PAR Technology (PAR) has been beaten down lately with too much selling pressure. While the stock has lost 15.1% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.Here is How to Spot Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator that ...

Core Viewpoint - PAR Technology (PAR) has experienced a significant downtrend, with a 13.3% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to analysts' positive earnings outlook [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2] - PAR's current RSI reading is 24.58, indicating that the heavy selling pressure may be exhausting, which could lead to a price rebound [5] Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts regarding PAR's earnings estimates, with a 2.5% increase in the consensus EPS estimate over the last 30 days, suggesting potential price appreciation [6] - PAR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a near-term turnaround [7]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher [1] - The Zacks Momentum Style Score helps investors identify stocks with strong momentum, addressing the challenge of defining momentum [2] Group 2: PAR Technology Analysis - PAR Technology currently holds a Momentum Style Score of A and a Zacks Rank of 2 (Buy) [3][4] - Stocks rated Zacks Rank 1 (Strong Buy) and 2 (Buy) with Style Scores of A or B tend to outperform the market over the following month [4] Group 3: Performance Metrics - PAR shares have increased by 7.04% over the past week, outperforming the Zacks Computer - Integrated Systems industry, which rose by 5.71% [7] - Over the past quarter, PAR shares have gained 43.38%, and over the last year, they have increased by 102.7%, while the S&P 500 has only moved 7.42% and 32.55%, respectively [8] Group 4: Trading Volume and Earnings Outlook - PAR's average 20-day trading volume is 567,568 shares, indicating a bullish sign with rising stock prices [9] - In the past two months, one earnings estimate for PAR has moved higher, increasing the consensus estimate from -$0.83 to -$0.81 [11]

Company Overview - As of September 30, 2024, PAR Technology Corporation reported 36,305,087 shares of common stock outstanding[2]. - The company is classified as a Large Accelerated Filer, indicating a significant market presence and regulatory compliance[2]. Financial Performance - Total revenues for the three months ended September 30, 2024, increased to $96,754,000, up 40.8% from $68,701,000 in the same period of 2023[12]. - Subscription service revenue reached $59,909,000, a 91.1% increase compared to $31,363,000 in the prior year[12]. - Gross margin improved to $43,031,000 for the three months ended September 30, 2024, compared to $25,134,000 in the same period of 2023, reflecting a gross margin percentage increase[12]. - Operating loss for the three months ended September 30, 2024, was $15,194,000, slightly improved from a loss of $17,047,000 in the same period of 2023[12]. - Net loss from continuing operations for the three months ended September 30, 2024, was $20,664,000, compared to a loss of $19,234,000 in the prior year[12]. - Total revenues for the nine months ended September 30, 2024, were $244.977 million, a 17.5% increase from $206.814 million for the same period in 2023[103]. - The company reported a net income of $16,070 for the nine months ended September 30, 2024, compared to a net loss of $51,123 for the same period in 2023[18]. Cash and Assets - Cash and cash equivalents increased significantly to $105,804,000 as of September 30, 2024, from $37,183,000 at December 31, 2023[10]. - Total assets grew to $1,299,274,000 as of September 30, 2024, up from $802,606,000 at December 31, 2023[10]. - Total liabilities increased to $606,567,000 as of September 30, 2024, from $469,541,000 at December 31, 2023, reflecting increased operational scale[10]. - Total Shareholders' Equity increased to $692,707,000 as of September 30, 2024, up from $588,321,000 at June 30, 2024, reflecting a growth of approximately 17.7%[15]. Acquisitions and Integration - The company is focused on integrating acquisitions, such as Stuzo Holdings, LLC and TASK Group Holdings Limited, to enhance operational capabilities[7]. - The TASK Group Acquisition was completed on July 18, 2024, with a total purchase consideration of $245.5 million, including $131.5 million in cash and 2,163,393 shares of common stock[44]. - The Stuzo Acquisition on March 8, 2024, involved a total purchase consideration of approximately $170.5 million in cash and $19.2 million in common stock[53]. Revenue Streams - Subscription service revenues reached $143.2 million for the nine months ended September 30, 2024, up from $89.7 million in the same period of 2023[43]. - Hardware revenues decreased to $61.0 million, down $18.0 million or 22.8% compared to $79.0 million for the same period in 2023, primarily due to declines in terminals, peripherals, and kitchen display systems[129]. - Professional service revenues increased to $40.8 million, up $2.7 million or 7.1% compared to $38.1 million for the nine months ended September 30, 2023[131]. Operational Challenges - PAR anticipates challenges related to supply chain management, including securing alternative suppliers and managing inventory levels[7]. - Risks associated with international operations and geopolitical events are acknowledged as potential factors affecting business outcomes[7]. Employee and Internal Controls - PAR is committed to maintaining effective internal controls over financial reporting to ensure accuracy and compliance[8]. - The company is focused on attracting and retaining qualified employees to support business expansion and customer service needs[7]. Future Outlook - Forward-looking statements indicate expectations for future operations, including product offerings and market strategies, but actual results may differ due to various risks[5][6]. - The company expects total contractual obligations of $55.4 million over the next 12 months, which includes $36.3 million for normal operations and $17.1 million for interest payments on long-term debt[185]. - The company anticipates that available cash and cash equivalents will be sufficient to meet operating needs for at least the next 12 months[185].

Financial Data and Key Metrics Changes - PAR Technology reported total revenues of $96.8 million for Q3 2024, a 41% increase compared to the same period in 2023, driven by a 91% growth in subscription service revenue [27][28] - The company achieved a positive adjusted EBITDA of $2.4 million for the quarter, marking a significant improvement from a loss of $6.6 million in Q3 2023 [28][25] - Net loss from continuing operations was $20.7 million, or $0.58 loss per share, compared to a net loss of $19.2 million, or $0.70 loss per share in Q3 2023 [27][28] Business Line Data and Key Metrics Changes - Subscription services revenue reached $59.9 million, an increase of 91% year-over-year, representing 62% of total PAR revenue [29][30] - Annual recurring revenue (ARR) exited the quarter at $248.1 million, a 93% increase from the previous year, with Engagement Cloud up 149% and Operator Cloud up 41% [30][29] - Hardware revenue decreased by 12% year-over-year to $22.7 million, although it grew 13% sequentially compared to Q2 2024 [30][22] Market Data and Key Metrics Changes - Engagement Cloud ARR grew nearly 150% year-over-year, totaling $155 million, driven by significant customer wins and product adoption [15][16] - PAR Retail, now operating in over 25,000 convenience stores, is gaining momentum with a large Tier 1 customer win and an extended contract with a major oil customer [19][20] - The company noted strong demand in the convenience store sector, which is increasingly seen as a competitor to traditional restaurants [73][74] Company Strategy and Development Direction - PAR Technology is focused on delivering a unified solution that enhances user experience and customer retention, with a strategic emphasis on M&A to unlock new verticals [7][9] - The company aims to continue investing in growth while maintaining profitability, balancing the need for both as it navigates a strong pipeline of opportunities [62][63] - Management expressed confidence in the scalability of its products and the potential for continued organic growth, particularly in the Operator Cloud segment [10][78] Management's Comments on Operating Environment and Future Outlook - Management highlighted the positive operating environment and strong demand for its products, with no significant changes in the top of the funnel pipeline [77] - The company expects to continue its trajectory of growth, with a focus on maintaining a balance between growth and profitability [63][62] - Management is optimistic about the potential for further large deal signings and the impact of recent acquisitions on future growth [50][71] Other Important Information - The company reported a gross profit of $43 million, a 71% increase from the prior year, driven primarily by subscription services [33] - Operating expenses increased by 28% year-over-year, primarily due to M&A-related costs, but organic operating expenses showed modest growth [39] - Cash and cash equivalents stood at $105.8 million as of September 30, 2024, with significant cash provided by financing activities related to recent acquisitions [40][42] Q&A Session Summary Question: Update on large deal activity and potential for organic ARR growth - Management indicated a good chance of closing more large deals by year-end, which could accelerate organic ARR growth, although the timing of rollouts remains uncertain [49][50] Question: Insights on M&A progress and cross-selling opportunities - Positive experiences with the Stuzo acquisition were noted, with strong receptivity in the market and expectations for significant product delivery [51][52] Question: Observations from the rollout of major clients like Wendy's and Burger King - The rapid rollout of Punchh at Wendy's provided confidence in handling large enterprise clients, while the Burger King rollout is still in early stages [59][60] Question: Expectations for reaching positive free cash flow - Management expects a lag of roughly one quarter to achieve positive free cash flow, with current operating cash flow showing improvement [74] Question: Pipeline growth in convenience stores and resource allocation - The company is increasing sales resources in the convenience store segment, recognizing it as a significant growth opportunity [72][73] Question: Future M&A plans and market opportunities - Focus remains on smaller bolt-on acquisitions to enhance product functionality, with a keen eye on the current market landscape for potential opportunities [98][97]

Group 1 - PAR Technology reported a quarterly loss of $0.09 per share, better than the Zacks Consensus Estimate of a loss of $0.16, and improved from a loss of $0.21 per share a year ago, representing an earnings surprise of 43.75% [1] - The company posted revenues of $96.75 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 10.54%, but down from $107.13 million in the same quarter last year [2] - PAR Technology shares have increased approximately 52.8% year-to-date, outperforming the S&P 500's gain of 25.2% [3] Group 2 - The earnings outlook for PAR Technology is mixed, with the current consensus EPS estimate for the upcoming quarter at -$0.08 on revenues of $96.35 million, and -$0.83 on revenues of $349.8 million for the current fiscal year [7] - The Zacks Industry Rank indicates that the Computer - Integrated Systems sector is in the top 33% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

| --- | --- | --- | --- | --- | |------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Q3 '24 Earnings Presentation | | | | | | November 8, 2024 | | | | | | NYSE: PAR | | | | | 1 partech.com Forward-Looking Statements. This presentation contains forward-looking statements made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amend ...

Revenue Growth - Annual Recurring Revenue (ARR) increased to $248.1 million, representing a total growth of 93.3% year-over-year, with organic growth of 24.8% from $128.3 million in Q3 '23[1] - Quarterly subscription service revenues rose by 91.0% compared to Q3 '23[1] - Revenue for Q3 2024 was $96.8 million, a 40.8% increase from $68.7 million in Q3 2023[3] - Total revenues for the three months ended September 30, 2024, were $96,754,000, a 40.7% increase from $68,701,000 for the same period in 2023[19] - Subscription service revenue increased to $59,909,000, up 91.1% from $31,363,000 year-over-year[19] Profitability and Loss - The company reported its first quarter of positive adjusted EBITDA at $2.4 million, improving by $9.0 million from a loss of $6.6 million in Q3 '23[3] - The company reported a net loss from continuing operations of $(20.7) million in Q3 2024, compared to $(19.2) million in Q3 2023[3] - Operating loss for the three months ended September 30, 2024, was $(15,194,000), slightly improved from $(17,047,000) in the prior year[19] - Net loss from continuing operations for the three months ended September 30, 2024, was $(20,664,000), compared to $(19,234,000) for the same period in 2023[19] - The company reported a net income from discontinued operations of $832,000 for the three months ended September 30, 2024, down from $3,718,000 in the prior year[19] Margins and Expenses - Subscription service gross margin percentage improved to 55.3%, up from 50.6% in Q3 '23[3] - Gross margin for the three months ended September 30, 2024, was $43,031,000, compared to $25,134,000 for the same period in 2023, reflecting a significant improvement[19] - Total operating expenses for the three months ended September 30, 2024, were $58,225,000, an increase from $42,181,000 in the same period of 2023[19] - Research and development expenses increased to $17,821,000 for the three months ended September 30, 2024, compared to $14,660,000 in the prior year, indicating a focus on innovation[19] - Non-GAAP subscription service gross margin percentage is adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance costs[22] Assets and Acquisitions - PAR Technology's total assets increased to $1,299.3 million as of September 30, 2024, up from $802.6 million at the end of 2023[16] - The company completed the acquisition of TASK Group Holdings Limited, enhancing its global foodservice transaction platform capabilities[1] Shareholder Metrics - The company’s diluted net loss per share from continuing operations was $(0.58) for the three months ended September 30, 2024, compared to $(0.70) in the same period of 2023[19] - Non-GAAP diluted net loss per share for 2024 was $(0.09), compared to $(0.35) in 2023[27] - Diluted net income (loss) per share for the three months ended September 30, 2024, was $(0.56), consistent with $(0.56) in the same period of 2023[27] Other Financial Metrics - Adjusted EBITDA for the nine months ended September 30, 2024, was $(12,126,000), an improvement from $(31,025,000) in the same period of 2023[26] - Total interest expense for the three months ended September 30, 2024, was $3,417,000, up from $1,750,000 in the same period of 2023[26] - Stock-based compensation for the nine months ended September 30, 2024, was $16,583,000, compared to $10,544,000 in the same period of 2023[26] - Depreciation and amortization for the three months ended September 30, 2024, was $10,575,000, compared to $6,549,000 in the same period of 2023[26] - Transaction costs for the nine months ended September 30, 2024, totaled $6,103,000, with no transaction costs reported in the same period of 2023[26]

Financial Data and Key Metrics Changes - Total revenues for Q2 2024 were $78.2 million, a 12% increase compared to Q2 2023, driven by a 48% growth in subscription service revenue, partially offset by a 24% decrease in hardware revenue [19][20] - Net loss from continuing operations was $23.6 million, or $0.69 loss per share, compared to a net loss of $21.8 million, or $0.87 loss per share in the same period last year [20] - Adjusted EBITDA for Q2 2024 was a loss of $4.3 million, an improvement from a loss of $12.3 million in Q2 2023, driven by increased margin contribution from subscription services [20][14] Business Line Data and Key Metrics Changes - Subscription services revenue reached $44.9 million, a 48% increase from $30.4 million in the prior year, with organic subscription service revenue growing 15% excluding PAR Retail [21] - Annual recurring revenue (ARR) at the end of Q2 stood at $192 million, a 57% increase year-over-year, with Engagement Cloud up 77% and Operator Cloud up 37% [6][21] - Hardware revenue was $20.1 million, a 24% decrease from $26.4 million in the prior year, but showed a 10% sequential increase from Q1 2024 [21][19] Market Data and Key Metrics Changes - The company reported a gross processing volume run rate of $2.5 billion for PAR Payments, indicating strong pipeline execution with several new customer signings [7] - Same-store sales within the Brink base increased by an average of 5.5% year-over-year, suggesting that customers are gaining market share [30] Company Strategy and Development Direction - The company is transitioning to a pure-play foodservice technology business after divesting its government business, which is expected to enhance focus and transparency for investors [4][19] - The integration of Stuzo, now branded as PAR Retail, is seen as a smooth process, with positive customer reception and a strong pipeline for future growth [32] - The company aims to leverage its multi-product model to drive ROI for customers, especially in uncertain macroeconomic conditions [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted EBITDA positivity in Q3 2024, despite the challenges faced in the previous quarters [14][28] - The company is optimistic about the growth trajectory, expecting continued momentum from the Burger King and Wendy's rollouts, which are anticipated to contribute positively to future revenues [7][11] - Management highlighted the importance of customer success as a key driver for the company's financial outcomes, emphasizing the need for best-in-class products [17][30] Other Important Information - The company reported cash and cash equivalents of $114.9 million and short-term investments of $27.5 million as of June 30, 2024 [27] - The company is focused on maintaining tight control over operating expenses while driving substantial margin improvements [26][15] Q&A Session Summary Question: Integration of Stuzo and TASK - Management reported that the integration of Stuzo has gone exceptionally well, with positive customer feedback and a strong team integration [32][33] Question: Financial Impact of Acquisitions - Management remains confident in the expected contributions from Stuzo and TASK, with no significant changes to the forecasted ARR and adjusted EBITDA [34] Question: Stuzo's ARR Performance - Management clarified that the slight sequential decline in Stuzo's ARR was due to accounting adjustments rather than operational issues, and they expect growth moving forward [37][38] Question: Cross-Selling Opportunities with TASK - Management outlined plans for leveraging TASK's capabilities to enhance cross-selling opportunities in the U.S. and international markets [40][42] Question: Competitive Landscape Post-Acquisition - The acquisition of TASK is expected to enhance the company's competitiveness in international markets, addressing the needs of U.S. brands expanding globally [45][46] Question: Interest Expense and Share Count - Management provided insights on the interest expense related to the TASK acquisition and the expected adjustments to the balance sheet moving forward [48][50] Question: Organic ARR Growth Outlook - Management expressed confidence in maintaining organic ARR growth above 20%, with potential for acceleration depending on the success of ongoing rollouts [52][54]

Company Overview - As of August 6, 2024, PAR Technology Corporation has 36,283,935 shares of common stock outstanding[2]. - The company is classified as a Large Accelerated Filer, indicating a significant market presence and regulatory compliance[2]. Financial Performance - Total revenues for the three months ended June 30, 2024, were $78,150,000, an increase of 12.3% compared to $69,529,000 for the same period in 2023[12]. - Subscription service revenue increased by 47.8% to $44,872,000 for the three months ended June 30, 2024, compared to $30,372,000 in the prior year[12]. - Gross margin for the six months ended June 30, 2024, was $58,086,000, representing a 45.5% increase from $40,098,000 for the same period in 2023[12]. - The company reported a net income of $54,190,000 for the three months ended June 30, 2024, compared to a net loss of $19,702,000 for the same period in 2023[12]. - Total revenues for the six months ended June 30, 2024, were $148.2 million, a 7.3% increase from $138.1 million in the same period of 2023[91]. - The company reported a net income from discontinued operations of $79.9 million for the six months ended June 30, 2024, compared to $5.3 million in the same period last year, indicating a significant increase[91]. Cash and Assets - Cash and cash equivalents increased significantly to $114,928,000 as of June 30, 2024, from $37,183,000 at December 31, 2023[10]. - Total assets grew to $1,056,684,000 as of June 30, 2024, up from $802,606,000 at the end of 2023[10]. - The company’s goodwill increased to $623,875,000 as of June 30, 2024, compared to $488,918,000 at December 31, 2023[10]. - Total cash held on behalf of customers increased to $12.8 million as of June 30, 2024, from $10.2 million on December 31, 2023[24]. Acquisitions and Strategic Initiatives - The company is actively pursuing acquisitions, including Stuzo Holdings, LLC and TASK Group Holdings Limited, to expand its service capabilities[7]. - The Stuzo Acquisition was completed for a total consideration of approximately $170.5 million in cash and $19.2 million in stock, aimed at expanding the Company's presence in the convenience store market[38]. - The acquisition of TASK Group Holdings Limited was completed for a total consideration of $245.5 million, enhancing the company's service offerings[81]. Operational Challenges - PAR is facing risks related to macroeconomic trends, including inflation and geopolitical events, which could impact its financial performance[7]. - The company is navigating challenges related to supply chain management and manufacturing disruptions, which could affect product availability[7]. Internal Controls and Compliance - The company emphasizes the importance of maintaining effective internal controls over financial reporting to ensure accuracy[8]. - The report includes certifications from the Principal Financial Officer and Principal Executive Officer as per the Securities Exchange Act of 1934[31.2][32.1][32.2]. Future Outlook - PAR's management is focused on enhancing product offerings and market strategies to improve future operations and financial results[6]. - The company plans to continue focusing on market expansion and new product development to drive future growth[131]. Revenue Breakdown - Revenue from hardware for the six months ended June 30, 2024, was $38.3 million, compared to $53.2 million for the same period in 2023, indicating a decline of 28.0%[37]. - Subscription service revenues increased to $83.3 million, up $24.9 million or 42.7% from $58.3 million in the prior year, driven by Engagement Cloud services and the Stuzo Acquisition[98]. Expenses and Liabilities - General and Administrative (G&A) expenses for the six months ended June 30, 2024, were $50.5 million, an increase of $15.1 million or 42.8% compared to $35.4 million in the prior year[110]. - The company incurred capital expenditures of $407 for the six months ended June 30, 2024, compared to $3,023 in the same period of 2023[18]. Stock and Financing - The company raised approximately $200 million through a private placement of common stock at a 10% discount, resulting in net proceeds of approximately $194.4 million after issuance costs[62]. - The company secured a $90.0 million Credit Facility to finance the TASK acquisition, maturing by July 5, 2029[80].