PAR(US:PAR)2021-05-11 07:38Financial Data and Key Metrics Changes - In Q1 2021, the company reported revenues of $54.5 million, with a GAAP net loss of $8.3 million, or $0.38 per share, compared to a GAAP net loss of $10.9 million, or $0.61 per share for the same period in 2020 [15][29] - On an adjusted basis, the non-GAAP net loss for Q1 2021 was $7.6 million, or a loss of $0.34 per share, compared to a non-GAAP net loss of $4.7 million, or $0.26 per share for Q1 2020 [15][29] - The company reported a total backlog of over $140 million as of March 31, 2021 [31] Business Line Data and Key Metrics Changes - Brink's performance in Q1 included 1,345 new store bookings, an 85% improvement from Q1 2020, with an ARR of $25.6 million, a 15.3% increase from the same quarter last year [16][17] - Restaurant Magic bookings in the quarter were 231, with an ARR reported at $9 million, contributing to a combined ARR in Brink and Restaurant Magic of $34.6 million at the end of the quarter [20][21] - Product revenues were flat at $18.6 million compared to Q1 2020, while service revenue decreased by 4.3% to $18 million [29][30] Market Data and Key Metrics Changes - The government segment increased revenue by 3.2% compared to Q1 2020, with ISR revenues increasing by 8.8% [23][31] - COVID-related churn was 4% annualized of the overall base, down from a peak of 15% during the early stages of the pandemic [20] Company Strategy and Development Direction - The acquisition of Punchh is seen as a game-changer, enhancing PAR's position as a unified commerce cloud platform for enterprise restaurants [10][12] - The company aims to focus on capital allocation and strategic initiatives, including M&A activity to enhance its software offerings [26][27] - The management believes that technology will be central to the changes in restaurant operating models, with a focus on customer engagement and loyalty programs [13][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2021, citing strong bookings and a record backlog as indicators of future growth [7][8] - The company anticipates an acceleration in activations as COVID restrictions ease, with expectations of returning to traditional growth rates by the end of the year [44][85] - Management emphasized the importance of executing on the backlog to drive ARR growth, with historical growth rates of 40-50% being achievable [84][85] Other Important Information - The company reported a significant increase in SG&A expenses due to variable compensation and acquisition costs related to Punchh [33] - Cash used in operating activities improved to $3.4 million from $15.1 million in Q1 2020, reflecting better working capital management [35] Q&A Session Summary Question: What is driving the sustained strength in bookings? - Management noted that there were no large deals but attributed the strength to continued momentum from previous quarters and improved activation processes [40] Question: How should we think about Brink ARR growth? - Management expects to see acceleration in Q2 and beyond, with a strong backlog supporting growth [44][46] Question: What early reactions have been seen from customers regarding the Punchh acquisition? - Feedback has been positive, with existing customers showing interest and no significant customer dissatisfaction reported [51][52] Question: How will Punchh impact future numbers? - The integration will be reflected in the software and services revenue lines, providing more transparency in financial reporting [55] Question: What is the expected pace of activations for Brink? - Management anticipates returning to pre-pandemic activation levels, with potential for acceleration as restrictions ease [58][59] Question: How is the integration of Punchh progressing? - The integration is going well, with a focus on cross-selling and collaboration between teams [74][78] Question: How does the company prioritize chains for implementation? - Management indicated that they are actively working to educate customers on the ROI of their solutions and prioritize chains that can guarantee higher ARPU [88][92]