PAR Technology Corporation (PAR) Earnings Call Transcript & Summary

Thanks, everybody, for joining. Savneet Singh is the President and CEO of PAR Technology. He joined the company's Board in 2018 and subsequently took over as CEO in 2019. He's also a Morgan Stanley Alum. So welcome home. Great to have you. For those who don't know PAR, can you give us a quick summary of what you guys do?

Sure. We sell software to enterprise restaurants to help them manage their day-to-day workflow. Our solutions are broken up in 2 buckets. One bucket is called engagement software. So this is software that touches the end consumer like you or me, so that's loyalty software and online ordering. And then the second bucket is software that the operator in the store would use, and this is point-of-sale, back-office software and kind of underneath it all, we have payments.

You've significantly expanded the product portfolio from POS into loyalty and payments and back-office software. I'd love to hear your thoughts on truly becoming a platform. And I know you've talked a lot in your earnings about your Better Together thesis. So can you explain that for us?

Yes. So I'd say stepping back for a second, what's happening in restaurants and retail is that they're all going through some form of digital disruption. We used to say the reason I took the job at PAR was that you could see the software is the restaurant, the restaurant didn't realize it yet. And essentially, whenever there is a digital challenge in one of these businesses, they go and buy an individual software solution to solve that challenge. So they would say, okay, I've got a point-of-sale system. Now I need online ordering to have a website, and then I need a mobile vendor to create an app for mobile, then I need loyalty vendors, then I need offers and promotions vendors, then I need QR code payments, and then I need supply chain and all these little things are like a new vendor, new vendor, new vendor, new vendor, new vendor. And our thesis was that, that is a horrible way to go about it because you now have a bunch of different vendors trying to create a unified guest experience. And then on the back end, the operational elements are even more complicated because those products don't integrate. And so the back end is crazy because you don't know if a customer here is the same customer over here. You don't know if the menu here is menu over here. And so our thesis was always to try to bring these together into a more integrated offering so that we could actually give control back to the restaurants. And the way I like to think about it is if you're the CIO of a retail or a restaurant organization, your job has shifted to becoming a vendor manager and managing those vendors. And our hope is that we can get you more focused on your end customer again and create this great experience. And so our theory has been that we build or acquire products, integrate them into our existing suite of products, we can create unique functionality for that customer that does 2 things. One, it makes their life simpler because it's one vendor, one service desk, one support desk. But 2, you're getting product functionality you couldn't get because now we have 2 products under one roof and we can build stuff on top of that.

That makes a lot of sense. And to double-click a bit on product, I know you mentioned it a little bit before, but what product categories are you selling into? And I know M&A plays a pretty meaningful role in your business. How do you view M&A as part of your go-forward strategy?

So today, we sell loyalty and online ordering in one bucket, and then we sell point-of-sale back-of-house, back-of-house kind of being inventory accounting, labor and then payments, as I said kind of goes through everything that we do. And as we look at M&A, M&A for us is a product journey. It's not a financial journey. The financials have to work, but it's really focused on product. And the reason why is that we think that our success is being able to create -- buy an additional product, plug it into our, call it, our ecosystem, integrate it and then give the customer a unique experience at the end of that, that they couldn't get before. So you should be able to say, "Hey, when I had those 2 products under 2 different vendors, it was good. But when I had that under one vendor being PAR, I had a completely different experience that was way better." The example I give you, and it is like kind of extreme, but it's really true is that we have a back-office product and a POS product, and those are now sort of an integrated offering. The equivalent to this would be and everyone -- and I just an example to some investors, but would be if you use Outlook and you have your e-mail and your calendar, it would be -- what literally happens in a restaurant is you'd sign on to your e-mail and you'd sign it again separately to your calendar. And okay, that's kind of annoying because they aren't integrated even though they're in the same like suite of doing the same type of stuff. Then you're trying to set up the calendar invite and you're like, "Oh wait, my contacts and e-mail over here, don't actually come to my calendar. So then I got to go look up, go back there, forget the e-mail. That's like how restaurant technology works. These things that should be so obviously connected are actually distinct products. And so when we connect that, we create this -- then imagine you're like, oh my God, one day, my e-mail on my calendar, my context, it all flows through everything I do, my team is like a beautiful integrated process. That's what PAR does to the restaurant. And that is hugely impactful if you're a person running a restaurant today because your job is so complicated and you are really struggling with all these vendors and new storms of customers. And so that's kind of we do. And so when we think of M&A, we're like how do we create that experience all over again? How do we create that next thing you're going to add to the suite to make your life easier? And so that's why I think our M&A has worked because it's been -- it's a product development exercise. It is not a -- let's just create the biggest financial outcome we can. And if we can prove that product fit, then we look at the financial fit and the cultural fit and then try to make it work. And one thing we're really, really proud about is that when we acquire a business, we are almost always able to accelerate the growth, retain the people, higher retention rates than any company in software without adding an additional dollar of expense.

That's great. And I think the word you used is ecosystem, which clearly you have built that. I'm curious -- you've mentioned the point of sale kind of being the key component in the value chain or in the ecosystem. Can you expand on that a little bit?

Point of sale is a heartbeat of the restaurant. It's -- the ERP, it's [ picked ] your analog. It is the system that becomes a system of record because every other product will come to you with a whole bunch of data and then you don't know which one to pick and so you always end up back at the point of sale. And the reason why is almost every product integrates at the point of sale. So if you're running HR applications, you're running back office, you're running online ordering, all those systems are injecting or pulling from the point-of-sale system. So that kind of becomes like the system of record that everything comes off of. Said differently, if you're the CFO of a restaurant company, you're going to want the data from POS and nothing else to be what goes into your general ledger. And so if you get POS right, you have undue influence on the end customer because you run the most important product that they have. And so they'll kind of trust you with it. As an example, this is a horrible example, but if you had like a pacemaker and you needed to like add something to a pacemaker, like are you going to pick a new vendor and be like, I'm going to use the widget that the pacemaker that I already use that keeps me alive every single day, it's probably going to use. Like it's kind of like that if you do a good job. And so when we took over the company, like I mentioned, back, I think it was 2018, like that was the vision we sort of saw, which was like if you get point of sale right, you can then build on top of it and build a suite and conversely, get out of the conversation of I want a better point-of-sale step into, I want a platform that can actually deliver these outcomes that I couldn't get before.

I appreciate all the analogies. I definitely can relate to all this. I want to talk a little bit about TAM. What are your focus areas within the restaurant landscape and outside of it? Who are you targeting?

So our core markets are enterprise restaurants and enterprise convenience stores. We don't do anything outside of that right now. And we think it's a great pool to fish in because, one, it's an area that is just early in this sort of digital transformation cycle. Convenience stores are still, for the most part, running point-of-sale systems and inventory systems that are run on servers in the store, still not cloud-based. Restaurants are still really early in digital transformation and how they run their entire -- their world. So I just think it's early TAM on both of those segments becoming digital. Second, it's far less competitive than selling to single-store restaurants because you're not competing with Square, Toast, Lightspeed, I mean, just all these amazing companies. Most of our competition is I call it, Silicon Valley 1.0, the big companies of the past. So it's a little bit less competitive. And then 3, I think that our sort of idea of Better Together Integrated Solutions really works at the enterprise well because if you're selling into a small restaurant, like do they really need complicated loyalty? Do they need complicated analytics, like not really? And so I think while early on, it's a slower process to sell a lot of products. I think like the oil well is really deep because today you're selling the point of sale, then back office and loyalty and 5 years from now, you're selling them a dozen other things that integrate into it. And so we're squarely focused on those 2 end markets.

That makes a lot of sense. And if I -- I want to get into a few customer examples. But first, I would just ask what is your pitch? If you go to like Burger King is one I would love to hear you talk through what's the initial sales pitch to them? What can you do for them that they're not already doing?

So when you're talking to enterprises, it's generally an RFP process. So you get the pitch, but it's usually after you've kind of said answer the 300 questions and it's like a dense thing usually made by a fancy consulting firm. And so the way I'd answer is like it's not the pitch. It's -- we sell enterprise software. That is a product business. Your product has to win. We have the best salespeople, the best looking CEO, like it doesn't really matter. It is the product that wins in the end. And so our pitch is the product. Look at the product and the functionality underneath it. And what's amazing about our products is -- it is -- they are the most scalable, the most stable, which means a lot in our category. It doesn't sound sexy, but like stability really, really matters. And we think the most innovative because it's -- we're the most open. We have more integrations in APIs than anybody else in the industry. And so we're able to kind of say, hey, you came from this old product that is not open API that doesn't support like modern workflows that has -- doesn't have real-time data. And oh, by the way, it's not really in the cloud, but they're telling the cloud and you can move this more modern solution. And that's kind of like point one, which is we stick our foot in the door and say, that's why you want to pick our point-of-sale product as an example. And then we go in and say, "Hey, if you attach our back-office product, look at this amazing outcome you can do that you couldn't do before, like not having to log into your calendar and your e-mail and having separate contacts and so on and so forth." And then you kind of get them on this, oh, wow, like that's really interesting. This is sort of integrated and then you kind of go from there and you say, well, guess what, if you had payments, here's all the functionality and payments you couldn't get before. We can give you the Starbucks reload card. We can give you a one tap loyalty and loyalty program, one tap. And so you kind of get on this excitement of Better Together as we get going. Now we were -- to be candid, like this was a thesis we developed in 2018. It is manifesting in the last 12 to 18 months. So we are way, way too early. But it's clearly like working now. And I think it has a long runway just because retail and restaurant customers should not be tech companies. And I think it's been really challenging for them to sort of all of a sudden say, I'm going to make my core competency, not food, but like building software, like that's not actually what they're great at. That's not why you chose to go to that chain. And so giving them that control again, I think, is why we have -- this is kind of a decent runway in front of us.

You clearly have a ton of value to add in a lot of different ways. What is the typical -- if I were to go to an enterprise restaurant, what is the first sale? And what is the motion of, hey, you should add on this next module. How long does that typically take? And is that a motion you see a lot?

So generally, you try to land on point of sale because, again, like I mentioned, you have a lot of influence if you do a good job. And actually, we just had our earnings last week, and I mentioned we signed 8 new point-of-sale deals in Q4. All of them took an additional product in those deals. So what's the motion? Well, hopefully, you're buying 2 products at the point of that original sale. Generally, from there, it takes about another year to get the next product in the door. And that's usually our back-office solution. And that's because we get the ability to kind of convince you of this Better Together fits in this Better Together functionality. So we sort of announced on our call, one of our largest customers is now using our back office product. What was amazing about that, that was a deal we actually lost for the back office business a year plus ago to a well-heeled sexy cooler company. But once we're able to convince the brand that, hey, when you add this like to our existing product suite, you're getting all this functionality you couldn't get before, they did it. But it's usually about a year after that you can get going to the next one.

To talk a bit about market again, since COVID, obviously, the restaurant landscape has been dynamic, to say the least. What are the challenges that you're seeing restaurants face right now? And what trends across the segments that you cover?

Categorically, there is a slowdown in traffic across restaurants. Now it's not evenly dispersed. You see that far more significantly in single stores like the smaller restaurants. You see that dramatically in full-service dining, so kind of higher ticket prices. You see that very marginally in quick service, which is almost all of our business. So that trade down from expensive meal to cheap meal is like really very evident in our numbers. The second thing I think we see is that those special concepts that have that special something are doing incredibly well. Sweetgreen, Cava, like the brands that have captured the mind of a customer, we do not see any slowdown kind of happening there. As mentioned, we work with a really cool -- one of the best burger chains in the world in Canada and like their store in Toronto is still busting records every month and it's not a super cheap thing. And so that's the kind of second thing. In aggregate, though, I would say the slowdown, if you look at just our base of customers, which is a much healthier base than restaurants as a whole because we service that enterprise and QSR -- it's a pretty small impact. And what's interesting to us is like it's a tailwind because it actually accelerates a lot of the conversations to say, hey, like I need to reinvest my loyalty program because I need to get people in there because I'm scared of traffic declines or I want to increase bucket size or I have an issue with labor because there's going to be less labor availability, I want to automate my labor. So it's actually a decent pull-in of customers because we see that actually being a tailwind for us. Now if these comps go down 10%, like who knows? But in the QSR and fast casual space, that doesn't really happen.

And how -- just to stay on customers a bit, how does the pipeline look for 2025?

So it's really strong. I think we see more opportunity in cross-sell and upsell and net new deals than we probably ever had before. The business is generally doing strong, and I keep sort of skipping over the convenience side of our business, which is heavy on the food side as well. We have record pipeline there more than we've kind of ever had before. And so it looks really strong right now. Now how it'll look 2 quarters from now, I don't know. If the economy really does slow down, we see change, it could happen. But right now, it's really strong. It's strongest in convenience, POS and then like loyalty third, but I do think loyalty will actually pick up because if there's a slowdown, you're going to see much more investment happen there.

And in these times, I think it's -- the ecosystem is obviously important because it's kind of a mitigant to traffic. But I am curious, you sort of touched on it, but if someone is not using PAR at the enterprise level, are they cobbling together a bunch of different vendors or is it a legacy ERP like?

No, it's a bunch of vendors. It is a bunch of -- again, remember, 5, 6 years ago, it was 5 vendors that mattered. You had a POS system, you had a back-office system. You probably had some -- you had your -- an HR system, but you didn't have like -- there was no QR code payments. There was no like let me scan the table and order food. There wasn't -- certainly wasn't loyalty. There certainly wasn't online ordering. There was no integration to DoorDash and Uber Eats, right? These are all like brand-new things. And so cobbled together, it's like the right word, but it's like -- it wasn't like a ton of stuff. It was like a few applications. I would argue you didn't need an integrated suite of stuff back then because you didn't have all these -- you weren't -- your products weren't accessible through so many different channels. And that is going to continue, right? Like you're going to have TikTok ordering. You're going to have ordering in the virtual world, like you're going to just see more avenues to order food. The AI agents are going to allow you to order food directly, and that will be, I think, super exciting for our business, scary if you're DoorDash and Uber Eats. So I just think that like that's what's created this acceleration of vendors.

And so you kind of mentioned implicitly some growth vectors. But I am curious, where do you see not just your business, but where do you see the restaurant landscape going in the next few years? I know AI is the most topical word of the conference, of course. But how do you see the industry? And how do you see PAR fitting into that?

It's interesting. So for the last like 15 years, it's been said that restaurants are over retailed like the malls in America. But for some reason, like they have same-store sales growth almost every year. And so the obvious answer will be like there'll be consolidation, there's too many restaurants, but like it really hasn't played out. What I think is going to happen in the restaurant industry is that you are going to see tremendous change in the way that a restaurant operates. But I don't think you're going to see a tremendous change in the restaurants that you buy from, if that makes sense. I think a lot of this investment into new chains, new products, like most of it, I actually don't think it's going to work because I think there is still this emotional visceral connection to the food you buy or eat, like I'm always going to land in SFO and go to In-N-Out, no matter like what exists because there's some like emotional connection to that amazing experience. And so I think a lot of the research [indiscernible], hey, there's going to be all these new McDonalds and all these new things. I'm not a buyer on that. I just think the way we operate and get our food is going to change. So what do I mean by that? I think it is inevitable to have a lot of robotics in the kitchen. Being in the back of a restaurant is a horrendous job. Like it is just a job that you would never want your -- you say you want your kids to work in a restaurant, like you don't want them to have that job. It is brutal. People are just nasty to you. And it is tough because 10 -- not even 10 years, 5 years ago, you just had to deal with people coming in your store getting your food. Now you got to deal with DoorDash guy, the Uber guy, you got to look at their thing, rightsize to another system to another tablet, you got the people in the drive-thru, like it's a disastrous thing. And so like how do you solve that? You can put a bunch more people there and say you're the drive-thru guy, you're the door -- like that's not economical. And so you're going to have a bunch of robots making your food and you're going to have a bunch of automation of how that stuff flows to that restaurant, whether it's the cubicles that Sweetgreen has done or something more sophisticated. So what I think is going to happen in the restaurant is the complete change. If you think about it, I used to have this slide, but the way a restaurant looks -- the QSR restaurant looks today isn't that different from like 1980. There's a big counter. There's 2 or 3 point-of-sale systems, now there's some kiosks, but like it's pretty much the same 4 walls. But the actual operations have changed so much. 20% of your orders are coming from DoorDash and Uber Eats, like how those 4 walls haven't changed to support that, right? You should probably build out the back of the house that doesn't interfere with -- you guys have probably been restaurants where it's like you're trying to place them -- I got kids, so unfortunately, I go to these unhealthy restaurants. And you're like trying to place an order and you're waiting for 10 minutes because you're putting all the DoorDash stuff up there and the driver doesn't show up for 15 minutes. Like that is all going to be sequenced through better technology. And so I think the -- to answer your question on restaurants, I think the actual unit of fulfillment is going to change significantly because it's the only way I think that this is going to like be sustainable. I don't think that the restaurants are going to change that much as far the type of food that we eat and so on and so forth. I think that's just going to be a slow evolution. As far as like restaurant technology and AI, I think AI is going to hit the category that we serve today really late. I know I'm probably counter to most, but we still have customers that I have to explain to the clouded space. It's still really early. And I think we have a customer advisory board. And the last 2 years, I always say, rank these things as like what you're most interested in. AI is #1, 2 years in a row. And then I say, okay, here's the 15 items that are on our road map, and they're buckets, not the specific items. Rank how you want me to like spend on these and AI is always last. And I'm like, so if they're not willing to put their money behind it, like it's just a cool thing to talk about, but not a cool thing to execute on. Now part of that is probably on us, which is we got to do a better job of saying here's the value we can drive. But I think that AI is coming. I just think it's -- in the category that we are solving, the operations of the business have to change in order to support all these AI ideas.

Let's pivot just a bit to the financials. You've managed to actively -- to grow active sites pretty significantly over the last few years. I'm curious, with your ecosystem play and obviously, you have a multiproduct strategy going, how do you balance the -- let's go get new customers versus let's continue to upsell our current base?

I talked about this earlier, like we are an ambitious culture. So we're an and culture, so it's not an or and so you got to do both. And we measure it pretty precisely and push it really hard. So I don't think we think one or the other. We just have to do both. I think what's great about the growth in site count is that it's certainly expanded the opportunity to cross-sell and upsell, and that's what's working really well. We're sort of seeing like, wow, we can push this product here, push this product here. But at the same time, we're in like less than 30,000 point-of-sale sites. That's -- I think that's pathetic, like we should be so much bigger than that. And so I think I still get really excited about that front end, if you will. And so I just think we have to do both. And I think we feel really good about it, and the execution has been really strong by the team has done a great job. And also really efficient. I think one of the things that people are sort of seeing about our financial model is we spend 12%, 13% of sales of revenue on sales and marketing. There's not many software companies that are better than that. Nobody at our size. We spend less than 25% of revenue on R&D. So we're really efficient there. And so I think we have the opportunity to be sort of best-in-class margins while still doing both of those things because we have our obsession on -- we've got 4 or 5 products, one person can sell all those products. We don't need 5 salespeople.

Very interesting. And you kind of led me to the next question, which is you've obviously demonstrated a lot of top-tier growth over the last few years actually. And then while also generating a lot of operating leverage. I'm just curious, how do you balance that? I mean it's very difficult to do both things at the same time. You've managed to do so. What are the levers going forward for both growth and operating leverage?

So historically, we were lucky in that we had levers to have this operating margin expansion from 2 like big areas. One was we -- when we acquire a business, we truly integrate that business. So there's one engineering team. There's not 5 engineering teams because we have 5 different opportunities. It's one engineering team. It's one culture. We put our people in there. It's one -- like we really bring that under one roof. And what that allows is for us to then centralize R&D in a low-cost geography. And so that's been a really great tailwind. So we're -- I forget the math, but organically doubled revenues without growing R&D expense. That's hard to do, but we did it because we were still adding people just at a much lower geographic base. And so like that was a core lever that we had. The second thing that we were able to do is sort of the sales model I mentioned was we started to change our sales model and have one person sell more and more products. And so we get a ton of efficiency there. And the last thing is we are a really, really ambitious intense team. Whenever firms come to meet us, they walk away being like that's not your normal software company. That is just a little bit of different experience. And so on the G&A levers, we're like -- we literally just say like sorry, HR, you get -- figure out a way to make math work with no new people. Sorry, finance team you forgot to do it. And so there -- to your point on like what are we doing going forward? So I think there's a couple of levers we have to play with. One is the cross-sell motion is wildly accretive to the margin because you're selling additional product without the sales and marketing expense, without the go-to-market. So that's like critical to get that right, and that will create more margin expansion. The second thing I think you'll see us do is continue to do M&A that is accretive to our Rule of 40 score. And so that will help. These are businesses that are hopefully growing faster and higher margins, the potential for higher margins after they come to par. So I think that's like another lever that we have. And the third is just scale. Like we still think we're under scaled. And so I think we haven't really seen the peak of our gross margins to anywhere close to that yet.

Great. We have a couple of minutes for questions, if anybody has anything. How do you think the long-term model in terms of what the gross margin [Technical Difficulty].

Yes. So we talk about this a lot publicly. So we've historically said we want our gross margins to be in the mid-70s over time. And we want our operating margins to be in the mid-20s or higher. And the way we get there is we've sort of said we want our R&D expense to be 25% of revenue, our sales and marketing expense to be 15% of revenue and our G&A expense to be 10%, and you can get to 25% to 30% margins there. Now as you heard, we're way ahead of schedule on the sales and marketing R&D. We're already below the targets or beating the targets there. But where we need to do work is on the gross margin side, which is -- we just had our call last week, and we talked about how we think it's going to grow 50 basis points to 150 basis points every single quarter. And then on the G&A side and the G&A side is just scale. Once the revenue base gets a little bit bigger, we'll do it there. So of all the like fears that I have, like getting to long term -- the long-term margin targets is not one I worry about tremendously because we've already done it on the 2 hardest levers to get right, which is sales and R&D.

An unrelated question. You talked about robotics in the back room, making the food, et cetera. Who's doing that? I recall Kura Sushi is doing.

Which brands?

Which companies are doing that and starting with?

Today is very few. So White Castle is a thing with Flippy. Miso Robotics is a company doing it. I forget what brand they're in, but it's very, very few. Sweetgreen has their Infinite Kitchen in Chicago that makes your salads for you. We're still really early in it, but I think its unavoidable today for that not to happen more. And by the way, it doesn't need to mean like there's a robot making your home meal, but the prep stuff, like why is preparation done by a human being when that human being can focus on a guest. So most restaurants have 2 hours, 3 hours, 4 hours, sometimes 6 hours of prep before the restaurant opens. That can be done by robot, cutting the tomatoes, cutting the whatever the onions, like all that prep can be done. All the testing of the food, right? You got to test the temperature, right, like all of this can be much more automated to make the employee experience better. I mean we're not even out the dug out yet. We're early.

You made this great point earlier about your focus on enterprise partially because you're avoiding those competitors that focus on single stores, if you will. But Toast is making a big deal about going after your space. Can you help us understand why we shouldn't be worried about that?

Well, I worry about everything. So I'm the guy doesn't sleep and it's kind of paranoid and all. But I would say this whole thing. So I've always said that by mentioned, I'm a huge Toast fanboy. Like I was an investor in Toast, so I discovered PAR, so I'm forever grateful. And I really have tremendous admiration for them. But their journey to the enterprise has been -- so when I was on the Board of PAR in 2018, the big bear case was Toast is coming to the enterprise. So it's been a really long journey for them to get there because the enterprise functionality is dramatically different than down market. As far as their growth, I've actually said for years at all these investor conferences, I expect them to come into the full-service dining market, the table service market, that market that we don't play in historically. And the reason why it was pretty simple. They have an incredible offering in the single-store restaurants for eating, sitting down at a table service restaurant. The tablets, the QR code, it's beautiful, it's amazing. And so I thought they have a great competitive advantage to go take that functionality, bring to enterprise and something special they can build. So that's point one. And then point 2, they didn't have a competitor. The competitors were NCR, Oracle, the legacy tech guys. And so I've always assumed they were going to win that market. Ironically, actually the opposite. We're probably becoming a thorn on their side because now we have expanded into that full-service dining market. We look at it as expanding our TAM again, ironically, because that wasn't a business we played until the last 12 months. And so we have now expanded into that market, and then we'll kind of see who wins. But that wasn't a market we really played in, in a bigger degree. The last thing I'd say is there's plenty of market. I have always expected for them to be a competitor. I expect other people to eventually become competitors. We're not going to win the whole market. And I think if you were -- again, I think if you had to choose here and talk to whoever their head of enterprise or enterprise sales, I'd say like it's going to be a dog fight and it's going to take a long time before that. And I think our moat here will be that multiproduct connectivity that I mentioned that I think is very, very hard for anyone to replicate.

As a follow-up, I should notice, but you're expanding to full service, that means you have your own hardware. And is it competitive with that of Toast, which seems to be loved -- their hardware?

We think so. We won very large -- we're winning great business with it. It's not hardware that wins a deal, though. Like the Toast hardware, it's awesome, but it is not -- it's a third party that makes it and you can just make a deal with another third party to make the same darn thing. It's the -- the connectivity of the software that's really the secret sauce. The hardware is like -- by the way, we've been making -- PAR was founded on selling hardware to the restaurant chains for 40 years. So most people in the restaurant industry would tell you we've got the best hardware in the market.

Any other questions? Great. Savneet, thank you.

Thanks, [ Neil ].