PAR Technology Q3 2026 Earnings Call Transcript

PAR Technology (NYSE:PAR) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

PAR Technology reported record revenue of $137.1 million for Q3 2026, a 15% year-over-year increase, with adjusted EBITDA tripling to $17.1 million.

The company achieved a sequential increase in ARR to $354.5 million, marking the strongest ARR growth of the year and a 13% organic year-over-year increase.

PAR launched several new strategic initiatives including a customer data platform and PAR Intelligence enhancements, driving multi-product adoption and deepening customer relationships.

Notable customer wins included contracts with Poulet Rouge, Carvel, and Capriotti’s, and successful rollouts in partnerships with Burger King and Papa John’s.

Management highlighted strong financial improvements, with a focus on optimizing existing operations through AI and maintaining a robust pipeline for future deals.

Guidance for Q4 2026 projects revenue between $138 to $142 million and adjusted EBITDA between $17.5 to $19 million, with continued investment in R&D and expansion of product offerings.

Full Transcript

Jacinda (Moderator)

Good day, and thank you for standing by. Welcome to the PAR Technology 2026 third quarter 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 the session you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Chris Burns. Please go ahead.

Chris Burns

Thank you, Jacinda, and good afternoon, everyone. We appreciate you joining us today for PAR Technology’s 2026 third quarter financial results call. Earlier today we released our Q3 financial results. The earnings release is available on the Investor Relations page of our website at partech.com, where you can also find the Q3 financials presentation, as well as in our related Form 8-K furnished to the SEC. Before we begin, please be advised that our remarks today will contain forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information on these factors, please refer to our earnings release and our other reports filed with the SEC.

In addition, we will be discussing or providing certain non-GAAP financial measures today, which we believe will provide additional clarity regarding our ongoing performance. For a full reconciliation of the non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our Form 8-K filed this afternoon and our supplemental materials available on our website.

Joining me on the call today is PAR Technology CEO Savneet Singh and Bryan Menar, PAR Technology Chief Financial Officer. I’d now like to turn the call over to Savneet for the formal remarks portion of the call, which will be followed by general Q&A. Savneet

Savneet Singh (President and CEO)

Thanks, Chris, and thank you all for joining us today. In Q3, PAR remains squarely focused on delivering against our long-term growth strategy. We expanded our platform functionality with the release of a customer data platform, launched six new PAR Intelligence coaches and agents while tracking to exceed our full-year live site target of 50,000 stores, and saw cross-vertical traction with our customer identity resolution offering, all the while aggressively investing for the future.

We also managed to deliver record revenue, record adjusted EBITDA, and record free cash flow. We reported $137.1 million of revenue, up 15% year over year. Adjusted EBITDA was $17.1 million, nearly three times the level we produced a year ago and a $2.8 million increase sequentially. Free cash flow came in at $17.7 million. This marks our third consecutive quarter of increased sequential growth. Growth, profitability, and cash conversion expanded because of the continued success of our product suite in market led by our push of PAR Intelligence and bundled platform deals, climbing unit economics, and continued expansion of our operating leverage.

This is a model we have been building towards: a scaled platform where each incremental customer, product, and workflow makes the system more valuable while the economics improve underneath it. We exited Q3 with ARR of $354.5 million. The $16.5 million sequential increase from Q2 was the strongest ARR add of the year and brought organic year-over-year growth to approximately 13%. Our continued top-to-bottom line financial improvements are indicative of our ability to grow while also operating more efficiently within our cost of sales and opex.

Current market dynamics have restaurant and retail operators being squeezed between margin pressure and a consumer who is more sensitive to affordability. In that environment, an integrated platform earns its customers by helping brands run more consistently, innovate faster, and simplify the operating environment. Moreover, prevailing high interest rates ensure that brand growth is no longer over-indexed on new store openings. Optimization within the existing four walls and closing the gap between the best and worst performing sites—on average, a 6.4 times difference in profitability—offers a material uplift in earnings at a fraction of the spend. Importantly, AI has increased the relevance of our platform approach in this historically best-of-breed market. PAR unifies every transaction and every guest to deliver a foundation for agentic AI, and customers identify PAR as their principal partner to build an agentic future.

We saw this across the portfolio. Turning first to our restaurant performance in Q3, new customers Poulet Rouge and Carvel selected Punch, our industry-leading loyalty and engagement product. Adding Carvel now brings the complete GoTo Foods portfolio onto PAR. Of the new customer deals signed in Q3, more than 80% were multi-product. Habit Burger, Kura Sushi, Goodcents, and Jack’s Family Restaurants also renewed with product uplifts or expansion offerings.

PAR Ordering had another strong quarter, signing new customer deals including our largest ordering agreement to date with a large national restaurant chain that we’ll talk about post-launch next year. This will be a highly visible and important competitive takeaway. Capriotti’s, a sandwich chain, also selected PAR Ordering for their 175-plus stores. These larger and consistent wins continue to prove out the appeal of one connected digital cockpit and the advantage of solving ordering, loyalty, payments, and catering together rather than through disconnected products.

Critically, customers are seeing ordering as a natural platform extension of their existing PAR products, ensuring a robust and growing pipeline with active brand dialogue. Our POS business is executing well, and our current large enterprise rollouts are proceeding at accelerated timelines. We remain ahead of plan on Burger King’s point-of-sale activations and have crossed over 5,000 sites through September, and will kick off Papa John’s implementation at scale in Q4 as we roll out PAR POS and PAR Ops to their 3,000-plus U.S.-based stores.

On the new innovation front, this quarter we launched Guest 360, a customer data platform integrated into Punch that expands PAR’s guest intelligence beyond loyalty members to the broader restaurant base. By unifying transactions and engagement data across channels, Guest 360 enables brands to identify, segment, and activate guests directly within Punch and measure resulting revenue. What’s more, we continue to make tremendous strides on the next major version of our POS, which will release next year.

Completely agentic and built for this new world where time to delivery and innovation is tantamount, it will continue to drive PAR POS as a leader within restaurants. This innovation will reimagine the next generation of PAR’s POS platform while continuing to invest in the customers and products that got us here. It will be a new cross-platform experience on a modern architecture. The goal is simple: create a clear path forward for every customer regardless of where they start and make it easier for them to benefit from everything we are building across.

And now turning to PAR Retail, PAR Retail delivered another strong quarter of platform momentum. A Tier 1 major oil company signed a significant five-year partnership with PAR. The relationship also has meaningful expansion potential as the customer grows its network and adopts additional products, including our self-checkout solution, Touchpoint, and most importantly, PAR Intelligence. Kwik Fill, part of United Refining, selected PAR Retail and PAR Intelligence across more than 300 locations.

These customer wins reinforce a core part of our advantage: we can bring together hardware, software, data, and intelligence across convenience, retail, and food service. Similar to restaurants, the PAR platform playbook is working. This is a result of a concerted effort in bringing together our hardware and services offering, combining it with engagement software onboarded via the Stuzo acquisition in 2024, and building new functionality on top of the existing stack via PAR Intelligence.

Bridge also expanded its strategic relevance to PAR in the quarter. While our engagement products power loyalty and campaigns, and PAR Intelligence turns data into decisions and actions, Bridge adds the ability to recognize and understand shoppers beyond the loyalty program by connecting previously anonymous purchases to enrich customer profiles. That expands the audience brands can reach, gives PAR Intelligence a more complete view of customer behavior to turn fragmented signals into better decisions, and strengthens the measurement of marketing’s impact on sales.

The scope of Bridge is potent: 250 million-plus verified identities covering more than 90% of the U.S. population means that product-market fit is incredibly high if coupled with the likes of PAR Intelligence. An additional national retailer selected Bridge in the quarter after moving from a competing identity resolution platform. Our recently released Bridge 2.0 launched in October, and we believe the product is increasingly central to how we extend PAR Intelligence beyond a single vertical or workflow.

In summary, all of what we do centers around our platform and AI strategy. PAR Intelligence represents the next evolution of the PAR platform, a unified AI layer designed to improve execution and profitability across every customer location. Its differentiation rests on PAR’s extensive industry-specific data and ability to embed autonomous agents across its integrated software ecosystem. Already deployed agents support operational insights, personalized offers, and software development, creating a foundation for an expanding portfolio of AI-powered capabilities.

A restaurant or retailer does not create value by asking more questions; it creates value by making better decisions faster across thousands of locations. PAR Intelligence is designed to connect the signals already moving through PAR, including transactions, loyalty, ordering, inventory, and operations, and turn those signals into actions an operator can understand, approve, and measure. We remain focused on adoption and measurable outcomes in 2026 while building the premium capabilities in market and product attachment that can make AI a more meaningful revenue contributor in 2027.

The current use cases include offer performance, member growth, basket analysis, operational efficiency in-store and drive-thru, throughput speeds, financial review, and operating issue resolution. Although customers are currently paying for different facets of PAR Intelligence, it’s premature to force an artificial AI revenue metric just to satisfy the moment. We will show adoption, customer outcomes, and monetization as they become measurable and repeatable.

Before turning the call over to Brian, let me make some comments about big-picture items for our company. The improvement in our profitability is not coming from a retreat in product investment or a one-time surge in savings. Through the first nine months of 2024, adjusted EBITDA reached $40.4 million compared with $15.9 million in the prior-year period. At the same time, our R&D investments increased on a GAAP basis while G&A declined. We are investing in new product innovation to ensure continued growth acceleration while leveraging AI to drive efficiencies at traditional cost centers.

Our platform strategy is building customer relations over time versus maximizing prices in the short run. The current landscape makes PAR more indispensable to its customers than ever. As I recently shared, brands must get more out of their existing four walls as they are faced with depleting margins on the revenue front via a punishing third-party delivery tax, an inflationary labor and inventory environment, and rising interest rates. The ability to enhance individual store outcomes with localized guidance—made possible by PAR Intelligence—spotting what is affecting operational guest performance in real time at any unique location and driving context-aware actions will ultimately narrow the gap between the best and worst performing stores. Enabling the maximization of an individual outcome at a store and guest level is what AI catalyzes, something we could not do before this AI moment.

With that, I will turn the call over to Brian to review the financial results and outlook in more detail. Brian.

Bryan Menar (Chief Financial Officer)

Thank you, Savneet, and good afternoon, everyone. In Q3 we continue to demonstrate growth with profitability, Delivering both total revenue and adjusted EBITDA that exceed the consensus and the high end of the guidance. Our 15% year-over-year growth for the quarter was driven by all three revenue streams and across the verticals we serve. Combined with our focus on OPEX operational improvement, we delivered incremental margin dollars down to the bottom line. For the seventh quarter in a row, adjusted EBITDA has grown sequentially, reaching 17.1 million in Q3, up 11.3 million, or 193%, compared to Q3 prior year, and an improvement of 2.9 million sequentially from Q2 this year.

Now to the financial details. Total revenues were 137 million for Q3 2026, an increase of 15% compared to the same period in 2025, inclusive of subscription service revenue growth of 15%. Net loss for the third quarter of 2026 was 9 million, or a 22 cent loss per share, compared to a net loss of 18 million, or a 45 cent loss per share reported last year. Non-GAAP net income for the third quarter of 2026 was 10.8 million, an improvement of 8.8 million compared to 2 million in Q3 2025, and non-GAAP diluted earnings per share for Q3 2026 was $0.24 compared to $0.05 for the same period in ’25.

Now for more details on revenue. Subscription service revenue was reported at 86 million, an increase of 15% from the 75 million reported in the prior year, and represents 63% of total PAR Technology revenue. ARR exiting the quarter was 354.5 million, an increase of 18% from last year’s Q3. Organic ARR was up 13% year over year. ARR grew 16.5 million incrementally during the quarter, resulting in our second strongest organic ARR growth quarter ever.

Hardware revenue in the quarter was 34 million, an increase of 15% from last year’s 30 million. Professional service revenue was reported at 17 million, an increase of 16% from last year’s 15 million. Now turning to margins, gross margin was $60 million, an increase of 22% from the $49 million reported in the prior year. The increase was driven by subscription services with gross margin dollars of $48 million, an increase of 16% from the $41 million reported in the prior year. GAAP subscription service margin for the quarter was 55.8% compared to 55.3% last year. Non-GAAP subscription service margin for Q3 2026 was 66%, relatively unchanged compared to 66.2% in Q3 2025.

As discussed last quarter, we anticipated sequential margin improvement as we executed planned business model changes for the Bridge product line. This quarter’s results reflect progress on those changes, with non-GAAP subscription margins improving 90 basis points sequentially from Q2. Hardware margin for the quarter was 23% versus 18% in the prior year. This quarter’s performance is in line with recent quarterly results. Professional service margin for the quarter was 26% compared to 18% reported in the prior year.

Prior year margins were negatively impacted by a cost adjustment in that period. In regard to operating expenses, total GAAP operating expenses for the quarter were $65.5 million, down 2% from 66.9 million in Q3 2025. On a non-GAAP basis, operating expenses were 51.9 million, relatively consistent with the 51.7 million in the prior year. Excluding expenses stemming from recently acquired Bridge, non-GAAP operating expenses decreased 1.5 million year over year. In the current period, non-GAAP OPEX as a percent of total revenue was 38%, a meaningful 550 basis point improvement from the 43% in Q3 last year, demonstrating our ability to continue to scale efficiently and drive operating leverage.

Our ability to drive operating leverage and additional scale is a result of our teams identifying and driving integration improvements post the realignment of business operations into two verticals earlier this year, along with embedding our AI toolset as a strategic component of our operating model. Now to provide information on the company’s cash flow and balance sheet position. As of September 30, 2026, we had cash and cash equivalents of 94 million, an increase of 17 million compared to the prior quarter, driven by 17.7 million of free cash flow with cash provided from operations of 21 million, partially offset by investing activities of 3 million driven by capitalized software. The improvement in free cash flow conversion this quarter is consistent with the expectation we outlined on our last call as we drove incremental profitability along with seasonal working capital tailwinds, including 10 million of customer prepayments.

For Q4 we expect incremental modest positive free cash flow driven by continued profitability improvement but with more muted working capital support. Now let me share our expectations going forward. For the second consecutive quarter, both total revenue and adjusted EBITDA exceeded the high end of our guidance. We continue to grow the business while translating that growth into stronger profitability and cash flow. For the fourth quarter of 2026 we expect total revenue in the range of 138 to 142 million and adjusted EBITDA in the range of 17.5 to 19 million. For the full year 2026, we now expect total revenue in the range of 532.5 to 536.5 million, up from the prior range of 516 to 523 million, and adjusted EBITDA in the range of 57.9 to 59.4 million, up from our prior range of 50 to 53 million.

A few points of context on the outlook: we expect subscription service revenue growth to continue to strengthen in Q4, and on hardware, we expect revenue to stay at historical levels in Q4, primarily due to product refreshes in our legacy tier 1 accounts. Our profitability, adjusted EBITDA of 17.1 million in the third quarter combined with our outlook for Q4, reflects consistent strengthening of our financial profile driven by both continued top line growth and consistent discipline managing our cost base.

We expect additional gross margin flow-through from the increased Q4 revenue to be partially offset by a modest increase in OPEX in key investment areas within R&D and sales and marketing. I will now turn the call back over to Savneet for closing remarks prior to moving to Q&A.

Savneet Singh (President and CEO)

Thanks, Bryan. Before we open the call to your questions, let me leave you with four important points. First, our platform strategy is working. Our consistent ARR build only strengthened in Q3 and multi-product adoption continues to deepen our customer relationships. Customers see economic and functional value in our bundled offerings. This is leading us to have strong confidence not only in Q4 but what we see shaping up for a strong first half of next year.

Second, PAR Intelligence is moving from adoption to outcomes. Ultimately, the value is not a better dashboard, it’s a better decision embedded in the operating workflow and measurable at the store level. Third, the economics of our business are attractive and growing. We are growing gross profit, improving cash flow, expanding adjusted EBITDA and becoming more efficient while continuing to invest in the products that can drive the next stage of growth. Greater operating leverage has been the principal catalyst while our multi-product contracting module and improvements to ARPU, ARR to CAC and longer contract runtimes ensured continued multi-year trajectory.

Fourth, we remain firmly on offense by investing in future growth opportunities. We will not compromise on the long-term durability of our business, whether this be by aggressively taking price in the short run or underfunding or rejecting high-potential opportunities because of a multi-year project timeline. Enterprise tech requires continuously making principled bets and executing against the vision with staying power. This quarter our dual mandate of platform and PAR Intelligence has led to the release of a CDP system and the launch of six coaches and agents. The move to AI, though, is not just about an ordering agent or a chat interface. It’s about the complete rebuild of the operating model of our category. Most companies are spending millions improving customer experience their next customer will never see. They’re redesigning websites, building better apps and adding AI chatbots.

But what happens when the customer stops showing up? We think the next great disruption in business won’t just be AI replacing employees, it’ll be AI replacing customers. Not the demand, but the humans making purchasing decisions. But the bigger disruption isn’t who places the order, it’s what happens to the business on the other side of it. When customers become software, entire organizations built around selling to, servicing and coordinating with humans will need to be redesigned.

The way companies price, operate, make decisions and deliver products will fundamentally change. This moment excites us as a team and positions us to be a true partner to our customers living through the most intense disruption of their lifetimes. We said 2026 would be a show-me year. Our third quarter was in the spirit of this and has set us up to close the year out strong, including, amongst other things, the combination of ARR growth with a compounding adjusted EBITDA trajectory. This is the third consecutive year we are doubling adjusted EBITDA.

Importantly, the underlying market dynamics support a very long runway. I want to sincerely thank our team members for their incredible commitment to serve our customers while continuing to do more each and every day. It’s not easy to achieve the results we have and it’s only been possible because of a dedicated team committed to a long-term vision. We’ve asked a lot from our people and we continue to raise the bar and they continue to deliver. I couldn’t be prouder of the team we built. With that, operator, we can open the line for questions.

OPERATOR

At this time we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Mayank Tandon at Needham.

Mayank Tandon (Analyst)

Thank you. Good evening, Savneet. Congrats on the quarter. I wanted to start with your comments around just the end market being healthy. That was my sort of takeaway and the fact that you’re obviously winning these multi-product deals that are ramping up. So any initial thoughts on 2027? Is it conceivable that you can accelerate your growth just given some of the tailwinds as you exit ’26 into ’27? How should we think about that? And the same question on profitability.

You know, there have been obviously levers to drive margin expansion. How sustainable are those to drive further margin improvement in 2027?

Savneet Singh (President and CEO)

Thanks, Mayank. You know, I think, you know, this quarter we grew 13% ARR growth, up from the prior quarter and up from the quarter before that. We absolutely think there’s opportunity for that to grow as we continue to win new deals. And with this multi-product attachment really starting to kick in, it’s certainly quite plausible. In terms of margin, absolutely. I think we’ve done a good job of growing while holding costs, and you know that DNA is kind of with us, and so we’ll continue to hold ourselves, hold us up there and, you know, we want to expand what we do in 2027 on the bottom line as much as we do on the top line.

Mayank Tandon (Analyst)

Got it. Now I know you’re not overly reliant on tier one deals just given the deal activity this year and wins that you called out. But any updates in terms of large enterprise opportunities, what the pipeline looks like, the RFP activity, where you stand on some of these opportunities as you go into 2027.

Savneet Singh (President and CEO)

We can’t comment on anything specific, but I think that the Tier 1 pipeline is strong across both Engagement and Operator and we feel confident in our position. And as I kind of touched on the call, as we get the next major versions of our product out on the POS side in particular, I think it will help us win more deals, but also, you know, accelerate deals in time. But, you know, the pipeline’s strong. We can’t unfortunately comment on anything specific, but, you know, it continues to be really healthy.

OPERATOR

Our next question comes from Steven Sheldon at William Blair.

Steven Sheldon (Analyst)

Hey, thanks. First one, just on active sites. That was pretty flat sequentially and I think most were expecting to see that tick somewhat higher given the large deployments that are underway. So was there offsetting churn to consider? If so, was it concentrated to any specific product categories, and should we be expecting an uptick in active locations in 4Q?

Bryan Menar (Chief Financial Officer)

Yep, there was. It was an offset. Where it was was in a couple of our smaller concepts with single products that were not kind of the core products. And so what you actually kind of see that offset to, you see the ARPU increase significantly again quarter, quarter. And so that was the offset then with sites that we put on, but also with multi-product sites.

Steven Sheldon (Analyst)

Got it. Makes sense. And then on subscription gross margins, it’s been in a very tight range this year. I know there are a lot of moving pieces, so maybe just refresh us on some of the puts and takes there. Possible. Sounds like Bridge improvements helped this quarter, but yeah, we’d love some of the puts and takes there and maybe just early thoughts on how you think that could trend next year and going forward, especially as we continue to see these Tier 1 go-lives.

Bryan Menar (Chief Financial Officer)

I just want to make sure I’m understanding your question directly. And the puts and takes in some of the products that we’re rolling out.

Steven Sheldon (Analyst)

Sorry, just the subscription gross margins. Like it’s been in a tight range, it’s lower than it has been. It’s been as high as low 70s going back a few years ago. So do you see a pathway to getting that back closer to 70%?

Bryan Menar (Chief Financial Officer)

It would be over time. Right. So I think in each of our individual products we actually haven’t seen any kind of margin rate degradation. When we initially acquired Bridge, we knew we were acquiring at a time that had lower margin rates, but we also saw visibility of how we can continue to improve those. You actually saw that transpire here in Q3, which I kind of hinted at in the earnings script. What I would say is probably this: we’re at 66%. You know, going up at 66 to 67, 68 is probably in the foreseeable future where we’re at right now as we blend those margins in. We still have the headwinds also from, as we know, the acquisition that we had with the Plexir account that we know we’re working through. And that’s something that, you know, as we work through that actual contract through the exit of next year, we have an ability to change those margin rates as well.

Steven Sheldon (Analyst)

Got it. Thank you.

OPERATOR

Our next question comes from Eric Martinezzi at Lake Street Capital Markets.

Eric Martinezzi (Analyst)

Yeah, at least versus my own model, it looks like there is a good chunk of outperformance on the hardware side. Wondering just kind of if there was any particular onesie-twosie behind that? And then the expectation for Q4 for hardware. Could you cover that again?

Savneet Singh (President and CEO)

Yeah, you know, as Bryan mentioned in his script, we do see stronger hardware demand from our historical large Tier 1 accounts on the hardware side. And, you know, I think, you know, we sort of continue to say we don’t think it’ll continue to stay this high, but, you know, I think it’ll start to come back to normal levels over the next couple quarters here because we’ve had this very, very strong outperformance this year. And also I think part of it is, you know, our strategic management of our supply chain allowed us to be in a better position than many of our peers to support our customers during this time.

So I think we’ve won more share. Hopefully that relates to us also then continuing more share from a service perspective and then eventually from an error perspective. And so, you know, I think it’ll continue to be very high in Q4, maybe not quite as high as it is now. And then, you know, we’ll see how ’27 looks.

Eric Martinezzi (Analyst)

And is that—I saw the inventory uptick between Q2 and Q3. That’s to support those large Tier 1 accounts’ demand? Kind of my words, not yours, but a bit of a bubble here over the next couple quarters.

Bryan Menar (Chief Financial Officer)

Yeah. And it’s also simpler—and we’ve talked about, Eric—commitments we were making earlier this year on the memory chips. And so in Q3, we had some of our phase payments of those going in too. So you’re correct. I think inventory was up to about 41 million here. But we’re feeling good that what we’ve actually negotiated early this year takes care of us from a memory chip standpoint at least a year out from where we’re at right now, and we were able to actually lock in versus current chip rates probably 30–40% cheaper pricing because of that.

So we were willing to make that bet out there knowing that we had committed an amount from our customers. So that’s probably—that, in addition to the increased revenue activity you’re seeing in the near term—is why the inventory level is where it’s at.

Eric Martinezzi (Analyst)

Okay. And then terrific performance on the profits. It’s really nice to see the plan come to fruition here. On the adjusted EBITDA expansion in the back half of the year, as far as the SG&A, I think you said it was 51.9 million on the non-GAAP OpEx. What’s the expectation for Q4?

Bryan Menar (Chief Financial Officer)

It’s just—it’s going to be a modest increase. Right. So, I mean, when I’m talking about modest, you’re talking like maybe 1 to 2 million tops. That’s in there. We continue to manage through on the G&A. It’s more just some incremental investment in R&D and a little bit in sales and marketing.

Eric Martinezzi (Analyst)

Thanks for taking my questions.

OPERATOR

Our next question comes from Ella Smith at JPMorgan.

Ella Smith (Analyst)

Good evening. Thank you so much for taking my questions. So first, I know it’s early to talk about monetization, but I’m curious how you’re thinking about the roadmap to monetizing PAR Intelligence. And what do you think is the right pricing model for it?

Savneet Singh (President and CEO)

You know, from a roadmap perspective, our goal has been to get our product in the hands of as many users as possible. You know, see how they use it, see how they engage, look at the telemetry data to make sure we’re adding value, and then look to monetize, you know, next year. I think what we’ve observed so far is that the value we create is significant, and the key point for us will be to prove to our customers that the value we’re creating could not have been created without PAR Intelligence, which we’re excited to sort of get that out the door the next quarter or so here.

And, you know, I think once we prove that, you know, monetization will come right after. In terms of how we monetize, you know, today we’re envisioning it as a more traditional SaaS model, but, you know, it sort of depends on what outcomes we can create going forward. But I think to the categories that we serve, I think they’ve been used to that model and I think that’s what they’ll expect us to continue with.

Ella Smith (Analyst)

Very clear. Thank you. And Savneet, on Burger King, can you please give us a lay of the land? What has already been accomplished and what has yet to be deployed in 4Q and in 2027?

Savneet Singh (President and CEO)

Yeah, in Q3 we crossed well over 5,000 sites. We hope to be principally done by the end of this year. So there’s not a ton left after we get through this year, and then we’ll start working a lot harder to start rolling out more aggressively PAR Ops next year. So we’ve got some nice, call it backlog, if you would, on that side.

Ella Smith (Analyst)

Very clear. Thanks so much.

OPERATOR

As a reminder to ask a question, you will need to press Star 11 on your telephone and wait for your name to be announced. Our next question comes from Andrew Hart at BTIG.

Andrew Hart (Analyst)

Hi, thanks for the question. Great progress on the EBITDA margin. I know we’re not talking about 2027, but, Savneet, would love to just kind of hear how you’re thinking about the incremental margins in the business and maybe a framework you could kind of provide us so we can start putting math around where we think 2027 EBITDA and EBITDA margins can be shaking out. Thanks.

Savneet Singh (President and CEO)

Yeah, I mean, you know, we continue to sort of, I think, you know, find more efficiencies in our model and, you know, as Bryan and I kind of both touched on, as we sell more multi-product, you know, we’ll continue to see that because, you know, the ability to be more efficient across multiple products in the customer I think grows over time. And as we talked about our contracting, but also how we look at bundling services around that also increases the LTV over time.

So, you know, I think today, you know, if you look at the margin contribution of new, you know, revenue—software revenue added—is around 70%. You know, I think that’s probably a safe number to go with going forward. So, you know, it’s very, very efficient and high margin for us. And I think what’s critical is that, you know, you see that we’ve continued to invest in R&D. And so, you know, we’ve yet to take any cost out there and instead we’ve made investments in R&D to kind of prove out that the velocity of innovation will actually help us expand the LTV of customers, whether it’s through new products or functionality with existing products.

Andrew Hart (Analyst)

Okay, thanks. And then I guess on that point of investing in R&D, appreciate that. I guess when you also think about kind of go-to-market—like it’s been over a year now where you’ve had international capabilities with Task, over a year now where you’ve been in the C-store, and then obviously your traditional core markets—I guess what kind of pockets or verticals are you most excited to be investing in from a go-to-market perspective where you see a lot of opportunity to win business?

Savneet Singh (President and CEO)

Oh man, that’s like asking what’s your favorite kid. I think we see opportunity in all. I hate to give you an answer like that, but on the retail side the team has just executed beautifully and we see so much opportunity there. We’re making some really big, big innovation bets there and excited to see those hopefully hit the market sometime soon or get some commitments sometime soon. And so I’m wicked excited to see can we actually be disruptor again in that market where we have been for the last couple years?

Can we get another gigantic leg of the stool? So I’m super excited about that investment. On the restaurant side, I touched on it here, but our next major version of PAR POS is coming out next year. It’s going to be incredibly helpful for us not only in winning new deals, but also giving tremendous new functionality to our existing customers. And so that’s an equally exciting investment and one that I think our entire company is focused on getting out the door.

Internationally, the same type of thing. We’re winning deals on the Task platform, leveraging that platform in the retail side in the U.S. And so if I was to sort of simplify it, I’d say we’re probably most excited about the ability to be sort of in-store as it relates to retail and then sort of the next layer of growth within PAR POS. And then obviously, of course, PAR Intelligence is probably getting the most investment.

Andrew Hart (Analyst)

Thanks, guys. Great quarter.

Savneet Singh (President and CEO)

Thanks, Andrew.

OPERATOR

Our next question comes from Ted Farley at Jefferies.

Ted Farley (Analyst)

Hi, this is Teddy on for Samad Simone. Thanks for taking the question and congrats on a strong quarter. Last quarter you noted seeing more momentum out of the mid-tier customers maybe relative to Tier 1. You’ve highlighted the strength across Tier 1s on the call already, but any color you can provide on the mid-tier—any differences standing out on multi-product attach rates or retention? Thank you.

Savneet Singh (President and CEO)

Yeah, I think that the mid tier is doing fantastic right now. You can sort of see just how many multi-product deals we’re winning. More often than not, those are in the mid tier. And I think as we move to new models of sales to push deeper into that market, we’ll continue to win a lot more share there. So the mid tier pipeline has definitely grown a lot this year, but I think that’s a lot more of our success and better product integration, making it simpler for these smaller organizations.

So what I’m excited about there is first getting the existing ones rolled out. And so you can see we continue to grow revenue sequentially while growing profits. And a lot of that is those multi-products with ARPU, and then the continued growth of that pipeline for net new deals. So it’s really exciting what’s happening there.

Ted Farley (Analyst)

Awesome. Thanks. Congrats again on the quarter.

Savneet Singh (President and CEO)

Thanks, Teddy.

OPERATOR

I’m showing no further questions at this time. I would now like to turn it back to Chris Burns for closing remarks.

Chris Burns

Thanks, Jacinda, and thank you to everyone for joining us today. We appreciate you setting the time aside for us. We look forward to updating you further in the coming weeks. Have a good night.

OPERATOR

Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

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