Revenue during the quarter grew 10.23 percent to $32.68 million from $29.64 million in the previous year period. Gross margin for the quarter contracted 1075 basis points over the previous year period to 48.60 percent. Operating margin for the quarter stood at negative 7.17 percent as compared to a negative 1.28 percent for the previous year period.

Operating loss for the quarter was $2.34 million, compared with an operating loss of $0.38 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $1.31 million compared with $1.54 million in the prior year period. At the same time, adjusted EBITDA margin contracted 120 basis points in the quarter to 4 percent from 5.20 percent in the last year period.

Jim Dennedy, president and chief executive officer of Agilysys, commented, "The 10% revenue growth and 46% year-over-year growth in subscription-based revenue generated in the fiscal 2017 second quarter reflect momentum against key operating objectives. Increasing adoption of subscription licenses for both the new rGuest platform and the Company's iconic solutions have resulted in a 135% increase in the total contract value of bookings of subscription-based business in the first six months of fiscal 2017 compared to the first six months of fiscal 2016. The continued increase in the percentage of subscription revenues in our overall revenue mix is building a stronger foundation for Agilysys as we benefit from a larger base of recurring revenue and improve our ability to create deeper and broader connections to our customers."

For financial year 2017, Agilysys, Inc. projects revenue to be in the range of $132 million to $136 million.

The company has spent $8.10 million cash to meet investing activities during the first six months as against cash outgo of $12.23 million in the last year period.

The company has spent $0.66 million cash to carry out financing activities during the first six months as against cash outgo of $0.46 million in the last year period.

Cash and cash equivalents stood at $51.63 million as on Sep. 30, 2016, down 16.86 percent or $10.47 million from $62.10 million on Sep. 30, 2015.

Working capital drops significantly
Agilysys, Inc. has witnessed a decline in the working capital over the last year. It stood at $34.75 million as at Sep. 30, 2016, down 26.48 percent or $12.51 million from $47.26 million on Sep. 30, 2015. Current ratio was at 1.78 as on Sep. 30, 2016, down from 2.28 on Sep. 30, 2015.

Cash conversion cycle (CCC) has increased to 6 days for the quarter from 4 days for the last year period. Days sales outstanding went down to 50 days for the quarter compared with 56 days for the same period last year.

Days inventory outstanding was almost stable at 6 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went down to 50 days for the quarter from 67 for the same period last year.