PAR TECHNOLOGY CORP
For the period ended Sep 30, 2026. Filed Nov 5, 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.
Sep 30, 2026 · Filed Nov 5, 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 2026-06-30; filed 2026-08-06.
0000708821-26-000103
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0000708821-26-000116
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 98 previous paragraphs and 99 current paragraphs.
46 unchanged; 43 reworded; 9 added; 7 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 31 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 (9)
Current report
GAAP - Year-over-year increase of 50 bps
Current report
Total revenues were $137.1 million for the three months ended September 30, 2026, an increase of $17.9 million or 15.0% compared to $119.2 million for the three months ended September 30, 2025.
Current report
Total revenues were $394.5 million for the nine months ended September 30, 2026, an increase of $59.0 million or 17.6% compared to $335.4 million for the nine months ended September 30, 2025.
Current report
Hardware gross margin as a percentage of hardware revenue for the three months ended September 30, 2026, increased to 22.7% from 17.8% for the three months ended September 30, 2025. The increase was primarily driven by pricing actions implemented over the past year to offset increased supply chain costs associated with U.S. tariff policies.
Current report
Subscription service gross margin as a percentage of subscription service revenue for the nine months ended September 30, 2026, was relatively unchanged at 55.5% compared to 56.1% for the nine months ended September 30, 2025.
Current report
S&M expenses were $36.5 million for the nine months ended September 30, 2026, relatively unchanged from $36.5 million for the nine months ended September 30, 2025. S&M expense stemming from post-acquisition operations of the Bridg product line was $1.0 million. Excluding these costs, S&M expenses decreased $1.0 million, primarily driven by a $0.5 million decrease in recurring compensation costs and a $0.5 million decrease in marketing and advertising spend.
Current report
G&A expenses were $83.9 million for the nine months ended September 30, 2026, a decrease of $8.8 million or 9.5% compared to $92.7 million for the nine months ended September 30, 2025. The decrease was primarily driven by a $3.5 million decrease in recurring compensation costs, a $0.8 million decrease in bad debt expense, and a $1.3 million decrease in other non-compensation expenses.
Current report
(2) When convertible senior notes are dilutive on a non-GAAP basis, non-GAAP net income used to calculate non-GAAP diluted net income per share includes an add-back of interest expense associated with those dilutive convertible notes under the if-converted method.
Current report
As of September 1, 2026, the Company performed a quantitative goodwill impairment test of its single reporting unit, in response to, among other factors, the sustained decline in the Company’s share price and market capitalization through the third quarter of 2026 and the reversal of the recovery trend in September 2026. The estimated fair value of the reporting unit exceeded its carrying value by approximately 22% and, accordingly, no impairment was recognized. The fair value was estimated using a combination of income and market approaches, which require significant judgments, including projected revenue growth and operating margins, market multiples, a control premium, a discount rate of 12.5%, and a long-term growth rate of 3.0%. We considered events and circumstances through September 30, 2026, and concluded it was not more likely than not that the fair value of the reporting unit was less than its carrying value. If our share price and market capitalization decline further for a sustained period, particularly if accompanied by deterioration in our operating results, forecasts, peer valuation multiples, or other market-participant assumptions, we may be required to perform additional impairment testing.
Removed paragraphs (7)
Previous report
GAAP - Consistent year-over-year
Previous 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.
Previous report
Subscription service revenues were $83.4 million for the three months ended June 30, 2026, an increase of
Previous 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.
Previous report
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 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.
Previous 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.
Reworded paragraphs (43)
Previous wording
Non-GAAP - Year-over-year decrease of 130 bps
Current wording
Non-GAAP - Year-over-year decrease of 20 bps
Previous wording
Net Loss from Cont. Ops.Year-over-year improvement of $4.1 million
Current wording
Net Loss from Cont. Ops.Year-over-year improvement of $9.1 million
Previous wording
Adjusted EBITDAYear-over-year improvement of $8.7 million
Current wording
Adjusted EBITDAYear-over-year improvement of $11.3 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 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.
Current wording
The tariff and supply chain environment remains complex and evolving. Beginning in 2025, the U.S. government implemented a series of significant tariffs, including under the International Emergency Economic Powers Act ("IEEPA"), affecting imports from several countries where we source certain components and hardware products. On February 20, 2026, the U.S. Supreme Court held that IEEPA does not authorize the imposition of tariffs and, as of September 30, 2026, we have applied for and received refunds. Following the ruling, a 10% global tariff under Section 122 of the Trade Act of 1974 took effect on February 24, 2026 and expired on July 24, 2026 by its terms. On July 24, 2026, the U.S. Trade Representative imposed new duties under Section 301 of the Trade Act of 1974 of 10% or 12.5% on imports from 60 jurisdictions, which have no stated expiration date and are subject to legal challenge. We are continuing to assess the recoverability of additional IEEPA tariffs previously paid, as well as the effects of any additional tariffs or trade actions that may be imposed.
Previous 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.
Current wording
Subscription service revenues were $85.9 million for the three months ended September 30, 2026, an increase of $11.1 million or 14.9% compared to $74.8 million for the three months ended September 30, 2025. Of this increase, $4.2 million was contributed by the Bridg product line, acquired in March 2026. Excluding the Bridg contribution, subscription service revenues increased $6.9 million, driven by growth in average revenue per site through cross-selling, upselling, and price increase initiatives.
Previous 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.
Current wording
Hardware revenues were $34.4 million for the three months ended September 30, 2026, an increase of $4.5 million or 15.0% compared to $29.9 million for the three months ended September 30, 2025. The increase was primarily driven by increased revenues from sales of terminals of $3.6 million and an increase in international sales of $0.6 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
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.
Current wording
Professional service revenues were $16.9 million for the three months ended September 30, 2026, an increase of $2.3 million or 16.1% from $14.5 million for the three months ended September 30, 2025. The increase was primarily driven by a $2.5 million increase in installation revenues associated with the onboarding of tier-one customers.
Previous wording
$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 wording
Subscription service revenues were $247.8 million for the nine months ended September 30, 2026, an increase of $32.7 million or 15.2% compared to $215.1 million for the nine months ended September 30, 2025. Of this increase, $8.7 million was contributed by the Bridg product line, acquired in March 2026. Excluding the Bridg contribution, subscription service revenues increased $24.0 million, driven by growth in average revenue per site through cross-selling, upselling, and price increase initiatives.
Previous wording
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 wording
Hardware revenues were $98.7 million for the nine months ended September 30, 2026, an increase of $20.1 million or 25.6% compared to $78.6 million for the nine months ended September 30, 2025. The increase was primarily driven by increased revenues from sales of terminals of $12.2 million, peripherals (scanners, printers, and components) of $1.8 million, and an increase in international sales of $3.2 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
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 wording
Professional service revenues were $48.0 million for the nine months ended September 30, 2026, an increase of $6.2 million or 14.9% compared to $41.8 million for the nine months ended September 30, 2025. The increase was primarily driven by a $6.3 million increase in installation revenues associated with the onboarding of tier-one customers.
Previous wording
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 wording
Total gross margin as a percentage of total revenue for the three months ended September 30, 2026, increased to 43.8% from 41.3% for the three months ended September 30, 2025.
Previous wording
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 wording
Subscription service gross margin as a percentage of subscription service revenue for the three months ended September 30, 2026, was relatively unchanged at 55.8% compared to 55.3% for the three months ended September 30, 2025.
Previous wording
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 wording
Professional service gross margin as a percentage of professional service revenue for the three months ended September 30, 2026, increased to 25.9% from 17.6% for the three months ended September 30, 2025. The increase was primarily driven by lower hardware repair service costs, reflecting the timing of certain expenses in the prior period, and improved margins on installation services as increased volume associated with the onboarding of tier-one customers was absorbed by our existing cost base. These improvements were partially offset by a shift in professional service revenue mix toward lower-margin installation services.
Previous 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.
Current wording
Total gross margin as a percentage of revenue for the nine months ended September 30, 2026, was relatively unchanged at 43.4% compared to 44.3% for the nine months ended September 30, 2025.
Previous wording
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 wording
Hardware margin as a percentage of hardware revenue for the nine months ended September 30, 2026, decreased to 21.6% from 22.9% for the nine months ended September 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 the discontinuance of the PAR Clear product.
Previous wording
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 wording
Professional service gross margin as a percentage of professional service revenue for the nine months ended September 30, 2026, increased to 25.5% from 23.8% for the nine months ended September 30, 2025. The increase was primarily driven by improved margins on installation services as increased volume associated with the onboarding of tier-one customers was absorbed by our existing cost base. This improvement was partially offset by a shift in professional service revenue mix toward these lower-margin installation services.
Previous wording
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 wording
S&M expenses were $12.7 million for the three months ended September 30, 2026, an increase of $0.2 million or 1.7% compared to $12.5 million for the three months ended September 30, 2025. The increase was driven by $0.5 million of S&M expense stemming from post-acquisition operations of the Bridg product line. Excluding these costs, S&M expenses decreased $0.3 million, primarily due to a decrease in marketing and advertising spend.
Previous wording
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 wording
G&A expenses were $26.9 million for the three months ended September 30, 2026, a decrease of $4.8 million or 15.1% compared to $31.7 million for the three months ended September 30, 2025. The decrease was primarily driven by a $2.2 million decrease in recurring compensation costs and a $0.7 million decrease in bad debt expense.
Previous wording
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 wording
The remaining decrease was primarily driven by decreases in certain non-cash or non-recurring expenses consisting of a $1.1 million decrease in transaction due diligence and integration costs, a $0.4 million decrease in stock-based compensation, and a $0.4 million decrease in litigation-related expenses.
Previous wording
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 wording
The remaining decrease was primarily driven by decreases in certain non-cash or non-recurring expenses consisting of a $2.2 million decrease in transaction due diligence and integration costs, a $1.7 million decrease in stock-based compensation, and a $0.6 million decrease in litigation-related expenses, partially offset by a $1.3 million increase in severance costs related to non-recurring restructuring activities.
Previous wording
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 wording
R&D expenses were $22.2 million for the three months ended September 30, 2026, an increase of $2.9 million or 15.0% compared to $19.3 million for the three months ended September 30, 2025. The increase includes $1.1 million of R&D expense stemming from post-acquisition operations of the Bridg product line. The remaining $1.8 million increase was primarily driven by a $0.8 million increase in recurring compensation costs and a $0.8 million increase in software and development tool costs. The increase in R&D expense reflects continued investment in product development, including AI-enabled functionality and other enhancements to our product and service offerings.
Previous 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.
Current wording
R&D expenses were $66.7 million for the nine months ended September 30, 2026, an increase of $6.7 million or 11.1% compared to $60.0 million for the nine months ended September 30, 2025. The increase includes $2.4 million of R&D expense stemming from post-acquisition operations of the Bridg product line. The remaining $4.3 million increase was primarily driven by a $1.7 million increase in recurring compensation costs, a $1.7 million increase in software and development tool costs, and a $0.9 million increase in severance costs related to non-recurring restructuring activities. The increase in R&D expense reflects continued investment in product development, including AI-enabled functionality and other enhancements to our product and service offerings.
Previous wording
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 wording
Amortization of identifiable intangible assets was $10.9 million for the nine months ended September 30, 2026, an increase of $0.8 million from $10.0 million for the nine months ended September 30, 2025. The increase was primarily driven by an increase in amortizable intangible assets stemming from the Bridg Asset Acquisition.
Previous wording
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 wording
Intangible asset impairment loss was $5.4 million for the nine months ended September 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 nine months ended September 30, 2025.
Previous wording
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 wording
Other income, net was $0.3 million for the three months ended September 30, 2026, a decrease of $0.4 million compared to other income, net of $0.7 million for the three months ended September 30, 2025. The decrease was substantially driven by a decrease in foreign currency transaction gains during the current period.
Previous 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.
Current wording
Other income, net was $1.9 million for the nine months ended September 30, 2026, a change of $2.7 million compared to other expense, net of $0.8 million for the nine months ended September 30, 2025. The change was substantially driven by foreign currency transaction fluctuations, with net foreign currency gains recognized in
Previous wording
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 wording
Interest expense, net was $3.3 million for the three months ended September 30, 2026, an increase of $1.8 million compared to $1.5 million for the three months ended September 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.
Previous wording
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 wording
Interest expense, net was $8.6 million for the nine months ended September 30, 2026, an increase of $4.1 million compared to $4.5 million for the nine months ended September 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.
Previous 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").
Current wording
Gain on extinguishment of debt, net was $0.4 million for the nine months ended September 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 nine months ended September 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 $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 wording
Provision for income taxes was $0.5 million for the three months ended September 30, 2026, a change of $0.8 million compared to a benefit from income taxes of $0.3 million for the three months ended September 30, 2025. The change was primarily driven by an increase in foreign income tax expense.
Previous 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.
Current wording
Provision for income taxes was $3.5 million for the nine months ended September 30, 2026, an increase of $1.5 million compared to $1.9 million for the nine months ended September 30, 2025. The increase was primarily driven by an increase in foreign income tax expense.
Previous 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.
Current wording
There was no income from discontinued operations for the nine months ended September 30, 2026, compared to $0.2 million for the nine months ended September 30, 2025, stemming from a $0.2 million gain recognized from the divestiture of Rome Research Corporation ("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. 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.
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. 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 September 30, 2025 was $1.7 million lower than the constant currency ARR reported below.
Previous wording
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 wording
Beginning in the second quarter of 2026, 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.
Previous wording
The tables below provide reconciliations between net loss and adjusted EBITDA, diluted net loss per share and non-GAAP diluted net income (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 income 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
(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 wording
(4) 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 are included when their conversion is dilutive 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. For the three months ended September 30, 2026, the 2031 Notes were dilutive and included in the calculation.
Previous 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.
Current wording
Our primary sources of liquidity are cash and cash equivalents. As of September 30, 2026, we had cash and cash equivalents of $94.5 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 $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.
Current wording
Cash provided by operating activities was $11.4 million for the nine months ended September 30, 2026, compared to cash used in operating activities of $15.4 million for the nine months ended September 30, 2025. The improvement in operating cash flow was primarily driven by improved profitability from our core operations.
Previous 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.
Current wording
Cash used in investing activities was $9.6 million for the nine months ended September 30, 2026 compared to $10.9 million for the nine months ended September 30, 2025. Cash used in investing activities during the nine months ended September 30, 2026 included capital expenditures of $8.3 million for developed technology costs associated with our software platforms and capital expenditures of $1.0 million for fixed assets. The greater amount of cash used in investing activities during the nine months ended September 30, 2025 was largely driven by our asset acquisition of GoSkip, partially offset by an increase in capital expenditures for developed technology costs during the nine months ended September 30, 2026.
Previous 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.
Current wording
Cash provided by financing activities was $15.6 million for the nine months ended September 30, 2026, compared to $11.5 million for the nine months ended September 30, 2025. Cash provided by financing activities during the nine months ended September 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 our common stock, and $2.9 million used to repay the remaining principal on the 2026 Notes. Cash provided by financing activities during the nine months ended September 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.
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Current report — wording carried from elsewhere
the current period compared to net losses in the prior period.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.