Agilysys, Inc. (NASDAQ:AGYS) Q1 2024 Earnings Call Transcript

Ramesh Srinivasan: Yes. So this is – hi, Brian. So this was a sales record, Brian for the April through June quarter. This is the best Q1 quarter that we’ve ever had in sales, so that was an excellent sales quarter for us and like it always tends to happen in our sales, the sales success came from both current customers and from new customers. And of course the new opportunities we divided into three parts. One is brand new customers who have never used our product before. One is new sites, which we have – these are customer – current customers, but that particular property has not seen our product before. And then, of course, a big part of it is new product, which is a current property has a product and now they are buying more products from us.

That’s how we divide it. And this Q1 sales success was almost equally divided between those two. We had excellent success with new products, new properties and new customers. Our deal size for new customers is among the highest levels it’s been at, and a lot of current customers also expanded their sales business with us. So it was a combination of all of that, which is how it tends to be for us, Brian. Our current customers are so happy that we have invested and innovated and done so much with our products. So they continue to invest more and more with us, which is great for us because, obviously, the sales acquisition costs are very low. And new customers, especially the bigger, the sizable opportunities are increasingly more and more last year and this year.

So that is also increasing. Now in terms of go-to-market, we have expanded our sales. The last 15 months have been excellent for us as well as marketing is concerned. In terms of digital marketing, in terms of greater reach out to prospective customers, it cannot be any better than what we have done in the last 15 months, especially compared to our past. So the marketing activities have gone well. We are participating more in trade shows, which tends to be one of the best mechanisms where – by which new customers get in touch with us. And also, we have expanded our sales force, which is a major driver for us, like the data that I gave you during the prepared remarks. If you divide our sales force into two halves, Brian, the top half consists of veteran who have been with us for a long time, and then the second half consists of people who have been with us for a maximum of 2.5 years, the second half only contributed 6% of sales all of last fiscal year.

And so far, we are already contributing close to 20% – 19% to 20%. And when you take the second half of the sales team, whatever total sales they did all of last year, they’ve already done close to 75% of that already, in the first three months, 72% or so. So the second half of our sales team is also beginning to contribute a lot, and that has a lot to do with the fact that these new products that the industry really needs is now settling down in the field, which means we have more and more reference customers. The customer satisfaction levels are increasing. And for us, there is nothing greater go-to-market than having more referenceable customers. So all the momentum across marketing and increased sales team, the second half of the sales team contributing a lot more now, which means sales productivity is picking up.

All the new products we developed in the last three, four years are settling well in the field. So we are getting more references from there. So all across, the momentum is really increasing well in Brian.