By Emily Dattilo

Shares of Agilysys were trading sharply lower after the hospitality software company slashed revenue guidance.

The stock price fell 20% to $19.83 in premarket trading Wednesday.

For its third fiscal quarter ended Dec. 31, the company reported adjusted earnings of 38 cents per share, beating Wall Street's call for 31 cents. Total net revenue of $69.6 million was below the consensus estimate of $72.4 million.

"We are pleased to report strong subscription revenue growth results for the quarter," said Chief Financial Officer Dave Wood in the earnings release. "One time revenue remains challenged as we see continued impacts from our slow point-of-sales bookings during the first half of the year and wind down the heavy lift of significant development efforts related to large projects."

That said, the company cut its fiscal 2025 total revenue outlook to about $273 million from a prior range of between $28o million and $285 million. Analysts had penciled in $281.9 million.

Needham analysts led by Mayank Tandon weighed in on the quarter, maintaining a Buy rating but trimming their price target to $125 from $145.

"While results/outlook were disappointing, we remain encouraged with the margin improvement and subscription revenue trajectory, and with the shares indicating down 20%+ after-hours, we would be buyers on the weakness," analysts wrote.

Write to Emily Dattilo at emily.dattilo@dowjones.com

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January 22, 2025 08:47 ET (13:47 GMT)

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