Par Technology Corporation

08/08/2025 | Press release | Distributed by Public on 08/08/2025 14:07

Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto included under "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report and our audited consolidated financial statements and the notes thereto included under "Part II, Item 8. Financial Statements and Supplementary Data" of the 2024 Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed under "Forward-Looking Statements".
OVERVIEW
Q2 2025 Operating Performance Highlights
Organic - Year-over-year
growth of 16.1%
Total - Year-over-year
growth of 49.2%
GAAP- Year-over-year improvement of 220 basis points (bps)
Non-GAAP- Consistent year-over-year
Net Loss from Cont. Ops.
Year-over-year decrease of $2.5 million
Adjusted EBITDA
Year-over-year improvement of $9.9 million
Refer to "Key Performance Indicators and Non-GAAP Financial Measures" below for important information on key performance indicators and non-GAAP financial measures, including annual recurring revenue ("ARR"), non-GAAP subscription service gross margin percentage, and adjusted EBITDA. We use these key performance indicators and non-GAAP financial measures to evaluate our performance.
Macroeconomic Environment
The tariff environment is complex and evolving. Beginning in the second quarter of 2025, the U.S. government implemented a series of significant new tariffs, including on imports from several countries where we source certain components and hardware products. Other countries have responded with retaliatory actions or plans for retaliatory actions. Some of these tariff announcements have since been followed by announcements of limited exemptions and temporary pauses. These actions have introduced increased uncertainty into global trade policies and supply chains. We continue to monitor macroeconomic trends and uncertainties in light of continuing changes to global tariff policies, which may have adverse effects on our hardware revenue and hardware gross margin. As a result of these events, we anticipate increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty due to rapid changes in global trade policies. We are continuing to evaluate and implement mitigating actions, including potential supply chain resiliency movements and cost or pricing measures, if needed, as the tariff environment evolves.
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was signed into law. The Act contains changes to U.S. federal tax law that may require further clarification and the issuance of interpretive guidance. The effects of the Act are not reflected in the financial statements and the notes thereto included under "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report because it was enacted after June 30, 2025. However, we are currently evaluating the impact of the Act on our consolidated financial statements.
RESULTS OF OPERATIONS
Consolidated Results:
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Revenues, net:
Subscription service $ 71,903 $ 44,872 64.0 % 57.4 % 60.2 %
Hardware 26,864 20,116 23.9 % 25.7 % 33.5 %
Professional service 13,637 13,162 12.1 % 16.8 % 3.6 %
Total revenues, net $ 112,404 $ 78,150 100.0 % 100.0 % 43.8 %
Gross margin:
Subscription service $ 39,759 $ 23,831 35.4 % 30.5 % 66.8 %
Hardware 7,324 4,577 6.5 % 5.9 % 60.0 %
Professional service 3,909 3,620 3.5 % 4.6 % 8.0 %
Total gross margin $ 50,992 $ 32,028 45.4 % 41.0 % 59.2 %
Operating expenses:
Sales and marketing $ 12,274 $ 9,811 10.9 % 12.6 % 25.1 %
General and administrative 31,697 25,369 28.2 % 32.5 % 24.9 %
Research and development 20,934 16,237 18.6 % 20.8 % 28.9 %
Amortization of identifiable intangible assets 3,394 1,946 3.0 % 2.5 % 74.4 %
Adjustment to contingent consideration liability - (600) - % (0.8) % (100.0) %
Total operating expenses $ 68,299 $ 52,763 60.8 % 67.5 % 29.4 %
Operating loss $ (17,307) $ (20,735) (15.4) % (26.5) % (16.5) %
Other expense, net (1,381) (610) (1.2) % (0.8) % 126.4 %
Interest expense, net (1,408) (1,630) (1.3) % (2.1) % (13.6) %
Loss from continuing operations before income taxes (20,096) (22,975) (17.9) % (29.4) % (12.5) %
Provision for income taxes (944) (612) (0.8) % (0.8) % 54.2 %
Net loss from continuing operations $ (21,040) $ (23,587) (18.7) % (30.2) % (10.8) %
Net income from discontinued operations - 77,777 - % 99.5 % (100.0) %
Net (loss) income $ (21,040) $ 54,190 (18.7) % 69.3 % (138.8) %
Consolidated Results (continued):
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Revenues, net:
Subscription service $ 140,313 $ 83,251 64.9 % 56.2 % 68.5 %
Hardware 48,707 38,342 22.5 % 25.9 % 27.0 %
Professional service 27,243 26,630 12.6 % 18.0 % 2.3 %
Total revenues, net $ 216,263 $ 148,223 100.0 % 100.0 % 45.9 %
Gross margin:
Subscription service $ 79,269 $ 43,616 36.7 % 29.4 % 81.7 %
Hardware 12,699 8,633 5.9 % 5.8 % 47.1 %
Professional service 7,366 5,837 3.4 % 3.9 % 26.2 %
Total gross margin $ 99,334 $ 58,086 45.9 % 39.2 % 71.0 %
Operating expenses:
Sales and marketing $ 24,056 $ 20,737 11.1 % 14.0 % 16.0 %
General and administrative 60,981 50,544 28.2 % 34.1 % 20.6 %
Research and development 40,701 32,005 18.8 % 21.6 % 27.2 %
Amortization of identifiable intangible assets 6,653 2,878 3.1 % 1.9 % 131.2 %
Adjustment to contingent consideration liability - (600) - % (0.4) % (100.0) %
Total operating expenses $ 132,391 $ 105,564 61.2 % 71.2 % 25.4 %
Operating loss $ (33,057) $ (47,478) (15.3) % (32.0) % (30.4) %
Other expense, net (1,472) (310) (0.7) % (0.2) % > 200%
Interest expense, net (3,042) (3,338) (1.4) % (2.3) % (8.9) %
Loss on extinguishment of debt (5,791) - (2.7) % - % - %
Loss from continuing operations before income taxes (43,362) (51,126) (20.1) % (34.5) % (15.2) %
(Provision for) benefit from income taxes (2,225) 7,173 (1.0) % 4.8 % (131.0) %
Net loss from continuing operations $ (45,587) $ (43,953) (21.1) % (29.7) % 3.7 %
Net income from discontinued operations 197 79,855 0.1 % 53.9 % (99.8) %
Net (loss) income $ (45,390) $ 35,902 (21.0) % 24.2 % (226.4) %
Revenues, Net
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Subscription service $ 71,903 $ 44,872 64.0 % 57.4 % 60.2 %
Hardware 26,864 20,116 23.9 % 25.7 % 33.5 %
Professional service 13,637 13,162 12.1 % 16.8 % 3.6 %
Total revenues, net $ 112,404 $ 78,150 100.0 % 100.0 % 43.8 %
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
Total revenues were $112.4 million for the three months ended June 30, 2025, an increase of $34.3 million
or 43.8% compared to $78.2 million for the three months ended June 30, 2024.
Subscription service revenues were $71.9 million for the three months ended June 30, 2025, an increase of $27.0 million or 60.2% compared to $44.9 million for the three months ended June 30, 2024. The increase was substantially driven by increased Engagement Cloud subscription service revenues of $18.9 million, of which $11.7 million was attributable to inorganic revenue growth contributed by the Plexure product line and customer contracts acquired in the GoSkip Asset Acquisition (now integrated into the PAR Retail product line). The residual increase of $7.2 million from Engagement Cloud subscription service revenues was driven by 13.3% organic growth in active sites. Operator Cloud subscription service revenues increased $8.2 million, of which $5.8 million was attributable to inorganic revenue growth contributed by the TASK and Delaget product lines. The residual increase of $2.4 million from Operator Cloud subscription services was driven by 9.8% organic growth in active sites.
Hardware revenues were $26.9 million for the three months ended June 30, 2025, an increase of $6.7 million or 33.5% compared to $20.1 million for the three months ended June 30, 2024. The increase was primarily driven by increased revenues from sales of terminals of $3.4 million, kitchen display systems of $1.3 million, kiosks of $0.8 million, and an increase in international sales of $1.1 million. These increases were driven by both price increases and increased sales volume, the timing of tier one enterprise customer hardware refresh cycles, and the timing of onboarding of Operator Cloud customers buying hardware. Hardware revenues will continue to be affected by the timing of the aforementioned drivers.
Professional service revenues were $13.6 million for the three months ended June 30, 2025, which remained relatively unchanged from $13.2 million for the three months ended June 30, 2024.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Subscription service $ 140,313 $ 83,251 64.9 % 56.2 % 68.5 %
Hardware 48,707 38,342 22.5 % 25.9 % 27.0 %
Professional service 27,243 26,630 12.6 % 18.0 % 2.3 %
Total revenues, net $ 216,263 $ 148,223 100.0 % 100.0 % 45.9 %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Total revenues were $216.3 million for the six months ended June 30, 2025, an increase of $68.0 million or 45.9% compared to $148.2 million for the six months ended June 30, 2024.
Subscription service revenues were $140.3 million for the six months ended June 30, 2025, an increase of $57.1 million or 68.5% compared to $83.3 million for the six months ended June 30, 2024. The increase was substantially driven by increased Engagement Cloud subscription service revenues of $39.7 million, of which $28.3 million was attributable to inorganic revenue growth contributed by the Plexure product line, the GoSkip Asset Acquisition, and the inclusion of approximately two additional months of revenue from the existing PAR Retail business in the current period. The residual increase of $11.4 million from Engagement Cloud subscription services was driven by 14.4% organic growth in active sites. Operator Cloud subscription service revenues increased $17.4 million, of which $12.0 million was attributable to inorganic revenue growth contributed by the TASK and Delaget product lines. The residual increase of $5.4 million from Operator Cloud subscription services was driven by 11.2% organic growth in active sites.
Hardware revenues were $48.7 million for the six months ended June 30, 2025, an increase of $10.4 million or 27.0% compared to $38.3 million for the six months ended June 30, 2024. The increase was primarily driven by increased revenues from sales of terminals of $5.0 million, kitchen display systems of $1.7 million, peripherals (scanners, printers, and components) of $1.1 million, and an increase in international sales of $1.3 million. These increases were substantially driven by price increases, the timing of tier one enterprise customer hardware refresh cycles, and the timing of onboarding of Operator Cloud customers buying hardware. Hardware revenues will continue to be affected by the timing the aforementioned drivers.
Professional service revenues were $27.2 million for the six months ended June 30, 2025, which remained relatively unchanged from $26.6 million for the six months ended June 30, 2024.
Gross Margin
Three Months Ended June 30, Gross Margin Percentage Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Subscription service $ 39,759 $ 23,831 55.3 % 53.1 % 220 bps
Hardware 7,324 4,577 27.3 % 22.8 % 450 bps
Professional service 3,909 3,620 28.7 % 27.5 % 120 bps
Total gross margin $ 50,992 $ 32,028 45.4 % 41.0 % 440 bps
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
Total gross margin as a percentage of total revenue for the three months ended June 30, 2025, increased to 45.4% as compared to 41.0% for the three months ended June 30, 2024.
Subscription service gross margin as a percentage of subscription service revenue for the three months ended June 30, 2025, increased to 55.3% as compared to 53.1% for the three months ended June 30, 2024. The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs, as well as improved gross margins stemming from post-acquisition operations of the Delaget product line.
Hardware gross margin as a percentage of hardware revenue for the three months ended June 30, 2025, increased to 27.3% as compared to 22.8% for the three months ended June 30, 2024. The increase was primarily driven by a more favorable product mix, with a higher proportion of higher-margin hardware sales in the current period, as well as a year-over-year reduction in compensation expense as we aligned our hardware-related workforce with organizational priorities.
Professional service gross margin as a percentage of professional service revenue for the three months ended June 30, 2025, increased to 28.7% as compared to 27.5% for the three months ended June 30, 2024. The increase was primarily driven by higher gross margins for field operations and hardware service repair, substantially driven by improved cost management and reductions in third-party spending.
Six Months Ended June 30, Gross Margin Percentage Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Subscription service $ 79,269 $ 43,616 56.5 % 52.4 % 410 bps
Hardware 12,699 8,633 26.1 % 22.5 % 360 bps
Professional service 7,366 5,837 27.0 % 21.9 % 510 bps
Total gross margin $ 99,334 $ 58,086 45.9 % 39.2 % 670 bps
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Total gross margin as a percentage of revenue for the six months ended June 30, 2025, increased to 45.9% as compared to 39.2% for the six months ended June 30, 2024.
Subscription service margin as a percentage of subscription service revenue for the six months ended June 30, 2025, increased to 56.5% as compared to 52.4% for the six months ended June 30, 2024. The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs, as well as improved gross margins stemming from post-acquisition operations of the Delaget product line and the inclusion of approximately two additional months of PAR Retail product line results in the current period.
Hardware margin as a percentage of hardware revenue for the six months ended June 30, 2025, increased to 26.1% as compared to 22.5% for the six months ended June 30, 2024. The increase was primarily driven by a more favorable product mix, with a higher proportion of higher-margin hardware sales in the current period, as well as a year-over-year reduction in compensation expense as we aligned our hardware-related workforce with organizational priorities.
Professional service margin as a percentage of professional service revenue for the six months ended June 30, 2025, increased to 27.0% as compared to 21.9% for the six months ended June 30, 2024. The increase was primarily driven by higher gross margins for field operations and hardware service repair, substantially driven by improved cost management and reductions in third-party spending.
Sales and Marketing Expense ("S&M")
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Sales and marketing $ 12,274 $ 9,811 10.9 % 12.6 % 25.1 %
For the three months ended June 30, 2025 compared to the threemonths ended June 30, 2024
S&M expenses were $12.3 million for the three months ended June 30, 2025, an increase of $2.5 million or 25.1% compared to $9.8 million for the three months ended June 30, 2024. The increase was substantially driven by a $1.9 million increase in inorganic S&M expense, stemming from post-acquisition operations of TASK Group and the Delaget product line. Organic S&M expense increased by $0.6 million, primarily driven by a $0.3 million increase in commission expense, reflecting higher sales volume and continued expansion into multi-location enterprise accounts, and a $0.3 million increase in marketing event spend to support cross-sell initiatives across our combined customer base.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Sales and marketing $ 24,056 $ 20,737 11.1 % 14.0 % 16.0 %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
S&M expenses were $24.1 million for the six months ended June 30, 2025, an increase of $3.3 million or 16.0% compared to $20.7 million for the six months ended June 30, 2024. The increase was substantially driven by a $4.2 million increase in inorganic S&M expense, stemming from post-acquisition operations of TASK Group and the Delaget product line, as well as the inclusion of approximately two additional months of PAR Retail S&M expense in the current period. Organic S&M expense decreased by $0.9 million primarily driven by a decrease in compensation expense, reflecting continued realization of synergies in our sales and marketing model.
General and Administrative Expense ("G&A")
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
General and administrative $ 31,697 $ 25,369 28.2 % 32.5 % 24.9 %
For the three months ended June 30, 2025 compared to the threemonths ended June 30, 2024
G&A expenses were $31.7 million for the three months ended June 30, 2025, an increase of $6.3 million or 24.9% compared to $25.4 million for the three months ended June 30, 2024. The increase was substantially driven by a $4.8 million increase in inorganic G&A expense stemming from post-acquisition operations of TASK Group and the Delaget product line. Organic G&A expense increased $1.5 million, primarily driven by certain non-cash or non-recurring expenses consisting of a $1.3 million one-time litigation expense in the current period and a $0.9 million increase in stock-based compensation expense, partially offset by a $1.1 million decrease in costs related to transaction due diligence.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
General and administrative $ 60,981 $ 50,544 28.2 % 34.1 % 20.6 %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
G&A expenses were $61.0 million for the six months ended June 30, 2025, an increase of $10.4 million or 20.6% compared to $50.5 million for the six months ended June 30, 2024. The increase was driven by a $10.3 million increase in inorganic G&A expense stemming from post-acquisition operations of TASK Group and the Delaget product line, as well as the inclusion of approximately two additional months of PAR Retail G&A expense in the current period. Organic G&A expense was relatively flat year-over-year.
Research and Development Expenses ("R&D")
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Research and development $ 20,934 $ 16,237 18.6 % 20.8 % 28.9 %
For the three months ended June 30, 2025 compared to the threemonths ended June 30, 2024
R&D expenses were $20.9 million for the three months ended June 30, 2025, an increase of $4.7 million or 28.9% compared to $16.2 million for the three months ended June 30, 2024. The increase was substantially driven by a $2.6 million increase in inorganic R&D expense stemming from post-acquisition operations of TASK Group and the Delaget product line, as well as R&D expense resulting from the integration of assets acquired in the GoSkip Asset Acquisition. Organic R&D expense increased by $2.1 million primarily driven by higher outsourced development costs as we continue to work to improve and diversify our product and service offerings.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Research and development $ 40,701 $ 32,005 18.8 % 21.6 % 27.2 %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
R&D expenses were $40.7 million for the six months ended June 30, 2025, an increase of $8.7 million or 27.2% compared to $32.0 million for the six months ended June 30, 2024. The increase was substantially driven by a $6.4 million increase in inorganic R&D expense stemming from post-acquisition operations of TASK Group and the Delaget product line, R&D expense resulting from the integration of assets acquired in the GoSkip Asset Acquisition, and the inclusion of approximately two additional months of PAR Retail R&D expense in the current period. Organic R&D expense increased by $2.3 million primarily driven by higher outsourced development costs as we continue to work to improve and diversify our product and service offerings.
Other Operating Expenses
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Amortization of identifiable intangible assets $ 3,394 $ 1,946 3.0 % 2.5 % 74.4 %
Adjustment to contingent consideration liability - (600) - % (0.8) % (100.0) %
For the three months ended June 30, 2025 compared to the threemonths ended June 30, 2024
Amortization of identifiable intangible assets was $3.4 million for the three months ended June 30, 2025, an increase of $1.4 million as compared to $1.9 million for the three months ended June 30, 2024. The increase was primarily driven by an increase in amortizable intangible assets stemming from the TASK Group Acquisition, Delaget
Acquisition, and GoSkip Asset Acquisition.
Included in operating expenses for the three months ended June 30, 2024 was a $0.6 million decrease to the fair value of the contingent consideration liability for certain post-closing revenue focused milestones from the MENU Acquisition. There was no comparable adjustment to contingent consideration liability for the three months ended June 30, 2025.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Amortization of identifiable intangible assets $ 6,653 $ 2,878 3.1 % 1.9 % 131.2 %
Adjustment to contingent consideration liability - (600) - % (0.4) % (100.0) %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Amortization of identifiable intangible assets was $6.7 million for the six months ended June 30, 2025, an increase of $3.8 million as compared to $2.9 million for the six months ended June 30, 2024. The increase was primarily driven by an increase in amortizable intangible assets stemming from the Stuzo Acquisition, TASK Group Acquisition, Delaget Acquisition, and GoSkip Asset Acquisition.
Included in operating expenses for the six months ended June 30, 2024 was a $0.6 million decrease to the fair value of the contingent consideration liability for certain post-closing revenue focused milestones from the MENU Acquisition. There was no comparable adjustment to contingent consideration liability for the six months ended June 30, 2025.
Other Expense, Net
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Other expense, net $ (1,381) $ (610) (1.2) % (0.8) % 126.4 %
For the three months ended June 30, 2025 compared to the threemonths ended June 30, 2024
Other expense, net was $1.4 million for the three months ended June 30, 2025, an increase of $0.8 million compared to $0.6 million for the three months ended June 30, 2024. The increase was substantially driven by increases in foreign currency transaction losses and other miscellaneous expenses.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Other expense, net $ (1,472) $ (310) (0.7) % (0.2) % > 200%
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Other expense, net was $1.5 million for the six months ended June 30, 2025, an increase of $1.2 million compared to $0.3 million for the six months ended June 30, 2024. The increase was substantially driven by increases in foreign currency transaction losses and other miscellaneous expenses.
Interest Expense, Net
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Interest expense, net $ (1,408) $ (1,630) (1.3) % (2.1) % (13.6) %
For the three months ended June 30, 2025 compared to the threemonths ended June 30, 2024
Interest expense, net was $1.4 million for the three months ended June 30, 2025, which remained relatively unchanged from $1.6 million for the three months ended June 30, 2024.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Interest expense, net $ (3,042) $ (3,338) (1.4) % (2.3) % (8.9) %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Interest expense, net was $3.0 million for the six months ended June 30, 2025, which remained relatively unchanged from $3.3 million for the six months ended June 30, 2024.
Loss on Extinguishment of Debt
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
There was no loss on extinguishment of debt for the three months ended June 30, 2025, or the three months ended June 30, 2024.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Loss on extinguishment of debt $ (5,791) $ - (2.7) % - % - %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Loss on extinguishment of debt was $5.8 million for the six months ended June 30, 2025, related to early repayment of the Credit Facility. There was no comparable loss on extinguishment of debt for the six months ended June 30, 2024.
Taxes
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Provision for income taxes $ (944) $ (612) (0.8) % (0.8) % 54.2 %
For the three months ended June 30, 2025 compared to the threemonths ended June 30, 2024
Provision for income taxes was $0.9 million for the three months ended June 30, 2025, a change of $0.3 million as compared to $0.6 million for the three months ended June 30, 2024. The change was primarily driven by an increase in foreign jurisdiction tax obligations.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
(Provision for) benefit from income taxes $ (2,225) $ 7,173 (1.0) % 4.8 % (131.0) %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Provision for income taxes was $2.2 million for the six months ended June 30, 2025, a change of $9.4 million as compared to a benefit from income taxes of $7.2 million for the six months ended June 30, 2024. The change was primarily driven by the absence of a one-time benefit recorded in the prior year, resulting from a reduction in the valuation allowance related to deferred tax liabilities established in connection with the Stuzo Acquisition. The provision recorded during the six months ended June 30, 2025 primarily related to foreign and state income tax expense.
Net Income from Discontinued Operations
Three Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Net income from discontinued operations $ - $ 77,777 - % 99.5 % (100.0) %
For the three months ended June 30, 2025 compared to the three months ended June 30, 2024
During the three months ended June 30, 2024, a $76.8 million gain from the divestiture of PAR Government Systems Corporation ("PGSC") was recognized. The residual amount represents PGSC and Rome Research Corporation ("RRC") operating income, offset by a provision for income taxes relating to the gain from the divestiture of PGSC. There was no comparable net income from discontinued operations for the three months ended June 30, 2025.
Six Months Ended June 30, Percentage of total revenue Increase (decrease)
(in thousands) 2025 2024 2025 2024 2025 vs 2024
Net income from discontinued operations $ 197 $ 79,855 0.1 % 53.9 % (99.8) %
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Net income from discontinued operations was $0.2 million for the six months ended June 30, 2025, a decrease of $79.7 million as compared to $79.9 million for the six months ended June 30, 2024. During the six months ended June 30, 2024, a $76.8 million gain from the divestiture of PGSC was recognized. The residual amount represents PGSC and RRC operating income, offset by a provision for income taxes relating to the gain from the divestiture of PGSC. During the six months ended June 30, 2025, a $0.2 million gain from the divestiture of RRC was recognized as a result of a favorable net working capital settlement.
Key Performance Indicators and Non-GAAP Financial Measures:
We monitor certain key performance indicators and non-GAAP financial measures in the evaluation and management of our business; certain key performance indicators and non-GAAP financial measures are provided in this Quarterly Report because we believe they are useful in facilitating period-to-period comparisons of our business performance. Key performance indicators and non-GAAP financial measures do not reflect and should be viewed independently of our financial performance determined in accordance with GAAP. Key performance indicators and non-GAAP financial measures are not forecasts or indicators of future or expected results and should not have undue reliance placed upon them by investors.
Key Performance Indicators
Within this Quarterly Report the Company makes reference to annual recurring revenue, or ARR, and active sites, which are both key performance indicators. The Company uses ARR and active sites as key performance
indicators of the scale of our subscription services for both new and existing customers.
ARR is the annualized revenue from our subscription services, which includes subscription fees for our SaaS solutions and related support, managed platform development services, and transaction-based fees for payment processing services. We generally calculate ARR by annualizing the monthly recurring revenue for all active sites as of the last day of each month for the respective reporting period. ARR is an operating measure, it does not reflect our revenue determined in accordance with GAAP, and ARR should be viewed independently of, and not combined with or substituted for, our revenue and other financial information determined in accordance with GAAP. Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of our future or expected results. Our reported ARR is based on a constant currency, using the exchange rates established at the beginning of the year and consistently applied throughout the period and to comparative periods presented. The table below presents our ARR on a constant currency basis, calculated using the exchange rates set at the beginning of 2025. For acquisitions made during each period, the constant currency rate applied is the exchange rate at the date of each acquisition's closure. There was no impact on our ARR as of June 30, 2024 as a result of applying a constant currency as the exchange rate effects only began with the TASK Group Acquisition in July 2024.
Active sites represent locations active on our subscription services as of the last day of the respective reporting period. Our key performance indicators ARR and active sites are presented as two subscription service product lines:
•Engagement Cloud consisting of PAR Engagement (Punchh and PAR Ordering), PAR Retail (including GoSkip), and Plexure product offerings.
•Operator Cloud consisting of PAR POS, PAR Pay, PAR OPS (Data Central and Delaget), and TASK product offerings.
Annual Recurring Revenue
As of June 30, Increase (decrease)
(in thousands) 2025 2024 2025 vs 2024
Engagement Cloud:
Organic $ 127,896 $ 107,933 18.5 %
Inorganic* 39,569 - - %
Total Engagement Cloud 167,465 107,933 55.2 %
Operator Cloud:
Organic 95,297 84,235 13.1 %
Inorganic** 23,897 - - %
Total Operator Cloud 119,194 84,235 41.5 %
Total $ 286,659 $ 192,168 49.2 %
*Inorganic Engagement Cloud ARR represents GoSkip and Plexure ARR only as of June 30, 2025.
**Inorganic Operator Cloud ARR represents TASK and Delaget ARR only as of June 30, 2025.
Active Sites
As of June 30, Increase (decrease)
(in thousands) 2025 2024 2025 vs 2024
Engagement Cloud:
Organic 105.3 94.6 11.3 %
Inorganic* 13.8 - - %
Total Engagement Cloud 119.1 94.6 25.9 %
Operator Cloud:
Organic 30.0 27.7 8.2 %
Inorganic** 27.4 - - %
Total Operator Cloud 57.4 27.7 107.2 %
*Inorganic Engagement Cloud active sites represents GoSkip and Plexure active sites only as of June 30, 2025.
**Inorganic Operator Cloud active sites represents TASK and Delaget active sites only as of June 30, 2025.
Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with GAAP, this Quarterly Report contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. Our non-GAAP financial measures reflect adjustments based on one or more of the following items below. The income tax effect of the below adjustments, with the exception of non-recurring income taxes, were not tax-effected due to the valuation allowance on all of our net deferred tax assets.
Our non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Additionally, these measures may not be comparable to similarly titled measures disclosed by other companies.
Non-GAAP Measure or Adjustment Definition Usefulness to management and investors
Non-GAAP subscription service gross margin percentage
Represents subscription service gross margin percentage adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance.
We believe that non-GAAP subscription service gross margin percentage and adjusted EBITDA provide useful perspectives with respect to the Company's core operating performance and ongoing cash earnings by adjusting for certain non-cash and non-recurring charges that may not be indicative of our financial performance.
Adjusted EBITDA
Represents net (loss) income before income taxes, interest expense, and depreciation and amortization adjusted to exclude discontinued operations, stock-based compensation, contingent consideration, transaction costs, severance, litigation expense, loss on extinguishment of debt, and other expense, net.
Non-GAAP diluted net income (loss) per share
Represents net (loss) income per share excluding amortization of acquired intangible assets, non-recurring income taxes, non-cash interest, discontinued operations, stock-based compensation, contingent consideration, transaction costs, severance, litigation expense, loss on extinguishment of debt, and other expense, net.
We believe that adjusting our diluted net (loss) income per share to remove non-cash and non-recurring charges provides a useful perspective with respect to the Company's operating performance as well as comparisons to past and competitor operating results.
Non-GAAP Measure or Adjustment Definition Usefulness to management and investors
Stock-based compensation Consists of non-cash charges related to our employee equity incentive plans. We exclude stock-based compensation because management does not view these non-cash charges as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results.
Contingent consideration Adjustment reflects a non-cash reduction to the fair market value of the contingent consideration liability related to the MENU Acquisition. We exclude changes to the fair market value of our contingent consideration liability because management does not view these non-cash, non-recurring charges as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results.
Transaction costs Adjustment reflects non-recurring professional fees incurred in transaction due diligence and integration, including costs incurred in the acquisitions of Stuzo, TASK Group, and Delaget. We exclude professional fees incurred in corporate development because management does not view these non-recurring charges, which are inconsistent in size and are significantly impacted by the timing and valuation of our transactions, as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends.
Severance Adjustment reflects severance tied to non-recurring restructuring events included in cost of sales, sales and marketing expense, general and administrative expense, and research and development expense. We exclude these non-recurring adjustments because management does not view these costs as part of our core operating performance. These adjustments facilitate a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results.
Litigation expense Adjustment reflects non-recurring legal fees incurred in connection with certain litigation matters.
Loss on extinguishment of debt Adjustment reflects loss on extinguishment of debt related to the early repayment of the Credit Facility.
Discontinued operations Adjustment reflects income from discontinued operations related to the divestiture of our Government segment.
Other expense, net Adjustment reflects foreign currency transaction gains and losses and other non-recurring income and expenses recorded in other expense, net in the accompanying statements of operations.
Non-recurring income taxes Adjustment reflects a partial release of our deferred tax asset valuation allowance resulting from the Stuzo Acquisition. We exclude these non-cash and non-recurring adjustments for purposes of calculating non-GAAP diluted net income (loss) per share because management does not view these costs as part of our core operating performance. These adjustments facilitate a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends.
Non-cash interest Adjustment reflects non-cash amortization of issuance costs and discount related to the Company's long-term debt.
Acquired intangible assets amortization Adjustment reflects amortization expense of acquired developed technology included within cost of sales and amortization expense of acquired intangible assets.
The tables below provide reconciliations between net (loss) income and adjusted EBITDA, diluted net (loss) income per share and non-GAAP diluted net income (loss) per share, and subscription service gross margin percentage and non-GAAP subscription service gross margin percentage. Amounts presented in the reconciliations and other tables presented herein may not sum due to rounding.
(in thousands) Three Months Ended June 30, Six Months Ended June 30,
Reconciliation of Net (Loss) Income to Adjusted EBITDA 2025 2024 2025 2024
Net (loss) income $ (21,040) $ 54,190 $ (45,390) $ 35,902
Discontinued operations - (77,777) (197) (79,855)
Net loss from continuing operations (21,040) (23,587) (45,587) (43,953)
Provision for (benefit from) income taxes 944 612 2,225 (7,173)
Interest expense, net 1,408 1,630 3,042 3,338
Depreciation and amortization 12,415 8,834 24,297 16,127
Stock-based compensation 7,887 6,286 15,068 10,696
Contingent consideration - (600) - (600)
Transaction costs 561 1,573 1,716 4,978
Severance 638 294 710 1,728
Litigation expense 1,347 - 1,347 -
Loss on extinguishment of debt - - 5,791 -
Other expense, net 1,381 610 1,472 310
Adjusted EBITDA $ 5,541 $ (4,348) $ 10,081 $ (14,549)
(in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30,
Reconciliation between GAAP and Non-GAAP Diluted Net Income (Loss) per share 2025 2024 2025 2024
Diluted net (loss) income per share $ (0.52) $ 1.60 $ (1.13) $ 1.09
Discontinued operations - (2.29) - (2.42)
Diluted net loss per share from continuing operations (0.52) (0.69) (1.13) (1.33)
Non-recurring income taxes - 0.01 - (0.23)
Non-cash interest 0.01 0.02 0.03 0.03
Acquired intangible assets amortization 0.24 0.20 0.48 0.36
Stock-based compensation 0.19 0.18 0.37 0.32
Contingent consideration - (0.02) - (0.02)
Transaction costs 0.01 0.05 0.04 0.15
Severance 0.02 0.01 0.02 0.05
Litigation expense 0.03 - 0.03 -
Loss on extinguishment of debt - - 0.14 -
Other expense, net 0.03 0.02 0.04 0.01
Non-GAAP diluted net income (loss) per share $ 0.03 $ (0.23) $ 0.02 $ (0.66)
Diluted weighted average shares outstanding 40,520 34,015 40,348 32,935
(in thousands, except percentages) Three Months Ended June 30, Six Months Ended June 30,
Reconciliation between GAAP and Non-GAAP
Subscription Service Gross Margin Percentage 		2025 2024 2025 2024
Subscription Service Gross Margin Percentage 55.3 % 53.1 % 56.5 % 52.4 %
Subscription Service Gross Margin $ 39,759 $ 23,831 $ 79,269 $ 43,616
Depreciation and amortization 7,836 5,860 15,431 11,260
Stock-based compensation 172 94 299 126
Severance - - - 54
Non-GAAP Subscription Service Gross Margin $ 47,767 $ 29,785 $ 94,999 $ 55,056
Non-GAAP Subscription Service Gross Margin Percentage 66.4 % 66.4 % 67.7 % 66.1 %
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are cash and cash equivalents. As of June 30, 2025, we had cash and cash equivalents of $85.1 million. Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less, including money market funds.
Cash used in operating activities was $23.8 million for the six months ended June 30, 2025, compared to $37.4 million for the six months ended June 30, 2024. The decrease in cash used in operating activities was primarily driven by improved profitability from our core operations.
Cash used in investing activities was $7.7 million for the six months ended June 30, 2025 compared to $72.9 million for the six months ended June 30, 2024. Cash used in investing activities during the six months ended June 30, 2025 included $4.3 million of cash consideration paid in connection with the GoSkip Asset Acquisition and capital expenditures of $2.4 million for developed technology costs associated with our software platforms, partially offset by $0.2 million of cash consideration received in connection with the divestiture of RRC. The greater amount of cash used in investing activities during the six months ended June 30, 2024 was largely driven by the Stuzo Acquisition during that period, which was partially offset by $87.1 million of cash consideration received in connection with the divestiture of PGSC and $9.4 million of proceeds from net sales of short-term held-to-maturity investments.
Cash provided by financing activities was $11.4 million for the six months ended June 30, 2025, compared to $191.5 million for the six months ended June 30, 2024. Cash provided by financing activities during the six months ended June 30, 2025 primarily consisted of the net proceeds from the sale of the 2030 Notes of $111.1 million (net of issuance costs), partially offset by the repayment in full of $90 million principal amount outstanding under the Credit Facility plus accrued interest and prepayment premium. Cash provided by financing activities during the six months ended June 30, 2024 primarily consisted of a private placement of common stock of $194.5 million (net of issuance costs). We do not have any off-balance sheet arrangements or obligations.
We expect our available cash and cash equivalents will be sufficient to meet our operating needs for at least the next 12 months. Over the next 12 months our total contractual obligations are $72.1 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $43.3 million, interest payments of $6.4 million and principal payments of $20.0 million related to long-term debt, and facility lease obligations of $2.4 million. We expect to fund such commitments with cash provided by operating activities and our sources of liquidity.
Our non-current contractual obligations are $419.3 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $21.0 million, interest payments of $12.0 million and principal payments of $380.0 million related to long-term debt, and facility leases of $6.3 million. Refer to "Note 8 - Debt" of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report for additional information. We expect to fund such commitments with cash provided by operating activities, our sources of liquidity, and if necessary, equity, equity-linked, or debt financing arrangements.
Our actual cash needs will depend on many factors, including our rate of revenue growth, growth of our SaaS revenues, the timing and extent of spending to support our product development and acquisition integration efforts, the timing of introductions of new products and enhancements to existing products, market acceptance of our products, and the factors described above in "Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations", elsewhere in this Quarterly Report, in the 2024 Annual Report, and in our other filings with the SEC.
From time to time, we may seek to raise additional capital through equity, equity-linked, and debt financing arrangements. In addition, our board of directors and management regularly evaluate our business, strategy, and financial plans and prospects. As part of this evaluation, the board of directors and management periodically consider strategic alternatives to maximize value for our shareholders, including strategic transactions such as an acquisition, or a sale or spin-off of non-strategic company assets or businesses. We cannot provide assurance that any additional financing or strategic alternatives will be available to us on acceptable terms or at all.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our financial statements are based on the application of accounting principles generally accepted in the United States of America. GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied. Valuations based on estimates are reviewed for reasonableness and adequacy on a consistent basis. Significant items subject to these estimates and assumptions include revenue recognition, the recognition and measurement of assets acquired and liabilities assumed in business combinations and asset acquisitions at fair value, identifiable intangible assets and goodwill, valuation allowances for receivables, valuation of excess and obsolete inventories, and classification of discontinued operations. Actual results could differ from these estimates. Our estimates are subject to uncertainties, including those associated with market conditions, risks and trends. Refer to "Part II, Item 1A. Risk Factors" of this Quarterly Report for additional information. Our critical accounting policies have not changed materially from the discussion of those policies included under "Critical Accounting Policies and Estimates" in our 2024 Annual Report.
Par Technology Corporation published this content on August 08, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on August 08, 2025 at 20:08 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]