PAR Technology Corporation (PAR) Earnings Call Transcript & Summary

[Audio Gap] at Citi, and I cover vertical software and payments. With me, I've got Savneet Singh, who is the CEO of PAR Technology. Savneet, thanks for joining us.

Thanks for having us.

First of all, level-setting, there are people in the crowd who are probably less familiar with PAR. At a high level, could you walk us through the company's history, the business overview and since you took over as CEO, where are you in the company's transformation journey from -- to a broader restaurant tech platform now?

It would be hard to make that short. So we were founded 50 or 60 years ago, originally as a defense contractor. We went public in 1982 after our founders invented the point-of-sale terminal for restaurants and McDonald's went to single sourcing of the vendor. For most of our life, we were a hardware and services company that was trying to find a way to become a software business. So we would have massive swings in revenue based off the refresh cycles of restaurants. In 2014, we acquired a point-of-sale software product called Brink, that was really a product kind of business. That business started to grow nicely. I joined the Board of the company in the beginning of 2018 with no desire to run the company. But I think the idea at that time was we were this hardware company, we had these great relationships with most of the large restaurant companies in America, could we go upsell them with software product? 8 or 9 months after joining the Board, I became the CEO. Seemed like at the time, it was to sell the company because we thought we were on the verge of decay for lots of esoteric reasons you wouldn't believe. And then during that time, I think we did a lots of restructuring. We sort of found our way through it. And I think we, as a management team, got really convicted on this idea that software was eating the restaurant, the restaurant chain, just no idea. And our idea was could we not just sell a point-of-sale product, but a platform to run the enterprise restaurant? Because it was very clear then, and obviously, the pandemic accelerated things tremendously, that restaurants were going to be adopting massive amounts of software to help them run a modern restaurant today. And to put it in perspective, McDonald's is probably the most sophisticated restaurant company in the world. They launched a loyalty program in 2021, and that's McDonald's. And so restaurants just have not made these dramatic investments in technology and so our idea was could we play in the enterprise. And so when we took over the company in 2018, we were probably $5 million or $6 million software revenue. Today, we're around $140 million. So we've grown a lot, 2/3 organic, 1/3 inorganic and, really, today, we are sort of front-to-back a platform-driven enterprise restaurant. So we have the largest loyalty product for restaurants called Punchh. So if you've got kids that eat unhealthy food, we're probably in your pockets. We have an online ordering product, and so we call that our customer engagement suite, where products that touch the customer. And then in our operator solutions, [ software for operator ], we have point-of-sale payments and back office. And so we call it unified commerce because we integrate these products very deeply so that you don't have -- it doesn't seem like you have 10 different products running your store; it seems like you've got 1. And that's been a really nice -- it'd still be a nice sales pitch, now it's returned to reality, which is our customers also want that vendor consolidation.

It's interesting. And I think you touched upon an interesting point around unified commerce. When you think about kind of large enterprise restaurants that you target as your kind of ICP, who are the key decision makers there? Is it the CIO, CEO? And why do they go with PAR versus kind of other solutions that they have -- that there are in the market?

So I'll do the latter first. So why make a change? Point-of-sale is your land-and-expand product. And it's a heavy lift. It's not an easy thing. That's why it's so sticky. That's why I kind of love the category. It's like once you're in there, it's [indiscernible] if you do a decent job. You don't even need to do a good job, you just got to survive. And generally, it's -- I think it's sort of been some of the trends I talked earlier, but most restaurants -- I say almost all restaurants have realized that investments in technology have very high ROI to their business. If you sort of grab the stock charts of the restaurant companies that have made massive investments in technology, Starbucks, Chipotle, Panera, Cava, like look at how much more they've outperformed their peers. Now part of that is just their operational excellence, they're great businesses, but they made this massive investment in technology. And so every single restaurant company is like, I've got to do the same thing, how do I keep up? If you're a big burger chain and you're competing with McDonald's and McDonald's has got a loyalty app, like that will make a meaningful difference when you go to that restaurant who you pick. Most people pick the one that they get the loyalty because there's some affiliation there. And so the move has been driven by this desire to sort of catch up to the industry's best from a technology perspective. And the way that restaurants were going about it was saying, "Oh, yes, I need an online ordering company. So let me bolt on an ordering product to my old POS product. Oh, now I need a mobile app. I'm going to build a mobile app and test that into that. Oh, I need a loyalty product, I'm going to add that to that. Oh, I need like a modern supply chain because now if there's an E.coli outbreak, I need to know where that came from. I want to add modern payroll. I want to pay at the table. I want to do all this stuff." And so they just kept adding all these disparate vendors to their old ecosystem that was not cloud-based, and it broke. It just constantly didn't work. They didn't talk to each other. And so these CIOs, to your first part of your question, were really suffering from a dispersion of vendors. And this is really common in any market that digitally transformed. You get excited and are like, "Oh, I'm going to this widget, this AI tool, this tool." And you wake up 1 day and you're like, "Oh, my god, I'm just a vendor manager, negotiating price. I haven't created a new experience for my customer." And so that's really what's happening, which is -- it's hard to build a modern restaurant today without a modern infrastructure. It's kind of like, I'm going to build all these apps and run it off like an old phone, like just it's really hard to do. And so the buyer is generally the CIO. They're the one that's sort of there, but it's really the CEO that's behind it. And so the vast major of enterprise deals we have, my relationship's with the CIO and the CEO because in that CEO's plan for that year, a huge part of it is what's digital sales, how are we growing it? What are we doing it? How are we making that profitable? And so it used to be the purview. I suspect -- I was in this business, but 10 years ago, it was just the CIO to cost it, as you'd pick cheapest vendor that doesn't break. Today, that CEO is very involved because they want to be aligned into what's the digital story. And I always -- in meetings today, and I say, just look at the earnings call of any restaurant chain, like really pick any, and I don't know, 10% of it will be on digital. And so it's kind of hard for the CEO not to be involved when that's such a big focus from his investor base and effectively his boss.

That's very interesting. You touched upon a few themes like one of the things that is the company's history, like how you have originated and how you target and price customers. Can you talk a little bit about kind of who you see as your core competition today, especially when it comes to your targeted market?

Yes. I'm paranoid because I assume everyone's our competitor. But I think at a high level, historically, the core competitors have been Oracle, NCR and Global Payments through a product called Xenial. They're -- all of them or 2 of them are in every RFP we go to. So we are always going head-to-head against those. And we always like that dynamic because those are great companies, but that's like Silicon Valley 1.0. Like I think that's like a healthy place to fish. But there's also now competitors, I'd say, suggest coming from all other parts. So OLO is an incredible online ordering product, really stable, but legacy in nature. And so how do they come into our market? And so we've been very aggressive in kind of going there. Well, you've got -- down market, you've got Toast, you've got Square, you've got Lightspeed trying to come upmarket. So competition comes from everywhere, but the enterprise restaurant is dramatically different than the down-market restaurant. A good way to think about it is if you run a local Italian restaurant, I would say go use Toast. It's an amazing product. But think of the buyer there. The CEO is oftentimes a CIO, the CMO, the CTO, the chef, like the CFO, all in one. And so the solution that person needs is completely different than the solution what an Arby's would need where you've got an actual CFO, CMI -- CIO, you have district manager, you have a franchisee manager, you've got the tax person in there, you've got accountants in there, you've got lawyers in there. I mean the extensibility of your product is completely different. And so there's such different products that you have this really big gap between the SMB market and the enterprise market. And will there be overlap? For sure. Will Toast come up? Absolutely, and they're going to work their way there. But it's a big enough market where I think we've got a large enough moat where we feel really good that even with that, we're in a good spot. But historically, those 2 or 3 big companies really dominate this market.

Yes. It's interesting. And then listening to you definitely feels like software is leading this strong.

It is. Very much.

You had very good wins recently with Burger King, Bob Evans. How has that changed your business outlook, especially when it comes to kind of go-to-market sales motion? Does that -- a bid like that, does that change your kind of sales cycles and then provide momentum to your business?

So the short answer is, has it changed? Yes. Would I tie it to that? I'm not sure. Like what I tell you that our pipeline and I said this on our call yesterday and IR before us, it's never been bigger. Like it is sort of one of those things we're like where did all this come from? Now is it because of those wins? Maybe. It's sort of self-validating and reflective in the sense that you get Burger King. So everybody else is like, "Oh, you're good enough for them, you're probably good enough for us." That could be it. Part of me, it's kind of a combination of, I think, hey, that's very validating because the big legacy chains, they're -- restaurants are interesting. The most innovative companies are the big companies. They're not the small companies because they have budget to invest. McDonald's is the most innovative restaurant company in the world. They're also the biggest. Usually, it's the other way around, right? The start-ups will be more innovative than the big companies. And so it could be that. Part of it I just think is this sort of commitment to like hey, we live in this digital world, whether we like it or not, we're there. And the only way I can sort of explain to new hires at PAR is restaurants have this incredibly unfair juxtaposition. We all, as consumers or restaurants, expect to go to a restaurant, have a great meal, healthy, organic, whatever, clean food, great service, smiles, everything we want, like the same experience we had 20 years ago when we went to a restaurant with our parents. But at the same time, when we order off-premise, we want to be able to access them on TikTok, Instagram. We want to follow the delivery like it's Amazon.com. And so they have to be like Amazon.com when you're ordering and have this amazing in-store experience. And so the equivalent of going on Amazon warehouse and be like go run a 3-star restaurant here, like that's tough to do. And so -- and they're doing it all from literally the same as that box they had 20 years ago. Like the restaurant form factor hasn't changed that much. And so the only way to solve that is through technology. And so I think restaurants kind of realize, okay, this is going to stay. This is going to happen. And I think that the ROI is now high enough where it's now like leading to this change in pipeline. So the short answer is, yes, it's definitely like since that moment, it's been a large growth of RFPs. But I don't know if it's because of that or just the market itself.

Interesting. We shall see.

Yes, we'll find out.

My second -- my next question is kind of related to the last one around go-to-market motion. So now you have new products, Punchh, MENU, you have back-office products as well. But given the company's kind of history, do you still kind of land with POS payments products and expand from there on? Or do you land with kind of other products that you have now and then attach payments? How do you -- how should we think about that?

So we run in 2 business units. And so -- and they're really tied to the buyer persona. So we run one what we call guest engagement, which think of the guests as products that touch the end-market guests, so you the consumer. So that will be our loyalty products and online ordering. And then we have a second business unit that is what we call operator solutions, which sells to operators, the guy that's in the store, running the store or owns a store. And through those buying units, the reason we sell like that is one sells at CIOs, one sells through the CMO. Again, the CEO and CIO kind of still sit on top of everything. And within those business units, there is a ton of cross-sell and upsell. So the vast majority of our products that buy our Brink POS are usually buying our payments or our back-office product or within a short order, Burger King being a good example of that. On the other side, what we've found is we just got into the online ordering business and I think we've signed 11 or 12 customers, all but one of them have been a loyalty customer of ours. And so we're like, oh, we can really sell that through that loyalty base that we have. And the one that -- by the way, the one that's not is Burger King, who was our Brink customer. So we're seeing that tremendous sort of synergy on that go-to-market. Now we do cross-sell between those 2 groups, but it's a handoff versus, hey, the same person can carry that in its bag because the sales process is very different.

Yes. Yes, makes sense. How should we think about ARPU in that case? And how does that change between kind of like going from Brink, MENU, Punchh and the data solutions?

So I think from a core ARPU perspective, we feel really confident in the quality of our products. I always tell our product team, you can say you're the best product, but the only way to prove you're the best product is if you're the highest price. So don't tell me you're the best product unless you can get price -- premium price for it. And we're kind of there. So I would say our loyalty product and our POS product are certainly the premium-priced product in our market. I don't think it's impacted our sales, but we are definitely there. I think in some of these deals, we're meaningfully more expensive. And we're not doing it for expense. I guess we actually think we can improve the ROI behind that buying decision. So POS today when we land is -- it sort of depends on the makeup of a store, but call it $2,500 to $3,000 per store. If you go back 3 years ago, it was like $1,900 a store. So it's been really nice to see that reward for the hard work we had. And then everything there's an upsell. Our back-office product is $1,500. Payments, that's usually $1,000, $2,000 depending on volume, so on and so forth in there. And we really make an effort not to bundle for discounting. We make a bundle to sell, "Hey, it's going to be unified you're going to get more." And so we don't usually discount yet. Now could we down the road you win a big deal? Sure. But generally, ARPU has been a nice driver for us. I think we just reported yesterday, but I think our ARPU on our operator stuff was up 15% last year-over-year. And that's -- last year, it was up another like 18%. So that motion is working really well.

That's interesting. One of the things that you talked about is kind of selling it as a 1 solution rather than simply like a price bundling kind of solution. Is that one of the big kind of -- does that come up in your conversations with CIOs and your customers, in that when you have an issue, whether it's with the software or the payments, you call us versus [indiscernible]?

Yes. I mean I give you just a hey there on Toast, but I'll give you a good one, which is the #1 call to any POS company's help desk in our category is almost always payments. "The Verifone device isn't working. Is it your fault? Is it Verifone's device or whoever's device? Is it PAR's device?" Blah, blah, blah. It's like, literally -- I remember when I first got the PAR, it was like 40% of the calls. And it always annoyed me because I'm like, well, like, we got to pay the cost of that support desk even though it might not be our fault. And so when we go to a brand and we're like, "Listen, knowing that happens, it'll be like us pointing to your payment company, the payment for your company plan point at us. That goes on for 2 days before anybody figures out. CIO screams. Then we figure out what the real problem is." And so -- and now imagine you're the franchisee and you're like waiting for 2 days, stuff's not processing, you don't feel you're getting paid, whatever. And so the simplicity of being like, hey, it's just 1 vendor. And because we're under 1 house, it's like we're going to solve the problem because we have no one to point the finger to. That is a huge and easy sales pace. So there's a simplicity of like having 1 vendor at the actual store manager, franchisee level that really matters. "Oh you've a problem in the back office?" Same guys, so on and so forth. That actually makes our life just tremendously easier. At the corporate level, I think it's vendor consolidation. I think it's like, gosh, we've got 25 different guys running in the store now like this is a mess. And are we getting the analytics? One of my favorite conversations to have with CFOs and CIOs of the big restaurant companies they're like, "Oh, we've got Braze going in, we've got Snowflake going in" and I'm like, "Oh, that's amazing. Like you guys are so innovative" but I'm like, "Do you get any value from it?" Because I know the data that I send there does not match around my ordering company. So like who's doing the work to like make sure these are the same things. And generally, it's really hard. And that's not meant to be disparity, but it's actually a really tough challenge when you've got different menus here and here. Your DoorDash menu is different than your in-store menu, different than your X, Y, Z menu. Like those are tough challenges actually, really, really tough. And by the way, those menus change every single day. And so how do you make that seamless, right? And so our idea is, okay, if we build a beautiful unified solution and there's 1 menu that updates everywhere, like holy cow, like imagine the simplicity you have from data, reporting, tax issues. It's pretty wild how that simplicity works. And so I think at the corporate level, that's what they're thinking about. I think at the franchisee level, it's like just make my life easy.

Yes, yes. It's interesting like how restaurant tech and broader fintech world kind of went through unbundling of solutions and now there is instead of --

Yes, re-rebundling.

Instead, in your case, so calling it rebundling, it's actually convergence of solutions, kind of solutions coming together as 1 unified solution.

Yes. I think the challenge for every industry is bundling, consolidation, these like have very negative connotations, right? Because historically, that required a trade-off between functionality and simplicity. Fine, I'll buy your next product, even though it's 80% as good as the other product just because it makes my life simpler. And our -- like I said, our mono said, we need to have the best products. And so the products should be able to stand on their own. That's like that's what we go up against though because if you go to most of our customer base, they're like, "Oh, man, I remember when Oracle bundled all these things together, and [ CRM ] bundled all these things together and the products are crap, but we were kind of forced to use it." Where we're like, "We actually have the best product." And so we will not sacrifice the quality of the product for the bundle. And so that's kind of our great challenge or opportunity.

Interesting. Yes. One of the things we talked about was ARPU. As the leadership team, how does the PAR leadership team kind of think about ARPU expansion versus kind of getting into more -- getting into like a larger number of sites, getting into bigger brands?

Well, we get paid on it, so there's a lot of focus on it. So no, I mean I think to me, ARPU is 2 factors, it's price and module. And so we focus on both. What I say I'm like happy where we are like, no, this is probably where we've the most room for opportunity. Our white space, if all of our customers bought all of our products, it's like 3 to 5x the revenue we have today, right? So there's a ton of white space there. So even if we got 20% of it, you're like doubling revenue just from your core base, right? So there's a lot, a lot, a lot of room to grow there. And so I think that we've got to drive the module upsell as well as price. Price is the easy one, ironically because when we go into a new deal, we're starting at a good price now, where historically, we were way below market. Upselling, raising price on our existing customers, always a harder conversation. But generally, if you do a good job, they want to stick with you. And it's the disruptive nature of I'm going to save 15% or 20% on an expense that is not my biggest line item and disrupt the operations of all my stores, like I hate to say we have leverage on our customers, but we definitely have leverage on our customers there if we've done a good job. If you do a bad job, then they're like more than happy to flip you the bird. But I think you've got to like execute there. So long story short, I think most of our growth historically has been new logos and new sites. It's not been that cross-sell, upsell motion. '23 was our first -- like, okay, we kind of figured out; '24, we want to accelerate it. But I think what's exciting is our unit count keeps growing so fast. So it's sort of like we will figure it out, but it's hard to say like one's more of a priority than the other because we want to capture more market share.

Got it. I want to go back a little bit about kind of go -- talking a little bit more about MENU and Punchh. MENU, Punchh and drink as well. Among those individual products, where do you see the current challenges and the most opportunities within those individual products? If you can double-click for us that would be very interesting.

Yes. So let's see. Brink, it's just rock and rolling. Like it's the biggest pipeline we've ever had. Just won our biggest deal. There's good mojo there. Execution is still super. POS is a very, very tough, tough business because you have this combination of not just software, but it's distributed computing across thousands of different restaurants and stores. And so you deal with issues like the WiFi is not working in the store and [ Whitefalls ], Montana, that's your fault. So it's a tough business, but that's why it's so sticky, and you can upsell all other stuff. But there, it's honestly just winning new logos. We have a good motion. We've got a great team, great product, and it's just the more we can prove out the ROI of our product and do greater customer service, we should do fine. So that one is just new logos, like we are just rocking and rolling. I think we were up 45% last quarter on our operator solutions business. So we feel like good there. Punchh is growing slower, but has really started to pick up momentum. We announced a bunch of these wins. We've got more wins coming this quarter. We haven't got the revenue for those wins yet. And so Punchh will have an acceleration of growth this year, I expect, and I expect in '24 because of those new wins that we've won. But is Punchh going to grow 45% like Brink or 40% like Brink did just last quarter? Like no, because it's also already in almost half the top 100 restaurants in the country. And so for Punchh, the challenge I give the team is like there are other ways to grow. There's price. There's M&A. And so I think they'll see a lot of our M&A focus on that side because we could still drive that by adding products to push to that base. And then MENU is just getting off the ground. So we -- on our call yesterday, we announced our first U.S. customer goal. I have a chain called Beef 'O' Brady's, so you can download the app or go to the website and see how beautiful the online ordering experience is versus our peers. We just yesterday launched our second big customer, a much, much larger chain. And so that business is winning at a really accelerated rate. The massive challenge there is going to be, we spent 6 months taking a product that was built exclusively for the international market and brought it to the U.S. And so there will be all sorts of challenges, support calls, cultural issues, like all the stuff that you'd expect. But for MENU, I think the -- I said this on our call, like our headwind in MENU's been almost our entire loss is [indiscernible] at PAR. And so it's hitting like how efficient the rest of our products have been, right? And so now we have to get the ROI out of it. And it's just like a mandate, we've got to prove this thing out. And we will because as you saw, part of the reason we won Burger King was because of that. And so it's an amazing strategic tool for us. And so the revenue -- like literally, first revenue just started 2 weeks ago, and now we'll see.

Yes. That's an interesting outlook for 2024 and beyond. Let's talk a little bit about churn. How do you think about churn? I saw some of the numbers in your earnings announcement. It seems very low for an enterprise platform. I would love to kind of hear more about kind of how do you think about churn.

Churn to me is a function of the category you sell into, right? So if you're selling into small restaurants, like your churn is going to be super high, no matter how great your product is. So the end market dictates -- almost always dictates your churn. And for us, we sell into an amazing end market. QSR, fast casual restaurants are incredibly, incredibly durable businesses. McDonald's franchises do not go out of business. They just don't. Same with Arby's, same with all of them. Many of our chains measure the length of a franchisee in decades. Like are you a one-and-a-halfer? Or like it's really these are just such durable businesses. And when we have churn in those markets, it's usually a churn that we unfortunately we're going to churn, and then it's an open of a different location. And so our gross churn, I think it's near the best in software. And I don't think that's going to change because the beauty of those models is because the return on capital is so high, they do fine in down markets. It's not like you have a massive set of CapEx that you've got to earn revenue until these things are profitable day 1. And so they're very durable, which is why our churn is so low. Like I said, are we great? Yes. Do we churn less than our peers? Yes. But it's like the end market is dictating that.

You've talked a lot about like front-of-the-house products. You have a back office, back of the house product as well. Can you talk to us about the -- how you use data to kind of shape the experience of the end consumers as well as your own customers?

Yes. I mean, I think, first, from our customer perspective, restaurants, it's surprising. They've always been consumers of data, but it's never been nearly to the level that I think they have today. So as an example, you kind of always knew when the launch rush was going to be, you kind of always knew when you'd have a lull and you could maybe cut staff or adjust supply chain. You knew X, Y, Z holiday was big for you because you sell hot dogs on July 4, and so you'd be like, I'm going to step up and buy a bunch of hot dog buns. But it -- so the first wave of data into the restaurant was like just making that more intuitive, which is like, hey, the last 5 years on this weekend, sales like this. So we've set inventory for this, so we don't have to cut out something. You don't run out of product or supply, you have labor and so on and so forth. But now with our products in the back office, you have literally like profitability to the product, to the store, to the employee. And so you can optimize your menu, optimize your food displacement costs. Also on your buying, a lot of times, restaurants are incredibly cost-sensitive. And so should you buy every 30 days or 100 days on your napkins and all that stuff is now at your fingertips. And so that's what's so powerful about adding software to the back office is, you have incredible, incredible data. And to the employee, too, right, you could figure out, wow, like that employee or that server is way better than the rest of my servers because X, Y and Z reason. So our customers are using data in that sense. Now I think every CIO restaurant company like are using data like super well, like no one's going to rank themselves a day. And I wouldn't rank them either because they have too much data issue, and like how to use it and for the challenges I talk about which is the data is not unified. And so it's very siloed. And how do you get value from that? It's not there. And I think the big problem is that -- the obvious is done. You've got a loyalty program. You know who your most loyal customers are. You know that, okay, I don't need to over discount for those guys. I need to discount for these guys to bring them in. Like that's all everybody looks at and kind of figures out. It's like, well, how do I target the customers that are not on my loyalty program? Or, hey, do I need to keep giving Arby like a discount on that green smoothie? Like he's going to come in anyways. Like do I -- that's just the stuff that has to happen next. Or how do you optimize your staff? Or when do you turn off DoorDash because it's low margin because you got too much -- that stuff's like still to come. With our own business, I think we're still -- we're not like a consumer business where we've got 10 million customers, right? And so I think that where do we use data? We use it just like anybody else. We use the telemetry to see what parts of our product are being used. So POS, this gigantic product, is there a part of our product that nobody uses that we can just cut off and save on cost? But as far as like customer data, like we know every logo we're going to selling into. And so I don't think it helps us so much there. And as always, like everybody has data, it's just do you take action on, which I think is oftentimes a problem.

It's interesting to hear you talk about the nuances, especially when you move to enterprise QSR, large restaurant brands. Very interesting. One of the things you touched upon in our conversation was around kind of MENU and some of the losses that you talked about. Can you talk about a little bit around kind of margin profile going forward and how you see the overall expense side of the P&L as it relates to sales and marketing, R&D and G&A?

Yes, our goal as an organization, is we want our gross margins to be in the mid-70s and higher. And we used to be in the low 70s. Our actions on MENU and our growth in payments, which is lower margin right now, it will eventually get to 70s, have depressed that and so we've had this kind of headwind. We've also absorbed all the Burger King costs upfront or a lot of them upfront, not all of it. And so we haven't got the revenue from that. So we've had this headwind of observing all this cost for this big customer launch without there and then this money-losing MENU product, which we do think will change over time. And so I really feel -- that's like the thing I like. We will get to that because we used to be there, that's not like a hard one to believe. And I do think our team is pretty good at like figuring out every little thing you can cut off on your DevOps cost. Our goal on R&D spend is to get it to be 25% of our revenues, and our goal of our sales and marketing is somewhere between 10% and 15%. I always tell our team, like I think we can be one of the most efficient sales and marketing organizations in software because we really know every single customer. It's named accounts. You're not calling random people. Like you literally know everybody, and so we should be able to have more products per sales in our bag and go quickly. And then our G&A, my hope on G&A is always to like keep it flat, to grow very small amounts and so that we can scale into it. We have a big G&A base because of the legacy of our business and all the stuff, but we're not growing that. We haven't grown our OpEx in about 5 quarters. And yesterday, I suggested it will probably grow, I don't know, 5% this year. All of that is tied to new customer wins. And what's cool about the OpEx in Burger King, if there's something cool on OpEx, is it also comes down. And so a lot of our OpEx there support people to get the product launch, get it going, answer franchisee questions. But then once that happens, we don't necessarily need to keep them forever going forward. But generally, those are the targets we have set for ourselves.

Yes, that's interesting, the operating leverage you have built in your model and especially getting into 2024.

Yes. And think about this, our Brink, Punchh and data center products had no head count growth in the last 18 months. Yet, those businesses have grown by -- in 18 months, each of them has grown by at least half with no head count growth. And so the growth has really been focused on these net new areas.

Got it. Got it. Over the last, call it, 4 or 5 years, you made significant decisions across your product and expanding that product set. What do you see as the key pivot points for the business kind of going forward?

I don't know if I were to look at like this is the pivot and we're going to go this way. We are a really ambitious set of team members. I always say one thing about that is I think that you will see us take big risks always, calculated but big. I don't see us as being an incremental company ever. Life is too short. Our team is too -- I always say to investors, like if you just let the people like work with me, like they're going to think they're all better than me. And so like that's tough because you're like, man, how do I impress these little guys who are 10x, 20x better than me, keep them here. And so that -- what I mean by that is like we won't -- our pivots will be not a pivot, but a big bet. So what does that mean? We'll probably be acquisitive because we need -- we want more opportunity, we want to expand our TAM. But because our -- and also, I think since we've delivered on the product and our product is winning, that's the time to pounce. That's the time to be like, "Oh, let's just sit here and like see what happens." Like now it sounds like, "Oh wow, you love us like what's the next product we can pull into you? And how do we get closer and closer to serve you as our customer?" And so I don't know if we have a pivot, but I do think you'll see us take some big swings, whether it be M&A or product adds because I don't think you can stay static. And I do -- I am paranoid about competition. And so I just assume someone's going to spend 5x as much as we do with better people and how do we keep that moat.

Yes, interesting. You talk about M&A and some of your R&D investments that you're like 25% of revenue as kind of R&D. Is there -- are there any kind of top of the mind kind of areas where you want to take your R&D or even your inorganic expansion areas?

So on the organic expansions area, it's actually much more about how we integrate amongst our products better and better and better because what I want to go -- every customer to feel it's like, "Hey, if I buy 1 product at PAR, it's amazing. If I buy 2, it's like amazing times 2. When I buy 3, it's amazing times 5." And because they integrate the sort of ability to single sign-on, all that stuff is like makes my life so much so simpler, so easier. In my house, I have ADT and then like Blink cameras and then I have this, and so like 3 different cameras apps. If it was all 1, I'd be like oh my God, that was so simple and I'd pay twice the price and it'd be awesome. Similar experience in restaurant. And so a lot of our internals focus on that side, like just how do we make our products when they're unified surprise and delight, surprise and delight, so the customers feel like they're getting more and more and more when they buy more products. It's not on, let's go create a new widget because when we do that, then we can take more price and then when we have a new widget, we can upsell. On the sort of inorganic growth, I think we are -- as was mentioned, in our guest engagement side, where we have slower growth, we are going to push that through acquisition, I hope. International, we don't have such [ a day ]. So we would probably look international one day. Down market, do we want to go down market or not down market? And so there's a lot to look at. But I think at its core, we will be looking for products that serve the enterprise that when integrated to PAR, the customer gets something better. And that's what we've always kind of focused on and looked at it. And then I think as far as do we ever want to buy a competitor? Do we want to buy market share? I think this challenge is, of course, we'd look at it, but there has to be such a large margin of safety on the multiple you go in in because that's when things get screwed up. You buy too big competitors, you put them together, it's like what product wins, what's team wins. What do you tell the customers? Have you just now created a whole reason for a bunch of customers to go RFP because it's like you're forcing them on a new product. Those are tough things, right? And so we would do it, but we would need a massive margin of safety to make sure we didn't screw that up. So most of our inorganic is like what product can we take into our base, not to slam it in there, but the customer actually feels like, "Oh, PAR does that, it's going to make my life better, simpler and easier."

Okay. Cool. We have covered a lot of ground. Any other closing remarks before we finish our conversation?

No, I think we covered most of it.

Right. Well, thanks, Savneet. Thanks for taking the time.

Thank you.

It was a very interesting conversation. Thanks so much.