PAR TECHNOLOGY CORP Q1 FY2025 earnings call

• Revenue: Reported $104 million in Q1, a 48% y-o-y increase. Subscription services revenue was $68.4 million, up 78% y-o-y. - ARR: Total ARR was $282 million, up 52% y-o-y, with organic growth at 18%. - Gross Profit: Non-GAAP gross profit grew organically nearly 35% y-o-y, and subscription service gross margins exceeded 69%. - Adjusted EBITDA: $4.5 million for Q1, a $15 million improvement from Q1 2024. - Operator Solutions: Paused Burger King PAR POS implementation but restarted with positive feedback, launched new PAR OPS product line, and was selected by Popeyes as back-of-house vendor. - Payments: Drove high transaction counts, added 5 new concepts, and launched PAR Gift Card offering. - Engagement Cloud: Saw record digital offers and loyalty program users, with 57% of new deals being multiproduct. - Hardware: Improved performance with PAR WAVE and PAR Clear drive-thru solution driving growth.

Operator Solutions: Total ARR grew 49% in Q1, with organic growth at 18% y-o-y, and ARR now totals $117 million. Subscription services revenue increased by 78% to $68.4 million in Q1, with 20% organic growth. Payments: Continued high transaction counts and processing volumes, added 5 new concepts, and saw multiproduct adoption. Engagement Cloud: Record growth in engagement and usage, ARR up 54%, with 57% of new deals being multiproduct. Hardware: Hardware revenues increased by 20% y-o-y, driven by PAR WAVE and PAR Clear drive-thru solution, with hardware now comprising 21% of revenues.

• Target 20% plus organic growth for the year. - Anticipate strong ramp up in the second half of 2025, with EBITDA expansion towards the end of the year. - Continued multiproduct deals expected to drive growth, with potential for higher ARR growth in future quarters.

• Tariff uncertainty and retaliatory tariffs introducing volatility in global trade policies and supply chains. Efforts are in place to mitigate impacts, with hardware comprising 21% of revenues providing some confidence in managing negative impacts.

Q: About the cadence of growth and the 20% organic growth target for the year A: Still targeting 20% plus organic growth for the year, with more multiproduct deals expected in the second half of 2025, leading to EBITDA expansion towards the end of the year Q: Details on the five new multiproduct wins A: Can't disclose specific deal sizes, but there were high win rates on Tier 1 deals, with most deals being multiproduct Q: ARR adjustment due to foreign exchange (FX) A: FX adjustments, especially from non-US revenues, led to ARR adjustment, but constant currency ARR grew $10 million from Q4 2024 Q: Cross-sell opportunity and average revenue per user (ARPU) A: Potential 4x growth if all products were bought by customers, with technical integration driving cross-sell opportunities Q: M&A strategy and hardware tariff exposure A: Aggressive M&A focusing on product fit, with hardware tariff exposure managed through supply chain adjustments and open communication with customers