- 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
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 2024
Q2 2023
vs. Q2 2023
Q2 2024
Q2 2023
vs. 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
Percentage
53.1%
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 2024
Q2 2023
vs. Q2 2023
Q2 2024
Q2 2023
vs. 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
Percentage
52.4%
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.
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.
Trademarks.
“PAR®,” “Brink POS®,” “Punchh®,” “MENU™,” “Data Central®,” "Open
Commerce®,” "PAR® Pay”, “PAR® Payment Services”, "Stuzo™," "PAR
Retail™," 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.
PAR TECHNOLOGY
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in thousands, except
share amounts)
Assets
June 30, 2024
December 31, 2023
Current assets:
Cash and cash equivalents
$
114,928
$
37,183
Cash held on behalf of customers
12,804
10,170
Short-term investments
27,527
37,194
Accounts receivable – net
50,203
42,679
Inventories
25,526
23,560
Other current assets
9,427
8,123
Current assets of discontinued
operations
6,382
21,690
Total current assets
246,797
180,599
Property, plant and equipment – net
14,452
15,524
Goodwill
623,875
488,918
Intangible assets – net
148,292
93,969
Lease right-of-use assets
4,740
3,169
Other assets
17,689
17,642
Noncurrent assets of discontinued
operations
839
2,785
Total Assets
$
1,056,684
$
802,606
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
30,682
$
25,599
Accrued salaries and benefits
13,954
14,128
Accrued expenses
4,047
3,533
Customers payable
12,804
10,170
Lease liabilities – current portion
1,288
1,120
Customer deposits and deferred service
revenue
14,294
9,304
Current liabilities of discontinued
operations
2,033
16,378
Total current liabilities
79,102
80,232
Lease liabilities – net of current
portion
3,540
2,145
Long-term debt
378,672
377,647
Deferred service revenue – noncurrent
2,876
4,204
Other long-term liabilities
4,173
3,603
Noncurrent liabilities of discontinued
operations
—
1,710
Total liabilities
468,363
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, respectively
705
584
Additional paid in capital
852,406
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’ equity
588,321
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”).
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,
2024
2023
2024
2023
Revenues, net:
Hardware
$
20,116
$
26,390
$
38,342
$
53,167
Subscription service
44,872
30,372
83,251
58,337
Professional service
13,162
12,767
26,630
26,609
Total revenues, net
78,150
69,529
148,223
138,113
Cost of sales:
Hardware
15,539
21,326
29,709
43,707
Subscription service
21,041
17,233
39,635
31,158
Professional service
9,542
11,784
20,793
23,150
Total cost of sales
46,122
50,343
90,137
98,015
Gross margin
32,028
19,186
58,086
40,098
Operating expenses:
Sales and marketing
9,811
10,075
20,737
19,473
General and administrative
25,369
16,434
50,544
35,401
Research and development
16,237
14,888
32,005
29,203
Amortization of identifiable intangible
assets
1,946
465
2,878
929
Adjustment to contingent consideration
liability
(600
)
(2,300
)
(600
)
(7,500
)
Gain on insurance proceeds
—
(500
)
—
(500
)
Total operating expenses
52,763
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
operations
77,777
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 operations
2.29
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.
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 Measure
Definition
Usefulness 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.
Non-GAAP Adjustment
Definition
Usefulness to management and
investors
Stock-based compensation
Stock-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 consideration
Adjustment 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 costs
Adjustment 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 proceeds
Adjustment 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.
Severance
Adjustment reflects the severance included
in cost of sales, sales and marketing expense, general and
administrative expense, and research and development expense.
Discontinued operations
Adjustment reflects income from
discontinued operations related to the disposition of our
Government segment.
Other expense (income), net
Adjustment 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
taxes
Adjustment 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 interest
Adjustment reflects non-cash amortization
of issuance costs related to the Company's long-term debt.
Acquired intangible assets
amortization
Adjustment reflects amortization expense
of acquired developed technology included within cost of sales and
amortization expense of acquired intangible assets.
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 EBITDA
2024
2023
2024
2023
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
taxes
612
383
(7,173
)
698
Interest expense, net
1,630
1,735
3,338
3,402
Depreciation and amortization
8,834
6,817
16,127
13,584
Stock-based compensation
6,286
3,601
10,696
6,609
Contingent consideration
(600
)
(2,300
)
(600
)
(7,500
)
Transaction costs
1,573
—
4,978
—
Gain on insurance proceeds
—
(500
)
—
(500
)
Severance
294
—
1,728
253
Other expense (income), net
610
(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
2024
2023
2024
2023
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
taxes
0.01
—
(0.23
)
—
Non-cash interest
0.02
0.02
0.03
0.04
Acquired intangible assets
amortization
0.20
0.16
0.36
0.32
Stock-based compensation
0.18
0.13
0.32
0.24
Contingent consideration
(0.02
)
(0.08
)
(0.02
)
(0.27
)
Transaction costs
0.05
—
0.15
—
Gain on insurance proceeds
—
(0.02
)
—
(0.02
)
Severance
0.01
—
0.05
0.01
Other expense (income), net
0.02
(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
outstanding
34,015
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
2024
2023
2024
2023
Subscription Service Gross Margin
Percentage
53.1
%
43.3
%
52.4
%
46.6
%
Depreciation and amortization
13.1
%
17.4
%
13.4
%
18.8
%
Stock-based compensation
0.2
%
0.2
%
0.2
%
0.2
%
Severance
—
%
—
%
0.1
%
—
%
Non-GAAP Subscription Service Gross Margin
Percentage
66.4
%
60.9
%
66.1
%
65.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808387744/en/
Christopher R. Byrnes (315) 743-8376 cbyrnes@partech.com,
www.partech.com
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