All right, thank you. Good morning, everyone. Thank you for joining for the Agilysys session. I'm Stephen Sheldon. I'm a research analyst in the technology group at William Blair. Please visit our website at williamblair.com for a complete list of research disclosures and potential conflicts of interest. We are thrilled to have the Agilysys team back here at our conference once again. I think it's their second time being here. My team initiated coverage on this one about a year ago. As most probably know, it's one of the leading software providers to the broader hospitality industry for both POS solutions and for property management systems, and has had some marquee wins in recent years that I'm sure they'll dig into. We are really happy to have Ramesh Srinivasan here, who's the President and CEO of Agilysys.
We also have Jess Hennessy out in the audience in the back there who runs IR. With that, I'll turn it over to Ramesh.
Thank you. Thank you, Steve. Good morning. Thank you for all your interest and support for Agilysys. I'm a little bit of a nervous public speaker, so please work with me. Public speaking was not one of the tests I went through when I got this job, January 2017. I've been here now for close to eight and a half years, and it's been a fun ride. I'll try to give you a quick words of view of who Agilysys is and probably leave a little bit of time for questions at the end as well. Yeah, our mission in hospitality is to make things easier for customer users and through them for their guests. The current landscape of hospitality technology is quite broken apart, quite fragmented.
If you go to a typical resort with spa and golf, and you can book for your groups, and it has a couple of big restaurants, and you go to a resort like that, there are normally a lot of custom vendors, technology vendors, who are providing products. These customers really struggle to get the whole thing together. Therefore, the guests also suffer. For example, when you go to the reception desk, they just have no idea that you tend to spend a lot of money in spa, that you tend to spend a lot of money in restaurants, that you like certain activities like yoga lessons, and there is a tennis court that you like. They just have no idea of you as a guest at all.
When you go have lunch there, they do not know that you have a spa appointment at 2:00 P.M. It is fragmented systems that typically do not talk very well to each other. We took upon a task of creating a modern cloud-native hospitality ecosystem of products across food and beverage point of sale, hotel management systems, which are typically referred to as property management systems, PMS, and everything around it: spa, golf, sales and catering, service task optimization within a resort, loyalty promotions. You currently earn points mostly for your room. What is wrong in earning points because you play a lot of golf in a resort? We have created a loyalty promotions tool that you can earn points and redeem points at any touch point.
Every person who deals with you from the customer knows who you are, how valuable you are, how many times you have come to the resort. Our mission is to make things easier for our customer users. Our customer is the hotel, our resorts, to make it easier for them and through them to increase guest experiences. One other thing is we stay dedicated to past customer investments. We do not force customers to upgrade to our modern versions. We are forced to carry a couple of R&D, one for an old generation of product and one for new. We are slowly trying to move customers all to our modern platforms. We never force it. Customers spend millions, hundreds of thousands of dollars buying our systems, and we stay dedicated to it.
That's sort of if you take our mission, our mission is to make things easier in hospitality. Let's continue pushing. Global presence, we are there in about 118 countries. Our two major offices in the U.S. are in Alpharetta, which is our headquarters, and in Las Vegas. Now, every property you see in Las Vegas is our customer, either POS or PMS or spa or all of the above. We have a big office in Las Vegas, which is where I am based at. My previous job, I used to be with Valley Technologies for nine years in Vegas. I lived in the same house for 20 years. I just chose there. Our headquarters is Atlanta. Now Atlanta has overtaken Las Vegas as our biggest office.
We also have two development centers in Bellevue, Washington, in Toronto, where we did a couple of acquisitions, and also one in Santa Barbara, which is where our POS system was born. We are there in all the other usual suspects all over the world. London and Singapore is our APAC headquarters. We just started an office in Sydney about a year, year and a half ago. We are in Hong Kong. We are in Manila and Kuala Lumpur, in Shenzhen, China. We are there all over the place. We are a global company. Now, there are four I just want to give you a quick idea of the verticals we play in. Our biggest vertical is casino gaming. For some reason, this company had, and thank God for that, a great DNA in gaming for the last two decades.
Casino gaming is about 50% of our revenue. They normally are our biggest customers. Some of the biggest deals we do are in gaming. We have a strong DNA in gaming. We have reasonable market share in POS and PMS in gaming. That is a very important vertical for us. We are also in hotels, resorts, and cruise ships. Sometimes in our earnings call, we will be referring to that as HRC. Royal Caribbean is a big customer of ours. Carnival UK is a big customer of ours on the cruise ship side. We really have done a lot of great technology work in cruise ships. There are major ships running today with no fixed F&B terminal. Everything is handheld. Them taking the order, by the time they take your order, the bar and the restaurant and the cruise ship are already working on it.
A runner is running down with your food. The whole thing is automated in cruise ships. We revolutionized how F&B is run in cruise ships a few years ago. Now we have added our loyalty promotions module. Like if they have to control that you are allowed four drinks in a day, but not more than two per hour, the system controls that. If you go ask for a third drink, the system will automatically stop that within an hour. A lot of automation in cruise ships. Of course, multi-amenity resorts is our sweet spot. If there is a resort that has multiple amenities that offers you spa, golf, and a whole lot of other amenities, that's our sweet spot because that's where our ecosystem applies. Hotels, hotel chains is a big vertical of ours. Also managed food service.
We refer to this as FSM, food service management. A lot of the top corporate cafeterias in America are controlled by a few FSM vendors. We are their technology partner. Like we run Microsoft's compound in Redmond, about 34 different cafes. Like Marriott headquarters in Bethesda, Maryland, when all their executives go to order lunch and go every day, they use an Agilysys POS system. That is food service management. We learn a lot from every vertical, and we bring that to the other. For example, loyalty promotions are lessons we have learned from gaming. We are bringing the benefit of that to the other verticals as well. The guest side kiosk, the ability for a guest to order food themselves in a kiosk, a lot of those lessons were learned in food service management, in cafeterias, which we have brought to hotels and resorts as well.
We learn a lot from each of the verticals and bring the advantages to the other. We are enterprise software. We do not play in the lower end. We are not a retail restaurant provider, F&B provider like Toast or Square. We do not compete in those markets. We do not compete with Cloudbeds in Motel Sixes and the smaller hotels. We are enterprises, hotel, resorts, cruise ships. More complex enterprise software is where we play in. International is we have not done great with international because till recently, we did not have the products for it. We took all our products for a complete rewrite in 2017. We have finished modernizing them. We have the most modern set of products now. Each of our modern products are anywhere from, say, nine months to three years old.
You can think of us as like a $275 million annual revenue startup that is just getting started with providing modern technology to hospitality. International is a growing area for us. We did not focus much on international till our products got to where they were. Now we are very focused on international, but we have very low market share there. It is a very small percentage of our revenue, but massive growth potential in international for us. When you think across our products, you leave aside services revenue from our revenue, our revenue gets allocated approximately about 55% is our POS product, which used to be our dominant product for a while. About one fourth of it is a property management system, hotel management system area. We also have inventory procurement for food and beverage. We provide an inventory procurement software for food and beverage.
That sort of makes up our product makeup. 92% of our revenue is North America. Only 8% is international. That's a huge growth area for us. We have typically, historically, not done very well there. International revenue is now picking up for us. I'm showing you that share price growth. That's to give you a general history of the company. Agilysys has been public for 50+ years. In fact, when NASDAQ called me and the CFO to congratulate her on 50 years, we had no clue. We said we had no idea we were public for 50 years. This company was all over the place. Pioneer Electronics, we were in radio parts, electronic chips, all kinds of stuff we did for 50 years. Our stock didn't go anywhere. In 2013, this next slide is when we became the company we are today.
At that time, the management team decided, forget about all the other businesses. We are going to get out of everything. We are only going to focus on hospitality software. Before 2013, they had acquired a bunch of old technology hospitality software companies. They decided we are going to focus only on that and got rid of all their other businesses. When we think of Agilysys and in our earnings call, we say record revenue, this, that, we are only referring to the period from 2013 till now. From 2013 till about 2017, things didn't go well in this company. There was a management team that tried to modernize the products, spent a lot of money, didn't go anywhere. It was a difficult period for the company. Massive management changes were made in 2017.
We started reducing the cost of R&D per unit of output. We really got more done, spending less in R&D, completely revamped all our products. Our resurgence started around the 2018 time frame. Since then, it has been a pretty decent success story. It was a $10 stock around the 2017 time frame. Today, we are $110 or so. We've done fairly well since then. We hit a trough during COVID. We were doing well in 2020. COVID hit us badly when every one of our customers was shut down. Every single customer was shut down. We recovered from it. We continued investing in product innovation. We have produced pretty good results since then. Thirteen consecutive quarters of record revenue growth. Thirteen sequentially consecutive quarters of record revenue growth. We continue growing revenue every quarter. We are operating at a record level.
If you look there, around the $40 million per quarter phase, it took us about three, three and a half years there. We moved into the $50 million phase for another three years. Since then, it has really picked up at a pretty good rate now. The last quarter was again a record revenue quarter, January through March that we just announced. Our fiscal year is April through March. Our highlight has been our subscription revenue growth. Initially, there was not much cloud revenue we had. After we revamped and rewrote all our products, they all are cloud-native products. One feature with us, we also support on-premises installs because many of the hospitality customers want to be on-premises. It is not our job to force them to the cloud. We are generally a customer-centric company.
We tend to do what customers want us to do. Therefore, all the enhancements we do in our products are all, a vast majority of them are driven by customers. We rewrote all our products. We modernized our platform to all be cloud-native. However, if a customer wants that same version to work on-premise, it has been engineered that it will also work on-premise. Some of our biggest customers are still on-premise. We can't help it. 80%-90% of our new installs are all in the cloud. You see that line there that has grown, that's the subscription revenue growth. That is our biggest driver, subscription revenue growth. For the last four consecutive years, we have grown it by 27% a year.
If you exclude one acquisition that we did, Book4Time, if you exclude that, for four consecutive years, we have grown subscription revenue by 25% each year. This year again, this April through March, we have again guided to 25% subscription revenue growth. You see that blue line there, that is annual maintenance. That sort of remains steady. There are many big customers who are still on an annual maintenance perpetual license basis. It has not gone down. It has not fallen off the earth. We have grown it slightly. We do not expect much growth in the annual maintenance line. If you ask us what has been driving us, why we have been successful, we have had these five defining strategy pillars that we have stuck to for the last seven years.
There is going to be no change in that in the foreseeable future. We are 100% hospitality-focused. We are vertically focused. It's a huge market. We are still a small player. We have massive amounts of growth possible. We could grow revenue even if we don't sell a new customer. If we just sell more to our current customers, we could grow our revenue significantly. It's a big market. We have massive growth prospects ahead of us. We have no reason to distract ourselves out of hospitality. We are 100% hospitality-focused. We are very obsessively customer-centric. We are driving our products forward. We are about 20% EBITDA by revenue, give or take. This year, we have guided to 20%. We could be 25% next quarter if we wanted to. We could let go a lot of our R&D.
We would still be the largest R&D team in hospitality. We are seeing growth potential ahead. This could be a big company in the future. We are still fueling that and keeping our profitability at about 20% of revenue. Over a period of time, you should expect profitability to improve. There are a lot of things that we do for customers. Like we support the old versions. We do not force them to move to the new ones. We carry an R&D team for that. We are generally a very customer-centric company. We are quite a nerdy sort of company. We have 2,300 employees. 1,500 are in R&D. If you meet three Agilysys employees, chances are at least one of them can code. Maybe two of them can code. We are very product innovation-driven.
We believe that if we continue innovating, there are not many vendors in this industry who are innovating across the whole ecosystem. We see a massive opportunity. Everything is state-of-the-art, cloud-native. We also provide on-premise options and end-to-end comprehensive solutions. I'll give you a quick picture of that. That is the product suite that we developed over the last seven years. What you see in the middle green, the dark green portion, are our core products: POS, PMS, and inventory procurement for food and beverage. We rewrote all those products. Not one line of code is common now. We completely took it up and rewrote it. We have an India Development Center that is captive that we own ourselves. That is extremely cost-effective for us. The India Development Center plus U.S. R&D.
We have significant R&D in the U.S. as well, in Atlanta, Alpharetta, Las Vegas, Bellevue, Toronto, and Santa Barbara, California. We used those teams, completely rewrote the products so that that entire core product set has been redone into modern technology. We also added about 25 additional add-on modules. Like around POS, we have digital, we have remote ordering. You can order food through your phone. We have a guest-facing kiosk. If you go to some of the major food outlets in Las Vegas, there will not be anybody manning that. There will be 10 outlets there. You either scan a QR code on your phone or go to a kiosk. You order from all the outlets. You order an ice cream for your kid and a pizza or Lebanese food or steak and all that. Whenever it is ready, they send you a text.
You go pick it up, one credit card charge. We have simplified the whole thing. That is what you see in the far left corner. All those products there are POS add-on modules. What you see around the circle, around the racetrack that we call, is all PMS add-on modules: spa, golf, service optimization, sales and catering, a membership module, condo accounting. There are many resorts that have condos that are owned by others. Loyalty promotions up there, digital marketing. They communicate with each guest differently based on the level of the guest. A data analysis tool, a booking engine. Now for many resorts, a guest can go to a booking engine and book all your amenities in one shot, not just your room. You can book your room, your golf tee time, your spa appointment, your tennis lesson the next day, all in one shot.
The resort can build restrictions into that. You have to stay for three nights before you can play in that golf course. We have enabled all of that with a modern hospitality suite. Now the POS platform is unified. We are one of the very few vendors where staff-facing, where the staff takes your order and enters it into a terminal, or guest-facing, you can order it yourself, is all one unified system. There are not many vendors who provide that today. When we modernized it, we accomplished that as well. The big advantage of having a product ecosystem like this is ease of integration. Instead of you buying from five different vendors, obviously buy from one vendor. It is better integrated because they are all sitting next to each other in R&D. The bigger advantage is pace of innovation.
We recently took a water park live in Oklahoma where everything is controlled by the wristband. You and your spouse have wristbands, and then your two children have wristbands. The whole thing is automated. There is $50 that your kid can spend in certain areas. They can just go scan their wristband, and it will control them at $50. You can put in more controls as to how much they can spend at what time and all that. The entire thing is automated just using the wristband. There are some last-minute changes that customer wanted to get done. It required changes in three of the products. We got all three of them done in the next couple of months. If you are dealing with three different vendors, each of them have their own product roadmaps, it is very difficult.
The pace of innovation is highest with us now. That is the thing I'm most excited about. If we can keep up this pace of innovation, we will do very well. We are also introducing AI in a lot of areas. AI has been very handy for us to improve our product development speed. It's improved our efficiencies by about 30%-35%. We are now doing product development at a much faster pace thanks to Copilot and all that. In addition to that, we have introduced AI tools into a lot of our products. Like in the booking engine, you go to the booking engine, we are enabling conversational ordering. Or you call the spa to make your booking. There is an AI engine that will handle your booking. What kind of therapist do you need? What kind of time do you need?
It'll make sure that it doesn't leave a small gap that cannot be filled up. All that is handled by AI now. So a lot, and for example, in the guest-facing kiosk, image generation is done by AI. Many outlets struggle to create a nice image of a hamburger, whether you can believe that or not. If you give a description of a complex salad, multiple things, AI generates the image for you. There are a lot of things we are doing with AI that is making our products better. We are sprinkling in AI wherever it's applicable. We are the highest price vendor. We are not the lowest price vendor when we are competing for a deal. We need to keep our products at the top of the innovation ladder so that we can command a decent price for that.
AI is coming in handy for that. All of you have a question about Marriott, I'm pretty sure, right? Marriott in December 2022 chose us for a majority of their U.S. and Canada properties for PMS. The story about that is we were not part of the original RFP. They heard about us some 10 months after looking at other products that they were not very impressed with. They came and chose us after that. December 2022, we announced that PMS. Those go-lives should start in the next few quarters. If you listen to the Marriott earnings call, the Marriott CEO has also given updates about that. One year later, they chose us for POS as well. POS is a hunting license, meaning now we are now an approved vendor. We can go sell to Marriott properties like this.
Also, six months after that, they chose golf. We are now the, our golf product is a golf brand standard for Marriott. We are already live in about six or seven of their properties. They are also a membership customer. We acquired a company called Book4Time Spa, which is the standard in all Marriott properties. We have developed a great relationship with Marriott. The reason why they chose us: culture fit, our product strength, also our R&D strength. It was not just the state of the product at that point in time. The ability to improve the products over time was an important reason why they chose us. Currently, our PMS products are connected to less than 300,000 rooms.
If you take all the hotels and add up the rooms they have, where our hotel management system, PMS, property management system is running, it will not add up to 300,000 rooms. Our biggest competitor is more than 13x , 14x bigger than us. That is why we have low market share and we have a long growth path ahead. Now this Marriott deal itself could triple that. Because if you look at U.S., Canada properties of Marriott, it adds up to more than a million rooms. A majority of that, you can do the math. We are less than 300,000 rooms now. This one deal itself is going to triple our PMS business or close to it. It is a big market. It is a big total addressable market.
I generally don't spend too much of my time arguing whether it is $10 billion or $12 billion or $16 billion recurring revenue. All I know is our recurring revenue last year was only $170 million. We have a long growth path ahead. We don't need to go break our heads into how accurate these total addressable market numbers are. It's a huge marketplace we are in. There's no reason for us to distract ourselves anywhere. We have a massive growth path ahead of us. Now this is an important part that I showed you, that product suite of 20-30 products there. Let's say eight to 10 of those products are applicable for every site. We have about 6,200 properties running Agilysys products now. They're currently using an average of 2.25 products per site.
If we don't sign one new customer in the next three years and just focus on selling more to our current customers, that itself could expand our revenue rapidly. Now you see that has flattened down over the last year or so. That's because we acquired Book4Time. Book4Time came with 1,600 properties where they only, most of them use only Book4Time among Agilysys products. So if you had not done the acquisition, that number would have gone up to 2.5 per property. We are slowly growing the number of products that each of our customers are buying from us. That itself is a huge growth opportunity for us, just selling more to our current customers. Last year, we grew revenue by about 16%. We have five revenue buckets. Subscription revenue is growing. Services revenue is growing.
The other three revenue buckets are not growing. We have annual maintenance because most of our customers are choosing subscription. We have perpetual license, same reason. We have hardware reselling revenue that is going down because our POS systems have a less attached rate because we opened up the system. We rewrote our system so that it runs on iOS, Android, and Windows. They do not need to buy terminals from us. They can go to Best Buy and buy an iPad. We ourselves enabled it. Hardware reselling, perpetual license, annual maintenance is not growing. Services revenue and subscription will grow. That is why our growth was 16% overall revenue. Our subscription revenue grew by 40% last year, including Book4Time. Recurring revenue is about 62% of our total revenue. Within recurring revenue, subscription revenue has grown to 62%.
It just so happens both the numbers are 62. Subscription revenue and services together are about 60% of our revenue as well. We have guided to last year, we finished at $275.6 million. That is the year ending March. Our revenue was $275.6 million. We have guided to $308 million-$312 million. No Marriott PMS project revenue is included in that because we are not exactly sure when those go-lives, those mass go-lives will really start. It is a big project. Marriott is doing a great job of managing it well. Multiple vendors are involved. It is going well. We are just entering the test properties phase now. We cannot exactly predict when the mass go-lives will start, which will be a needle mover for our revenue.
We have not included that in our fiscal revenue at all because we just do not know exactly when the go-lives will start. Our guidance is $308 million-$312 million, not including that. 20% adjusted EBITDA by revenue, like I told you, because we are continuing to invest in the business. Subscription revenue, this should be the fifth consecutive year, if I am not mistaken, of 25% subscription revenue growth. Thank you. Sorry, I ran through that as quickly as I could. I will take a couple of questions.
Thank you. I think we just have time for maybe one or two here. I guess maybe as we think about, you talked in the beginning, I think, about a lot of hospitality, kind of owners, operators having very complicated tech stacks, many different vendors across their ecosystem. What is the friction point that you typically see for them consolidating around one platform like Agilysys? Are those friction points, are they starting to ease at all? I guess what is the holdup for more platform adoption?
There are quite a few friction points. Number one, Agilysys is not very well known. I have to take the blame for that. When we took up this company in 2017, we first had to focus on R&D. We had to get our products to world-class levels. There was no point marketing an '80s, '90s product, right? There is no point spending money in marketing, and then you as a CIO of a major corporation ask for a demo, and I am demoing an '80s product. We waited. We put all our eggs into the R&D basket. That product work is done now and has been done for two to three years now. Some products are about nine months old. Some are about three years old. We are implementing them.
First thing is Agilysys is either not well known or is known as your grandfather's or your father's company, right? In business enterprise software, it is not easy to go change your name around. We can't do an ad in the Super Bowl and change us around. You can't do that. You have to do it trade show by trade show, bit by bit. Now we are investing more in marketing. We are attending every trade show. We are sponsoring every event. We are getting out there. That is one issue. The other issue is our products are still young. We know we have a great tech stack. Customers are getting great benefits out of it. We do not have hundreds of reference customers. We have tens of reference customers. It needs to establish itself more and more in the field.
This business runs with reference customers. By the way, this user conference we held recently that you attended, we put eight of those customers on main stage, which is a big risk to take. I'm telling you, if you ever run an enterprise software company where every customer has their own opinions about the products, people do not take the risk of putting them. I had to fight an internal battle in the company to convince my company to do that. Eight major customers, including Marriott, Disneyland Paris, Caesars Entertainment, were all on main stage. He was listening to some of their comments about how much they are gaining from these modern products. We need to do more of that. That is one friction point. Number two is a normal technology friction point, right?
When you're trying to replace eight vendors with one vendor, you still have to deal with interfaces. It's complex. It is not simple, trivial stuff. That takes a few months to get done. It is happening more and more. We are happy with the way things are going.
That's great. I think we are out of time. I think we'll move it up to the breakout room, which is in Jenny A upstairs. Ramesh, thank you so much.