PAR Technology Corporation (NYSE:PAR) Q4 2024 Earnings Call Transcript

PAR Technology Corporation (NYSE:PAR) Q4 2024 Earnings Call Transcript February 28, 2025

Operator: Good day, and thank you for standing by. Welcome to the PAR Technology Corporation 2024 Fourth Quarter and Year-End Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Christopher Byrnes, Senior Vice President of Investor Relations and Business Development. Please go ahead.

Christopher Byrnes: Thank you, Daniel. Good morning, everyone, and thank you for joining us today for PAR Technology Corporation’s 2024 Fourth Quarter and Year-End Financial Results Call. Earlier this morning, we released our Q4 financial results. The earnings release is available on the investor relations page of our website at partech.com. You can also find the Q4 financials presentation as well. It’s in our related Form 8-K furnished to the SEC. During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items. A description and timing of these items along with a reconciliation of non-GAAP measures to the most comparable GAAP measures can be found in our earnings release.

I’d also like to remind participants that this conference call may include forward-looking statements that reflect management’s expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information on this conference call related to projections or other forward-looking statements may be relied upon and is subject to the Safe Harbor statement included in our earnings release this morning, and in our annual and quarterly filings with the SEC. Finally, I’d like to remind everyone that this call is being recorded. It will be made available for replay via a link available on the investor relations section of our website. Joining me on the call today is our CEO and President, Savneet Singh, and Bryan Menar, PAR Technology Corporation’s Chief Financial Officer.

I’d now like to turn the call over to Savneet Singh for the formal remarks portion of the call which will be followed by general Q&A. Savneet?

Savneet Singh: Thanks, Christopher Byrnes, and good morning, everyone. We reported $105 million in revenues in Q4, an increase of more than 50% year over year. Subscription services ARR more than doubled to $276 million from last year, with 21% organic growth when compared to Q4 of 2023. Alongside this revenue growth, our non-capitalized profit grew organically 30% year over year. Adjusted EBITDA came in at $5.8 million, more than doubling the sequential previous quarter, continuing to show the long-term margin expansion potential. The growth in profitability in the quarter was driven by both Operator and Engagement Cloud. Operator Cloud ARR grew organically by 26% in Q4 when compared to the same period last year. ARR for this business unit now totals approximately $117 million, including Delegate.

Operator Cloud growth is being driven by increased new customer wins, upsells, and bookings from planned rollouts with existing customers. PAR POS signed eight new customer logos in the fourth quarter, with all of those new customers selecting multiple products from PAR Technology Corporation. This continues to validate our better together thesis while increasing our LTV per customer meaningfully with no additional cost to acquire. We are excited about the projected velocity for Burger King as well in 2025 across both POS and PAR Ops. Having recently expanded our partnership with Burger King to include our PAR Ops product line, we are working closely with BK and using Q1 to fine-tune the sequencing of rollouts between both products to enable a combined and mutually agreed-upon implementation rollout for 2025.

We expect significant and accelerated implementations from Q2 onwards. This is an exciting change as it demonstrates our better together thesis working at one of our largest POS customers. We currently have approximately 1,500 BK sites in backlog, with a robust white space ensuring excellent 2025 visibility, acceleration, and potential. While combining a second product to the BK rollout temporarily slows our PAR POS rollout in Q1, adding a second module dramatically increases our LTV. We would make this trade every time. And importantly, a combined rollout is the right thing for franchisees as well. We will never sacrifice customer success for short-term gain. Partnership is what drives our long-term strategy. At the very end of the quarter, we announced the acquisition of Delegate, and we immediately kicked off a rebrand of our back-office initiative into the new PAR Ops, which includes the Delegate and Data Central product modules.

Our integration with Delegate and the team has been better than expected, and we are seeing strong customer interest, including among marquee tier-one accounts. As we continue to build out our PAR Data Platform, Delegate not only boasts a highly synergistic product offering that will accelerate cross-sell, but it also affords entry into more than 25,000 sites covering 40 of the top 50 restaurant concepts. Further, it comes with a seasoned management team now driving the combined PAR Ops business. It’s important to note that Data Central finished up the year with a strong Q4 through targeted cross-sell growth across our customer base. Growth will accelerate as we are forecasting PAR Ops to have its strongest growth year yet in 2025. We have begun the work on product unification efforts with Delegate that includes single sign-on and real-time data flow, a big step in building towards our data platform.

This initiative is highly strategic and underscores our continued drive towards a better together platform that is not replicated anywhere else in the enterprise market. We will be sharing additional details as the year progresses on this exciting initiative. Now to report on our payments business. As we exit 2024, our payment services continue to drive high transaction counts and processing volumes across our customer base, and we look to take more stores live while driving better payment processing economics. Notably, we continue to see strong interest in our Punch Wallet with more customers onboarding every quarter, including Paris Baguette, Gold Star Chili, and Runza in Q4. Additionally, we successfully cross-sold a tier-one customer with approximately 1,000 locations on our payment services.

This customer’s conversion will positively impact our results over the coming quarters and is a further example of our better together project wins. As our customers continue to unify through a bus store and in-store processing with PAR Pay, the scale of our datasets across loyalty, ordering, and POS product puts PAR Technology Corporation in a unique position to leverage tokenized information to drive actionable insights mapping known and unknown customers, and personalizing communications to drive higher ROI and increased lifetime value. We are the only company in the enterprise who can link off-premise and on-premise tokenized data with loyalty data all the way to the back of house. This is a moat that is hard to replicate. There’s a growing trend in the industry towards disjointed multi-vendor solutions that attempt to stitch together guest data, payments, and ordering across multiple third parties.

But integrations alone don’t create intelligence. First-party data does. Many attempt to take pieces of payment data and combine them with external systems because PAR Technology Corporation owns the full technology stack, everything we do is first-party, ensuring true data integrity. Some would have you believe that restaurant technology should be run outside the POS, fragmenting operations across multiple platforms. We see it differently. POS is and will always be the true control center of the restaurant. After all, 80% of transactions still happen at the POS, where real-time transactions, menu data, and guest interactions all converge. Payments, loyalty, and ordering are not separate systems. They are part of a restaurant’s mission-critical platform.

That’s what makes our approach fundamentally different from the rest. Rather than layering on third-party processors and intermediaries, we are removing inefficiencies, giving our customers lower processing costs, higher authorization rates, and full control over the guest relationship. Looking ahead for the year, our pipeline remains robust for our payment offering across both PAR Clouds, ensuring we capture new growth opportunities. Moving to our Engagement Cloud, Engagement Cloud ARR reported 15% organic growth in Q4 when compared to the same quarter last year. ARR now stands at approximately $159 million for the Engagement Cloud and includes Plexure and PAR Retail. Our strong execution in this business has led to several new tier-one customer wins.

Our Engagement Cloud continues to exceed standards and dominate the loyalty offers and engagement market with consistently strong interest from existing and new customers. With increasing customer headwinds in 2025, many brands are doubling down on digital technology to drive increased consumer frequency and retention, notably through enhanced investments in loyalty programs. Punch is seeing continued product and sales consistency by delivering growth, with new customers and expansion with existing brands. Punch is a market leader for restaurant loyalty and delivers stability and innovation to our customers. This quarter, we achieved multiple large customer winbacks who had previously churned from Punch for pure guest data platforms but then returned back to Punch.

Most notably, a tier-one table service chain and two well-known casual dining enterprises are part of this transition back to Punch. Moving to PAR Retail. In the convenience and fuel industry, our team executed the launch of a major multi-thousand unit brand and additional major upsells with our largest customer in Q4. We brought to market the first fully integrated major oil and branded retailer program in the industry. Beyond our exciting customer wins, the PAR Retail product continues to expand to serve the fuel and convenience industry. In Q4, we successfully launched gamification, updated unified e-receipts, enhanced punch card functionality, and optimized member surveys with our focus on developing features that drive incremental outcomes like more visits, more gallons, and bigger baskets that continue to deliver value for our customers.

Our customers look to us to expand our platform into the industry-specific white space, and we are looking to accelerate innovation efforts in the retail vertical through M&A. We are targeting strategic opportunities in the near term that will add additional value to our customers and their members. Moreover, we’re beginning to see our integration synergy efforts begin to flourish as we have streamlined our efforts across the retail and restaurant space. We’ve seen already that this is allowing us to focus our R&D and sales efforts each between industries to maximize profitability, accelerate innovation, all while improving customer satisfaction. Briefly touching on hardware. I’m pleased to report that we have reversed recent trends and increased our hardware revenues by 7% in Q4 versus the same quarter last year.

Several key global brands have approved our newest platform, the PAR Wave, and we are seeing increases in both domestic and global sales. Also contributing to the turnaround was our new PAR Clear drive-through solution that is setting the standard for drive-through comps. An open architecture that will enable users to leverage the power of AI for the drive-through, PAR Clear is positioned to be not only the industry leader in QSR drive-through systems today but also the preferred platform for the future. Our hardware and POS software divisions are partnering closely on product to ensure that PAR Clear adds to our strategy of better together innovation. To summarize, we remain very bullish about the future of foodservice technology and PAR Technology Corporation’s continued role as a leading enterprise provider.

In 2025, we foresee our ability to execute on both our historical growth rates and deliver on the biggest M&A pipeline we’ve seen to date. We view this time as a great opportunity for us to make bold bets and strengthen our market position. I’m confident in our ability to consistently innovate and provide value to our customers for years to come. Persistence trumps everything, and I believe we’ll come out as a winner in the enterprise. Raising the bar for execution, investing in our products and teams for the long term, we are well-positioned to drive durable growth in the category. The opportunity will continue to grow for the foreseeable future. Bryan will now review the numbers in more detail. Bryan?

Bryan Menar: Thank you, Savneet Singh. Good morning. We closed out 2024 with another successful quarter for PAR Technology Corporation. Subscription services continue to fuel our organic growth while our team continues to execute with fiscal responsibility. As a result, adjusted EBITDA for the quarter improved $3.4 million sequentially from Q3 and $13.1 million compared to Q4 prior year. This positive movement is indicative of our ability to continue to drive growth with profitability. Now to the financial details. Total revenues were $105 million for Q4 2024, an increase of 50% compared to the same period in 2023, driven by subscription services revenue growth of 95% inclusive of 25% organic growth. Net loss from continuing operations for the fourth quarter of 2024 was $25 million or $0.68 loss per share, compared to a net loss from continuing operations of $22 million or $0.77 loss per share reported for the same period in 2023.

Non-GAAP net loss for the quarter of 2024 was $37,000 or effectively $0.00 per share, a significant improvement compared to non-GAAP net loss of $12 million or $0.43 loss per share for the prior year. Now for more details on revenue. Subscription services revenue was reported at $64 million, an increase of $31 million or 95% from the $33 million reported in the prior year and now represents 61% of our core revenue. Excluding core retail and Task Group, organic subscription services revenue grew 25% compared to the prior year. ARR exiting the quarter was $276 million, an increase of 102% from last year’s Q4, with Engagement Cloud up 150% and Operator Cloud up 60%. Excluding PAR Retail, Task Group, and Delegate, total organic annual recurring revenue was up 21% year over year.

Hardware revenue in the quarter was $26 million, an increase of $2 million or 7% from the $24 million reported in the prior year. Sequentially, compared to Q3 this year, hardware was up $3 million or 15% driven by an increase in volume attached to our software customers. Professional service revenue was reported at $15 million, an increase of $2 million or 17% from the $13 million reported in the prior year. The growth was driven by recurring revenue service contracts. $9 million of the professional services revenue in the quarter consisted of recurring revenue, a 25% increase versus the prior year. Now turning to margins. Gross margin was $45 million, an increase of $21 million or 86% from the $24 million reported in the prior year. The increase was driven by subscription services with a gross margin of $34 million, an increase of $18 million or 116% from the $16 million reported in the prior year.

Subscription services margin for the quarter was 53%, compared to 48% reported in Q4 of the prior year. The increase in margin is driven by continued focus on efficiency improvements with our hosting and customer support costs as well as accretive margin contributions from recent acquisitions. Excluding the amortization of intangible assets, stock-based compensation, and severance, total non-GAAP subscription services margin for Q4 2024 was 64.7% compared to 65.3% for Q4 of 2023. The modest tick down was driven by a shift in product mix post-2024 acquisitions. Gross margin continues to improve across our products and we expect total non-GAAP subscription services margin to continue to improve in this current baseline. Hardware margin for the quarter was 26% versus 29% in the prior year.

Hardware margin in Q4 2023 was positively affected by one-time inventory adjustments. Our focus on demonstrating value for our price with improved operational efficiency has allowed us to improve hardware margins during the year and finish 2024 with full-year hardware margin at 24%. Professional service margin for the quarter was 28%, compared to 10% reported in the prior year. The increase primarily consists of increases in margins for field operations and repair services, substantially driven by improved cost management and reductions in third-party spending. In regard to operating expenses, GAAP sales and marketing was $10.5 million, an increase of $1 million from the $9.5 million reported for the prior year. The increase was primarily driven by inorganic increases related to our acquisition, while organic sales and marketing expenses decreased $0.3 million year over year.

GAAP G&A was $31 million, an increase of $12 million from the $19 million reported in the prior year. The increase was primarily driven by non-GAAP adjustment items for M&A transaction fees and stock-based compensation, as well as inorganic increases related to our acquisitions. GAAP R&D was $17 million, an increase of $3 million from the $14 million recorded in the prior year. The increase was primarily driven by inorganic increases related to our acquisitions, while organic R&D expenses decreased $0.5 million year over year. Our team was able to effectively drive cost efficiency and properly prioritize resource allocation, which enabled us to continue to drive innovative outcomes without incremental cost during 2024. Operating expenses excluding non-GAAP adjustments were $47 million, an increase of $9 million or 25% versus Q4 2023.

Excluding inorganic growth, organic operating expenses increased a modest 2%. The organic increase was primarily driven by variable compensation and benefits. Exiting Q4, non-GAAP OpEx as a percent of revenue was 45%, a 900 basis point improvement from 54% in Q4 prior year. Now to provide information on the company’s cash flow and balance sheet position. As of December 31, 2024, we had cash and cash equivalents of $108 million and short-term investments of $59 million. For the year ended December 31, cash used in operating activities from continuing operations was $21 million versus $32 million for the prior year, representing an improvement of $11 million. Cash flow metrics improved throughout 2024, and we exited the year with positive operating cash flow of $3 million for the fourth quarter.

Cash used in investing activities was $180 million for the year ended December 31, versus $8 million for the prior year. Investing activities included $309 million of net cash consideration in connection with our recent acquisitions and capital expenditures of $6 million for developed technology costs associated with software platforms, partially offset by $96 million of cash consideration received in connection with the disposition of PAR Government and $37 million of proceeds from net sales of short-term investments. Cash provided by financing activities was $279 million for the year ended December 31, compared to cash used of $2 million for the prior year. Financing activities were substantially driven by a private placement of common stock to fund the Stuzo acquisition and a credit facility entered into to fund the Task acquisition.

Subsequent to the 2024 fiscal year-end, the company issued $115 million of convertible notes and utilized the net proceeds from this offering to repay in full the credit facility. These transactions enhanced our capital structure by extending our debt maturity profile and significantly reducing our go-forward cash interest expense. I would now like to take a moment to reiterate and thank our PAR Technology Corporation team on how they managed a successful and action-packed year, both from an operational and business development point of view. We pride ourselves on making accretive capital allocation decisions, and through our focus on operational execution, position PAR Technology Corporation for sustained growth and success. As a result, the PAR Technology Corporation exiting 2024 is an improved and better-positioned organization than when we entered the year.

This is clearly demonstrated by some key financial metrics. ARR more than doubled during the year, increasing 102%. Locations utilizing our SaaS solutions doubled to over 140,000 locations at the end of 2024. Non-GAAP consolidated gross margin increased by 720 basis points to 50.3%. Q4 non-GAAP OpEx as a percent of revenue improved by 900 basis points compared to the prior year. And Q4 adjusted EBITDA improved by $13.1 million compared to Q4 prior year. We are proud of what we have been able to achieve, but we are by no means content with where we stand and look forward to continuing to execute our strategy as we progress through 2025. I’ll now turn the call back over to Savneet Singh for closing remarks prior to moving to Q&A.

Savneet Singh: Thanks, Bryan Menar. Let me wrap up with a few key messages before we open the call for Q&A. We’re pleased to have closed on a positive note with a strong Q4 performance and maintaining category leadership in food service tech. We had a key objective in 2024, and that was to grow sustainably and efficiently to build our business for the long term. To this end, our team executed on three main areas. First, we focused on driving organic ARR growth and sustained momentum in our software business. We worked on initiatives to improve our products and operations, cross-sell our entire software portfolio, and sign new customers. As we spoke about earlier, all of our POS deals in the quarter were multiproduct deals, and equally important was our upsell into our biggest POS customer.

Our flywheel continues to expand through our better together strategy, which is based on product innovation and ROI, not predatory pricing tactics. Second, we executed on a targeted and meaningful acquisition strategy to strengthen our product offerings, expand our TAM, and build out a global capability to serve food service enterprises. Our expansion into C-stores and international markets has created a truly new TAM for us, and our acquisition of Delegate is already accelerating our flywheel for existing customers, including our largest and most strategic. We also divested our legacy government business, which now enables us to 100% focus on our core markets. M&A is core to our product strategy, and our integration efforts are what drive our robust cross-sell.

PAR Technology Corporation has over many years invested in building a deep leadership bench that can digest and optimize investments. As companies join, they become part of a cohesive, culturally aligned PAR Technology Corporation where we add to, not detract from, their project aspirations and go-to-market motions. We cross-pollinate leaders quickly and unite core operating structures, and this synergistic approach to M&A is what sets us apart from other food service technology companies or sector investors who operate a collection of siloed entities and masquerade as multiproduct, while really just being single-threaded multiple times over. Better together is what we live every day at PAR Technology Corporation, and I’m extremely proud that the vast majority of our executive leadership team has risen through the ranks at PAR Technology Corporation over many years in multiple roles.

This is our key to turning inorganic growth into sustained future organic growth. We are a team of seasoned operators with a holistic view of our business and industry. Finally, we remain fanatical about managing our operating expenses by continually optimizing our cost structure. As a result, we maintained top-line revenue growth and have now delivered two quarters of strong adjusted EBITDA growth. I’m extremely proud of our revenue expansion. I’m equally proud that non-GAAP gross profit grew organically by 30% this quarter, and our adjusted EBITDA well more than doubled quarter over quarter. Today, our sales and marketing and R&D expenses are now well within our long-term goals of 15% and 25% respectively, far ahead of schedule, and I believe this shows the upside of our long-term margin goals for the company.

With 2024 firmly in the rearview mirror, we look towards 2025 with confidence and optimism. For 2025, we feel confident in committing to continue to grow our business at 20% plus annual rates for the year. Our growth quarter to quarter will never be linear, but I feel confident that over the course of the year, we’ll continue to hit our targets while continuing to drive EBITDA. What’s more, we see a number of key levers that create upside to our year. There’s still a lot of work ahead of us, but we are confident that our balance sheet, cost discipline, and execution strategies will enable us to continue to grow our business sustainably. As always, I want to thank my PAR Technology Corporation teammates for their hard work in driving these results.

Our shared belief that today is day one drives our collective hunger and ambition. I also want to express deep appreciation to our customers, partners, and shareholders. Thank you for your time this morning, and we will now open the call up to questions. Operator?

Q&A Session

Operator: As a reminder, to ask a question, press star one one on your telephone. Wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from Mayank Tandon with Needham. Your line is open.

Mayank Tandon: Thank you. Good morning. Congrats, Savneet Singh, Christopher Byrnes, and Bryan Menar on the quarter. Savneet Singh, I wanted to start with the upsell into BK. Does this change the timeline of the rollout? I believe the rollout was expected to be completed sometime in spring of 2026. Does this, in any way, change the timeline of the 7,000 plus locations? And also, does it change the ARR opportunity, which I believe was something in the order of low twenties millions? Is that going to be meaningfully different based on the upsell?

Savneet Singh: Yes. Yes. Go ahead. So it’ll probably push us out the quarter, quarter and a half. You know, Q1, as I referenced, we’re sequencing the rollout so that starting in Q2, we can do a combined rollout. So while it’ll slow down, call it Q1, just a pure POS rollout, it’ll really accelerate Q2 onward. As I mentioned, it’s a trade we would do all day long, because to your second point, it significantly adds to the ARR in that opportunity. As you know, we disclosed that your POS deal was around, you know, low twenties. This adds to that pretty meaningfully. We haven’t disclosed that number quite yet. But, you know, we feel really excited. It, you know, as I said, while it pushes out the rollout a little bit, it dramatically increases the LTV and operating cash flow that this deal will generate over time.

Mayank Tandon: Got it. And then maybe as a follow-up, I would just ask around the quarterly cadence. I get it. You said it’s not going to be linear. There’ll be some volatility, but any color you can provide in terms of the various revenue buckets, how we should think about the quarterly cadence and also the same question around margins, you know, should we expect sequential improvement? Or are there other factors we should consider as we’re modeling up at 2025?

Savneet Singh: Yeah. So I think that you should see, you know, meaningful margin expansion in the second half of the year, as well as acceleration of revenue. I’m here. Hi to this partly to this Burger King question you just asked. You remember, we’re going from one product to two products, so it’s a lot more revenue opportunity. And in a condensed period of time, so you’ll see that. So Q1 and Q2, we’ll be investing, you know, aggressively to make sure we can knock that rollout out. And again, you should take it and everyone else should take it. The fact that we’re expanding our relationship is a hugely positive sign that we’re doing a hopefully, doing a good job in earning their trust. So you’ll see in the back end more revenue growth, more significantly more EBITDA expansion because of that roll accelerating.

Plus, as we mentioned on the call, we have a large payment services deal rolling out that also hits the second half. As well as the convenience store deal that I mentioned on the call. These are all really exciting things, very forecastable. These aren’t sort of like, let’s hope. These are all in forecast. And as I mentioned, you know, we’ve already booked, you know, we’re 1,500 BKs and, you know, we’re in January. Right? So or February rather. So there’s a lot of room for excitement second half of the year.

Mayank Tandon: Great. That’s all good to hear. Congrats on the quarter.

Savneet Singh: Thanks, Mayank Tandon.

Operator: Thank you. Our next question comes from Stephen Sheldon with William Blair. Your line is open.

Stephen Sheldon: Hey. Thanks for taking my questions, and I had a lot seems like to be excited about. Just want to follow-up on Burger King. Can you just remind us what all is included in that contract? So I think it’s initially PAR POS potentially MenuLink. I think you’re saying now the contract includes PAR Ops. Obviously, as you talked about, very encouraging expansion. But when you say PAR Ops, I mean, are they adding both Data Central and Delegate, or just maybe just talk about all the products that they’re actually going to be picking.

Savneet Singh: Sure. So our core deals for POS and, you know, historically, parts of MenuLink, but POS is the vast majority of it. And our expansion into PAR Ops is on Data Central, but, you know, without question, you know, we’re sixty days into the Delegate acquisition. You know, we’ll certainly be trying to bring that opportunity into that as well. No guarantee it happens, but I think, you know, the better together point is resonating with them and, obviously, all of our customers given the attachment rates right now. So it’s still start with one and hopefully, we can add more if we do a good job.

Stephen Sheldon: Got it. That’s helpful. And then just on 2025, yeah. I appreciate the commentary that you’re confident in 20% annual growth rates. But just is there any way to roughly frame how you’re thinking about organic ARR next year, just given what you can see in the pipeline, you know, and kind of current implementation schedules. Just any way to refine that a little bit more?

Savneet Singh: Yeah. I mean, I think from what we see today, like I said, the second half will have, you know, sort of higher growth rates in the first half, partly because of the three deals I mentioned, the payment services deal going live, Burger King, acceleration from, you know, end of Q4. And then it’s the convenience store deal that goes live as well. So we have a lot of visibility into the second half for that acceleration. And so, you know, the way I think about it is, you know, 20% plus you should have higher than that in Q4, lower than that in Q1. And, again, Q1 being the slowest one because of the Burger King coordination we talked about. But in aggregate, we feel really, really good about the year. We have never had so much visibility when it comes to the rollout of, you know, these deals that I mentioned.

So we feel super confident in the year. With the visibility we have today. And as I mentioned, you know, those three deals that I mentioned that are key for the second half of the year, these are signed, committed, booked. These aren’t sort of pipeline.

Stephen Sheldon: Got it. That’s helpful. Thank you.

Operator: Thank you. Our next question comes from Will Nance with Goldman Sachs. Your line is open.

Will Nance: Hey, guys. Good morning. Congrats on all the good things you guys have going on. I wanted to ask just on the restaurant space more broadly. There’s been a lot of focus on the consumer and specifically the trends in restaurant sales, and you guys obviously have a very differentiated look into the different pockets of the restaurant space. What are you guys seeing on the ground? And, you know, what does it tell you about the health of the consumer?

Savneet Singh: You know, I’d say it’s not categorical. We see sort of a wide disparity of outcomes. In the full-service dining space, we see a slowdown. Ironically, that’s been really helpful in our Punch business because those firms are really investing in loyalty and as I think you heard me say, we had a couple of people that had previously left Punch to try consumer data platform type products come back to Punch. I think that’s a direct result of what’s happening in that sort of full-service dining market. And then, you know, in our kind of core QSR fast-casual space, it’s certainly seeing a slowdown. You know, it’s not what it was but, you know, we’re not seeing negative comps across our base. In fact, our base, you know, is still up, you know, low single digits.

So, you know, we sort of been lucky in that the customers we sell to have tended to outperform the restaurant industry in aggregate. So in general, our base is still growing. You know, there are bankruptcies happening, but they’re a very small portion of our base. And, again, that’s just a little bit of luck in the makeup of our current customer base. Where we see the most disruption, and I would say it’s significant, is in, you know, single stores and small chains. You know, we see numerous chains kind of sub-thirty units, forty units. Again, we don’t play a ton here. We see that space. And there are a lot of those ones that are experiencing tremendous pain. I think the reason why is that when you’re at that size, you don’t yet have a big enough brand to sort of have those sticky customers journey around a lot long enough generally.

And then two, I don’t think you have the investments in technology to fight back. So the larger brands, I think, are going to do better because they have the ability to invest in, and Punch is an example. They have the ability to invest in our data platform to bring customers back in. So, you know, in aggregate, our base is still growing, you know, single digits, which is great, low single digits. So it’s better than restaurants, but there’s a lot of disparity amongst the chains.

Will Nance: That’s super helpful. I appreciate all the possible detail there. And maybe a quick follow-up on the hardware inflection that you guys saw. You know, we heard from one of your competitors yesterday. It sounds like they’re expecting around a 20% drop in hardware revenues. So I guess what have you guys been able to do differently to reaccelerate that business? Are any of the momentum that you’re seeing competitive, like, competitive wins and just how are you thinking about the hardware refresh cycle?

Savneet Singh: So I think there’s two parts to it. So one is, you know, we sell to enterprise, and I’d like to say, enterprise is a product business. You gotta have a better product. And so I think, you know, if you look at the data, you know, we think our products are winning because they are stand-alone best-in-class products. And so I think that really helps us, specifically, we had really strong attachments. Our hardware product to our software customers. So even, you know, I won’t name it, but, you know, even, you know, a large dealer to where that we’re not picking for hardware have now started to adopt more and more for hardware. And it’s that better together functionality I mentioned, the idea that your hardware company is also your software company, so it’s also your service company, your call center, it makes life a lot easier.

So it’s the same better together fun thing that’s happening and so we continue to see, you know, call it attachment into the, you know, our core software customers drove it. On the legacy non-software customer side, you know, it’s not been a big change, but we have made some real investments into our drive-through product, and as you probably read in all the restaurant companies, you know, there’s a big move to voice AI in the drive-through, and so we, you know, we believe we’ll be the preferred partner there. Given that we are a software company that sells hardware now. And so I think that will be a nice driver of hardware growth going forward. Bryan, anything else?

Bryan Menar: Yeah. I was just gonna add in regards to the software attachment, the fact that our location size has doubled has then given us that much larger audience to be able to have that attachment to. And so that’s happening as where some of the hardware-only type of competitors are actually seeing a downturn. Maybe in certain areas, we actually continue to have a larger white space to be able to support that. So that’s been able to help us against what you’re seeing in other areas.

Will Nance: Awesome. Appreciate all the color, guys. Nice job today.

Savneet Singh: Thanks.

Operator: Thank you. As a reminder to ask a question, please press star one one on your telephone. Again, that is star one one to ask a question. Our next question comes from Samad Samana with Jefferies. Your line is open.

Samad Samana: Hey. Good morning. Thanks for taking my question. Savneet Singh, first just know you mentioned the drive-through hardware and how it’s kind of a leading class, and all your customers will leverage AI. My ears perked up a little bit about that. Is that AI that you guys have homegrown that will be embedded in that? Is that you guys working with third-party platforms that enable it? And then maybe help me understand the path modernization there through APIs, or is it your own product that you’re providing? And then I have one follow-up.

Savneet Singh: Yeah. Fantastic question. So for yeah. So what we’re we build the drive-through hardware that so think of that as the headsets, the base stations. But we are also, you know, in the PAR Clear, it’s a cloud offering. So we will be charging subscription software to allow you to manage your drive-through. Now why that’s important is that through that, to your point, there’ll be an API that allows the voice AI companies, which there are dozens of them out there, to plug in directly to the base station so that they can run their tech. So we aren’t going we aren’t yet going to be the company that’s sort of selling voice AI technology directly and trying to be an ordering company there yet. Might be something we explore in time, acquisition or not, but we’re kinda watching carefully.

However, you know, if you’re plugging into our base station, you’re gonna be paying us fees to do that and to enable that. And so it’s a way for us to, you know, make money on the potential growth, but importantly, we’re giving them a service that makes it a lot easier for them to run their platforms at these restaurants.

Samad Samana: Great. And then maybe just switching gears a little bit. On the Punch side, it’s great to hear about the customers boomeranging back. Maybe could you give a little bit of color of maybe what made them churn in the first place? And with that context in mind, what convinced them to come back? Right? Just putting those pieces together. I think, would be very helpful.

Savneet Singh: So, you know, we had a couple of customers about I don’t exactly wanna be a year ago, two years ago. So say, hey. We don’t wanna do loyalty program. We wanna use something more like a, you know, a CDP system or a guest data platform. Idea being you know, we’ll be targeting customers directly. We always see customers are, you know, 20% of our base. We wanna target everybody else. And, you know, candidly, those are really good sales pitches. But in reality, they don’t they’re not yet developed enough to drive the ROI loyalty program today. And in the end, I think brands need both. I think you need an awesome CDP system that can target customers on a very personalized level, but still need these loyalty programs that build really engendered loyalty.

Loyal customers are, you know, repeat visitors, they’re high margin, they are the advocates of your brand, you know, everywhere you go. And so I think what those brands realized is, hey. We thought we’re gonna You know, we’re gonna have loyalty across our entire set of customers, so why do we need just a loyalty product? And they ended up moving back realizing, you know, one, products that exist today that are trying that to build that promise aren’t yet ready. And two, candidly, ROI went down dramatically. And so it really was validating that the Punch product creates real true ROI back to the customer. Then I think those customers continue to evolve data platforms, they’ll end up taking the PAR Data Platform because when you can combine their loyalty first-party loyalty and PAR, plus their sort of called tokenized data in a data platform, plus all the operations back office we have, you know, that sort of point that I was making.

It’s I think it’s a real moat we have that nobody will be able to compete with.

Samad Samana: Great. I mean, as squeeze the third one in here. Any type of information you give us on Delegate’s financial profiles, maybe growth rate, margin structure, and how you’re thinking about it through 2025.

Savneet Singh: Sure. So when we closed the deal, it was about $19 million of recurring revenue. Historically, the business had grown, you know, well over 30%. I wanna say mid-thirties, and so it’s been it’s been a really fast-paced grower. It exited 2024 marginally profitable. And, you know, we’re, you know, hoping for this year, obviously, for that too. To be, you know, our fastest-growing product outside of payments and ordering. And we, you know, will certainly drive meaningful EBITDA. So you know, it’s kind of exciting to have the product that we think we can push through quickly. And as you’ve kind of seen, when we acquire business, we tend to ramp up revenue quickly. Exciting about Delegate is that it’s so synergistic that, you know, once we figure out single sign-on real-time data flow, it will be hard for customers to say no. So you know, I’m not saying it’s gonna keep growing 35%, but it will be I certainly believe it will be additive to our growth rate.

Samad Samana: Great. Congrats on that. I’m really transformative 2024.

Savneet Singh: Thank you.

Bryan Menar: Thanks a lot.

Operator: Thank you. Our next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is open.

Eric Martinuzzi: I wanted to ask about the subscription service gross margin. That non-GAAP number was 64.7%. It was below what we were forecasting for Q4. In your commentary, it sounds like you expect that to be a trough, but I was just curious where do you expect it either for the full year 2025 or a year from, you know, for Q4 2025?

Bryan Menar: Yeah. Eric Martinuzzi, appreciate the question. Yeah. You’re correct. If there was a came down from a year ago. It was really driven by our most recent acquisitions and kind of absorbing that in. But across our products, we continue to see the margin improvement in driving towards, so nothing operationally changed. It may have it may have then kind of reset a baseline and as we kind of grow off of that. So how you’ve been seeing the margin improve quarter over quarter, you know, not significant amounts, but call it your fifty to a hundred and fifty basis points. We expect that to continue as we move forward here in the near to medium term.

Eric Martinuzzi: Okay. And then just a housekeeping item here. Your pro forma share count you finished out Q4 with 37.2 million of diluted weighted average shares. What is that post Delegate?

Bryan Menar: Yeah. We’re just north of forty, Eric Martinuzzi.

Eric Martinuzzi: Thank you.

Operator: Thank you. Our next question comes from Adam Wyden with ADW Capital. Your line is open.

Adam Wyden: Hey, guys. Really, really, really good profit. So just a couple of things. On the gross margin again, Bryan Menar, so some of this is from the purchase. You expect so if you expect that gross margins are gonna improve fifty to a hundred and fifty basis points per quarter, you would expect your incremental gross margin rate to be materially higher on your subscription software, you know, pretty much every quarter throughout the year. Is that right?

Bryan Menar: Correct. And that’s gonna be so both top line. Right? Services being our growth driver right now, it’s 61% of our total revenue. And as Savneet Singh mentioned, you know, we expect that each, you know, call the twenty percent plus, you know, improve it increase year over year. Within the margin actual improving itself, would actually have a multiplier effect in regards to the gross profit margin increase.

Adam Wyden: Right. Yeah. I mean, look, I would think that payments and Delegate and all these things I mean, Stuzo, that you don’t have a ton of, like, piloting and hosting. I mean, I would think that your incremental gross margins on some of these I don’t know Cash very well, but I would think the incremental gross margins on a lot of these products should be, you know, seventy, seventy-five, eighty, maybe even more. Something like MenuLink also, you know, you’re sort of getting you leveraging all the R&D. And as you ramp MenuLink, I would think you’d have really high gross margins on a lot of these on the organic, you know, sort of prospectively. So I know last couple of quarters, you’ve had some sort of purchase accounting stuff, and I know you had something with Stuzo that lowered gross margin that was sort of a purchase accounting thing.

But I would think, like, sort of prospectively, as you ramp twenty percent organic ARR or plus, you would get high incremental gross margins going forward.

Bryan Menar: Yeah. There and it’s not gonna be, like, a significant increase from what we’ve seen trended over time. Right? It’s a nice it’s I wouldn’t say it’s modest. It’s something we kind of pride ourselves on how we improve it. And as you know, it varies also depending upon the kind of types of products. Right? Generally, a POS kind of product might have a little bit heavy in R&D and a back office. You can see that across the industry. Right? But we focus on each of our areas to make sure that we see and push the teams in each of the areas to incrementally improve their margins.

Adam Wyden: Okay. Great. And then my second question is back on M&A. Obviously, we’ve seen some other companies buying stuff, I guess, smaller stuff, but you know, when I look at sort of other companies that sort of know, are sort of one of one assets in enterprise, I don’t I guess, you know, maybe one example would be, like, ServiceTitan, although, you know, they’re sort of a sort of a vertical stack software for small businesses. They sort of are the only game in town, you know, sort of the vertical sort of end-to-end product. You know, those companies are sort of growing high teens, and they’re trading at, like, twelve times revenue. I’m sort of curious how you think about sort of doing M&A in the context of, you know, where your cost of capital is.

I mean, on our math, I mean, obviously, going into today, you guys were sort of in the fives on an EV to ARR basis depending on how you value the hardware business. I mean, it doesn’t feel like you have a ton of spread on the companies that you’re buying. I’m just curious, like, you know, how do you think about sort of getting your cost of capital up to do M&A? Is it you know, do you think that you’re gonna get your multiple back up, you know, maybe comment on that and just sort of, you know, the duration of the growth that it’s not just about twenty percent ARR growth this year, but that you have a multiyear runway to it. I mean, I’d love to sort of see how you think about sort of those two sort of concepts together because the multiple structurally hasn’t really expanded over the course of the last twelve months.

Right? I mean, if you really think about where the business was, it sixteen or whatever, fourteen months ago, pre-government, pre-task, pre, you know, pre-delegate, your ARR per share has grown meaningfully faster than sort of the multiple. So I’m just curious.

Savneet Singh: Yeah. Let me just jump in because we got three more four more calls after. So short answer is, in the end, numbers matter more than anything else. You know, accounting is the language of business, and our numbers will dictate how our stock performs. I think our numbers are great and strong and getting better and better, and I believe that markets reward the durability of revenue ostensibly believe in the durability of cash flow, and I think we are continuing to demonstrate that over and over again. And I believe the multiple we will get rewarded for that. You know, in the end, software companies’ multiples should contract when growth slows, when your TAM gets to the end of it, and you become, you know, your rule of forty flips to, you know, all cash flow versus growth.

We don’t have that situation here. In fact, you heard in my commentary, while our growth won’t be linear, like, there’s a lot of really nice upside here in the second half of the year that will also happen the following year. And so I think that I don’t I don’t know how you get to the five number, but I think we feel really confident that we’re one of the few software companies in our size that will be able to continue to grow at, you know, rates that are higher well above the median, if you will. Continue to drive, you know, impressive profit numbers. So the multiple rewarded, the numbers numbers went in the end. It doesn’t matter what I say or do and the numbers matter and we’ll get there. Specifically, to your point on M&A, you know, you and I have talked about this extensively, but when you’re using, you know, multiples, it’s a relative game.

So if we’re trading at, I don’t know, seven times, you know, current ARR, you know, we will set the benchmark for the market, and there are very few companies that have metrics as good as ours, and so I suspect that we will buy them at a discount to that multiple. Now are there certain assets that we might not be able to buy because we’re not trading at a while multiple? For sure, but there’s not a lot of those. And not a lot of that we want and not a lot of that would make sense in our flywheel. So as I said in the script, you know, we’ve got a really strong M&A pipeline. You know, every time I’ve said that, you know, we’ve executed upon that. I think you’ll see us continue to do that. And the critical part, you know, in my script was, you know, M&A for us is a product strategy.

It’s not a, you know, let’s go buy some bunch of revenue. It’s how do we create add a product to increase our organic growth and then our long-term, you know, profitability. And so we feel really good about that today. If I didn’t, I would tell you, hey, M&A is not gonna be part of our strategy, but, you know, we’re on the first call of the year and, you know, we’re talking about here. So I think you can take that as feel the multiples holding us back from being acquisitive right now.

Adam Wyden: Yeah. I was just gonna clarify on the ARR multiple, like, when you look at sort of ServiceTitan and then even Agilisys post sell-off, those companies are still trading at, like, double-digit sales multiples on this year. And I was talking about, you know, sort of a five, five and a half times on twenty-six. And, you know, when you look at the company on a twenty-six ARR, or twenty-six EBITDA, I mean, it’s there’s a massive gap between companies like Toast and ServiceTitan, and even Agilisys post a forty percent decline. So I’m just highlighting the fact that, like, we’re executing, you know, on many levels better than these other companies from a growth incremental margin perspective, but we continue to trade at a discount. So you know, I hope we can figure out a way to narrow that discount because I think this is a best-in-class company.

Savneet Singh: And let the numbers drive that. So, you know, our numbers will drive it in, and I’m so confident we’ll get there. Alright. Thanks, Adam Wyden.

Operator: Thank you. Our next question comes from Andrew Hart with BTIG. Your line is open.

Andrew Hart: Hey. Thanks for the question. So, Savneet Singh, obviously, I think a big message today was the better together that you were pushing on. I guess as, you know, ARR’s doubled the past year, business has scaled much more robust platform right now. Can you just discuss a little bit how some of your conversations with these larger enterprise CTOs have evolved just from a brand perspective and sales pipeline perspective?

Savneet Singh: Absolutely. Listen. You thank you for pulling out the script. You know, listen, like I said, we signed eight POS deals in the quarter, which is impressive in the enterprise space. All of them picked multiple products. We upsold our largest customer another product. You know, clearly the flywheel that I’ve talked about is working, and Delegate is really going to accelerate it. You know, Adam Wyden or sorry, the caller before Adam Wyden talked about it, but, you know, it’s a beautiful thing when that it’s working. You know, my conversations with these organizations, you know, I think we’re setting up for a really interesting outcome. As consumers, you know, there’s consumer uncertainty right now, so restaurants are now really focusing on digital efforts because they’re trying to create efficiencies in the back of house and pull you in the front end.

And so they’re creating more investments in technology. However, they’re making those investments in technology without increasing their staff. In fact, many restaurant companies, you know, are flat staffed, particularly in operations and IT space. And so how are they gonna do that? Probably don’t wanna add three more vendors. They probably wanna attach it into PAR Technology Corporation. And so I’ve had, you know, a couple of sales processes I’ve been a part of where, you know, it’s very clear that the reason why they love us is not just because their products are best in class, it’s because they can just trust the existing core relationship. And so, you know, we’ve spent an incredible amount of time and effort rejiggering our teams focusing on that account management side so that we can bring in those products.

And I just wanna be clear, we do not win because we bundle, we win because the products work better together. And, you know, my push to the Delegate team that now runs combined PAR Technology Corporation Data Central is the win for here us is not is that a year from now or six months from now, a customer looks and says, oh, when I had Delegate in PAR Technology Corporation, as two separate vendors, it was a different experience than when I had it under one roof at PAR Technology Corporation. That and I can’t stress you how powerful that is to the end customer. And we’ve had a lot of amazing examples of how we’re winning deals by just showing that in a demo saying, hey, what happens if you’ve got Punch and Brink, look at this unique functionality you can have with POS that others can’t.

So it really is a theme, you know, I think candidly we’re probably really too early on this thesis, you know, we’ve been talking about it for a long time, but it’s certainly playing out and again, you know, I never would have dreamt that all of our deals in a quarter were multiproduct deals, you know. That’s a really exciting change rep.

Andrew Hart: Thanks. And then thinking about 2025, you know, you talked about the Burger King expansion, the payments deal, the convenience deal. There’s a lot of moving pieces. You know, another one is, I guess, Stuzo gets layered into organic and Task gets layered into organic. So can you maybe talk about some of the things that can, you know, drive, you know, much higher than 20% growth, some of the things that you really have to execute on. And when you think about your staff in two Task and Stuzo getting layered into organic, how have those, you know, businesses been coming along as we get ready for 2025?

Savneet Singh: Great question. So one is getting our become organic will certainly help us. Stuzo, I suspect, will grow faster than 20% a year. I, you know, the Task Task has two businesses Task and Plexure Task itself will grow greater than 20% a year. Plexure might will be sort of closer to the Engagement Cloud growth rates. Then Delegate will go well above the 20%. So as we lap the acquisitions, you will have faster organic revenue growth because the acquisitions in general, we look to buy stuff that’s growing faster than us. So that’s just mathematically a nice part of it if that happens. And actually, I did mention on the other question, but that will also help the back half of the year as those as we update acquisition.

Second though, and listen more importantly, it’s our ability to execute upon the deals that we have in place. So to be up, you know, our plan, if you will, to get to 20% plus growth assumes a relatively conservative rollout at our largest POS customer. We wanna blow through that, and I know our partners at that company we can do even double of what we’re gonna do. And so that’s number one. Can we execute on that? Number two is in PAR Retail, you know, the team has done an incredible job, you know, I really, you know, leadership there has done a great job of driving that business, but we have tremendous levers in driving real upside to our deals there. Because in certain deals in PAR Retail, our pricing increases based on our performance. And so, as we have great performance, the pricing goes up quite meaningfully there.

And then third, is our ability to execute and get deals live and earlier than we expect. And that’s something that I think our team is feeling really good about today. We’ll see as it progresses, but there are a couple of really meaningful levers there to sort of that I think I see us out there. And then, you know, the last thing I’d say is that as we, you know, fold in these acquisitions, they do create an accelerated go-to-market motion because now we can pull in Data Central because the customer already uses Delegate as an example. We can pull in stuff faster and it’s just short in our sales cycle. That might not be the big lever, but I think over time, it creates a nice ability to shorten sales cycle, though, also.

Andrew Hart: Thanks, again.

Operator: Thank you. Next question comes from Charles Nabhan with Stephens. Your line is open.

Charles Nabhan: Hi. Good morning, and thank you for taking my question. I wanted to drill into the previous question a little further. Specifically around Task and the international opportunity. Clearly, that expands your TAM. It sounds like it’s growing in excess of 20%, but wondering if you could speak more broadly about the international opportunity, how you see that playing out, and, you know, any more specific color around Task would be helpful as well.

Savneet Singh: Absolutely. And give us another quarter because we’re gonna we’re making a lot of investments and changes there. We’ll just kinda talk about the next quarter or so. But, you know, I think right now, core markets we’re focusing on are sort of, you know, the APAC region where we’ve got a really strong foothold. You know, we are winning the sort of marquee brands in Australia, New Zealand, and that part of the world, and we’ve got a long, you know, a really nice pipeline to get executed on. So what we’re really kinda helping the team is operationalize that part of the business so that they can become as programmatic as we can about getting sites out the door. A small business, so it hasn’t gone through that scaling, if you will, of how do you add a thousand sites a quarter or something like that.

And so we’re working to kinda implement that took one of our best leaders at PAR Technology Corporation, and, you know, put him in charge of Task. And he is driving that. And so we’re gonna focus on that region first. Pull that forward, do a great job. We have already, you know, I think, brought in one or two really high-quality brands that are US brands that want to expand to that region to partner with us there. That’s crazy exciting for us because then obviously we can grow them, you know, in other parts around the globe. But we’re trying to master that one region, and then we’ll kind of expand out how to that.

Charles Nabhan: Got it. As a follow-up, I wanted to ask about the hardware, Mark. Nice little uptick this quarter. Apologize if you touched on this already, but you maybe talk about the drivers of that expansion during the fourth quarter as well as how we should think about that margin within hardware going forward. Are we sort of at peak margins within that business or could we potentially see more expansion as we move through 2025?

Bryan Menar: So we’ve been in both the hardware and some of the professional service actually linked to the hardware, we’ve been able to increase margin, percent year over year as you saw. Now, like, in the mid-twenties for hardware. Which we’re, you know, we’re proud of. Right? Some of the best hardware products are out there, like, in the low thirties. So we would like to continue to increase. We understand we’d only be modest work where we’re gonna get from that. And then from the actual professional services, as you saw, we went up from a ten percent last year to a twenty-eight percent. And so now we’ve been consistently in the mid to upper twenties on professional services. And that’s correlated as we continue to grow some of our hardware business that that would also increase from a revenue and then it’s recurring revenue.

So it gives consistent margins below that. But I would not expect this to have significant margin improvement in both in the hardware and professional services, but we are proud of how we’ve improved that for the past couple of years.

Charles Nabhan: Got it. Appreciate all the color, guys. Nice quarter. Thank you.

Savneet Singh: Thank you.

Operator: Thank you. Our next question comes from Anja Soderstrom with Sidoti. Your line is open.

Anja Soderstrom: Hi. Thank you for taking the question. Most of them have been addressed already, and congrats on the great year here. I have one question in terms of the tier-one pipeline. Have you seen that expanded? And how are you talking to those potential customers in terms of upselling as well? And how are you gonna be able to take on a tier-one customer in the near future given the expanded rollout with BK?

Savneet Singh: So tier-one pipeline remains strong. I think what the change we’ve seen is clearly the mid-market is really picking up for us. So it’s kinda nice to see that. You know, as far as being able to roll out additional concepts, we feel very good about that. You know, with BK, you know, this rollout and plan, the additional part of the rollout is a new module, a new product. So it won’t impact kind of the core POS pipeline that’s been strong for some time here. So I don’t think it’ll have an impact. And, you know, as I said, in Q1 and Q2, we’re making some real investments to, you know, make sure we don’t have any stumble there. You know, I think it’s, you know, one of the mistakes I see our peers making we used to make years ago is you spend all this time getting software.

Right? But then you get the rollout because you didn’t, you know, hire enough bodies or training. And so we’re, you know, we over-invest in that now because I think getting that right, you know, pulls revenue in faster and, you know, you make it up in spades down the road.

Anja Soderstrom: Okay. Thank you. That was all for me.

Savneet Singh: Thanks, Anja Soderstrom.

Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to Christopher Byrnes for closing remarks.

Christopher Byrnes: Thank you, Daniel, and thank you to everyone for joining us today. We look forward to updating you further in the coming weeks and days. Have a nice day and a great weekend. Thank you.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.