PAR Technology (PAR, Financial) announced its first-quarter revenue at $103.9 million, slightly below market expectations of $105.16 million. The company attributed its continued strong performance to the successful implementation of its Better Together software strategy and the stable nature of the enterprise food-service sector.
The company's Operator and Engagement solutions played a significant role in driving results, leading to over 20% organic growth in subscription service revenues, amounting to a total increase of 78%. Annual recurring revenue (ARR) saw an 18% rise compared to the first quarter of the previous year.
Moreover, the rising adoption of multi-product deals contributed to improved gross margins year-over-year. PAR Technology also reported its third consecutive quarter of positive Adjusted EBITDA, indicating a robust financial trajectory.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for PAR Technology Corp (PAR, Financial) is $87.00 with a high estimate of $105.00 and a low estimate of $57.00. The average target implies an upside of 39.42% from the current price of $62.40. More detailed estimate data can be found on the PAR Technology Corp (PAR) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, PAR Technology Corp's (PAR, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for PAR Technology Corp (PAR, Financial) in one year is $51.16, suggesting a downside of 18.01% from the current price of $62.4. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the PAR Technology Corp (PAR) Summary page.
PAR Key Business Developments
Release Date: February 28, 2025
- Revenue: $105 million in Q4, a 50% increase year-over-year.
- Subscription Services ARR: $276 million, more than doubled from last year with 21% organic growth.
- Adjusted EBITDA: $5.8 million, more than doubling sequentially from the previous quarter.
- Net Loss from Continuing Operations: $25 million or $0.68 loss per share, compared to $22 million or $0.77 loss per share in the prior year.
- Non-GAAP Net Loss: $37,000 or effectively $0.00 per share, improved from $12 million or $0.43 loss per share in the prior year.
- Gross Margin: $45 million, an increase of 86% from the prior year.
- Subscription Services Revenue: $64 million, a 55% increase from the prior year.
- Hardware Revenue: $26 million, a 7% increase from the prior year.
- Professional Service Revenue: $15 million, a 17% increase from the prior year.
- Cash and Cash Equivalents: $108 million as of December 31, 2024.
- Cash Flow from Operating Activities: Positive $3 million for Q4.
- Annual Recurring Revenue (ARR): Increased 102% year-over-year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PAR Technology Corp (PAR, Financial) reported a significant revenue increase of over 50% year-over-year in Q4 2024, reaching $105 million.
- Subscription services ARR more than doubled to $276 million, with 21% organic growth compared to Q4 2023.
- Adjusted EBITDA improved significantly, more than doubling sequentially to $5.8 million, indicating strong margin expansion potential.
- The company signed 8 new customer logos in Q4, all selecting multiple products, validating their 'Better Together' strategy.
- PAR Technology Corp's acquisition of Delegate is expected to accelerate cross-sales and expand their market reach, with strong customer interest already evident.
Negative Points
- Net loss from continuing operations for Q4 2024 was $25 million, slightly higher than the $22 million loss reported in the same period in 2023.
- The rollout of new products for Burger King is expected to delay the timeline by a quarter and a half, potentially impacting short-term revenue.
- Hardware margins decreased to 26% from 29% in the prior year, partly due to one-time inventory adjustments in Q4 2023.
- Operating expenses increased by 25% year-over-year, driven by M&A transaction fees and stock-based compensation.
- The company faces challenges in the full-service dining space, with a slowdown impacting some of their customer segments.
