Tuesday, Oppenheimer's latest IT Buyer Survey indicated a more normalized pattern in IT spending plans. The survey, which included 301 buyer interviews, suggests an improving demand environment for enterprise suppliers in the fourth quarter and a similar growth outlook for IT budgets in 2025.
The annual survey conducted in the fourth quarter shows that the majority of respondents are expecting normal spending seasonality this quarter and are planning for comparable IT budget growth in the next year. This points to a reduction in macroeconomic uncertainty and an acknowledgment of the growing significance of IT and AI within enterprises.
The feedback from the survey indicates that IT budgets, which were deferred earlier in the year, are now expected to be utilized in the fourth quarter, with little inclination to postpone spending into 2025. The survey's bottom line is that demand for enterprise suppliers is likely to improve in this quarter and remain steady as the new year approaches.
In conducting the research, Oppenheimer interviewed software buyers at several enterprise customer conferences, including those hosted by companies such as Adobe (NASDAQ:ADBE), Salesforce (NYSE:NYSE:CRM), and Oracle (NYSE:NYSE:ORCL). The consensus from these interviews is that there is an anticipation for a normal IT budget flush in the fourth quarter, with year-over-year expectations for similar IT budget growth in 2025.
However, the overall sentiment from the survey does not forecast a cyclical increase in IT spending. Instead, it presents a cautiously optimistic view for new software demand in the fourth quarter and the following year.
The results were most favorable for Agilysys (NASDAQ:AGYS) and ServiceNow (NYSE:NYSE:NOW), leading to raised price targets for these stocks, while expectations were less positive for Sprout Social (NASDAQ:SPT), among others, resulting in lowered price targets and estimates.According to InvestingPro data, Agilysys has demonstrated remarkable performance with a 55.91% year-to-date return and impressive revenue growth of 17.05% over the last twelve months.
The company's strong momentum is reflected in four analysts revising their earnings expectations upward for the upcoming period, though current valuation metrics suggest the stock may be trading above its Fair Value.Want deeper insights? InvestingPro subscribers have access to over 15 additional ProTips and comprehensive financial metrics for AGYS, including detailed valuation analysis and growth projections. The Pro Research Report offers expert analysis that transforms complex data into actionable intelligence for smarter investing decisions.
In other recent news, Agilysys reported a record revenue of $68.3 million in the second quarter of fiscal year 2025, a significant 16.5% increase from the previous year. The company's strategic acquisition of Book4Time played a key role in this growth, bolstering its spa management software offerings. Subscription revenue also witnessed a considerable surge of 36.6%, reaching $25.1 million, reflecting Agilysys's successful modernization and expansion efforts.
Other notable developments include the company's raised full-year revenue guidance to between $280 million and $285 million. Despite facing challenges in the U.S. food service management and Asia-Pacific markets, Agilysys remains optimistic about the recovery of its Point of Sale business and sees substantial potential for market expansion. The company also expressed interest in making more strategic acquisitions in the future.
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