Good day, and thank you for standing by. Welcome to the PAR Technology 2025 First Quarter Financial Results Conference Call. — Operator Instructions — Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Christopher Byrnes, Senior Vice President of Investor Relations and Business Development. Please go ahead.

Thank you, Daniel, and good morning, everyone, and thank you for joining us today for PAR Technologies first quarter financial results call. Earlier this morning, we released our Q1 financial results. The earnings release is available on the Investor Relations page of our website at partech.com, where you can also find the Q1 financials presentation as well as in our related Form 8-K furnished to the SEC. During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items. A description and timing of these items, along with a reconciliation of non-GAAP measures to the most comparable GAAP measures can be found in our earnings release. I’d also like to remind participants that this conference call may include forward-looking statements that reflect management’s expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information on this conference call related to projections or other forward-looking statements may be relied upon and subject to the safe harbor statement included in our earnings release 1 this morning and in our annual and quarterly filings with the SEC. Joining me on the call today is PAR’s CEO and President, Savneet Singh; and Bryan Menar, PAR’s Chief Financial Officer. I’d now like to turn the call over to Savneet for the formal remarks portion of the call, which will be followed by general Q&A. Savneet?

Thanks, Chris, and good morning, everyone. We reported $104 million in revenues in Q1, an increase of more than 48% year-over-year. Subscription services revenue increased by 78% in the quarter to $68.4 million from last year and 20% organic growth when compared to Q1 2024. Total ARR was reported at $282 million and grew 52%, including 18% organic from Q1 last year. Accounting for constant currency, sequential ARR grew $10 million from Q4. Alongside this revenue growth, our non-GAAP gross profit grew organically by nearly 35% year-over-year, and we ended the quarter with subscription service gross margins of over 69%. Adjusted EBITDA came in at $4.5 million for the quarter, a nearly $15 million improvement from Q1 last year. This is primarily driven by organic improvements, excluding M&A, showing the tremendous operating leverage we’ve demonstrated in our core assets. Our commitment to investing in long-term duration of profit dollars continues to really play out. Now to dig into our business with further detail. Total Operator Solutions ARR grew 49% in the quarter with organic growth at 18% when compared to the same period last year. ARR for this business unit now totals $117 million. As we messaged on last quarter’s call, in Q1, we paused the PAR POS implementation of Burger King in order to recalibrate for a dual PAR POS plus data central implementation with the customer. I’m happy to report that the rollout has since restarted, and we are receiving highly positive feedback from corporate and franchisee stakeholders alike. We are forecasting a strong ramp-up in the second half with install velocity expected to peak 2 in Q3 and Q4 for both product offerings. Crucially, the BK slowdown this quarter was offset by strong performance on other initiatives within our operator business. We continue to see a broader and healthy operational buying environment in the marketplace, demonstrated by the signing of 5 new PAR POS customers in Q1. Continuing the trend from last quarter, all deals were multiproduct in nature. The impact of these multiproduct rolls has yet to flow into our P&L and will provide strong revenue opportunities in the second half of this year and well into 2026. As we’ve mentioned before, these multiproduct deals increased LTV meaningfully without an additional dollar of acquisition cost. Our Better Together thesis is working. Further, our TASK platform is seeing continued traction under the PAR umbrella. We have been successful in positioning this product line alongside PAR POS domestically as well as standalone to global-minded prospects. The TASK platform pipeline is at a record high, and we believe PAR’s total POS offering now ensure full coverage of the enterprise hospitality POS market. Outside of POS, our Operator Solutions business unit continues to scale via our backoffice catalog. In March, we successfully launched our new PAR OPS product line at a large industry conference. PAR OPS includes Data Central and the newly acquired Delaget and delivers an enhanced and feature-rich back-office offering that is calibrated to meet both corporate and franchisee needs. The new and combined PAR OPS pipeline is showing strong and consistent growth as enterprise foodservice businesses emphasize back-office initiatives to drive operational efficiencies that ensure favorable and improved operating margins and labor productivity. More specifically, we have been successful in positioning Delaget-related functionality with our existing customers, while similarly cross-positioning the existing PAR catalog with the large Delaget customer base. Validating this rising importance of back office 3 in today’s business environment, I’m excited to announce that we were recently selected by Popeyes Louisiana Kitchen as the preferred back-of-house vendor for their network of 3,500-plus stores. This news, along with the previously reported back-office partnership with Burger King, underscores our valued and strategic partnership with RBI and validates our investment thesis into operator products. PAR OPS has the largest weighted pipeline we have seen to date. We anticipate macroeconomic pressure to continue the ongoing drive of concepts to upgrade their back-office technology and optimize efficiency. Now on to payments. In Q1, PAR Payment Services continued to drive high transaction counts and processing volumes across our customer base. Despite being a seasonally slower period, PAR Payments continued to grow and added 5 new concepts to its base. In the quarter, we rolled out Lenny’s Grills and Sub, Rocky Mountain Chocolate Factory, — indiscernible — of America and — indiscernible — Canada. Additionally, we saw continued multiproduct adoption with the signing of Mr. Pickle’s and Cargo Coffee on both our wallet and ordering solutions. The launch of PAR gift card offering further enabled our customers to benefit from increased customer engagement, operational efficiencies and cost savings. In short, PAR is uniquely positioned and hedged in the market to service both the dual need of revenue maximization and cost control. Moving to the Engagement Cloud. In today’s environment where consumers are more wallet conscious than ever, digital engagement is no longer a luxury, it’s a necessity. Loyalty programs and personalized digital offers are now central to driving traffic and frequency. We’re seeing this shift play out across our platforms with record growth in engagement and usage. Brands are doubling down on guest engagement and our tools are making measurable impact. The number of digital offers distributed and loyalty programs users reached record highs 4 in Q1, fueling growth at scale in both restaurant and retail. We believe this trend will accelerate as more businesses move beyond just getting online to investing in infrastructure that provides ROI, operational leverage and actionable guest insights. Winners in the market are embracing seamless identification, appless loyalty, gamification, AI and connected technology. This is where integrated platforms like ours, offering a better together approach drive superior outcomes. Our Engagement Cloud business delivered standout financial performance in Q1. We exceeded internal targets with ARR increasing 54%, including 18% organic growth when compared to Q1 last year. This was driven by our excellent gross retention of over 95% and the addition of a multiproduct Tier 1 burger brand. This reflects our ability to execute consistently, offering best-in-class product with better together functionality. Our flywheel is real and gaining momentum across all sectors of PAR, which positions us for continued success. We’re winning multiproduct deals at an impressive rate. In Q1, 57% of new signed engagement deals were multiproduct, including Punchh, Ordering and payments. This is a major leap from just 16% in Q1 2024. Much of this is driven by Ordering. In Q1, we soft launched Ordering 2.0, marking our best sales quarter in online Ordering in over 2 years. After a year of deep market analysis and product enhancements, ordering 2.0 now offers true enterprise menu management and features like order throttling to help kitchens manage high volumes. Our latest version of Ordering also provides for AI-driven upsells, seamlessly leveraging Punchh’s guest cohort data that enables more personalized upselling and higher check sizes. With over 200 million guests on Punchh, we are positioned to build one of the most powerful upsell models in the restaurant industry. Additionally, our new POS import feature ensures real-time menu management across all ordering channels, streamlining operations for customers. This is a powerful set of features that we don’t believe any point-to-point integration can solve, proving our better together model. 5 In our c-store and fuel business, we’re laying the groundwork for our flywheel. The highlight in Q1 was EG Group’s launch of SmartRewards across 1,500-plus sites. EG anticipates a 275% lift in engagement sign-ups this year, which is an outstanding expectation even before their full marketing strategy kicks in. In Q1, we also made our first retail acquisition with the acquihire of GoSkip. GoSkip provides self-checkout kiosks and Scan & Go solutions. Integrating GoSkip into our platform isn’t just about adding a feature. It’s about bringing our technology in the store. We’ve seen in our restaurant business that a connected full stack solution in-store and above store truly unlocks the power of data and the business flywheel. GoSkip enhances the utility and stickiness of our digital loyalty solutions, delivering more data, more engagement and the opportunity to attack the growing retail media network. This acquisition is a great way to grow PAR Retail. We see immediate runway to drive incremental revenue within our existing customers and will continue to be acquisitive in the convenience and retail industry. Before digging into Q1 hardware numbers, I want to briefly comment on the tariffs. The uncertainty around these actions, along with retaliatory tariffs imposed by other countries, have introduced increased volatility in global trade policies and supply chains. For- tunately, after the COVID supply chain disruptions, we purposely reduced our reliance on China and distributed our sourcing to other countries in Southeast Asia. On average, we import less than $1 million of peripheral devices per quarter from China. We’re continuing to evaluate the current environment, and we’ll take the necessary steps to mitigate the impacts on our business to the best of our ability. Fortunately, hardware now only comprises 21% of our revenues, and so our confidence is high that we can manage and mitigate any negative impacts resulting from the tariffs. In regards to our hardware business in Q1, we reported improved performance and in6 creased hardware revenues by 20% in Q1 versus the same quarter last year. In the quarter, we saw good demand for our newest platform, the PAR Wave, and we are seeing increases in both domestic and global sales. Also contributing to the turnaround was the new PAR Clear drive-thru solution that is setting the standard for drive-thru communications and is positioned to be the industry leader in QSR drive-thru systems. In summary, we continue to deliver on our Better Together philosophy of multiproduct innovation, which is core to our go-to-market flywheel. A great example of this came in Q1 with the completion of PAR POS powered in-store loyalty sign-up and intelligent upsell. By leveraging Punchh Code within PAR POS, our customers are able to instantly acquire loyalty customers within the 4 walls of their restaurant and via AI Insights upsell personalized product offerings. This functionality is keenly desired by our largest customers and recently drove a loyalty upsell into a fast-growth Tier 1 POS concept. Separately, our work on the PAR data platform continues at full speed. PAR’s multifaceted product portfolio affords an unmatched breadth and depth of data that when connected unlocks powerful proactive analytics. Not only are we able to leverage AI to produce comparative performance insights, we’re also delivering proactive analytics that prompt operators, for example, to sell expiring inventory via specially designed incentives that maximize profits and minimize operational costs. In an uncertain future, leading brands want an edge. We utilize smart data to give this edge to them. Our 3-tier strategy of best-in-class, better together and open continues to be validated by the market. We believe we are only scratching the surface with our product-led cross-sell initiatives. But cross-sell must also be matched by new logo adoption. A little over a year ago, post our Burger King win, we had communicated that we had an additional 7 Tier 1s in our pipeline. I’m happy to report that since that time, we have now won 4 of those 7 deals, and our pipeline has since then been replenished. We think this dynamic will continue, creating a deeper opportunity set to go multiproduct 7 over time. This holistic approach is a key validation of our platform thesis. In the long run, platforms, not point solutions, will dominate. Bryan will now review the numbers in more detail. Bryan?

Thank you, Savneet, and good morning, everyone. We started 2025 with the same successful execution of our strategy as we displayed exiting 2024. Subscription services con- tinue to fuel our organic growth and represented 66% of total Q1 revenue. Equally important, our consolidated non-GAAP gross margin continued to improve at 54%, driven by improved subscription services non-GAAP gross margin of 69%, all while continuing to drive efficient leverage of our operating expenses. As a result, for the third quarter in a row, we reported positive adjusted EBITDA, reporting $4.5 million, a $14.7 million improvement compared to Q1 prior year. We are executing to our company plan while also being aware of the ever-changing macro environment, analyzing and appropriately adjusting our execution depending upon impacts to our vendors, customers and ultimately to the consumers they service. Now to the financial details. Total revenues were $104 million for Q1 2025, an increase of 48% compared to the same period in 2024, driven by subscription service revenue growth of 78%, inclusive of 20% organic growth. Net loss from continuing operations for the first quarter of 2025 was $25 million or $0.61 loss per share compared to a net loss from continuing operations of $20 million or $0.69 loss per share reported for the same period in 2024. Non-GAAP net loss for the first quarter of 2025 was approximately $250,000 or $0.01 loss per share, a significant improvement compared to a non-GAAP net loss of $14 million or $0.47 loss per share for the prior year. Now for more details on revenue. Subscription service revenue was reported at $68 million, an increase of $30 million or 78% from the $38 million reported in the prior year 8 and now represents 66% of total PAR revenue. Organic subscription service revenue grew 20% compared to prior year when excluding revenue from our trailing 12-month acquisitions. ARR exiting the quarter was $282 million, an increase of 52% from last year’s Q1 with Engagement Cloud up 54% and Operator Cloud up 49%. Total organic ARR was up 18% year-over-year. Accounting for constant currency, sequential ARR grew $10 million or 3.7% from Q4 2024. Hardware revenue in the quarter was $22 million, an increase of $4 million or 20% from the $18 million reported in the prior year. The increase was driven by both Tier 1 enterprise customers and the continued penetration of the hardware in our expanding software customer base. Professional service revenue was reported at $13.6 million, relatively unchanged from the $13.5 million reported in the prior year. Now turning to margins. Gross margin was $48 million, an increase of $22 million or 86% from the $26 million reported in the prior year. The increase was driven by subscription services with gross margin of $40 million, an increase of $20 million or 100% from the $20 million reported in the prior year. GAAP subscription service margin for the quarter was 57.8% compared to 51.6% reported in Q1 of the prior year. The increase in margin is driven by a continued focus on efficiency improvements with our hosting and customer support contracts as well as accretive margin contributions from recent acquisitions. Excluding the amortization of intangible assets, stock-based compensation and severance, total non-GAAP subscription service margin for Q1 2025 was 69.1% compared to 65.7% for Q1 2024, demonstrating strong margin growth from our core business. Hardware margin for the quarter was 24.6% versus 22.3% in the prior year. The improvement in margin year-over-year was substantially driven by favorable product mix as well as year-over-year reduction in expense as we aligned our hardware-related workforce with organizational priorities. Professional service margin for the quarter was 25.4% compared to 16.5% reported in the prior year. The increase primarily consists of margin improvement from field operations and repair services, substantially driven by improved cost 9 management and reduction in third-party spending. In regard to operating expenses, GAAP sales and marketing was $12 million, an increase of $1 million from the $11 million reported for the prior year. The increase was primarily driven by inorganic increases related to our acquisitions, while organic sales and marketing expenses decreased $1.4 million year-over-year. GAAP G&A was $29 million, an increase of $4 million from the $25 million recorded in the prior year. The increase was once again primarily driven by inorganic increases, while organic G&A expenses decreased by $1.4 million year-over-year. GAAP R&D was $20 million, an increase of $4 million from the $16 million recorded in the prior year. The increase was primarily driven by inorganic expenses, while organic R&D expenses increased $0.4 million year-over-year. Operating expenses, excluding non-GAAP adjustments, was $52 million, an increase of $9 million or 22% versus Q1 2024. And when excluding inorganic growth, operating expenses actually decreased 3%. The organic decrease was primarily driven by a reduction in sales and marketing expenses. The acceleration of new multiproduct deals, along with efficient execution of cross-sell wins is enabling us to realize synergies in our sales operating model. Exiting Q1, non-GAAP OpEx as a percent of total revenue was 49.8%, a 1,060 basis point improvement from 60.4% in Q1 of the prior year as we continue to scale efficiently and demonstrate strong operating leverage. Now to provide information on the company’s cash flow and balance sheet position. As of March 31, 2025, we had cash and cash equivalents of $92 million and short-term investments of $0.5 million. For the 3 months ended March 31, cash used in operating activities from continuing operations was $17 million versus $24 million for the prior year. Cash usage this quarter was primarily driven by seasonal net working capital needs, including annual variable compensation and an increase in accounts receivable, primarily related to an annual contract we have been collecting post Q1. We expect operating cash 10 flow to improve meaningfully back to positive for the remainder of the year. Cash used in investing activities was $6 million for the 3 months ended March 31 versus $152 million for the prior year. Investing activities included $4 million of net cash consideration in connection with the tuck-in asset acquisition of GoSkip and capital expenditures of $1 million for developed technology costs associated with our software platforms. Cash provided by financing activities was $11 million for the 3 months ended March 31 versus $191 million for the prior year. Financing activities primarily consisted of the net proceeds from the 2030 notes of $111 million, of which $94 million was utilized to repay the credit facility in full. Before handing the call back over to Savneet, I would like to provide some insights on how we are managing the fluid environment around tariffs, international trade and the respective impact they are having on capital expenditure velocity. As Savneet stated, our direct tariff exposure is specifically tied to our hardware business. Our international vendor relationships are primarily with Southeast Asia, and we strategically reduced our exposure to China when we address the supply chain challenges result- ing from the COVID-19 pandemic. The go-forward tariff baseline is still being negotiated with respective countries. But considering our country allocation exposure, we are in a competitive position and can execute the appropriate supply chain adjustments while minimizing price impact to our customers. We also continue to analyze potential impact of businesses waiting on the sideline to make capital expenditure decisions until a clear economic picture emerges. As of now, we have not seen a direct impact, but we will continue to monitor closely. I’ll now turn the call back over to Savneet for closing remarks prior to moving to Q&A.

11 Thanks, Bryan. Let me wrap up with a few key messages before we open the call for Q&A. We had a strong Q1 with solid growth, excellent gross margin expansion and adjusted EBITDA. While much of our focus is on revenue, it’s really worth highlighting that our OpEx organically came down year-over-year. Today, our sales and marketing expense is 14% of subscription service revenues and R&D is 26% of subscription service revenues. Both are now near our long-term goals of 15% and 25%, respectively. We’ve continued to show success in cutting expenses while growing at a rapid rate. I believe this margin expansion will continue over time. Earlier, I talked about how our product flywheel is really working as we had more multiproduct deals this quarter than ever before, repeating the trend from last quarter. While this is an incredible demonstration of our product muscle integrating our acquired products, it’s also important to acknowledge the tremendous financial impacts that can come from an integrated suite of products. An often-misunderstood aspect of software M&A is that a roll-up can create value in simply acquiring businesses. I think that model is flawed as these integrated roll-ups provide value as capital allocation vehicles, not operating vehicles. The underwriting of those investments are really investments in an allocator versus investing behind an operating strategy with defined allocation goals. What I’ve learned from PAR is that as we acquire new products, we’re able to accelerate growth through technology integration and consolidated sales and product teams. When we integrate and acquire product, we make it easier to buy our product, but also prove that 2 products integrated contain new features unavailable before an acquisition. This leads to greater sales. As customers buy more products from PAR, our products become far stickier. It’s harder to rip out 3 integrated products than one solid module. This stickier base then has a longer and larger customer value with higher retention, thereby 12 increasing the ROIC of each equity dollar invested and in my opinion, suggests arguing for a higher and durable trading multiple than a disaggregated roll-up. The key is that each new acquisition actually accelerates growth once integrated, lowers churn and increases the duration of the customer cash flow stream, hence expanding LTV and increasing the value of PAR far more than standard M&A. This is why we view our M&A motion as both a product and financial initiative. Today, it’s clear that restaurants and foodservice businesses are seeing a slowdown in traffic. To combat this, they will need to embrace more technology. Those that lean in will be the winners. The impact of the macro uncertainty is hard to time. Today, while demand for PAR products continues to be strong, we’re fully prepared to deal with any potential slowdown. We operate in a market where large deals can take multiple quarters or even years to execute, where upfront R&D is at times needed to win large deals and we’re maximizing lifetime value of a customer can come at the expense of quarterly metrics. We will always choose the path of maximizing long-term value. We are not a reactive organization. We have built an unparalleled sector flywheel. This will not change irrespective of shortterm macroeconomic gyrations, tariffs or otherwise. This is the secret of our longevity and why our flywheel is only in its infancy. But this is our time to be aggressive. The fear in the market excites our team at PAR because we know this is where we are at our best. While others are fearful, we’ll continue to make the investments organically and inorganically to expand and accelerate our flywheel. As always, I want to thank my PAR teammates for their hard work in making these results possible. At our company, it’s our day 1 mentality that drives our collective hunger and ambition. Thank you for the time this morning, and we will now open the call up for questions. 13

— Operator Instructions — Our first question comes from Mayank Tandon with Needham.

Savneet, it sounds like with the BK rollout and these new deals that you won, there might be a step function in growth in the back half. To that extent, could you speak to the cadence of the growth as we look across the next 3 quarters and as these go-lives start to impact your revenue? And in that sense, are you still looking at a 20% ARR organic growth number for the year? Or do you think it could actually be better because now you have some of these new deals that could go live in the back half?

We’re still going to continue to target 20-plus percent organic growth for the year. What’s been really exciting, as I mentioned, is we had those 7 Tier 1 deals we talked about a little over a year ago. We won 4 of them. And I think the most exciting part about the company is that almost all the deals we’re signing now are multiproduct, which create far more revenue than an individual deal in our past. As you suggested, we’ll see more impact from these deals and our big POS rollout in the second half of the year. So I think you’ll see gradual sort of Q2 and Q1 be relatively similar, and then you’ll see a nice pickup in Q3 and Q4 and I think what’s going to be super exciting is that you’ll also see significant EBITDA expansion towards the end of the year because we are now at a scale where we’re getting the operating leverage on the individual large customers we launched in the last, call it, 12 months. So it’s really exciting second half of the year. And I think given the continually high win rates across these Tier 1 deals, it also makes for a pretty strong ’26. 14

Savneet, just as a quick follow-up, I would love to hear if you could provide more details on the 5 new logos, those multiproduct wins. I think you mentioned Popeyes as one of them. I’m assuming that’s one of the Tier 1s you won this quarter. But if you could maybe reconcile the 2 new Tier 1s that I believe you won this quarter because you already had won 2 last year. And then the 5 new logos, could you share any ARR metrics around that? And any other details you can provide on those wins?

Yes, of course. So let me just clarify the numbers. So we won 5 new POS deals in this quarter. We won, I believe, 8 in Q4. So there’s a bunch of deals that we’ve won on that side. And then we’ve won similar amounts on the Engagement Cloud as well. So the number of deals is actually quite high. I unfortunately can’t talk about any deal size and logo together given contracts and stuff. But generally, what we’re finding is that on these larger deals, we are really well situated to come in, make an impactful launch and then bring in the second product relatively quickly as we saw at Burger King and others. On the smaller deals or call it the midsized deals, that’s where we can bundle multiple products at the time of the deal. And so that’s the other part of it, which is we’re kind of balancing these larger deals, which are generally single product, then you add in the second product within a year of launch. The midsized deals, you can sell multiproduct at the time of the initial sale. So unfortunately, I can’t actually give sizes on these deals with a specific logo. That’s their private information. But like we said in the call, what’s exciting is even though we’ve won the deals that we talked about a year ago, the pipeline has been replenished pretty meaningfully. And so it’s sort of the digital transformation within the underlying category continues to be there. 15

Our next question comes from Stephen Sheldon with William Blair.

Big congrats on the sales momentum. First, it looks like reported ARR for the third and fourth quarter were brought down just a touch relative to what you reported last time. Can you give us some detail on that? I would guess it has something to do with acquired ARR, but just any additional context there would be great.

Yes, it’s actually FX. So the business we acquired in the second half of last year, TASK is almost entirely revenue from outside the United States. And so it’s the FX adjustments.

And so when you account for the constant currency, Stephen, that’s why I kind of referenced there in the earnings and going from Q4 to Q1, we saw the $10 million, 3.7% incremental growth in constant currency.

Okay. Got it. And then maybe following up on the last question. I mean you’ve got a lot of encouraging wins here. And if we’re just assuming somewhat reasonable implementation schedules, I guess, do you have any early read on what organic ARR growth could potentially look like next year? Or just generally, how much visibility do you have now, especially with the 4 Tier 1 wins that you talked about? Do you already have good line of sight to over 20% growth next year given what you’ve already won?

I don’t think we have enough visibility kind of beginning of May for ’26 yet. What I would say is we feel really good right now because not only are we winning these deals, but 16 we’re also attaching multiple products, right? And so the value of the deal is higher than we’ve historically been used to where it was usually 1 deal, 1 deal. Now it’s sort of 2. So right now, I don’t think we can say, hey, we’re there, but I think we’re certainly going to shoot for it given what’s happened so far.

Our next question comes from William Nance with Goldman Sachs.

I appreciate the detail on FX. I think that may have got lost in some of the morning shuffle. So if I’m hearing that right, it sounds like a lot of is it Australia dollar? I mean, I think most currencies have weakened year-to-date, but I think the Aussie dollar is actually stronger year-to-date. So I just wanted to confirm that, that’s the case. And maybe you could give us an update on the currency exposure so we can think about constant currency going forward.

Yes, that’s right. So it’s New Zealand dollar and Australian dollar, New Zealand actually bigger. And so that’s where the FX is there. If you adjust for constant currency, the sequential ARR growth was $10 million. So it does have an impact going forward.

Yes. No, that makes sense. That makes sense. Okay. So did you have a number on just like the percentage of ARR that is outside of the U.S.

Just under 20%.

All right. Very helpful. I appreciate that. Okay. And then just an update on the com17 petitive environment. You’ve seen some of the down market competitors making some traction, upmarket. What are you seeing in the RFP processes? And any notable changes in conversations?

I think we’re really happy with our competitive position. Certainly, on table service deals, as we’ve talked about in the past, we’re growing in there and I think starting to make real impact into those sales processes. These are those ones in particular are very long sales processes. That’s where we see some competitive positioning. But nothing that I think is worrying us in that when we’re head-to-head in the lab with a customer, I can’t think of a time where the customer said, we don’t have the product to win. Now that doesn’t mean we always win. There might be economic things that change. There might be relationships. But generally, from a product perspective, we feel really strong. And I think in the end, in enterprise software product wins. So we feel really, really good. And as I mentioned, on these Tier 1 deals, we’re still winning at a very high clip. And so I feel pretty good right now, but we obsess over every little competitor too. So we’re constantly kind of seeing how we stack up.

Our next question comes from Andrew Harte with BTIG.

So, you talked a lot today, I think about just multiproduct adoption. I guess when you think about how the PAR platform as a whole has evolved over the past year or so with all these different solutions and different ways to serve customers. What is the cross-sell opportunity or pipeline look like? I guess, like what would fully baked ARPU look like for a customer versus what it’s like today? Just trying to get an idea of what the penetration 18 of that cross-sell is and how much room for growth there is going forward?

Yes. I think Bryan and I have kind of said this before, we did, if every customer bought every product, it’s at least a 4x from where we are today in our revenue. So, it’s really, really meaningful. Now that won’t happen. There are certain customers that won’t happen, but there’s a lot of opportunity. And the critical part, Andrew, why I’ve been the last 2 quarters have been talking about this is that there’s 2 elements to this. The first is our products being integrated in a way that makes the competitive dynamics to the last question, incredibly favorable. I referenced this in the call, but we had a really unique customer win this quarter where we won a really, really impressive large Tier 1 chain because they realized that they could have their loyalty data, if you will, at the POS. And so, if you combine Punchh and PAR POS in-store, your cashier can be prompted with AI suggested upsells. They can see the loyalty data, loyalty points prompt you, same with the drive-thru. That’s an example of what we may think is simplistic functionality that nobody else really has right now. And I think that’s just crazy powerful. And so, as we build these technical features that combine the products, it really makes the cross-sell a lot easier because then it’s almost like how can I not choose that because I can’t get these sets of features and functions. So one is that sort of technical integration that’s now coming out from PAR that is really exciting and leading to the cross-sell. So, it’s not that we’ve amped up sales. In fact, our sales team has come down in size and gotten more efficient. It’s that technical side that’s actually winning the deals. And same on the ordering side that I spent some time on today, which is really growing nicely. The second part of the multiproduct side is the resulting financial impact. Now as I men19 tioned, we haven’t seen that flow through the P&L yet. That’s why I’m really excited for the second half of the year and 2026. But when you sell 2 products for the price of 1, if you will, on the acquisition cost, it really is highly, highly profitable. So, we still have that really interesting lever as it relates to our profitability in the next couple of years here.

And then maybe just following up on some of the questions that have been asked on ARR growth. Obviously, I think a lot of puts and takes. I’m just hoping to maybe dissect it a little bit more. I guess, on the first part of the delayed Burger King to expand the relationship, I think everyone is in agreement that’s great. I guess, can you help us understand maybe what the headwind to growth would have been was in 1Q from the pause on Burger King, and it’s nice to hear that it’s turned back on. And then the second half of it, you talked about there’s a lot of other areas where the slag was made out. Part of it was like the 7 Tier 1s in the pipeline a year ago, 4 of them have gone live. So, can you just talk about the implementation time line for those? Like does that give you – do those 4 wins give you 2 years of solid ARR growth, 3 years? Just trying to think about the durability of ARR growth beyond the next couple of quarters.

Sure. Let me do the second first. So those 4 that we’ve won, they’ve been won, not rolled out. So, there’s still a lot of revenue to come. So just a quick clarification, which again is probably, I think, really exciting, which is those deals, for the most part, are not driving the growth that we saw in this quarter. Those are still to come. So that’s really exciting. And I think as far as durability of revenue growth, that’s where we feel really strong today because we see that we have these deals roll out plus the other deals that I mentioned on the call that we’ve won. So, I think for the next couple of years, we see pretty strong revenue growth where we’ve got a nice backlog, if you can call it backlog to get rolled 20 out. The time line to roll out a deal varies significantly. From our engagement side of our business, it’s about 6 months from signing to launch to get it live. And that’s been pretty consistent since we’ve acquired and worked on the Punchh product line. On the POS side, from the moment you sign the deal, we usually guide that if you’re a 1,000-store chain, it takes us about a year to get you live, provided we have your commitment and support. And for larger chains, it can take 2 years. But those ones are a little harder to forecast because you’re working in tandem with the corporate. But those ones give you longer visibility because you’re rolling out over time, kind of like we’re doing on Burger King. To your first question, I feel really great. Without our biggest customer rolling out, we still hit 18% growth, really comfortably without any of those big deals going. And so, I think that just shows we don’t need to depend on large mega deals to still grow at pretty high rates. So, I was really happy with the quarter.

I think I would just add to what Savneet said there, too, is the fact that now we’re seeing some acceleration on the flywheel for the cross-sell as that becomes a bigger percent of our total growth that comes over, that kind of fills in the gaps that make happen in between these large sales cycles and some of these larger logos. So, it helps to smooth out the ARR growth as we go forward.

Our next question comes from Samad Samana with Jefferies.

Maybe first, Savneet, I appreciate the commentary on what differentiates your M&A strategy versus maybe some other companies that have a kind of more of a financial sponsor 21 type of view on M&A. And maybe if I build on the question, just as we think about all the transactions that you guys have done and the balance sheet where it is today, if you think about future potential M&A, especially if you think about something transformative, one, I guess, are you thinking about an opportunity like that? And if so, should we think about it as something – like how would you think about approaching the balance sheet just given where you’ve already spent capital recently? Just maybe any color there? And then I have a follow-up as well.

That’s a great question. So short answer is we’re going to be aggressive. I think, Samad, we’re a company that’s constantly sort of assessing where are we great and candidly, where do we suck. And one of the things that we learned in kind of that really sort of transparent environment is how do we continue to make our M&A better and better. And I think what I can say to you is because we’re so obsessed on the products fitting within PAR, we haven’t made a lot of mistakes. If I look at our M&A deals, I sort of think we really, really got it right. And a lot of that is the integration of the people. If I look at the acquisitions we made last year, we retained well over 90-plus percent of those employees, well over. And that’s kind of rare. And that’s allowed us to kind of build the momentum from the flywheel from the product side. So that foundational point is we’re going to do it again and again. And I think the transformative deals are exciting to us if they fit a product rubric that allows us to create more value to the customer. Because in the end, if we combine the products together and we create more value to the customer, we can then take more value back to PAR and our shareholders. So we’ll absolutely do that. How we fund that, I think, is really dependent upon a few things. One, what’s our cost of capital of the levers that we have at the time that we’re making the deal. 22 And so if we’re buying a business at a multiple that’s meaningfully discounted to our equity, we will look to use equity. If it’s a smaller transaction like we did with Skip this quarter, we’re comfortable using cash on the balance sheet. And then I think given the success we’ve had in the convert market, we can continue to look at the convert and debt markets. But it really, really is dependent on what’s our cost of capital at that time. So – and then looking at that lens of what doesn’t limit our flexibility going forward. Because I think if you’ve seen with us, we’ve gone through a period of 2 years of doing nothing and then 1 year doing 2 or 3 deals. And so it’s that combination of lowest cost of capital that doesn’t mess up our flexibility for the future is kind of how I think about it.

Appreciate that. And also, I appreciate that you use the industry standard of where do we suck to judge as well, Same here about myself. And then maybe just a follow-up for Bryan. If I think about the – if I just – this is more of a housekeeping question than anything else. It looks like in the slide deck, maybe the ARR was revised for some of the historical numbers. I just wanted to know, is there any kind of divestiture? Or is that being rebased because of currency? Just trying to understand what changed in the slide deck for the historical numbers. I’m curious if you knew off the top of your head.

Yes. It’s purely related 100% to the FX currency, and that’s why we referenced the constant currency. So you saw that in Q3, Q4 post the acquisition of TASK.

Our next question comes from Charles Nabhan with Stephens.

It sounds like you’re getting a lot of good traction in the payments business. My question there is, I know a few quarters ago, you had you had mentioned that payments was still a 23 bit dilutive to adjusted gross margin. I wanted to just get a sense for the impact on gross margin from the payments business as well as any color you could provide around the size of payments relative to either subscription revenue or total revenue?

Sure. So payments is still dilutive to gross margin, but going in the right direction. So as you can see, we continue to have nice gross margin expansion. And so even though payments is not yet at the company-wide gross margins, it’s working its way up there. In totality, payments is still less than 10% of our revenues. And remember, it critical to us, we collect payments or we report payments on a net basis. So it’s still small, but it’s working its way there. And I think once it gets to a meaningful size, we’ll start breaking it out. But we’re not yet at 10% of total revenue, which is exciting because we have a lot of penetration still to go.

Got it. And as a follow-up, I appreciate the comments on tariff exposure and it sounds like you’ve made some actions over the past few years that help alleviate that headwind to some degree. But as we think about that exposure, could you give us a little color around how quickly that book – the hardware book turns over? I assume the exposure lies in your incremental deals as well as the contracts that are coming up for renewal. So any color around how that flows through would be helpful.

Yes, sure. I’ll answer that and then Savneet can fill in the blanks. But we also make sure in our contracts, right, that we have the ability to have flexibility on pricing when there’s exposure to things such as tariffs. But at the same time, we also make sure, especially because of the high hardware attachment rate to our software as well that we work with the customers come to the right resolution. So I think we’re feeling comfortable on where 24 we are from a country exposure standpoint. We’re being open with all our customers on where like we’re seeing this move. And I think it’s been good conversations. We don’t see there being an issue. And then I think also from a supply chain standpoint, we make sure that we have able to kind of pull in as well. And so we’ve been able to lock in some pricing and pull in some of our POs that we wanted later in the year so that we could actually service our customers. And many of our customers remembered how we were able to supply them back in COVID where others couldn’t. And so we’ve also started seeing POs come in from our customers to help leverage that.

Our next question comes from Adam Wyden with ADW Capital.

Yes. Okay. So a couple of things. Just to clarify, you said that the 4 out of the 7 are not rolled out. Now can you clarify, are you talking about new Tier 1 logos that you haven’t won? Like I guess, would you like – so Popeyes Data Central is not included in that. But like, for example, if you had won Wendy’s point of sale, could that be that even though you have Wendy’s Punchh? I’m just trying to understand how you sort of think about the Tier 1 logos. Are they brand-new logos that you haven’t penetrated at all in any capacity? Or is it like a – could it be a major product like Wendy’s point of sale like that you don’t already have? Do you understand what I’m saying? Like – and how do you sort of define Tier 1 logo?

Sure. So the 7 logos, the ones we referred to, I think, on our – about a little over a year ago after BK when we were talking about the pipeline, we had said we were in the process – RFP process of 7 new customers. Of those, we won 4. And we define Tier 1 as 1,000 25 stores and above. And they would be – of those 7, 6 would be net new logos. One would be a major upsell into an existing customer. So 6 of the 7 will be net new logos to PAR.

Okay. And just to clarify, then I have one other question. You’re saying the 4 out of 7 have not been rolled out, but then you also sort of said your pipeline has been replenished. So on top of that, you would argue that even though you won those 4 out of 7, you have another 4 Tier 1 logos that are in RFP. Is that sort of how you define it being replenished?

Yes. So I’d say we’re – of those 4, 1 has been rolled out not entirely, and then we’ve got 3 coming. And then as far as pipeline being replenished, on a weighted average – weighted dollar basis, which is the way that we look at pipeline, the dollar value of the pipeline is more than it was when I made that comment over a year ago.

Okay. Amazing. And then a little bit more on M&A. Obviously, you’ve done a really nice job on M&A. Obviously, you’ve sort of said you want to be the largest sort of player in restaurant tech. I’m just curious, like can you talk about sort of some of the things that you think might be coming to market? And obviously, I know it has to be product specific, and it has to be sort of integrated. But I mean, if you were to say like what would an ideal PAR look to you like in 3 to 5 years? Like what would sort of be the margin structure and growth rate and sort of scale? I mean I’m just curious sort of like if you had a canvas and you could say, hey, this is what the business could look like in five years, like what does that look like to you?

It’s an impossible question because if you asked me 5 years ago, I’m not sure I would have designed where we are today. I would have been wrong and happier with what we 26 have today than I would have guessed 5 years ago. What I think is going to happen, what we’re shooting for PAR is we are a really ambitious, ambitious team. And candidly, if we just stay in our swim lane, I think we’d all be disappointed about what we accomplished. And so I think if you look at us 3 to 5 years from now, I suspect that we’ll be running the same playbook we’ve done in restaurants in the retail space as we’ve just started there. and other adjacent categories where we truly are not the restaurant leader, but the dominant food service leader across many categories more. And so you and I have talked about my love of certain businesses like Roper and others. I think we want to do that, but we wanted to do that in a more industry-specific manner because as I mentioned on the call, I think what I’ve learned at PAR is that when you can integrate M&A and create true revenue growth plus stickier customers and that integration is really critical. We do actually deserve a higher multiple because ostensibly, every acquisition actually makes your business better because it increases the lifetime value of an individual customer because whether they’re more sticky or you can increase revenue, so on and so forth. And so I think that’s the way that we think about it. And so I would love to create the next version of one of those businesses, but each vertical will be very, very integrated, like we’ve done at PAR because I think that’s really served us well.

Our next question comes from George Sutton with Craig-Hallum.

Particular congratulations on the Mr. Pickle’s deal. So Savneet, I’m curious when we talk about the better together in the context of how the RFPs are coming into you. My assumption is the RFPs are typically around one specific area. And then through that process, you try to cross-sell or after that process, you try to cross-sell. Do you see a scenario where the RFPs graduate to a more mature thought around a broadened technology suite that really limits the potential to you as the provider? 27

That’s an amazing question. The short answer is yes and yes. So RFPs come in, they’re generally single product in nature, and then we work to sort of introduce the other products and hopefully then convince them to do that. But the reason why I said your question is fantastic is what you just described is what we’re seeing happen today. The historically, the deals were – here’s an engagement deal, here’s a POS deal. And today, those are colliding into one. We actually are seeing more and more customers collapse the digital, which would be the digital side of restaurants historically has been the, call it, the marketing and IT world. And the operational side would be the operators in the IT world kind of merge into one buyer. And that has been really, really instructive in how we think about our own business and continuing to collapse and consolidate what we do internally. And so the short answer is we push it the way you described. I believe the market is moving to the way where it will be combined offerings and actually saying, "Hey, I want these outcomes show me how your products get these outcomes versus give me just a back-office solution.

Got you. And just one question for clarity. You mentioned that 57% of your deals were multiproduct this quarter versus, I believe you said 16% just a year ago. I just want to make sure I heard those numbers. To me, that’s an amazing message, if that’s the case.

So it’s even better than that. So in the Operator Solutions side, so we run the 2 separate business units, as you know. On the Operator Solutions side, 100% of deals have been multiproduct the last 2 quarters. That’s just truly off the charts. On the engagement side, we’re up to 57% of new deals are multiproduct, up from 14%. So it’s really, really been exciting. A lot of that’s been driven by – we rebuilt the PAR ordering product, and that is now being attached into a meaningful amount of deals. So yes, it’s – that’s why I sort of 28 talked about a lot on this call. It’s – and again, it’s approposes your prior question, right, which is the market is kind of coming in that direction.

Our next question comes from Eric Martinuzzi with Lake Street Capital Markets.

Yes. I was curious to know on the PAR OPS product, which is the amalgamation of the data central and Delaget. What was prior to the acquisition of Delaget, what was the ARR for a typical data central location?

About $1,500 a year.

Okay. And then what’s the – what does that expand to if someone adds on Delaget? Or is it just bundled in now?

So Delaget has a couple of different modules. So it’s anywhere from, call it, $500 up to $1,300, $1,400 depending on who buy all 3 modules or just one.

Got it. And then a question regarding the hardware. Was there any evidence of people pulling ahead orders in Q1 in anticipation of potential tariff-related inflation?

We see that in Q2. So we did see some of that happen in Q2. So we think Q2 will be strong from a hardware perspective. But it’s – hardware, as Bryan mentioned, is 20-ish percent of our business now. And so we don’t look at that as having tremendous impact 29 quarter-to-quarter. I think that’s the beauty of it, which is the tariffs while scary for some, we feel we’re going to manage it really well. And real I think the team did such a good job during COVID that we’ve really got redundant supply chains, very little exposure to China. And so we have seen some of that. I think we’ll see maybe a little more throughout this quarter. But I think we expect the hardware to continue to be strong for at least Q2 and hopefully the rest of the year. But we haven’t – I don’t think we and Bryan have yet seen orders getting pushed out because of hardware cost. And I think the result of that is because we’ve been able to avoid the China tariffs.

Our next question is a follow-up from Adam Wyden with ADW Capital.

On this, I know you guys talked about the rebasing of the ARR of about, I guess, it was like $3.5 million for constant currency. Can you talk about what the effect on EBITDA was in the quarter and what the actual effect on revenue was? Because it looks like you would have made a lot more EBITDA and a lot more revenue on a constant currency basis. And then as you sort of expect, like you’re going to have higher incremental margins going forward as the other businesses are sort of growing sort of going forward. Can you just talk a little bit about that?

Yes. Good question, Adam. I think from an EBITDA or from a revenue standpoint, would have impacted probably about $1 million from an FX exposure standpoint. And then you’re roughly below that, call it, $700,000 and change from an EBITDA there.

I’m showing no further questions at this time. I would now like to turn it back to Christopher Byrnes for closing remarks. 30

Well, thank you, Daniel, and thank you to everyone for joining us today. We look forward to updating you further in the coming weeks and days. Please have a great weekend, and have a nice day.

This concludes today’s conference call. Thank you for participating. You may now disconnect. Copyright © 2025, S&P Global Market Intelligence. All rights reserved 31