within those annual reporting periods. The ASU may be applied using a modified prospective, modified retrospective or retrospective approach with early adoption permitted in an interim or annual reporting period. If an entity early adopts in an interim reporting period, it must adopt as of the beginning of the annual reporting period that includes that interim reporting period. We adopted ASU 2025-10 under the modified prospective approach effective as of April 1, 2025 – see Note 6, Income Taxes.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which removes all references to software development stages and clarifies the threshold entities apply to begin capitalizing costs. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, or our fiscal 2029, and interim reporting periods within those annual reporting periods. The ASU may be applied prospectively, retrospectively or through a modified transition approach with early adoption permitted. We are currently evaluating the potential impact the ASU may have on our Consolidated Financial Statements upon adoption.

In November 2024, the FASB issued ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (“ASU 2024-03”) to expand expense disclosures by requiring disaggregated disclosure of certain income statement expense line items, including those that contain purchases of inventory, employee compensation, depreciation and amortization. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, or our fiscal 2028, and subsequent interim periods, with early adoption permitted. The amendments should be applied prospectively, but retrospective application is permitted. We are currently assessing the impact on our disclosures.

In December 2023, the FASB issued ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) to update income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The amendments in the ASU also remove disclosures related to certain unrecognized tax benefits and deferred taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, or our fiscal 2026. The amendments may be applied prospectively or retrospectively with early adoption permitted. We are currently assessing the impact on our disclosures.

3. Revenue Recognition

Our customary business practice is to enter into legally enforceable written contracts with our customers. The majority of our contracts are governed by a master service agreement between us and the customer, which sets forth the general terms and conditions of any individual contract between the parties, which is then supplemented by a customer order to specify the different goods and services, the associated prices, and any additional terms for an individual contract. Performance obligations specific to each individual contract are defined within the terms of each order. Each performance obligation is identified based on the goods and services that will be transferred to our customer that are both capable of being distinct and are distinct within the context of the contract. The transaction price is determined based on the consideration that we will be entitled to and that we expect to receive in exchange for transferring goods or services to the customer. Typically, our contracts do not provide our customer with any right of return or refund; we do not constrain the contract price as it is probable that there will not be a significant revenue reversal due to a return or refund.

Typically, our customer contracts contain one or more of the following goods or services which constitute performance obligations.

Our proprietary software licenses typically provide for a perpetual right to use our software. Generally, our contracts do not provide significant services of integration and customization, and installation services are not required to be purchased directly from us. The software is delivered before related services are provided and is functional without professional services, updates and technical support. We have concluded that the software license is distinct as the customer can benefit from the software on its own. Software revenue is typically recognized when the software is delivered or made available for download to the customer.

We recognize revenue for hardware sales when the product is shipped to the customer and when obligations that affect the customer’s final acceptance of the arrangement have been fulfilled. Hardware is purchased from suppliers and provided to the end-user customers via drop-ship or from inventory. We are responsible for negotiating price both with the supplier and the customer, payment to the supplier, establishing payment terms and product returns with the customer, and we bear the credit risk if the customer does not pay for the goods. As the principal contact with the customer, we recognize revenue and cost of goods sold when we ship or are notified by the supplier that the product has been shipped. In certain limited instances, as shipping terms dictate, revenue is recognized upon receipt at the point of destination or upon installation at the customer site.

~~software. Accordingly~~services, ~~each~~updates ofand ~~the~~technical ~~rights~~support. toWe ~~access~~have ~~the~~concluded ~~software,~~that the ~~maintenance~~software ~~services,~~license ~~any hosting services, and any transaction-based services~~ is ~~not considered a~~ distinct ~~performance~~as ~~obligation~~the incustomer ~~the~~can ~~context~~benefit offrom the ~~contract~~software ~~and~~on ~~should~~its beown. ~~combined~~Software ~~into~~revenue ais ~~single~~typically ~~performance obligation to be~~ recognized ~~over~~when the ~~contract~~software ~~period.~~is ~~The~~delivered ~~Company~~or ~~recognizes~~made ~~subscription~~available ~~revenue~~for ~~over~~download ~~monthly~~to ~~periods based on~~ the ~~typical monthly invoicing and renewal cycle in accordance with our~~ customer ~~agreement terms~~.

Our subscription service revenue is comprised of fees for contracts that provide customers a right to access our software for a subscribed period. We do not provide the customer the contractual right to license the software at any time outside of the subscription period under these contracts. Our subscription service revenue is primarily based on rates per location, including rates per points of sale and per room. We recognize certain subscription service revenue on a per-transaction basis. The customer can only benefit from the software and software maintenance when provided the right to access the software. Accordingly, each of the rights to access the software, the maintenance services, any hosting services, and any transaction-based services is not considered a distinct performance obligation in the context of the contract and should be combined into a single performance obligation to be recognized over the contract period. The Company recognizes subscription revenue over monthly periods based on the typical monthly invoicing and renewal cycle in accordance with our customer agreement terms.

We derive maintenance service revenue from providing unspecified updates, upgrades, bug fixes, and technical support services for our proprietary software. These services represent a stand-ready obligation that is concurrently delivered and has the same pattern of transfer to the customer; we account for these maintenance services as a single performance obligation. Maintenance revenue includes the same services provided by third-parties for remarketed software. We recognize substantially all maintenance revenue over the contract period of the maintenance agreement. We also recognize certain maintenance service revenue based on the volume of payment transactions processed by third parties through access to our software.

Professional services revenues primarily consist of fees for consulting, implementation, installation, integration, development and training and are generally recognized over time as the customer simultaneously receives and consumes the benefits of the professional services as the services are being performed. Certain professional development services are recognized upon delivery of the developed solutions to the customer. At the end of each reporting period, we recognize the most likely amount of variable consideration on any contract holdbacks we expect to bill for development services delivered. Professional services can be provided by internal or external providers, do not significantly affect the customer’s ability to access or use other provided goods or services, and provide a measure of benefit beyond that of other promised goods or services in the contract. As a result, professional services are considered distinct in the context of the contract and represent a separate performance obligation. Professional services that are billed on a time and materials basis are recognized over time as the services are performed. For contracts billed on a fixed price basis, revenue is recognized over time using an input method based on labor hours expended to date relative to the total labor hours expected to be required to satisfy the related performance obligation.

We use the market approach to derive standalone selling price (“SSP”) by maximizing observable data points (in the form of recently executed customer contracts) to determine the price customers are willing to pay for the goods and services transferred. If the contract contains a single performance obligation, the entire transaction price is allocated to that performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative SSP basis.

Shipping and handling fees billed to customers are recognized as revenue and the related costs are recognized in cost of goods sold. Revenue is recorded net of any applicable taxes collected and remitted to governmental agencies.

Disaggregation of Revenue

We derive and report our revenue from the sale of products (proprietary software licenses, third party hardware and operating systems), subscription and maintenance, and professional services. Products revenue recognized at a point in time totaled $10.17 million and $10.57 million, and $2030.17 million and $2031.41 million for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, respectively. Subscription, maintenance, and substantially all professional services revenue recognized over time totaled $69.27 million and $5758.89 million, and $~~135~~205.96 million and $~~111~~170.43 million for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, respectively.

Contract Balances

Contract assets are rights to consideration in exchange for goods or services that we have transferred to a customer when that right is conditional on something other than the passage of time. The majority of our contract assets represent unbilled amounts related to products and professional services. We expect billing and collection of our contract assets to occur within the next twelve months. We receive payments from customers based upon contractual billing schedules and accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities represent consideration received or consideration which is unconditionally due from customers prior to transferring goods or services to the customer under the terms of the contract.

Revenue recognized from amounts included in contract liabilities at the beginning of the period was $1913.89 million and $1210.76 million, and $5266.98 million and $4252.28 million for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, respectively. Because the right to the consideration became unconditional, we transferred to accounts receivable from contract assets at the beginning of the period, $0.51 million ~~and~~for ~~$0.3~~the ~~million~~three months ended December 31, 2025, and $4.45 million and $2.2 million for the ~~three~~nine ~~and six~~ months ended ~~September~~December 3031, 2025 and 2024, respectively.

10Substantially all of our arrangements are for a period of one year or less. As a result, unsatisfied performance obligations as of December 31, 2025 are expected to be satisfied and the allocated transaction price recognized in revenue within a period of 12 months or less.

Substantially all of our arrangements are for a period of one year or less. As a result, unsatisfied performance obligations as of September 30, 2025 are expected to be satisfied and the allocated transaction price recognized in revenue within a period of 12 months or less.

Assets Recognized from Costs to Obtain a Contract

Sales commission expenses that would not have occurred absent the customer contracts are considered incremental costs to obtain a contract. We expense the incremental costs to obtain a contract as incurred when the expected benefit and amortization period is one year or less. For subscription contracts that are renewed monthly based on an agreement term, we capitalize commission expenses and amortize as we satisfy the underlying performance obligations, generally based on the contract terms and anticipated renewals.

We had $7.02 million and $5.15 million of capitalized sales incentive costs as of ~~September~~December 3031, 2025 and 2024, respectively. These balances are included in other non-current assets on our condensed consolidated balance sheets. During the three and ~~six~~nine months ended ~~September~~December 3031, 2025, we expensed $10.39 million and $23.54 million, respectively, of sales commissions, which included amortization of capitalized amounts of $0.6 million and $1.17 million, respectively. During the comparable periods ending ~~September~~December 3031, 2024, we expensed $01.90 million and $12.8 million, respectively, of sales commissions, which included amortization of capitalized amounts of $0.45 million and $01.93 million, respectively. These expenses are included in operating expenses – sales and marketing in our condensed consolidated statement of operations. All other costs to obtain a contract are not considered incremental and therefore are expensed as incurred.

4. Additional Balance Sheet Information

Additional information related to the condensed consolidated balance sheets is as follows:

(In thousands)	~~September~~December 3031, 2025		March 31, 2025
Prepaid expenses and other current assets:
Prepaid expenses	$	910,~~720~~227	$	8,059
Other		347		1,201
Employee retention credits receivable (see Note 6, Income Taxes)		3,016		—
Total	$	10,067	$	9,260
Other		164		1,201
Total	$	13,407	$	9,260
Accrued liabilities:
Salaries, wages, employee benefits, and payroll taxes	$	1317,~~977~~606	$	17,007
Income and indirect taxes payable		~~433~~1,003		1,512
Other		~~1,239~~863		3,805
Total	$	1519,~~649~~472	$	22,324

5. Supplemental Disclosures of Cash Flow Information

Additional information related to the condensed consolidated statements of cash flows is as follows:

	Six Months Ended September 30,
	Nine Months Ended December 31,
(In thousands)		2025		2024
Cash receipts for interest	$	~~732~~1,254	$	23,~~852~~181
Cash payments for interest		274		~~299~~955
Cash payments for income tax, net		1,~~244~~718		1,~~031~~566
Cash payments for operating leases		35,~~406~~162		23,~~278~~843
Accrued capital expenditures		~~125~~115		6617

6. Income Taxes

The following table compares our income tax provision and effective tax rates for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024:

	Three months endedSeptember 30,						Six Months EndedSeptember 30,
	Three months endedDecember 31,						Nine Months EndedDecember 31,
(Dollars in thousands)	2025			2024			2025			2024
Income tax provision (benefit)	$	4,001		$	3,782		$	3,960		$	(2,951	)
Income tax provision	$	2,986		$	3,913		$	6,946		$	962
Effective tax rate		2523.52	%	nm	50.5	%		1920.38	%	nm	4.7	%

nm - not meaningful

For the ~~six~~nine months ended ~~September~~December 3031, 2025 ~~and 2024~~, income tax provision ~~(benefit)~~ and the effective tax rate were primarily driven by the ~~impact~~tax effects of ~~discrete~~share-based ~~excess~~compensation, ~~tax~~global ~~benefits~~intangible ~~associated~~low-taxed ~~with~~income ~~Share-Based~~(GILTI) ~~Compensation~~and the mix of earnings in the U.S. and India.

For the ~~three~~nine months ended ~~September~~December 3031, ~~2025 and~~ 2024, income tax provision and the effective tax rate were primarily driven by ~~activity~~the inimpact ~~India~~of ~~and~~discrete ~~the~~excess Utax benefits associated with Share-Based Compensation.S.

~~Our~~For ~~India subsidiary operates in a “Special Economic Zone (SEZ)”. One of~~ the ~~benefits~~three ~~associated~~months ~~with~~ended ~~the~~December ~~SEZ~~31, is2025 ~~that~~and ~~the~~2024, ~~India subsidiary is not subject to regular India~~ income ~~taxes~~tax ~~during~~provision ~~its~~and ~~first~~the ~~five~~effective ~~years~~tax ofrate ~~operations,~~were ~~which~~primarily ~~included~~driven ~~fiscal~~by ~~2018~~the ~~through~~tax ~~fiscal~~effects ~~2022. The India subsidiary is subject to 50%~~ of ~~regular~~share-based ~~India~~compensation, ~~income~~GILTI ~~taxes~~and ~~during~~the ~~its~~mix ~~second five years~~ of ~~operations,~~earnings ~~which~~in ~~includes~~the ~~fiscal~~U.S. ~~2023~~and ~~through fiscal 2027~~India.

~~The~~Our ~~Coronavirus~~India ~~Aid,~~subsidiary ~~Relief,~~operates ~~and Economic Security Act (CARES Act) is a stimulus bill which was~~ in ~~response to economic consequences of the COVID-19 pandemic. The CARES Act provided an employee retention credit, which is~~ a ~~refundable~~“Special ~~tax~~Economic ~~credit~~Zone against certain employment taxes. We filed our employee retention credit claims under the CARES Act during January 2024. In the absence of clear U.S. GAAP on accounting and reporting for such credits, the Company follows guidance under International Accounting Standards (~~“IAS”~~SEZ) ~~20 – Accounting for Government Grants and Disclosure of Government Assistance~~”. ~~Under~~One ~~IAS 20, we record any credits for which collection is reasonably assured, or probable, after considering all facts and circumstances including whether any statutes~~ of ~~limitations apply. We are reasonably assured of collection once we receive confirmation that~~ the ~~Internal~~benefits ~~Revenue~~associated ~~Service~~with ~~has processed our claim for~~ the ~~credit,~~SEZ ~~and~~is wethat ~~know~~ the ~~amount~~India ofsubsidiary ~~the~~is ~~credit~~not ~~plus~~subject ~~any~~to ~~associated~~regular ~~interest.~~India ~~During~~income ~~the~~taxes ~~six~~during ~~months~~its ~~ended~~first ~~September~~five ~~30,~~years ~~2025, we recorded $6.1 million~~ of ~~employee retention credits including associated interest received in cash as other (gains) charges~~operations, ~~net,~~which inincluded ~~the~~fiscal ~~condensed consolidated statements of operations.~~

2018 through fiscal 2022. The India subsidiary is subject to 50% of regular India income taxes during its second five years of operations, which includes fiscal 2023 through fiscal 2027.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a stimulus bill which was in response to economic consequences of the COVID-19 pandemic. The CARES Act provided an employee retention credit, which is a refundable tax credit against certain employment taxes. We filed our employee retention credit claims under the CARES Act during January 2024. In accordance with ASU 2025-10, which we adopted early effective as of April 1, 2025 as permitted, we record any credits for which collection is probable after considering all facts and circumstances including whether any statutes of limitations apply. We consider collection probable once we receive confirmation that the Internal Revenue Service has processed our claim for the credit, and we know the amount of the credit plus any associated interest to be refunded. During the nine months ended December 31, 2025 and 2024, we recorded $9.1 million and $0.5 million, respectively, of employee retention credits including associated interest received or expected to be received in cash as other (gains) charges, net, in the condensed consolidated statements of operations. As of December 31, 2025, we recorded $3.0 million of employee retention credits receivable as other current assets on the condensed consolidated balance sheet.

We have recorded and maintain valuation allowances offsetting the Company’s deferred tax assets in certain U.S. States and foreign jurisdictions. The ultimate realization of deferred tax assets depends on various factors including the generation of future taxable income in the periods in which the underlying temporary differences are deductible. We maintain valuation allowances for deferred tax assets until we have sufficient evidence to support the reversal of all or some portion of the allowances.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in the Company’s fiscal 2026, including the restoration of immediate expensing of domestic research and development expenditures, reinstatement of accelerated fixed asset depreciation and modifications to the international tax framework. We applied the relevant changes to the Company’s income tax provision for the period ended ~~September~~December 3031, 2025, which did not materially impact the Company’s consolidated tax position. We expect future cash tax savings resulting from the full expensing of U.S. research and development expenses under the OBBBA. OBBBA also amended and extended to calendar year 2030 the statute of limitations for employee retention credits under the CARES Act for certain employment taxes incurred during the three months ended September 30, 2021. The amendment and extension does not impact our recognition and measurement of credits under ASU 2025-10.

7. Commitments and Contingencies

We are involved in legal actions that arise in the ordinary course of business. It is the opinion of management that the resolution of any current pending litigation will not have a material adverse effect on our financial position or results of operations.

As of ~~September~~December 3031, 2025, we have an additional operating ~~leases~~lease that ~~have~~has not yet commenced of approximately $10.89 million. ~~These~~This ~~leases~~lease ~~are~~is expected to commence in fiscal year ~~2026 and in fiscal year~~ 2027 with an initial lease ~~terms~~term of approximately ~~5 to~~ 2 years~~, respectively~~.

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8. Earnings per Share

The following data shows the amounts used in computing earnings per share and the effect on earnings and the weighted average number of shares of dilutive potential common shares.

	Three Months Ended September 30,				Six Months Ended September 30,
	Three Months Ended December 31,				Nine Months Ended December 31,
(In thousands, except per share data)	2025		2024		2025		2024
Numerator:
Net income	$	119,~~710~~897	$	13,~~364~~830	$	1626,~~600~~497	$	1519,~~470~~300
Denominator:
Weighted average shares outstanding - basic		27,~~882~~970		27,~~533~~667		27,~~838~~882		27,~~335~~446
Dilutive SSARs		~~305~~301		~~432~~399		~~304~~303		~~571~~514
Dilutive unvested restricted stock units		8789		3044		6174		2840
Dilutive unvested restricted shares		~~123~~78		~~262~~204		~~145~~120		~~268~~248
Weighted average shares outstanding - diluted		28,~~397~~438		28,~~257~~314		28,~~348~~379		28,~~202~~248
Income per share - basic:	$	0.4235	$	0.0514	$	0.6095	$	0.5770
Income per share - diluted:	$	0.4135	$	0.0514	$	0.5993	$	0.5568
Anti-dilutive restricted shares, restricted stock units, and performance shares		—198		—136		1198		24136

Basic income per share is computed as net income attributable to common shareholders divided by the weighted average basic shares outstanding. The outstanding shares used to calculate the weighted average basic shares excludes ~~156~~76,~~781~~335 and ~~345~~248,~~625~~704 of restricted shares at ~~September~~December 3031, 2025 and 2024, respectively, as these shares were issued but were not vested and therefore, not considered outstanding for purposes of computing basic income per share at the balance sheet dates.

Diluted income per share includes the impact of all potentially dilutive securities on earnings per share. We have stock-settled appreciation rights (SSARs), restricted shares, and restricted stock units that are potentially dilutive securities.

9. Share-based Compensation

We may grant incentive stock options, non-qualified stock options, SSARs, restricted shares, restricted stock units, and performance shares under our shareholder-approved Amended and Restated 2024 Equity Incentive Plan (the 2024 Plan) for up to three million common shares, plus 237,080 common shares, the number of shares that were remaining for grant under the 2020 Equity Incentive Plan, as Amended and Restated (the 2020 Plan) as of the effective date of the 2024 Plan, plus the number of shares remaining for grant under the 2020 Plan that are forfeited, settled in cash, canceled or expired. The maximum aggregate number of common shares available for issuance under the 2024 Plan is 3.2 million. We may also grant shares under our shareholder-approved Employee Stock Purchase Plan (the ESPP) for up to 0.5 million common shares.

We may distribute authorized but unissued shares or treasury shares to satisfy share option and SSAR exercises or grants of restricted shares, restricted stock units, performance shares, or ESPP shares.

For SSARs, the exercise price must be set at least equal to the closing market price of our common shares on the date of grant. The maximum term of SSARs is seven years from the date of grant. The Compensation Committee of the Board of Directors establishes the period over which SSARs are subject to a service condition vest and the vesting criteria for SSARs subject to a market condition.

Restricted shares and restricted stock units, whether time-vested or performance-based, may be issued at no cost or at a purchase price that may be below their fair market value, but are subject to forfeiture and restrictions on their sale or other transfer. Performance-based grants may be conditioned upon the attainment of specified performance objectives and other conditions, restrictions, and contingencies. Restricted shares have the right to receive dividends, if any, upon vesting, subject to the same forfeiture provisions that apply to the underlying grants.

1314

We record compensation expense related to SSARs, restricted shares, restricted stock units, performance shares, and ESPP shares granted to certain employees and non-employee directors based on the fair value of the awards on the grant date. The fair value of restricted stock unit and restricted share grants subject only to a service condition is based on the closing price of our common shares on the grant date. For SSAR grants subject only to a service condition, we estimate the fair value on the grant date using the Black-Scholes-Merton option pricing model with inputs including the closing market price at grant date, exercise price and assumptions regarding the risk-free interest rate, expected volatility of our common shares based on historical volatility, and expected term as estimated using the simplified method. We use the simplified method for SSAR grants because we believe historical exercise data does not provide a reasonable basis upon which to estimate the expected term. For restricted stock unit, restricted share, and SSAR grants subject to a market condition, we estimate the fair value on the grant date through a lattice option pricing model that utilizes a Monte Carlo analysis with inputs including the closing market price at grant date, share price threshold, performance period term and assumptions regarding the risk-free interest rate and expected volatility of our common shares based on historical volatility. Inputs for SSAR grants subject to a market condition also include exercise price, remaining contractual term, and suboptimal exercise factor.

We record compensation expense for restricted stock units, restricted shares, and SSAR grants subject to a service condition using the graded vesting method. We record compensation expense for ESPP shares on a straight-line basis over the applicable offering period. We record compensation expense for SSAR grants subject only to a market condition over the derived service period, which is an output of the lattice option pricing model.

The following table summarizes the share-based compensation expense for grants included in the condensed consolidated statements of operations:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

(In thousands)

2025

2024

2025

2024

Product development

23,~~933~~422

2,~~271~~293

69,~~007~~429

47,~~907~~199

Sales and marketing

~~478~~555

~~243~~541

~~977~~1,531

~~574~~1,115

General and administrative

1,~~589~~792

1,~~495~~384

34,~~045~~838

24,~~957~~342

Total share-based compensation expense

5,~~000~~769

4,~~009~~218

1015,~~029~~798

812,~~438~~656

Stock-Settled Appreciation Rights

SSARs are rights granted to an employee to receive value equal to the difference between the price of our common shares on the date of exercise and the exercise price. The value is settled in common shares of Agilysys, Inc.

We use a Black-Scholes-Merton option pricing model to estimate the fair value of service condition SSARs and a lattice option pricing model to estimate the fair value of market condition SSARs. There were no SSARs granted during the ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024.

The following table summarizes the activity during the ~~six~~nine months ended ~~September~~December 3031, 2025 for SSARs awarded under the 2020 and 2016 Plans:

(In thousands, except share and per share data)	Number ofRights			Weighted-AverageExercise Price		RemainingContractualTerm		AggregateIntrinsicValue
				(per right)		(in years)
Outstanding at April 1, 2025		394,959		$	20.04
Granted		—			—
Exercised		(2345,~~604~~421	)		19.7990
Forfeited		—			—
Expired		—			—
Outstanding at September 30, 2025		371,355		$	20.06		1.7	$	31,637
Outstanding at December 31, 2025		349,538		$	20.06		1.4	$	34,528
Exercisable at September 30, 2025		371,355		$	20.06		1.7	$	31,637
Exercisable at December 31, 2025		349,538		$	20.06		1.4	$	34,528
Vested at September 30, 2025		371,355		$	20.06		1.7	$	31,637
Vested at December 31, 2025		349,538		$	20.06		1.4	$	34,528

As of ~~September~~December 3031, 2025, there was no unrecognized share-based compensation expense related to SSARs.

1415

Restricted Shares

We granted shares to certain of our Directors, executives and key employees, the vesting of which is service-based. The following table summarizes the activity during the ~~six~~nine months ended ~~September~~December 3031, 2025 for restricted shares granted under the 2020 Plan:

	Number of Shares			Weighted-Average Grant-Date Fair Value
				(per share)
Outstanding at April 1, 2025		229,710		$	76.01
Granted		4,970			100.19
Vested		(75154,~~292~~821	)		5167.3831
Forfeited		(23,~~607~~524	)		9293.0550
Expected to vest at September 30, 2025		156,781		$	88.35
Expected to vest at December 31, 2025		76,335		$	94.49

As of ~~September~~December 3031, 2025, total unrecognized share-based compensation expense related to unvested restricted shares was $32.4 million, which is expected to be recognized over a weighted-average vesting period of 1.42 years.

Restricted Stock Units

We granted restricted stock units to certain of our Directors, executives and key employees, the vesting of which is service-based. Certain restricted stock units are also subject to a market condition. The following table summarizes the activity during ~~six~~nine months ended ~~September~~December 3031, 2025 for restricted stock units awarded under the 2020 and 2024 Plans:

	Number of Shares			Weighted-Average Grant-Date Fair Value
				(per share)
Outstanding at April 1, 2025		181,195		$	118.90
Granted		8208,~~400~~051			~~103~~126.1828
Vested		—(43,010	)		—137.34
Forfeited		(25,~~894~~783	)		~~137~~134.4803
Expected to vest at September 30, 2025		186,701		$	117.91
Expected to vest at December 31, 2025		340,453		$	120.83

As of ~~September~~December 3031, 2025, total unrecognized share-based compensation expense related to non-vested restricted stock units was $929.47 million, which is expected to be recognized over the weighted-average vesting period of 2.06 years.

Performance Shares

Upon approval of the Compensation Committee of our Board of Directors, after achieving the performance conditions associated with our annual bonus plan, we granted 4,970 common shares to our Chief Executive Officer in May 2025 that vested immediately for a total value of $0.5 million.

Employee Stock Purchase Plan Shares

The ESPP permits participants to purchase common stock through regular payroll deductions, up to a specified percentage of their eligible compensation. The ESPP is compensatory because, among other provisions, it currently allows participants to purchase stock at up to a 15% discount from the lower of the closing price of a share of our common stock on the first or last trading day of the ESPP offering period. We measure share-based compensation expense for the ESPP based on the fair value of the ESPP grant at the beginning of the offering period. The fair value includes the value of the discount and the value associated with the call and put options that take advantage of the variability in the common stock price during the offering period. We estimate the value of the call and put options using the Black-Scholes-Merton option pricing model with inputs including the closing market price of our common stock on the first date of the offering period and assumptions regarding the risk-free interest rate, expected term, and expected volatility of our common shares over the offering period based on historical volatility.

1516

	Offering Period Ending			Offering Period Ended			Offering Period Ended			Offering Period Ended
	Offering Period Ended			Offering Period Ended			Offering Period Ended			Offering Period Ended
	December 31, 2025			June 30, 2025			December 31, 2024			June 30, 2024
Grant date fair value	$	115.19		$	131.71		$	103.43		$	81.60
Risk-free interest rate over contractual term		4.30	%		4.31	%		4.91	%		5.36	%
Expected term (in years)		0.50			0.49			0.50			0.41
Expected volatility		60.10	%		42.40	%		40.93	%		47.41	%

The risk-free interest rate is based on the yield of a zero coupon U.S. Treasury bond whose maturity period approximates the expected term of the ESPP shares. The expected term is the offering period, which is typically six months.

We record amounts withheld from participants during each offering period in accrued salaries, wages and related benefits in the consolidated balance sheets until such shares are purchased. Amounts withheld from participants for the offering period ending December 31, 2025 totaled $0.37 million as of ~~September~~December 3031, 2025.

As of ~~September~~December 3031, 2025, there was ~~$0.1~~no ~~million in~~ unrecognized share-based compensation expense related to the offering period ~~ending~~ended December 31, 2025.

10. Segment Information

Operating segments represent components of an entity for which discrete financial information is available to the entity’s chief operating decision maker (“CODM”). Our Chief Executive Officer is our CODM.

We operate as a single reporting segment providing software solutions to the global hospitality industry as our CODM reviews the financial information presented on a consolidated basis to allocate resources, assess financial performance, and make operating decisions. During our budgeting and forecasting process, our CODM allocates resources including employees, equipment and financial resources. Our CODM regularly considers forecast-to-actual variances to assess financial performance and to make operating decisions around product development, pricing, employee compensation, and for investments in information security and technology infrastructure, and in market development. The Company’s measure of segment profit or loss is net income as shown in our condensed consolidated statements of operations.

Our CODM reviews segment assets, reported as total assets on our condensed consolidated balance sheets, and capital expenditures, as reported on our condensed consolidated statements of cash flows.

The segment accounting policies are the same as those we describe in Note 2, Summary of Significant Accounting Policies, except that certain expense allocations we make for presentation of cost of goods sold as reported in our condensed consolidated statements of operations in accordance with U.S. GAAP, primarily for employee compensation, are not applied to cost of revenue as reported in the table below.

1617

The significant expense categories and consolidated net income provided to the CODM for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024 are as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

(In thousands)

2025

2024

2025

2024

Net revenue:

Products

10,~~095~~681

10,~~525~~677

2030,~~050~~731

2031,~~400~~077

Subscription and maintenance

5052,~~955~~007

4144,~~432~~379

99151,~~579~~586

79123,~~474~~853

Professional services

1817,~~249~~702

1614,~~322~~505

3654,~~347~~049

3146,~~917~~422

Total net revenue

7980,~~299~~390

6869,~~279~~561

~~155~~236,~~976~~366

~~131~~201,~~791~~352

Cost of revenue (1)

12,~~893~~684

1011,~~665~~277

2538,~~396~~080

2032,~~965~~242

Product development expenses (1)

1617,~~636~~223

15,~~745~~183

3250,~~940~~163

2944,~~780~~963

Sales and marketing expenses (1)

98,~~555~~745

8,~~551~~477

2129,~~012~~757

1523,~~234~~711

Professional services expenses (1)

11,~~306~~274

8,~~563~~085

2233,~~067~~341

1624,~~377~~462

Customer support expenses (1)

34,~~941~~119

3,~~757~~662

711,~~775~~894

710,~~155~~817

General and administrative expenses (1)

89,~~706~~196

8,~~796~~277

1827,~~158~~354

1726,~~958~~235

Share-based compensation

5,~~000~~769

4,~~009~~218

1015,~~029~~798

812,~~438~~656

Other segment items (2)

~~(448~~1,483

)

6,~~829~~552

13,~~999~~482

~~414~~6,966

Net income

119,~~710~~897

13,~~364~~830

1626,~~600~~497

1519,~~470~~300


(1)		Exclusive of share-based compensation shown separately
(2)		Other segment items include depreciation, amortization of internal-use software and intangibles, legal settlements, interest income and expense, other non-operating income and expense, income tax benefit, and other charges

The following table lists long-lived assets by geographical area, which includes property and equipment, net and operating lease right-of-use assets as of ~~September~~December 3031, 2025 and March 31, 2025:

(In thousands)	~~September~~December 3031,2025		March 31,2025
United States	$	16,~~867~~019	$	18,618
India		12,~~641~~878		14,150
Rest of world (1)		~~871~~698		1,064
Total long-lived assets	$	3029,~~379~~595	$	33,832


(1)		No individual country other than the United States and India exceeded 10% of our total long-lived assets for any period presented

1718

11. Debt

Revolving Credit Facility

On August 16, 2024 (the “Credit Agreement Closing Date”), we entered into a credit agreement (the “Credit Agreement”) with the lenders party thereto and Bank of America, N.A., as lender and administrative agent (in such capacity, the “Agent”). The Credit Agreement provides for a revolving credit facility in the initial maximum aggregate principal amount of $75.0 million (the “Revolving Facility”). The Revolving Facility includes the ability for the Company to request an increase to the commitments under the Revolving Facility by an additional aggregate principal amount of up to $25.0 million. On the Credit Agreement Closing Date, the Company drew $50.0 million on the Revolving Facility (the “Initial Revolving Loan”), the proceeds of which we used to fund the Book4Time acquisition described in Note 12 below. WeThere ~~repaid~~is ~~the~~no ~~remaining~~ principal balance ~~of $12.0 million,~~ outstanding as of ~~June~~December 3031, 2025~~, during July 2025~~.

The Revolving Facility matures on August 16, 2027, the three-year anniversary of the Credit Agreement Closing Date, at which time any and all outstanding principal balance will be due and payable. The Company may voluntarily repay outstanding loans and terminate commitments under the Revolving Facility at any time without premium or penalty. There are no repayments required before August 16, 2027. Debt issuance costs relating to the Revolving Facility of $0.3 million, included in other non-current assets on our condensed consolidated balance sheet, amortize into interest expense over the three-year life of the Credit Agreement.

Our obligations under the Revolving Facility are guaranteed by certain of the Company’s subsidiaries (the “Subsidiary Guarantors”), subject to certain customary exceptions and limitations. Pursuant to a security and pledge agreement, dated as of the Credit Agreement Closing Date, among the Company, the Subsidiary Guarantors and the Agent, the Revolving Facility is secured by a first-priority lien on substantially all of the Company’s and the Subsidiary Guarantors’ present and future personal assets and intangible assets and the outstanding capital stock of the Company’s subsidiaries owned by the Company or any Subsidiary Guarantor, in each case, subject to certain customary exceptions and limitations.

The Initial Revolving Loan bore interest at the SOFR Daily Floating Rate (as defined in the Credit Agreement), plus an initial margin of 1.625%, which was subject to adjustment as of each fiscal quarter end within the ranges set forth in the Credit Agreement. We are to pay a commitment fee under the Revolving Facility in respect of any unutilized commitments thereunder, which is determined on a leverage-based sliding scale ranging from 0.225% to 0.325% per annum. ~~The initial commitment fee was 0.275% subject to quarterly adjustment.~~ We record the commitment fee as a component of interest expense. Interest and commitment fees are payable quarterly.

The Credit Agreement contains certain restrictive covenants, including financial covenants that require the Company to maintain a consolidated interest coverage ratio and a consolidated leverage ratio determined at the end of each fiscal quarter as defined in the Credit Agreement. We were in compliance with all financial covenants of the Credit Agreement as of ~~September~~December 3031, 2025.

1819

12. Business Combination

On August 20, 2024 (the "Acquisition Date"), we acquired all the issued and outstanding shares of Book4Time Parent, Inc. (“Book4Time”), a hospitality software company based in Canada. Book4Time is now a wholly-owned subsidiary of Agilysys, Inc. The consolidated financial statements include the results of Book4Time’s operations since the Acquisition Date. The acquisition expands the opportunity to increase our solutions-per-customer globally.

The purchase price consisted of $147.2 million of cash paid at closing, funded from cash on hand and the proceeds of the Initial Revolving Loan, and $1.1 million of cash paid in March 2025 for settlement of certain post-closing adjustments partially offset by $2.5 million of Book4Time’s cash received in the acquisition, resulting in net cash consideration of $145.8 million. We allocated the purchase price for Book4Time to the intangible and certain tangible assets acquired and certain liabilities assumed based on their estimated fair values on the Acquisition Date, with the remaining unallocated purchase price recorded as goodwill. We determined the fair values assigned to identifiable intangible assets acquired primarily by using the income approach, which discounts the expected future cash flows to present value using estimates and assumptions determined by management.

The following table sets forth the components and the allocation of the purchase price for our acquisition of Book4Time:


(In thousands)	Total
Components of Purchase Price:
Cash	$	148,280
Total purchase price	$	148,280
Allocation of Purchase Price:
Net tangible assets (liabilities):
Accounts receivable, net	$	1,623
Other current assets, including cash acquired		3,705
Other assets		623
Current and other liabilities		(1,973	)
Deferred tax liabilities		(11,351	)
Contract liabilities		(9,324	)
Net tangible assets (liabilities)		(16,697	)
Identifiable intangible assets:
Customer relationships		35,800
Non-competition agreements		5,500
Developed technology		2,600
Trade names		17,100
Total identifiable intangible assets		61,000
Goodwill		103,977
Total purchase price allocation	$	148,280

We assigned the acquired customer relationships, non-competition agreements, developed technology, and trade name estimated useful lives of 20 years, three years, five years, and 15 years, respectively, with a weighted average useful life of approximately 15.8 years. The identifiable intangible assets acquired amortize on a straight-line basis, which we believe approximates the pattern in which the assets are utilized, over their estimated useful lives.

The goodwill recognized in the Book4Time purchase price allocation is attributable to synergies in products and technologies to serve a broader customer base, and the addition of a skilled, assembled workforce, which is not separable from goodwill under FASB Accounting Standards Codification 805. As part of the acquisition, the Company acquired fully trained personnel thereby avoiding the expenditure that would have been required to hire and train equivalent personnel. We considered the replacement cost method as most appropriate for the assembled workforce valuation. We valued the assembled workforce included in goodwill at $1.5 million. The total goodwill recognized in the acquisition amounted to $104.0 million, which is not deductible for income tax purposes.

The Company recognized acquisition costs of $0.24 million ~~and $0.3 million~~ related to the acquisition of Book4Time, consisting primarily of professional fees, during the ~~three~~nine ~~and six~~ months ended ~~September~~December 3031, 2025. The consolidated statement of operations includes these costs in other (gains) charges, net.

1920

Revenue attributable to Book4Time included in our condensed consolidated statement of operations, which we define as revenue on Book4Time customer contracts in place as of the Acquisition Date, was $24.16 million ~~and~~for ~~$2.2~~the ~~million~~three months ended December 31, 2024, and $6.9 million and $26.28 million for the ~~three~~nine ~~and six~~ months ended ~~September~~December 3031, 2025 and 2024, respectively. Net income was not material.

Unaudited Pro-Forma Information

The financial information in the table below summarizes the combined results of operations of Agilysys and Book4Time, on a pro-forma basis, as though the companies had been combined as of the beginning of the periods presented. The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on April 1, 2024 or of results that may occur in the future.

The following unaudited pro-forma financial information for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, respectively, combines the historical results of Agilysys and of Book4Time, as converted to U.S. GAAP, for the respective periods:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

2025

2024

2025

2024

(In thousands)

Pro-Forma

Revenue

7980,~~299~~390

7069,~~783~~561

~~155~~236,~~976~~366

~~138~~208,~~737~~298

Net income

129,~~929~~954

24,~~764~~159

1827,~~955~~347

1013,~~871~~608

We based the foregoing pro-forma results on estimates and assumptions that we believe are reasonable. The pro-forma results include adjustments primarily related to purchase accounting. We included acquisition costs and other non-recurring charges incurred in the earliest period presented.

2021

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

In “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”), management explains the general financial condition and results of operations for Agilysys and subsidiaries including:

— what factors affect our business;

— what our earnings and costs were;

— why those earnings and costs were different from the year before;

— where the earnings came from;

— how our financial condition was affected; and

— where the cash will come from to fund future operations.

The MD&A analyzes changes in specific line items in the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows and provides information that management believes is important to assessing and understanding our consolidated financial condition and results of operations. This Quarterly Report on Form 10-Q updates information included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission (SEC). This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes that appear in Item 1 of this Quarterly Report as well as our Annual Report for the year ended March 31, 2025. Information provided in the MD&A may include forward-looking statements that involve risks and uncertainties. Many factors could cause actual results to be materially different from those contained in the forward-looking statements. See “Forward-Looking Information” on page 3031 of this Quarterly Report, Item 1A "Risk Factors" in Part II of this Quarterly Report, and Item 1A “Risk Factors” in Part I of our Annual Report for the fiscal year ended March 31, 2025 for additional information concerning these items. Management believes that this information, discussion, and disclosure is important in making decisions about investing in Agilysys.

Overview

Recent Developments

Macroeconomic Conditions

During the three and ~~six~~nine months ended ~~September~~December 3031, 2025, global macroeconomic and geopolitical conditions were, and continue to be, ~~influenced~~shaped by a number of factors, including, but not limited to, changes in global tariff and other trade policies, new and existing domestic and foreign laws and regulations, armed conflicts, foreign currency fluctuations, labor shortages and natural disasters. We believe such ~~conditions~~factors are ~~impacting~~negatively influencing customer spending and provider pricing decisions resulting in decreased demand, increased costs, and reduced margins ~~particularly~~with invarying ~~areas~~impact ~~outside~~across ofour ~~the United States~~markets.

Book4Time

On August 20, 2024, we acquired Book4Time Parent, Inc. (“Book4Time”), the global leader in spa management SaaS software, as further described in Note 12, Business Combination, to our condensed consolidated financial statements included under Part I, Item 1 of this quarterly report. The cash consideration for the acquisition totaled $145.8 million of net cash, partially funded by a credit agreement (the “Credit Agreement”) we entered into on August 16, 2024 (the “Credit Agreement Closing Date”), with the lenders party thereto and Bank of America, N.A., as lender and administrative agent, as further described in Note 11, Debt, to our condensed consolidated financial statements included under Part I, Item 1 of this quarterly report.

Our Business

The Company has one reportable segment serving the global hospitality industry. Agilysys operates across ~~North~~the ~~America~~Americas, Europe, the Middle East, Africa, Asia-Pacific, and India with headquarters located in Alpharetta, ~~Georgia~~GA.

2122

Our top priority is increasing shareholder value by improving operating and financial performance and profitably growing the business through superior products and services. To that end, we expect to invest a certain portion of our cash on hand to fund enhancements to existing software products, to develop and market new software products, and to expand our customer breadth, both vertically and geographically.

Our strategic plan specifically focuses on:

•

Putting the customer first

•

Focusing on product innovation and development

•

Improving our liquidity

•

Increasing organizational efficiency and teamwork

•

Developing our employees and leaders

•

Growing revenue by improving the breadth and depth of our product set across both point-of-sale and property management applications

•

Growing revenue through international expansion

The primary objective of our ongoing strategic planning process is to create shareholder value by capitalizing on growth opportunities, increasing profitability and strengthening our competitive position within the specific technology solutions and end markets we serve. Profitability and industry-leading growth will be achieved through tighter management of operating expenses and sharpening the focus of our investments to concentrate on growth opportunities that offer the highest returns.

Revenue - Defined

As required by the SEC, we separately present revenue earned as products revenue, subscription and maintenance revenue or professional services revenue in our condensed consolidated statements of operations. In addition to the SEC requirements, we may, at times, also refer to revenue as defined below. The terminology, definitions, and applications of terms we use to describe our revenue may be different from those used by other companies and caution should be used when comparing these financial measures to those of other companies. We use the following terms to describe revenue:

•

Revenue – We present revenue net of sales returns and allowances.

•

Products revenue – Revenue earned from the sales of software licenses, third party hardware and operating systems.

•

Subscription and maintenance revenue – Revenue earned from the ongoing delivery of software updates, upgrades, bug fixes, technical support, and transaction-based fees over the period covered by subscription or maintenance agreements with our customers for both proprietary and remarketed solutions.

•

Professional services revenue – Revenue earned from the delivery of implementation, integration, development and installation services for proprietary and remarketed products.

2223

Results of Operations

~~Second~~Third Fiscal Quarter 2026 Compared to ~~Second~~Third Fiscal Quarter 2025

Net Revenue and Operating Income

The following table presents our consolidated revenue and operating results for the three months ended ~~September~~December 3031, 2025 and 2024:

	Three Months Ended September 30,						Increase (decrease)
	Three Months Ended December 31,						Increase (decrease)
(In thousands)	2025			2024			$			%
Net revenue:
Products	$	10,~~095~~681		$	10,~~525~~677		$	~~(430~~4	)		(40.10	)%
Subscription and maintenance		5052,~~955~~007			4144,~~432~~379			97,~~523~~628			2317.02	%
Professional services		1817,~~249~~702			1614,~~322~~505			13,~~927~~197			1122.80	%
Total net revenue		7980,~~299~~390			6869,~~279~~561			1110,~~020~~829			1615.16	%
Cost of goods sold:
Products		65,~~037~~946			5,~~206~~550			~~831~~396			167.01	%
Subscription and maintenance		10,~~850~~909			89,~~827~~531			21,~~023~~378			2214.95	%
Professional services		13,~~445~~293			1110,~~032~~625			2,~~413~~668			2125.91	%
Total cost of goods sold		30,~~332~~148			25,~~065~~706			54,~~267~~442			2117.03	%
Gross profit	$	4850,~~967~~242		$	43,~~214~~855		$	56,~~753~~387			1314.36	%
Gross profit margin		6162.75	%		63.30	%
Operating expenses:
Product development	$	1718,~~825~~926		$	1614,~~172~~971		$	13,~~653~~955			1026.24	%
Sales and marketing		9,~~781~~106			89,~~794~~013			~~987~~93			111.20	%
General and administrative		10,~~164~~833			109,~~162~~536			21,297			013.06	%
Depreciation of fixed assets		~~964~~1,009			~~915~~985			4924			52.4	%
Amortization of internal-use software and intangibles		1,~~432~~417			~~904~~1,622			~~528~~(205	)		58(12.46	)%
Other (gains) charges, net		(52,~~456~~717	)		~~2,037~~(12	)		(72,~~493~~705	)	nm	~~(367.8~~	)%
Legal settlements		110			104			6			5.8	%
Legal settlements, net		(64	)		330			(394	)	nm
Operating income	$	1411,~~147~~732		$	47,~~126~~410		$	104,~~021~~322			~~242~~58.93	%
Operating income percentage		1714.86	%		610.07	%

nm - not meaningful

2324

The following table presents the percentage relationship of our condensed consolidated statement of operations line items to our consolidated net revenues for the periods presented:

	Three Months Ended September 30,
	Three Months Ended December 31,
	2025			2024
Net revenue:
Products		1213.73	%		15.43	%
Subscription and maintenance		64.37			6063.78
Professional services		2322.0			2320.9
Total net revenue		100.0	%		100.0	%
Cost of goods sold:
Products		7.64	%		78.60	%
Subscription and maintenance		13.76			1213.97
Professional services		1716.05			1615.23
Total cost of goods sold		3837.35	%		3637.70	%
Gross profit		6162.75	%		63.30	%
Operating expenses:
Product development		2223.5	%		2321.75	%
Sales and marketing		1211.3			1213.90
General and administrative		1213.85			1413.97
Depreciation of fixed assets		1.23			1.34
Amortization of internal-use software and intangibles		1.8			12.3
Other (gains) charges, net		(63.84	)		30.0
Legal settlements		0.1			0.2
Legal settlements, net		(0.1	)		0.4
Operating income		1714.86	%		610.07	%

Net revenue. Total net revenue increased $1110.08 million, or 1615.16%, during the ~~second~~third quarter of fiscal 2026 compared to the ~~second~~third quarter of fiscal 2025. Products revenue ~~decreased~~remained $0flat.4 ~~million,~~The orrecent ~~4.1%,~~trend of declining products revenue due to increasing customer preference for subscription-based ~~software~~versus ~~licenses instead of~~ perpetual software licenses, ~~and~~was tooffset ~~their~~during ~~decreasing~~the ~~need~~quarter ~~for~~by ~~hardware~~higher ~~due~~fulfillment toof ~~improvements~~perpetual wesoftware ~~have~~licenses ~~made~~compared to ~~our~~the ~~technology~~previous ~~enabling~~three ~~more support for consumer-grade devices our customers can source elsewhere~~quarters. Subscription and maintenance revenue increased $97.56 million, or 2317.02%, compared to the ~~second~~third quarter of fiscal 2025 driven by continued growth in subscription-based service revenue ~~including $5~~.3 ~~million of Book4Time subscription-based service revenue.~~ Total subscription revenue, ~~including Book4Time subscription revenue,~~ increased 3323.1% during the ~~second~~third quarter of fiscal 2026 compared to the ~~second~~third quarter of fiscal 2025. Professional services revenue increased $13.92 million, or 1122.80%, due to higher ~~sales and~~ service activity as our new and existing customers continue implementing technology to improve their operations.

Gross profit and gross profit margin. Our total gross profit increased $56.84 million, or 1314.36%, during the ~~second~~third quarter of fiscal 2026 and total gross profit margin decreased from 63.30% to 6162.75% compared to the ~~second~~third quarter of fiscal 2025 driven by changes in the composition of revenue by category. Products gross profit decreased $10.34 million, or ~~23.~~7.6%, and products gross profit margin decreased from 5048.50% to 4044.23% due to the composition of hardware ~~and proprietary software~~ products delivered. Subscription and maintenance gross profit increased $76.53 million, or 2317.09%, and gross profit margin ~~stayed~~increased ~~consistent~~from at 78.75% to 79.0% as subscription revenue increases outpaced associated variable costs as a result of certain cost control measures. Professional services gross profit ~~decreased~~increased $0.5 million, or 913.26%, and gross profit margin decreased from 3226.47% to 2624.39% reflecting lower utilization rates due to continued hiring and training of new staff ~~and timing of certain large projects~~.

Operating Expenses

Operating expenses, excluding other (gains) charges, net, and legal settlements, net, increased $35.2 million, or 814.73%, during the ~~second~~third quarter of fiscal 2026 compared with the ~~second~~third quarter of fiscal 2025.

Product development. Product development increased $14.70 million, or 1026.24%, in the ~~second~~third quarter of fiscal 2026 compared with the ~~second~~third quarter of fiscal 2025 due to hiring and increased salary, incentive and employee benefits rates across our development teams.

Sales and marketing. Sales and marketing increased $1.0.1 million, or 111.20%, in the ~~second~~third quarter of fiscal 2026 compared with the ~~second~~third quarter of fiscal 2025 due to hiring and increased compensation rates across our sales teams offset by timing of marketing event and trade show activity.

2425

General and administrative. General and administrative ~~remained~~increased ~~consistent~~$1.3 million, or 13.6%, in the third quarter of fiscal 2026 compared with the ~~second~~third quarter of fiscal 2025 due to increased compensation rates across our administrative teams.

Depreciation of fixed assets. Depreciation of fixed assets remained consistent with the ~~second~~third quarter of fiscal 2025.

Amortization of internal-use software and intangibles. Amortization of internal-use software and intangibles ~~increased~~decreased $0.52 million in the ~~second~~third quarter of fiscal 2026 compared with the ~~second~~third quarter of fiscal 2025 ~~due~~as a result of changes to the ~~addition~~purchase ofprice allocation during the measurement period impacting certain intangible assets resulting from the Book4Time acquisition.

Other (gains) charges, net. Other (gains) charges, net, consist of losses on asset disposals, severance costs, charitable contributions, employee retention credits, and acquisition costs related to business combinations.

Legal settlements, net. Legal settlements, net, consist of certain customer and employment settlements and other business-related matters net of any recoveries.

Other income (expense)

	Three Months Ended September 30,						Favorable (unfavorable)
	Three Months Ended December 31,						Favorable (unfavorable)
(In thousands)	2025			2024			$			%
Other income (expense):
Interest income	$	~~346~~485		$	~~1,095~~416		$	~~(749~~69	)		~~(68~~16.46	)%
Interest expense		(5630	)		(~~458~~657	)		~~402~~627		nm	95.4	%
Other income, net		~~1,274~~696			~~383~~574			~~891~~122		nm	21.3	%
Total other income, net	$	1,~~564~~151		$	~~1,020~~333		$	~~544~~818			53245.36	%

nm - not meaningful

Interest income. Interest income consists of interest earned on cash equivalents including short-term investments in commercial paper, treasury bills and money market funds.

Interest expense. Interest expense consists of interest charges under our Credit Agreement and amortization of related debt issuance costs.

Other income, net. Other income, net, mainly consists of movement of foreign currencies against the U.S. dollar.

Income Taxes

	Three Months Ended September 30,						Unfavorable
	Three Months Ended December 31,						Favorable
(In thousands)	2025			2024			$			%
Income tax provision	$	42,~~001~~986		$	3,~~782~~913		$	~~219~~(927	)	nm	(23.7	)%
Effective tax rate		2523.52	%	nm	50.5	%

nm - not meaningful

For the three months ended ~~September~~December 3031, 2025 and 2024, income tax provision and the effective tax rate were primarily driven by ~~activity~~the intax ~~India~~effects of share-based compensation, GILTI and the mix of earnings in the U.S. and India.

We are consistently subject to tax audits. Due to the nature of examinations in multiple jurisdictions, changes could occur in the amount of gross unrecognized tax benefits during the next 12 months that we cannot anticipate.

2526

Results of Operations

First ~~Half~~Nine Months Fiscal 2026 Compared to First ~~Half~~Nine Months Fiscal 2025

Net Revenue and Operating Income

The following table presents our consolidated revenue and operating results for the ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024:

	Six Months Ended September 30,						Increase (decrease)
	Nine Months Ended December 31,						Increase (decrease)
(In thousands)	2025			2024			$			%
Net revenue:
Products	$	2030,~~050~~731		$	2031,~~400~~077		$	(~~350~~346	)		(1.71	)%
Subscription and maintenance		99151,~~579~~586			79123,~~474~~853			2027,~~105~~733			2522.34	%
Professional services		3654,~~347~~049			3146,~~917~~422			47,~~430~~627			1316.94	%
Total net revenue		~~155~~236,~~976~~366			~~131~~201,~~791~~352			2435,~~185~~014			1817.4	%
Cost of goods sold:
Products		1218,~~236~~182			1015,~~432~~982			12,~~804~~200			1713.38	%
Subscription and maintenance		2031,~~833~~742			1626,~~935~~466			35,~~898~~276			2319.09	%
Professional services		2639,~~645~~938			2131,~~342~~967			57,~~303~~971			24.89	%
Total cost of goods sold		5989,~~714~~862			4874,~~709~~415			1115,~~005~~447			2220.68	%
Gross profit	$	96146,~~262~~504		$	83126,~~082~~937		$	1319,~~180~~567			15.94	%
Gross profit margin		6162.70	%		63.0	%
Operating expenses:
Product development	$	3554,~~280~~207		$	3045,~~892~~863		$	48,~~388~~344			1418.2	%
Sales and marketing		2130,~~574~~681			1524,~~808~~822			5,~~766~~859			3623.56	%
General and administrative		2031,~~920~~753			2030,~~645~~181			~~275~~1,572			15.32	%
Depreciation of fixed assets		12,~~908~~918			12,~~752~~738			~~156~~180			86.96	%
Amortization of internal-use software and intangibles		24,~~890~~307			12,~~155~~777			1,~~735~~530			~~150~~55.21	%
Other (gains) charges, net		(57,~~203~~923	)		2,~~587~~576			(710,~~790~~499	)	nm
Legal settlements		225			369			(144	)		(39.0	)%
Legal settlements, net		161			699			(538	)		(77.0	)%
Operating income	$	1830,~~668~~400		$	917,~~874~~281		$	813,~~794~~119			8975.19	%
Operating income percentage		12.09	%		78.56	%

nm - not meaningful

2627

The following table presents the percentage relationship of our condensed consolidated statement of operations line items to our consolidated net revenues for the periods presented:

	Six Months Ended September 30,
	Nine Months Ended December 31,
	2025			2024
Net revenue:
Products		1213.90	%		15.54	%
Subscription and maintenance		6364.81			6061.35
Professional services		2322.39			2423.21
Total net revenue		100.0	%		100.0	%
Cost of goods sold:
Products		7.87	%		7.9	%
Subscription and maintenance		13.4	%		1213.81
Professional services		1716.19	%		16.30
Total cost of goods sold		38.30	%		37.0	%
Gross profit		6162.70	%		63.0	%
Operating expenses:
Product development		22.69	%		2322.48	%
Sales and marketing		13.80	%		12.03
General and administrative		13.45	%		15.70
Depreciation of fixed assets		1.2	%		1.34
Amortization of internal-use software and intangibles		1.98	%		01.94
Other (gains) charges, net		(3.34	)%		21.03
Legal settlements		0.1	%		0.2
Legal settlements, net		0.1	%		0.2
Operating income		12.09	%		78.56	%

Net revenue. Total net revenue increased $2435.20 million, or 1817.4%, during the first ~~half~~nine months of fiscal 2026 compared to the first ~~half~~nine months of fiscal 2025. Products revenue decreased $0.43 million, or 1.71%, due to increasing customer preference for subscription-based software licenses instead of perpetual software licenses ~~and to their decreasing need for hardware due to improvements we have made to our technology enabling more support for consumer-grade devices our customers can source elsewhere~~. Subscription and maintenance revenue increased $2027.17 million, or 2522.34%, compared to the first ~~half~~nine months of fiscal 2025 driven by continued growth in subscription-based service revenue including $1015.47 million and $6.6 million of Book4Time subscription-based service revenue during the nine months ended December 31, 2025 and 2024, respectively. Total subscription revenue, including Book4Time subscription revenue, increased 3832.36% during the first ~~half~~nine months of fiscal 2026 compared to the first ~~half~~nine months of fiscal 2025. Professional services revenue increased $47.46 million, or 1316.94%, due to higher sales and service activity as our new and existing customers continue implementing technology to improve their operations.

Gross profit and gross profit margin. Our total gross profit increased $1319.26 million, or 15.94%, during the first ~~half~~nine months of fiscal 2026 and total gross profit margin decreased from 63.0% to 6162.70% compared to the first ~~half~~nine months of fiscal 2025 driven by changes in the composition of revenue by category. Products gross profit decreased $2.25 million, or 2116.69%, and products gross profit margin decreased from 48.96% to 3940.08% due to the composition of hardware and proprietary software products delivered. Subscription and maintenance gross profit increased $1622.25 million, or 2523.91%, and gross profit margin increased from 78.76% to 79.1% as revenue increases outpaced variable costs as a result of cost optimization discipline. Professional services gross profit decreased $0.93 million, or 82.34%, and gross profit margin decreased from 3331.1% to 26.71% reflecting lower utilization rates due to continued hiring and training of new staff and timing of certain large projects.

Operating Expenses

Operating expenses, excluding other charges, net and legal settlements, net, increased $1217.35 million, or 1716.54%, during the first ~~half~~nine months of fiscal 2026 compared with the first ~~half~~nine months of fiscal 2025.

Product development. Product development increased $48.43 million, or 1418.2%, in the first ~~half~~nine months of fiscal 2026 compared with the first ~~half~~nine months of fiscal 2025 due to hiring and increased salary, incentive and employee benefits rates across our development teams.

Sales and marketing. Sales and marketing increased $5.89 million, or 3623.56%, in the first ~~half~~nine months of fiscal 2026 compared with the first ~~half~~nine months of fiscal 2025 due to hiring and increased compensation rates across our sales teams, sales team additions from the Book4Time acquisition, ~~and~~higher ~~timing~~levels of marketing event and trade show activity, and increased bad debt expense.

2728

General and administrative. General and administrative increased $01.36 million, or 15.32%, in the first ~~half~~nine months of fiscal 2026 compared with the first ~~half~~nine months of fiscal 2025 due to increased compensation rates across our administrative teams.

Depreciation of fixed assets. Depreciation of fixed assets increased $0.2 million, or 86.96%, in the first ~~half~~nine months of fiscal 2026 compared with the first ~~half~~nine months of fiscal 2025 due to the addition of fixed assets.

Amortization of internal-use software and intangibles. Amortization of internal-use software and intangibles increased $1.75 million, or ~~150~~55.21%, in the first ~~half~~nine months of fiscal 2026 compared with the first ~~half~~nine months of fiscal 2025 due to the addition of certain intangible assets resulting from the Book4Time acquisition.

Other (gains) charges, net. Other (gains) charges, net consist of losses on asset disposals, severance costs, charitable contributions, employee retention credits, and acquisition costs related to business combinations.

Legal settlements, net. Legal settlements, net, consist of ~~settlements~~certain ofcustomer and employment settlements and other business-related matters net of any recoveries.

Other income (expense)

	Six Months Ended September 30,						Favorable (unfavorable)
	Nine Months Ended December 31,						Favorable (unfavorable)
(In thousands)	2025			2024			$			%
Other income (expense):
Interest income	$	~~793~~1,278		$	23,~~877~~293		$	(2,~~084~~015	)		(7261.42	)%
Interest expense		(~~273~~303	)		(~~458~~1,116	)		~~185~~813		nm	72.8	%
Other income, net		12,~~372~~068			~~226~~804			1,~~146~~264		nm	157.2	%
Total other income, net	$	13,~~892~~043		$	2,~~645~~981		$	~~(753~~62	)		~~(28~~2.51	)%

nm - not meaningful

Interest income. Interest income consists of interest earned on cash equivalents including short-term investments in commercial paper, treasury bills and money market funds.

Interest expense. Interest expense consists of interest charges under our Credit Agreement and amortization of related debt issuance costs.

Other income, net. Other income, net, mainly consists of movement of foreign currencies against the U.S. dollar.

Income Taxes

	Six Months Ended September 30,						Unfavorable
	Nine Months Ended December 31,						Unfavorable
(In thousands)	2025			2024			$		%
Income tax provision (benefit)	$	3,960		$	(2,951	)	$	6,911	nm
Income tax provision	$	6,946		$	962		$	5,984	nm
Effective tax rate		1920.38	%	nm	4.7	%

nm - not meaningful

For the ~~six~~nine months ended ~~September~~December 3031, 2025 ~~and 2024~~, income tax provision ~~(benefit)~~ and the effective tax rate were primarily driven by the ~~impact~~tax effects of ~~discrete~~share-based ~~excess~~compensation, ~~tax~~GILTI ~~benefits~~and ~~associated~~the ~~with~~mix ~~Share-Based~~of ~~Compensation~~earnings in the U.S. and India.

For the nine months ended December 31, 2024, income tax provision and the effective tax rate were primarily driven by the impact of discrete excess tax benefits associated with Share-Based Compensation.

28During the nine months ended December 31, 2025 and 2024, we recorded $9.1 million and $0.5 million, respectively, of employee retention credits under the CARES Act including associated interest received or expected to be received in cash as other (gains) charges, net, in the condensed consolidated statements of operations. As of December 31, 2025, we recorded $3.0 million of employee retention credits receivable as other current assets on the condensed consolidated balance sheet.

~~The~~On ~~Coronavirus~~July ~~Aid~~4, ~~Relief~~2025, ~~and~~the ~~Economic~~One ~~Security~~Big ~~Act~~Beautiful ~~(CARES~~Bill Act (OBBBA) iswas asigned ~~stimulus~~into ~~bill~~law. ~~which~~The ~~was~~legislation inincludes ~~response~~several changes to ~~economic~~federal ~~consequences~~tax law that generally allow for more favorable deductibility of certain business expenses beginning in the ~~COVID-19~~Company’s ~~pandemic.~~fiscal ~~The~~2026, ~~CARES~~including ~~Act~~the ~~provided~~restoration anof ~~employee~~immediate ~~retention~~expensing ~~credit~~of domestic research and development expenditures, ~~which~~reinstatement isof aaccelerated ~~refundable~~fixed ~~tax~~asset ~~credit~~depreciation ~~against~~and ~~certain~~modifications ~~employment~~to ~~taxes~~the international tax framework. ~~During~~We applied the ~~six~~relevant ~~months~~changes to the Company’s income tax provision for the period ended ~~September~~December 3031, 2025, wewhich ~~recorded~~did ~~$6.1~~not ~~million~~materially ofimpact ~~employee~~the ~~retention~~Company’s ~~credits~~consolidated ~~including~~tax ~~associated~~position. ~~interest~~We ~~received~~expect infuture cash astax ~~other~~savings ~~(gains)~~resulting ~~charges,~~from ~~net,~~the infull ~~the~~expensing ~~condensed~~of ~~consolidated~~U.S. ~~statements~~research ofand ~~operations~~development expenses under the OBBBA.

Liquidity and Capital Resources

Overview

Our primary recurring source of cash is the collection of proceeds from the sale of products and services to our customers, including cash periodically collected in advance of delivery or performance.

Our cash requirements consist primarily of working capital needs, capital expenditures, and payments of contractual obligations. Our contractual obligations consist primarily of operating leases for office space and our Credit Agreement.

The Credit Agreement provides for a revolving credit facility in the initial maximum aggregate principal amount of $75 million (the “Revolving Facility”). The Revolving Facility includes the ability for the Company to request an increase to the commitments under the Revolving Facility by an additional aggregate principal amount of up to $25 million. On the Credit Agreement Closing Date, we drew $50 million on the Revolving Facility, the proceeds of which we used to fund the Business Combination described below. We have repaid the entire principal balance as of July 2025.

We have expanded our business in part by investing in strategic growth through business acquisitions. We have used cash as consideration in our business acquisitions, including $145.8 million of net cash, partially funded by our Revolving Facility, during the ~~six~~nine months ended ~~September~~December 3031, 2024, to complete the acquisition of Book4Time. We completed no business combinations during the ~~six~~nine months ended ~~September~~December 3031, 2025.

At ~~September~~December 3031, 2025, 100% of our cash and cash equivalents, of which 8892% were located in the United States, were deposited in bank accounts or invested in highly liquid investments including commercial paper and treasury bills with original maturity from the date of acquisition of three months or less and money market funds. We determine the fair value of commercial paper using significant other observable inputs based on pricing from independent sources that use quoted prices in active markets for identical assets or other observable inputs including benchmark yields and interest rates. We believe credit risk is limited with respect to our cash and cash equivalents.

We believe that cash flow from operating activities, cash on hand of $5981.35 million as of ~~September~~December 3031, 2025, and access to capital markets will provide adequate funds to meet our short- and long-term liquidity requirements.

Cash Flow

	Six Months Ended September 30,
	Nine Months Ended December 31,
(In thousands)		2025			2024
Net cash provided by (used in):
Operating activities	$	1034,~~867~~162		$	727,~~688~~976
Investing activities		(~~850~~1,424	)		(~~146~~147,~~465~~054	)
Financing activities		(2324,~~965~~580	)		4835,~~680~~251
Effect of exchange rate changes on cash		~~243~~254			94(303	)
Decrease in cash	$	(13,705	)	$	(90,003	)
Increase (decrease) in cash	$	8,412		$	(84,130	)

Cash flow provided by operating activities. Due to cash-based earnings of $3555.09 million and a decrease of $2421.17 million due to changes in net operating assets and liabilities. Cash-based earnings is net income of $1626.65 million and $1829.4 million of non-cash adjustments.

Cash flow used in investing activities. Consists of property and equipment purchases.

Cash flow (used in) provided by financing activities. Consists of $24.0 million in debt repayments during the ~~six~~nine months ended ~~September~~December 3031, 2025, proceeds from Employee Stock Purchase Plan purchases, and the repurchase of shares to satisfy employee tax withholding on share-based compensation.

Contractual Obligations

As of ~~September~~December 3031, 2025, there were no significant changes to our contractual obligations as presented in our Annual Report for the year ended March 31, 2025.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Critical Accounting Policies

A detailed description of our significant accounting policies is included in our Annual Report for the year ended March 31, 2025. There have been no material changes in our significant accounting policies and estimates since March 31, 2025.

Forward-Looking Information

This Quarterly Report and other 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-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," “outlook,” “forecast,” “preliminary,” "estimate," "expect," "strategy," "future," "likely," "may," “would,” “could,” "should," "will" and similar references to future periods. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. These statements are based on management’s current expectations, intentions, or beliefs and are subject to a number of factors, assumptions, and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences or that might otherwise impact the business include the risk factors set forth in Item 1A in Part II of this Quarterly Report and Item IA of our Annual Report for the fiscal year ended March 31, 2025. We undertake no obligation to update any such factor or to publicly announce the results of any revisions to any forward-looking statements contained herein whether as a result of new information, future events, or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk affecting us, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in our Annual Report for the fiscal year ended March 31, 2025. There have been no material changes in our market risk exposures since March 31, 2025.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision of and with the participation of our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and Corporate Controller and Treasurer, as Principal Accounting Officer (“PAO”), management evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report. Based on that evaluation, the CEO, CFO and PAO concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting occurred during the ~~six~~nine months ended ~~September~~December 3031, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our CEO, CFO and PAO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be achieved. Further, the design of a control system must reflect the impact of resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the possibility that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors. Additionally, controls can be circumvented by individual acts, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all possible future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

3132

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There have been no material changes in the risk factors included in our Annual Report for the fiscal year ended March 31, 2025 that may materially affect our business, results of operations, or financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~Rule 10b5-1 Trading Plans~~None.

On July 23, 2025, William David Wood III, Chief Financial Officer of the Company, adopted a Rule 10b5-1 trading plan (the “Wood Plan”) for the sale of up to 6,000 shares of common stock. After the applicable cooling-off period under Rule 10b5-1, transactions under the Wood Plan may begin in October 2025, subject to certain conditions. The Wood Plan will terminate on July 25, 2026, unless terminated earlier in accordance with its terms.

On August 28, 2025, Ramesh Srinivasan, President and Chief Executive Officer of the Company, adopted a Rule 10b5-1 trading plan (the “Srinivasan Plan”) for the sale of up to 133,447 shares of common stock. After the applicable cooling-off period under Rule 10b5-1, transactions under the Srinivasan Plan may begin in November 2025, subject to certain conditions. The Srinivasan Plan will terminate on August 27, 2026, unless terminated earlier in accordance with its terms.

Item 6. Exhibits

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
31.3		Rule 13a-14(a)/15d-14(a) Certification of Corporate Controller and Treasurer.
32		Certification of Chief Executive Officer, Chief Financial Officer and Corporate Controller and Treasurer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)
*		Denotes a management contract or compensatory plan or arrangement.

Item 6. Exhibits


10.1*		Form of Restricted Stock Unit Agreement under the Agilysys, Inc. 2024 Equity Incentive Plan.

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

31.3		Rule 13a-14(a)/15d-14(a) Certification of Corporate Controller and Treasurer.

32		Certification of Chief Executive Officer, Chief Financial Officer and Corporate Controller and Treasurer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*		Denotes a management contract or compensatory plan or arrangement.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.

AGILYSYS, INC.

Date:	~~October~~January 2726, ~~2025~~2026	/s/ William David Wood III
		William David Wood III
		Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Officer)

3435

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