Logility Reports Revenue Decline and Operating Loss Amid Strategic Acquisitions

Logility Supply Chain Solutions, Inc. (formerly American Software, Inc.) reported a decline in financial performance for the three and nine months ended January 31, 2025, as detailed in its latest 10-Q filing. Total revenues for the third quarter were $25.0 million, a decrease of 2% from $25.5 million in the same period last year. For the nine-month period, revenues fell 1% to $76.5 million from $77.1 million. The company experienced a notable 21% drop in professional services and other revenue, alongside a 12% decline in maintenance revenue, although subscription fees increased by 5% to $14.8 million, reflecting a growing customer base and higher contract values.

The company's operating loss for the third quarter was $3.5 million, compared to an operating income of $0.8 million in the prior year. This shift was attributed to increased expenses, particularly in general and administrative costs, which surged by 57% to $9.2 million, largely due to legal and advisory fees related to a pending merger agreement with Aptean, Inc. The net loss attributable to common shareholders for the quarter was $2.8 million, translating to a loss per share of $0.08, a stark contrast to earnings of $4.1 million, or $0.12 per share, in the same quarter last year.

Logility's strategic developments included the acquisition of Garvis AI Limited, a startup specializing in AI-driven demand forecasting, for approximately $25 million. This acquisition is expected to enhance Logility's supply chain management capabilities by integrating advanced AI technologies into its existing platform. Additionally, the company announced a merger agreement with Aptean, which will see Logility become a wholly-owned subsidiary of Aptean, with shareholders set to receive $14.30 per share in cash. The merger is anticipated to close in the second quarter of 2025, pending regulatory approvals and shareholder consent.

Operationally, Logility reported a customer base of approximately 500 clients across 80 countries, with a significant portion of revenue derived from the domestic market, which accounted for 78% of total revenue. The company noted a decrease in its employee headcount to 389 from 402 year-over-year, reflecting ongoing adjustments to align with its strategic focus. The firm also reported a decrease in deferred revenue, which fell to $38.1 million from $47.6 million, indicating a shift in revenue recognition timing and client contract renewals.

Looking ahead, Logility's management expressed cautious optimism regarding future performance, citing the potential for improved market conditions and increased demand for supply chain solutions as companies seek to enhance productivity and profitability. However, they acknowledged the ongoing economic uncertainties that could impact client spending and the timing of capital expenditures. The company remains focused on leveraging its technological advancements and strategic acquisitions to drive growth in a competitive landscape.