PAR Technology Corporation (PAR) Earnings Call Transcript & Summary

Hey. Good afternoon, guys. Welcome to the Needham Growth Conference. My name is Kyle Peterson. I'm on the fintech research team here at Needham. Up next, we have PAR Technology. I'm going to turn it to CEO, Savneet Singh. So Savneet, take it away.

Thank you. So I think before I start, it's probably helpful to give you some context on who PAR Technology is as it's a company in the midst of a rapid change. And to kind of understand that change, I think you have to have a little bit of grounding where it came from. The company was founded 50 years ago, originally as a government contractor to the Department of Defense, effectively doing IT projects for the U.S. government. And 10 years into its journey, it transformed into a point-of-sale company. One of the founders' mother was a McDonald's franchisee, convinced her kid to make a point-of-sale system and it very rapidly became the leading point-of-sale system in the country. So in 1978, they invented the point-of-sale terminal. In 1980, they signed McDonald's as their first customer. And they went public in 1982 off of the success of that business. And for the next 20 years, PAR was one of the fastest-growing technology companies, I think, probably in the country, definitely in the region that we occupy. And over time, the business started to slow down. And I think PAR suffered from 2 very large strategic mistakes. The first was that it over-relied on a couple of very large customers, predominantly McDonald's and Yum! Brands. And it really missed out on the software revolution. And as business models evolve, software became the more valuable part of the point-of-sale system, not hardware. And PAR was sort of always scrambling to maintain market share of hardware business without actually having a software product to pull product -- to pull through. And so I'd say, for the next 15 years of its life, the company really was challenged. It became a cyclical hardware product in a mature market. And 5 years ago, the company -- to rectify this, 5 years ago, the company bought a small software business called Brink Software, which was a cloud point-of-sale product. The restaurant industry was just at the midst of moving from traditional on-premise software to the cloud, and Brink while very small at the time, was the -- was one of many options. But it was very focused on the enterprise market which was PAR service. And so the idea at the time was we've got all this distribution into large QSR and fast casual restaurants so we can take the small 9-person company and grow it. And the company has been very successful in doing that. So over the last 5 years, that acquisition has gone from being installed in 300 stores to over 9,300 and sort of 25x growth. And so a lot of our company's story is continue to transform this company from a, call it a legacy hardware and service provider to a software business. And so a lot of the steps we're taking, have been focused on really trying to clean that up. So today, we operate 3 divisions but -- 2 divisions but 2 units within 1 division. The bottom is our Government Services business. It's the business we are founded on, think $65 million, $70 million of revenue, 10%-ish kind of cash flow margins, relatively stable business and a business that we've messaged consistently that we don't intend to hold on to for the long run as it's not core to [ what we're up to ]. Historically, the business is you leverage the cash from this business to reinvest into our software business. At the top left is Brink. This is sort of what our business is anchored towards. This is where we expect significant growth and a lot of our M&A activity to come out of. And on the top, I guess, your right, my left, is our historical hardware business where, still to this day, we sell hardware into many of the largest restaurant chains in the country and hold strong market share, the idea being that, over time, we can transition these hardware customers into Brink customers. So I'll walk you quickly through Brink. We are an ambitious team, and I think we've got a belief that as this market evolves, we believe we can become the largest player in our space. We are right now at the inception of the restaurant industry evolving. If you think back just 2 or 3 years ago, the idea of restaurants having mobile apps, having Uber Eats, food delivery, loyalty, these were like completely foreign concepts. And today, they're very much accepted as the norm. And that decision of when you buy at point-of-sale system has now moved from the CIO saying, "Hey, I need to upgrade my system to make my life easier" to the CEO saying, "Hey, McDonald's, Starbucks, Panera have loyalty, I need that, too." And so the demands of the restaurant are being driven by the consumer behavior, and that consumer behavior is leading to this dramatic rise in the need for cloud modern software. And so we believe that we have the right product at the right time as this wave to the cloud happens, and we believe you can measure us by these metrics and more. And a lot of our root of our DNA, and the reason why PAR has been successful in maintaining market share in these large logos for so many years is that it assesses over its customer. PAR is by far the smallest vendor in every single one of the large customers we service, but routinely skips the highest grades and has maintained market share. McDonald's is still a customer until this day, and it's because PAR obsesses over how to serve its customers. And we really believe that DNA will continue to differentiate with our customers. And this is a statement that I sort of live by, but much of our ambition is going to be rooted in how great we can build and attract and retain talent. And as you'll hear a little bit later today, we've done a dramatic refresh of management, over -- well over half the management team has changed at the Brink business, and we're starting to get people coming to the company that you would sort of scratch your head and say, "What the heck are they doing at PAR?" That's sort of becoming the norm, and I think that's one of the most exciting things we have going for us. Today, the way people sort of look at our market is there are about 700,000 restaurants in the United States, about 1 million in North America -- excuse me, between the U.S. and -- basically, North America. And of that, we think half that market is addressable to us today. And those -- that's what we call quick service and fast casual. These are restaurants that you're in and out of, we call it the closed check, open and close check relatively quickly. Today, our ARPU is about $2,000 per store. But in many ways, it very much narrows the actual market that we're flowing into. Today, we service quick service and fast casual. Relatively soon, just at the end of Q1, excuse me, we'll have table service fine dining and virtual kitchens and [ in time international ]. And so we think the actual unit count that we're -- that we sort of normally talk about is 350,000 restaurants dramatically underestimates the size of our market. Alongside that though is also the underestimation of ARPU. We look at ARPU and say, today, we make about $2,000 per store. And we've moved that up quite significantly over just this year. You can see us starting to move up from a price point perspective. And I think if was to give you one chart to leave with today, this would be the chart. The average restaurant we service, we think, spends about $700 to $800 a month on software. And today, we are about $150 or $160 of that software. And we believe it's very easy for us to walk up this map, whether it be organic or through acquisition. Just a few weeks ago, we closed an acquisition right here in the back office. So our potential TAM from every store went from $160 a month to $285 a month, and you'll continue to see us acquire our way or build our way into more and more products into that individual restaurant. And I think the thing that we think -- that I think the market underestimates and I've seen this happen over and over again, as markets move and products move from on-premise to the cloud, usually -- the simple math is always, well, $1 of maintenance revenue is worth $2 of LTV and a SaaS product. And the way we've always looked at it and I think we've seen over and over again is it's actually worth $10. And the reason it's worth 10 is as these products become cloud-enabled, the demands of the customer grow exponentially. And so as I mentioned, if you look back in this chart I put out here, there are 2 or 3 products here -- surveys, loyalty, online ordering -- didn't exist 4 years ago. There are 2 or 3 products that are here that are now -- that are not on here but that now pretty much every single customer wants, things like delivery management of Uber Eats. And so as these products have become cloud-enabled and as consumers expect more and more, we think this 700 million could double in the next 5 years as the demands of the customer continue to expand. And so if today, if you're starting a restaurant, I guarantee you'll say, "Hey, I need a module to manage my third-party delivery on Uber and Postmates and DoorDash. That's not even on here today, and tomorrow it will be something else. And so we think that while the market is growing very quickly, we're just at the beginning of that happening. And I think a lot of where we -- the story of PAR has been getting us to be focused on that. So in 2019, I stepped into the role of the company. And I think we were a company in a bit of transition. We were scaling but not growing as fast as we were historically. We had a lot of technical debt. We had some perception that we were a hardware company, masking as a software company. We have a lot of customer interest, but to be frank, very poor execution. And we had a lot of competition coming from the incumbents and from the bottom of the market. And I think where we are today and where I think you'll see us be successful is we've completely refreshed the management team with incredibly high quality talent. There's not a customer I go to that does not tell me, you have the best team we've seen in the industry. Really, there's not one customer that will tell you -- that would disagree with that statement. We've very much changed the way we run our company. We were a software company masking as a services company. Our way of doing business historically has been, "Customer, what do you want? We'll give you whatever you want." And today, we're very much saying, "Hey, this is what our product does, and it sort of doesn't. And if you really want that, then we're not the right product for you." And that's how you build a high-quality product business. And so we've really anchored around building a great product. We have ambitions well beyond point-of-sale. And that road map I laid out earlier, gives you a part of that. And we've executed 2 M&A transactions in the last 3 months, and I think you'll continue to see us be aggressive on the M&A front. As we look at the point-of-sale as just planting the flag, and we think we can expand well, well beyond that as we go. And as a team, not only is our compensation tied to shareholder return, ROIC, but it's like the culture of a company. You don't come to any executive without saying, "Hey, I want to spend [ without a model ] and saying, "Here's the return on that spend. " And that's really been a -- it's been a bit of a game changer in us in making our decisions a lot easier. And so we don't let -- there's always reasons where you can make exceptions and people -- the team understands that. But rooting ourselves in that idea that we -- every dollar we spend is your money, has really helped us get where we need to. And so how are we going to accomplish our goals of becoming the largest food service provider is, number one, getting our customers to be raving fans. And we're walking in this journey. This is scary statistic, but in the beginning of the year, our customer NPS score was worse than Time Warner Cable, well worse, negative 20-plus. We've already guided to positive territory. And I suffice that, I think we'll be extremely positive by the end of 2020. And so we've dramatically changed that culture of the team. The second thing, I think, if you were to sort of track our progress will be, are we able to actually grow our market share within that restaurant. Are we just selling you a point-of-sale or are we selling your payments, back office, delivery, so on and so forth, and you'll watch that TAM continue -- that market share in that restaurant expand? And then third is our TAM. Today, it's 350,000 restaurants. Tomorrow, it should be 700,000 restaurants, and you'll see us continue to build out products to service that -- like table service and what we call Tier 4. And then, like I said, it's always folks are #1. How do we make sure that customer never wants to leave us? And at Brink, I think this all comes down to the same thing I said in the beginning, which is we've got a really aggressive strategy. We're really focused on building a high quality team, and I think we now have the capital and the foundation to do it. So very quickly, here's where Brink is today. These are some of our large customers. We're in about 9,300 stores as of Q3, $18 million of run rate revenue. We've continued to say that when we started 2019, we actually brought down revenue growth quite considerably. We said no to a number of large customers because we had to address the challenges we had. We had to fix our software development. We had to build our products so that we could scale. And so 2020 is the beginning of that reacceleration. We expect growth to reaccelerate on a bigger base in 2020. And it's still very much with one hand tied behind our back. Over 50% of our R&D spend is still spent on, I would call, product backlog, things that we owe customers that are not new revenue generating. And so what I get very excited about is we think we're going to dramatically accelerate revenue growth in Q1 and Q2. But as we get towards the end of the year, moving that R&D spend off of historical backlog into completely new revenue, will be very exciting to see what it can do. And so we're really excited about the opportunities that's in front of us. And I'd like to say this, if we were average, we'd still be growing pretty fast. It's -- part of this is just the market-covering effort for us. And so I think we're really special and great. Part of it is we're the beneficiary of being in a really great market. Some nice revenue growth. One interesting statistic is Brink is still the only pure cloud solution to have won a restaurant chain over 1,000 sites. So restaurant chains that have moved to the cloud have either stayed with their incumbent solution or picked Brink and nobody else. And so we've really carved out a niche at those large restaurant chains, that if that's where they want to go, we happen to be the selection, and I think we can make a compelling case that the vast majority of restaurants will move to the cloud in the next, call it, the next upgrade cycle. I'll probably do this more in the Q&A, but there are a lot of levers for us to expand our pie. So as I mentioned, we started out with just point-of-sale. We're adding in a payments product, which should significantly drive revenue from restaurants and ad payments. And over time, you'll see us bundling our back office solution and more. Our hardware businesses is our -- sort of, I'll call it our second division. This is a business that services existing large customers. This business has been squarely focused on generating cash. It's a business that was losing money for some time. We've ripped out a lot of cost and our goal here is to service these customers that, over time, we can transition them into Brink customers. Simply by the fact that most of these are the larger and older organizations, they will be the slowest into the cloud because they have a much bigger lift to get there. But I'm proud to say, at the end of Q3, we signed our first legacy customer, and converted to a Brink customer, and I think we'll see more of these happen. But without question, the goal of this business is to reduce the working capital size -- side of you, drive more cash flow and convert these customers to Brink. I don't think in a very long period of time, you'll see us continue to manufacture. The idea here is to really become a pure software provider. We've completed 2 acquisitions in the last few months. We just closed on a deal called Restaurant Magic. This is a business that does the back office of the restaurant. It's probably the second most robust product in a restaurant. The point-of-sale is first. Back office is second. This is their inventory. This can be scheduling, labor. It's vital. We love this business. It's got a 98% retention rate. It's got -- it's been growing 25%, 30% a year with 1 salesperson and they have a very strong overlap with our customers. Our customers love this product. I always joke that we've got -- I don't know how many, 40, 50 customer service people, and we've got [ 9,300 ] sites. They've got like 4 and they have to keep 300 sites. That's the quality of the product is very high. And so going forward, we intend to bundle this as we go through our new customers is our first sort of leg. And I think we bought it at an attractive price relative to where the markets are, and the founders took stock. And so we were able to convince them to take less money to come to work at PAR, and it's a very synergist product to what we're doing, and it's kind of the beginning of that roll up that we're looking to do. And I think we will accelerate revenue growth significantly. And so if you look on a forward multiple, I think we got it, again, very fairly priced. And these are a bit of our -- the customers that they have, a lot of overlap, so we know the product works well. We did one other small acquisition at the end of Q3 or maybe the beginning of Q4, which was a drive-through business. This business we bought for 2x cash flow on a growing cash flow. It was an opportunistic deal out of a carve-out of 3M. And what we really liked about this business is they service -- I don't know if it's here, but they service a number of customers we don't service, including Starbucks, Wendy's, Whataburger, Burger King, a bunch of customers that we think we're going to start building a wedge into. And it's incredibly synergistic to our hardware business, in that it's not cyclical. It's 20%, 25% cash flow margin business and ties up 0 in working capital. So it's a business that we think is relative to that quality and will help us move forward -- oh here's the clients. And so if you look at this list today, our software business does not service Starbucks or -- excuse me, our software hardware business don't service Starbucks. We don't service Wendy's. We don't service Burger King, Dunkin' Donuts, White Castle. These are all customers -- Chick-fil-A -- that we now have a wedge into and we're having really interesting conversations with. And lastly, this is our historical government business. It's a business that's got 2 divisions, mission systems, think of this a little bit as butts on seats. We charge for technical labor and make a spread on that. And then Intel Solutions, which is more project-based work. The business has historically been very, very, very consistent, 5-year-ish contracts with the U.S. government. And it's driven roughly 10% pretax margins for a long time. This business, last year -- this year, we'll do -- sorry, 2019 is somewhere around $65 million to $70 million revenue. It should grow in 2020, but it's a business that we have continued to foster an independent culture ethos so that in time we can divest it and focus completely on the restaurant business. I would say the most exciting part about this business is that our backlog in this business is the largest it's ever been and should continue to expand, and we hope we'll get the credit from an acquirer for that backlog. I think we've talked about that. And I think one point to sort of highlight is since the beginning of the year, the average customer we signed up is $200 a month versus historically, the average customer being at $160 a month. And so we've kind of proven our ability to continue to kind of walk up the price and focus on higher-paying customers. And so I think we'll get -- continue to see ARPU expand just with our existing products. So that's it. I can answer any questions.

Sorry. Do you mind repeating the thinking around the time line and what needs to happen in order to meet that [indiscernible]

Sure. So what we historically said is we want to make sure we're [ confident ] with the value that we have. It's coming off of a business -- after Q3, we were down year-over-year for the first time in some time. A lot of that's tied to government shutdown, funding apps, things that were sort of externalities that were not actually relative to the actual DNA of the business. And so we've got a couple of very large opportunities coming up this year that are pretty much binary events, very, very large contracts that would double our backlog. And so our idea is let's win those contracts, double our backlog so that we can get the multiple that we think we deserve on it. I think if we went out today, we'd get a decent price, but we wouldn't be maximizing the value we can derive from it. And since we're not sort of desperate for cash at the moment, I don't -- we don't -- I don't want to rush to sell and lose a couple of turns on the multiple.

So in 2020 you [indiscernible]

We haven't given formal guidance, but I think that there's 0 synergy that's keeping it. And so if we don't win those contracts, or we do win those contracts, I think we would probably make a push to do something. Anything else?

When you talk about your advantages [indiscernible]

Sure. So there's 2 ends of this market. There's the enterprise market, which is, call it, stores that are 1,000-plus or 5,000-plus -- or excuse me, brands that are 5,000-plus -- 500-plus. And then there's kind of the smaller end of the market. On the higher end market, what we call the enterprise part of the market, that's really where we shine. And a lot of this comes down to like the DNA of the founding of the company, it was very much built on trying to service that customer base. And so every nuance of that business was meant to serve that. And so that can be everything from, hey, in a franchise concept system, you have reporting at the store level, at the district manager level, at the franchisee level, all this level of reporting that has happened plus a coordinated supply chain inventory. It's a very much more complex product than the small end of the business where you've got one store and there's no such thing as inventory management or labor management or all the things that have sort of -- promotions, mobile, all these things are done differently. I oftentimes say it's akin to if you were like a designer or a builder of a race car and then said, go build the minivan, like you can build the minivan, but it will take you some time to figure out like what the nuances of how to build that perfectly for that customer base is. They'll still takes you from A to B, but they service very different needs. And so the enterprise market, we really carved out a nice niche there. And listen, it's held for some time now. And that honestly tells us about us really doing the investment that we should have and now we're doing that, and I think we'll extend that lead. Downmarket, there's not a lot of differentiation in product. And I think it's oftentimes comes down to great sales practices. And so I expect our sort of -- we have, I think, 2 advantages downmarket. Number one is we're working through the open platform. And what that means is we don't force you to take our loyalty product. We don't force you to take our online or any of that stuff. You say you want to work with whatever loyalty product you want, you can use Brink. And that's really been helpful to win both upmarket and downmarket because we don't have a closed system. The second advantage is because Brink is considered the enterprise system, if you've got a really fast-growing enterprise, a sweet green [ cover grill ], whatever it maybe, [ chopped salad ], you'll end up choosing Brink because you're sort of planning to be 1,000 restaurant store chain, right? And so the credibility does help us win down there. But like I said, it's much more competitive, but also the downmarket it's much juicier. It's -- the margins are bigger, you can bundle up more products together. And so we're making a push for that in 2020.

[indiscernible] personnel hiring, that kind of thing [indiscernible]

Yes. I think, with Brink in particular, there's probably one person left on the management team. So we've done a pretty close to a wholesale refresh of that team. And the receptivity has been great, the quality of talent. We have a general manager that sold a -- his point-of-sale business for $40 million. He's passionate about the business, he's turning it around. My lieutenant is a person we pulled out of 3G because we're trying to build that deep operational excellence. We're pulling in people from -- I think, what I view is the best software companies in the world, Workday, ServiceNow, trying to really, really anchor ourselves in that quality of talent. And so we've taken our time. We didn't rush to do that. And so it took us 6 months to get close to where I think we now feel like we've got the right team.

Two questions on [indiscernible] of the stores. Do you have a new CEO?

Yes.

So is your primary competitor [indiscernible] could you talk a little bit about your background before coming here and what [indiscernible]

Sure. So on the competitive point, in the enterprise customer base, which is a bit of our bread and butter, it's probably 2 big competitors, NCR, which has a product called Aloha and Micros or some version of Oracle. They have Symphony, Micros got a huge selection of products. Downmarket, it's a host of competitors. It's everyone from Square to the startups -- Toast, Revel, Gusto, which is now called Qu. I mean there's just a bunch of them downmarket. So -- and NCR and Oracle and there's just a -- it's a much more dispersed market. Market, it's those 2 plus just a dozen legacy providers that are private equity-owned or owned by payments companies, neither of which are really investing into R&D. My background, I joined the Board of PAR April of 2018. So I didn't join as a member of management. I was running a software roll-up and buying sticky software businesses. I got to know the company because a person was trying to buy Brink out of PAR. It was probably the beginning of 2000 -- it's probably right somewhere in the middle or end of 2017. And then it's a long story we can talk about it after, but through a bunch of different machinations, I ended up setting off the Board to originally as interim to sort of right the ship. And there were 4 goals when I came in. The first was to do this idea that we need to do a restructuring. We laid off about 13% or 14% of the restaurant workforce overnight, primarily in the hardware business to take that capital to reinvest in Brink. And we separated at that time, it was a little controversial. We separated Brink from the rest of the business, so they could operate independently because the thesis was that because everything was run by the same management team, the government business, the hardware business, the software business, a lot of decisions weren't being prioritized appropriately. And so we separated those businesses. The second goal was to -- we had a lot of, I think, overhang. We were -- had an active shareholder fight. We had -- we're being sued by the SEC, the DOJ. We had the perception that we had a founding family that didn't get along with management, a lot of like just a lot of drama. And so we cleaned all that up relatively quickly. And I think most of those people became very big supporters of us. Our law suits got thrown out. We really just went after these problems. The third goal was to go raise capital because I think the challenge that we at the Board felt at the time was that without capital, who would want to step into it as a CEO because it was -- there was a lot of complications. And so we raised a convert in April of '19 for $80 million, I think, at really significantly better terms than what we were kind of thinking about just a few months before that, and then really changed the culture of the place. And so anyways, after doing that, it went a lot better and faster. And I think more than anything else, I've watched as an investor sort of again, these markets that went from on-prem to the cloud and just how fast and rapid that went. And honestly, even if you're the B player, you did great. It's like buying a SaaS stock in 2015, you could have bought any and you probably did okay. A little bit of that it's like for the way that I feel about the markets that we're in today. And then obviously, given my background wanting to roll out software businesses this is a pretty attractive place. And I like to joke, it's a lot easier not competing with everybody in this room than competing with guys that build the restaurant technology. And so I think we -- I thought that was an attractive place to be. So that's why I'm here. I think that was...

[indiscernible]

So it's in the process of being reworked. So it's probably not relevant now, but my 2019 -- right now, I'm on a year-to-year contract that's delivered on a milestone basis by goals set by the Board. So fix that, like do this, do that sort of that much? It's actually a great point to talk about...

[indiscernible]

No. So I came on originally and I got nothing because again, I was just stepping off the Board. And when I signed on for a year, I had the potential to earn 100,000 shares based off of hitting certain milestones and metrics, which would at the end of the 1-year period, which should be in a couple of months.

Okay. When I think about McDonald's, and maybe you can correct me. I think a lot of their systems, they're very technical [ work ] and a lot of that's done in-house. How do you do that both as a potential customer, because I think you talked about being a potential customer and also a broader trend of restaurants doing this in-house really could [indiscernible] how does [indiscernible] want to own the customer experience [indiscernible]

Yes. So the #1 mistake to make restaurant technology is comparing anyone to McDonald's. [ They're actually a unique beast], again having not come from the industry, one of the first things that I did was went to go meet a lot of the restaurant CIOs and CEOs and then read every single earnings transcript there was. McDonald's is just an incredible organization. I mean, they buy technology companies. They're probably the only company out there that have a true software development team in-house. And so McDonald's might be one that never comes because they've spent hundreds of millions of dollars -- it includes acquisitions, billions of dollars building software. I don't know if they'll ever really make that change. But McDonald's is probably the biggest driver of change in the restaurant market. People sort of think this is crazy. But when McDonald's launched Uber Eats, it wasn't an integrated product. They shipped a terminal to the store and said when an order comes here, type it in the cash registry, right? That's -- it's very inefficient, but because they're such an operationally efficient business, they can make that work. That's very unique. And so McDonald's is probably the only company that we work with, where -- and Panera might be another one, where they've spent that time to build up the tech stack. It's actually the opposite. And so I always give as an example, we're working on a 850 store chain, and they have 100 people. The entire company, 100 people, right? So they maybe have 20 people in IT and of those maybe 5 of them are maybe in software development, right? And so most of these chains -- but their expertise in not developing software or building out product, right? And so they really depend on the vendors. And so what's historically happened is these point-of-sale companies have taken advantage of that trust. They said, "Hey, I'll be your point-of-sale company. I'll take care of all that." And they sold them this gigantic bill of goods and never executed on it. And that's why I challenge you to find that a large restaurant chain that's happy with their point of sale company. There's not one. Literally not one. And so I always look if the bar is so damn low, right? We just have to do okay and you'll think we're great. And so in many ways, I think our DNA of trying to serve that customer will help us build that trust where we can run the entire IT stack for these companies because they don't have the team to do that, and I don't expect any of them to really want to do that. Sorry. There'll be a few, like I think some of these young start-ups, maybe [indiscernible] have really smart big IT teams, the vast majority of them are just not focused on that. Because you've got to think, well that's a massive CapEx to put in there, if it's not driving revenue in the short run

Can you talk a little bit more about [indiscernible]

Sure. So it's -- back office is effectively things like inventory management, supply chain, a little bit of labor like scheduling your employees, a little bit of shift management, if you want to. But it's the product that's most integrated into the point-of-sale system. So what I love about it is now when you have your point -- when we're your point-of-sale vendor, we not only have your -- you call your pricing, your menu, we also now know the cost of every product, right? We can create really interesting products out of this field. We can go to that franchisee and say, "Hey, do you know that that tomatoes are on sale today, you should go sell tomato salad." Or, "Hey, there's this inventory data that's looking at it, you should start stocking up on this product because the season is coming." We have a lot of data now that we can do something really special with. And so it's a really interesting way to kind of combine the 2 data sources. On a product perspective, it competes with a number of existing players. The ones that we probably see the most are called CrunchTime, Altametrics is actually McDonald's vendor, a very big, a very large company. Kompete is another one, SynergySuite. There's a host of players in there. The reason we went really aggressive after Restaurant Magic was we have probably referred -- over the last 2 years, we probably referred to them almost all of their customers. And so we know that our customers love the product. And so when they -- and so when we were asked, like -- I mean, the reason that we ended up here was I said to my sales team, I said, If we could sell one other product, what could you sell the most of?" And they all said Restaurant Magic, so I was like -- it was almost unanimous. And so it wasn't -- my job wasn't that complicated, if that's what they think they can push out and that's what they'll sign up to sell and that's what we should do. But in reality, we knew the business so well because we have so many shared relationships that it wasn't a big leap. And then it was just about convincing that team to take stock and work with us. That was obviously the harder part about it.

[indiscernible] I'm curious to hear what you think you will now be on the other side [indiscernible] like shareholders [indiscernible]

So it's a great question. I would say this. I think we've got great shareholders who get a lot of it. So I sound like an operator now. So I would say there's probably 2 things that I think shareholders don't like drill into enough. The first is like the TAM. I think that people really underestimate how big the software market could be, and they look at our TAM and say, "Well, it's 300,000 restaurants times this, there's a -- and they sort of underestimate the opportunity size. And why I think that's important is not because I think, "Oh, we can be this big." It's that they underestimate the potential growth over the long time -- over the very, very long period of time. And so I spend a lot of time telling people what I think 2020 is going to be like. But if the TAM is as big as I think it is and if the market evolves as fast as I think it would, like I said, I don't -- it doesn't take a big leap of faith to have -- build up some growth for 10 years as opposed to 3 years. And so I think there's a lot of focus on like the current TAM as opposed to the sort of the shift that's happening. And again, we have -- I have the perfect data. I talk to CIOs and all of them are just like, "Oh, my god, I just don't know how to get all this stuff done." And so I think people underestimate the TAM a lot about what we're trying to do. The second thing is a little bit simplistic, but obviously, I think -- I did this myself. I think they underestimate how hard operating is. I think it's -- I always hate it when they're like, just do this. There's no such thing like just. Like it just doesn't exist. You have to like -- and so I find that people underestimate that. One other thing I'd say that I think people are -- I don't know if they underestimate, but I think they're starting to understand that is the quality of the team and the culture might be the only moat we ever really build. And software has many inherent moats, but I've done a lot of work around. If you -- and because I think I have a little bit experience investing in like earlier stage companies, like the only like analogue [ I suppose with all of them ] was like there's always unique culture at the ones that were just crazy sets, or whether it was Stripe or Uber, you can always pull up something. I think one of the things that we spent a massive amount of time thinking about is building up that team so that the culture is right. And I'm going to give you a couple of examples because I think this is really helpful. So when you come to interview at PAR, you do a standard process. But if you're an executive, you actually literally go in with a lower salary and you go and sign up for KPIs that you have to hit. And the idea of being here is, listen, I want a fun place to work, but what's fun is us winning. And you have to sign up for that, all right? And if you sign up for that, we'll pay you way more than you make wherever you are today. But if you don't, you're going to make less money. And that attracts a certain type of personality, and it scares away another type of personality. But our idea was if we sort of were very transparent about that, we would attract people that were attracted to that type of like intense rigorous culture. And so we spent a lot of time trying to build that intensity in what we're doing. And so the reason why my lieutenant is a guy from 3G and not from Google. Like, while we do think we can reinvent the world and not be evil, there's no doubt that our biggest skill will be our intent to focus on execution. So I think anyways, I think there's a lot of underestimation in that culture and the team part of it, which, again, also our ability to attract that talent is really -- I think, will be the only moat we have in 5 years.

Thank you.