Earnings call transcript: PAR Technology Q2 2025 beats forecasts, stock drops

PAR Technology Corporation (NASDAQ:PAR) reported its second-quarter 2025 earnings, surpassing analyst expectations with an EPS of $0.03, compared to the forecasted $0.02. Revenue also exceeded projections, reaching $112.4 million against a forecast of $110.82 million. Despite these positive results, the company’s stock saw a decline of 13.84%, closing at $56.1 in pre-market trading. According to InvestingPro data, PAR’s stock has shown significant volatility, with a beta of 1.7, and has declined 20.15% year-to-date. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels.

Key Takeaways

• PAR Technology’s EPS and revenue both exceeded analyst forecasts.
• Stock price fell by 13.84% in pre-market trading despite earnings beat.
• Subscription services revenue increased by 60% year-over-year.
• The company launched several new AI-driven products and expanded its market presence.
• Macroeconomic volatility is impacting the quick-service restaurant (QSR) market.

Company Performance

PAR Technology demonstrated robust performance in Q2 2025, with revenue climbing 44% year-over-year to $112.4 million. The company reported significant growth in its subscription services, which saw a 60% increase, contributing to an annual recurring revenue (ARR) of $287 million, up 49% from the previous year. The company’s strategic initiatives and product innovations have positioned it well within the competitive landscape, particularly in online ordering and loyalty programs. InvestingPro analysis reveals a strong revenue growth trajectory, with a 37.95% increase in the last twelve months and a healthy current ratio of 2.05, indicating solid liquidity. Discover more insights about PAR’s financial health and growth potential in the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Financial Highlights

• Revenue: $112.4 million, up 44% year-over-year.
• Earnings per share: $0.03, surpassing the forecast of $0.02.
• Adjusted EBITDA: $5.5 million.
• Subscription services revenue: $72 million, up 60% year-over-year.
• Annual Recurring Revenue (ARR): $287 million, up 49% year-over-year.

Earnings vs. Forecast

PAR Technology exceeded earnings expectations with an EPS of $0.03, a 50% surprise over the forecasted $0.02. Revenue also surpassed projections by 1.43%, totaling $112.4 million against an expected $110.82 million. This marks a notable achievement for the company, given the challenging macroeconomic conditions impacting the industry.

Market Reaction

Despite the positive earnings surprise, PAR Technology’s stock fell by 13.84% in pre-market trading, closing at $56.1. This decline could be attributed to broader market trends or investor concerns over macroeconomic volatility affecting the QSR market. The stock’s current price is closer to its 52-week low of $46.93, indicating potential investor caution.

Outlook & Guidance

Looking ahead, PAR Technology remains optimistic, targeting 20% organic ARR growth with expectations of mid-teens growth for 2025. The company is focusing on AI integration and product development, with a significant pipeline of $100 million, excluding mega deals. Potential global Tier 1 deals are anticipated in late 2025/2026, which could further bolster the company’s market position. InvestingPro data shows analyst price targets ranging from $69.61 to $105, suggesting significant upside potential. While the company is not currently profitable, analysts predict profitability this year, with an EPS forecast of $0.11 for FY2025.

Executive Commentary

CEO Savneet Singh emphasized the company’s strong foundation and future prospects, stating, "Our foundation is strong and our future path is certain." He also highlighted the company’s commitment to AI, noting, "PAR is all in on AI." These statements reflect the company’s strategic focus and confidence in its growth trajectory.

Risks and Challenges

• Macroeconomic volatility in the QSR market could impact future growth.
• Slower POS rollouts due to economic uncertainty may affect short-term revenues.
• The strategic pause on some product implementations could delay potential revenue streams.
• Increasing competition in the technology solutions sector could pressure market share.
• Dependence on successful AI integration and product development for future growth.

Q&A

During the earnings call, analysts raised concerns about the slower rollout of POS systems due to economic uncertainty. Executives reassured stakeholders by emphasizing the strategic focus on larger, multi-product deals, which are expected to increase average revenue per user. The company remains confident in its long-term growth potential despite current challenges.

Full transcript - PAR Technology Corp (PAR) Q2 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the PAR Technology Fiscal Year twenty twenty five Second Quarter Financial Results Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you’ll need to press 11 on your telephone.

You will then hear an automated message advised when your hand is raised. To withdraw your question, please press 1 on

Savneet Singh, CEO and President, PAR Technology: the phone.

Conference Operator: I would now like to turn the call over to your speaker for today, Chris Burns, senior vice president for IR and business development. Please go ahead, Chris.

Chris Burns, Senior Vice President of IR and Business Development, PAR Technology: Thank you, Lisa. Good morning, everyone, and thank you for joining us today for PAR Technologies twenty twenty five second quarter financial results call. Earlier this morning, we released our financial results. The earnings release is available on the Investor Relations page of our website at partech.com, where you can also find the Q2 financials presentation as well as in our related Form eight ks furnished to the SEC. During the call this morning, we’ll reference non GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items.

A description and timing of these items, along with a reconciliation of non GAAP measures to the most comparable GAAP measures can be found in our earnings release. I’d also like to remind participants that this conference call may include forward looking statements that reflect management’s expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information on this conference call related to projections or other forward looking statements may be relied upon and subject to the Safe Harbor statement included in our earnings release this morning and in our annual and quarterly filings with the SEC. Finally, I’d like to remind everyone that this call is being recorded and it will be made available for replay via a link available on the Investor Relations section of our website.

Joining me on the call today is PAR’s CEO and President, Savneet Singh and Brian Menard, PAR’s Chief Financial Officer. I’d now like to turn the call over to Savneet for the formal remarks portion of the call, which will be followed by general Q and A. Savneet?

Savneet Singh, CEO and President, PAR Technology: Thanks, Chris, and good morning, everyone. Thank you for joining us today. We reported $112,400,000 in revenues in the quarter, an increase of 44% year over year. We also continue to expand our profitability. Adjusted EBITDA came in at $5,500,000 This number includes $450,000 of accounting charges for non period deferred contract costs, which when further backed out brings our EBITDA to $6,000,000 for the quarter.

Subscription services revenue increased by 60% in the quarter to $72,000,000 from last year and 21% organic when compared to Q1 twenty twenty four. We delivered ARR of approximately $287,000,000 up 49% year over year and achieved organic ARR growth of 16% showing positive momentum across our platform as we just restarted our major rollout and are prepping for several multi product rollouts later this year in early twenty twenty six. These results reflect the growing demand for unified technology in the food service industry and the better outcomes our solutions can deliver for brands. Now to dig into our business with further detail. Total operator cloud ARR ended at $119,000,000 and grew 42% in the quarter, with organic growth at 13% when compared to the same period last year.

This growth is slower than our historical trend due to the mid quarter restart of BK, which only hit scale starting in June. Crucially, we have significant committed rollout visibility through Q4, which will markedly increase POS growth in the second half of the year. As we mentioned in last quarter’s call, in restarted the Q2, working implementation of PAR POS and initiated the rollout of PAR Ops to their stores. We continue to receive very positive feedback from corporate and franchisee stakeholders alike, and this successful partnership was ultimately crucial to us also contracting with Popeyes Louisiana Kitchen with PAR Ops. Outside of Burger King, we’re seeing strong mid market traction with 17 new direct POS logos signed in Q2 alone, continuing the trend from last quarter.

All of these deals were multi product, proving the strength of our product and better together value proposition versus up and coming point solution competitors or SMB providers trying to crack the enterprise. Our thesis, delivering outcomes of efficient operations and higher sales is playing out quickly in the mid market and beginning to gain traction in the enterprise with proof points like ParOps and RBI. Our back office product suite, which we retitled from Data Central to ParOps earlier this year, is proving to be one of the most exciting areas of innovation and growth at Par. PAR Ops delivered a strong sales quarter with three new customer deals. We also kicked off our implementation with Popeyes Louisiana Kitchen and Burger King.

We believe that a key Better Together enhancement has been the addition of the delegate product suite, which we believe will drive our flywheel with strong multi product adoption. As an example of this, Coach AI, our AI powered intelligent assistant, pulls real time POS data, drive through timer information, and voice of the customer guest metrics to give in store operators actionable intelligence to maximize efficiency. It is in clear enhancement of both the POS and back office experience. We’re at the point where PAR ops itself is becoming a hero product within the PAR portfolio that is capable of driving cross sell. The PAR Ops product suite has a significant late stage pipeline covering multiple existing and prospective Tier one and Tier two customers, and we are trending towards both 2025 and 2026 being record years for this product line.

Separately, with respect to our Task POS platform, we have aggressively repositioned our focus to pursue global Tier one deals and realize the value that the Par Umbrella brand brings to go to market efforts. We have gotten extremely compelling feedback from the biggest and fastest growing brands that our Task POS platform architecture is the best in the world for global brands pursuing international expansion. Of that, we’ve taken the important measure at investment to this business while pausing projected rollouts to focus on building out the product for the slate of late stage tier one prospective customers. A recent example of TASK’s potential was the recent launch of Wingstop’s inaugural store in Australia this past quarter. We believe the near term trade off of growth for product build out will set PAR up for massive success in the future.

We anticipate rolling out our accrued multimillion dollar backlog of tasks starting in Q1 twenty twenty six. We believe our decision to run a double pronged POS strategy with par POS from domestic brands and tasks for global brands will ensure we cover the maximum amount of enterprise concepts. There is no one size fits all with point of sale software, and with our current portfolio, we cover both domestic and global enterprise QSR brands, while also building a pathway toward continued expansion in other hospitality verticals. Now on to payments. In the second quarter, PAR’s payment business started a major shift in operating model, moving from 99% card present transactions to now accepting and selling card not present transactions with the cross sell of our PAR wallets, ordering and retail solutions.

Due to this shift in the timing around the attaching payments with PAR POS rollouts, we saw a slower than normal quarter in Q2. The second half of this year should return payments back to the growth as we’ve signed some significant 500 plus location card not present payment deals that we will announce very soon. We continue to see PAR payments as a key and strategic growth driver for PAR with a much larger and future TAM, given the addition of new sales channels and outlets. In short, Operator Cloud is uniquely positioned and hedged in the market to service both the dual need of revenue maximization and operational efficiency. While our business may not be consistent quarter to quarter, the 2025 pipeline keeps us very confident about the long term growth with nearly $50,000,000 in prospective ARR within just POS and back office.

Further, our point of sale products have over $20,000,000 of ARR tied to already contracted rollouts, giving high future visibility and confidence. It’s important to note that the aforementioned pipeline number does not even include two mega Tier one deals we’re pursuing. Moving to the engagement cloud. In Q2, we continued to strengthen our market position driven by a robust customer demand and strong strategic innovation. We exceeded internal targets with engagement ARR increasing 55%, including 18.5% organic growth compared to Q2 last year.

For enterprise restaurants, the growth trajectory of digital engagement loyalty programs significantly outpaced traditional sales channels. Despite broader industry headwinds and consumer spending, brands remain committed to enhancing their digital strategies with PAR’s Punch ordering and wallet platforms being key focus points of investment. In today’s competitive market, where customer acquisition costs continue to rise, loyalty programs have shifted from optional extras to essential tools. They’re critical not only for driving repeat business, but also for building lasting emotional connection with guests. Our platforms, powered by a better together approach, uniquely position restaurants to capitalize on these opportunities and drive superior outcomes.

As a result, we have begun winning multi product deals at an impressive rate. In Q2, we signed 10 new engagement mid market and enterprise customer deals. 70% of these deals included multiple products, including punch, ordering and payments. Let me reiterate that point. 70% of our deals from Punch now include a second product.

When last year Q2, zero deals did this. This is an enormous change at par. Critical to this multi product evolution is the expansion of par ordering. We closed six new ordering deals this quarter, demonstrating momentum and growing demand for our comprehensive offerings. What’s particularly noteworthy is that 100% of new Q2 ordering deals were cross sells into our existing base.

What largely drove that trajectory change in the cross sell within the engagement cloud was our launch of a new suite of products, our engagement, which unifies four essential pillars, marketing, ordering, loyalty, and data into one integrated solution. Even more exciting than our recent wins is our product momentum. The industry is ready to move beyond online ordering one point zero and is actively seeking innovation. Our development team velocity underscores this. Story point commitments have doubled compared to last year, meaning we’re now launching twice the product volume.

The perfect example of this are the embedded AI driven tools proven to boost check size via intelligent upsell and drive higher one to one personalization through smart segment builder. We feel that our ordering product is now best in class versus the legacy peers focused on driving cash flow returns versus product outcomes. Similar to Opera Cloud, Engagement Cloud ended the quarter with a pipeline of over $50,000,000 providing strong visibility for future growth. Now turning to Par Retail. Par Retail delivered another strong quarter and is quickly becoming the second pillar of our multi vertical strategy.

Our flywheel and convenience and fuel is starting to accelerate. In Q2, we secured four high value enterprise wins. Historically, in the C store industry, deals are chunky. In an average year, we would close two to four total. Our speed this year highlights the growing trend amongst operators, a move towards consolidation with a single trusted technology partner.

And we’re building momentum and are actively engaged with eight more enterprise opportunities with the potential to close in the back half of this year. Additionally, this quarter we completed the integration of our new self checkout product Skip. This is adding an extremely healthy ARPU white space and tight synergy to drive better outcomes for our customers. Our largest customers are already in talks to expand their relationship with self checkout. In comparison to restaurant, we see that while C store deals move slower, they are highly strategic long term multi product relationships that drive massive future potential to higher ARPU and expand within the PAR ecosystem.

Just as important as new customer wins in C stores is the expansion among existing customers. A standout example is EG Group, one of the largest global forecourt operators. Since launching on par retail, EG has scaled significantly, currently performing at nearly three times its original program metrics. More importantly, they are now actively evaluating additional par products, including self checkout to drive further operational efficiencies and open new revenue streams. This kind of expansion combined with the momentum we have winning new logos demonstrates the beginning of our long term flywheel in the convenience and fuel industry.

We are clearly viewing the potential of this industry to becoming a meaningful driver of PAR’s growth overall. Moving to hardware. We had a stronger than planned quarter in hardware revenues with an increase of 33.5%. Clearly, there are a number of our hardware customers who accelerate their purchase ahead of tariffs being assigned. The continued uncertainty around tariffs will increase volatility into global trade policies and supply chains.

We will constantly evaluate the current environment and will take the necessary steps to mitigate the impact on our business to the best of our ability. In summary, Q2 was a validation of PAR’s platform strategy and market position. Q2 saw 27 new logos signed with PAR, of whom 19 were multi product. Across foodservice, we’re seeing a definitive shift in buying behavior towards unified enterprise grade solutions, an environment in which PAR is uniquely well positioned as an industry leader. While our quarter to quarter movements are never linear, our twenty twenty five pipeline of new deals stands near 100,000,000 which gives us great confidence around long term durable growth.

What’s more, we feel even more excited that when looking at pipeline, we exclude our largest deals from these accounts in order not to be over reliant on a deal or two, giving us even more confidence on our long term potential. Brian will now read the numbers in more detail and I’ll come back at the end. Brian?

Brian Menard, Chief Financial Officer, PAR Technology: Thank you, Savneet, and good morning, everyone. In Q2, we continue to execute to our plan of driving organic growth across our products and the verticals we serve while also driving incremental bottom line improvement. Subscription services continue to fuel our organic growth and represented 64% of total Q2 revenue. The growth from higher margin revenue streams resulted in the consolidated non GAAP gross margin of $59,300,000 an increase of 20,800,000 or 54% compared to Q2 prior year. We managed the growth while continuing to drive efficient operating expenses.

As a result, we reported $9,900,000 improvement in adjusted EBITDA compared to Q2 prior year. Now to the financial details. Total revenues were $112,000,000 for Q2 twenty twenty five, an increase of 44% compared to the same period in 2024, driven by subscription service revenue growth of 60%, inclusive of 21% organic growth. Net loss from continuing operations for the second quarter of twenty twenty five was $21,000,000 or $0.52 loss per share compared to a net loss from continuing operations of 24,000,000 or $0.69 loss per share reported for the same period in 2024. Non GAAP net income for the 2025 was approximately $1,000,000 or $03 income per share, a significant improvement compared to a non GAAP net loss of $8,000,000 or $0.23 loss per share for the prior year.

Adjusted EBITDA for the 2025 was $5,500,000 an improvement of $9,900,000 compared to the same period in 2024. Sequentially, adjusted EBITDA improved by $1,000,000 in the 2025. Q2 adjusted EBITDA of $5,500,000 included $450,000 of accounting charges for non period deferred contract costs. Removing these non period charges, adjusted EBITDA would have been $6,000,000 Now for more details on revenue. Subscription service revenue was reported at $72,000,000 an increase of $27,000,000 or 60% from the $45,000,000 reported in the prior year and now represents 64% of total par revenue.

Organic subscription service revenue grew 21% compared to prior year when excluding revenue from our trailing 12 acquisitions. ARR exiting the quarter was $287,000,000 an increase of 49% from last year’s Q2 with Engagement Cloud up 55% and Operator Cloud up 42%. Total organic ARR was up 16% year over year. Hardware revenue in the quarter was $27,000,000 an increase of $7,000,000 or 34% from the $20,000,000 reported in the prior year. The increase was primarily driven by continued penetration of hardware attachment into our expanding software customer base.

Professional service revenue was reported at 13,600,000 relatively unchanged from the $13,200,000 reported in the prior year. Now turning to margins. Gross margin was $51,000,000 an increase of $19,000,000 or 59% from the $32,000,000 reported in the prior year. The increase was driven by subscription services with gross margin dollars of 40,000,000 an increase of $16,000,000 or 67% from the $24,000,000 reported in the prior year. GAAP subscription service margin for the quarter was 55.3% compared to 53.1% reported in Q2 of the prior year.

Excluding the amortization of intangible assets, stock based compensation and severance, total non GAAP subscription services margin for Q2 twenty twenty five was 66.4% consistent with the 66.4% for Q2 twenty twenty four. Sequentially, the margin decrease from Q1’s margin of 69% was primarily driven to favorable Q1 adjustments and Q2 product mix. We expect adjusted subscription service margin baseline to be between 6667% for the 2025. Hardware margin for the quarter was 27.3% versus 22.8% in the prior year. The improvement in margin year over year was substantially driven by favorable product mix, as well as year over year reduction in expense as we aligned our hardware related workforce with organizational priorities.

We continue to monitor the uncertainties in light of continuing changes to global tariff policies, which may have adverse effects on our hardware revenue and hardware gross margin. We are continuing to evaluate and implement mitigating actions, including potential supply chain resiliency movements and cost or pricing measures, if needed as the tariff environment evolves. Professional service margin for the quarter was 28.7% compared to 27.5% reported in the prior year. Increase primarily consists of margin improvement from field operations and repair services, substantially driven by improved cost management and reduction in third party spending. In regard to operating expenses, GAAP sales and marketing was $12,000,000 an increase of $2,000,000 from the $10,000,000 reported in the prior year.

The increase was primarily driven by inorganic increases related to our acquisitions, while organic sales and marketing expenses increased $600,000 year over year. GAAP G and A was $32,000,000 an increase of $6,000,000 from the $25,000,000 reported in the prior year. The increase was once again primarily driven by inorganic increases, while organic G and A expenses increased by $1,500,000 year over year, primarily due to certain non cash or non recurring expenses, of which $1,100,000 are non GAAP adjustments. GAAP R and D was $21,000,000 an increase of $5,000,000 from the $16,000,000 recorded in the prior year. The increase was primarily driven by inorganic expenses, while organic R and D expenses increased $2,100,000 year over year.

Operating expenses excluding non GAAP adjustments was $54,000,000 an increase of $11,000,000 or 26% versus Q2 twenty twenty four. But when excluding inorganic growth, operating expenses only increased $2,400,000 or 6%. The organic increases was primarily driven by a continued investment in R and D expense. Exiting Q2, non GAAP OpEx as a percent of total revenue was 47.9%, a six eighty basis point improvement from 54.7% in Q2 of the prior year, as we continue to scale efficiently and demonstrate strong operating leverage. Now to provide information on the company’s cash flow and balance sheet position.

As of 06/30/2025, we had cash and cash equivalents of $85,000,000 and short term investments of $600,000 For the six months ended June 30, cash used in operating activities from continuing operations was $24,000,000 versus $33,000,000 for the prior year. Q2 cash used in operating activities of $6,600,000 improved noticeably from Q1. We expect operating cash flow to continue to improve back to positive for the remainder of the year as we continue to drive incremental profitability and we reduce our net working capital needs. Cash used in investing activities was $8,000,000 for the six months ended June 30 versus $73,000,000 for the prior year. Investing activities included $4,000,000 of net cash consideration in connection with the tuck in asset acquisition of GoSkip and capital expenditures of $2,000,000 for developed technology costs associated with our software platforms.

Cash provided by financing activities was $11,000,000 for the six months ended June 30 versus $192,000,000 for the prior year. Financing activities primarily consisted of the net proceeds from the 2,030 notes of 111,000,000 of which $94,000,000 was utilized to repay the credit facility in full. As noted in our performance and remarks, we are pleased with the team’s ability to continue to drive meaningful organic growth and incremental profitability, while also making the appropriate investments for sustained growth as we move forward with the next phase of our transformation. Our focus on delivering best of breed products that truly provide exponential value when bundled together has allowed us to continue to build a healthy pipeline with both multi product opportunities as well as accelerated cross sell penetration. I will now turn the call back over to Savneet for closing remarks prior to moving to Q and A.

As we wrap up this morning, I want to talk about PAR’s trajectory for the balance of the year. Our most significant growth potential continues to

Savneet Singh, CEO and President, PAR Technology: be in POS. It remains critical to restaurant operations, is one of our highest ARPU products, has incredibly sticky retention and is our best pathway for cross selling. Despite this opportunity, the POS business has progressed slower than we initially forecasted for 2025. This delay impacts short term revenue opportunities in POS and payments. Our roommates remain very high, but deal rollouts have been slower and deal signings of larger deals delayed, not lost.

Critically, while macroeconomic pressures can impact the timing of adoption, they do not change the eventual need for the tech upgrades, given major recent changes in restaurant software. Legacy systems do not have the capacity to run AI driven tools, and in the battle for efficiency, the tech forward concepts will always win the day. Said differently, the revenue will come just a little slower than expected. And as I mentioned, our signed but not yet fully rolled out POS deals are worth over $20,000,000 on their own today. These deals are already won, not in pipeline.

We remain highly confident in our long term growth prospects. With the strongest sales pipeline we’ve seen in the past five years and the combination of par POS and task ensuring we have the largest POS TAM than we’ve ever had. Currently, we have active advanced stage discussions with three top 20 restaurant brands, two of whom are global top 10 brands. Securing any one of these would significantly accelerate our growth trajectory alongside the $50,000,000 operator cloud pipeline I mentioned earlier. Even aside from these major POS opportunities, maintains a steady and reliable growth rate exceeding 15%.

In short, just one or two Tier one POS deals will provide accelerated growth off that base for years to come, alongside the many multi product rollouts we have planned for later this year and 2026. So while we continue to target 20% growth in organic ARR as our North Star in everything we do, we expect this year to end in the mid teens driven by the slower POS and payment rollouts we’ve seen in the first half of this year. While the second half looks very strong and Burger King is rolling out as planned following the June ramp up, the slower first half will make this target harder to achieve. There is certainly plenty of opportunity for us to call back to our goal for the year, but we want to be prudent in setting expectations. I wanted to close the call on a personal note.

I’ve now been the CEO of PAR for over six and a half years. I take tremendous pride in what we’ve accomplished, but also believe we are only as good as the future value we can create today. I know many of you have built a financial position in PAR, but have also taken a personal bet on me and our leadership team. We are reminded of this every day and are driven to deliver by the belief you have in us. We do not take this lightly.

Part is a representation of myself and the team I represent, and I take the responsibility as a pillar of not only my career, but my life. Our culture is one of relentless accountability, urgency, ownership. We treat your capital like it’s our own. We know that every dollar we spend is yours, not ours, and never forget that. Above all, we believe there is one metric and one metric alone that matters, shareholder return over the long run, and we never lose sight of that responsibility.

We’re a company built on the idea that nothing is given and everything is earned. We do not make decisions driven by quarterly results and always consider long term value. Whether that’s price increases, accelerating go lives when you’re leaving a multi product angle on the table, or instituting taxes on third party systems, there are ultimately always levers we choose not to pursue or pull because we do not believe in the trade off. The long term must always win. We want to continue to partner with investors that believe in our long term story and strategy.

This is one of great and seeing around corners, one of converting a legacy hardware business burning cash into a profitable enterprise software platform with a deep moat and flywheel. We did this by biding our time for the right opportunities and striking when the window was right in the M and A market and building products with long term payoff perspective. There’s a reason PAR is not focused on consolidating legacy companies focused on profit versus growth. It does not sync with our formula of best in class and better together. So let me be clear, our foundation is strong and our future path is certain.

Whether by contracted future rollouts or late stage Tier one pipeline, the future is bright. A game isn’t decided by where it stands at halftime and we have a proven team of intense competitors at par that are geared up to maximize long term value for shareholders. We treat this opportunity as it’s the one that will define our legacy. That mindset has driven us for the last six and a half years and it power us forward. Thank you for taking that on par.

We intend to continually prove you right. Operator, please open the line for questions.

Conference Operator: Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone. You will then hear an automated message advising your hand is raised. We ask that you please limit yourself to two questions. Also, please wait for your name and company to be announced before proceeding with that question.

One moment, please, while we can file the Q and A roster. The first question of today is going to come from Mayank Tandon of Needham. Your line is open.

Mayank Tandon, Analyst, Needham: Thank you. Good morning, Submit, Brian, and Chris. I wanted to start, Sabneet, with, some of the comments you made towards the end of the call regarding the growth ramp. So just to be clear, given the BK rollout timing, it’s nice to hear that it’s back on track and some of the deals that are now go live. Should we still expect subscription growth to reaccelerate from the first half?

So any directional guidance you can provide on that would be helpful. And, also, any comments around what we should think about on the services and the hardware side, just so we have our models in a good spot.

Brian Menard, Chief Financial Officer, PAR Technology: Mike, is Brian. Thanks for the question. I’ll take that first and then Savneet can finish it up. But in regards to the acceleration, yes, like when we talk about year over year growth and what Savneet was talking about the end of the script there is because of Q1 and Q2 slowing down because of the rollouts. We have that ripple effect as you go through Q3 and Q4 because it’s still in your metric.

Year over year growth is actually a lagging indicator. Incrementally, right, if you go from quarter to quarter, we’re expecting now we’re seeing accelerated growth incrementally from Q3 into Q4. Hopefully that answers your question there. I’ll let Sven answer your questions on the services and hardware.

Savneet Singh, CEO and President, PAR Technology: Yes, so the back half looks very strong. It’s more about we’re starting from a lower error base than we expected, so getting to the 20% will be a little bit harder, but there are a lot of levers to do that. I just want to be prudent in setting expectations. And as you heard, we’ve got a ton of contracted revenue that just needs to get rolled out and so it’s more about when that hits and the timing of that. On the hardware side, we had a spike in Q2, we think we assume driven by the uncertainty around tariffs and some people pulling ahead.

And so I expect hardware to come down in Q3 to some more traditional levels, same in Q4. If there’s more aggressive tariff talk, you’ll see it spike again because I think our customers clearly want to get ahead of that. But right now, I think we’re at a point where there seems to be some stability in the buying cycle there. And on the services side, I think it’ll be consistent. You’ll see some pickup just because we do have, as Brian mentioned, incremental revenue growth is dollar revenue growth in the second half of year is much larger than the first half of the year, so more installs, more PS type work on that side.

Mayank Tandon, Analyst, Needham: Got it. That’s helpful. And then as my follow-up, Savneet, again, great to hear about the multi product wins, the record number there. Could you maybe give us any thoughts around what are the scope and size of these deals relative to those single product deals? In other words, what is the ARPU uplift that you can typically capture from these type of wins?

Savneet Singh, CEO and President, PAR Technology: It’s a great question. So when they come from the Operator Cloud, and I’ll give you the average at the end, but the company Operator Cloud, you’re usually taking a POS deal that’s anywhere from $2,400 to $3,000 a year and you’re adding another $1,600 of back office, and if it’s payments, you’re adding another 2,000 to $3,000 as well. So it is, call it, a 60% doubling of the revenue base depending on which product has been attached. So it’s very, very impactful. We had an example of a small chain we signed in Q1, it’s about 100 stores.

Normally 100 stores picking us for POS will be call it ARPU per store of around $2,500 This client will be a $700 or $800,000 a year customer, so paying us 700 or $8,000 because they took the full product suite. And so it has a meaningful impact. That hasn’t flown through our P and L yet. This has been a very new trend for us. On the engagement cloud, it’s a little bit smaller.

The average loyalty customer is, call it, anywhere from 80 to $100 a month, sometimes a little bit bigger than that and growing, obviously. And when they add ordering, it’s around the same depending on which modules they pick. So it’s a doubling on that side. So it is a really, really meaningful impact to the P and L and again something we’re looking forward to, you know, having flow into the P and L at the end of this year and next year.

Mayank Tandon, Analyst, Needham: That’s great. Thank you so much.

Conference Operator: Thank you. One moment for the next question. And the next question will come from the line of Steven Sheldon of William Blair. Your line is open.

Steven Sheldon, Analyst, William Blair: Hey. Thanks. So, Stephanie, you mentioned two mega tier one deals that you’re currently pursuing in the operator cloud. I know there are probably limitations on what you can say, but any more context on those, you know, when decisions are potentially going to get made and what par solutions those brands might be considering, is POS on the table for those considerations?

Savneet Singh, CEO and President, PAR Technology: Yeah, they are POS deals. Like I said, three top 20 brands, two top 10 brands, all POS related and at least one of them we hope to be multi product, maybe two, but so it’s all POS driven. Timing on two of them we expect in 2025. One of them will be I’m expecting ’26, the customer will say ’25. So, are big, but the bigger point I think we’re making here is that by adding Task to the PART platform, we’re now able to do these global deals that really are impacting our pipeline.

And so we’ve offensively stopped most Task rollouts for this year, again, muting our growth a bit for reinvesting aggressively in the TASK platform to not only have these deals, but have more of these global brands that historically we’ve not been able to participate in. So short answer is twenty twenty five for two, twenty twenty six for one is our guess, and all POS. And I just want to

Brian Menard, Chief Financial Officer, PAR Technology: add one thing, Stephen, to that, just want to make sure from the remarks that we had in the script too, amounts that we’re talking about pipeline in there excluded these because we didn’t want to kind of distort what we’re talking about here. So we have a healthy pipeline across our products, across the verticals we’re serving. And these are other additional actual jobs that are actually our focus for the long term strategic growth.

Steven Sheldon, Analyst, William Blair: Got it. Yeah. That’s helpful. And then, just looking at the active sites between operator and engagement, it seemed like both were maybe down just a touch sequentially. I mean, context on that?

What drove that?

Savneet Singh, CEO and President, PAR Technology: Yeah, absolutely. So, on the engagement side, you’ll see a nice pickup in Q3. We’re signing deals and so we started collecting revenue, but they haven’t gone live yet, so it’s just a timing issue on the engagement side. I said, engagement side had really, really strong ARR growth. And so you’ll see the results flow into the next Q.

So I’m super excited there. We had some smaller churn there that candidly was needed churn. Nothing historical rates, nothing different than historical rates and obviously stuff that we think was good churn for us. On the operator cloud side, it’s just the second half of the year, the sites get really rolling.

Brian Menard, Chief Financial Officer, PAR Technology: And the first half was really due to the rollouts being delayed that caused that issue in regards to what we saw for growth rates year over year.

Savneet Singh, CEO and President, PAR Technology: Okay, thank you.

Conference Operator: Thank you. One moment for the next question. And the next question is coming from the line of Andrew Varte of BTIG. Your line is open.

Andrew Varte, Analyst, BTIG: Hi. Thanks for the question. Savneet, really appreciate the comments on Better Together. It sounds like the multiproduct sales cycle really starts with POS. But I guess, can you talk about what are the most common add ons?

I think something you talked about in your prepared remarks is par ops having really great momentum. Do you see that as cross sell or an upsell or net new? Just help us understand the sales cycle starting with POS and then what you go with from there.

Savneet Singh, CEO and President, PAR Technology: That’s a great question. Generally, in the operator cloud side, you’re attaching payments in back office. Obviously, lot of my commentary on the excitement of ParOps is because we sort of figured that bundle out really well and it’s always product related. Once we deliver product functionality, we’re able to sort of build that pipeline up. So it’s usually you’re attaching one of those two there.

On the engagement side, it’s really par ordering. It’s attaching our online ordering product, which is now really best in class and going to start taking real share. So on that side, it’s par ordering. What I think is going be more exciting in the coming years will be adding product three, four, five, and six. That’s what’s next and we’re gearing up for that.

Andrew Varte, Analyst, BTIG: Thanks. And then I would love to hear your thoughts on the online ordering space, especially with the Olo deal announced a couple months ago. It it feels like PAR has a great opportunity to effectively compete in online ordering with menu as an upsell as you just kinda talked about. So would love to hear your thoughts on the online ordering space and then maybe just your continued appetite to probably do M and A. It sounds like there was another tuck in this quarter as well.

Thanks.

Savneet Singh, CEO and President, PAR Technology: So yeah, absolutely. I mean, par ordering has been an incredible bright spot for the year. Our ability to our velocity of product is incredible there. We’re shipping almost every few weeks. The confidence we have in being best in class there is just super high.

What’s been fun is that we’ve done this in Stealth of Night with a small team and now the results and the wins are there. And so we won six logos this quarter. I think we’re going have some great wins in Q3 and in Q4. And for the first time, we feel we’re ready to go and start poaching the big guys. So PAR is in a really strong you can see just from the numbers of wins where the deals are winning.

And what gives us a huge advantage here is that the integration of PAR ordering within loyalty in particular, but also within POS and other parts of PAR, it gives us an advantage that we don’t believe anybody can compete with. And so that scale where we have the largest loyalty business in the industry and attaching ordering to that, it is a better product. And so we expect a lot more to happen here. Now we’re early, but we feel pretty good about it. The other thing I’d sort of add there is I mentioned in the script, but the growth in par ordering is also pulling in future payments revenue.

And so that will be another lever that we think we’ll get to later this year, and that’s a very, very juicy revenue stream. So yeah, I think we feel really good. The fact that we’re releasing every quarter now the number of wins, we expect to have a bunch of new press releases coming out with wins in the second half of the year, And these are logos you’ll recognize.

Brian Menard, Chief Financial Officer, PAR Technology: And then Andrew, just I think in your references, make sure I clear up for you on the tuck in acquisition, it was go skip the reference to cash flow section, which was a tuck in at the end of Q1. And that is in our retail vertical.

Savneet Singh, CEO and President, PAR Technology: Thanks, guys. I appreciate the color.

Eric Montesini, Analyst, Lake Street: Thank

Conference Operator: you. One moment for the next question. And then our next question will be coming from the line of Will Nance of Goldman Sachs. Your line is open.

Steven Sheldon, Analyst, William Blair: Hey, guys. Good morning. Thank you for taking the questions. I wanted to come back

Savneet Singh, CEO and President, PAR Technology: to the ARR growth. Heard you on where you’re expecting to end the year as of some of the

Steven Sheldon, Analyst, William Blair: push outs, but it sounds like on an incremental basis, are expecting some acceleration. And so I

Savneet Singh, CEO and President, PAR Technology: was just wondering if you

Steven Sheldon, Analyst, William Blair: could kind of go through the puts and takes, Burger King restarting, something’s getting pushed out. What does it sort

Savneet Singh, CEO and President, PAR Technology: of take or what’s the line of sight? Or do you have a sense for when

Steven Sheldon, Analyst, William Blair: we could see ARR growth kind of back in that 20% range? Do we need to lap the first half of twenty twenty five when things were going a little bit slower to kind of see the full acceleration or could we see it sooner?

Savneet Singh, CEO and President, PAR Technology: The earliest you’d see it is Q4, but I think it’ll be a little bit after that. That’s why I made the comments, although there’s a lot of good stuff happening. As you can see, the quarter to quarter is a little hard for us to forecast. The puts and takes are pretty simple. Burger King is going great, but from the baseline of ARR we’re at now, going to add a bunch of ARR, probably what we hope to add because it’s starting at a lower base, the comparison will look lower.

And so this is more about rollouts we had planned that over $20,000,000 of contract revenue going a little bit slower than we expected, and I think very much tied to the macroeconomic uncertainty where we saw people say, Hey, let’s push out the rollout a month or two. So still contracted, still guaranteed to pay par with a contract, but we need those deals to continue to accelerate. And so I think that’s been the main headwind, if you will. The other one is our decision, which is purposeful to not take TASC revenue live and focus on these global Tier one deals. That was a nice chunk of revenue that we could have taken on, as I mentioned at the end of the script, like we could have done on a very short term basis, but we decided to make the right we think the right thing so we can hopefully win one of these global Tier one deals and make that ROI there.

And the last one I mentioned is that the multi product deals that we do, they do slow down the single product sale. And we’ve continued to make the decision, which is the multi product is so powerful, the economics are so much better for our shareholders that we’ll always do that. And so we’ll get faster and faster at that, but they do slow down stuff a little bit. Now, to the part of what could get us there, the rollout accelerations absolutely can come through and we’ve seen those turn on a dime in the past, but we want to be careful, but those can absolutely come through. Number two is Delegate and the par ops having a strong end of the year because Delegate becomes organic by the end of the year.

And I think the third thing is the winning of any one of these larger deals that are in the pipeline, we would hope to start billing in 2025. And so there are a number of levers that can get us there, but we want to be careful in not getting ahead of ourselves. So we’re still shooting for it, but I wanted to be transparent of sort of like, hey, the first half because of the POS side became a little bit slower and so we want to be careful.

Brian Menard, Chief Financial Officer, PAR Technology: And what I’ll just add to that, Savneet’s right and everything we just talked about there in regards from a business perspective. And I think Will, what you’re referencing is also the pure math of it. You’re right, when lapping in Q1 and Q2 of next year and over what happened in the first half of this year, the math goes in your favor at that point in time as well on top of what Stephanie just laid out for you.

Steven Sheldon, Analyst, William Blair: Got it. That’s very clear. And if I could just follow-up on the task side, at the risk of asking a potentially dumb question, like, why can’t you do both on this? So, it seems like you’re delaying kind of implementations of clients already signed to focus on, like, go to market and people that are not signed. So, what’s sort of the connection there and why is it you can’t implement some of the book while you’re going after some of these newer opportunities?

Savneet Singh, CEO and President, PAR Technology: It’s primarily dev capacity. When you’re implementing a new deal, you’re configuring a ton of work upfront. And so when you’re winning a Tier one deal, you’re doing a bunch of work in advance to win that deal. You’re setting up the menus, the labs, the back end. And so it’s a small team, and we’ve made a decision to have those really tough conversations with customers and make those investments in the product.

And so it’s just about scaling up the team so that we can do both. To be honest, we didn’t expect this to happen so fast. That’s really the thing here. It’s a wonderful problem, guess, which is we didn’t think this has come so quickly on these global deals and as a result we didn’t have the team ready to do that. So we’re adding more expense to grow that team and then we just need to get the existing team get hopefully crack on the Tier one deals.

And then we’ll go back and take that revenue live because I do think we’ll still win that, we’ll still be able to roll out those deals, but we can’t do both right now with the size of the team we have.

Adam Wunden, Analyst, AVW Capital: Okay, now that’s clear.

Savneet Singh, CEO and President, PAR Technology: I appreciate it. At the risk

Steven Sheldon, Analyst, William Blair: of I’ll take the liberty of maybe asking a quick one here. Are these in house out of house conversions or these competitive situations? I mean, I’m sure they’re competitive RFPs, but are they using existing vendor or these and a lot of

Savneet Singh, CEO and President, PAR Technology: the industry got in house technology? Everyone is on some legacy product primarily. Are, you know, there is certainly, you know, in our tier one pipeline there’s certainly, you know, in house technology being used, but I want be careful what I say there. Okay, understood. Thanks for taking the questions.

Conference Operator: Thank you. One moment for the next question. And the next question will be coming from the line of Samad Samana of Jefferies. Your line is open.

Steven Sheldon, Analyst, William Blair: Hi, good morning. Thanks for taking my questions. Maybe first, just stepping back, Sami, like as we you mentioned macro a couple of times and you mentioned payments was maybe a little bit lower. Was that more related to what you’ve seen out of maybe some of the QSRs talking about like cross currents and is that what impacted payments or is there something else that we need to know about there? And then I have a follow-up question as well.

Savneet Singh, CEO and President, PAR Technology: It’s two things really. So one is POS going slower impacts payments because they’re usually bundled together. So that’s the big driver there. And the second is the point you mentioned, which is there’s definitely a slowdown in sort of QSR. And so that’s the second part.

But the first part is the more important one for the first half so far. Understood. And then if you

Steven Sheldon, Analyst, William Blair: think about the record $100,000,000 pipeline, obviously, it’s very impressive. You guys are also bigger than ever. You have more product than ever. So is there a way to both weight that maybe relative to what you would have offered historically? Obviously, 100,000,000, again, is a big number.

And then maybe related to that, of that 100,000,000 what what would you look at that maybe like the twelve month horizon looking like in terms of converting that from pipeline to bookings or revenue?

Savneet Singh, CEO and President, PAR Technology: Yeah, so let’s say in a few ways. Well first thing which is the pipeline doesn’t include what’s already contracts roll out. So as I mentioned, on the POS side alone there’s $20,000,000 that needs to be rolled out that’s contracted already. I don’t have it off hand, but there’ll be big numbers for loyalty, retail, so on and so forth. So you’ve got a lot of coverage just from what’s already contracted out.

Generally when we look at pipeline, you’re looking at what you can sign within the next twelve months and you’re weighting it down over there. So it is a conservative UR pipeline already because we want to make sure that they’re there. So from a pipeline coverage perspective, it’s not only the pipeline larger than it’s ever been, from a pipeline coverage perspective, I. E. Coverage to hit your growth rates, it’s also higher than we’ve had historically in the past.

The last thing, Brian mentioned this, we’ve removed these sort of mega tier one deals just because they make the pipeline look almost too big. And so you’ve got that also as a nice tailwind.

Steven Sheldon, Analyst, William Blair: Great. Appreciate the time as always. Thank you.

Conference Operator: Thank you. And our next one moment for the next question. Our next question will come from the line of Charles Natham of Stephens. Your line is open.

Charles Natham, Analyst, Stephens: Good morning, and thank you for taking my question. I wanted to double click on your comments around the gross margin. I know some of the sequential down the sequential decrease is due to some nonrecurring benefits in the first quarter. But as we think about that range of 66% to 67% in the back half of the year and beyond, could you maybe talk about the puts and the takes, whether we could expect fourth quarter to be maybe a little higher, how we should think about 26 as well as the impact of payments and menu, which is have historically been diluted to subscription gross margin?

Brian Menard, Chief Financial Officer, PAR Technology: Sure. I’ll take this one. This is Brian. Thanks for the question. You’re correct, Part of the 69 and then sequential down, we referenced this I think in the Q1 call, about at least 1% of that, 100 basis points was due to some favorability one timers in Q1, so I talked about 68.

And then the remainder of the majority is actually product mix of where the actual growth came from both ARR and subscription services revenue in Q2. That mix is not going to change noticeably in Q3 and Q4. That’s why the range that was given for Q2 and Q4. But our longer term goal of getting it back up closer to 70% is still out there, right? It’s just that that baseline where we’re at right now with the mix, it’s going be tough to get there.

So it’s why we want to manage your expectation there for both Q3 and Q4.

Charles Natham, Analyst, Stephens: Got it. Okay. And as a follow-up, I wanted to get your perspective on AI. First, as a disruptive force to the industry, and then secondly, as an opportunity, not just externally, as a means of as an opportunity to enhance your product set and value proposition to customers, but also as a as a as a means of improving your internal efficiency. So any perspective on that, I

Steven Sheldon, Analyst, William Blair: think, would be helpful.

Savneet Singh, CEO and President, PAR Technology: Yeah. Absolutely. And I think if you’d asked anybody, any employee at PAR, PAR is all in on AI. I think lots of people say that. I think we have focused on being executional oriented there.

So instead of sort of prophesizing about how amazing AI is going to be, we really break it down into projects what we can deliver. Every department leader at par has to deliver a plan on AI and what does an AI first version of their organization look like and then working backwards, how do we get there from where we are today. So we’re seeing meaningful success right now in two areas, which would be on the development side, our development efficiency, our ability to not increase development headcount while still shipping more product than ever before is crystal clear. Whether you measure it in story points, whether you measure it as commits, you’re seeing tremendous, tremendous acceleration of velocity over there, and we are still not even halfway through what we want to get done on that side. The other part of the world we’re seeing that is on support, where not only are we using tooling to make our teams better, to understand types of calls, call volumes, we’re also building out our agents so that we can start answering in a more automated fashion and we’re there.

What’s amazing about that though, it’s also become an amazing tool for our internal team, so our sales teams no longer need to figure out a complex configuration or track down a hardware piece, it’s all done through an internal AI PAR agent. So those are two big areas we see meaningful ability to control costs, can cut costs. We’ll see it going forward, and I think the more important part of AI for us will be delivery to our customers. At par, AI is built in, it’s not bolted on. We’re building it natively within our products because we control the workflow.

And I think having the workflow is going to matter because we’ve got proprietary data, you’re already in our products, and so our ability to connect your restaurant and your systems through AI is far better than somebody coming in from the outside. And so I think we have an incredible advantage that we are looking to take advantage of. I mentioned on the call one of our first products coming out later this quarter it’s called CoachAI, and it’s a great example of using AI to pull data across the POS, the back office, the drive through to give actionable insights to the operators to, Hey, do this, cut this, what about this? It’s becoming the agent for the store. These are really, really big changes to the operator, and so that’s where we’re most excited.

And we started on the internal because we believe that we have to be AI in the internal in order to be external to our customers.

Charles Natham, Analyst, Stephens: Got it. Appreciate the color, guys. Thank you.

Conference Operator: Thank you. One moment for the next question. And the next question will come from the line of Eric Montesini of Lake Street. Your line is open.

Eric Montesini, Analyst, Lake Street: Yep, just from a macro perspective, been seeing some headlines about lower foot traffic at QSR. Just curious to know if you’ve seen any lift in the engagement cloud pipeline that you could say was kind of tied to that where people are saying, okay, I’ve got to pull whatever levers are available to me?

Savneet Singh, CEO and President, PAR Technology: Yeah, absolutely. We’re seeing a lot of strength in the engagement side in pipeline, so we’ll see if that converts. What’s been exciting is the engagement side business has been growing without that, but we certainly see a lot more interest in loyalty. What’s critical about that is that the loyalty engagements we have today, it’s not about, Okay, let me go send a bunch of discounts to get you to come back in the store. It’s about building these personal connections.

And why I love that is that it actually ingrains the loyalty in the workflow of the customer, the customer being you and I as a customer of that restaurant versus us always selling tools to the internal. And why that’s powerful is that you can then connect in par ordering, par wallets, and do so much more. So the simple answer is absolutely, there’s a lot more demand for engagement in a world where there is absolutely a lot of volatility in short term volatility from the macroeconomics in the QSR and fast casual space. But I think the long term trend here is going to continue because the value of these loyalty programs in good and bad markets is undeniable.

Eric Montesini, Analyst, Lake Street: Got it. Thank you.

Conference Operator: Thank you. One moment. And our next question will be coming from the line of George Sutton of Craig Hallum. Your line is open.

Savneet Singh, CEO and President, PAR Technology0: Thank you. Savneet, you had mentioned that, the point of sale process was slow or sales process was slow. I’m curious how much is that driven by your actual focus on trying to sign multiproduct deals? Obviously, it’s kind of a long term gain for some short term pain. I’m just curious how significant is that?

Savneet Singh, CEO and President, PAR Technology: So it’s not significant, but it’s 10% or 15%, there’s some impact for sure because you’re trying to bundle the second product. But I just want to be clear, it’s not the sales side, it’s the getting the deals rolled out because when we roll out a deal, there’s a CapEx for the restaurateur, usually the hardware and services, and so that’s what’s been slower than we expected. And then some of the sales that have been slower, again, all these deals will come in the door. I think this stuff might be tied to the multi product that you mentioned or just, hey, macroeconomic uncertainty. But what I think is most important to get is it’s not that the pipeline is just strong, it’s actually the signed deals are there, they just got to get out the door.

Brian Menard, Chief Financial Officer, PAR Technology: And we have seen the acceleration of rollouts happen at the very end of Q2 in the last month.

Savneet Singh, CEO and President, PAR Technology0: Understand. Thanks for the clarity. And on your online ordering two point zero thesis relative to one point zero, Can you just talk about the metrics behind that? What what you are seeing in terms of any of the improved metrics for the customers?

Savneet Singh, CEO and President, PAR Technology: Yeah. Generally, think when when you bundle as we’ve been doing ordering with loyalty, you see an increase in few areas. You see an increase in conversion, which is wildly important as I’m sure you’re like me, there’s tons of abandoned carts all over the internet. You see an increase in basket size and then you see an increase in long term customer value. I can come back to you with specifics on that.

It’s probably too early just because we’ve had this real sales philosophy last, call it, six months, but that’s what’s been crazy, crazy exciting. And I’ll give you some examples that I think are just really neat. When you now use these online ordering products, upfront you can say, I have these three allergies and the menu gets updated just to update for Things like that, that we could add so much functionality that we just think it’s going be hard for anyone to compete with us when you combine that loyalty data within the ordering suite.

Savneet Singh, CEO and President, PAR Technology0: Awesome. Thank you.

Conference Operator: Thank you. And the next question will be coming from the line of Adam Wunden of AVW Capital. Please go ahead.

Adam Wunden, Analyst, AVW Capital: Hey. So you talked a little bit about Task. And two questions on Task. One is you talked about a Q1 twenty six rollout per Task and then you also talked about having to do, I guess, stuff for people in the pipeline. Is that affecting your gross margin?

I mean, if there’s not additional G and A or resources, I mean, are you spending additional money that’s running through the P and L today in with the idea that you’re going to get this business?

Savneet Singh, CEO and President, PAR Technology: Correct. So we’ve increased investment in TASK. It’s not a singular rollout for TASK. We had a multimillion dollar backlog of TASK customers to roll out in 2025. We’ve pushed most of that to 2026 so that we can build out for these potential global Tier one deals that we’re chasing.

And so the short answer is yes, but I just want clear, it’s not one deal, it’s the backlog of deals we’ve already signed that needs to get out the door.

Adam Wunden, Analyst, AVW Capital: Got it. So, you’re hosting and piloting and spending money basically allowing basically the stuff that’s already been signed on task and also the new stuff in the pipeline. You’re also spending money with the hope that these guys take it on and they start billing. So that’s obviously going to be affecting your gross margin on the task side now.

Savneet Singh, CEO and President, PAR Technology: Yeah. I was looking at more at configuration, building integrations, things like that. The hosting is absolutely, but it’s that other core R and D work that hits both the COGS line and the R and D line.

Adam Wunden, Analyst, AVW Capital: Okay. And then you said $100,000,000 not including the super Tier one. I mean, is there any way you can try and quantify what that could look like? Would it be a global deal? Would it be a singular market deal?

I mean, is there any way you can sort of bracket that? Because I think you said that you would expect to hear two of them in 2025 and one in 2026. Is there any sort of way you could attempt to quantify? I mean, obviously, that there’s a probability element to it. But if in fact you did win one or two of those, how do you think about what those could be?

Savneet Singh, CEO and President, PAR Technology: They’re very large. Mean, the reason I don’t put them in the pipeline is that they sway the pipeline numbers so significantly that I don’t want the sales team getting lazy thinking we got plenty of coverage. The two of them are global deals, so they are not a one country deal, they’re global deals, and one of them is call it North America. These deals would be you know, up there with our largest or many multiples of our largest customer now.

Adam Wunden, Analyst, AVW Capital: Right. So it’s not just a singular market. You would be getting like a geography. You’d get like in North America or you’d get, you know, the globe for two of these. These things could in be theory they could be very large.

And then, you know, my other question is, you know, obviously the company has been acquisitive. You know, you’re seeing other people like DoorDash buy seven rooms and and Toma Bravo buying Olo. I mean, you’ve been the acquirer of choice and you’ve done a phenomenal job doing it. But I think, now when I look at the stock where it is right now, I think you’re trading at, I don’t know, under five times ARR on 2026. I mean, I have to sort of think about what the ’26 ARR is.

But I mean, you’re trading at effectively a multiple that’s likely lower than anything you’re going to buy. I mean, do you think about sort of the delta between sort of what I would consider other vertical software companies like a Guidewire or ServiceTitan or an Axon, which has, you know, a hardware and software component, even something like Agilisys. I mean, how do you think about, you know, sort of doing M and A with your multiple here? And, I guess the question is, would you at this point consider being the inquiry? Because it feels like the market is not really appreciating sort of the value of this platform.

Savneet Singh, CEO and President, PAR Technology: On the last part, we are for sale every day, and there’s nothing that would prevent someone from coming into par at any time. If it creates value for shareholders that we believe beats the long term value shareholders, I think myself and my board will be super supportive of that. And we’ve always said that. As I said in the script, we are highly aligned to you as a shareholder and care only about driving returns. So if that drives a return, it’s always there.

Nothing will stop that. Does it make it a lot more attractive? Of course, if our multiples are, it certainly makes us probably more attractive, but I think what makes us more attractive is our business has never been in a better position from a competitive standpoint, from a market standpoint, and so I think that’s what should drive anyone’s decision. On your first point, we feel there’s plenty of M and A to be done. Comparing us to Guidewire and these other major companies, yeah it obviously pisses me off because I think we’ve got longer, more growth prospects in front of us.

But I think at the same time our M and A is relative to our category And so it’s very hard for anyone that we want to acquire to argue that they deserve a higher multiple than par. And so definitely, think we would set the tone of valuation based off where we are trading. And sure, there are random things out there that are out of our range, but that’s usually not the stuff that we want or we are chasing. We’re looking for blocking and tackling products that we can integrate quickly, build AI on top of. We’re not looking for the Silicon Valley startup that has $500,000 of revenue and wants half a billion dollars of price.

We’re looking for pure enterprise software. And so to me, valuation is a relative game to the category you’re looking to acquire. And in our category, we still feel very, really good.

Adam Wunden, Analyst, AVW Capital: Got it. So, but I mean, there’s I mean, I guess what I would say is like for the time being, you know, because I think a lot of people on this call, you know, I know you probably can’t comment about party A and all this stuff and proxies and this and that, but I think there was some expectation that you guys would look to do transformational M and A as you talked about in the past. And so I think is it fair to assume that given where your cost of capital is, you’re going be doing primarily tuck ins and not really big things? I mean, is that sort of fair? I mean, because obviously bigger things are, you know, have higher premiums and whatnot.

I mean, is it fair to assume that your focus will be on tuck

Savneet Singh, CEO and President, PAR Technology: in M and A?

Adam Wunden, Analyst, AVW Capital: I mean, these other things are trading at much higher multiples. I mean, bigger assets trade at bigger multiples generally.

Savneet Singh, CEO and President, PAR Technology: Yeah, I mean, listen, I think we are not bidding for Olo. As I mentioned, par ordering is doing great. While there’s probably incredible synergies between our companies, we feel great where we are and our ability to take share. M and A for us, as I’ve said to you many times, it’s not as programmatic as it sounds. It’s very opportunistic and it’s very product led.

Today, our pipeline is heavily focused on you call tuck in, I call them capabilities that will allow tremendous cross sell. But there are still plenty of large assets that if we can buy them accretively, we would go after. And again, bigger assets trade for bigger multiples. But in our category, they’re not things that are going to trade higher than us that are generally large because we set that tone on valuation because, hey, you went public as an example, you’re going to trade lower than we trade because generally we are the bigger platform and we’ve got well present better metrics. So again, is hard to be precise because we’re fishing in a pool that we kind of know everybody.

And so I don’t think the larger players in our space say, Oh, I expect to trade at a Palantir multiple. They expect to trade at multiples that our category trades at and that’s where we feel. So we still feel really good about the M and A pipeline and I don’t think that that’s going to change. But thank you for the call, Adam, and I’ll pass it back to the operator.

Conference Operator: Thank you. This does conclude today’s Q and A session. I would like to turn the call back over to Chris now for closing remarks.

Chris Burns, Senior Vice President of IR and Business Development, PAR Technology: Thanks, Lisa, and thanks to everyone for joining us today. We look forward to speaking and updating most of you in the coming days and weeks. Thank you and have a nice day.

Conference Operator: This concludes today’s conference call. You all may disconnect.

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