false000070882100007088212024-08-082024-08-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 8, 2024
New PAR Logo.jpg
PAR Technology Corporation
(Exact name of registrant as specified in its charter)
Delaware
1-09720
16-1434688
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York 13413-4991
(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code: (315) 738-0600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common StockPARNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

                             Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02    Results of Operations and Financial Condition.

On August 8, 2024, PAR Technology Corporation (“Company”) issued a press release to report its financial results for the quarter ended June 30, 2024. A copy of the press release is attached to this current report on Form 8-K as Exhibit 99.1.

Item 7.01    Regulation FD Disclosure.

There will be a conference call at 9:00 a.m. (Eastern) on August 8, 2024, during which management will discuss the Company's financial results for the second quarter ended June 30, 2024. The earnings conference call will be webcast live. To access the webcast, please visit the PAR Technology Investor Relations website at www.partech.com/investor-relations/. A recording of the webcast will be available on this site after the event.

The Company's quarterly earnings presentation containing additional information for the quarter ended June 30, 2024 is attached to this current report on Form 8-K as Exhibit 99.2.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits.
Exhibit No.Exhibit Description
99.1
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)







SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PAR TECHNOLOGY CORPORATION
(Registrant)
Date:August 8, 2024
/s/ Bryan A. Menar
Bryan A. Menar
Chief Financial Officer
(Principal Financial Officer)


Exhibit 99.1
newparlogo.jpg            
FOR RELEASE:
CONTACT:
 New Hartford, NY, August 8, 2024
Christopher R. Byrnes (315) 743-8376
cbyrnes@partech.com, www.partech.com

PAR TECHNOLOGY CORPORATION ANNOUNCES SECOND QUARTER 2024 RESULTS

•Annual Recurring Revenue (ARR)(1) grew to $192.2 million - total growth of 56.9% inclusive of organic growth of 23.9% from $122.5 million reported in Q2 '23

•Quarterly subscription service revenues increased 47.7% year-over-year from Q2 '23

•PAR completed the sale of PAR Government Systems Corporation for $95.0 million and, after period end, completed the sale of Rome Research Corporation for $7.0 million

•After period end, PAR completed the acquisition of TASK Group Holdings Limited (“TASK”), an Australia-based global foodservice transaction platform

New Hartford, NY - August 8, 2024 -- PAR Technology Corporation (NYSE: PAR) (“PAR Technology” or the “Company”) today announced its financial results for the second quarter ended June 30, 2024.

“We delivered a strong second quarter, aided by durable demand for our foodservice technology software. Our organic ARR grew by 24% and total ARR grew by 57% in the quarter from Q2 ‘23. Our business continues to scale and we are tracking to hit our goal to be adjusted EBITDA positive next quarter” commented Savneet Singh, PAR Technology CEO. “2024 is an important year for PAR and an inflection point for our Company. By acquiring Stuzo, and TASK, we have enhanced our position as a leading provider of cloud-based technology solutions to enterprise foodservice organizations across the globe. Our “better together” platform strategy will enable PAR to take advantage of the long-term trends driving our business, creating new business opportunities and improved financial performance.”

Q2 2024 Financial Highlights
(in millions, except % and per share amounts)GAAP
Non-GAAP(1)
Q2 2024Q2 2023vs. Q2 2023Q2 2024Q2 2023vs. Q2 2023
Revenue$78.2$69.5
better 12.4%
Net Loss from Continuing Operations/Adjusted EBITDA$(23.6)$(21.8)
worse $1.7 million
$(4.3)$(12.3)
better $7.9 million
Diluted Net Loss Per Share from Continuing Operations$(0.69)$(0.80)
better $0.11
$(0.23)$(0.60)
better $0.37
Subscription Service Gross Margin Percentage53.1%43.3%
better 9.8%
66.4%60.9%
better 5.5%

Year-to-Date 2024 Financial Highlights
(in millions, except % and per share amounts)GAAP
Non-GAAP(1)
Q2 2024Q2 2023vs. Q2 2023Q2 2024Q2 2023vs. Q2 2023
Revenue$148.2$138.1
better 7.3%
Net Loss from Continuing Operations/Adjusted EBITDA$(44.0)$(40.9)
worse $3.1 million
$(14.5)$(24.5)
better $9.9 million
Diluted Net Loss Per Share from Continuing Operations$(1.33)$(1.49)
better $0.16
$(0.66)$(1.18)
better $0.52
Subscription Service Gross Margin Percentage52.4%46.6%
better 5.8%
66.1%65.6%
better 0.5%

(1) See “Key Performance Indicators and Non-GAAP Financial Measures” for reconciliations and descriptions of non-GAAP financial measures to corresponding GAAP financial measures.
1

The Company's key performance indicators ARR and Active Sites(1) are presented as two subscription service product lines: Engagement Cloud (Punchh, PAR Retail (formerly Stuzo product offerings), and MENU) and Operator Cloud (Brink POS, PAR Payment Services, PAR Pay, and Data Central).

Highlights of Engagement Cloud - Second Quarter 2024(1):
•ARR at end of Q2 '24 totaled $107.9 million
•Active Sites as of June 30, 2024 totaled 94.6 thousand restaurants

Highlights of Operator Cloud - Second Quarter 2024(1):

•ARR at end of Q2 '24 totaled $84.2 million
•Active Sites as of June 30, 2024 totaled 27.7 thousand restaurants

(1) See “Key Performance Indicators and Non-GAAP Financial Measures” below.

Earnings Conference Call.

There will be a conference call at 9:00 a.m. (Eastern) on August 8, 2024, during which management will discuss the Company's financial results for the second quarter ended June 30, 2024. The earnings conference call will be webcast live. To access the webcast, please visit the PAR Technology Investor Relations website at www.partech.com/investor-relations/. A recording of the webcast will be available on this site after the event.

About PAR Technology Corporation.

For more than 40 years, PAR Technology Corporation’s (NYSE Symbol: PAR) cutting-edge products and services have helped bold and passionate restaurant brands build lasting guest relationships. We are the partner enterprise foodservice organizations rely on when they need to serve amazing moments from open to close, during the most hectic rush hours, and when the world forces them to adapt and overcome. More than 70,000 restaurants in more than 110 countries use PAR’s restaurant point-of-sale, customer loyalty and engagement, payments, omnichannel digital ordering and delivery, and back-office software solutions as well as industry leading hardware and drive-thru offerings. To learn more, visit partech.com or connect with us on LinkedIn, Twitter, Facebook, and Instagram. The Company's Environmental, Social, and Governance report can be found at https://www.partech.com/company/ESG.

Key Performance Indicators and Non-GAAP Financial Measures.

We monitor certain key performance indicators and non-GAAP financial measures in the evaluation and management of our business; certain key performance indicators and non-GAAP financial measures are provided in this press release because we believe they are useful in facilitating period-to-period comparisons of our business performance. Key performance indicators and non-GAAP financial measures do not reflect and should be viewed independently of our financial performance determined in accordance with GAAP. Key performance indicators and non-GAAP financial measures are not forecasts or indicators of future or expected results and should not have undue reliance placed upon them by investors.

Where non-GAAP financial measures are included in this press release, the most directly comparable GAAP financial measures and a detailed reconciliation between GAAP and non-GAAP financial measures is included in this press release under “Non-GAAP Financial Measures”.

Unless otherwise indicated, financial and operating data included in this press release is as of June 30, 2024.

As used in this press release,

“Annual Recurring Revenue” or “ARR” is the annualized revenue from subscription services, including subscription fees for our SaaS solutions and related software support, managed platform development services, and transaction-based payment processing services. We generally calculate ARR by annualizing the monthly subscription service revenue for all Active Sites as of the last day of each month for the respective reporting period.

“Active Sites” represent locations active on PAR’s subscription services as of the last day of the respective reporting period.
2

Trademarks.

“PAR®,” “Brink POS®,” “Punchh®,” “MENUTM,” “Data Central®,” "Open Commerce®,” "PAR® Pay”, “PAR® Payment Services”, "StuzoTM," "PAR RetailTM," and other trademarks appearing in this press release belong to us.

Forward-Looking Statements.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, Section 27A of the Securities Act of 1933, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of our future operations, financial condition, financial results, business strategies and prospects. Forward-looking statements are generally identified by words such as “believe,” “could”, “may,” "opportunities," “will,” and similar expressions. Forward-looking statements are based on management's current expectations and assumptions and are inherently uncertain. Actual results and outcomes could differ materially from those expressed in or implied by forward-looking statements contained in this press release about our business, financial condition, and results of operations. Factors, risks, trends and uncertainties that could cause our actual results to differ materially from those expressed in or implied by forward-looking statements contained in this press release include, among others, our ability to successfully develop or acquire and transition new products and services and enhance existing products and services to meet evolving customer needs and respond to emerging technological trends, including artificial intelligence; unfavorable macroeconomic conditions, such as recession or slowed economic growth, fluctuating interest rates, inflation, and changes in consumer confidence and discretionary spending; business uncertainties relating to acquisitions, divestitures, and capital markets transactions, including the timing of such transactions, PAR’s ability to recognize future annual recurring revenues, adjusted EBITDA, cash flow, margins and achieve other synergies, and the anticipated costs, timing and complexity of integration, including the acquisitions of Stuzo Holdings, LLC and TASK Group Holdings Limited; our ability to retain and add integration partners, and our success in acquiring and developing relevant technology for current, new, and potential customers for our service and product offerings; geopolitical events, including the effects of the Russia-Ukraine war, tensions with China and between China and Taiwan, the Israel-Hamas conflict, other hostilities in the Middle East and political and regulatory uncertainty relating to the 2024 presidential election in the United States; component shortages, inventory management, and/or manufacturing disruptions and logistics challenges; risks associated with our international operations; our ability to generate sufficient cash flow or access additional financing sources as needed to repay our outstanding debts, including amounts owed under outstanding convertible notes and our credit facility; changes in estimates and assumptions we make in connection with the preparation of our financial statements, in building our business and operational plans, and in executing our strategies; and the other factors, risks, trends and uncertainties discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on the information available to us on the date hereof. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.


###
3

PAR TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share amounts)

AssetsJune 30, 2024December 31, 2023
Current assets:
Cash and cash equivalents$114,928 $37,183 
Cash held on behalf of customers12,804 10,170 
Short-term investments27,527 37,194 
Accounts receivable – net50,203 42,679 
Inventories25,526 23,560 
Other current assets9,427 8,123 
Current assets of discontinued operations6,382 21,690 
Total current assets246,797 180,599 
Property, plant and equipment – net14,452 15,524 
Goodwill623,875 488,918 
Intangible assets – net148,292 93,969 
Lease right-of-use assets4,740 3,169 
Other assets17,689 17,642 
Noncurrent assets of discontinued operations839 2,785 
Total Assets$1,056,684 $802,606 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$30,682 $25,599 
Accrued salaries and benefits13,954 14,128 
Accrued expenses4,047 3,533 
Customers payable12,804 10,170 
Lease liabilities – current portion1,288 1,120 
Customer deposits and deferred service revenue14,294 9,304 
Current liabilities of discontinued operations2,033 16,378 
Total current liabilities79,102 80,232 
Lease liabilities – net of current portion3,540 2,145 
Long-term debt378,672 377,647 
Deferred service revenue – noncurrent2,876 4,204 
Other long-term liabilities4,173 3,603 
Noncurrent liabilities of discontinued operations— 1,710 
Total liabilities468,363 469,541 
Shareholders’ equity:
Preferred stock, $0.02 par value, 1,000,000 shares authorized, none outstanding— — 
Common stock, $0.02 par value, 116,000,000 shares authorized, 35,574,128 and 29,386,234 shares issued, 34,104,235 and 28,029,915 outstanding at June 30, 2024 and December 31, 2023, respectively705 584 
Additional paid in capital852,406 625,154 
Accumulated deficit(239,054)(274,956)
Accumulated other comprehensive loss(3,908)(939)
Treasury stock, at cost, 1,469,893 shares and 1,356,319 shares at June 30, 2024 and December 31, 2023, respectively(21,828)(16,778)
Total shareholders’ equity588,321 333,065 
Total Liabilities and Shareholders’ Equity$1,056,684 $802,606 

See notes to unaudited interim condensed consolidated financial statements included in the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2024 (the “Quarterly Report”).
4

PAR TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Revenues, net:
Hardware$20,116 $26,390 $38,342 $53,167 
Subscription service44,872 30,372 83,251 58,337 
Professional service13,162 12,767 26,630 26,609 
Total revenues, net78,150 69,529 148,223 138,113 
Cost of sales:
Hardware15,539 21,326 29,709 43,707 
Subscription service21,041 17,233 39,635 31,158 
Professional service9,542 11,784 20,793 23,150 
Total cost of sales46,122 50,343 90,137 98,015 
Gross margin32,028 19,186 58,086 40,098 
Operating expenses:
Sales and marketing9,811 10,075 20,737 19,473 
General and administrative25,369 16,434 50,544 35,401 
Research and development16,237 14,888 32,005 29,203 
Amortization of identifiable intangible assets1,946 465 2,878 929 
Adjustment to contingent consideration liability(600)(2,300)(600)(7,500)
Gain on insurance proceeds— (500)— (500)
Total operating expenses52,763 39,062 105,564 77,006 
Operating loss(20,735)(19,876)(47,478)(36,908)
Other (expense) income, net(610)155 (310)146 
Interest expense, net(1,630)(1,735)(3,338)(3,402)
Loss from continuing operations before (provision for) benefit from income taxes(22,975)(21,456)(51,126)(40,164)
(Provision for) benefit from income taxes(612)(383)7,173 (698)
Net loss from continuing operations(23,587)(21,839)(43,953)(40,862)
Net income from discontinued operations77,777 2,137 79,855 5,255 
Net income (loss)$54,190 $(19,702)$35,902 $(35,607)
Net income (loss) per share (basic and diluted):
Continuing operations$(0.69)$(0.80)$(1.33)$(1.49)
Discontinued operations2.29 0.08 2.42 0.19 
Total$1.60 $(0.72)$1.09 $(1.30)
Weighted average shares outstanding (basic and diluted)34,015 27,357 32,935 27,381 
See notes to unaudited interim condensed consolidated financial statements included in the Quarterly Report.





5

PAR TECHNOLOGY CORPORATION
SUPPLEMENTAL INFORMATION
(unaudited)

Non-GAAP Financial Measures

In addition to disclosing financial results in accordance with GAAP, this press release 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. The income tax effect of the below adjustments, with the exception of (provision for) benefit from income taxes, were not tax-effected due to the valuation allowance on all of our net deferred tax assets.

Our non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Additionally, these measures may not be comparable to similarly titled measures disclosed by other companies.

Beginning with the second quarter of 2024, we have modified our definition of adjusted subscription service gross margin percentage and have renamed this non-GAAP measure to non-GAAP subscription service gross margin percentage. Non-GAAP subscription service gross margin percentage is adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance costs included within subscription service cost of sales. Our prior definition of adjusted subscription service gross margin percentage only excluded amortization from acquired and internally developed software. This change was made to conform with the methodology that we use to calculate other non-GAAP measures, including adjusted EBITDA outlined below, and to align with how management views our core operating performance.

Non-GAAP MeasureDefinitionUsefulness to management and investors
Non-GAAP subscription service gross margin percentage
Non-GAAP subscription service gross margin percentage represents subscription service gross margin percentage adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance.
We believe that non-GAAP subscription service gross margin percentage and adjusted EBITDA provide useful perspectives with respect to the Company's core operating performance and ongoing cash earnings by adjusting for certain non-cash and non-recurring charges that may not be indicative of our financial performance.
Adjusted EBITDA
Adjusted EBITDA represents net income (loss) before income taxes, interest expense and depreciation and amortization adjusted to exclude certain non-cash and non-recurring charges that may not be indicative of our financial performance.
Non-GAAP diluted net loss per share
Non-GAAP diluted net loss per share represents net loss per share excluding amortization of acquired intangible assets and certain non-cash and non-recurring charges that may not be indicative of our financial performance.
We believe that adjusting our non-GAAP diluted net loss per share to remove non-cash and non-recurring charges provides a useful perspective with respect to the Company's operating performance as well as comparisons to past and competitor operating results.

6

Non-GAAP AdjustmentDefinitionUsefulness to management and investors
Stock-based compensationStock-based compensation consists of charges related to our employee equity incentive plans.We exclude stock-based compensation because these non-cash charges are not viewed by management as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results.
Contingent considerationAdjustment reflects a non-cash reduction to the fair market value of the contingent consideration liability related to our acquisition of MENU Technologies AG.We exclude changes to the fair market value of our contingent consideration liability because management does not view these non-cash, non-recurring charges as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results.
Transaction costsAdjustment reflects non-recurring professional fees incurred in transaction due diligence, including costs incurred in the acquisitions of Stuzo Blocker, Inc., Stuzo Holdings, LLC and their subsidiaries (the "Stuzo Acquisition") and TASK.We exclude professional fees incurred in corporate development because management does not view these non-recurring charges, which are inconsistent in size and are significantly impacted by the timing and valuation of our transactions, as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends.
Gain on insurance proceedsAdjustment reflects the gain on insurance proceeds due to the settlement of a legacy claim.We exclude these non-recurring adjustments because these costs do not reflect our core operating performance. These adjustments facilitate a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results.
SeveranceAdjustment reflects the severance included in cost of sales, sales and marketing expense, general and administrative expense, and research and development expense.
Discontinued operationsAdjustment reflects income from discontinued operations related to the disposition of our Government segment.
Other expense (income), netAdjustment reflects foreign currency transaction gains and losses, rental income and losses, and other non-recurring expenses recorded in other expense (income), net, in the accompanying statements of operations.
(Provision for) benefit from income taxesAdjustment reflects a partial release of our deferred tax asset valuation allowance resulting from the Stuzo Acquisition.We exclude these non-cash and non-recurring adjustments for purposes of calculating non-GAAP diluted net loss per share because these costs do not reflect our core operating performance. These adjustments facilitate a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends.
Non-cash interestAdjustment reflects non-cash amortization of issuance costs related to the Company's long-term debt.
Acquired intangible assets amortizationAdjustment reflects amortization expense of acquired developed technology included within cost of sales and amortization expense of acquired intangible assets.

7

The tables below provide reconciliations between net income (loss) and adjusted EBITDA, diluted net income (loss) per share and non-GAAP diluted net loss per share, and subscription service gross margin percentage and non-GAAP subscription service gross margin percentage.

(in thousands)Three Months Ended June 30,Six Months Ended June 30,
Reconciliation of Net Income (Loss) to Adjusted EBITDA2024202320242023
Net income (loss)$54,190 $(19,702)$35,902 $(35,607)
Discontinued operations(77,777)(2,137)(79,855)(5,255)
Net loss from continuing operations(23,587)(21,839)(43,953)(40,862)
Provision for (benefit from) income taxes612 383 (7,173)698 
Interest expense, net1,630 1,735 3,338 3,402 
Depreciation and amortization 8,834 6,817 16,127 13,584 
Stock-based compensation6,286 3,601 10,696 6,609 
Contingent consideration(600)(2,300)(600)(7,500)
Transaction costs1,573 — 4,978 — 
Gain on insurance proceeds— (500)— (500)
Severance294 — 1,728 253 
Other expense (income), net610 (155)310 (146)
Adjusted EBITDA$(4,348)$(12,258)$(14,549)$(24,462)


(in thousands, except per share amounts)Three Months Ended June 30,Six Months Ended June 30,
Reconciliation between GAAP and Non-GAAP
Diluted Net Income (Loss) per share		2024202320242023
Diluted net income (loss) per share$1.60 $(0.72)$1.09 $(1.30)
Discontinued operations(2.29)(0.08)(2.42)(0.19)
Diluted net loss per share from continuing operations(0.69)(0.80)(1.33)(1.49)
Provision for (benefit from) income taxes0.01 — (0.23)— 
Non-cash interest0.02 0.02 0.03 0.04 
Acquired intangible assets amortization0.20 0.16 0.36 0.32 
Stock-based compensation0.18 0.13 0.32 0.24 
Contingent consideration(0.02)(0.08)(0.02)(0.27)
Transaction costs0.05 — 0.15 — 
Gain on insurance proceeds— (0.02)— (0.02)
Severance0.01 — 0.05 0.01 
Other expense (income), net0.02 (0.01)0.01 (0.01)
Non-GAAP diluted net loss per share$(0.23)$(0.60)$(0.66)$(1.18)
Diluted weighted average shares outstanding34,015 27,357 32,935 27,381 

Three Months Ended June 30,Six Months Ended June 30,
Reconciliation between GAAP and Non-GAAP
Subscription Service Gross Margin Percentage		2024202320242023
Subscription Service Gross Margin Percentage53.1 %43.3 %52.4 %46.6 %
Depreciation and amortization13.1 %17.4 %13.4 %18.8 %
Stock-based compensation0.2 %0.2 %0.2 %0.2 %
Severance— %— %0.1 %— %
Non-GAAP Subscription Service Gross Margin Percentage66.4 %60.9 %66.1 %65.6 %
8
partech.com Q2 ‘24 Earnings Presentation August 8, 2024 NYSE: PAR 1

 
partech.com Forward-Looking Statements. This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, Section 27A of the Securities Act of 1933, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of our future operations, financial condition, financial results, business strategies and prospects. Forward-looking statements are generally identified by words such as "actionable," “believe,” “estimate,” "future," “may,” “opportunity,” "potential," "repeatable," “will,” and similar expressions. Forward-looking statements are based on management's current expectations and assumptions that are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in or implied by forward-looking statements contained in this presentation about our business, financial condition, and results of operations. Factors, risks, trends and uncertainties that could cause our actual results to differ materially from those expressed in or implied by forward-looking statements contained in this presentation include, among others, our ability to successfully develop or acquire and transition new products and services and enhance existing products and services to meet evolving customer needs and respond to emerging technological trends, including artificial intelligence; unfavorable macroeconomic conditions, such as recession or slowed economic growth, fluctuating interest rates, inflation, and changes in consumer confidence and discretionary spending; business uncertainties relating to acquisitions, divestitures, and capital markets transactions, including the timing of such transactions, PAR’s ability to recognize future annual recurring revenues, adjusted EBITDA, cash flow, margins and achieve other synergies, and the anticipated costs, timing and complexity of integration, including the acquisitions of Stuzo Holdings, LLC and TASK Group Holdings Limited; our ability to retain and add integration partners, and our success in acquiring and developing relevant technology for current, new, and potential customers for our service and product offerings; geopolitical events, including the effects of the Russia-Ukraine war, tensions with China and between China and Taiwan, the Israel-Hamas conflict, other hostilities in the Middle East and political and regulatory uncertainty relating to the 2024 presidential election in the United States; component shortages, inventory management, and/or manufacturing disruptions and logistics challenges; risks associated with our international operations; our ability to generate sufficient cash flow or access additional financing sources as needed to repay our outstanding debts, including amounts owed under outstanding convertible notes and our credit facility; changes in estimates and assumptions we make in connection with the preparation of our financial statements, in building our business and operational plans, and in executing our strategies; and the other factors, risks, trends and uncertainties discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law. Industry and Market Data. Market, industry, and other data included in this presentation are from or based on our own internal good faith estimates and research, and on publicly available publications, research, surveys and studies conducted by third parties, which we believe are reliable, but have not independently verified. Similarly, while we believe our internal estimates and research are reliable, we have not independently verified our internal estimates or research. While we are not aware of any misstatements regarding any market, industry, or other data used by us or expressed in this presentation, such information, because it has not been verified or, by its nature - market surveys, estimates, projections or similar data, are inherently subject to uncertainties, and actual results may differ materially from the assumptions and circumstances reflected in this information. Key Performance Indicators and Non-GAAP Financial Measures.(1) We monitor certain key performance indicators and non-GAAP financial measures in the evaluation and management of our business; certain key performance indicators and non-GAAP financial measures are provided in this presentation as we believe they are useful in facilitating period-to-period comparisons of our business performance. Key performance indicators and non-GAAP financial measures do not reflect and should be viewed independently of our financial performance determined in accordance with GAAP. Key performance indicators and non-GAAP financial measures are not forecasts or indicators of future or expected results and should not have undue reliance placed upon them by investors. Where non-GAAP financial measures are included in this presentation, the most directly comparable GAAP financial measures and a detailed reconciliation between GAAP and non- GAAP financial measures is included in Appendix A to this presentation. Unless otherwise indicated, financial and operating data included in this presentation is as of June 30, 2024. Trademarks. “PAR®,” “Brink POS®,” “Punchh®,” “MENUTM,” “Data Central®,” "Open Commerce®,” "PAR® Pay”, “PAR® Payment Services”, "StuzoTM," "PAR RetailTM," and other trademarks identifying our products and services appearing in this presentation belong to us. This presentation may also contain trade names and trademarks of other companies. Our use of such other companies’ trade names or trademarks is not intended to imply any endorsement or sponsorship by these companies of us or our products or services. (1) See Appendix A for Non-GAAP reconciliations and Key Performance Indicators 2

 
partech.com Our Journey … Thus Far ... 3 $192.2M Q2 2024

 
partech.com • Unified technology platform offering integrated solutions and sophisticated data insights • Pairs with our state of the art hardware offerings for a complete tech stack • Supported by our comprehensive professional service offerings to drive a positive customer experience Building a Unified Experience... Leading To 4PAR Retail includes Stuzo products and services, which were rebranded in the quarter ended 6/30/2024.

 
partech.com PAR's Success Will Be Driven by our Flywheel 5

 
partech.com Financial Review Second Quarter 2024 Highlights 6

 
partech.com Q2 2024 Highlights 1. Consistent delivery on strong organic ARR growth 2. Cross-sell traction creating meaningful revenue opportunity from existing and potential future whitespace 3. Strong visibility towards adjusted EBITDA break-even 4. Sale of PAR Government segment -> to a pure play foodservice tech led organization 5. Repeatable M&A motion providing accretive results 7

 
partech.com Q2 2024 Revenue Breakout Revenue by Offering 25.7% 57.4% 16.8% Hardware Subscription Service Professional Service ARR by Subscription Product Line 43.8% 56.2% Operator Cloud Engagement Cloud 8

 
partech.com Strong Organic & Inorganic ARR Growth Year-over-year metrics are for the quarter ended 6/30/2024 compared to the quarter ended 6/30/2023. Please see Appendix A — Key Performance Indicators for more information on ARR. 122.5 128.3 136.9 144.7 151.8 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 122.5 128.3 136.9 185.7 192.2 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 9 Organic ARR 24% Y/Y Growth Total ARR 57% Y/Y Growth ($'000,000)

 
partech.com Engagement Cloud Year-over-year metrics are for the quarter ended 6/30/2024 compared to the quarter ended 6/30/2023. Please see Appendix A — Key Performance Indicators for more information on ARR. 60.9 62.2 63.8 107.2 107.9 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 77% Y/Y Growth Operator Cloud 61.6 66.1 73.1 78.5 84.2 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 37% Y/Y Growth 10 Resilient ARR Growth Across Product Lines ($'000,000)

 
partech.com Driving Margin Expansion (1) Non-GAAP Subscription Service Gross Margin percentage and Non-GAAP Gross Margin percentage are Non-GAAP financial measures. Please see Appendix A for a detailed reconciliation to Subscription Service Gross Margin percentage and Gross Margin percentage (GAAP). Year-over-year metrics are for the quarter ended 6/30/2024 compared to the quarter ended 6/30/2023. 60.9% 69.4% 65.3% 65.7% 66.4% Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 11 550 Basis Point Margin Expansion Non-GAAP Subscription Service Gross Margin Percentage(1) 36.1% 45.2% 43.1% 45.6% 49.3% Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 1,320 Basis Point Margin Expansion Non-GAAP Gross Margin Percentage(1)

 
partech.com Q2 ‘24 Financials Consolidated Highlights • 67% increase in gross margin from Q2 2023 • $7.9 million increase in Adjusted EBITDA(1) from Q2 2023 • $5.9 million increase in Adjusted EBITDA(1) from Q1 2024 Subscription Service Highlights • 57% increase in ARR from Q2 2023 • 48% increase in revenue from Q2 2023 Three Months Ended June 30, (in thousands) 2024 2023 Revenues, net: Hardware $ 20,116 $ 26,390 Subscription service 44,872 30,372 Professional service 13,162 12,767 Total revenues, net 78,150 69,529 Total gross margin 32,028 19,186 Operating expenses: Sales and marketing 9,811 10,075 General and administrative 25,369 16,434 Research and development 16,237 14,888 Amortization of identifiable intangible assets 1,946 465 Adjustment to contingent consideration liability (600) (2,300) Gain on insurance proceeds — (500) Total operating expenses 52,763 39,062 Other (expense) income, net (610) 155 Interest expense, net (1,630) (1,735) Loss from continuing operations before provision for income taxes (22,975) (21,456) Provision for income taxes (612) (383) Net loss from continuing operations (23,587) (21,839) Net income from discontinued operations 77,777 2,137 Net income (loss) 54,190 (19,702) Non-GAAP adjustments (58,538) 7,444 Adjusted EBITDA(1) (4,348) (12,258) 12 (1) Adjusted EBITDA is a Non-GAAP financial measure. Please see Appendix A for a detailed reconciliation from net income (loss) to Adjusted EBITDA.

 
partech.com Appendix A 13

 
partech.com 3 Months Ended Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Subscription Service Gross Margin Percentage 43.3% 50.6% 48.1% 51.6% 53.1% Add: Depreciation and amortization 17.4% 18.4% 16.9% 13.9% 13.1% Add: Stock-based compensation 0.2% 0.4% 0.3% 0.1% 0.2% Add: Severance —% —% —% 0.1% —% Non-GAAP Subscription Service Gross Margin Percentage 60.9% 69.4% 65.3% 65.7% 66.4% May not sum/recalculate due to rounding. Non-GAAP Subscription Service Gross Margin Percentage Reconciliation 14

 
partech.com 3 Months Ended Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Gross Margin Percentage 27.6% 36.6% 34.6% 37.2% 41.0% Add: Depreciation and amortization 8.2% 8.2% 8.2% 7.9% 7.6% Add: Stock-based compensation 0.3% 0.4% 0.3% 0.2% 0.4% Add: Severance —% —% —% 0.3% 0.3% Non-GAAP Gross Margin Percentage 36.1% 45.2% 43.1% 45.6% 49.3% May not sum/recalculate due to rounding. Non-GAAP Gross Margin Percentage Reconciliation 15

 
partech.com (in thousands) 3 Months Ended Q2'24 Q1'24 Q2'23 Net income (loss) $54,190 $(18,288) $(19,702) Discontinued operations (77,777) (2,078) (2,137) Net loss from continuing operations (23,587) (20,366) (21,839) Provision for (benefit from) income taxes 612 (7,785) 383 Interest expense, net 1,630 1,708 1,735 Depreciation and amortization 8,834 7,293 6,817 Stock-based compensation 6,286 4,410 3,601 Contingent consideration (600) — (2,300) Transaction costs 1,573 3,405 — Gain on insurance proceeds — — (500) Severance 294 1,434 — Other expense (income), net 610 (300) (155) Adjusted EBITDA $(4,348) $(10,201) $(12,258) 16 Net Income (Loss) to Adjusted EBITDA Reconciliation

 
partech.com 1. Foodservice market ready for disruption • Large TAM in restaurants with ~1m locations in the US spending 2-3% of total revenue on technology1 • The industry shift to cloud technology has led to an explosion in new technology from Voice AI to marketing technology 2. Meeting market need with a Unified Experience • Today technology is driving a wedge between restaurants and their guests • Brands are shifting to well integrated vendors and more targeted guest interactions • There is an opportunity to create an integrated solution with unified data that enables restaurants to have 1:1 relationship with their guests 3. ARR at scale with strong SaaS metrics • Through both organic and inorganic strategies, ARR has reached $192.2M with significant opportunity to expand within existing customers and win new business. 1) Source: Technomic Investment Thesis 17

 
partech.com • Annual Recurring Revenue or "ARR” is the annualized revenue from subscription services, including subscription fees for our SaaS solutions and related software support, managed platform development services, and transaction-based payment processing services. We generally calculate ARR by annualizing the monthly subscription service revenue for all Active Sites as of the last day of each month for the respective reporting period. • “Active Sites” represent locations active on PAR’s subscription services as of the last day of the respective reporting period. • “Non-GAAP Subscription Service Gross Margin Percentage” represents subscription service gross margin percentage adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance. • “Non-GAAP Gross Margin Percentage” represents gross margin percentage adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance. • “Adjusted EBITDA” represents net income (loss) before income taxes, interest expense and depreciation and amortization adjusted to exclude certain non-cash and non-recurring charges that may not be indicative of our financial performance. Key Performance Indicators 18

 
partech.com Thank You! 19

 
v3.24.2.u1
Cover Page
Aug. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 08, 2024
Entity Registrant Name PAR Technology Corporation
Entity Incorporation, State or Country Code DE
Entity File Number 1-09720
Entity Tax Identification Number 16-1434688
Entity Address, Address Line One PAR Technology Park
Entity Address, Address Line Two 8383 Seneca Turnpike
Entity Address, City or Town New Hartford
Entity Address, State or Province NY
Entity Address, Postal Zip Code 13413-4991
City Area Code 315
Local Phone Number 738-0600
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol PAR
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000708821
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