Restaurant technology provider PAR Technology (NYSE:PAR) announced better-than-expected revenue in Q2 CY2025, with sales up 43.8% year on year to $112.4 million. Its non-GAAP profit of $0.52 per share decreased from $1.59 in the same quarter last year.
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PAR Technology (PAR) Q2 CY2025 Highlights:
- Revenue: $112.4 million vs analyst estimates of $111 million (43.8% year-on-year growth, 1.3% beat)
- Adjusted EBITDA: $5.54 million vs analyst estimates of $5.45 million (4.9% margin, 1.6% beat)
- Operating Margin: -15.4%, up from -26.5% in the same quarter last year
- Annual Recurring Revenue: $286.7 million at quarter end, up 49.2% year on year
- Market Capitalization: $1.90 billion
StockStory’s Take
PAR Technology’s second quarter results were met with a negative market reaction, as execution challenges and slower-than-anticipated rollouts weighed on sentiment. Despite delivering revenue above Wall Street expectations, management acknowledged that delays in point-of-sale (POS) and payments implementations, particularly with large customers, hampered the pace of growth. CEO Savneet Singh described the quarter as one where “the POS business has progressed slower than we initially forecasted for 2025,” emphasizing that signed deals remain intact but are taking longer to convert into revenue.
Looking ahead, management is focused on accelerating the rollout of contracted deals and pursuing large-scale, multi-product wins within its Operator Cloud and Engagement Cloud segments. Singh highlighted the significance of the company’s late-stage pipeline, noting, “Securing any one of these would significantly accelerate our growth trajectory.” However, leadership also signaled caution, stating that macroeconomic pressures and operational resource constraints could continue to impact the timing of revenue recognition. The company remains committed to its long-term strategy but expects growth targets may be harder to achieve in the near term.
Key Insights from Management’s Remarks
Management attributed recent performance to multi-product deal momentum, delayed rollouts, and increased investment in core platforms, while emphasizing the importance of cross-selling and operational leverage.
- Multi-product deal traction: PAR signed a record number of new multi-product deals, with 70% of Punchh (Engagement Cloud) contracts now including at least one additional product. Management believes this shift meaningfully increases average revenue per customer and drives stronger long-term relationships.
- Delayed POS and payment rollouts: The company experienced slower-than-expected implementation timelines for large point-of-sale and payment deals, which management attributed to both macroeconomic uncertainty and the complexity of multiproduct integration. These delays impacted short-term revenue recognition but did not result in lost business.
- Operator Cloud pipeline visibility: PAR restarted the large-scale Burger King rollout and initiated new deployments at Popeyes Louisiana Kitchen, providing committed rollout visibility through the end of the year. The company has over $20 million in annual recurring revenue already contracted but not yet fully rolled out.
- TASK platform investment: Management intentionally paused most TASK POS rollouts to focus resources on customizing the product for global Tier 1 prospects. This strategic pivot is expected to defer near-term revenue but position PAR for larger international wins in 2026.
- Hardware revenue volatility: Hardware revenues were higher than planned due to customers accelerating purchases ahead of potential tariffs. Management cautioned that ongoing tariff uncertainty could increase volatility in hardware sales and margins going forward.
Drivers of Future Performance
Management’s outlook is anchored by accelerating rollouts, multi-product deal execution, and ongoing investment in platform capabilities, while acknowledging risks from macroeconomic and operational headwinds.
- Execution of contracted backlog: Leadership expects that rolling out the $20 million in already-contracted POS and back-office deals will be the primary driver of near-term revenue growth. However, the pace will depend on customers’ willingness to proceed amid macroeconomic uncertainty.
- Pursuit of global Tier 1 deals: The company is prioritizing resource allocation to secure two large-scale, multi-country POS deals, which management described as potentially “many multiples of our largest customer now.” The outcome and timing of these deals are expected to significantly influence growth in 2025 and 2026.
- Margin and product mix dynamics: Management guided for subscription service gross margins in the 66%-67% range, noting that increased investment in TASK and product development, as well as the mix shift toward multi-product bundles, could pressure margins in the short term. Hardware margins are expected to remain volatile due to tariff and supply chain risks.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) the pace at which PAR converts its contracted backlog, especially with major QSR brands like Burger King and Popeyes, (2) progress on winning and implementing large-scale global Tier 1 POS deals, and (3) the impact of multi-product bundling on average revenue per customer and cross-sell rates. Volatility in hardware sales due to tariff policy changes and the ability to scale platform investments efficiently will also be key indicators of future performance.
PAR Technology currently trades at $47.58, down from $57.95 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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