Agilysys (AGYS) Delivered Strong Quarterly Report Amid Post-Challenges Confidence Boost

Conestoga Capital Advisors, an asset management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter began with a historically poor start but gained momentum later as tariff fears subsided and market volatility dropped precipitously. Conestoga Small Cap Composite returned 4.76% in the quarter compared to 11.97% for the Russell 2000 Growth Index. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its second-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Agilysys, Inc. (NASDAQ:AGYS). Agilysys, Inc. (NASDAQ:AGYS) develops and markets software solutions and services to the hospitality industry. The one-month return of Agilysys, Inc. (NASDAQ:AGYS) was 0.49%, and its shares gained 2.52% of their value over the last 52 weeks. On July 24, 2025, Agilysys, Inc. (NASDAQ:AGYS) stock closed at $113.49 per share, with a market capitalization of $3.182 billion.

Conestoga Capital Advisors stated the following regarding Agilysys, Inc. (NASDAQ:AGYS) in its second quarter 2025 investor letter:

“Agilysys, Inc. (NASDAQ:AGYS): AGYS posted a solid FY4Q report that quelled investors’ fear after a challenging 3Q. The company reported strong revenue growth and EBITDA growth. More importantly, the company’s subscription revenue growth was up 22% organically and its professional services revenue bounced back with 22% growth. While the company’s FY2026 guidance was conservative, the company showed significant progress on operational issues that plagued the FY3Q. The company’s guidance also did not include any contribution from the highly anticipated Marriott PMS rollout.”

Why Is Agilysys Inc (AGYS) Plunging In 2025?

An expert IT engineer demonstrating a new software solution to hotel managers in a boardroom.

Agilysys, Inc. (NASDAQ:AGYS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 21 hedge fund portfolios held Agilysys, Inc. (NASDAQ:AGYS) at the end of the first quarter compared to 20 in the previous quarter. Agilysys, Inc. (NASDAQ:AGYS) reported Q1 fiscal 2026 revenue of $76.7 million, a 21% increase year-over-year, marking the 14th consecutive quarter of record results. While we acknowledge the risk and potential of Agilysys, Inc. (NASDAQ:AGYS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Agilysys, Inc. (NASDAQ:AGYS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Agilysys, Inc. (NASDAQ:AGYS) and shared the list of best software stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.