PAR Technology Corporation

Good day, and thank you for standing by. Welcome to the PAR Technology 2025 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Chris Burns, Senior Vice President of IR and Business Development. Please go ahead.

Thank you, Elliot, and good afternoon, everyone. I'd like to thank you for joining us today for PAR Technologies' 2025 Third Quarter Financial Results Call. Earlier today, we released our financial results. The earnings release is available on the investor relations page of our website at partech.com, where you can also find the Q3 financial presentation, as well as in our related form, 8K Furnished to the SEC. During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items. A description and timing of these items, along with a reconciliation of non-GAAP measures to the most comparable GAAP measures, can be found in our earnings release. I'd also like to remind participants that this conference call may include forward-looking statements that reflect management's expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information on this conference call related to projections or other forward-looking statements may be relied upon and subject to the safe harbor statement included in our earnings release this afternoon and in our annual and quarterly filings with the SEC. Finally, I'd like to remind everyone that this call is being recorded and it will be made available for replay via a link available on the investor relations section of our website. Joining me on the call today is PAR's CEO and President, Savneet Singh, and Brian Minar, PAR's Chief Financial Officer. I'd now like to turn the call over to Savneet for the formal remarks portion of the call, which will be followed by general Q&A. Savneet?

Good afternoon, everyone, and thanks for joining us. Q3 was another strong quarter for PAR, one that shows the progress we're making on all fronts, growth, profitability, and cash generation. We delivered $119 million in revenue, up 23% year-over-year, driven by software subscription and hardware revenue growth. Our adjusted EBITDA came in at $5.8 million, This number includes $800,000 of accounting adjustments for non-period costs, which, when further backed out, brings our adjusted EBITDA to $6.6 million, continuing a nice March upward in EBITDA and cash flow. Our commitment to a flat cost base also played out. Non-GAAP OpEx was 44% of revenue, down from 60% just 18 months ago. This result was driven by our commitment to proving our operating leverage and our ability to begin to realize the operational savings being driven by AI utilization internally. Our ARR hit $298.4 million at the end of Q3, up 15% organically, reflecting steady execution across both sides of our platform. All told, ARR grew $12 million sequentially in Q3, and we expect that number to increase in Q4 to take us to our goals for the year. Now to dig into our business performance in the third quarter. Q3 was another quarter of solid execution for Operator Cloud. AR increased 31% year-over-year, including 14% organic growth. In Q3, we proved we can scale large enterprise deployments, innovate with AI, and keep customer satisfaction high, all while maintaining a disciplined focus on expense management and pursuing additional multiple large Tier 1 opportunities. Our POS business continues to perform exceptionally well. Our Burger King implementation cadence during the quarter accelerated dramatically with high efficiency, and we're pacing to meet Burger King's target for 2025, which then creates great visibility for 2026. Our Ops platform had a steady quarter as we ramped into Burger King and another large Tier 1 enterprise. The real story, though, in ParOps is the momentum and new launches in innovation. We brought Coach AI to market, an AI-driven assistant that allows operators to prompt operational questions in natural language and get immediate answers from their data. This innovation comes from combining delegate and data central product suites, and we see cross-sell and up-sell possibilities across our wider base. We also launched AI chatbot support, helping users self-service faster and reduce support ticket volume, a meaningful productivity win. We expanded our international functionality and onboarded a Burger King franchisee in Canada across all sites, including French language functionality in Quebec, showcasing our ability to deliver for global customers. The par ops operational groundwork and product expansion we put in place will pay off nicely in 2026 as we enter the year with record backlog in customer commitments. Turning to task, as we mentioned last quarter, we pushed out rollouts to next year in preparation for large RFP work. As we now move from RFP to actual development, our goal will be to maintain our launch schedule for next year with new customers while we begin to our aggressive build schedule for this tier one opportunity. That's a major validation of both product and team capability, and hopefully we will have more to share publicly in time. What is crucial is that 2025 is proving to be the strongest bookings year in the history of the operator cloud segment, paving the way for years of sustained growth. On last quarter's call, I mentioned that we had $20 million in POS contract value that had not yet been rolled out. Our late stage and weighted pipeline on par POS more than doubles this number again, ensuring a robust growth foundation for years to come. Now turning to the engagement cloud that also had a strong Q3. Engagement cloud ARR grew 16% from Q3 last year, including 15% organic growth. We continue to see real momentum and investment in digital engagement in the markets we serve, as brands look to connect more deeply with their guests. What's exciting is that similar to last quarter, 70 plus percent of new deals signed in the quarter were multi-product, including loyalty, ordering, and pay, showing that customers increasingly see the value in the full engagement ecosystem Not just one solution, but the whole connected platform. A single cockpit to manage your entire digital business. We also saw renewals and upsells for Punch with three major tier one brands, proving that our long term partnerships continue to grow stronger over time. On the innovation front, we launched new capabilities for engagement and catering in games. Both of which enhance the competitiveness of our solution and add real differentiation to our overall engagement platform. Moving to part ordering. I'm encouraged to report that this was our biggest win quarter for PAR ordering to date, highlighted by six new customer wins, all upsells and multi-product deals, including a 400-plus location enterprise chain, a clear signal that our products are winning at scale. In the quarter, we were also able to sign two new customers that were previously using the largest online ordering provider in our space. We hope this creates a template to accelerate our growth in 2026, as PAR ordering is not only a best-in-class platform now, but also an incredibly easy proof point of our Better Together thesis. Customers of PAR Ordering and Punch and POS can now update menus in one place, push changes to third-party delivery channels, and manage every aspect of their digital business from just one system. It's one of those few times in the enterprise software world where the demo just speaks for itself. Our solution for fuel and convenience stores, PAR Retail, had a standout quarter, demonstrating what execution and innovation look like working together. In Q3, we had key integration milestones and launched new features that are driving record engagement and customer success. We also added four new enterprise wins, including a successful punch to par retail migration in the quarter. It's important to note, as we finalize the transitions from punch to par retail, there's an opportunity for us to expand gross margins by taking out punch convenience store costs and taking up the price for moving customers to the more robust par retail platform. From a product perspective, we made Command Center smarter and more dynamic, and it introduced Messaging Center and audience experts, making it easier for retailers to launch campaigns and analyze audience data in real time. And all of this hard work and achievement is working. Nearly every customer hit all-time highs in active program membership this quarter. So a great overall quarter for PAR Retail, in which it continues to lead in digital trade and engagement, with strong customer results and clear momentum heading into 2026. A few summary thoughts here before turning over to Brian for a deep dive on our numbers. I briefly mentioned this earlier, but this quarter marks a major milestone in PAR's journey to redefine restaurant technology with the launch of PAR AI, our new intelligence layer built natally across the PAR platform. The first product in this suite, Coach AI, is now live and already transforming how operators manage their business. PAR AI is different. It's built in, not bolted on. We've embedded AI intelligence directly into the operational workflow across POS, back office, loyalty, drive-through, and payments. This approach turns every par product into an active decision engine, creating a connected, intelligent restaurant ecosystem, all pulling data from a clean pane of glass. Coach AI is our first step. It's an operational intelligence assistant that enables restaurant leaders to ask natural language questions and instantly surface live insights from POS, labor, and inventory data. No spreadsheets. no extra apps, no manual reporting. Importantly, it dramatically lowers the know-how required to be an operational expert, allowing more employees to engage with the product, and most importantly, saving brands hours of time. Early customers like Charter Foods have already eliminated the need for traditional BI tools and are realizing meaningful time savings and better decision-making. What's next? Later this year, we'll introduce a marketing intelligence assistant with the PAR engagement platform, enabling marketers to instantly analyze campaign performance, loyalty data, and customer engagement metrics in real time. Imagine being able to build, segment, launch, and execute a promotional campaign all within a prompt-like interface. This is more than a product launch. It's a strategic shift to an AI-native future. As I've said before, it's not about building tools. It's about owning the workflows so that AI is in the places where we as users are actually living. This new foundation will fuel capabilities like ROI-ranked operational recommendations, voice-enabled ordering, and real-time audience targeting. all designed to make restaurant operations faster, smarter, and more adaptive. As GenAI becomes embedded in the fabric of enterprise software, we believe the platform strategy is quickly emerging as the key to long-term value. It's not just about building tools anymore. It's about building AI-native workflows. Companies that act as platforms, not point solutions, are in the best position to win. Why? Because they're integrated where work actually happens. That means deeper engagement, better data, and a natural fit for generative AI features that drive real, measurable impact. Moreover, by leveraging tooling and a tool set that you already understand, you lower the bar for training and adoption, a massive issue in today's early AI products. This is exactly where PAR shines. We don't just automate tasks. We connect entire workflows across departments. While point solutions stay stuck in silos, PAR brings teams together, streamlining operations, and enables the collaboration at scale. For restaurants, this isn't a nice to have. It's the foundation for running a smarter, faster, and more agile business. We feel deeply passionate that AI makes PAR stronger because it brings the value of better together to life faster and proves the ROI of doing more with PAR. We believe it helps dig a deeper moat and also pulls more of the ecosystem our way. Brian will now walk through our numbers. Brian?