PAR - Earnings call transcript Q2 2021 | PAR Technology Corporation

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Operator

Good day and thank you for standing by. Welcome to the PAR Technology Fiscal Year 2021 Second Quarter Financial Results Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. like for the today, now your over I’d speaker first Mr. Instructions] to conference hand to [Operator Chris Byrnes, Vice President of Business Development. Please go ahead.

Chris Byrnes

our access and the Investor to Also, at afternoon like worldwide the as Form PAR’s found call in RJ, the this welcome Relations as disclosure call we of results that well certain you, the good see press SEC. playback. and can and care also and the complete afternoon furnished conference the I’d via financial X-K Thank News Participants be results the like this review. you take press At I’d The details aware today section related be we second of call time, release are the in please available today. regards for be XXXX to are for our To our call website our call recording this release to quarter financial afternoon. in web. will to the of www.partech.com. broadcasting to on details, issued this should

future participants So of also includes please you ask any included in data. reflect on recording. a the if forward-looking that remind management’s both this our that be conference like available conference statements and it to will I’d live based currently question, advised, be use call expectations

with afternoon subject related are events and this safe and information and statements and in statement the future our results upon to or SEC. filings to be annual our projections earnings harbor call actual other this to However, quarterly subject uncertainties. relied conference in the may The on release included forward-looking

Financial and PAR’s for which the Savneet? is like followed call and will call, PAR’s the the general President, be formal call Chief Savneet on Savneet Bryan Singh; I’d CEO portion remarks the to turn to me of by now over today Menar, Officer. Q&A. Joining

Savneet Singh

begin, for today. are to quickly I the welcome working thank of our Punchh good towards first Thanks, shareholders our joining commerce team unified reported platform. within firms and To growth business strong to a our in see sequential QX. business Chris, momentum afternoon, year-over-year early in our everyone, and and on lines call building in this report as Brink you and I’m want our continued Together, PAR. we and pleased quarter, strong progress

our First to the first and update move months acquisition to on post-closing results. three success you review the Punchh the on quarter’s and in

of X. during you know, on the acquisition quarter second As we the Punchh completed April

lines. assumption in stock-based With business the large The restaurants. companies. approximately by Punchh incremental serves the We the tremendous leading company provides leader and purchase a the commerce expand combination And of price customer of providing experience was growth to to in opportunities plan Punchh believe XXX both largest market customer compensation, reach. of Punchh’s to XX date. far loyalty for our technology plus platform a enterprise for use suite we unified combined is PAR cloud our Punchh largest provider of that million acquisition solutions a approximately $XXX of and that restaurant is

the has of towards the May. a We opportunities those opportunity vision Punchh been at an our to objectives also the relationships made customer months enterprise call on the Punchh’s initial and part leverage investor for the our pleased three for We deliver PAR have in to discussed that restaurants. we’ve brand progress with early strong level in platform I’m PAR.

regular prioritized working are opportunities have in engaged together teams cadence. well and their Our very a

proven came the dependability the of two the accurate. to has high organizations compatibility pre-acquisition the degree backlog impressions regarding through cultures the of far between Our in of thus be

can The is control over deliver top, transaction, or also but destiny. be to we we that payment on run give strengths and They and restaurant, are. company’s are our combining work customers on they how goal their begun up. have our learn more on to their together, customers quickly teams guests, top complementary each product and back a office. about We’ll as excited build to platform combined can configure integrate Our roadmaps,

has provide years, tremendously technology expansive over to proliferated set journey. Punchh enterprise We the restaurant and in restaurant PAR of restaurant win mark can to most While truly has entire yet companies aim have their restaurants. won, restaurant few the Together, the that. change capabilities the last operator technological most differently, platform while Said now a for not. companies have technology

growth. of result a we As capabilities, those for offerings platform our demand saw

their of the in the same-store a cited top midst an conditions of are that investment technology the and of experiencing Many sales, I of ticket PAR’s earlier, restaurants restaurant hardships and the COVID are growth back remarkable traffic from These foot pandemic. provide price. at bounce As average business record of for environment restaurants in customers by list. caused

In of QX, second XX% loss same or period XXXX. million per $X.X million loss we a million loss $X.XX basis, ago. quarter $X loss $X.XX million, to share per of to a loss quarter per net non-GAAP share share a one of period gives revenues the GAAP compared $X.XX Bryan net $X.XX compared an loss for net million net the Now or $XX before briefly for per in also increase $X for of or of loss XXXX non-GAAP review in XXXX. reported details. loss On reported same second or adjusted year Today, further share we $XX the a was reported the numbers from GAAP to

XXX% hardware Punchh’s growth ARR led combined with Data of strong this of ARR and the important moving More Brink new Punchh the should in contribution, though, in The growth Punchh solid foundation strong continued X,XXX QX of recovery. face the the at million, Adjusting we We exiting activations by is aided the growth a for Central be as saw of supply Brink in this ARR the period performance of velocity QX Brink still growth underlying around chain. stores in momentum acquisition increase quarter, is for QX through would by in – QX The Punchh. Now and the XXXX to notable lay we in our challenges of half growth XX.X%. QX. performance. was second business year. activated contribution reported the $XX.X the quarter several

are at bookings from this Brink customers of to our stores velocity I business. QX, be but We’re metric from was was assigned prime varies, came installed. from to QX in totally In linear be for purchase quarter for a now order exit seeing end number came within the record to significant activations, quarter-to-quarter very Brink as stores QX and well. pipeline not continued open backlog and yet our and not X,XXX XX,XXX company order expect activation, that QX, the second KPR XXXX. active our XX% a Bookings of only but is At as we reported million, This earlier, a important and increase that reported from velocity have QX and to we X,XXX, also XXXX. increase with point patterns hope $XX.X from continue. the It’s our out strong. of growth customer-to-customer ARR new over as mentioned improved customers, order XX% is demonstrates deep,

the QX, reported than very pipeline. number in confident in I’m our we lower While

Punchh. X, April did they to and not as is disappoint. expected, contribution Turning Their of to results as QX

QX and has QX. million, at loyalty ARR restaurants. reported added a total increase Contracted $XX.X XX,XXX and of at nearly $X.X a was line in since the the year-over-year product Punchh by X,XXX live new QX of at end live end ARR sites now a XX% the end for of the XX that QX, increase proves end XX% in over customer the at million, Punchh’s of totaled experience significant million Our last $XX.X sites the June, sites and demand increase and of a a value just number months.

platform. QX. and added have back of improved QX XXX, and is this Magic Central, our pleased extremely in at from acquired Data Magic PAR the $XX.X end quarter We’re million XX% increase reported the X.X. fortunate Brink last in to transaction ARR a at of at the Restaurant ARR Restaurant the Combined leader and software saw now office industry bookings year’s to

in I to the improvement Brink pace and as technology expected XXXX half, bookings non-customer-facing growth near-term XXXX quarter, bookings the As normal see to progresses as and for in more last activations to weakness Central expect mentioned back I’m by we encouraged some Central plays Data our within Data restaurants. continue for expect out. also demand similar we improve

is in at Now from this in review our point-of-sale Communication product Product our $XX.X impacted quarter, to Drive-Thru XX% improved Product a that recently or sales in dramatically and hardware reported Systems ended revenues quarter. QX XXXX – quarter the quarter, the the increase. COVID business. reported million quickly business

purchase chain capital price improving vigilance. and rollout industry-wide note, XXXX. see continue the vaccine ongoing of impact restaurants, favorable to freight require seeing costs constraints, sales and are higher will to we such throughout challenges As management we as and increases supply logistic significant Important environment current inflation to

some growth put charges. are other we’ve We hope in and dramatic and this and through continue rallies, seeing margin mitigate already shipping associated to improvements experienced with which QX, increases margin supply impact the chain including I the with current have addressable QX. pain, costs To to price actions

this our know and long committed challenge to pass supply allowed don’t chain to stayed we how us have them. us of exist, parts While will challenges customers on to

our review to Now segment. Government

to QX million, $XX.X of of decrease year. a of compared revenues reported business last Government when minor X.X% Our

contract QX $XXX.X backlog was end of Our million. at the

and strong. closed of high-tech We Solutions and transformative revenue busy have restaurant and labor large a midst include where a and new specifically line. Punchh, continue industry contract second record our We can with to the business be active our as contract more In announced is in with quarter. the new decade-long in Intel leverage traffic performance experience customers contracts customer summary, optimism the and We seek had customer work we that continues sales to levels. pipeline excellence, opportunities considerable we acquisition value-added direct out store on entire

Brink, the drive towards in of deployments half we strong and XXXX, second Looking QX QX anticipate growth. ARR should of which accelerated

platform your success will more inorganically rates on for increase And more to QX on our that to acquisition, customers. subscription take that, the Punchh I’ll Bryan of will we numbers details organically attractive Given call and make the over to to then look and us build the questions. continue and our the turn more both with

Bryan Menar

revenue year. quarter increase an in everyone. and good $XX.X the from the Thank in Product the was Savneet, XX% million of reported million, $XX.X million $XX.X afternoon, or you, prior

Contract million of revenue quarters. includes streams increase revenue million be of product display compared XX in Service revenues to both recurring service that other contract multiple from revenue the revenue. in revenue revenue In increase XX% a $XX was $XX.X the XXXX, a the at XXXX. revenue Of million The $XX.X growth continued million, the accounts the million from $X.X quarter the kitchen revenue. a in streams decrease million, by highest Brink to by the in POS decrease revenue $X.X contracts is revenue line, of $XX.X subscription million the first our $XX.X XXXX. Government partially Mission of by year. by $X.X total, The $X.X $X.X to Tier was the as hardware in recorded software-related by in hardware was total revenue customers. increase services QX contributed backlog prior our of and of X revenue our software an The of XX. increase associated ISR solutions million or decrease comprised XX% software of of million to reported as in rollout to from product service with offset legacy a business some revenue service quarter during software backlog $XX.X million new in million QX million recurring hardware $XX.X in contracts. and X.X% increase and the $XX.X million increase systems, or driven product our $XXX million of driven and Our refresh a investment of reported the preceding Growth was to expand or drive-thru in driven XX.X% a was the company or $X.X revenue including million, compared Contract reported support Punchh over million Systems line. $X.X in of which includes noting inclusion primarily continues from base, June the continues implementation our was our factors, significant,

agreement the amortization organization. expense offset for increase contracts. increase material million for or impact infrastructure interest would $X.X Net Punchh by turning margins The for in quarter costs the the million, million, XXXX. $X.X to with for driven the increase the million marketing, Owl tax the acquisition. million $X.X is accretion higher expenses. field $X costs in regards favorable note, Punchh internal the the of million second while for expenses additional the reported of revenue by corporate Net GAAP reported product issuance compared $X.X of there X.X% same versus XXXX. The $X.X net is in Punchh driven non-cash costs decrease last partially existing year. primarily expenses. primarily from increase $X.X primarily costs million was our Now benefit of due a drivers absorption total million to $X.X the in million XX.X% $XX.X and QX million, part in was quarter operations which in of XX% period million driven the in the was quarter was In Other was an were variable X.X% in partial for discount acquisition. developed adjustment liability contract the company’s management $X.X related QX was compensation driven $X.X for taxes, QX of in amortization as technology from The increase The included costs million million of XXXX. QX investments in amortization by million cost. compared as includes $X.X to to to the a margin low $X.X net million, $XX.X operational XX.X%, Service margin compensation, $X.X $X.X for tax by Important Government as XX.X% be tax an quarter into margin Net was were in and recorded compared notes overhead million from $XX.X organization. debt improvements which productivity absorption and R&D acquisition credit intangibles. related for $XX margins. and tax transaction. for release excluding entered was driven SG&A $X.X Product XX.X% issuance. fixed Punchh expense sales to The assumed by more the increase million created million a the allowance a deferred acquisition provision of reported compared to increase quarter. increase compared acquired effective of XXXX. Punchh was million stock-based of The tax were $X.X service XXXX. to primarily and XX.X% The a an valuation of on margin XXXX, by our the XXXX. by QX existing in product was by margin the quarter as Punchh Rock transitioning development increases the Punchh the $X.X was technology of to is $X in second XXXX of the to million to incurred quarter million by driven million $X.X in $XX.X incremental million operational for expenses, we was deferred result million intangible included benefit deferred A of XXXX, of XXXX driven million addition part for $X of QX recorded of to for the interest

balance and sheet position. company’s to flow provide cash on information the Now

of for million the by Cash was was six six primarily months XX, of the XX, consideration investments driven For million $XXX.X XXXX. June months in and net activities with associated other inventory $XX cash hospitality the opportunities million software used increase $X.X million XX, June six for financing was the with for working six million ended for XX, losses, charges an was XXXX partners. for an the of months XXXX. June additional $X.X included of platforms which million the year. used was XXXX, June six and for net Cash Punchh operating strategic months versus $XX.X acquisition. for driven investing the by various the six ended six key operating primarily million of months million million, activities months during months the for the the months Capitalized advantage assets $X.X driven Cash took the cash six net software million million XX, XX, XX, ended investing by increase capital versus prepaid $XX.X in in June ended XX, assets ended $X.X by company was as June ended June net XXXX $XXX.X activities connection year. used $XXX.X June was versus XXXX, in current used ended prior $XX.X ended requirements, activities XXXX prior non-cash with in versus for repricing XXXX

XX, our the million Act received six Associates. from by funds III June proceeds of XXXX, the T. common proceeds we the under and Owl private months with net And the of from agreement. term million During $XXX.X Rock Rowe Price advised net of credit accounts ended placement $XXX.X and certain loan stock

XX million. while the During the some on notes months supply demand increased increased June will million move outstanding inventory outstanding XXXX. enterprise hand XXXX, XX, to mitigate XXXX This the of XXXX, Days December XXXX million for XX to concludes XX, days volume. Accounts ensuring Government majority of by meet XXXX at notes. XX, half from million net XX, within remarks, restaurants the retail compared and Q&A. Days within XX, increased We my days offset XXXX. the and our and from XXXX. of to XX, December $XX.X increased in to XX issuance XXXX, at now XXXX Inventory delays our $X.X from we we chain June days second sales of proceeds ended of the formal increased repurchase receivable XX, installations we December the to to customers’ due the June received improved at $X.X can shortages of XX at days by six from $XXX December

Operator

Jefferies. question from line Your [Operator Samad from the Instructions] Samana comes first of

open. Your is line

Samad Samana

Delta now, I afternoon, you and looked, and you, variant? us XX thanks you with maybe there’s the quarter, us far understand I as the demand how talked good think the understand questions. helpful concerns about looks think environment Hi, but around activity my about the I for into comment in XQ? of first, for would trajectory, to third you the days then I obviously both think can on Maybe first start bookings, And then help when can extent like, environment I so bookings XQ taking maybe and to has if activations Savneet, maybe bookings especially the know it what be

Savneet Singh

Sure.

We given impact Delta the it huge built relates bookings a any haven’t variant have on just yet the on seen the Obviously, activations. over pandemic. the up push as activations backlog we to or

say seen last would there, And big of there, we but lot early nor our Yes, all all can there. sort in a that changes on I seen any the the ago, is change focus did lot of so haven’t of haven’t as on bookings fine, in I track. front. come years X.X change the and this A quarter, it bookings months. bookings any are they’re

of always So the because what end July the a quarter at is what could of super the quarter. happens there’s in just happen illustrative not rush for

see pain store to if come Delta issues coming be the say. be that side store. variant early in too cause would on requires we to or would any activation because I would the party would where But first to would us So the say

at incredible on seen like we’re turning side, seeing ARR. fact, activation all, mentioned, momentum on haven’t We that in I just

Samad Samana

of a to you How or just past, it what looks about like the think of be north low sites for model? I plus Great, was maybe last And track which quarter think assumptions been we If helpful was X,XXX. that again, in about if would velocity should this XX question. the XXXX helped that year. of I we XXX another type our the obviously, type guys maybe my like at really you should on in X,XXX back think for have of activations do quarter? us able to averaged increased months, follow-up last maybe over are of site me understand the the activations second kind more of XXX, to But sharp guess couple activated of quarter Or well I quarters? XH next kind we of get level brings

Savneet Singh

easily Yes. in I expect QX. that to clear very QX

activations. I I see meaningful the a in the think ready just upswing very will a hope we in closer. up in we we’ll over I think significant growth we’re stack continued of to when be – on that’s get continues QX. is for go. it activations, all now built that But pace have Obviously, reflective quarter-over-quarter the which we a pandemic just And

I to expect anywhere to where to back, come wouldn’t us So it back go second half time for I XXXX. expect wouldn’t some in were we

Samad Samana

I organizations to Okay, the about technology the How the think off the And maybe different then to and of two the sales that, should on we is starting incentives How will as go to the – it to should organization acquisition, company kind sell? And Punchh that seems Are question start. on an think integration them there update Just long similar out take think process. early that go-to-market model. good folding then great. a just we a you the give about integration? like into take? maybe

Savneet Singh

Yes.

been focused on tied getting And lot internal of call will more our – in strategy. more only roadmaps G&A have part. also to we’ve product order the M&A on ticking sure not So two help in that a few our and together. that us a product development so there, month months roadmap. we’ll or just the tech the a it, strategic, combine that combined the That’s functions, first but important We off we want first make most the guide together

make be we product think on one those can each I be us equal and and of then And the proving sales then obviously, And next. G&A tech one-plus-one key be will sales. will that would three So that last.

G&A. the doing we’re say I’d So

one We’re process, product move moving excited and which is the tech, on sales. a on to about, to and most but we’re long we’ll then

are certainly ability the strong seeing upsell We it. amongst for

We force got to got yet. point we’re just of the haven’t we where the haven’t point that’s dramatically because yet to compensating, sales

Samad Samana

terminal to And too But the little Great. maybe more? the traditional factor impacting on want – for your Brink? could of as into that having is it’s one business? is don’t that know Just Brink much quarter-over-quarter, maybe Or Q&A. is for this down chain for only point-of-sale kind double-click hog impact well? any maybe then the more impacting is ability of a modestly And supply we but how me. bit should deals that I backlog? I to issues, – you that it the close more into the

Savneet Singh

our strong growth and get customers impacting increases, price QX, if activity. It should in been supportive impacts. I we we’ve better some margin said really They for have than up of to they’ve little I to our through and margins the continue. gone would as and shipping impacted been buy and the had year-over-year. nothing QX, the a accepted There Where recovered it, that a cost revenue don’t will be but strong more, hitting margins even in better not put yet. mitigation was QX, we done has that those well inputs QX some expect we as as because stronger, Not it it what in margin that has what had we now. bit was of – albeit

slowed feel margin bookings it’s think now it impacts, think the super This – I dynamic, being on good where on Samad. has not though, down. pretty we and activations I So is

could change feel it overnight, we are where now. we but good all very So

Samad Samana

leaves that to my question. And me last Understood.

confidence it’s was three forward, say same the your think you growth the you’ve as the same. year. about And it quarter I think acquisition. as ago, time Would lot we more transformative Brink, that as in of done kind is a half company I ARR had a a accelerating months, this of back confidence the think of the less Just quarter, last that in been

six on should how about maybe Just that the view think we’re months? rounding we now next August, the

Savneet Singh

Yes, activations, was I I’ve would i.e., hopefully and to – continue were September. turning now then July ARR, than more we seen that on record just we’re because expect say, August I book confident a

feel didn’t QX So expense that predict. I in being expect strong, then we we QX some other now there confident will continue super even was I think more unless issue in and

Brink I even that think will the we very half So be second stronger feel strong.

Brink our half are part that we that stores of those decent I the the other of are second are – The pricing number historical And priced of are is stores. say activated – in first sort half, a would below.

weren’t some were our So there – customers. they highest-priced

half, the second The very I feel is that positive us. also for customer mix

Samad Samana

Great. over my again questions. taking for next Thanks analyst. turn it I’ll to

Savneet Singh

Thanks lot. a

Operator

of line Sutton Your from the next question Craig-Hallum. comes from George

Your line is open.

George Sutton

I from believe, to you it I Can see your payment the about Thank customer, announcement at see least the a here? Mr. you opportunity you. wondered excited that were talk Pickle’s, you signed if you address first could payment as opportunity, perspective. we formal and

Savneet Singh

Yes, absolutely.

and good of was So momentum. some buy that a us we’re get our definitely of all customer That to starting win they for products. sort

fantastic to So see. that’s

full-time a now focused sales. on I person we’ve payment got think

team. of part going had our we’ve is next approved We a revenue just meaningful Payments development product be person. a the So year. to

year. as couple ago, of – unexpected by couple We’re that months starting at mentioned to hopefully, a larger – the momentum this few that a of hope were couple the win really I one, least year, we’ll there. end customers And but I a of

taking first the revenue in I bit think XXXX it’s our longer will us a the here. revenue six Everything be would then year, the end So as months. decent while by I suggest and get good I a in we’ll – it think of part lot of is a see to little we’ve learned

the think – expected will going I is than in. we better outcome of it a actually be net

George Sutton

sell a right restaurant I You your opportunity. relative what I There fairly significant could great discussed now. you to occurring, of trends a would address couple into those define as to environment quick service are and wondered if

have and they doing are we’re the First, your second, those suggesting the innovations issues? that shortages in that look labor are to can obviously what seeing QSRs design issue and than for the different product that be going And digital past. very

Savneet Singh

Absolutely.

the lot closely off comes the of to win be we We’re your on All that and the from on sell the So stuff data we that. powers there, digital design app. is of the platform platform side, store and the right? we that inside products want a where that store outside whether

restaurant So you was across more I did point. same-store it’s average, think And it’s that PAR, if average XX them. point that’s a just the making look It’s months are has I average single the of not that an of trend. ago, it huge volume. ticket every almost higher was sales we restaurants just beneficiary of part not order at And one has exciting they the than the

example launched challenges, amazing products which it’s talked it’s of hopefully So redesign the reinvest absolutely which product. that are certainly pretty that good is of bills that around that an second change. Pickup, of off the to the of PAR. see you’ve net a some your their and opportunity point-of-sale customer them for platform question a engagement be of loyalty in beneficiary We digital we bundled into about. or allow On should resiliency, coming labor Punchh to those because most And will are

in on being things Our we point sort certainly, address And M&A we our that have will solution, back of product say solution. store. of partakes these most the talked might I Central, like that by a a And definitely restaurant that address to that long in focus past digital see you historically our our on given going look scheduling builder is ordering front labor labor. But to that’s hole talking strong do customers would to Data about the something office this problem are how as some I for think management – continue think expect our challenges, acquisition. about us I of it’s time. it’s I from

George Sutton

ambient your give Lastly call to interesting your people Can set to sure and this an of just for thoughts had see able I’m will were me, that not technology. on that there us a product you the meet summary most opportunity? relative article. quick you

Savneet Singh

sure. For

– what’s that of foundational back in know with the transaction, payment sort Punchh kitchen. information, of the on customer, we thesis know the part big know is the we the a with we PAR So we have in going Punchh office the of acquiring

like or you be George, to are, should able your down, is, into be should again, all by should menu, adjust your food, so for And LTE. you. information, if your order should one be your I able that and your gift over cards, like taking restaurant to through, sit what a this phone able mean platform experience. wallet, sort your cards power all restaurant this, an able ambient should who opt VoLTE, you out preferences to day Punchh that I know be you together, something into And ever walk And decide to you Voice without your payments, of your loyalty expect to adjust the all done –

in-store that away technology create actually technologies is experience so because such almost How and the Amazon do that brand, help it And feel like dream. makes it that the of that’s Go sort you farther making brand you closer ability the experience enhancing having store. that not then outside that from really that also the to store at is restaurant that

really that’s want what to So create. we

George Sutton

you very much. Thank Beautiful.

Operator

line of from comes Sheldon Your Blair. next the William from Stephen question

is line open. Your

Pat McIlwee

Hi, on this Stephen. for actually McIlwee is Pat

think here. but covered I quick of had lot more we one just it, I a one

And you drove cross-sell If that? bit of the traction the just and Punchh, the but bit kind touched more upsell then talk on on this you’re a ARR growth about seeing specifically, what could what with curious there? you strong a quarter? So

Savneet Singh

us is if George’s we that. will XX.X% were see continue had real Punchh this versa, the cross-sell. just think, is I And question the customers say in been a won ARR the more of on happen and about that that formal as I coming is point – in our and push few we’ll get Punchh digital together to XXXX, But months, growth, it be growth. just last we which that of impact sort assuming will I here we would lot of have the there with happen. and get came in eventually, A in QX talking from side later there’s first banner, of were definitely cross-sell was think There’s that under continue. sort that that say that beneficiary will I are the a a year been vice from we huge to Brink. been quickly, move would businesses,

was many I very all were vendors for lot of they’re about that today, to with software different thing almost attractive vendors. – Managing actually of managing acquisition majority of consolidating think customers, the too a products the because work. other stores excited of them not They’re because The I overwhelmed. vast wasn’t a is expecting, dozen but I’ve idea the them, to and spoken

not and think we interesting I that point. that there into or could And push, those customer pick Brink think not solutions have so I which your may is will pick Punchh opportunities come be

I Punchh the happen Brink where year. is can obvious later we RFP RFP will year, other and quickly. the next more it’s that the an bring think right in in now, is or But ones

Pat McIlwee

Thanks Okay. Makes sense. for the question.

Operator

from question [Operator Wyden of from line the Instructions] ADW Your next comes Capital. Adam

open. is line Your

Adam Wyden

of you conservative among talk mean, to and margin profitability? and your EBITDA peer to I Look, talked Savneet. people conferences the clarity? about And of people had what sort of I you to give your margin, people. nature guess, you for Twitter your or Hey, a path implies One, relative can on forward? a of, misinterpretation confusion some going bit that been at there’s little couple questions. certain accounting and know gross I I gross could modeling group about

Savneet Singh

Sure.

Brink account gross So Historically, we as a margin if was in how to software. break for just conservative are very I out we business.

there, as – past, And plus. It’s stuff, software. talked got the a in to We’ve we’ve been of encompass the XXs it’s sort sorts So in path of of to two but doing here. the the the two year years strong lap get strong get scale, rework I’d over path as we all there, next been to say, get last also service historically Brink of we’ve gross includes line benefits the all got over other be margins. of or about XXs our

overspent better, of seeing get And to so the think we’re and I results obviously we’ve that.

margins. is that tailwind other is we contributor The high what I’d largest software our Punchh ARR natural call at already huge have

forward. turn this I just – get And the revenue. Brink Punchh strong interesting The benefit business everything the of last challenge have and because as move year, so helps as grows, quarter, well. growth that expand got and of expansion margins which will say you including margin margin saw scale, that that will think been hardware benefit we economies will very over get service our And tremendous again, low the also we’ll our had we continue has I’d as as we’ve we now pretty this

Adam Wyden

is and the potential Yes. EBITDA gets is mean, I for think me fact the once I gross that I look, nature although but the the for margins that forthcoming, margins matter. mean, best-in-class less low because enterprise a going, have part that churn of the that’s ARR and story about growth, this of really very to major this has that thing your

be So exciting. it will

Savneet Singh

Certainly, on want I on impacts. two that. on focus see Adam, – XXX% remember ton overengineered, has was the And It’s And spend you of as been ton very given getting of scale, behind which last business. yes, immense of it a of a product engineering building putting investment Brink I don’t product years, a but been teams the the building get out tiny on focus management was think margin. historically none was to group, you right, a

investments, benefit of that And new products of those same come, so are as particularly we but that to the we team. off haven’t of got launch – those

margin You margin, expect but should existing to be the also much higher our see expansion each additional us scaling case. for gross be products, from absolutely the incrementally which I product

Adam Wyden

Right.

in think holistically Brink you’ve a spinal restaurant cord I to whether So view, from macro Data you or require over clear as you or easier second that going of cloud you the just delivery on mean, don’t mean, doesn’t things all is are valuation – or the be perspective, that the noted that Bloomberg, ever opportunity about call, Central XYZ Punchh it, hardware. you off, and of the and the have don’t it’s all can if these upsells click Magic, present, I I relatively to company effectively on think called pretty call – and on switch been the payments, the that you PAR Restaurant

since much for PAR to it’s price, this to the probably so activations. coverage. buying most that we side had And what existing and of trades then can upselling is company to against I that has more today the means largest backdrop, is ever it right this kind relative would sell call there of research than story, which And targets Brink clients at analyst mispriced M&A about been the modules to argue it’s XX-month me, the sell-side discount that

going to you’re mean, the that from incrementally, be got of you I Because it’s combined think cheaper. the of lower In for is a executing. going fact, kind was kind forward think now getting though that it’s deals that about obviously, it missing more then trading trading on Punchh it than that even you’ve deal. for pre obviously, you even capital quarter, to a And what cost of capital? is cost do solving How scale. basis do it’s of expensive

cost So you gap in think story just modules pipeline kind kind of and how because your these there? of think all exciting a that’s get upselling kind of for aligned the curious that, capital the M&A super of of I you if about terms me balls narrowing can

Savneet Singh

Yes, for sure.

think So and how raise of very cost we those done we cognizant I we’ve to I numbers. capital ability in be sensitive to the of demonstrated capital. are way think get in to the our super acquisitions that our And we’ve we

year, as to second you is, gap think good I quarter, in the I really have the and one. way half. continue I had to is guess out. close expect excited grow. we and continue mean the growth this Point point about XX.X% first get feel We’ve I that’s mentioned, to I story growth to had think And really I think got us foremost, also ARR half of that second this we execution. I the two the

I think been feel our and good it. we’ve successful very M&A, we in because about

continue to do We’re going to that.

that vital well. it’s this so do And we

I capital, And used last message our think think cleared about in when and get think that to of going valuations position. have the – the that people do out our out of we exist is that we’ve And our to story we do you we we the I got it’s talked getting kind category, companies so our really what hurdles. is to have we are see there, like I

message I that’s getting So of more out. the think just

Adam Wyden

to for of at this you look, cap as Yes. shares and smaller of they mid-cap or and I’ll majority leave kind is, I Goldman it’s to don’t company I our anyone the I it’s story. $X share, mean, know, of And you for was that Punchh adviser single look, with that and $X.X exciting vast conference in it at between market clear kind really M&A believe, these have micro-cap don’t we target this want would else, this. investors. the coverage. call, XX a the think whatever outstanding. an purchased me deal first I billion that is million a on say I I shares Sachs on mean, super analysts

we built story you’re you’ve a built management culture. really today of bought in I So we ARR. million we like did team. this you’ve year-end it. ARR, over and we more $X dead the $XXX shambles than $XXX was purchased a we there, of look, and entrepreneurial roughly thing are it when little got mean Shyam million mean, and and And million cap the here left utter when market restaurant for corporation I

we that modern of we’ve cheaper So it’s with me its of mean just arguably, to been governance. kind kind corporate really astounding flabbergasted. are history today than this I’m in I

mean XXx. million years. $X three I what find from I’ve three you see I years to it, can’t owned execution. and So $XXX over five the capital reason why say, to round call the of kind don’t to path encourage that’s creative cost I I it to I ARR for get guys to you XXx forward any of ARR, that of million, next ways look excellent

good So keep three up execution cost and years, But our just maybe unbelievable work. and the of next between capital. the five to get now actually we’ll

Savneet Singh

Great. Adam. Thanks,

Operator

back Mr. there phone are now time. call at line the like this would over the turn Savneet no to questions to I further Sir? Singh.

Savneet Singh

We Thanks, joining. updating look the in you everyone, next quarter. to forward for

Operator

all We participating. Ladies thank and concludes this call. you today’s gentlemen, conference for

now may You disconnect.

PAR Technology (PAR) 10 Aug 212021 Q2 Earnings call transcript