Parr Technology at Wolfe Research FinTech Forum: Strategic Growth Insights

On Wednesday, 12 March 2025, Parr Technology Corporation (NYSE: PAR) presented at the Wolfe Research FinTech Forum, offering a comprehensive overview of its strategic direction and financial performance. CEO Savneet Singh highlighted Parr’s robust growth trajectory and unique platform approach, while acknowledging competitive pressures and economic challenges.

Key Takeaways

• Parr Technology reported a 25-fold increase in software revenues over six years.
• The company maintains a strong gross retention rate of 95-96%.
• Strategic acquisitions, such as Task, are aiding international expansion.
• Economic pressures on restaurants are driving tech investment in QSR and fast-casual sectors.
• Parr aims to simplify restaurant operations and expand into convenience and fuel store sectors.

Financial Results

• Recurring revenue concluded last year at approximately $276 million.
• The company achieved its second consecutive quarter of positive adjusted EBITDA.
• Operating expenses grew by only 1.5% year-over-year, despite over 20% business growth.

Operational Updates

• Parr is focused on providing a unified solution for enterprise-level restaurants.
• Strategic initiatives include expanding the product line and integrating acquisitions.
• Recent acquisitions include Delegate, which audits DoorDash fees, and Task, supporting McDonald’s loyalty solutions in 67 regions.

Future Outlook

• Parr is prioritizing the simplification of restaurant operations through integrated software solutions.
• The company sees significant growth potential in convenience and fuel stores, compounding at 14-15% annually since the pandemic.
• International expansion is a key focus, leveraging the Task acquisition to bridge US customers abroad.

Q&A Highlights

• Parr distinguishes itself from competitors like Oracle and NCR through its unified platform.
• The company is gaining market share from various competitors, including NCR.
• CEO Singh emphasized product quality as a primary competitive advantage, stating, "You win because products win."

For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - Wolfe Research FinTech Forum:

Scott Wirtzel, Payments Team, Wolfe: everyone. My name is Scott Wirtzel. I work on the payments team here at Wolfe. Happy to be joined by, Savneet Singh, the CEO of Parr, for a fireside chat here.

Thank you. Yeah. Thank you for coming. So maybe before we start, there, you know, there may be some in the room who are not as familiar with Parr and the story. So maybe we could just begin with a quick overview.

Savneet Singh, CEO, Parr: Well, it’s a long winding road, but maybe we’ll start with where we are today. So today, we sell software to large restaurant chains. Our core market is restaurant large multi unit operators in the convenience and restaurant space. And we sell to them kind of end to end software. We sell to them loyalty, online ordering, and then we sell inside the store point of sale software and back office.

We ended last year about $275 70 6 million dollars recurring revenue. A lot of what our view or vision of the industry is that restaurants and sort of the retail industry in general is being eaten alive by software. And much of the innovation has happened down market. Individual single stores, you’ve seen the amazing success of Toast and Square and everybody else down there. We have focused squarely on the enterprise side.

And so if you kind of think of our ICP as everybody from a Sweetgreen or a Kava all the way up to a Burger King. And, and so we send them, what we think is more of a platform approach than a bunch of individual point solutions. And why that’s important is that as these these organizations have become digital the last, call it, you know, five to ten years, they’ve really had the spender sprawl. They’ve gone from having four or five key software products in their stores to 15 or 20. And it’s creating a ton of confusion and complexity within the store.

I’m sure you guys have all gone to a quick service restaurant and had the challenge of having to wait in line while the DoorDash orders are being fulfilled or just the complications around all that. And so what we’re doing at par is providing more of an end to end solution to this market versus a bunch of different point solutions.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. Gotcha. And you mentioned, you know, it’s been a journey. You’ve been CEO for five years now. Six.

So six now. And can you maybe just discuss the biggest changes you’ve seen the company make during your tenure? And, you know, as we look ahead, what are you most excited about, and what are some of the key strategic priorities for this year and beyond?

Savneet Singh, CEO, Parr: Oh, wow. So we are not the traditional sort of call it a couple hundred million dollar ARR company. When we took over the business in Q4 of twenty eighteen, we were $10,000,000 of recurring revenue and call it $175,000,000 of hardware and services. So our software revenues have gone up almost 25 times in six years. Half of that has been organic.

Half of that has been inorganic. But what’s sort of, I think, critical about that journey is that we sort of jumped into the business in q four of eighteen. Our original goal was just avoid bankruptcy and stay in business and survive. But, you know, back at that moment in time, you could sort of see the writing on the wall. You can see that these enterprise restaurants were really starting to look at these digital channels as the future of of what was happening.

And And more importantly, you can see that nobody was really solving that challenge. And so when we took over the business, we were a point of sale company. We had $10,000,000 of recurring revenue. We said, okay, we’re gonna we’re gonna really harden and become a great POS provider. But even back then, we sort of said, hey.

To make this business successful, we can’t just be a lone vendor. We need to actually bolt on the core products of the restaurants. Those products are integrated together, creating more unified guest experience. And so we went on this path of aggressively growing our product while bolting on additional modules over time through acquisition. And then we spend a lot of our R and D dollars integrating those products into one more unified platform.

And that’s really been the key to our success. I think we’ve had tremendous organic growth. When we buy a business, we almost I mean, always accelerate the growth pretty significantly. But what I think is unique about our model is that we we are able to penetrate these large organizations and then begin to upsell them additional products. And they’re not buying it because it’s a bundle or it’s simple.

They’re actually bundling because they’re getting unique and new functionality they couldn’t get before. And that is a really, really unique thing that very few software you know, very few acquisitions companies that are acquisitive can can do is that we actually can create new functionality. I think that’s why we’re kind of winning the market today. But, you know, culturally, you know, you gotta imagine we were a you know, 50 year old hard, you know, company selling hardware and services in Upstate New York. And today, we’re a software business.

So it’s hard to answer your question, but, you know, we we we kind of transformed the business to focus on providing a more unified solution to this enterprise food service industry.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. Gotcha. And before we get into sort of the products and sort of the industry and all that, you know, you guys reported pretty, you know, pretty good results. I think it was about a week and a half ago, two weeks ago and, which included your second straight quarter of positive adjusted EBITDA. So what would you say are the key points from your results that investors should be aware of to better understand the par story going forward?

Savneet Singh, CEO, Parr: I mean, first and foremost, I think, you know, I was, at one point, in my life, a software investor. And I think, you know, the critical aspects of what makes a great software business are, you know, durability, visibility. And I think what’s amazing about our business is that, you know, the durability of our revenue stream is really strong. Our our gross retention gross retention is, you know, 95, 90 six. And and and it’s been increasing.

It’s actually not been decreasing. So so that is hard to, you know, find. That’s that that is that is, you know, it just sort of in the end, the end market you sell to matters a lot. And so that’s sort of point one. I think we’ve kind of shown how durable it is.

But the second part I think is even more exciting and the best takeaway from our results is that we’ve had incredible durable growth. Most software companies post the pandemic have had relatively fast decelerated growth. We never experienced that. And why I say that is, what I talk about on the call is that in Q4 and for parts of Q4 and for Q1, you know, we we are taking a pause rolling out our largest deal of all time for good reason. We added additional product and so we’re slowing down and and and selling two products.

But even with that slowdown, we still grew well, you know, over 20% and and and, you know, guided that we’ll do that again in ’20 in ’25. And so I think that’s probably the biggest takeaway is, like, we we have a lot of visibility into continuing to be one of the faster growers in the SaaS industry. And I think that, again, comes back to selling this really, really healthy end market. And so that that would be sort of the major takeaway. I think the sub takeaway is that, you know, in EBITDA, we we continue to sort of, I think, show that while we have demonstrated really, really durable consistent growth for many years now, you know, we’re also really, really tough on on the OpEx side.

Our OpEx, you know, year over year was near flat or grew 1.5%, while the business grew over 20%. That’s the second year in a row that’s happened. And so the business has compounded at relatively fast rates on the top line, but we have not taken up OpEx. And so you’ve had this really nice drop down into into the bottom line. So I think, you know, that’s sort of our model, and that will hopefully continue for a long time.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. Gotcha. And you mentioned selling into a, you know, kind of healthy end market. So I would love to just kinda hear what trends you’re kinda seeing right now in the restaurant industry, and, you know, anything you can point to, you know, if it varies by different you know, I know you’re mostly enterprise if it’s different between QSR and full service. But yeah.

Savneet Singh, CEO, Parr: Yeah. So so there’s no doubt that restaurants are feeling some of the economic pressure that you that you read about. That that’s sort of categorically true. There’s there’s there that that is sort of happening. Now what I think is, and I’ll answer your question more fully, but I think it’s cool about our market is that because we sell to that QSR, fast casual multi unit area, you know, smaller these these sort of slowdowns don’t we have not yet experienced that they have an impact on tech budgets.

In fact, it tends to accelerate. If you look at the pandemic, even if you go back to the great financial crisis, like tech investments continued. And the reason why is that they generally lead to more sales or more cost efficiencies. As an example, I mentioned on our call, we have the largest loyalty software in all of restaurants. So if you’ve got the Taco Bell app, you know, that runs through our loyalty engine.

And and and these markets where things are slowing down, you, like, wanna bring your customers back in. So you spend more on loyalty, spend more on the ordering, spend more on the digital. At the same time, you spend more on the back office because you’re trying to save costs. And so, you know, generally, you see that. And so it’s it’s it’s kind of interesting just to observe that.

But to your point, there’s definitely a slowdown. Now in our market, it’s it’s relatively small. When I look at the same store sales data of our customers, we aren’t seeing anywhere close to the numbers that reported publicly, but I think that’s because of our focus on the quick service and fast casual market. Where we do see, you know, pretty dramatic drop offs are and this is and that’s more industry data and a little bit of time to exposure we have is in the sort of single store, you know, fine dining. You know, you are seeing this trade this trade down from, you know, instead of going to my steak dinner, maybe I’ll go to, you know, Cava or Sweetgreen.

You’re that is, like, clearly happening in our data. And then I would say the area where we see the most, you know, pain are undersized chains. So we don’t again, we don’t really sell into this, but if you’re a 10 unit, 20 unit, 30 unit franchise model, we are seeing those things go out of business left and right and or get consolidated very quickly. Now we we don’t have a lot of exposure there, but, you know, the problem is when you’re ten, twenty, 30 units and you have this vision of being McDonald’s one day, you don’t have the the buying power of a McDonald’s. You don’t have the playbooks yet.

You don’t have the health the financial health of the operators yet. And so if you’re an operator, you know, if you’re a 10 unit chain, like, the franchisees you’re attracting are generally people that are emerging wealth. They’re not super established. And so if they got a bad year, they can’t fund that business. And so that’s where we see the most pain.

Whether it doesn’t matter quick service slash casual or full service signing, those small chains are really getting getting hurt. And so that’s where you see a lot of the pain. In the upmarket where we are, it’s you know, there’s definitely a slowdown, but it’s not pronounced yet. Gotcha.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. That’s interesting. Maybe if we move over to the product side, just starting off, what products would you say are core to the par value proposition that you offer?

Savneet Singh, CEO, Parr: Yeah. So for us, it’s pretty simple. We we we break our business into two business units. One is called operator solutions, which is point of sale software and back office. Point of sale is the core product that we sell.

It is the most important product you’ll find in a, in a retail business. In general, it’s like the ERP system. It’s a heartbeat. It’s, you know, whether it’s an online order or an on premise order, it it all runs to the point of sale which kicks to the kitchen. It kicks to your HR systems, your tax systems.

It is it is like the most important product. If your point of sale system goes down, like, everything goes down, online loyalty, so on and so forth. If your online ordering system goes down, like, you can still operate your store, you can still run loyalty. And so it’s the that’s sort of the core product. And then the other set of the other business team we have is called Engagement Solutions, and and that’s really loyalty software.

And that is software that touches you, the end consumer. And so we think of our products as products that touch the operator and products that touch the end consumer. And and and there, as I mentioned, we have the largest loyalty software, in restaurants and and and in convenience stores. And, and and then we kind of bolt onto it as small online ordering business that’s growing very quickly. But those that’s sort of the two key products, is point of sale software and loyalty.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. Gotcha. Now are there any recent product launches maybe that aren’t yet at a high level of adoption that, you know, you could see meaningful traction with and get, you know, stronger attach rates over time?

Savneet Singh, CEO, Parr: Yeah. We’ve got a, you know, a robust r and d effort, but, I’ll give you a couple. I’ll give you one that’s kind of I think it’s very interesting. So we we we create something called Punch Wallet. Punch is the name of our loyalty product.

But, it’s it’s essentially, giving every restaurant on our platform the ability to have the Starbucks loyalty card experience, where you’ve got one card in your Apple Wallet or Google Wallet that is your loyalty information, your payment information, your your coupons, your points, whatever it might be, it’s all in one card. And our customers really love this because historically, like trying to you know, you’ve probably wondered for a long time, Starbucks has had an incredible loyalty program for so long. Others haven’t been able to create that. And that’s predominantly because you had this disjointed set of vendors. You had a loyalty vendor there.

You had an ordering vendor there. You had a payment vendor there. Point of sale vendor there. Trying to get these four or five vendors to create this Starbucks experience is impossible. Well, we actually have that under one roof, so we can create that unique functionality.

And so we’ve been seeing that grow very, very rapidly. And that’s been, like, a neat thing to to see.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. Gotcha. And then, you know, as merchants demand more products and you have to potentially increase velocity, I mean, how do you evaluate whether you are going to build a product in house or maybe go out and try to acquire something to bring into the suite?

Savneet Singh, CEO, Parr: There’s a lot that goes into that. I’ll start by saying for us, we’ve been relatively acquisitive. We try to sort of end up buying on average one or two businesses a year. But for us, M and A is a product initiative. It’s not a financial initiative.

The financial is the outcome of that successful product. And so we obsess on, can we acquire a product that when we add it to our existing suite of products, is the customer getting something new and different? And if they are, then that’s value that we’ve created that we can then take value for ourselves. We don’t look at it as, okay, those numbers are those numbers are good. Let’s add it because then you’re left with a bunch of disjointed products that don’t work in the end and and are you private equities better at doing that than than we’d ever be?

And and so when we look at buying versus building, it generally comes down to a couple of things. But one of the things I think a lot about is if it’s a brownfield opportunity, if it’s a if it’s a category that’s already well developed, it’s probably not worth us building, unless we have an incredibly unique view of, like, how to deal with something completely different. And the reason why is we sell it to enterprises. And so if you’re gonna build a product, it’s a year, eighteen months of real build work, multiple teams, an incredible effort. Then you take that product and you go to your first couple customers.

You’re like, hey, can you use this? Can you try this? Can you sell it? And you’ll get one or two enterprising people that say, okay. Let’s just try your thing out.

And then you get a bunch of feedback, and then you gotta go take that and add that back to the product. And then you’re back in market. So you’re eighteen months, two years before you’re actually in market. And again, it’s a nine month to a year sales cycle. So the you know, so then you’re three years out before you’ve got your first couple real customers and ten years out before you have massive market share.

Like, it’s I I just think or, you know, whatever it is, pick your pick your year. So the ROI on that is just really long. And it’s like it’s like, you know, a DCF model, like, the internal value looks really great, but, you know, you gotta you gotta get to that. And so generally in Brownfield, I think we think about, can we acquire a product? Can we spice up the product?

But more importantly, if we buy that product, can we connect it to our existing products so that they get a really, really unique experience? If it’s a greenfield opportunity, I. E. It’s a new category that no one is really, has dominant market share, we’d prefer to build because then it’s already natively integrated in what we do. So that’s generally how we look at it.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. Gotcha. And are there any key product areas that you’re looking to kind of address through M and A over the near medium term here?

Savneet Singh, CEO, Parr: I think we’ve got a couple of areas that we’re kind of, I guess, looking at. We will continue to look at operating the back of the restaurant. What I mean by that is running a restaurant has changed so dramatically in the last decade, but the actual four walls of the restaurant haven’t really changed that much. You know, you go to McDonald’s store today, and it’s not that distinct from when it was when you went there as a kid, you know, except for some kiosks maybe now in the front. But the actual back of the restaurant is the exact same thing.

Yet the order channelings have changed dramatically. The fulfillment model has changed tremendously. And so I think software has to kind of help put all that together. How do you sequence orders? How do you time orders?

How do you create products that can integrate with the robots in the kitchen to connecting to the DoorDash drivers to collecting tax payments on the municipalities that you deliver to that have, you know, DoorDash and REITs taxes. Like, it’s it’s a credit complex. And so I think simplifying the operations of the restaurant is where we’re spending a lot of time looking at. And then the other part that I think, you know, we don’t spend enough time talking about is, you know, we’ve had tremendous growth in food the food service market outside of restaurant, particularly in convenience and and fuel stops. And convenience and fuel stores are are interesting businesses in that their food service, the food first service part of their business has been compounding at 14 to 15% for now four four years in a row.

You know, basically since the pandemic, they’ve been compounding at 14% a year. That’s way higher than restaurants. And, you know, I I always say this comment. The biggest threat to McDonald’s isn’t Burger King. It’s it’s 07:11.

You know, you you you know, you stop. You buy your breakfast there. You go get your gas. You pick your meal there. When we have a trade down in the economy, you know, like I mentioned, you’re not may not stop at the restaurant.

You may not stop to fill your gas and get buy the pizza at at the convenience store. And so we’ve had there’s been tremendous growth in food service outside of the actual restaurant. And so I think we made an acquisition about a year ago, almost to the date, that really made us now the largest loyalty provider in that market. And I think you’ll hope you’ll see us try to do more there just because our expertise in restaurants is really helping us win in that core category as well.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. Gotcha. And if we move over to the competitive environment, you know, maybe not all the way up to enterprise yet, but we definitely are seeing restaurant point of sale, you know, software payments providers move further upmarket. For sure. So just wondering if you can maybe touch on, you know, any changes you’ve seen in the competitive environment over the last, let’s say, twelve months.

And then, you know, how can Par differentiate itself from those competitors that could be coming into the space?

Savneet Singh, CEO, Parr: So, you know, I think, you know, generally, our our our our main competitors are still the big legacy providers in this category, which are Oracle, NCR, Xennial, which is a product by Global Payments. They really control, you know, well over half this market. And, and so they have huge installed bases. They have people that know their products, that install their products. And so you’ve got this this this site base.

Then you’ve got us, who’s sort of, you know, now been in it for, you know, call it a decade, but, you know, really been emerging the last few years. And then you have, you know, a collection of, like, the long tail. And that long tail includes everybody from, you know, a random POS product that was built twenty years ago that some big chain customized to Toast, to Square, to everybody in between. And, you know, I think the way that I sort of think about it is, everybody that’s down market will have to come up market because the TAM is limited in the end down market. You know, there are, you know, call it seven fifty, eight hundred thousand restaurants in The United States.

You know, less than half of them, you know, the data is sort of fuzzy, so who knows, but are are down market. And so, you know, if you you want to sort of keep growing, you’ve got to kind of encroach upon the enterprise product market. The challenge is that taking a product that was built for the individual restaurant and making it to an enterprise product is really, really hard. I remember when I took over Par, you know, everyone was like, why are you doing this? You know, Square and Toast and everyone’s like, coming to the enterprise, you’re totally screwed.

And, you know, fast forward six years, like, that hasn’t totally played out. Now could it play out the next six years? Maybe. But I still think it’s it’s just a really different business model. It’s a really different product model, and it’s a very different cultural DNA.

You know, as an example, if you if I went today and I went and sold to my local, you know, favorite Italian restaurant, you know, that sales cycle is like a month to two months and I’m done. And not only that, I at the time I actually sell the product to that customer, I can sell them point of sale, online ordering, payments, and, like, literally one sale, and I’m done. And and and that guy probably found me through an Instagram ad. If I want to go sell to, like, I don’t know, Arby’s, that’s like a year and a half, two year sales cycle, and I’m selling one product. Right?

And so it’s just so different, and and so you gotta go after that. Where I think that our moat will be and will continue to be is that, while point of sale is sort of like the heartbeat of the restaurant, it’s the unified nature of what we do that’s creating, you know, I think competitive barriers because we can go to these these these restaurants and say, hey, now you’ve got point of sale here. Let’s have an integrated back office solution. Let’s have an integrated online ordering system, point of sale system. And that really is, I think, massively differentiating.

And the way I like to explain this is all of these systems at a restaurant are, at some point, have overlap with another system. So, like, it would be the equivalent of, like, if you had Microsoft Outlook and you had to go log in to your email as a separate application as your calendar. Like, that’s just kind of annoying thing you’d have to do every single time. Then pretend you had to go, like, send a calendar invite, but your contacts on the calendar were were different than the contacts in your Outlook email. Like, that’s what the restaurant is.

It’s like, I got a menu here. I got a menu here. I got a customer database here. Customer database here. And so, like, these things don’t connect.

And so we go to the restaurant, like, hey. Great news. Your back office and your online ordering, it’s single sign on. It’s the same database. That’s literally so it’s like you were an Outlook and calendar user.

Like, how much would you sell? I’d be like, oh, I don’t get a sign on twice in the same context. Like, that simplification is, like, so powerful. And I think, you know, today, we’re the only provider that can manifest that. Gotcha.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. And then, you know, as these new kind of newcomers to the enterprise space come in, have you seen any changes on the pricing side at all? Or has it been relevant? Yeah.

Savneet Singh, CEO, Parr: For sure. I mean, I think it’s like any any market. The the incumbents have, you know, tried to lower price to hold on to shares, so maybe not potentially win new deals. And I think the new guys come in and, you know, and and their weapon is price. Their weapon is, hey, like, take a take a shot on us.

We have this awesome product. We’re coming out market and and and so on and so forth. And by the way, we’re ostensibly giving it to you for free because we need to sort of get logos to prove it. And so, you know, my my view on that is that, that’s a tough game to compete against. Right?

That is no doubt something that will be we have to compete against. But in the end, I think product wins. And, you know, my my view is, like, someone’s wanting to give away their product for free. You know, generally, like, those customers come back to us because in the end, you need to pay for, like, the quality. And in enterprise software, it is very, very hard to run your business on the b minus software.

You sort of do need the product that’s actually gonna power power your future. And so I think that, you know, I hope in the end we win because of this more unified approach, but there’s no doubt there’ll be competition and and and, you know, we feel like, you know, we’re well situated.

Scott Wirtzel, Payments Team, Wolfe: If we switch topics here, I mean, if we go on to sort of like the digitization of the restaurant, you know, what inning do you think we are in for in, like, restaurant digital transformation? And then do you have a sense of, you know, what percentage of restaurants are on modern cloud platforms right now and sort of how much, you know, white space there still is there?

Savneet Singh, CEO, Parr: So, you know, I think we’re in we’re in early innings. I don’t know if it’s the first or the third, but, like, we’re still, like, pretty early. I I don’t think we’re, you know, in the dugout anymore, though. Like, I do think that, like, the pandemic pulled through a lot of of this. I mean, I I remember I took over, like I said, in in q four of eighteen.

I remember my first couple customer pitches, I was convincing restaurant CEO CIOs the cloud was safe. Like, you know, that’s like the the world and that was 02/2018. That wasn’t like, you know, that long ago. You know, I remember sending CIOs articles that the CIA uses AWS and trust me, like, it’s okay. You know, we’re not in that world anymore.

Like, there’s like this I think they sort of believe digital is here to stay. And so I think we’re definitely, you know, you know, in the early innings. But the reason why I say it’s early is that, there’s just so much that has to still be connected to make it work. And I’ll give you an example. We bought a business, the very last day of 02/2024 called Delegate.

Delegate has, in our opinion, the best recovery product, meaning, it it it’s basically audits your DoorDash new bar eets, fees and refunds to ensure that you are not always getting screwed by the refund. So, like, when you order your DoorDash order and you’re like, hey, my order came two hours late. Like, I don’t want to pay for the thing or I got or I got the wrong, the wrong, you know, the wrong person’s meal, the automatic thing that happens is DoorDash refunds the customer and it takes it out of the restaurant’s wallet. That’s That’s super painful to the restaurant. So this software kind of automates us, hey.

We had the food ready. Your driver didn’t show up on time or your driver picked up the wrong bag, and then you can kinda get the money back. So it’s super important product. If you asked me, like, three years ago, I’d be like, I would have never thought we would be in this business. Like, it’s just it’s just but that’s what digital innovation does.

It creates, like, a whole new category you thought that you didn’t need. And and why do you need that? Well, one, that’s those restaurants need that money back in pocket, but then you need to do the tax reconciliation. You need to do, like, the audit and the financials offer so that these products become bigger and bigger. And this is one example of I think there’s gonna be dozens of stuff like that as we go that just, like, digitize, digitize, digitize.

Everything from the employee experience is going to change, the robots that are gonna come in. All these things will have different pieces of workflow software that have to kinda integrate into something to give a a more wholesome experience. And I always like to think that, you know, people always talk about a unified ordering experience for the customer. And but you also need that for your operators, your employees. They need to see and feel the same thing.

Like, how annoying would it be to employee and be like, okay, I gotta check into this point of sales software, this back office software, this HR software. Like, oh, I wanna use the robot. I gotta go stand I mean, that’s that’s kinda because I think we’re we’re super early. As far as, like, where we are in the cloud adoption, it’s an impossible question because of which product. If we’re talking about point of sale, I don’t know, for 10% or 15% in the way.

But, you know, like I said, most of the most of the market is still on these legacy products. If you’re talking about back office product, we’re probably like 2%, five % maybe. If we’re talking about, you know, ongoing loyalty, I’d say half the markets are there. So it just sort of depends on what product, but we’re we’re still pretty early. And to me, the cloud thing doesn’t really matter anymore as as we sort of look at, like, different modes of compute.

You know, you’ve got McDonald’s going to to to the edge. You’ve got other customers going back to processing in the store because they’re like, why do I need edge compute? Like, what is so real time about, you know, what I’m doing? And so to me, it’s not so much cloud. It’s sort of, are your workflows now digitally aided?

Scott Wirtzel, Payments Team, Wolfe: Gotcha. Gotcha. And you had mentioned one acquisition there, with Delegate, but maybe we can touch on the Task acquisition and, you know, how that’s helping maybe your international expansion journey. And then, you know, I think McDonald’s is maybe a good use case on the loyalty side that you can touch on.

Savneet Singh, CEO, Parr: For sure. You know, Task is an amazing product engineering organization. And we bought the business in February July of last year. Maybe August. July or August.

Task has sort of two business lines, if you will. One is a very large loyalty business that focuses on providing McDonald’s loyalty in something like 67 different, territories and regions. So Hong Kong, Spain, Portugal, you know, many many of its many large markets. And, and so if you were in, you know, Spain or Portugal and you have the McDonald’s app, that’s that’s us. And it’s an incredible product.

I mean, I I really encourage you when you go on vacation outside The United States and and play with the McDonald’s app, it’s you know, I have, like, very little kids, and it’s, like, freaking amazing. You can get, you know, like, you can be in Italy, order, you know, order a beer and get your kid, like, a toy. Like, it’s the coolest. It’s really well done. And so we saw that a long time ago.

And the reason why it was exciting to us is, well, we’re the largest loyalty provider in The United States. They’ve they’ve won the biggest, most important customer in the world over there. And so we’ve been so impressed by that winning that business, but then also just succeeding and growing. Like, you know, McDonald’s is is is arguably the most sophisticated restaurant company in the world. And this is a little tiny vendor company in Australia, like, working in everywhere from Hong Kong to, Japan to I mean, it was just sort of impressive.

So we really they kind of came on our radar there. The second part of their business is, what we do, point of sale, back office, digital ordering in a unified platform internationally. And so we saw this product and we’re like, crap. Like, they’re doing exactly what we’re doing, but they’re doing it internationally. Now they were small.

And we said, you know, let let let’s acquire tasks and then we will be able to be a bridge for our US customers to grow abroad. So it’s been a really great experience. You know, I mentioned in the q and a on our call that, you know, we we think, you know, when we acquired the business, the loyalty side of of, of task was was growing sort of in the teens. The point of sale side was, you know, not growing that much. We think that’s gonna accelerate to over 20% this year.

Again, showing our playbook of, like, you know, growing the go to market. And as we scale, it’ll be an amazing tool for, hopefully, mega brands to take their their their their US presence international or even bring it to The US. So it’s a it’s a very important strategic asset for us because, you know, I say this often, but the biggest growth area for restaurants, US based restaurants, is outside The United States. Most of the high growth chains in The United States are gonna go more grow more stores outside The United States than inside. And so we really wanna make sure we had a presence there, for the risk of somebody else who owns that business and then enters our territory in The US.

Scott Wirtzel, Payments Team, Wolfe: Totally. Totally. And then, I mean, as we think about these growth areas, you know, whether it’s the recovery or the loyalty side, like, how does the kind of competitive landscape differ there relative to sort of the, you know, more traditional point of sale software side?

Savneet Singh, CEO, Parr: It’s way more niche. So on the loyalty side, we have a few competitors there. They seem to continue to get bought by private equity and get traded around a lot. We love that because generally, financial buyers are less product focus. And so we get to I think we take market share there.

And so that’s sort of interesting to us. But I would say the reason why the niche comment matters more is that those products are single solutions. They solve one problem. Hey, we are your loyalty provider, and that’s all we do. Or, hey.

We’re your inventory solution, and this is all we do. And though that model, I think, is gonna become a message of the past because I think being a single solution is not going to solve the operator’s problems anymore because it’s not integrated with the rest of what you do. And so we mentioned at our call, we have started to win a second module within our largest customer. And why that’s so important is that is that we have now proven to our largest customer, which we’re in the middle of the world, that, when you integrate our back office product to our point of sale software, you get a really magical experience like that calendar email thing example I gave. And and so, while the competitive suite has good products, it’s the integrated thing that gets you to win.

And I think that’s really cool. I’ll just give you one silly example. But we’re working on a large hopefully, trying to win a large loyalty deal. And they run our point of sale system. And what that restaurant marketer or tech or CEO wants to do is that when you come into that restaurant and you show your loyalty app to the cashier or you give them the number at the drive thru, they want the cashier at the point of sale system to say, hey, do you know you have these offers, these promotions, these coupons, these values, whatever?

They want them to prompt you, the customer, with that over there. Well, guess what? Nobody can do that because the loyalty system is completely different than the point of sale system. However, since we control both of them, we can actually go to the cashier and prompt suggestive selling and upsell to them given that customer’s loyalty information. So, like, a cool example would be, you you you go and say, here’s my loyalty app.

Instead of you the the cashier saying, hey, you know, look, the the loyalty app can then trigger and say, hey, like, this person’s vegan, or they’ve got little kids. The prompt you get suggests to sell them and say, like, have you tried our vegan burger? And, you know, do the kids want their normal thing? And so you can do really cool stuff like that that gives them more integrated experience. And we think, again, I think that’s going to be the the competitive to win over time.

Gotcha.

Scott Wirtzel, Payments Team, Wolfe: Gotcha. And we’ll we’ll take some questions from the audience soon. But I wanted to maybe hit on the go to market side, and just talk about your approach in terms of landing new customers and maybe the flywheel effect around, you know, first landing with an initial product and then cross selling and sort of driving the upsell to bring restaurant locations sort of towards that maybe $10,000 ARPU number?

Savneet Singh, CEO, Parr: So, you know, I say this a lot, but, you know, to me, go to market is still a product exercise. You have to have the best products to win. You don’t win on a great Instagram ad. You don’t win because you’ve got an amazing salesperson. You win because products win.

You have to have the best products. You know, our our sort of mandated part is best in class and better together. Each product has to be the best of what they do. And then when they’re integrated to each other to each other, they have to be better together. And so it starts there.

You cannot I think I think it’s really hard unless, you know, you’re the mega guys like Oracle and Salesforce and all sorts of it to be, like, average have average products win because, you know, in our market, like, I think I think product wins. But for us, our go to market motion is to we call it, land with a hero product. And for us, we have two hero products, point of sale and loyalty. And we plan our flag with that first product. And our goal planting and let’s use a point of sale example, is to plan our flag with point of sale and hopefully, in a very short order, convince you that we have delivered on the promises we told you during the sales process.

Then at that time, we only try to bolt on payments or back office to continue to build the flywheel there. And the beauty of that is that as we add additional products, we’re usually able to convince you that you got something better. For example, if you take our point of sale on payments, you know, most people just say, hey, take our payments. It’s whatever. We’re going to rip you off on payments, but don’t worry about it.

No one’s going to know. We sort of go in there and are like, hey, we’re going to give you this integrated payment offering. Look at all the value you get. You you now have one support desk. So when you have an issue with your number one call to a point of sale on average, number one call to a point of sale support desk is a payment issue.

And, basically, here’s what happens. Like, if you’re you’re the you’re the you’re the franchisee, you’re the guy running the store and the payment device isn’t working, you call the point of sale guy and you’re like, hey. My payment device is not working. The point of sale support guy is like, it’s a problem with your payment company. Go call the payment company.

The payment company says, it’s probably probably a problem with the point of sale guy. And they just keep pointing their fingers. Well, guess what? If you can go to a franchisee and say, guess what? It’s one vendor and so we’re gonna solve your problem.

Like a huge, like, unlock for them. Then you go and say, hey. We have transparent pricing. And then you go and say, hey. We can unlock all this cool functionality.

So then they add payments, and then they have a better experience there. And then you’re like, hey. Did you know we have a back office product that when you integrate it into the point of sale, you get all this new functionality? And so you kind of work this flywheel over time where as they add each additional product, your collective products get way sicker, but also the customer is getting a better experience. And so that flywheel sort of accelerates.

And that’s why I think we’re usually able to accelerate the growth of the companies we acquire because we kind of plug them into the flywheel and create that better together functionality.

Scott Wirtzel, Payments Team, Wolfe: Any questions from the audience?

Unidentified speaker: Hey. Thanks for being here, guys. When we think about just the opportunity from a competitive standpoint, we have seen, you know, so many companies saying that they’re doing something differentiated on technology. And a lot of the companies that investors here cover, I think, you know, whether it’s Pfizer and BentoBox or it’s maybe a smaller side side of the market in terms of restaurant size, but they’re all saying they can offer more and more solutions upmarket. And so I guess just to revisit the competitive landscape first, I mean, are you seeing anything different whatsoever in the past, you know, call it year, year or two years?

Obviously, Toast talks about going upmarket also. So maybe just the competitive landscape, if you could help reframe if if there’s been any change from your perspective. And then who is the area of where you’re seeing the most opportunity? I mean, NCR comes up a lot in ALOA, but curious to hear where you’re taking the most share from, in your perspective.

Savneet Singh, CEO, Parr: Yes. So I think on the kind of landscape side, it’s still when we go into an RFP, it is, I don’t know, eight out of ten, nine out of 10 chance. One of the finest will be Oracle or NCR, almost always. That’s either they’re the installed provider or they’ve got great relationships. They’re always a finalist.

You know, a second finalist is usually us, hopefully. And the third finalist could be anybody from Toast to a bunch of products you’ve never heard of. And it’s sort of all all over the place. Like, it really is. Toast, no doubt, is trying to grow aggressively into the enterprise.

And we’ve we’ve kind of always, if you’ve sort of feared me for for many years, these kind of conferences, I always expect Toast to be successful in the full service dining part of the enterprise market. And the reason why is historically, we weren’t in that market. And so they were going to have the same competitive advantage of going against the legacy guys like Oracle or NCR, NCR, whoever. And so I’ve always thought that would be a market that they would grow into. Interestingly, I think I look at sort of in a few places like we have now grown into that market.

So I feel like we’ve almost encroached upon their territory because I don’t think they expected us to be a competitor in that market. But I have, as Atel investor said, I’m the biggest Toast fanboy there is. I think they’ve done an incredible job disrupting that market, a lot for us to learn from them. But I wouldn’t say it’s like you’re feeling like tectonic plates move. It’s sort of the same those three or four folks that would be in that final RFP, it’s exactly the same group that would have been there three years ago.

Who’s in the final hasn’t changed that much. The narrative has changed a ton where you see everybody saying we’re going enterprise, going enterprise, going enterprise. We don’t really see Shiphore, Fiserv, Square in the enterprise RFPs. We don’t really see them in those. It’s generally Toast would be in there or some of the other guys.

But we don’t see those guys almost at all, just literally zero. I think if I asked our sales team, list the top five or seven or eight people, they wouldn’t show up. Onto the second part of your question of, like, where we’re focusing. You know, there isn’t like a swim you know, the enterprise category is predominantly quick service and fast casual. Full service dining is a small subset.

There are not a lot of thousand unit sit down restaurants. There’s All Gutter and whatever. There’s Dime Brands. There’s Brinker, and not a lot more. Like, there’s just not a ton of big multi unit full service dining chains.

And so our focus is kind of this broader QSR fast casual now growing into that full service market. As far as like where we’re taking share, obviously NCR has had very public issues for some time. So generally we’d find them a shared donor. But it’s kind of, I wouldn’t say there’s one area where you take more. It’s, you know, kind of across the board.

Scott Wirtzel, Payments Team, Wolfe: Cool. I think, I think we’re out of time, actually. But, Sameer, thank you for joining us. And, got a break next and then our TP.

Savneet Singh, CEO, Parr: Thank you. Yeah.

Scott Wirtzel, Payments Team, Wolfe: Appreciate it. That was great.

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