PAR Technology Corporation (PAR) Earnings Call Transcript & Summary

All right. We are going to get started here. Next up, we are super excited to have Savneet Singh here, President and CEO of PAR Technology. Savneet took over the role of CEO back in 2019 and has been regular at our conference for the last several years. Savneet, thanks for being here again.

Thanks for having us.

All right. So look, to hop right in, PAR has been through an impressive transformational journey over the last decade. So for those who are not as familiar, it would be great to go through a little bit of background on PAR, kind of how did you get to where it is today.

So for most of our life, call it, 40 years, we were primarily a hardware and services provider to the category. Our founders invented the point-of-sale terminal, had a great run in the '80s, and then sort of 25 years of a more challenged business selling hardware and services to restaurants. So you go into restaurant, you'd see our logo on the devices, but we weren't selling the software on the inside. And so the business was cyclical, tied to the buying cycles of those restaurants. In 2014, we made a small acquisition that got us into the software space called Brink, which was point-of-sale software for the cloud. And it was very tiny in a few hundred stores. In 2018, I joined the company and we sort of went on this all-out shift into becoming a software business versus hardware business. And so we spent the first year or 2 really rebuilding and rearchitecting that point-of-sale product so it could scale. And since bolted on a loyalty product, a back-office product and a digital ordering product so we can kind of become the end-to-end solution for the enterprise. And our thesis has always been that restaurants, as they become more digital, their system becomes more fractured. They have more disparate pieces of software not speaking to each other. And over time, the restaurants will want to consolidate to a platform versus a bunch of different stuff. And I think that is really what's kind of propelled us to grow well above our customers -- our competitors, excuse me.

Yes. Great. So you've made some acquisitions over the past year with TASK and Stuzo, most recently, Delaget. Can you just walk through each of these acquisitions, what they brought to PAR? And then as we're approaching the anniversary, it would be great to hear how the integration process has gone and how -- particularly how it's gone relative to your expectations?

Yes. So our M&A backing up is 100% product-driven. So we don't look at M&A as just let's look at how much revenue and EBITDA we can bring in, it's really been focused on are we filling a core hole for a product or creating opportunity for a product set. So we like to think that if we acquire something, it either is a TAM expander or it's making our collective stickier, better and also expanding the TAM that way. So last year, we acquired Stuzo. And Stuzo is now called PAR Retail is the largest loyalty provider in convenience stores. We fell into this market, honestly, little happenstance. We were growing very quickly as a loyalty provider in restaurants and then convenience stores, started buying our software and really looking to expand their food service offering to compete with restaurants and they sort of saw us as a natural extension. So we had a lot of success, but it was not a focused effort because we were still growing faster in restaurants, and we kind of had this off the side of our desk. And so we decided to go really focused and create a focused effort just to win that C-store market, and so we acquired Stuzo. It's been an incredible acquisition, probably our best integration of all time. By the end of the year, we'll have migrated every customer onto one platform, which is really hard to do in any software business around big enterprises like the Chevrons and Casey's of the world. And it's been an incredible journey. I think we inherited no credit to us, but a great team, and then we've helped bolster that team. And obviously, they've kind of really risen and helped expand -- taken on our culture and made it better. So been a home run for us. And a category, I think will continue to be more acquisitive over time. TASK, which we acquired about a year ago, was our attempt at growing into the international market. It's been, I think, a great acquisition in that as we kind of talked about this on our call, we're in three really large potential restaurant RFPs and near final on all of them and two of them are on TASK. Never in a million years that we think that would happen within the first 12 months of buying these products. I used to say that's the call option. That will happen in 3, 4 years maybe. And so that's really exciting to see. And at the same time, the core business is doing really well within its international markets, primarily Australia. We launched with Wingstop. We've launched -- we're already on Guzman y Gomez, which is kind of like the fast-growing, fast casual kind of like not similar food, but concept of Sweetgreen and a few others. So I feel really excited about that business. And again, I think we would do it again over and over again. Delaget, we bought December 31, 2024. And so we are using that product within our PAR OPS suite. So OPS is kind of our operational set of products. So that, I think, is going to be really -- continue to be a really great driver of growth for us because we think the back office is where an incredible amount of innovation is still to come in restaurants, and this is just part of it. And so this was unique to us because it was incremental functionality within a product as opposed to a new product line. But while it's still really early to determine if it's a success or not, I think the team feels like it will work great. But each one of these things are filling those two buckets that we're expanding our TAM. So the first two, we're expanding the TAM. The second one is making the collective stronger.

Very good. So just on the TASK side, it sounds like things have gone very different to what you expected, but for the better, right. These big RFPs that you didn't expect to be operating in. I think on the call, there was some focus on some of the reprioritization that you had to do on the back of that. So I guess the stock reacted negatively on that. What do you think the market is missing? And how do you think about some of that reprioritization and the impact that it will have on things like ARR growth over the next year?

Yes. I mean I think the decision -- so we had customers ready to roll out on TASK that would be revenues in 2025 that we proactively went to and pushed out to 2026. The reason we did that was as we got into the later stages of these RFPs, we needed to build a lot of functionality to give us a great shot at winning those RFPs. And so while it sucks to, one, not -- to our investors not to have that revenue come in, but also to call these customers and say, "Hey, we're going to push you out of here or whatever it may be because we're building something else," which is a highly uncomfortable thing to do. We think it's the right way to think about our time and capital allocation because if you win one of these big deals, it pays for itself many times over, but it also gives those customers we pushed off a better product to use because we built great functionality. And if for some reason, we don't win any of those deals, you've now built the functionality to go win the next large deal. So I think it makes a ton of sense. And normally, we would never have to have one or the other, but we just didn't -- never in wildest dreams we think that would happen now. We always expect that would happen years from now. So it's tough, but I think it's the right -- like if PAR was a private company and I owned every share, I would have made that decision 100 times over.

So I guess talk about that, like is this indicative of a resource constraint? Is it because of the size of these RFPs? And does it make you feel any differently about hiring or investments?

On the first two, yes and yes. I mean, again, TASK is a really small product line. And so if this was on our PAR POS business or our back office business, we would never have to make these decisions, we would be able to do it all. It just happened so far ahead of schedule that we weren't prepared for it. And conversely, I would say, well, man, what have we made that investment a year ago, but like it would have been so stupid to have made the investment to go try, I think we're going to win a big global deal when we don't even have 5,000 customers on it yet, right? And so it was more a deep focus on always been retrospective of what could we have done differently. And I don't think we would have made -- there's probably nothing you could have said to me, I would have said, "Hey, let's do that earlier until we had the data point that the product was actually like better than we thought." So I think that it was a -- it's a resource-constrained dynamic that won't happen again on TASK. But again, if we bought a business again that had a few million of revenue, we'd probably run it all over again. If they happen to get an RP with the big brands, we probably end up that all over again. And I think that's just the nature. But again, it just happens so rarely that I'm not really worried about it.

Yes. No, that makes sense. Okay. And then I guess the other thing that maybe was lost on people is the international footprint. Most of the other platforms, you mentioned the POS, like being much bigger resources domestically than internationally, I think that played into it as well.

That's correct. Yes. So international, we just -- we didn't -- obviously, the development cast that came with TASK, but we also didn't -- we didn't have an international footprint. So you don't have your support, your installation, all that stuff would have to be...

You can't shift people from Albany to Australia or whatever. I know you're not in Albany, but somewhere around there.

It's all the same.

It's all the same, being north of Manhattan, yes. Okay. Just on the macro point, I know there's been a lot of focus on the health of the consumer. Can you talk a little bit about just what you have seen in your restaurant clientele?

So listen, Q2 was really tough for our restaurant clientele. 2/3 of our customers had negative same-store sales and negative traffic. We've never seen anything like that outside of COVID. It was very surprising. Q1 was slowing, but not like declining. And I don't think anyone was prepared. I listened to almost all the public company restaurants that reported in Q2, and it was a bloodbath for all of them, except for Chili's maybe, like very few did really well. And it was -- I think it was the speed of that shock that caused everyone to freak out, not the fact that it was there. And so the health of the restaurant was really bad in Q2. And we thought it would be come down in April because of the tariff stuff and sort of like cut back quickly, but it took a few months for it to get back to, call it, some form of normalcy. And now we're there, and it's kind of -- we're kind of beyond that. But yes, Q2 ended very weak for many restaurant companies. And I don't think anyone projected that.

Do you know why, I mean?

I think there's a couple of things, and only two things I can point to. One is when that economic uncertainty came, even though the stock market came rolling back, the average American still was holding on to their wallet. And it seemed to have an outsized impact on restaurant spending. I don't know why. But if you just look at CAVA, look at McDonald's, look at all these brands, like they all had such horrible quarters relative to expectations. I don't -- I think it just -- that, that was the space that the consumers decide not to spend. That usually doesn't happen. I mean we've had quarters where you would see 6%, 7%, 8%, 10% sequential menu price inflation and not seeing this type of impact. And so this is not like -- to me, it was hard to figure out what was the underlying trend because it's not like the inflation numbers were up 10% like we saw the year before or 2 years before. The second thing that happened, and this is, I think, a little bit maybe more specific to us, we are heavy QSR or fast casual. That is where 80%, 90% of the enterprise business is in the United States. You had this dynamic, though, that the full-service dining restaurants had done a really good job bringing down their prices to be similar to quick service, and there was some shift -- share shift from quick service to full-service dining. So I think that also had something to do with it. But given how categorical it was, I just think it was something to do more with the macro.

Yes. No, I mean, that makes sense. Back to normal, I think we've been hearing kind of negative low single digits consistently for the last couple, I don't know, years at this point, but certainly a number of quarters. Is that kind of what you mean by back to normal?

No, it's a little better than that, I think, is what we see. I think the other part to remember though, is like the way that restaurant data has gone for years has been heavily focused on traffic, and as traffic as a proxy for same-store sales. The problem with that now is because so many orders are digital, whether that's through DoorDash or Uber Eats or through your native applications, it's actually order count that kind of matters more now than traffic because that traffic decline might be being offset by your growth in delivery or off-premise. And that isn't disclosed publicly. And so that's why it's a little bit harder now to like look at the data of restaurants. So we continue to see delivery increase, not decrease. We continue to see growth in traffic through all native applications, so website, mobile. And so you're continuing to see the digital softwares in the world kind of happen within restaurants. And I think all that's going to mean is that whether you slow down your tech investments in Q2, like you're not going to be able to stop because those channels are not changing. And I do think our -- this wasn't by design, but our bet on QSR and fast casual puts us in a very special place because those are the -- that is the category that will win in a world like that, where -- in a world where more deliveries order than less, you want to be a vendor to the customers that are set up for that, and that's the quick service and fast casual space.

And just to underline it, I think most people know this, but other than -- I mean, you do have PAR payments. There's some exposure to same-store sales and things of that life. But when you see a macro turn like that in the end market, how does it impact PAR?

So most of the time, it does not have a ton of impact on us. Again, because we're selling to the QSR space, which normally takes share and kind of it's relatively healthy and long buying cycles. So normally it doesn't. But for us, it would be a small portion of our payments business, and that's really about it. Everything else is generally pretty immune. And you usually see -- if it's a prolonged period of time, we would then see a boost in our engagement business loyalty. And so our pipeline of our loyalty business has grown pretty considerably. And I suspect that's because of the weak Q2, people are like, hey, I want to focus on revenue-driving software.

Yes. Makes sense. All right. It wouldn't be at that conference without asking about AI. I know you run very lean teams. How are you thinking about AI as an accelerant to internal efficiencies? And then how are you thinking about AI for more customer-facing applications?

On the internal, it's a constant kind of drumbeat of why do we need to hire if we can do with AI. I wouldn't say we're perfect, but I think we probably talk about it more than any other company that's of our size at least, which is this constant like how do we apply, how do we apply. And so where we've seen the most success has been on the dev side. So Copilot, Cursor, Windsurf like we've seen -- we really do track, one, not only how much code is generated, but how much is deployed and shipped and then days on keyboard versus days in meetings and stuff like that. So we've definitely seen real, real where we can point to best dollars we've saved by implementing this tooling. So we've seen that. And I think most companies that kind of go all in have seen that impact. The second part, we see it is on support. You can clearly see when we've installed tooling in our call centers, in our L2, L3, the, a, the support agent is way more equipped to handle your problems, so resolution times go down. But two, you need less people if that goes down, too. And so we're not yet at a world where we're displacing agents with humans, but I think we're like on that path of if the restaurants are ready, we're ready for that. And then I think the third place that we see it is just all the manual processes that exist in the company that's been around for 40 or 50 years where we can start adding tons of AI. Where I hope to see it over time is everywhere. I tell our HR team, there should just be an HR agent that I can ask for my W-2, my pay stub, I can ask, hey, can I write my review for this employee, hey, can you pull my last review for Will and his comp and did my review titled as comp? I'm just interacting with that, that's there. And so we kind of challenged everyone on our executive leadership team to come back and map out what is an AI first version of your department look like in 2 years and start telling me how we get -- what are the steps to get there today. On the product side is where I think we have to be great. I don't think you have a choice not to be. And so we released -- we just released our first set of AI products this week. One is -- the first one is called Coach AI, which is a tool for in-store operators to basically have a ChatGPT like experience on how you're in your restaurant. So it can be like, tell me what shift did the best this week, tell me what product combo is doing the best. Hey, what's my labor schedule for tomorrow? Hey, where am I short in the next 2 weeks on this or that. And so it's that -- but it's also proactively putting stuff in front of you so that operator has to think less and just action more. And that's going to be really cool as we then eventually add in more data from disparate products. So now you can -- instead of just asking about inventory, you can ask about food costs and then you go to promotions. And our plan is that eventually, it will then incorporate our loyalty business as well. So as an example, when you get a flag on -- historically, you as a restaurant operator, get a flag and say, whatever hot dogs are expiring in 10 days. There's not a lot you can do with that. You can -- but now you can say, oh, great, press the button, go on a promotion for hot dogs. That promotion will be through Gen AI targeted, whether it's SMS or app or how are you going to target to the right customer base that will actually like your hot dogs. And then it will then trigger to your back-office software to trigger an extra labor unit the day you run the promotion to make sure that you can handle the customers and so on and so forth. And so as we add more products to that, it will be really powerful to kind of coach you through that and optimize your profitability on a per store basis. Our second wave of AI products coming out this year will be on the marketing side, where I think offensively, it's how do you target a customer more one-to-one. So instead of doing a segment, how do I target Will specifically. And now you got a young kid at home and realizing X, Y and Z. And so that, I think, is going to be really, really exciting over time because you're going point-to-point marketing and also giving you that, again, conversation like, hey, can you write me a campaign that does this? Hey, can you pull up the last report of marketing campaigns that we did and what was the ROI on those products? What marketing campaign should I cut, stuff like that, giving them that again. And why that's so powerful is that it allows anyone in the organization to be an expert now on how to target customers as opposed to the person that would have to come and say, run me report to do this and tell me this. It lowers the bar for everyone to be involved.

Totally. No, that makes sense. Okay. I wanted to bring it back to the financial trajectory. We touched on some of the changes in implementation schedules earlier in the conversation. Can you talk about just the longer-term growth rate for ARR, maybe putting some bigger wins, things like Burger King or any other large RFPs that might come in the door? How do you think about kind of the sustainable growth rate for the business? And then how do you think about how one of these like large Tier 1 RFPs could impact that?

So I think we guided on the call for mid-teens growth. And I think we can grow at those rates for some time with our existing base of customers, the quantity of upsell we have. And I think we just see a lot of opportunity in what we have in these multiproduct deals we talked about in the call. I think if we win these much larger deals, that does go -- take us back into the 20s where we've been historically. And I think it's not just these deals, but it's our ability to win them every single year going forward, which I think the category is moving in that direction. So that's kind of look at it, which is without -- we don't win any of them, which I think would really suck and given our finance in three, like I hope we get at least one. Hopefully, we get all. But even without that, I still think we're a really nice grower with great profitability.

Great. You continue to see pretty healthy growth in the hardware side. Could you talk about any tariff-related impacts you're seeing both in kind of the POS business and as it relates to kind of the core kind of software-oriented business as well as kind of the legacy hardware business?

We haven't seen a ton of impact. The biggest impact ironically was positive. In Q2, we saw people kind of rush to buy because of the fear of tariffs. I think in our business, the software still drives so much more of the decision than the hardware. The hardware does matter, and we've seen those that are trying to grow into the enterprise. Their way of getting in has been giving away free hardware. That does have impact. It matters a lot. But if your core product can't deliver on the promises that you've given, like it doesn't really matter. And so it does have some impact. It has certainly will slow down things here or there, but we've generally found ways to pass on the tariff impact to our customers. And the bigger challenge is the uncertainty. That's what creates the slowdown for us. So if there's -- where we are exposed to tariffs are Korea, not so much in China anymore, Taiwan, like those are the countries that we are more susceptible, but our entire category is. So it's not like anyone gets an advantage.

Yes. Makes sense. Okay. Maybe let's talk about competition then. We always get questions on competition in the restaurant and software space or the kind of software-enabled payment space for restaurants. Particularly at the lower end of the market, I think everyone is well aware of the success that Toast has had in kind of edging out a lot of the more marginal competitors. They've been making some inroads upmarket. NCR Voyix has also been doubling down. How do you think about the competitive dynamic longer term and how you feel like PAR is positioned?

For most -- I mean, all of the time that I've been the CEO, our core biggest competitors and shared donors to us have been NCR, Oracle and Xenial, which is owned by Global. And that's kind of been in every RFP, one of those are the finalists alongside of us if we're a finalist. Toast, we see in every RFP. I don't think there's been one, they haven't participated or thrown their hat in the ring for many, many years. And they have won some deals, I think sometimes for esoteric reasons, sometimes for pricing. I think that we don't really look at it yet as the sky is falling. In fact, we won more POS deals this quarter than we've ever won before. We won 17 direct deals, 10 indirect deals through resellers. That is, I don't know, 2 or 3x what we normally would win. So my point being, we would have competed likely against Square or Toast in every single one of those deals. And so our win rates are still really high, and we haven't seen that impact. And I think I have so much love and admiration for Toast, as you and I have talked about. I think it's an incredible business. I don't know if it makes a ton of sense for them to be in our category. I always give this math, which is we are loyalty point-of-sale on ordering. But our point-of-sale business itself is less than $100 million, and we've been fully focused on that for 7 years, I guess, 6.5 years, 7 years I've been the CEO. If Toast won all those deals, if they added $100 million of ARR to their business, it doesn't really like move the needle. You know what I mean in the sense of like, is it really worth the time. And so I think there'll be a competitor, but I don't know -- I don't think it changes a ton. And I think the reason why is enterprise software is a product game, it's not a marketing game. It's just can you build the best product. And I think we still have the best product, and I think our data will show that.

Great. So just maybe talk through typical go-to-market in each product. You just mentioned success you're having both through direct and indirect sales. What -- how is the go-to-market structure today? And are you leaning in particularly in any one channel?

90-plus percent of what we do is direct. Indirect, we only do for point-of-sale and smaller concepts and something we've done for a long time. The reason we do that is oftentimes, that's where you discover the next Sweetgreen or the next CAVA or the next great GrowthChain. And so we kind of say -- we keep good relationships there. But almost all of what we do is direct. Our sales has sort of -- we have two buyer personas we service. One is the CIO, and that's our -- what we call our operator solutions. That's point of sale, that's back office, that's payments. That's software that the employees in the restaurant are touching. And then our second motion is to the kind of CMO or Chief Digital Officer, which is where we sell loyalty and online ordering, and that's stuff that touches the end customer. And our goal is to land with a hero product in each one of those verticals and then kind of upsell and then eventually cross-sell amongst the two. I think the biggest change in our market is now that we're now usually able to sell two products at the time at first sale. Normally, that was a multiyear journey. And I think that will continue. I think that the biggest change in the end market of buyers outside of their macro world is that they're trying to consolidate more of this stuff versus having 10 dozen incremental investments and trying to figure out how to get it all to work together.

Yes. No, that makes sense. So maybe talk about that, the cross-sell success. What does the trajectory look like? And what's kind of the end state for getting fully cross-sold sales and things of that nature?

So last quarter, 70% of our deals were multiproduct deals, 100% of point-of-sale deals were multiproduct. So point-of-sale really being a beautiful land and expand product. In Q1, 100% of point-of-sale deals were multiproduct and 50% of all deals. And so we've kind of stumbled our way. A year ago, I think the answer would have been 0 or basically close to 0. And so we've kind of stumbled our way to figuring out how to actually attach product at the point of the first sale. And then hopefully, we can grow from there. We kind of do a very, very detailed, we call it, like opportunity of our TAM, meaning we don't assume every customer will ever buy every product because there are certain customers McDonald's and Burger King, we don't think we'll ever buy our payments products because they've got direct deals and like -- so we removed that from our TAM. Or if we've got a customer that's spent $100 million building their own loyalty product, we don't assume they're going to buy loyalty. And so when we kind of trim that down and say what is the actual observable TAM within our base, we think it's like tripling -- is a triple within there. Now whether that takes 2 years or 10 years, I don't know. But there's a really nice kind of well to kind of dig into over time of mining the existing base. And so it's probably 2 to 3x of our current revenue base and we can get what we think is actually actionable product into those customers.

Got it. And then just continuing on that, the cross-sell has been particularly noticeable in some of these marquee client wins. Could you maybe talk through some of the changes in Burger King, Wendy's and just maybe update us broadly on kind of time lines around those implementations separately?

Yes. So we signed Burger King in November, December of 2023. We started installing in April of '24. So it was a really fast turnaround for us for something so big. We've had great success. A year into the deal, we were able to upsell them a second product, which is our PAR OPS, which is our back office product. It used to be called Data Central, a huge win for us. We didn't win this product at the time we won the point-of-sale business. They had chose another vendor, but now kind of nominated us as their preferred vendor going forward. It adds a wide range, but it probably adds another $6 million, $7 million of revenue to an already very large $20 million, $22 million, $23 million deal. And importantly, I think it makes us stickier at the customer because now they've got two products. The reason why I think we were successful was not because we sold it really hard, it's because the products were deeply integrated into each other such that the customer, i.e., the franchisee or the store owner now had one reporting platform. They didn't have to go to two places, they had one database. So the data integrity was very high. It made it so obvious to use us versus having to use a different vendor and have two different systems to log in and compare data, that's kind of a mess. And so I think we're able to demonstrate the product functionality, which then made it a no-brainer for them to kind of push us forward. And so that's kind of been the unlock. It hasn't been that we've been better go-to-market or we "figure out to cross-sell." So as we integrate the products, we've been able to unlock the cross-sell opportunity. That, I think, is the major distinction for us. And I think that will continue as we integrate deeper and deeper and deeper, will give you less reasons not to pick us and be less -- have to be less convincing because it will be so obvious outside of the box. And we continue to see that. I think all these new deals, we're winning -- again, our sales team is doing a great job, but most of that is because the product is there. The other place that we see this now is on the digital ordering side. We have a very, very small online ordering business. And we've been building and building and building. And so it's a real competitive alternative to Olo and some of the existing players there. And I think we're now at a point where like, hey, we're actually going to win a bunch of these deals. And we're winning it because we think the product is amazing. It's super modern. It's built in today's modern world versus built a long time ago. But more importantly, why it's so useful, I think, is because it allows you to manage your digital from like one place, one digital cockpit to manage your menu. So your online ordering menu changes, it automatically updates your loyalty menu. So you don't have to update in two places. You have change in image here, changes in image over there, you update pricing, menu, so on and so forth. You can do that from one place. And that integration is very hard to convince -- it's very hard to argue against that if you're a customer saying, okay, I want to manage whatever PAR's loyalty here, and I want to manage someone else's -- another online ordering product here, and then my team is going to constantly like that. Our solution, I think, is just a lot simpler.

Yes. Great. Let's pivot to payments. Understand we're still early innings, but how are you currently approaching the payments opportunity? You talked about how -- maybe it's less applicable at the very high end of the market. What's kind of the target audience for that product? And where are you at in sort of cross-selling that into the base?

It's been an evolution. I think for the first couple of years, we've been in payments for 2 or 3 years. Most of our or almost all of our business came from point-of-sale deals where you're tapping your card and we're getting the processing and sometimes the gateway. And we did a good job of kind of getting through, I don't, 5% to 10% of the base. And now every renewal cycle, we're trying to kind of attach it in. Where we're seeing a lot of opportunity in payments is actually the digital side. So because we're the largest loyalty software in restaurants, we're in the pockets of 2/3 or 3/4 of Americans or adult Americans. So we're touching you somehow. And we are selling into those customers that have our apps, the ability to pay through their loyalty app. And that's really powerful because not because we make a lot of money, but because it makes the checkout experience a lot seamless. So you check out with your Smoothie King card that's in your Apple or Google Wallet that allows you to earn points on that transaction, allows you to redeem a coupon or whatever rewards you have and pay in one tap. So instead of going and saying, "Hey, here's my loyalty number, can I use this -- here's my coupon and can I get points for this order and then here's my tap to pay?" It's one tap and you're done. And so when we do that, we get the processing revenues out of that. And so that's a really powerful outcome for our customers, outcome for their customers and then us making the processing revenue. And so we're making a big push into this kind of off-premise payments. which is not a place we did before. And then lastly, as we grow in online ordering business, which we have been very tiny and slow to get to, but now going very quickly, we then get the processing fees if you're ordering on one of the websites we power.

Great. All right. A couple of minutes left here. Maybe you can touch on expense management. I think we've been very impressed with the company's ability to manage expenses despite maintaining the top line trajectory. As the business continues to expand, just how do you think about the need to add more resources and what's sort of the normal OpEx growth trajectory from here?

I think we've kind of -- I think we've realized over time that the beauty of our business over time is that we don't ever need a big step-up in operating expenses to support new customers. Burger King was our largest deal by a long shot, and we barely added anything. And candidly, if you look at our financials, it looks like we added nothing because we were able to cover it up through cost cuts elsewhere. And that's kind of how we want to be. There may be one or two deals that happen in the lifespan of PAR that will require incremental investments that investors would notice from our P&L. But I think our stated goal is to always, always keep OpEx growth really small single digits. That requires a ton of work because everyone gets a raise every year if they stick around the company generally. And so you've got to cut to fund those raises. And then I think part of the reason we've been successful is the deployment of AI across our development teams. Our biggest investment is always going to be R&D. And our ability to ship more product with less people will be critical to our ability to keep those numbers down. Today, we spent about 25% of revenue on R&D, 14% to 15% on sales and marketing. Those are great numbers. I think those are near best-in-class. And so G&A is where we need to continue to hold that as tightly as possible so that we can scale and get the operating leverage there over time.

Got it. Great. Just on capital allocation. You've done several deals. There's been a lot of speculation in just like the M&A backdrop in the market, obviously, some like well-telegraphed processes that are out there. Just wondering, it would be great to hear how you're thinking about the M&A environment and if this is an area we could see PAR return to over the course of the next 12 to 18 months?

We're always looking. Our M&A is very product-led. Like I said, it's not let's go buy $100 million of revenue this year. And so it's opportunistic in that sense. So if we can find a product that makes our collective stickier, i.e., expand the LTV or opens up a TAM we think we can win, we'll go after it. So today, we have relatively smaller deals in the pipeline. We've got a couple of AI deals, a couple of products in the back office that we're looking at. And those are solutions that we don't have today that actually make our collective better, meaning the chance for multiproduct deal adoption will increase. In our category, restaurants and convenience store software, there's half a dozen to 10 large companies that will always take a look at, which will dramatically change the size of our company. But it's so infrequent that they trade. And so we never really count on that and kind of focus on this continual product, more of these product-led acquisitions.

Great. So last question. During the 2024 Investor Day, you highlighted the data platform strategy, which enables synergies across operators that have more complex operations. Can you talk a little bit about that strategy and how it improves on the current value proposition?

Yes. We're focused on coming out with what we call the PAR Data Platform. But really simplistically, it's a platform that takes your data across your entire restaurant. So this would include the products that are PAR products, but also the products that are not PAR products. So that might include credit card data. It might include competitor data, whatever that may be. And the reason why we think this is powerful is AI is kind of funny. We live in a world where every enterprise, whether you're a bank or a restaurant, you've got too many software applications running that don't talk to each other. Like it's just -- you talk to any CIO, they're going to tell you the same thing. And now we have AI, and I just think AI makes that problem worse because it's like are you going to listen to my agent or that guy's agent, who's going to win? What agent wins in that battle, who's the source of truth? And so what we're trying to build is that source of truth for our customers. And we think we have the right to potentially win because we have the most -- the wildest product, meaning we have the most data to leverage to go do that. And so this is an attempt to put that data in one place, give you that foundation to get insights, but then really build your AI future out of. Because today, I think it's really hard to build these beautiful AI outcomes when you're using just a small sliver of your data across your -- so it will make you a little bit more efficient in one thing you do, but it's not really like giving you unlock that you couldn't do before Gen AI.

Got it. That makes sense. Well, I think that basically takes us the time, but thank you so much for having the conversation with us today. I appreciate you coming to the conference yet again, and I hope we see you back next year.

Thanks, Will.