NEW HARTFORD, N.Y. — PAR Technology Corp. (NYSE: PAR) ended the second quarter with higher sales, but a net loss as the company battled some sales glitches and made investments toward future success. PAR’s sales for the quarter ending June 30, 2023, totaled $100.5 million, up 18.2 percent from $85.1 million a year prior. The […]
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NEW HARTFORD, N.Y. — PAR Technology Corp. (NYSE: PAR) ended the second quarter with higher sales, but a net loss as the company battled some sales glitches and made investments toward future success.
PAR’s sales for the quarter ending June 30, 2023, totaled $100.5 million, up 18.2 percent from $85.1 million a year prior. The company’s net loss grew during the second quarter to $19.7 million, or 72 cents per share, compared with a net loss of $18.8 million, or 70 cents a share, for the same period a year earlier.
“In the second quarter, PAR again delivered strong results,” CEO Savneet Singh contended during an Aug. 9 conference call with investors and the media. “Restaurants of all types and at all stages are using PAR as their growth enabler, leveraging our offerings to create a more seamless, cost effective, and simpler infrastructure.”
PAR provides an array of technology systems and services for fast-casual and quick-service restaurants. They include its Brink and PixelPoint point-of-sale systems, Data Central cloud-based restaurant management system, Punchh loyalty-program system, MENU omni-channel ordering system, and payment services for payment devices.
Restaurants today are focused on creating consistent customer-service experiences across multiple ordering channels, Singh said, but they are also trying to reduce costs, mitigate risks, and convert costs to profit.
“For years, they viewed technology as a capital investment, and today, they are coming around to the idea that software is now a key investment,” he says. “We believe PAR is well situated to take share with these dynamics.”
A number of PAR’s offerings are subscription-based, and subscription-services revenue rose 31.2 percent during the quarter to $30.4 million, with annual recurring revenue (ARR) growing 24.3 percent to more than $122.5 million.
That growth, however, came with a price tag as the company struggled to keep up with the demand, particularly for its Punchh system.
“This usage was beyond anything we had planned for and resulted in us having short-term disruptions which led to one-time customer credits to certain customers,” Singh said. “To ensure we can support this new baseline of usage, we have ramped up spend and importantly, we are tooling so that we don’t encounter these issues again.”
“While it is challenging to have given out credits, those are one-time in nature, and we are going all-in on our infrastructure now to enjoy the spoils in 2024 and beyond,” he added.
Even when adjusting the results for those non-recurring items, PAR’s quarterly loss still works out to 52 cents per share, which is worse than the Zacks Equity Research estimate of a loss of 32 cents.
“Over the last four quarters, the company has surpassed consensus EPS estimates just once,” the Zacks report noted. However, the research firm expects PAR’s stock to perform in line with the market in the near future.
PAR’s government business — which includes mission systems; intelligence, surveillance, and reconnaissance solutions, and commercial software — saw an increase in revenue for the quarter to $31 million from $20.9 million a year ago.
“In summary, we are heading into the second half of the year with significant momentum and a strong pipeline, and we will approach 2024 with the same focus, ambition, and values that have shaped the company,” Singh said.