PAR TECHNOLOGY CORP

Previous wording

Non-GAAP - Year-over-year 2.6% decline

Current wording

Non-GAAP - Year-over-year improvement of 340 basis points (bps)

Previous wording

Net Loss from Cont. Ops.Year-over-year decline of $1.4 million

Current wording

Net Loss from Cont. Ops.Year-over-year increase of $4.2 million

Previous wording

Adjusted EBITDAYear-over-year improvement of $9.0 million

Current wording

Adjusted EBITDAYear-over-year improvement of $14.7 million

Previous wording

Refer to “Note 3 – Acquisitions”, “Note 4 – Discontinued Operations”, and “Note 8 – Debt” of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report for additional information about the sale of RRC, the Credit Facility, and the acquisition of TASK Group.

Current wording

Refer to "Note 3 – Acquisitions" and “Note 8 – Debt” of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report for additional information about the GoSkip Asset Acquisition, the 2030 Notes, and repayment of the Credit Facility.

Previous wording

Subscription service revenues were $143.2 million for the nine months ended September 30, 2024, an increase of $53.5 million or 59.6% compared to $89.7 million for the nine months ended September 30, 2023. The increase was substantially driven by increased Engagement Cloud subscription service revenues of $35.5 million, of which $31.2 million was driven by inorganic increases in revenues of $23.4 million and $7.8 million stemming from the post-acquisition operations of the PAR Retail and Plexure product lines, respectively. The residual increase of $4.3 million from Engagement Cloud subscription services was driven by an 8.5% organic increase in active sites. Operator Cloud subscription services increased $17.7 million of which revenues of $1.4 million was driven by an inorganic increase in revenues stemming from the post-acquisition operations of the TASK product line. The residual increase of $16.3 million from Operator Cloud subscription services was driven by an 18.3% increase in organic active sites and a 13.1% increase in average revenue per site equally driven by cross-selling initiatives, upselling, and price increases.

Current wording

Subscription service revenues were $68.4 million for the three months ended March 31, 2025, an increase of $30.0 million or 78.2% compared to $38.4 million for the three months ended March 31, 2024. The increase was substantially driven by increased Engagement Cloud subscription service revenues of $20.9 million, of which $16.7 million was driven by inorganic revenue growth contributed by the Plexure product line and the inclusion of approximately two additional months of PAR Retail product line revenues in the current period. The residual increase of $4.2 million from Engagement Cloud subscription service revenues was driven by 15.3% organic growth in active sites. Operator Cloud subscription service revenues increased $9.1 million, of which $6.1 million was driven by inorganic revenue growth contributed by the TASK and Delaget product lines. The residual increase of $3.0 million from Operator Cloud subscription services was driven by 11.0% organic growth in active sites and 3.3% organic growth in average revenue per site driven by cross-selling initiatives, upselling, and price increases.

Previous wording

Hardware revenues were $22.7 million for the three months ended September 30, 2024, a decrease of $3.2 million or 12.3% compared to $25.8 million for the three months ended September 30, 2023. The decrease primarily consists of decreases in hardware revenues from international hardware sales of $1.3 million, peripherals (scanners, printers, and components) of $0.8 million, and tablets of $0.6 million. These decreases were substantially driven by the timing of tier one enterprise customer hardware refresh cycles and timing of onboarding of Operator Cloud customers buying hardware.

Current wording

Hardware revenues were $21.8 million for the three months ended March 31, 2025, an increase of $3.6 million or 19.8% compared to $18.2 million for the three months ended March 31, 2024. The increase primarily consists of increased terminals sales of $1.6 million, peripherals (scanners, printers, and components) sales of $1.4 million, and kitchen display systems sales of $0.4 million. These increases were substantially driven by price increases, the timing of tier one enterprise customer hardware refresh cycles, and the timing of onboarding of Operator Cloud customers buying hardware. Hardware revenues will continue to be affected by the timing of the aforementioned drivers.

Previous wording

Subscription service margin as a percentage of subscription service revenue for the three months ended September 30, 2024, increased to 55.3% as compared to 50.6% for the three months ended September 30, 2023. The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs as well as improved margins stemming from post-acquisition operations of PAR Retail and TASK Group.

Current wording

Subscription service gross margin as a percentage of subscription service revenue for the three months ended March 31, 2025, increased to 57.8% as compared to 51.6% for the three months ended March 31, 2024. The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs, as well as improved gross margins stemming from post-acquisition operations of the PAR Retail, TASK, and Delaget product lines.

Previous wording

Professional service margin as a percentage of professional service revenue for the nine months ended September 30, 2024, increased to 24.4% as compared to 16.3% for the nine months ended September 30, 2023. The increase primarily consists of increased margins for hardware service repair and field operations substantially driven by improved cost management.

Current wording

Professional service gross margin as a percentage of professional service revenue for the three months ended March 31, 2025, increased to 25.4% as compared to 16.5% for the three months ended March 31, 2024. The increase primarily consists of increased margins for field operations and hardware service repair substantially driven by improved cost management and reductions in third-party spending.

Previous wording

S&M expenses were $10.5 million for the three months ended September 30, 2024, an increase of $1.0 million or 10.2% compared to $9.5 million for the three months ended September 30, 2023. The increase consists of an increase in inorganic S&M expense of $1.1 million stemming from post-acquisition operations of PAR Retail and TASK Group while organic S&M expense decreased by $0.1 million.

Current wording

S&M expenses were $11.8 million for the three months ended March 31, 2025, an increase of $0.9 million or 7.8% compared to $10.9 million for the three months ended March 31, 2024. The increase was substantially driven by a $2.3 million increase in inorganic S&M expense, stemming from post-acquisition operations of TASK Group and Delaget, as well as the inclusion of approximately two additional months of PAR Retail S&M expense in the current period. Organic S&M expense decreased by $1.4 million, primarily driven by a $0.8 million decrease in marketing costs and a $0.4 million decrease in compensation expense, reflecting continued realization of synergies in our sales and marketing model.

Previous wording

G&A expenses were $27.4 million for the three months ended September 30, 2024, an increase of $9.8 million or 56.1% compared to $17.5 million for the three months ended September 30, 2023. The increase primarily consists of a $3.6 million increase in inorganic G&A expense stemming from post-acquisition operations of PAR Retail and TASK Group and a $2.1 million increase in organic compensation costs.

Current wording

G&A expenses were $29.3 million for the three months ended March 31, 2025, an increase of $4.1 million or 16.3% compared to $25.2 million for the three months ended March 31, 2024. The increase was substantially driven by a $5.5 million increase in inorganic G&A expense stemming from post-acquisition operations of TASK Group and Delaget, as well as the inclusion of approximately two additional months of PAR Retail G&A expense in the current period, partially offset by a $0.7 million decrease in organic variable compensation expense.

Previous wording

The residual increase was substantially driven by a $3.4 million increase in certain non-cash or non-recurring expenses consisting of $1.7 million in stock-based compensation, $1.1 million in costs related to transaction due diligence, $0.4 million in depreciation and amortization, and $0.2 million in asset impairment expense.

Current wording

The residual decrease was substantially driven by certain non-cash or non-recurring expenses consisting of a $2.2 million decrease in costs related to transaction due diligence and a $0.7 million decrease in one-time severance costs, partially offset by a $2.3 million increase in stock-based compensation expense.

Previous wording

R&D expenses were $17.8 million for the three months ended September 30, 2024, an increase of $3.2 million or 21.6% compared to $14.7 million for the three months ended September 30, 2023. The increase consists of an increase in inorganic R&D expense of $3.4 million driven by post-acquisition operations of PAR Retail and TASK Group while organic R&D expense decreased by $0.2 million as we continue to reinforce efficiency in our R&D function.

Current wording

R&D expenses were $19.8 million for the three months ended March 31, 2025, an increase of $4.0 million or 25.4% compared to $15.8 million for the three months ended March 31, 2024. The increase was substantially driven by a $3.6 million increase in inorganic R&D expense stemming from post-acquisition operations of TASK Group and Delaget, as well as the inclusion of approximately two additional months of PAR Retail R&D expense in the current period. Organic R&D expense increased by $0.4 million driven by higher outsourced development costs as we continue to work to improve and diversify our product and service offerings.

Previous wording

Amortization of identifiable intangible assets was $2.7 million for the three months ended September 30, 2024, an increase of $2.2 million as compared to $0.5 million for the three months ended September 30, 2023. The increase primarily consists of an increase in amortizable intangible assets stemming from the Stuzo Acquisition and TASK Group Acquisition.

Current wording

Amortization of identifiable intangible assets was $3.3 million for the three months ended March 31, 2025, an increase of $2.3 million as compared to $0.9 million for the three months ended March 31, 2024. The increase primarily consists of an increase in amortizable intangible assets stemming from the Stuzo Acquisition, TASK Group Acquisition, Delaget Acquisition, and GoSkip Asset Acquisition.

Previous wording

Other expense, net was $1.4 million for the three months ended September 30, 2024, an increase of $1.1 million compared to $0.3 million for the three months ended September 30, 2023. Other expense, net primarily consists of rental income, net of applicable expenses, foreign currency transaction gains and losses and other non-operating income/expenses. The change was substantially driven by increases in foreign currency transaction losses and other miscellaneous expenses.

Current wording

Other expense, net was $0.1 million for the three months ended March 31, 2025, a decrease of $0.4 million compared to other income, net of $0.3 million for the three months ended March 31, 2024. The change was substantially driven by increases in foreign currency transaction losses and other miscellaneous expenses.

Previous wording

Net income from discontinued operations was $0.8 million for the three months ended September 30, 2024, a decrease of $2.9 million as compared to $3.7 million for the three months ended September 30, 2023. The decrease was primarily driven by PGSC and RRC operating income only being included for the three months ended September 30, 2023, partially offset by a gain from the sale of RRC.

Current wording

Net income from discontinued operations was $0.2 million for the three months ended March 31, 2025, a decrease of $1.9 million as compared to $2.1 million for the three months ended March 31, 2024. The decrease was primarily driven by PGSC and RRC operating income only being present for the three months ended March 31, 2024, compared to a gain from the divestiture of RRC recognized during the three months ended March 31, 2025.

Previous wording

ARR is the annualized revenue from our subscription services, which includes subscription fees for our SaaS solutions and related support, managed platform development services, and transaction-based fees for payment processing services. We generally calculate ARR by annualizing the monthly recurring revenue for all active sites as of the last day of each month for the respective reporting period. ARR is an operating measure, it does not reflect our revenue determined in accordance with GAAP, and ARR should be viewed independently of, and not combined with or substituted for, our revenue and other financial information determined in accordance with GAAP. Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of our future or expected results.

Current wording

ARR is the annualized revenue from our subscription services, which includes subscription fees for our SaaS solutions and related support, managed platform development services, and transaction-based fees for payment processing services. We generally calculate ARR by annualizing the monthly recurring revenue for all active sites as of the last day of each month for the respective reporting period. ARR is an operating measure, it does not reflect our revenue determined in accordance with GAAP, and ARR should be viewed independently of, and not combined with or substituted for, our revenue and other financial information determined in accordance with GAAP. Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of our future or expected results. Our reported ARR is based on a constant currency, using the exchange rates established at the beginning of the year and consistently applied throughout the period and to comparative periods presented. The table below presents our ARR on a constant currency basis, calculated using the exchange rates set at the beginning of 2025. For acquisitions made during each period, the constant currency rate applied is the exchange rate at the date of each acquisition's closure. There was no impact on our ARR as of March 31, 2024 as a result of applying a constant currency as the exchange rate effects only began with the TASK Group Acquisition in July 2024.

Previous wording

•Engagement Cloud consisting of Punchh, PAR Retail, PAR Ordering, and Plexure product offerings.

Current wording

•Engagement Cloud consisting of Punchh, PAR Retail (including GoSkip), PAR Ordering, and Plexure product offerings.

Previous wording

•Operator Cloud consisting of PAR POS, PAR Payment Services, PAR Pay, Data Central, and TASK product offerings.

Current wording

•Operator Cloud consisting of PAR POS, PAR Pay, PAR OPS (Data Central and Delaget), and TASK product offerings.

Previous wording

*Inorganic Engagement Cloud ARR represents PAR Retail and Plexure ARR only as of September 30, 2024.

Current wording

*Inorganic Engagement Cloud ARR represents GoSkip and Plexure ARR only as of March 31, 2025.

Previous wording

**Inorganic Operator Cloud ARR represents TASK ARR only as of September 30, 2024.

Current wording

**Inorganic Operator Cloud ARR represents TASK and Delaget ARR only as of March 31, 2025.

Previous wording

*Inorganic Engagement Cloud active sites includes PAR Retail and Plexure active sites only as of September 30, 2024.

Current wording

*Inorganic Engagement Cloud active sites represents GoSkip and Plexure active sites only as of March 31, 2025.

Previous wording

**Inorganic Operator Cloud active sites represents TASK active sites only as of September 30, 2024.

Current wording

**Inorganic Operator Cloud active sites represents TASK and Delaget active sites only as of March 31, 2025.

Previous wording

The tables below provide reconciliations between net income (loss) and adjusted EBITDA, diluted net income (loss) per share and non-GAAP diluted net loss per share, and subscription service gross margin percentage and non-GAAP subscription service gross margin percentage. Amounts presented in the reconciliations and other tables presented herein may not sum due to rounding.

Current wording

The tables below provide reconciliations between net loss and adjusted EBITDA, diluted net loss per share and non-GAAP diluted net loss per share, and subscription service gross margin percentage and non-GAAP subscription service gross margin percentage. Amounts presented in the reconciliations and other tables presented herein may not sum due to rounding.

Previous wording

Our primary sources of liquidity are cash and cash equivalents and short-term investments. As of September 30, 2024, we had cash and cash equivalents of $105.8 million and short-term investments of $12.6 million. Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less, including money market funds. Short-term investments are held-to-maturity investment securities consisting of investment-grade interest bearing instruments, primarily treasury bills and notes, which are stated at amortized cost.

Current wording

Our primary sources of liquidity are cash and cash equivalents. As of March 31, 2025, we had cash and cash equivalents of $91.7 million. Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less, including money market funds.

Previous wording

Cash used in operating activities was $28.6 million for the nine months ended September 30, 2024, compared to $18.5 million for the nine months ended September 30, 2023. The increase in cash used in operating activities of $10.1 million was substantially driven by an increase in cash used relating to our discontinued operations.

Current wording

Cash used in operating activities was $17.2 million for the three months ended March 31, 2025, compared to $23.6 million for the three months ended March 31, 2024. The decrease in cash used in operating activities was primarily driven by improved profitability from our core operations.

Previous wording

Cash used in investing activities was $178.1 million for the nine months ended September 30, 2024 compared to $4.8 million for the nine months ended September 30, 2023. Cash used in investing activities during the nine months ended September 30, 2024 included $293.6 million of cash consideration paid in connection with the Stuzo Acquisition and the TASK Group Acquisition (net of cash acquired) and capital expenditures of $4.0 million for developed technology costs associated with our software platforms, partially offset by $92.1 million of cash consideration received in connection with the disposition of PGSC and RRC and $24.9 million of proceeds from net sales of short-term held-to-maturity investments.

Current wording

Cash used in investing activities was $5.7 million for the three months ended March 31, 2025 compared to $151.9 million for the three months ended March 31, 2024. Cash used in investing activities during the three months ended March 31, 2025 included $4.3 million of cash consideration paid in connection with the GoSkip Asset Acquisition and capital expenditures of $1.1 million for developed technology costs associated with our software platforms, partially offset by $0.2 million of cash consideration received in connection with the disposition of RRC.

Previous wording

Cash provided by financing activities was $279.3 million for the nine months ended September 30, 2024, compared to cash used in financing activities of $1.8 million for the nine months ended September 30, 2023. Cash provided by financing activities during the nine months ended September 30, 2024 primarily consisted of a private placement of common stock of $194.5 million (net of issuance costs) and $87.3 million (net of issuance costs) from the Credit Facility. We do not have any off-balance sheet arrangements or obligations.

Current wording

Cash provided by financing activities was $10.7 million for the three months ended March 31, 2025, compared to $190.8 million for the three months ended March 31, 2024. Cash provided by financing activities during the three months ended March 31, 2025 primarily consisted of the net proceeds from the sale of the 2030 Notes of $111.1 million (net of issuance costs), partially offset by the repayment in full of $90 million principal amount outstanding under the Credit Facility plus accrued interest and prepayment premium. We do not have any off-balance sheet arrangements or obligations.

Previous wording

We expect our available cash and cash equivalents will be sufficient to meet our operating needs for at least the next 12 months. Over the next 12 months our total contractual obligations are $55.4 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $36.3 million, interest payments on long-term debt of $17.1 million and facility lease obligations of $2.0 million. We expect to fund such commitments with cash provided by operating activities and our sources of liquidity.

Current wording

We expect our available cash and cash equivalents will be sufficient to meet our operating needs for at least the next 12 months. Over the next 12 months our total contractual obligations are $53.8 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $44.6 million, interest payments on long-term debt of $6.5 million and facility lease obligations of $2.7 million. We expect to fund such commitments with cash provided by operating activities and our sources of liquidity.

Previous wording

Our non-current contractual obligations are $550.2 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $41.1 million, interest payments of $29.3 million and principal payments of $475.0 million related to long-term debt, and facility leases of $4.8 million. Refer to “Note 8 – Debt” of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report for additional information.

Current wording

Our non-current contractual obligations are $445.7 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $25.6 million, interest payments of $13.6 million and principal payments of $400.0 million related to long-term debt, and facility leases of $6.5 million. Refer to “Note 8 – Debt” of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report for additional information. We expect to fund such commitments with cash provided by operating activities, our sources of liquidity, and if necessary, equity, equity-linked, or debt financing arrangements.

Previous wording

Our financial statements are based on the application of accounting principles generally accepted in the United States of America. GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied. Valuations based on estimates are reviewed for reasonableness and adequacy on a consistent basis. Significant items subject to these estimates and assumptions include revenue recognition, stock-based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant, and equipment including right-to-use assets and liabilities, identifiable intangible assets and goodwill, valuation allowances for receivables, valuation of excess and obsolete inventories, and measurement of contingent consideration at fair value. Actual results could differ from these estimates. Our estimates are subject to uncertainties, including those associated with market conditions, risks and trends. Refer to "Part II, Item 1A. Risk Factors" of this Quarterly Report for additional information. Our critical accounting policies have not changed materially from the discussion of those policies included under “Critical Accounting Policies and Estimates” in our 2023 Annual Report.

Current wording

Our financial statements are based on the application of accounting principles generally accepted in the United States of America. GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied. Valuations based on estimates are reviewed for reasonableness and adequacy on a consistent basis. Significant items subject to these estimates and assumptions include revenue recognition, the recognition and measurement of assets acquired and liabilities assumed in business combinations and asset acquisitions at fair value, identifiable intangible assets and goodwill, valuation allowances for receivables, valuation of excess and obsolete inventories, and classification of discontinued operations. Actual results could differ from these estimates. Our estimates are subject to uncertainties, including those associated with market conditions, risks and trends. Refer to "Part II, Item 1A. Risk Factors" of this Quarterly Report for additional information. Our critical accounting policies have not changed materially from the discussion of those policies included under “Critical Accounting Policies and Estimates” in our 2024 Annual Report.