PAR - Earnings call transcript Q1 2024 | PAR Technology Corporation

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Chris Byrnes

[Audio Gap] closing on March 11, 2024, and therefore our reported first quarter results include 20 days of Stuzo results as well. At times during this call, we may discuss organic or standalone results, which excludes Stuzo, to help listeners understand our organic performance.

Now I'll turn the call over to Savneet for the formal remarks portion of the call, followed by Q&A.

Savneet Singh

Thank you, Chris. We had a strong start to '24 achieving 25% growth in ARR, while closing one M&A transaction, [ we're ] announcing a second.

is able ] growth to EBITDA in business confident we while services positive be we'll continue QX. subscription [ and clicking feel turning Our to drive underscore while be of but value unified rather sacrifice a more solution again. our outcomes.This as to from prove to our continue point demonstrating generates really that products together, helping better our standalone Crucially, wish that functionality, best-in-class, customers working and PAR better the not to validated I buying does products beyond our on could PAR single of experiences Each generates and other sale products, better stickiness total expanding product generate. thereby what enhancing sales opportunities a The flywheel when first XX% compared subscription at to QX services the quarter, ARR 'XX. organically by is PAR grew real.For million, increase last When first quarter the a XX% we contribution, at add Stuzo's year. from ARR now $XXX.X stands

our material from to and closes, going last of 'XX, QX Stuzo. ARR manner notably XX% Engagement organic Data are in which ] and and mentioned reporting in Cloud, we current in includes as call, proforma organized the few Central Payments; past we're segments: over Simply [ and achieved Burger would we've Brink, all Punchh are a on months, King MENU, $XXX put, PAR contribution Wendy's.As and TASK includes Cloud, which X we I same year-over-year once Operator reporting be internally. large without Additionally, logos million signed basis.In the our grew products be expansion

API QX and increased and period price at to increases engagement XX% teams.Operator deals, same PAR win solutions increased grew when solutions cloud Cloud with higher services Cloud Our improvement. by due operator payment in and the Operator same last last marketing driven $XX.X being from XX% live. year. the Operator rates value continued to go while Brink and monetization, by predominantly work digital ARPU year is growth ARPU compared million cloud period to cloud teams, IT work with operations our ARR

ramped ARPU is in POS tenants and accounts an demonstrated growth opportunity white pipeline.Brink We to and value of where expect continue we most more central its the received our We've operations. billion across it month enterprise, POS our well when criticality mission API cross-sell by the of the accelerate existing our installed product, is space of small true of ] project remains QX.Payments the The This high the robust current [ as of as to are strategic per a scalability, growth for PAR presents an the solution and of teams where BK [ continues the above restaurant where mission critical successful than doubled ] given and in-store, and almost up as to lies. stability number expect additional fact that extensibility velocity relatively is to the by rapid X feel start stores. Brink store kitchen products. heartbeat nature year-over-year. pings for we selected

We managed to chain X,XXX strongest our forward, achieved highest and customer efficiencies, very the a is rollout pipeline additional achieve infrastructure operational ever processing volume PARPay leveraging billion. increased rate of across annualized the restaurant of PAR Each from have benefits and lower PAR which and multiple QX becoming run gross we products, engagement has of all by savings had. with across growth this to PARPay enterprise cost high native products.Looking payments of a volume, seasonally While is led period these X its concepts. store $X.X processing slow via full

Go materially customer verticals, a Live which adoption quarter drive will include Center. QX. acquisition in volume, strong delivered the Stuzo into recently With is margins.Data announced The to deal Travel Central and TASK, expanding higher PARPay and the the engaged of team fully at continue Love's new

pipeline of expected robust reliable year.Our concepts for this feel the a out with total less processing. enhanced the bullish Data in to cloud lower Central X provide [ be very lower we sticky, deals and Menu our continued cloud funnel. to which now year build macroeconomic to expand to XX%.Meanwhile, ] a starting terms, of drive and to complexity, Stuzo, excluding our multiple attachment PAR and about Tier continue margin. very operator for Brink helping which stronger especially times.Our and closed engagement business Payment momentum difficult the hosting We ownership, Brink last includes investments through in customer cross-sell, second live tech expect debt opportunities as half are We only than cost its payment go strengthened Punchh, and remain with of offerings quarter. improve year-over-year large platform customer security our deals works Stuzo products in highly was Deals are ARR pipeline its of and ability growth cloud, Operator satisfaction

value. PAR refresher, a convenience including in industry, the The further and At our for for time, coffee some new chicken is Stuzo Punchh solution the flows for offer This customer Punchh and logos, drive value our products and a leading engagement cross-sell brand national will engagement opportunities the Punchh drive totals including at QX. Stuzo's engagement additional TAM previously service Beef end a to for new fuel payment as contributor wallet. like strong food Stuzo digital of leading improved opportunity the digital We customer to Also, The is acquisition us Burger with part loyalty in increasing to profit Wendy's application, same provider with announcing customer into in new share the convenience recent and and with software allows [ ] XXX-store solution major which will and now empowers open full the including commerce and we're our more of ahead, stable the platform, had retailer enable cloud redemption ordering in PAR C-Stores be X,XXX a best-in-class product PAR and momentum strong help million.Although markets, and functionality cloud's Stuzo's King and sites across provider million engagement the also newest growth. digital ARR meaningful. with certainly X we trailing than combination EBITDA stronger exciting delivered of year chain. and full only QX stores revenue PAR unit than material QX around restaurant contribution positive cross-sell more Stuzo launch the gain of stickiness for cloud from X 'O' wallet the seamless XX,XXX be of other its technology Brady's, opportunities, economics.Engagement of XX leading across we chain.Looking a sales customer $XXX wins, drive now is the QX a products as substantial solid to continued Stuzo, material also 'XX also going to impacts chains expect implied by of sites over months a $XX to provides and for Stuzo.Just was contribution with X more innovation XXX,XXX adjusted with of C-Store.Additionally, in Stuzo industry the QX reported base weeks, suite.MENU, domestically. opportunities live C-Store and stores lifetime

software PAR's pillars. with key across continue to and the food see We operational in service positioned uniquely engagement technology best-in-class sector

the focusing restaurant such, Brink from experiences newly QX Brink, due to of robust from normal enabling than third-party updated softer are to a together as macroenvironment infrastructure demand had forecast base. are to the predict concepts ahead our drive selling non-Brink year the their shifting we're response our efforts their that increase industry who that hardware few shortfall continue benefit guarantee always PAR make separately favorable competitors keeps integration better protect a current and customers across to to ahead our product as we used McDonald's legacy experiences.Moving with not one of hardware, in ability hard better products sales and a are this for hardware, to only given use an there seasonality numbers the who have part up customer sales Our our together integrations equation issues we'll Hardware as on while convention control increased equipment. to and are sensitivity environment us of focusing on and hardware single historically and us terminal, during Wave.Additionally, the will getting believe well to to to released namely our recent opportunities conservative sales to and ourselves.We dependent

Brink Additionally, an of future. not to projects, hardware XXX% attachment hardware to large tap issue space able upcoming will to the is if.Moving near grow when, cap customers and be into near expenses. continue will only this in Hardware new to with white a truly of a rate

the adding Burger return last investment QX right OpEx to rollouts non-GAAP is the expenses giving and King year, increase grew excluding with rationalize associated our this additional expense this us end of year compared growth how walk excluding earlier to our ARR mentioned, most operating numbers on business, that rigid when X% sized detail, expect accelerates through company more we expense the Stuzo. today then any becoming. margin and Our and I'm provide PAR will very this though, that go-to-market the subscription actually without additional year.What provide which prove for we Stuzo last will Almost gross have just will down downward.In differently, significant This management would TASK, so operating and flat than XXXX services I sit XX%, is profitability.To come to lower proud quarter underlying a through positive about this our ARR which healthy meaningfully we grow be our as expense. expect expenses, to at to to acquisitions, the at quarter tailwinds with OpEx I exclude organic if we OpEx by started, quarterly will consistent EBITDA are grow combined subscription we expect where similar growing the the point.At quarter-over-quarter. addition, entire cost operating teams M&A that our Said Wendy's excluding and allow year we top, to I third added These clarity unit expect services was without our margin only of also on want as accretive course to only we're help rates adjusted 'XX. economics

we'll to see we scale, as expense can a XX% drive done get plus. improvements contribution Stuzo We earlier the this sales We and estimate would ARR this this around This the think we complete quarter As marketing confident this including and feel mentioned we cost of year. continue from percentage to of our get to I want year. XX%. number this when the annualized will get cuts improve we as be benefit

was last around as again our estimate our of have we lower.We flagged As or better XX% our XX%. including This expense of to to on Stuzo ARR continues XX%. want contribution R&D the annualized get sites we percentage call, I and this number from number get to a target

to strategy that years we deals long-term flywheel $X OpEx million investors large hope same of margin.What's million customers seeing PAR focus adding see, intense the EBITDA and that bring another driving the keeping PAR, base more? we're focused we're led acceleration and to internationally.To established has of $X towards creating I into flat to be several can strong our of strategy. a [indiscernible] in and a a and TASK we a we're As recap, strong benefit ago products, the As pipeline cross-sell on goals executing we'll our on

restaurant and is the acquire into journey.We've digital to We positions of that their largest cross-sell company customers and offer new trusted to numbers of our in then us the with the accretive helping have and we base. technology of that world are I'll fundamentals well finally, our TAM profitability while companies at as ourselves model business with more a strong to into continuing M&A a the to industry.Bryan dedicated employee guidance established come back win and to the for they products committed have Bryan? our crucially drive margin with We a cross-sell greater organic partner in as companies and detail year. base and across most some talented will some the expanding strategy review while towards the our XX, shareholder value journey our who markets globe executed these and potential.And disciplined to undertake Rule innovative partner have rest

Bryan Menar

QX loss $X.X at in XX.X% residual revenue in reported post-acquisition XXXX net details a increase $XX.X increase of period million by from driven in a cloud revenue period and adjusted was or loss quarter revenue. per the Stuzo active of year. The service loss service or compared increase $X.X $XX.X XXXX to of hardware per loss a XXXX site. contribution annual of loss XX% per per revenue an Stuzo, $X.XX service of grew coming $XX.X cloud XX. and million partially Adjusted compared same X services, same $XX.X a in offset margin loss contract the in same compared share for Savneet, [ of first $X.XX and XXXX and of in professional period for decreases a within of March in the ] ARR million XXXX. of for share XX.X% of March driven months compared Stuzo services $XXX.X substantially and XX.X% revenue was X% quarter engagement our $X.X Total revenue. subscription ] operator you, or and [ with the million, revenues was by good XXXX $XXX.X adjusted $XX by average million EBITDA The subscription million, share in the revenue, of million sites an $X.XX margin.Now growth quarter ended and year's prior million, reported for EBITDA were an from on cloud increase from up increase of site.Excluding everyone. was hardware driven exiting engagement $XX.XX XXXX.Adjusted $X.X engagement service increase ended engagement cloud from loss million to cloud by X up increase for of million to X.X% XX.X%. Net XX.X% million, subscription acquisition months reduction And our revenues a first for a for from by meaningful active million to of increase of partially offset by March an revenue to million revenue increase organic $XX in prior for services the was year. operator X.X% per in recurring loss XXXX, quarter to or an the more in average cloud million compared million loss driven net The last and Thank XX.X% net increase The contributed $XX.X from per Subscription increases was as revenues. $X.XX XX, share the the of was million with XX, the by the primarily morning, services reported $X.X included from $X.X sites the subscription or services driven increased loss

generation quarter recurring hardware by of Excluding was in Stuzo, revenue refreshes $XX.X of was decrease the the up total The or the XX.X% next enterprise organic and decrease in customer substantially annual reported timing year. million million prior a revenue $XX.X was terminal driven and and $X.X million, timing PAR headset year-over-year.Hardware rollouts. XX.X% of

base.Professional a expanding We legacy primarily driven first recurring revenue revenue the in as government within associated million year. from to hardware software by hardware the ISR from backlog an strong, million continue continues revenue and quarter government $X.X million million our the attached was business product from of quarter optimistic X.X% $X.X of in government's business reported service line. our of as appropriately Contract well customer solution revenue of XXXX. as million prior or our $XX.X decrease contracts.Contract revenue, business $XX.X was be reported increase The sales contract both the million be our growing funded. to increase our in increase with the was of $XX.X service or support XX.X% million, the demands hardware hardware of reported $X.X we address professional in at from $XX.X the consisted $X.X in million, customers

adjusted for of X% Gross quarter was of XXXX, in compared prior increase was of decrease As services quarter from turning of million, or of efficiency first a is with in $XXX.X the margin intangible service services, compared reported focus for total acquisition an XX amortization costs $XX margin increase prior XXXX ended million stemming $XXX in million.Now inventory in a backlog is gross assets, driven as the the million, increase price was XXXX. subscription million, XXXX. versus driven X December, cloud XXXX. support to XX% in million XX.X% driven Total the quarter $XX.X the XX.X% margin with margin Stuzo's of improved operator The our on service Increase of by for consistent $XX in was post quarter improvements $X.X margins. continued and XX.X% increases. QX the The substantially XX% of adjusted funded XXXX. and as hosting reported was margin was $XX.X backlog XXXX margin XX.X% operations.Excluding customer as million for XXXX.Hardware of the million March, was reported the first March, QX by profit management by an XX% with to as the the our well to XX% million year. subscription compared March year.Subscription year-over-year $X.X service to subscription was improved in margins QX $XX.X of months profit from in for Sequentially, improvement

hardware The a to decrease services. demonstrating related for has focus margin first with price Our reported to for improved decrease in for XX.X% in efficiency of quarter our compared was to in the hardware allowed year-over-year.Professional quarter is value XX.X% us margins continue margin margin of service XXXX. driven improve the operational by

$X.X million XXXX. flat regard compared QX Government in upper for GAAP from million margins expenses, We margins XXXX. teens marketing sales $X.X XXXX.In contract remained X.X% service expect in the of million and QX professional was for reported essentially operating as at and remainder to to to the of remain increase the $XX.X X.X%

post-acquisition more and G&A we was cost was the $X.X reported transaction The M&A XXXX changes severance increase an recorded prior was to increase was made as or well driven increase increase The million sales of $X.X million and increase million an Stuzo. and GAAP $XX.X primarily adjustments efficient of XX% by an $XX.X compensation, increase increase from enable from fees $XX.X organization expense, R&D as million, million year cost, of an QX to Savneet growth.GAAP As million, $XX.X the $XX.X quarter, non-GAAP the marketing during in XXXX. post-Stuzo $X.X XXXX. the was mentioned, in the in by stock-based million excluding operating versus X%. Stuzo QX cost.QX excluding driven million, was acquisition

organic expenses drive the be the to we to company's for explained of continue balance with As Savneet operating provide position. and on flow cash manage to information as year earlier, growth, and we flat expect consistent last remainder how year.Now operating expenses we the revenue sheet ARR

loss X growth.Cash the XX, this short-term XX month for for [ investments.Cash Cash to months partially restaurant, $XX.X X in an developed activities for March due activities months retail million offset versus operating activities stock.I'll consideration X during software with XX, of X was for financing million ended year. sales million ] with XX receivable in call for a $XXX.X Savneet during by the over private the driven to cap was prior And financing was million months now the X acquisition million costs from operations prior used turn the March accounts March provided the expenditures resulting to was and by moving of cash $X.X Investing million placement associated platforms. For prior March in included by in activities driven connection X Stuzo all and net a compared proceeds substantially versus and the in common year. year. Q&A. ended requirements ended used cash March closing substantially the for from our used cash $X.X activities technology increase back revenue months of remarks net months ended Finance to the million for to of the capital for were the working investment activities net $XX.X million $XXX.X March by used prior for ended additional $X.X net $XX.X million $XXX.X ended XX XX

Savneet Singh

Thank you, Bryan.

before we of open In a to Q&A. me with program, submitted a initial regard orders Burger call being indications the are up Let key implementation new that up wrap healthy King few are pace. phase for at the the messages early

I confident end year-over-year predict on While only the and Burger The our our of very we In King have XX%. to it's sit plans. we growth give profitability. our clarity, or BK, the base has And we reason BK year, will will approach with XX% In can install growth fast well low hard perfectly internally very around rollout to rollout a we where what every impact accelerate our executing our share provide from a be we're at and the team. a our strong end to rollout, X-year feel will event I'll the event growth on higher. have shared

a growth feel we're I assuming mid-case, mid-XXs we can confident As and that. hit

progress XXXX.With rollouts for strong customers, last the don't King we high early the of and our certainly on for then parts mentioned call, are and install we in quickly of inflection fast an rolled whatever indication give desire sync are the at As this point including and and and XXXX get Burger in we in we PAR acquisitions, out a every will XXXX. year PAR. feel BK Wendy's new quality

intend we true with earlier, meaningful profits. QX momentary positive the continue be even we then EBITDA and in This business challenges to said today. I fast the hardware As see in to acceleration holds a

investment ARR grown our Our to rewarding and per share their at our flow in substantially transitioning will ARR we've clash flywheel, per for shareholders highlighted PAR flywheel future and has business for is flow. cash our lead for cash to share.As a past, a us proxy free flow number focus the

together work where call together.With open of X flywheel. will cash not off value to focus for customers, This in will flow, must cash our for on Q&A. that, customer free the attention employees flow Operator? focus win our on shareholders of a proxy products free it's take actually future, The to balance use living I'll but the cash exciting and winning As all not our we look to and core have flow.

Operator

question our And Instructions] [Operator Craig-Hallum. from the Sutton line first of comes George from

George Sutton

wanted to about of you were opportunities. understand Savneet, your talking as I pipeline better working through

got massive from of your these some encouraged you've to folks rollout that on those able of Wendy's side other out roll even at as you getting rollout, Burger Given more options? a or that they're you are King any the are you're pushback pretty pipeline in and versus loyalty looking they

Savneet Singh

I couple latter. through think obviously much to transparency never validating Data of on of the we we've have we're side out had sort new can what calls and I rolling and so to it's deal those press we roll flow payment more the we looking for that Brink, win We before, potential Central ago, give think very deals and sharing we're a releases. forward out, what as deals, said our as but on it's details

a handle I think [ that win And it's you and brands as scale. can on we're big we comfortable ] first job the feel And that as it then in that so reflective other of helps I you mentioned, doing that, customer. a great customer another, rollout large feel

new I that only reference same think would and will say they customer help the customers.

George Sutton

have for TASK you're pipeline knowing chains, some past those how of particularly I'm curious on year? as to with international on just in bringing Now been that you your these in go, those later discussions this larger opportunities the take unable

Savneet Singh

and them. to the think but can think of it a say comfort I we've U.S. on Historically, a has positive say RP said, been sort I a been signed and really customers and pain have it's international [ future like an for we've we them the that strategy challenge TASK acquire execute I'd to we umbrella, in an obviously public think just against solution. under of a the that the agreement you lot categorically response been good for gives a would I will us if because ], TASK be from execute we will as we point customers mark And customers PAR it's that in

because into hardware us family. like think a integrate things modules. the TASK rapidly PAR and ability additional see we're to to within of the TASK But acceleration And really allows also cross-sell payments, business excited I so the lot the we'll it

So it'll work ways. both

George Sutton

And recur, you Bryan, when could clear? that you at -- then so for nature necessarily just me, in lastly anything quarter, one-time there spend in SG&A just was wouldn't I'm the being look

Bryan Menar

in take of were quarter large we within you the can sitting what reorg that Most G&A. which the see the We is place that you AK in did in obviously the related OpEx. amounts have of there kind Yes, see adjustment during some the transaction too, for ] related what transactions all to in [ did, fees were M&A happened severance. non-GAAP

And so when about we what increase look from year-over-year. X% total was at of organic a we non-GAAP did a standpoint OpEx

Operator

Street. a question of Lake next Eric Our comes from Martinuzzi line from

Eric Martinuzzi

restaurant brands Stuzo the Yes, essentially going I towards post-Stuzo enterprise the lines and better X product with wanted aimed at Punchh pointed to understand roadmap product the C-Stores? acquisition. Are we to be running

Savneet Singh

Great question.

consolidating application. consolidating towards So aggressively we working one are into and

really to -- such large but combining that excited It's you, a very our we those, that large having a multi-year I process, we Stuzo feel think they're feel functionality. excited. spoken about would I to tell the be going customers, customers,

the to example, a be for product the that multi-year so product But don't to new we're of and process. complicate going it'll X one we're the merging down answer market is deals short Stuzo get on the so And products. focusing as we the an in

that really think so acquired when what first we we'd is of about I think feedback The would been from business. market we has far. additional when we announced we'll customer the I tell PAR you has good see than we changed expected So feel cross-sell products the excellent, faster and opportunity into this

Eric Martinuzzi

-- historically of we is smaller thought to we a PAR some $XXX you kind recover a orders, this of hardware But about annual then million some of kind and Okay. hardware reasons with about that. X talked customer We was you had then And on kind business? enterprise get and gen did rollout. of QX headset business. the as Do lumpiness side, next guess business or I I've and talked it issues for terminal in the back that and

Savneet Singh

I our think is the yes, So, -- base. in non-Brink weakness

we've they million as our customers we how optimism, are it's harder amount think hardware. to and cards, But these year, get continue if, grow pipeline but I Brink an strong don't Brink of and Brink So and given in when the stages mentioned, there guaranteed. that that just not on to beyond the There's to it make us. attach The we're is again, [ hardware attaching, think up. to we've of winning I of we're won It's are deals me, attachment when. to that attach deals winning what opportunity hardware, get that a the believe that depend large it. hardware want incredible attachment I When given the recently rollouts certainly well we and It's of you Brink we'll that going be sort is that $XXX in got business will the their will will this then for of ] we this going be and final how matter to comes forward, driver tell for or Brink of in. back

are that, it not Will back absolutely. but this to will million? said at year? I I'm be there the people counting PAR Absolutely. a think that get So on we $XXX

Operator

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

Stephen Sheldon

progressing go Maybe are and mean, to you just on how just think to confidence I complete of right expectations rollout, can bargaining successfully? April. you you relative the in that what's level the implementation maybe started talk I live -- things now your have your generally about to own headcount the come maybe

Savneet Singh

to communicate what in yes we're with us. short us. check tight. Stephen, is leadership. coordination The that yes. really with They very and is happy I feel weekly about They're answer great We delivering.

tell for optimism our room their Manager General of Our there's given business only execution. execution Brink will and that you -- here our

So we good. feel very

we're Now listen, X it. month into

So where expecting expecting the could things on has feel We I appropriate it, get side not change? here. prep I'm Yes, each to given to done how we from as today. staff, call, OpEx work are mentioned not much grow to we're

fact, I come it'll down. In think

out. up. we've We're And ramped so rolling

to support add don't we to it. the I that going to is think up ramp well, why so rollout's expect and more

Stephen Sheldon

And from for have? think to? as currently gross of can at mandated on -- adjusted of where you being a whether I most product areas are adjusted I the such that MENU, different And you've which and then frame drag before that the drag us margins range maybe MENU you as is is get those to kind plus moderating margins, with Are in gross where the the all, fit XX% every just called remind products coming products think just that out drag? you've one help

Savneet Singh

category. and Punchh this bottom between definitely this in say all at MENU sites that. I X,XXX amount Data the MENU so which and quarter, mid-XXs, added is the high products of Yes, very and a as large at XXs Central saw, the very, end of but are you that low drag, very MENU's

So too, revenue have live Payments one a as you'll as fast. growing margin that again, got the gets has there, to good there. but to Payments head get so is

who we'll So get there. that's

top Punchh the At and this bottom is very of MENU. Brink kind so And the is Data and in the Central end, middle. of it's at

Operator

next line comes Samana the Jefferies. Our Samad of question from from

Unknown Analyst

for Jeremy Samad. This is on

or guess the on about to on I XX% wanted based rollout. on that some the up hurdles you moving follow of I question rollout. It's great faster XXXX? would that rollout to prevent Or guess see it would and BK revenue XX% more that to give what higher what what BK color slower visibility? get are in to So I to from the the

Savneet Singh

part performance. [ feel like about. I is strongly the So really ] that's our And said, #X I

whole executing feels and even tell We're you better. I committed BK team promised, would same to communication's think and And the as probably thing. excellent. Our that the we've way

for our alongside up is rollouts down own choreographed we to variable variable So the need other to and reason The corporate these partners. of go performance control. we we don't side anything that's or our that's incredibly sort because ] on and [ #X are is the control work the

committed slow be if the rollout, we're incentivized where they [ machinations as there. so fast it we possible. way And it I wanted go time, both down, to need only the above internal as tier we're to as ] they reason wouldn't midpoint But mentioned, a because the to some make equally is,

Unknown Analyst

some win It's the a few you color. little customer, of great helpful to in wins enterprise Wendy's little release. I Wendy's, the that guess something or the ask X another mentioned, weeks Punchh complimentary this then really for I it wanted it about from full more announced this bit Tier see other maybe And language the That's different back. deal to press support. Maybe was rip-and-replace a a I was seemed What is guess? like?

Savneet Singh

It's rip-and-replace, -- a a Punchh. It's really big truly full full so initiative. big No, it's at solution the it's within win. a

Operator

the Adam ADW. question from of to next Our line comes Wyden

Adam Wyden

you obviously Burger about So added the to come there much can to appears some of obviously of look sort period, implementation are sort here. will organically. just give sort then some of guys of you sort to Is is that do King I math down? give have to like Wendy's transaction, of I with ARR help little non-recurring. million you about a you and of EBITDA in your Take minus million million us want King Well, $X $X us or of in the bit mean can the that severance as sort that minus obviously organic some you in parameters implementation $X of this? $X forward If anything million question. costs, down you have costs it's how move at go that me how It period. -- or but Burger there's whether of EBITDA, expect with the of I one-time sort of

XX% quarter? Stuzo, a and in true got little second gets million, Am a of to that in you if which And doing like profitability quarter $X second margin, million, Stuzo, I that gross incremental is into Wouldn't the I If EBITDA full is adding million $X the OpEx contribution, coming or that OpEx mean, quarter organic, of $X is wrong? take OpEx that you're you you make right? you breakeven you XX% get which flat, you flat if down? take something again million. hold your then wouldn't and take your is $X very doing

Savneet Singh

We're guidance hit out putting certainly It it. sure we to make can could.

we're As doesn't our doing hardware I business better. the get assuming said, guidance

So are said, growing. I really -- margins business mean software feel like clicking, I the we is the

way in working You efficient how its and got there. we've sales is can R&D marketing. see

feel And good it. about we really so

accrual what possible, you. we So a put in to can't spend call could specifically that Things to want some always bonus an one-time QX, reason be we adjusted is it's what insurance sure And about offline. that don't that hour would hit challenging payments we? can talking I QX amortized, out. are, -- items that for but I pension, quarter adjustments, Canadian tell get think make we because I there like

So I number would we not example.So think in apples QX. good QX summary, getting there really about as QX in an say to I apples is the compared feel to

to organically, holding adding excluding Payments. expense Burger OpEx heads The real Stuzo the and As on be acceleration. Central Wendy's Punchh, expect was call, push within I trying even. we really come and were any only said, It's down products I think the we continued I this as of to we're the call Data to on said so lot. core added The meaningful heads the King, I it's actually Brink, part was and not

$X And will the business TASK, obviously it's million So that's profitability we $X ] in million million it [ annualized. add. driving when core ], [ [ call another Stuzo roll then ], meaningful $X

Adam Wyden

expecting about million lot gross I'm you first the a just year-over-year? it ]. hardware mean which headwinds you Would you margin a pretty headwind, -- the the I in mean, about would decline quarter. had I think Are of from that sequentially you of in -- cake [ taking basically sort I I because $X.X the -- in big expect was But EBITDA. mean, quarter additional already obviously its is a I calculated probably point

from hardware are declines of in right? where additional QX, that is expecting not you you're mean, in level sort the I So

Savneet Singh

think I -- not, as to any and in I -- we've we'll QX little meaningfully [indiscernible], but haven't we worse a think -- be I'm half fact, public, of QX current these over had, wins that with second And announced expecting bit I think in better. QX get I some when we by they sorry, I'm are said, we that the not expecting means. when

Adam Wyden

Yes.

what if doing, analysis organic just right? and similar of OpEx if the in -- of So must you're right? going holding to sort was couple down, I'm expect second flat again, you you EBITDA? in only get mean, from Stuzo on right? I the the back revenue And very like quarter a the anything quarter I it, you It get much weeks, have been contribution mean, didn't

Savneet Singh

Stuzo quarter. a We the little in weeks of than got less about bit X

in in really benefit there. not we get it's of that QX. So And the full

Adam Wyden

Right.

full quarter a So get Stuzo. you of

quarter in hopefully down whatnot. obviously because there hopefully you the your How flat, Are organic when second some So flow OpEx gross get through revenue a flat, online a we are how add about that comes OpEx some think and should about about talking declines revenue? dollars and obviously implementation layoffs through you do flow of last or a of you at statement say of think you You talking the is right? XXX% the margin you in question. And was organic now OpEx if were about -- some adding incremental against rate?

Savneet Singh

Yes. and that right? Data getting A deals. into today we've really That through on MENU, that stapling margin incredibly much we depends an Brink Like versus obviously are the is Data better lower. at Central our the which at so through product, rate. Central gross margin flow of things margin higher seen is gross flow gross one is high is product, much,

product. So it depends on the

margins So grow I budget what down. That's as talked And well. stay just gross that to we've gross internally, let's we flat. the assume number, expect drops about margins

Adam Wyden

products go margin in drive better as gross margins you lower utilization? your your Wouldn't up

Savneet Singh

Correct.

Adam Wyden

incremental of margin MENU, XX% if than a I gross I a mean, I the margin wouldn't mean, revenue MENU on guess is dollar on you're be that higher a at -- Brink?

Savneet Singh

Once we clear cost, the yes.

Amazon we're a as a instance, example, we're MENU remember, still firing product. And even an launching add customer when an you so up still

which still I get to there's to margins. Punchh same really get I incremental time ton. growing exciting and gross should the mean, a So want gross costs, are over but to MENU margins, MENU yes,

so And in. have get But come there. time, yes, dollars over will it actual the to revenue

that of full quarter. quarter customers to these revenue that's QX, those or So margins. boost this we gross again and In we the launched up get going X X

customer? million this into On $X because hard So I million, point margin what thing. we're bit incremental so right? what We're MENU, think gross is it's $X bucks your a early, is, little a of

we're other product still than higher different can any should so SaaS be every as instance not XX% but incremental an is say, I drop, lot. because And where example oh, the no it's it margin

Adam Wyden

Right.

margin at our So and lower sort plus ] a hardware million minimum quarter. lower that's I'm just seeing be guidance. as quarter assuming where [ we hopefully million, $X.X of being incremental gross mean, it's assumption [ I ] drive walk with profitability second fair to Is are I right? OpEx. sort around doesn't a our get that at from utilization XX% are XX% they Stuzo worse, fair margin we $X mean away guess the this? conservative ] plus of of in be I products, a if [ should take that should So higher full I guys your way you in

Savneet Singh

your pretty On accurate those assumptions, everything. math generally think is it directionally I is. And on

Operator

further at management any And conference there are to for no this time. questions the I'll remarks. back hand further

Savneet Singh

future look updating updates in profitability, the giving forward progress free our some of to you more cashflow you for but on wins. these towards and great everybody, joining Thanks, large also We our call. Thanks.

Operator

for all the joining you Thank call today.

disconnect. may You now

PAR Technology (PAR) 9 May 242024 Q1 Earnings call transcript