PAR(PAR) - 2023 Q4 - Annual Results

Financial Highlights This section provides an overview of PAR Technology's financial performance for Q4 and the full year 2023, highlighting key revenue and loss metrics Q4 2023 Financial Summary PAR Technology's Q4 2023 revenue grew 10.3% to $107.7 million, but net loss widened to $18.6 million and Adjusted EBITDA loss increased Q4 2023 Financial Performance vs. Q4 2022 (in millions) | Metric | Q4 2023 | Q4 2022 | Change | | :--- | :--- | :--- | :--- | | Revenues | $107.7 | $97.7 | +10.3% | | Net Loss | $(18.6) | $(13.5) | +37.8% | | Net Loss per Share | $(0.67) | $(0.50) | +34.0% | | EBITDA | $(8.8) | $(4.6) | +91.3% | | Adjusted EBITDA | $(4.5) | $(2.8) | +60.7% | | Adjusted Net Loss | $(9.3) | $(7.0) | +32.9% | | Adjusted Net Loss per Share | $(0.33) | $(0.26) | +26.9% | Full Year 2023 Financial Summary Full year 2023 revenues grew 16.9% to $415.8 million, with strong subscription and ARR growth, while net loss remained stable Full Year 2023 Financial Performance vs. 2022 (in millions) | Metric | FY 2023 | FY 2022 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $415.8 | $355.8 | +16.9% | | Subscription Service Revenues | $122.6 | $97.5 | +25.7% | | Annual Recurring Revenue (ARR) | $136.9 | $111.4 | +22.8% | | Net Loss | $(69.8) | $(69.3) | +0.7% | | Net Loss per Share | $(2.53) | $(2.55) | -0.8% | | Adjusted EBITDA | $(25.8) | $(18.8) | +37.2% | | Adjusted Net Loss | $(42.0) | $(35.9) | +17.0% | Business Segment Performance This section details the company's business segment performance, including CEO insights and key product line indicators CEO Commentary CEO Savneet Singh attributes strong Q4 performance to unified commerce platform growth and key customer acquisitions, including Burger King - The company's strong Q4 results were driven by the strength of its unified commerce platform, leading to notable new customer wins[6] - Key new customers include Burger King, Hooters of America, and Bob Evans[6] - PAR is focused on executing the Burger King rollout and capitalizing on new business opportunities in early 2024[6] Key Performance Indicators by Product Line Q4 2023 KPIs show Guest Engagement leading in ARR and active sites, with Operator Solutions strong in ARR and new bookings Q4 2023 Key Performance Indicators by Product Line | Product Line | ARR (End of Q4 '23) (in millions) | New Store Activations (Q4 '23) | Bookings (Q4 '23) | Active Sites (as of Dec 31, '23) (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Guest Engagement | $63.8 | ~3,200 | N/A | ~70.8 | | Operator Solutions | $60.2 | ~1,200 | ~3,400 | ~23.3 | | Back Office | $13.0 | ~400 | N/A | ~7.7 | Financial Statements This section presents the company's consolidated financial statements, including balance sheets and statements of operations Consolidated Balance Sheets As of December 31, 2023, total assets decreased to $802.6 million, primarily due to reduced cash and inventories, impacting overall equity Balance Sheet Summary (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $37,369 | $70,328 | | Total current assets | $180,599 | $223,949 | | Total Assets | $802,606 | $854,858 | | Total current liabilities | $80,232 | $67,824 | | Long-term debt | $377,647 | $389,192 | | Total Liabilities | $469,541 | $479,664 | | Total Shareholders' Equity | $333,065 | $375,194 | Consolidated Statements of Operations Full year 2023 revenues increased to $415.8 million, led by subscription services, but higher operating expenses resulted in a $69.8 million net loss Statement of Operations Summary (in thousands) | Account | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Total revenues, net | $415,823 | $355,795 | | Subscription service revenue | $122,597 | $97,499 | | Hardware revenue | $103,391 | $114,410 | | Gross margin | $98,310 | $89,293 | | Total operating expenses | $158,019 | $147,325 | | Operating loss | $(59,709) | $(58,032) | | Net loss | $(69,752) | $(69,319) | | Net loss per share | $(2.53) | $(2.55) | Supplemental Information and Non-GAAP Measures This section provides supplemental financial information, including segment revenue breakdown and reconciliations of non-GAAP financial measures Segment Revenue by Product Line Q4 2023 saw a slight revenue decrease in Restaurant/Retail due to hardware decline, while the Government segment experienced strong growth Segment Revenue (in thousands) | Segment | Q4 2023 | Q4 2022 | Change YoY | | :--- | :--- | :--- | :--- | | Restaurant/Retail | $69,900 | $70,977 | -1.5% | | Hardware | $24,400 | $29,590 | -17.5% | | Subscription service | $32,897 | $27,908 | +17.9% | | Government | $37,808 | $26,673 | +41.7% | | Total Revenue | $107,708 | $97,650 | +10.3% | Reconciliation of Non-GAAP Financial Measures The company provides non-GAAP measures, including Adjusted EBITDA and Adjusted Net Loss, to offer supplemental insight into core business trends by excluding non-recurring charges - The company uses non-GAAP measures like EBITDA, adjusted EBITDA, and adjusted net loss to evaluate its continuing operations and believes they provide investors with insight into underlying business trends[24][25] - Adjustments primarily exclude non-cash and non-recurring charges such as stock-based compensation, acquisition expenses, amortization of acquired intangibles, and litigation expenses[25][27] Reconciliation of Net Loss to EBITDA and Adjusted EBITDA Q4 2023 GAAP net loss of $18.6 million reconciled to an Adjusted EBITDA loss of $4.5 million, with full year Adjusted EBITDA loss at $25.8 million Q4 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Net loss | $(18,629) | $(13,481) | | Depreciation and amortization | $7,001 | $6,502 | | EBITDA | $(8,791) | $(4,599) | | Stock-based compensation | $3,785 | $3,169 | | Contingent consideration | $(1,700) | $(4,400) | | Transaction costs | $2,273 | $215 | | Adjusted EBITDA | $(4,454) | $(2,844) | Full Year Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net loss | $(69,752) | $(69,319) | | Depreciation and amortization | $27,481 | $26,095 | | EBITDA | $(33,352) | $(33,161) | | Stock-based compensation | $14,427 | $13,426 | | Contingent consideration | $(9,200) | $(4,400) | | Transaction costs | $2,273 | $1,300 | | Adjusted EBITDA | $(25,783) | $(18,845) | Reconciliation of Net Loss to Adjusted Net Loss Q4 2023 GAAP net loss of $18.6 million adjusted to $9.3 million non-GAAP net loss, with full year adjusted net loss at $42.0 million Q4 Reconciliation of Net Loss to Adjusted Net Loss (in thousands, except per share) | Line Item | Q4 2023 (Amount) | Q4 2023 (Per Share) | Q4 2022 (Amount) | Q4 2022 (Per Share) | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(18,629) | $(0.67) | $(13,481) | $(0.50) | | Acquired intangible assets amortization | $4,519 | $0.16 | $4,170 | $0.15 | | Stock-based compensation | $3,785 | $0.14 | $3,169 | $0.12 | | Adjusted net loss | $(9,274) | $(0.33) | $(7,043) | $(0.26) | Full Year Reconciliation of Net Loss to Adjusted Net Loss (in thousands, except per share) | Line Item | FY 2023 (Amount) | FY 2023 (Per Share) | FY 2022 (Amount) | FY 2022 (Per Share) | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(69,752) | $(2.53) | $(69,319) | $(2.55) | | Acquired intangible assets amortization | $18,074 | $0.66 | $17,111 | $0.63 | | Stock-based compensation | $14,427 | $0.52 | $13,426 | $0.49 | | Adjusted net loss | $(42,016) | $(1.52) | $(35,895) | $(1.32) |