Core Insights - The information technology sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1] - The Relative Strength Index (RSI) is a key indicator for identifying oversold conditions, with values below 30 indicating potential buying opportunities [1] Company Summaries - **Freshworks Inc (NASDAQ:FRSH)**: - Recently appointed Enrique Ortegon as senior vice president and general manager of Americas Field Sales, expected to drive growth [8] - Stock has decreased approximately 15% over the past month, with a 52-week low of $10.81 [8] - Current RSI value is 29.7, with shares closing at $11.18, reflecting a 1.2% decline [8] - **PAR Technology Corp (NYSE:PAR)**: - Analyst Mark Palmer maintained a Buy rating but reduced the price target from $92 to $77 [8] - Stock has fallen around 21% in the last month, reaching a 52-week low of $37.29 [8] - Current RSI value is 23.4, with shares closing at $37.96, showing a slight increase of 0.2% [8] - **Rapid7 Inc (NASDAQ:RPD)**: - Analyst Erin Wilson maintained an Equal-Weight rating and lowered the price target from $28 to $22 [8] - Stock has decreased about 14% over the past month, with a 52-week low of $17.76 [8] - Current RSI value is 26.3, with shares closing at $17.77, reflecting a 4.5% decline [8]

Core Insights - The information technology sector has several oversold stocks, presenting potential buying opportunities for undervalued companies [1] - The Relative Strength Index (RSI) is a key indicator for identifying oversold conditions, with values below 30 indicating potential buying opportunities [1] Company Summaries - **Freshworks Inc (NASDAQ:FRSH)**: - Recently appointed Enrique Ortegon as senior vice president and general manager of Americas Field Sales, expected to drive growth [8] - Stock has decreased approximately 15% over the past month, with a 52-week low of $10.81 [8] - Current RSI value is 29.7, with shares closing at $11.18, reflecting a 1.2% decline [8] - **PAR Technology Corp (NYSE:PAR)**: - Analyst Mark Palmer maintained a Buy rating but reduced the price target from $92 to $77 [8] - Stock has fallen around 21% in the last month, reaching a 52-week low of $37.29 [8] - Current RSI value is 23.4, with shares closing at $37.96, showing a slight increase of 0.2% [8] - **Rapid7 Inc (NASDAQ:RPD)**: - Morgan Stanley analyst Erin Wilson maintained an Equal-Weight rating and lowered the price target from $28 to $22 [8] - Stock has decreased about 14% over the past month, with a 52-week low of $17.76 [8] - Current RSI value is 26.3, with shares closing at $17.77, reflecting a 4.5% decline [8]

Core Insights - The analyst previously rated PAR as a Hold when the stock was approximately $66, indicating that while the fundamentals were strong, the stock price did not provide sufficient upside potential for investors if performance faltered [1]. Group 1 - The analyst emphasizes a focus on technology, infrastructure, and internet services, particularly favoring companies that exhibit strong fundamentals alongside significant growth potential [1]. - The article aims to foster thoughtful discussions around investment ideas and long-term returns, rather than short-term market fluctuations [1].

Company Performance - Shares of PAR Technology (NYSE: PAR) have declined over 40% year-to-date, indicating that the company's performance has not met the high expectations set by investors [1]. Analyst Background - The analysis is conducted by an individual investor with over 7 years of personal investment experience, focusing on undercovered companies across sectors such as technology, software, electronics, and energy transition [1]. Investment Strategy - The investor aims to identify asymmetric investment opportunities with the potential for market-beating returns, particularly in small to mid-cap companies that are less researched by others [1].

Company Performance - Shares of PAR Technology (NYSE: PAR) have declined over 40% year-to-date, indicating that the company's performance has not met the high expectations set by investors [1]. Analyst Background - The analysis is conducted by an individual investor with over 7 years of personal investment experience, focusing on undercovered companies across sectors such as technology, software, electronics, and energy transition [1]. Investment Strategy - The investor aims to identify asymmetric investment opportunities with the goal of achieving market-beating returns, particularly in small to mid-cap companies that are less researched by others [1].

Core Insights - PAR Technology Corporation has launched PAR Games™, an interactive loyalty experience aimed at enhancing guest engagement through personalized brand interactions triggered by everyday behaviors [1] - The new loyalty program seeks to transform traditional passive loyalty into real-time emotional engagement, helping marketers increase customer visits and gather zero-party data while minimizing reliance on discounts [1] Company Overview - PAR Technology Corporation is recognized as a leading provider of foodservice technology [1] - The introduction of PAR Games™ reflects the company's commitment to innovating loyalty programs in the foodservice industry [1]

Core Insights - PAR has undergone a significant transformation over the past decade, evolving from a hardware and services provider to a more software-oriented business model [1] Company Background - For approximately 40 years, PAR primarily operated as a hardware and services provider, notably inventing the point-of-sale terminal and experiencing success in the 1980s, followed by a challenging 25-year period focused on selling hardware and services to restaurants [2] - The business model was cyclical, heavily dependent on the purchasing cycles of restaurants, with PAR's logo visible on devices but lacking in software sales [2] Strategic Developments - In 2014, PAR made a strategic acquisition of Brink, a cloud-based point-of-sale software, marking its entry into the software space, which initially served only a few hundred stores [3] - The leadership change in 2018 brought new direction and focus to the company's growth strategy [3]

NEW HARTFORD, N.Y.--(BUSINESS WIRE)--PAR Technology Corporation (NYSE: PAR), a leading foodservice technology provider, today announced the launch of PAR® AI, the new intelligence layer embedded directly into the PAR product suite. PAR AI introduces Coach AIâ"¢, a purpose-built intelligent assistant designed for critical roles in restaurant operations. Intelligence That's Built In, Not Bolted On Unlike AI add-ons that create complexity and enable silos, PAR AI-powered features are built into the. ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited Q2 2025 financials show strong revenue growth, improved net loss, and slight asset increase from acquisitions [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheets show total assets at $1.39 billion, driven by goodwill, offset by lower cash, with rising long-term debt | Balance Sheet Items (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $85,122 | $108,117 | | Accounts receivable – net | $72,332 | $59,726 | | Goodwill | $906,361 | $887,459 | | Total Assets | $1,391,740 | $1,380,727 | | **Liabilities & Equity** | | | | Total current liabilities | $128,938 | $111,837 | | Long-term debt | $372,848 | $368,355 | | Total liabilities | $532,598 | $509,017 | | Total shareholders' equity | $859,142 | $871,710 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 operations show 43.8% revenue growth, driven by subscriptions, improving net loss to $21.0 million | Income Statement (In thousands, except EPS) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total revenues, net** | **$112,404** | **$78,150** | | Subscription service revenue | $71,903 | $44,872 | | Hardware revenue | $26,864 | $20,116 | | **Gross margin** | **$50,992** | **$32,028** | | Operating loss | ($17,307) | ($20,735) | | **Net loss from continuing operations** | **($21,040)** | **($23,587)** | | Net (loss) income per share (basic and diluted) | ($0.52) | ($0.69) | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Six months ended June 30, 2025, show improved operating cash usage, $7.7 million investing, and $11.4 million financing | Cash Flow Summary (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($23,798) | ($37,422) | | Net cash used in investing activities | ($7,693) | ($72,914) | | Net cash provided by financing activities | $11,441 | $191,503 | | Net (decrease) increase in cash | ($18,753) | $81,035 | [Notes to Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the single Restaurant/Retail segment, recent acquisitions, debt restructuring, and key customer relationships - The company operates in a single segment, Restaurant/Retail, providing omnichannel cloud-based software and hardware solutions[31](index=31&type=chunk) - Completed the GoSkip Asset Acquisition for approximately **$4.8 million in cash** to expand its PAR Retail product offerings[45](index=45&type=chunk) - Acquired Delaget for a total consideration of **$125.1 million**, consisting of **$16.9 million in cash** and **$108.2 million in equity**, to complement its Operator Cloud solutions[51](index=51&type=chunk)[52](index=52&type=chunk) - In January 2025, the company issued **$115.0 million of 1.00% Convertible Senior Notes due 2030** and used the proceeds to repay its **$90.0 million credit facility**, resulting in a **$5.8 million loss on debt extinguishment**[81](index=81&type=chunk)[82](index=82&type=chunk) | Customer | Q2 2025 Revenue % | YTD 2025 Revenue % | | :--- | :--- | :--- | | McDonald's Corporation | 18% | 18% | | Yum! Brands, Inc. | 9% | 9% | | All Others | 73% | 73% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q2 2025 revenue growth, improved gross margin, narrowed operating loss, and sufficient liquidity [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q2 2025 results show 43.8% revenue growth, led by subscription services, improved gross margin, and a narrowed operating loss | Revenue Breakdown (In thousands) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Subscription service | $71,903 | $44,872 | 60.2% | | Hardware | $26,864 | $20,116 | 33.5% | | Professional service | $13,637 | $13,162 | 3.6% | | **Total revenues, net** | **$112,404** | **$78,150** | **43.8%** | - The increase in subscription revenue was driven by **$11.7 million** from the Plexure and GoSkip acquisitions (Engagement Cloud) and **$5.8 million** from the TASK and Delaget acquisitions (Operator Cloud), supplemented by organic growth in active sites[110](index=110&type=chunk) | Gross Margin % | Q2 2025 | Q2 2024 | Basis Point Change | | :--- | :--- | :--- | :--- | | Subscription service | 55.3% | 53.1% | +220 bps | | Hardware | 27.3% | 22.8% | +450 bps | | Professional service | 28.7% | 27.5% | +120 bps | | **Total gross margin** | **45.4%** | **41.0%** | **+440 bps** | [Key Performance Indicators and Non-GAAP Financial Measures](index=46&type=section&id=Key%20Performance%20Indicators%20and%20Non-GAAP%20Financial%20Measures) KPIs show **ARR up 49.2%** to $286.7 million, active sites at 176,500, and Adjusted EBITDA improving to $5.5 million | Annual Recurring Revenue (ARR) (In thousands) | As of June 30, 2025 | As of June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Engagement Cloud | $167,465 | $107,933 | 55.2% | | Total Operator Cloud | $119,194 | $84,235 | 41.5% | | **Total ARR** | **$286,659** | **$192,168** | **49.2%** | | Active Sites (in thousands) | As of June 30, 2025 | As of June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Engagement Cloud | 119.1 | 94.6 | 25.9% | | Total Operator Cloud | 57.4 | 27.7 | 107.2% | | Reconciliation to Adjusted EBITDA (In thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net (loss) income | ($21,040) | $54,190 | | Adjustments (Discontinued ops, D&A, etc.) | $26,581 | ($58,538) | | **Adjusted EBITDA** | **$5,541** | **($4,348)** | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $85.1 million in cash, with $23.8 million cash used in operations, and expects sufficient liquidity for 12 months - As of June 30, 2025, the company had cash and cash equivalents of **$85.1 million**[169](index=169&type=chunk) - Cash used in operating activities for the first six months of 2025 was **$23.8 million**, an improvement from **$37.4 million** in the prior year period, driven by improved profitability[170](index=170&type=chunk) - The company expects its available cash to be sufficient to meet its operating needs for at least the next 12 months, which includes funding **$72.1 million** in total contractual obligations[173](index=173&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces immaterial foreign currency and interest rate risks, with fixed-rate debt mitigating interest rate exposure - The company's primary foreign currency exposures relate to non-dollar sales and expenses in Canada, Europe, Asia, and Australia[178](index=178&type=chunk) - Interest rate risk is considered low as the company's Senior Notes (**$20.0 million 2026 Notes**, **$265.0 million 2027 Notes**, and **$115.0 million 2030 Notes**) all have fixed interest rates[179](index=179&type=chunk)[180](index=180&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, disclosure controls and procedures were effective, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[181](index=181&type=chunk) - No material changes to the internal control over financial reporting were identified during the quarter ended June 30, 2025[182](index=182&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any pending litigation expected to materially affect its financial condition or operations - The company does not believe it has any pending litigation that would have a material adverse effect on its financial condition or operations[184](index=184&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K have occurred - No material changes to the Risk Factors described in the 2024 Annual Report have occurred[185](index=185&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company withheld 435 shares at $65.56 per share to cover tax obligations on vested restricted stock units - In June 2025, **435 shares** were withheld at an average price of **$65.56** to satisfy tax obligations on vested restricted stock units[186](index=186&type=chunk)[188](index=188&type=chunk) [Item 5. Other Information](index=55&type=section&id=Item%205.%20Other%20Information) Bylaws were amended for director nominations, and a mandatory 'Sell-to-Cover' policy was adopted for RSU tax obligations - On June 2, 2025, shareholders approved amendments to the company's bylaws to enhance procedural and disclosure requirements for director nominations, including universal proxy rules[189](index=189&type=chunk) - On June 3, 2025, the board adopted a mandatory 'Sell-to-Cover' policy requiring the automatic sale of shares to satisfy tax obligations upon RSU vesting for all equity plan participants, including Section 16 Officers[194](index=194&type=chunk)[195](index=195&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including amended bylaws and officer certifications - Lists exhibits filed with the report, such as the Restated Certificate of Incorporation, Amended and Restated Bylaws, and officer certifications[197](index=197&type=chunk)

Financial Data and Key Metrics Changes - The company reported revenues of $112.4 million for Q2 2025, an increase of 44% year over year [6][26] - Adjusted EBITDA was $5.5 million, which includes $450,000 of accounting charges for non-period deferred contract costs, leading to an adjusted EBITDA of $6 million when backed out [6][27] - Subscription services revenue increased by 60% to $72 million, representing 64% of total revenue [7][27] - The net loss from continuing operations was $21 million, or $0.52 loss per share, compared to a net loss of $24 million, or $0.69 loss per share in the prior year [26][27] - Non-GAAP net income was approximately $1 million, or $0.03 income per share, a significant improvement from a non-GAAP net loss of $8 million, or $0.23 loss per share in the prior year [26][27] Business Line Data and Key Metrics Changes - Total operator cloud ARR ended at $119 million, growing 42% year over year, with organic growth at 13% [7][28] - Engagement Cloud ARR increased by 55%, including 18.5% organic growth compared to Q2 last year [14][28] - Hardware revenue was $27 million, an increase of 34% from the prior year, driven by hardware attachment into the expanding software customer base [28][29] - Professional service revenue remained relatively unchanged at $13.6 million [28] Market Data and Key Metrics Changes - The company signed 27 new logos in Q2, with 19 being multi-product deals, indicating a shift towards unified enterprise-grade solutions in the food service industry [24] - The engagement cloud saw a significant increase in multi-product deals, with 70% of new deals including multiple products [16][28] Company Strategy and Development Direction - The company is focusing on a dual-pronged POS strategy with PAR POS for domestic brands and TASK for global brands, aiming to maximize enterprise concepts [12][39] - There is a strong emphasis on cross-selling and multi-product adoption, with the addition of the Delegate product suite expected to drive growth [10][16] - The company is strategically investing in product development while pausing projected rollouts to focus on building out the TASK platform for late-stage Tier one customers [11][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth prospects, despite slower-than-expected short-term revenue opportunities due to macroeconomic pressures [36][39] - The company anticipates a strong second half of the year, with significant contracted revenue waiting to be rolled out [51][81] - Management highlighted the importance of technology upgrades in the restaurant industry, indicating that the eventual need for tech upgrades remains unchanged despite current delays [37][39] Other Important Information - The company has a pipeline of nearly $50 million in prospective ARR within just POS and back office, providing strong visibility for future growth [13][24] - The company is monitoring uncertainties related to global tariff policies, which may impact hardware revenue and margins [31] Q&A Session Summary Question: Expectations for subscription growth reacceleration - Management indicated that while the back half of the year looks strong, achieving the targeted 20% growth will be challenging due to a lower starting base and slower rollouts in the first half [48][51] Question: Scope and size of multi-product deals - Multi-product deals typically result in a significant uplift in ARPU, with examples showing a doubling of revenue per customer when multiple products are adopted [53][54] Question: Context on mega Tier one deals - Management confirmed that they are pursuing POS deals with three top 20 brands, with decisions expected in 2025 and 2026 [59][60] Question: Active sites between operator and engagement - Management noted that the slight sequential decline in active sites is a timing issue, with a strong pickup expected in Q3 [61][62] Question: Online ordering space and M&A appetite - Management expressed confidence in the online ordering space, highlighting the integration of PAR ordering with loyalty programs as a competitive advantage [69][72]