PAR TECHNOLOGY CORP
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
PAR$20.55+7.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0000708821-26-000078
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0000708821-26-000103
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 98 current paragraphs.
32 unchanged; 27 reworded; 36 added; 10 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 20 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
GAAP - Consistent year-over-year
Current report
Total revenues were $133.4 million for the three months ended June 30, 2026, an increase of $21.0 million or 18.7% compared to $112.4 million for the three months ended June 30, 2025.
Current report
Subscription service revenues were $83.4 million for the three months ended June 30, 2026, an increase of
Current report
$11.5 million or 16.0% compared to $71.9 million for the three months ended June 30, 2025. Of this increase, $4.2 million was driven by inorganic revenue growth contributed by the Bridg product line. The remaining $7.3 million was driven by growth in average revenue per site through cross-selling, upselling, and price increase initiatives.
Current report
Total revenues were $257.4 million for the six months ended June 30, 2026, an increase of $41.1 million or 19.0% compared to $216.3 million for the six months ended June 30, 2025.
Current report
Professional service revenues were $31.1 million for the six months ended June 30, 2026, an increase of $3.9 million or 14.3% compared to $27.2 million for the six months ended June 30, 2025. The increase was primarily driven by a $3.8 million increase in installation revenues associated with the onboarding of tier-one customers.
Current report
Total gross margin as a percentage of total revenue for the three months ended June 30, 2026, decreased to 42.4% as compared to 45.4% for the three months ended June 30, 2025.
Current report
Subscription service gross margin as a percentage of subscription service revenue for the three months ended June 30, 2026, remained consistent at 55.2% as compared to 55.3% for the three months ended June 30, 2025.
Current report
Hardware gross margin as a percentage of hardware revenue for the three months ended June 30, 2026, decreased to 20.3% as compared to 27.3% for the three months ended June 30, 2025. The decrease was primarily driven by an increase in excess and obsolete inventory expense, including a $1.5 million charge recorded in the second quarter of 2026 related to a discontinued product, and a shift in hardware product mix.
Current report
Professional service gross margin as a percentage of professional service revenue for the three months ended June 30, 2026, decreased to 22.7% as compared to 28.7% for the three months ended June 30, 2025. The decrease was primarily driven by a shift in professional service revenue mix toward lower-margin installation services associated with the onboarding of tier-one customers.
Current report
Hardware margin as a percentage of hardware revenue for the six months ended June 30, 2026, decreased to 20.9% from 26.1% for the six months ended June 30, 2025. The decrease was driven by an increase in excess and obsolete inventory expense, including a $1.5 million charge recorded in the second quarter of 2026 related to a discontinued product, and a shift in hardware product mix.
Current report
Professional service margin as a percentage of professional service revenue for the six months ended June 30, 2026, decreased to 25.4% from 27.0% for the six months ended June 30, 2025. The decrease was primarily driven by a shift in professional service revenue mix toward lower-margin installation services associated with the onboarding of tier-one customers.
Current report
S&M expenses were $11.6 million for the three months ended June 30, 2026, a decrease of $0.7 million or 5.8% compared to $12.3 million for the three months ended June 30, 2025. The decrease was driven by a $1.2 million decrease in organic S&M expense, primarily due to a $0.5 million decrease in recurring compensation costs, a $0.3 million decrease in marketing and advertising spend, and a $0.3 million decrease in travel expense and purchased services. The decrease was partially offset by a $0.5 million increase in inorganic S&M expense stemming from post-acquisition operations of the Bridg product line.
Current report
S&M expenses were $23.8 million for the six months ended June 30, 2026, a decrease of $0.2 million or 0.9% compared to $24.1 million for the six months ended June 30, 2025. The decrease was driven by a $0.7 million decrease in organic S&M expense, primarily due to a $0.9 million decrease in recurring compensation costs, partially offset by a $0.2 million increase in severance costs related to non-recurring restructuring activities. This decrease was partially offset by a $0.5 million increase in inorganic S&M expense stemming from post-acquisition operations of the Bridg product line.
Current report
G&A expenses were $26.3 million for the three months ended June 30, 2026, a decrease of $5.4 million or 17.1% compared to $31.7 million for the three months ended June 30, 2025. The decrease was primarily driven by a $1.1 million decrease in bad debt expense, a $0.7 million decrease in recurring compensation costs, a $0.5 million decrease in purchased services, and a $0.5 million decrease in travel expense.
Current report
The remaining decrease was primarily driven by decreases in certain non-cash or non-recurring expenses consisting of a $1.2 million decrease in stock-based compensation, a $0.6 million decrease in transaction due diligence and integration costs, and a $0.6 million decrease in litigation-related expenses.
Current report
G&A expenses were $57.0 million for the six months ended June 30, 2026, a decrease of $4.0 million or 6.6% compared to $61.0 million for the six months ended June 30, 2025. The decrease was primarily driven by a $1.5 million decrease in purchased services and a $1.4 million decrease in recurring compensation costs.
Current report
The remaining decrease was primarily driven by decreases in certain non-cash or non-recurring expenses consisting of a $1.3 million decrease in stock-based compensation, a $1.1 million decrease in transaction due diligence and integration costs, and a $0.2 million decrease in litigation-related expenses, partially offset by a $1.4 million increase in severance costs related to non-recurring restructuring activities.
Current report
Research and Development Expense ("R&D")
Current report
R&D expenses were $22.5 million for the three months ended June 30, 2026, an increase of $1.6 million or 7.5% compared to $20.9 million for the three months ended June 30, 2025. The increase includes $1.3 million of inorganic R&D expense stemming from post-acquisition operations of the Bridg product line. Organic R&D expense increased by $0.3 million, primarily driven by a $0.5 million increase in consulting services and a $0.4 million increase in outsourced development costs, partially offset by a $0.6 million decrease in recurring compensation costs. The net increase in recurring R&D expense reflects continued investment in product development, including AI-enabled functionality and other enhancements to our product and service offerings.
Current report
Other Operating Expenses
Current report
Intangible asset impairment loss was $5.4 million for the three months ended June 30, 2026, related to the write-off of an indefinite-lived trademark acquired in the Stuzo Acquisition. There was no intangible asset impairment loss for the three months ended June 30, 2025.
Current report
Amortization of identifiable intangible assets was $7.2 million for the six months ended June 30, 2026, an increase of $0.5 million from $6.7 million for the six months ended June 30, 2025. The increase was primarily driven by an increase in amortizable intangible assets stemming from the Bridg Asset Acquisition.
Current report
Intangible asset impairment loss was $5.4 million for the six months ended June 30, 2026, related to the write-off of an indefinite-lived trademark acquired in the Stuzo Acquisition. There was no intangible asset impairment loss for the six months ended June 30, 2025.
Current report
Interest expense, net was $3.4 million for the three months ended June 30, 2026, an increase of $2.0 million compared to $1.4 million for the three months ended June 30, 2025. The increase was driven by a higher outstanding principal balance following the March 2026 issuance of the 2031 Notes, which also carry a higher interest rate than the Company's other convertible notes.
Current report
Interest expense, net was $5.3 million for the six months ended June 30, 2026, an increase of $2.3 million compared to $3.0 million for the six months ended June 30, 2025. The increase was driven by a higher outstanding principal balance following the March 2026 issuance of the 2031 Notes, which also carry a higher interest rate than the Company's other convertible notes.
Current report
There was no gain or loss on extinguishment of debt for the three months ended June 30, 2026 or the three months ended June 30, 2025.
Current report
Provision for income taxes was $2.9 million for the six months ended June 30, 2026, an increase of $0.7 million compared to $2.2 million for the six months ended June 30, 2025. The increase was primarily driven by additional foreign income tax expense.
Current report
Beginning with this Quarterly Report, our key performance indicators, ARR and active sites, are presented on a total basis rather than disaggregated into our Engagement Cloud and Operator Cloud subscription service product lines as presented in prior periods. As multi-product arrangements have become increasingly common and our products are marketed and delivered as a unified platform, management no longer views or manages the business along these two separate product lines. This change aligns our key performance indicators with how management currently evaluates the business. Prior period amounts have been conformed to this presentation for comparability. Total active sites will not equal the sum of previously reported product line active site counts because sites that subscribed to both product lines are counted only once in the total active site metric.
Current report
Beginning in the second quarter of 2026, the Company revised its calculation of non-GAAP net income (loss) per share to: (i) reflect the current and deferred income tax effects attributable to its non-GAAP adjustments; and (ii) include the dilutive effect of equity-based awards and other potentially dilutive securities when the Company reports non-GAAP net income, even when such securities are excluded from GAAP diluted earnings per share because they were antidilutive to the GAAP net loss. Prior period non-GAAP amounts presented herein have been recast to conform to the revised methodology. These revisions affect only the Company’s non-GAAP measures and do not affect its GAAP financial statements, GAAP net income (loss), or GAAP net income (loss) per share.
Current report
(1) The income tax effect of the non-GAAP adjustments reflects the jurisdiction-specific tax consequences attributable to those adjustments, calculated by (i) applying the applicable statutory tax rate to non-GAAP adjustments in jurisdictions where no valuation allowance exists; and (ii) applying no tax effect to adjustments in jurisdictions with a full valuation allowance.
Current report
(2) Represents the incremental effect of dilutive securities included in the calculation of non-GAAP diluted weighted average shares outstanding.
Current report
(3) Non-GAAP diluted weighted average shares outstanding include the effect of potentially dilutive common stock equivalents (stock options, restricted stock units, and warrants) under the treasury stock method. Shares issuable upon conversion of the Company's convertible senior notes were excluded because their conversion would have been antidilutive to non-GAAP net income per share for the periods presented after applying the if-converted method from the beginning of the period or, if later, the issuance date, which requires adding back the related interest expense to the numerator and including the shares issuable upon conversion in the denominator.
Current report
(1) The income tax effect of the non-GAAP adjustments reflects the jurisdiction-specific tax consequences attributable to those adjustments, calculated by (i) applying the applicable statutory tax rate to non-GAAP adjustments in jurisdictions where no valuation allowance exists; and (ii) applying no tax effect to adjustments in jurisdictions with a full valuation allowance.
Current report
(2) Represents the incremental effect of dilutive securities included in the calculation of non-GAAP diluted weighted average shares outstanding.
Current report
(3) Non-GAAP diluted weighted average shares outstanding include the effect of potentially dilutive common stock equivalents (stock options, restricted stock units, and warrants) under the treasury stock method. Shares issuable upon conversion of the Company's convertible senior notes were excluded because their conversion would have been antidilutive to non-GAAP net income per share for the periods presented after applying the if-converted method from the beginning of the period or, if later, the issuance date, which requires adding back the related interest expense to the numerator and including the shares issuable upon conversion in the denominator.
Removed paragraphs (10)
Previous report
Total revenues were $124.0 million for the three months ended March 31, 2026, an increase of $20.1 million or 19.4% compared to $103.9 million for the three months ended March 31, 2025.
Previous report
Hardware margin as a percentage of hardware revenue for the three months ended March 31, 2026, decreased to 21.6% from 24.6% for the three months ended March 31, 2025. The decrease was driven by a shift in hardware product mix and higher tariff-related costs compared to the prior year. While pricing adjustments initiated in the third quarter of 2025 have partially mitigated these cost increases, they have not fully offset the impact, resulting in continued margin compression. The Company plans to implement additional pricing actions and will continue to evaluate its pricing strategy on a quarterly basis.
Previous report
Professional service margin as a percentage of professional service revenue for the three months ended March 31, 2026, increased to 27.8% from 25.4% for the three months ended March 31, 2025. The increase was primarily driven by improved margins in our hardware service repair operations and field operations as a result of reduced third-party spending and improved cost management.
Previous report
S&M expenses were $12.3 million for the three months ended March 31, 2026, an increase of $0.5 million or 4.3% compared to $11.8 million for the three months ended March 31, 2025. The increase was primarily driven by a $0.8 million increase in marketing expenses and a $0.3 million increase in severance costs related to non-recurring restructuring events, partially offset by a $0.4 million decrease in recurring compensation costs and a $0.2 million decrease in contracted services.
Previous report
G&A expenses were $30.7 million for the three months ended March 31, 2026, an increase of $1.4 million or 4.8% compared to $29.3 million for the three months ended March 31, 2025. The increase was primarily driven by a $1.2 million increase in severance costs related to non-recurring restructuring events.
Previous report
Research and Development Expenses ("R&D")
Previous report
Amortization of Identifiable Intangible Assets
Previous report
Interest expense, net was $1.9 million for the three months ended March 31, 2026, relatively unchanged from $1.6 million for the three months ended March 31, 2025.
Previous report
•Engagement Cloud consisting of PAR Engagement (Punchh and PAR Ordering), PAR Retail, Plexure, and Bridg product offerings.
Previous report
•Operator Cloud consisting of PAR POS, PAR Pay, PAR OPS (Data Central and Delaget), and TASK product offerings.
Reworded paragraphs (27)
Previous wording
Non-GAAP - Year-over-year decrease of 350 bps
Current wording
Non-GAAP - Year-over-year decrease of 130 bps
Previous wording
Net Loss from Cont. Ops.Year-over-year improvement of $8.4 million
Current wording
Net Loss from Cont. Ops.Year-over-year improvement of $4.1 million
Previous wording
Adjusted EBITDAYear-over-year improvement of $4.4 million
Current wording
Adjusted EBITDAYear-over-year improvement of $8.7 million
Previous wording
The tariff and supply chain environment remains complex and evolving. Beginning in the second quarter of 2025, the U.S. government implemented a series of significant new tariffs, including under the International Emergency Economic Powers Act ("IEEPA"), affecting imports from several countries where we source certain components and hardware products. Other countries responded with retaliatory actions or plans for retaliatory actions. On February 20, 2026, the U.S. Supreme Court held that IEEPA does not authorize the President to impose tariffs, though the administrative process for seeking refunds remains under development and subject to considerable uncertainty. Following the ruling, the administration announced a replacement, time-limited 10% global ad valorem tariff effective February 24, 2026, which has subsequently been subject to legal challenge. In March 2026, the U.S. Trade Representative was directed to initiate new investigations for the purpose of building the legal foundation for a second round of durable, country-specific tariffs. The resulting situation remains uncertain and fluid.
Current wording
The tariff and supply chain environment remains complex and evolving. Beginning in the second quarter of 2025, the U.S. government implemented a series of significant new tariffs, including under the International Emergency Economic Powers Act ("IEEPA"), affecting imports from several countries where we source certain components and hardware products. Other countries responded with retaliatory actions or plans for retaliatory actions. On February 20, 2026, the U.S. Supreme Court held that IEEPA does not authorize the President to impose tariffs and, following the ruling, the administration announced a replacement, time-limited 10% global ad valorem tariff effective February 24, 2026, which expired July 24, 2026. In its place, the administration immediately imposed new Section 301 duties of 10 to 12.5 percent on products from 80 countries. Litigation continues over refunds tied to the invalidated IEEPA duties and the tariff environment remains subject to considerable uncertainty.
Previous wording
Professional service revenues were $16.2 million for the three months ended March 31, 2026, an increase of $2.6 million or 19.0% compared to $13.6 million for the three months ended March 31, 2025. The increase was primarily driven by a $2.3 million increase in installation revenues associated with the onboarding of Tier 1 Operator Cloud customers.
Current wording
Professional service revenues were $14.9 million for the three months ended June 30, 2026, an increase of $1.3 million or 9.5% from $13.6 million for the three months ended June 30, 2025. The increase was primarily driven by a $1.5 million increase in installation revenues associated with the onboarding of tier-one customers.
Previous wording
Subscription service revenues were $78.5 million for the three months ended March 31, 2026, an increase of $10.1 million or 14.8% compared to $68.4 million for the three months ended March 31, 2025. The increase was primarily driven by increased Engagement Cloud subscription service revenues of $6.2 million, primarily driven by growth in average revenue per site through cross-selling initiatives, upselling, and price increases. Operator Cloud subscription service revenues increased $3.9 million, primarily driven by growth in active sites.
Current wording
Subscription service revenues were $161.9 million for the six months ended June 30, 2026, an increase of $21.6 million or 15.4% compared to $140.3 million for the six months ended June 30, 2025. Of this increase, $4.5 million was driven by inorganic revenue growth contributed by the Bridg product line. The remaining $17.1 million was driven by growth in average revenue per site through cross-selling, upselling, and price increase initiatives.
Previous wording
Hardware revenues were $29.3 million for the three months ended March 31, 2026, an increase of $7.4 million or 33.9% compared to $21.8 million for the three months ended March 31, 2025. The increase was primarily driven by increased revenues from sales of terminals of $3.8 million, peripherals (scanners, printers, and components) of $0.9 million, kiosks of $0.9 million, and an increase in international sales of $0.8 million. These increases were substantially driven by the timing of tier-one enterprise customer hardware refresh cycles and the onboarding of Operator Cloud customers purchasing hardware. Hardware revenues will continue to be affected by the timing of the aforementioned drivers.
Current wording
Hardware revenues were $64.3 million for the six months ended June 30, 2026, an increase of $15.6 million or 32.1% compared to $48.7 million for the six months ended June 30, 2025. The increase was primarily driven by increased revenues from sales of terminals of $8.6 million, peripherals (scanners, printers, and components) of $3.0 million, kiosks of $0.8 million, and an increase in international sales of $2.5 million. These increases were substantially driven by the timing of tier-one enterprise customer hardware refresh cycles and the onboarding of subscription service customers purchasing hardware. Hardware revenues will continue to be affected by the timing of the aforementioned drivers.
Previous wording
Total gross margin as a percentage of revenue for the three months ended March 31, 2026, decreased to 44.0% from 46.5% for the three months ended March 31, 2025.
Current wording
Total gross margin as a percentage of revenue for the six months ended June 30, 2026, decreased to 43.2% from 45.9% for the six months ended June 30, 2025.
Previous wording
Subscription service margin as a percentage of subscription service revenue for the three months ended March 31, 2026, decreased to 55.6% from 57.8% for the three months ended March 31, 2025. The decrease primarily reflects a change in subscription service revenue mix, as product and service offerings with comparatively lower gross margins represented a greater proportion of revenue, consistent with the mix shift that began in the second quarter of 2025.
Current wording
Subscription service margin as a percentage of subscription service revenue for the six months ended June 30, 2026, decreased to 55.4% from 56.5% for the six months ended June 30, 2025. The decrease primarily reflects a change in subscription service revenue mix, as product and service offerings with comparatively lower gross margins represented a greater proportion of revenue, consistent with the mix shift that began in the second quarter of 2025. The prior year comparative includes periods prior to this shift.
Previous wording
R&D expenses were $22.0 million for the three months ended March 31, 2026, an increase of $2.2 million or 11.2% compared to $19.8 million for the three months ended March 31, 2025. The increase was primarily driven by a $0.8 million increase in outsourced development costs and a $0.6 million increase in recurring compensation costs, reflecting continued investment in product development, including AI-enabled functionality and other enhancements to our product and service offerings. The residual increase was primarily driven by a $0.6 million increase in severance costs related to non-recurring restructuring events.
Current wording
R&D expenses were $44.5 million for the six months ended June 30, 2026, an increase of $3.8 million or 9.3% compared to $40.7 million for the six months ended June 30, 2025. The increase includes $1.3 million of inorganic R&D expense stemming from post-acquisition operations of the Bridg product line. Organic R&D expense increased $2.5 million, primarily driven by a $1.2 million increase in outsourced development costs and a $1.0 million increase in consulting services, partially offset by a $0.5 million decrease in recurring compensation costs. The net increase in recurring R&D expense reflects continued investment in product development, including AI-enabled functionality and other enhancements to our product and service offerings. The remaining increase was driven by a $0.8 million increase in severance costs related to non-recurring restructuring activities.
Previous wording
Amortization of identifiable intangible assets was $3.4 million for the three months ended March 31, 2026, relatively unchanged from $3.3 million for the three months ended March 31, 2025.
Current wording
Amortization of identifiable intangible assets was $3.7 million for the three months ended June 30, 2026, an increase of $0.3 million as compared to $3.4 million for the three months ended June 30, 2025. The increase was primarily driven by an increase in amortizable intangible assets stemming from the Bridg Asset Acquisition.
Previous wording
Other income, net was $0.8 million for the three months ended March 31, 2026, a change of $0.9 million compared to other expense, net of $0.1 million for the three months ended March 31, 2025. The change was primarily driven by foreign currency fluctuations, with net foreign currency gains recognized in the current period compared to net losses in the prior period.
Current wording
Other income, net was $0.8 million for the three months ended June 30, 2026, a change of $2.2 million compared to other expense, net of $1.4 million for the three months ended June 30, 2025. The change was substantially driven by foreign currency transaction fluctuations, with net foreign currency gains recognized in the current period compared to net losses in the prior period.
Previous wording
Gain on extinguishment of debt, net was $0.4 million for the three months ended March 31, 2026, related to the $3.9 million gain recognized on the repurchase of a portion of the 2027 Notes, partially offset by the $3.5 million loss recognized on the induced conversion of a portion of the 2026 Notes. For the three months ended March 31, 2025, loss on extinguishment of debt, net was $5.8 million, related to the early repayment of the Credit Facility.
Current wording
Gain on extinguishment of debt, net was $0.4 million for the six months ended June 30, 2026, related to the $3.9 million gain recognized on the repurchase of a portion of the 2027 Notes, partially offset by the $3.5 million loss recognized on the induced conversion of a portion of the 2026 Notes. For the six months ended June 30, 2025, loss on extinguishment of debt, net was $5.8 million, related to the early repayment of the former credit facility with Blue Owl Capital Corporation as administrative agent and collateral agent and Blue Owl Credit Advisors, LLC as lead arranger and bookrunner (the "Credit Facility").
Previous wording
Provision for income taxes was $1.6 million for the three months ended March 31, 2026, relatively unchanged from $1.3 million for the three months ended March 31, 2025.
Current wording
Provision for income taxes was $1.4 million for the three months ended June 30, 2026, an increase of $0.4 million compared to $0.9 million for the three months ended June 30, 2025. The increase was primarily driven by additional foreign income tax expense.
Previous wording
There was no income from discontinued operations for the three months ended March 31, 2026, compared to $0.2 million for the three months ended March 31, 2025, stemming from a $0.2 million gain recognized from the divestiture of RRC as a result of a favorable net working capital settlement.
Current wording
There was no income from discontinued operations for the six months ended June 30, 2026, compared to $0.2 million for the six months ended June 30, 2025, stemming from a $0.2 million gain recognized from the divestiture of RRC as a result of a favorable net working capital settlement.
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 2026. Using the exchange rates established during the prior period, ARR as of June 30, 2025 was $1.5 million lower than the constant currency ARR reported below.
Previous wording
Active sites represent locations active on our subscription services as of the last day of the respective reporting period. Our key performance indicators ARR and active sites are presented as two subscription service product lines:
Current wording
Active sites represent locations active on our subscription services as of the last day of the respective reporting period.
Previous wording
Beginning in the first quarter of 2026, the Company revised its methodology for classifying organic and inorganic ARR. Under the revised methodology, inorganic ARR is defined as ARR attributable to an acquisition as of the acquisition date. Any change to ARR subsequent to that date is classified as organic ARR. Management believes this methodology provides investors with useful information differentiating ARR acquired in a transaction from ARR changes driven by operating performance after acquisition. Prior to this change, ARR contributions from acquisitions were classified as inorganic for the first twelve months following acquisition. 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 2026. Using the exchange rates established during the prior period, Engagement Cloud ARR and Operator Cloud ARR as of March 31, 2025 were $1.0 million and $0.6 million lower, respectively, than the constant currency ARR reported below.
Current wording
Beginning in the first quarter of 2026, the Company revised its methodology for classifying organic and inorganic ARR. Under the revised methodology, inorganic ARR is defined as ARR attributable to an acquisition as of the acquisition date. Any change to ARR subsequent to that date is classified as organic ARR. Management believes this methodology provides investors with useful information differentiating ARR acquired in a transaction from ARR changes driven by operating performance after acquisition. Prior to this change, ARR contributions from acquisitions were classified as inorganic for the first twelve months following acquisition.
Previous wording
*Inorganic Engagement Cloud ARR represents Bridg ARR only as of March 24, 2026.
Current wording
*Inorganic ARR represents Bridg ARR only as of March 24, 2026.
Previous wording
*Inorganic Engagement Cloud active sites represent Bridg active sites only as of March 24, 2026.
Current wording
*Inorganic active sites represent Bridg unique active sites only as of March 24, 2026.
Previous wording
In addition to disclosing financial results in accordance with GAAP, this Quarterly Report contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. Our non-GAAP financial measures reflect adjustments based on one or more of the following items below. The income tax effect of the below adjustments were not tax-effected due to the valuation allowance on all of our net deferred tax assets.
Current wording
In addition to disclosing financial results in accordance with GAAP, this Quarterly Report contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. Our non-GAAP financial measures reflect adjustments based on one or more of the following items below.
Previous wording
Our primary sources of liquidity are cash and cash equivalents. As of March 31, 2026, we had cash and cash equivalents of $77.2 million. Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less, including money market funds.
Current wording
Our primary sources of liquidity are cash and cash equivalents. As of June 30, 2026, we had cash and cash equivalents of $77.4 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 $16.6 million for the three months ended March 31, 2026, compared to $17.2 million for the three months ended March 31, 2025. The decrease in cash used in operating activities was primarily driven by improved profitability from our core operations, partially offset by an increased investment in inventory to support anticipated customer demand.
Current wording
Cash used in operating activities was $9.4 million for the six months ended June 30, 2026, compared to $23.8 million for the six months ended June 30, 2025. 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 $3.0 million for the three months ended March 31, 2026 compared to $5.7 million for the three months ended March 31, 2025. Cash used in investing activities during the three months ended March 31, 2026 included capital expenditures of $2.4 million for developed technology costs associated with our software platforms and capital expenditures of $0.3 million for fixed assets. The greater amount of cash used in investing activities during the three months ended March 31, 2025 was largely driven by the GoSkip Asset Acquisition.
Current wording
Cash used in investing activities was $6.5 million for the six months ended June 30, 2026 compared to $7.7 million for the six months ended June 30, 2025. Cash used in investing activities during the six months ended June 30, 2026 included capital expenditures of $5.4 million for developed technology costs associated with our software platforms and capital expenditures of $0.8 million for fixed assets. The greater amount of cash used in investing activities during the six months ended June 30, 2025 was largely driven by the GoSkip Asset Acquisition.
Previous wording
Cash provided by financing activities was $17.8 million for the three months ended March 31, 2026, compared to $10.7 million for the three months ended March 31, 2025. Cash provided by financing activities during the three months ended March 31, 2026 primarily consisted of the net proceeds from the sale of the 2031 Notes of $257.1 million (net of issuance costs), partially offset by $206.2 million used to repurchase a portion of the 2027 Notes and $33.1 million used to repurchase shares of the Company's common stock. 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 $93.6 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.
Current wording
Cash provided by financing activities was $15.6 million for the six months ended June 30, 2026, compared to $11.4 million for the six months ended June 30, 2025. Cash provided by financing activities during the six months ended June 30, 2026 primarily consisted of the net proceeds from the sale of the 2031 Notes of $257.1 million (net of issuance costs), partially offset by $206.2 million used to repurchase a portion of the 2027 Notes, $33.1 million used to repurchase shares of the Company's common stock, and $2.9 million used to repay the remaining principal on the 2026 Notes. Cash provided by financing activities during the six months ended June 30, 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 $93.6 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
Over the next 12 months our total contractual obligations are $84.2 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $63.8 million, interest payments of $14.9 million and principal payments of $2.9 million related to long-term debt, and facility lease obligations of $2.6 million. We believe our existing cash and cash equivalents, together with cash flows expected to be generated by our operations, will be sufficient to fund these commitments.
Current wording
Over the next 12 months our total contractual obligations are $78.7 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $61.1 million, interest payments of $14.9 million related to long-term debt, and facility lease obligations of $2.7 million. We believe our existing cash and cash equivalents, together with cash flows expected to be generated by our operations, will be sufficient to fund these commitments.
Previous wording
Our non-current contractual obligations are $510.1 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $14.3 million, interest payments of $54.1 million and principal payments of $433.0 million related to long-term debt, and facility leases of $8.7 million. Refer to “Note 7 — 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 believe our existing cash and cash equivalents, together with cash flows expected to be generated by our operations, and if necessary, equity, equity-linked, or debt financing arrangements, will be sufficient to fund these commitments. Our actual cash needs will depend on many factors, including our rate of revenue growth, growth of our SaaS revenues, the timing and extent of spending to support our product development and acquisition integration efforts, the timing of introductions of new products and enhancements to existing products, market acceptance of our products, and the factors described above in "Part I, Item 2. Management's Discussion and
Current wording
Our non-current contractual obligations are $509.4 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $18.0 million, interest payments of $50.4 million and principal payments of $433.0 million related to long-term debt, and facility leases of $8.0 million. Refer to “Note 7 — 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 believe our existing cash and cash equivalents, together with cash flows expected to be generated by our operations, and if necessary, equity, equity-linked, or debt financing arrangements, will be sufficient to fund these commitments. Our actual cash needs will depend on many factors, including our rate of revenue growth, growth of our SaaS revenues, the timing and extent of spending to support our product development and acquisition integration efforts, the timing of introductions of new products and enhancements to existing products, market acceptance of our products, and the factors described above in "Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations”, elsewhere in this Quarterly Report, in the 2025 Annual Report, and in our other filings with the SEC.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Hardware revenues were $35.1 million for the three months ended June 30, 2026, an increase of $8.2 million or 30.6% compared to $26.9 million for the three months ended June 30, 2025. The increase was primarily driven by increased revenues from sales of terminals of $4.8 million, peripherals (scanners, printers, and components) of $2.1 million, and an increase in international sales of $1.7 million. These increases were substantially driven by the timing of tier-one enterprise customer hardware refresh cycles and the onboarding of subscription service customers purchasing hardware. Hardware revenues will continue to be affected by the timing of the aforementioned drivers.
Current report — wording carried from elsewhere
Other income, net was $1.6 million for the six months ended June 30, 2026, a change of $3.1 million compared to other expense, net of $1.5 million for the six months ended June 30, 2025. The change was substantially driven by foreign currency fluctuations, with net foreign currency gains recognized in the current period compared to net losses in the prior period.
Current report — wording carried from elsewhere
There was no income from discontinued operations for the three months ended June 30, 2026 or the three months ended June 30, 2025.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
GAAP - Year-over-year decrease of 220 basis points (bps)
Previous report — wording carried elsewhere
Analysis of Financial Condition and Results of Operations”, elsewhere in this Quarterly Report, in the 2025 Annual Report, and in our other filings with the SEC.