PAR Technology Corporation (PAR) Earnings Call Transcript & Summary

Everyone, thanks for joining us. I will start by reading, for important disclosures, please see the Morgan Stanley research disclosure website. If you have any questions, please reach out to your Morgan Stanley sales representative.

Savneet, great to have you here. You just reported Q4 last week. Anything that would stand out that you'd like to talk about?

Yes. I think we had a really strong Q4. We ended the year sort of annualized growth about 15%, which is an awesome accomplishment given a little bit of the slow start we had. So we pulled in about, I think, $17 million of ARR just in that quarter, which is a record for us, about $7 million EBITDA. So good profitability, really good growth. And then maybe, most importantly, had our biggest bookings quarter ever as well. So it was really a strong quarter that lots of positives, margin expansion on I think every line. But I think critical to the future is that the bookings are really important for the next couple of years here. So really strong that way. And then we announced a win of Papa Johns, which will be our, I think, our second largest restaurant customer ever. So a lot of really, really exciting stuff there.

That's great. You've had several AI launches throughout the last year. It seems that it's kind of emphasized throughout the platform at this point. Can you talk, A, just a bit about how AI is playing into the platform? And B, why PAR is foundationally a good place to be to implement AI solutions?

Yes. Maybe I'll do the latter first and then kind of weave into the first part. But AI, I think, we were a company that 3 years ago or 3.5 years ago were freaking out, of like, "Oh, my gosh, this is the end of everything." And we've totally changed, and I think for objective reasons, in the sense that we service an end market that is not digitally native. And it is relatively an organization that depends on vendors to create their future. And I think what we've observed is that they're really dependent upon us to become their vendor to deliver those AI solutions. And more importantly, one of the great challenges of being in the restaurant and retail category has been this huge vendor sprawl of having, in the last 5 years, adopted a dozen new software products that you didn't have 5, 6 years ago, and then trying to manage all that. And there isn't a CIO or CTO in that organization that wishes they had less. And so we think the category itself is really interesting to service from an AI perspective for all those reasons. And then maybe the last one I'll sort of suggest is these are organizations that are, they look big optically. We serve a couple of big 1,000-unit-plus restaurant chains, and their entire corporate headquarters is 10 people and the IT team is like 8. Those aren't organizations that are going to go out and go build a point-of-sale system or a loyalty system. They're just not set up that way nor are they willing take the risk to do that. So I think it's a good -- and then you have sort of the in-person nature of restaurants. It's just a really good category to build. And then you have them trying to serve a digital-native customer base that's evolving very quickly. And so it's a really good market to sell into. And at the same time, a really tough market for you to build your own product if you're coming from that side. As far as what we're doing, so we kind of witnessed that early on and said, oh wow, like this is going to be the biggest opportunity for us because all these customers are now under intense cost pressure both from the labor side and the input side, i.e., the food. And at the same time, they're really struggling with traffic the last 12, 15 months. And so the need for solutions has really accelerated. And so we launched our first product towards the end of Q3, called Coach AI, which at the time was ostensibly ChatGPT for your data on the Back Office, but it's sort of turned now into prescriptive recommendations to run your restaurant better. So you can go in there and it will point you, say, hey, you got to go focus on the store. Hey, the labor schedule is not working. Or, hey -- you can query it and ask for what's the most profitable promotion we've done in this part of the country, or whatever it may be. And what we observed was crazy, for us, which is, of the 13,000 stores we have on Back Office, 1,000 became customers within the first quarter. We are normally in the category that's a 6 to 12-month sales cycle. That was just mind-blowing to us. The second thing that was interesting was almost every single customer is an active daily user, meaning they use it multiple times a day, which, again, is very unique in the category we service. And third is we made them pay for it. So we weren't sort of saying, here's this thing for free. So all of those gave us a lot of encouragement that we can really service the need for our customers. And we're turning that product into what we call a self-driving product, which is now, instead of suggesting these recommendations, press this button to implement this recommendation, run this promotion or order this food or whatever it may be. And so that kind of really encouraged us to kind of triple down and invest in that because I think we can -- I've always sort of seen the AI narrative for vertical software companies as very defensive. It's, oh, we have these great -- we have very low churn and so people love our products. And I think going on offense is actually more important than defending the base that you have today. So we're really aggressively investing, and we've got our second product we just announced today and kind of the same thing in the loyalty space. But long story short, I think that the end market is really, really ripe for AI. They're desperate for those cost advantages and revenue advantages. And then second, it's just not a category that's going to build it themselves. And so I think the vendors that have trust are the ones that can deliver.

That's really exciting with the new products. And I think what's even more exciting is you're able to commercialize them and charge for them. What gave you the confidence that -- you're in a customer base that, obviously, I guess it speaks to the mission criticality of what you're doing, but can you talk through that decision to actually charge your customers and not just give everything away for free, which is an approach some people take?

Yes, I think if you're going to talk to the product team at PAR, they'll sort of say that one of the annoying things that I've always said to them is every product team comes, says, "We've got the best product, we have the best product, we have the best product." And I've always said, you have the best product if you're the highest priced and it doesn't hurt your volumes. And so I think culturally as a business, I think our product team is like, well, if we just give it for free, Savneet's going to say, "Well, how can you tell me it's the best product if no one's paying for it?" And so we kind of have that culturally, as like, hey, a product's valuable if someone actually wants to spend money on it. And so it's kind of part of our DNA to do that. And it's a really high bar because everybody is putting a wrapper around their products and saying they're an AI product, but very few people are actually building a new product. And so we really early on were like, hey, everyone's going to have a chat interface to their enterprise software products. That's a given. What can we do that is actually a new product that creates new value so we can actually charge for it? And I think that focus as opposed to not just trying to be the chat wrapper, but actually what's the net new thing, allows us to feel comfortable to charge for it. I think that was a distinction. Now we've experimented with price -- SaaS pricing models, we've used tokens, we've looked at transactional. So we'll figure that part out. But it is clear that the category is definitely willing to pay.

Yes. That's -- it's been really evident just through your numbers. And I'm curious, these are relatively new products, not just for you but for the entire ecosystem, but even starting with Coach AI. Has your go-to-market fundamentally changed? Obviously, you're playing in a segment of the enterprise. How are you articulating this in your typical go-to-market motion?

So our go-to-market has changed not because of AI, but because we have kind of transitioned our customer base to be multiproduct in nature. Maybe the most exciting data point, and I skipped this on your comment on Q4, was that the average customer bought 2 products from us last year, when historically it was 1. And that was a really wow experience for us, which says, "Hey, we're going to mine this customer base. We're going to put more -- push more sales directly." And that is a really great narrative for AI because AI is a beautiful connective tool across all of your products. So illustratively, if you've got a scheduling software here, you've got a labor management software here, you've got a point-of-sale software here, connecting those through AI is actually a lot easier and a lot simpler to the end user. And so that, I think that is actually really accelerating that sales motion to buy more from us, not less. So I don't -- it's actually changed us more than we've adopted around it.

Yes. I mean I can remember talking to you years ago and you had a vision of building a real platform. And it seems like AI is only as good as its inputs. And if you have a true platform with multi prongs and multiple products, you really get the benefit. I mean have you seen that in practice?

Yes, absolutely. I mean, I think we've seen it in a few ways. Our largest point-of-sale win of all time was Burger King. A year later, they added on our Back Office product and sort of love the AI tooling that we have in there. And that was sort of like, wow, we can displace these big back-office companies with that. On the online ordering side, where we're a minnow in a big market, we're seeing that the integration between our online ordering and our loyalty business is giving us that, "Oh, my gosh, I can sell the customer something totally different than any competitor because you can sort of have one database, one tax system, one so on and so forth," is really, really powerful. And the ability to use AI to prove that is really -- it's just very, very real now. And I think that's what's giving us a lot of confidence. And one of the other kind of exciting things I was sort of telling investors is we grew 15% last year. We guided that we don't intend to decelerate our growth year-over-year, which I think is a great thing in a market where everyone is decelerating. But it assumes none of these AI things worked. And so for us, we're excited because I think they create a lot of upside to the company going forward.

Last question on AI, I think we've given it enough airtime. But what do you think -- what's next? Just I mean, you can lump it together or separately for restaurants and convenience stores. How do you see them using this type of technology in the future, either through PAR or just generally?

So I think what -- the first level for every kind of physical business, so these are retail stores or restaurants or convenience stores, stuff that we sell to, is that I see all of them using it as a way to cut cost first. That's why the Back Office matters. How do I manage inventory better, my supply chain better, my labor units? How do I get that data out? How do I lower cost? It's clearly the first thing that they're all jumping into. And I think you have to prove that ROI quickly so that they can buy more and more, versus something long term in nature where [ I think how things worked ]. The second part, we think, is going to be on the customer engagement side. How do I, instead of sending you a random coupon that you're a, whatever, 35-year-old male with 2 kids in New York City, how do I then say, actually, I'm going to send a segmented campaign that's tailored just to a meal? And how do I figure out how to use data that's not just the data that I have in the app from you, but the data that I can get publicly from everywhere else put all together? And so that ability to like hyper-hyper-target is going to be really interesting from a loyalty perspective and all that data. That cannot happen without AI today. AI sort of creates a bunch of segments and you sort of -- or with machine learning, creates a bunch of segments and you target. But with AI, you can actually target each individual human being and make it feel like a customized experience. I think that's going to be second place. The third place, which is I think going to be the incredible unlock, is the self-driving restaurant. And in a sense what I mean by that is we have this product we're building where we really do expect that you're in a store and you get a flag that say, "Hot dogs are expiring in 10 days." And very quickly, it says, "Do you want to run a promotion to sell hot dogs?" And then you press a button that says yes. And then not only does it give you a campaign. It tells you, here's all the perfect segments. It says, here's all the people that never have chargebacks. Here's the people that used to buy hot dogs and bought hot dogs, there's a good chance to bring them back in. It does figure out what colors the campaign should look like. Should it be a push, should it be an SMS, should it be an email? Does all that insane amount of work and testing upfront. And then you can say, okay, run the campaign. And then when it runs a campaign, say, "Hey, we're also provisioning an extra labor unit the day we run the campaign because there's going to be crowds in the store." And then creates this -- reflects the cycle, and when inventory comes down, shuts the campaign off. And it totally releases that store. Now why that's so exciting to me is not just because it can do that full 360 view of like optimizing inventory and making the customer feel really happy, but also allows these gigantic organizations to optimize profitability on a per store basis. Today you go run a campaign for, whatever, buy 2, get 1 free, that campaign is across all of your stores. Versus I'm going to optimize that unique store -- each individual store on a hyper-targeted basis. That's really powerful, very unique, and no one is close to doing that yet. So I think that's the journey of the way that the category will move. And I think that applies to all retail industries.

That's really interesting. I mean we've certainly seen personalization come through. But to hear about it in the store level, it makes a lot of sense, it resonates. Let's talk a bit about customers. We've talked about Burger King today. Obviously, that was a huge win. You've been able to see a lot of upsell through different products across your portfolio. Let's talk about Papa Johns. I mean that's another landmark win for you guys. Can you talk a bit about the process to win that deal? Are you competing with folks? And this is kind of an entrant, I guess, in a way into a new segment for you.

It is, yes. Yes. So I think it's -- the risk of being hyperbolic, like it's landmark for us in the sense that it is our second biggest deal ever, I think, in restaurants, which is amazing. It's a multiproduct deal, so it's point-of-sale and Back Office, which is great, kind of again proving the model. Yes, and a very great and fair price point. But why it's really interesting is it entered us into this pizza category. And pizza is really, really unique in the restaurant space in that, for the point-of-sale market, it doesn't really service it today. So Papa Johns has built their own point-of-sale product. Domino's, the same thing. Most of the large pizza chains have built their own systems because the existing off-the-shelf products didn't service that category. So it wasn't really part of our TAM for the longest time. Downmarket, the same thing. The big point-of-sale companies that sold downmarket didn't really have a pizza offering, and so there's a specialized pizza POS. In upmarket, you built it on your own. And so why it's exciting to us is we also kind of cracked the code of a really, really high-quality brand that's going through its own transformation, particularly on the digital side. And hopefully, it's the beachhead for us to then go after the rest of the pizza market, which has not actually had an alternative in the past. We're not competing against competitors. We're competing against legacy products they've built at home, and clearly, many of them want to change. And so I think that's really exciting for us. The process was unique. It was a much faster process than normal, that they were sort of in acute need. I think the other part was the CIO of Papa Johns is a guy named Kevin Vasconi, who is sort of close to royalty in our category. He was at Domino's and Wendy's, so he's sort of the guy that had a lot of digital innovation. And so he was the one to partner with a -- he wanted to partner with a company that was as innovative as him. And so he's literally on stage, I think, with the CEO of Google Cloud at their events as a big partner of GCP. He's pushing edge compute, like all the stuff way ahead of the rest of the category. And I think for him, it was really important that he had a vendor partner that was as aligned to that sort of digital innovation because he's such a legend in doing that. And so the coolest part about it was that we got it quickly, and then they are trusting us to build all the gaps we have to get pizza because, clearly, haven't done it before, in a very short period of time. And I think that's his bet on the execution of our company, which I would tell you, 99 out of 100 companies in our category like never hit their goals or dates, anything, like it's just notorious. And for us, he did enough references to sort of say that we would. So it's probably a 6-month process, and I think just an incredible partnership.

I assume when you land a big deal like this, and you probably saw some of this in Burger King, I mean, is there some snowball effect where it helps you with others in that category? Obviously, just the reference of having these big brands helps you win other big brands, I assume. Is that how it works in practice?

It does. I think we learned from Burger King. No one's ever really sure of that. But I think after we won Burger King, it was clear how larger brands were like all of a sudden, like, "Oh wow, these younger, newer companies can service the larger brands." And then I think winning Papa Johns is sort of reinforcing to that, but then also hopefully is reference for the other big pizza brands. So I think so, and we certainly saw it after Burger King.

So switching gears a bit to another brand that's near and dear to my heart, Shake Shack. You and I have talked about loyalty and how important that product is specifically to the platform. Can you talk a little bit about the Shake Shack deal? Just tell us the high-level punchlines?

Yes. So no plans, but they purchased our product or committed to purchase our product Punchh. I think Shake Shack is, as you said, a very special brand that has a unique brand promise. And the challenge of that is that brand promise, the way that you feel about Shake Shack, what I used to feel as an intern at CSFB waiting in line to get hot dogs for the trading floor, like that -- it was an in-person experience. It was the quality of the food, it was a small brand. And then transitioning that experiential feeling you have to something digital is crazy hard, and most of the times it does not work. You'll see brands that have been sort of focused on limited supply or steak restaurants all of a sudden have discounts on a loyalty app, and you're like, it totally kills UR. And I think for Shake Shack, that was probably the most important thing. Can they make that digital presence feel like the same connective tissue you had in the store? And I think they viewed our product as not only being really robust in terms of the ability to service every type of promotion, the tier structure they want or the point structure they want or whatever it may be, but also experiential and things like offering them games and passes and all sorts of different tokens. And so I think a core reason we won was that we had this breadth of functionality, but also this big focus on creating the experience within their digital presence as opposed to just saying it's a discounting app.

That's great. And sort of switching gears, but I want to talk -- you just made an acquisition of a company, Bridg. I'm curious, how does it align to the broader platform? And I do want to talk about M&A more broadly in a bit. But can you tell us a little bit about this deal?

Yes. It's a really exciting deal for us. Bridg we acquired for $27.5 million. It's about $14.5 million of revenue, so a low-multiple, high-quality business. Bridg's core product is called IDR, Identity Resolution. And really what it's doing is helping retailers and restaurants identify their non-loyal customers, meaning customers that aren't enrolled in loyalty programs. So you can sort of see who your loyal customers are, your nonloyal customers, compare their behaviors. And then work to create campaigns to convert your customers that aren't on the loyalty program over to your loyalty program. And the business has I think gone through a lot of change. In 2021, it was acquired for $350 million and then had a -- and then subsequently another $150 million went to earn-out. And so it's a business that was acquired for $0.5 billion just 4 years ago. And so it was a really high-flying, really well-thought-of program built by a supersmart team. But the challenge was that it was within an amazing organization, but one that wasn't meant to service enterprise customers in the way that we do. And so it kind of withered on the line there. And so when you bring that into PAR, why it's so powerful is now we can go to our customers who are the large -- we have the largest loyalty footprint across restaurants and retail, and now say, hey, we've got your loyalty data in one place, and now we have every other customer -- ostensibly every other customer in your -- in the same database. And now we have all the customer data in one place. And for us, it was as much of an AI investment as it was a traditional acquisition in the sense that now we are the AI tools to the customer. If you actually want to have any question about your customer, we have it all in one place and we can make it digestible and easy to work. So we're wicked excited and a leap just from taking that IDR business to becoming a customer data platform. And so it's defense and offense to us. It's solidifying the value of our loyalty program, but also now letting us go after the rest of the space. So it's a really, really exciting deal. And I'd say it's one of those few opportunities where I think the pipeline and focus we have will be underestimated post-deal, because we just see so many ways that we can cross-sell this into our customer base pretty quickly.

That's great. Kind of switching back to the customers. Papa Johns, obviously a Tier 1 deal. Do you see any other Tier 1 deals in the pipeline in the somewhat in the future?

We've got 3 in pipeline right now that are very, very large transactions. All 3 of them would be our -- would be, I think, larger than Papa Johns. And so a really big opportunity for us. We are making tremendous progress. It's been crazy exciting. We won Papa Johns and then, all of a sudden, we had a larger chain come in to the RFP process. And so the pipeline has just -- has not really shrunk in a long time. And so I think that's representative of a couple of things. One, the category itself is just becoming more and more digital. Like it is just clear that there's more push and more investment by these brands to push into solutions like us. I think the second part is the industry being very comfortable with us and saying, okay, like PAR can actually handle all these companies at scale, this complexity, can do pizza, so on and so forth. I think that's the other part that's there. And then third, we continue to really move the ball down the field on these 3 deals and feel really excited about the opportunity to win. And so it's, like I said in our guidance on the call, none of our guidance assumes we win anything, and we still feel really good. But obviously, we're hopeful we win more than 1 of these over time.

That's great. And you kind of touched on it earlier too, but just from a market perspective, I mean, are you seeing -- I assume a lot of the larger food service organizations have custom-built stuff and they're just cobbling together different solutions out of, I won't say arrogance, but just out of "We can probably do it best because we need something that's very tailored to us." Are you seeing that trend changing to where the larger food service organizations are saying, hey, maybe these tech -- I'm obviously not calling you a start-up, but like tech-forward platforms?

Yes. So I think categorically, yes. So there's certainly been a move over the last 5, 6 years to stop building internal software and move to third party. Burger King is a really good example of that, but there are others. And I think that's been a great thing. Now I don't think any of those brands were -- acted with arrogance or hubris when they first made the decision to go build it, because I think they were doing this like 15 years ago when there wasn't a good alternative, and you could argue, if I build my own point of sale or loyalty, it's going to be better than the off-the-shelf thing. But the challenge with building software is you never stop building. And so you're like, oh, I'm going to go spend a bunch of money to build a product and then I can just fire everybody and I can use this product forever. And like that's, as you know, not how it works. And then technology changes, you got to build more, integrate more, have more partners. And argument I've always given to, when I have this argument with potential customers, the few that kind of hold on, like who's going to hire better developers: a software company or a restaurant company? And who's going to sort of see that -- and not to mention, because our product is in so many other brands, we see so much more stuff. So we can see the innovation coming around the corner where you're just captive to what you have today and you miss out on that. And so categorically, there's absolute a move to third-party software. Now there are a couple of brands, like literally, it's a couple, less than one hand, that are -- I think will continue to try to build. Yum! Brands has been very public about making massive investments in internal technology. And so I root for them, but I think it's going to be really tough because one of the challenges of serving retail businesses is that you can go build a great technology and then you got to sell it to your own franchisees, there's friction there because they're like, well, are you ripping me off? What are you -- there's a little bit of that. And then two, connecting this all together is just crazy hard. And so I think in times of economic concern uncertainty, like if you're the CFO, like, why are we spending all this money building our own stuff when we can just have the franchisees pay a third-party vendor? So I think you'll continue to see people build less and less over time. And that's really just because I think if you look back the last 15 years, I don't think those few brands that did it got a great ROI from it.

Yes. It's a good segue into competition. We obviously see a lot of really new entrants in every category of software that are AI-native and up and coming. How do you see your competition? Has it evolved? Where do you feel like your positioning is across the landscape?

So from a current landscape perspective, it hasn't really changed that much on our core product of POS. We still have our 3 big competitors: NCR, Oracle, Global Payments that own a large portion of the market, and 1 or 2 smaller companies that are always there. But it hasn't really evolved, and AI has not changed that at all, yet. Now we'll watch it very carefully. But I think that's primarily because point-of-sale is such a heavy, mission-critical product. It's an enormous product. It is hard to replicate. You can vibe-code an interface, but like it's so hard to build the decades of experience, the trust, the integrations, the data. And I don't think there's going to be a single brand of scale that's going to trust such an important product to something that hasn't been really, really tested. And I just think it's really hard. And that's why I don't think start-ups are trying to go after that category in a big way, at least we haven't seen that yet. But that's incumbent upon us to become that, so that even if that thing exists, you're going to pick the one, the brand that you already trust. On the engagement side of our business, which is loyalty and online ordering, I think you will see people try and enter that market. But for some of the reasons, I think there'll be modules, not core disruptive products. Because your loyalty engine, it's hard to envision you replacing that, particularly when it's $90 a month. It's not like you're going to save tons of money. But you can imagine certain AI tools coming in and redoing the app, redoing the customer engagement experience with the actual touch to the customer. And so those would be interesting acquisitions for us for maybe down the road, but we haven't seen anyone kind of truly come in and say "We're going to replace it all." So the enterprise, haven't really seen much change. It's sort of been the same folks and seems to be same folks. And I think our big advantage versus the existing players is, I always envision this sort of world of you go to an enterprise CIO and every vendor is like, "Well, my agent is the best agent," and "My agent is the best agent," and "My agent is the best agent." There's going to be this sort of friction. And you're going to pick the agent that has the most data and the most products in your store because that's the one that's going to be the source of truth, and that's kind of where we feel really lucky right now.

Yes. I mean I would say across tech, being a platform is a real advantage. When it comes to M&A, I think you've been very tactical about how you've augmented the platform, Bridg being a really great example. That was clearly an awesome opportunity and a lot of bang for your buck, to say the least. How does M&A play into the future for you? Is that still going to be a lever that you're going to pull?

I think it's something we always have to maintain to look at, but I think today where our stock price is, like it's probably going to be a smaller lever to look at. I don't think we'll be doing anything aggressive until we feel like we're getting value for the business we've built. But I think we have been pretty public about kind of built the core building blocks we had. And so we weren't really looking for something big and transformative anyways. And I think where M&A will be really valuable for us over time, provided we get our cost of capital down, is on the sort of tooling around our platform. What stuff that we can fold in that can fit there? Or can we continue to grow into new verticals? Our expansion into convenience stores has been really successful. We see a few other verticals we want to get to in time. And whether we build or buy will be probably dependent on the cost to do that. But I think we'll continue to do it. We feel like it's really worked well for us. It's certainly elevated the quality of the talent. It's certainly elevated the quality of the business. But I think we've got to pick our spots here really carefully right now.

Great. Anybody have questions? We can pause for a minute and see if anyone wants to ask anything from the audience. All right. Talking about trends, so if I think about you having a platform strategy gives you a pretty great view into what's going on in restaurants, have you noticed any particularly interesting customer trends or traffic trends or segments or different categories that are -- you're seeing a lot more interest? I'm just curious because you honestly have an amazing view over a lot of different aspects into the food industry.

Yes. I think there are a few macro trends and then some micro trends, meaning short term. One of the biggest macro trends we see is the convenience store market really encroaching upon the restaurant market. If you look at the convenience store category, it's been an incredible category. You look at the stocks of the public convenience stores, they've been some of the best-performing stocks for the last decade, the last 15 years. But their business is more and more challenged with things like EV charging, things like DoorDash and DashMart making it easier to buy the stuff that you'd go pay for at a convenience store. And so the way that the convenience market has responded is really invested in their food offerings. And so I always sort of say this, but I suspect the biggest competitor of McDonald's is not Burger King, it's 7-Eleven. Do you get your -- you pick up your breakfast sandwich there instead of going to your normal QSR. And what we've seen is an incredible amount of investment from the convenience store category to now not only compete on breakfast, but to have prepared foods for lunch, for dinner, and really picking a path of being super cheap or being like really high-quality food, or you can look at Casey's which is now the fourth or fifth largest pizza chain in America, but it's a convenience store. You're really seeing just a big trend. And so as a result, that category is now trying to become digital-like restaurants. So they're buying loyalty from companies like ourselves, and realizing that to truly compete with restaurants, they've got to make very similar investments. So I think that's a trend. I think that trend continues. And I think it's a challenging one because, again, if we have EV charging and you're stuck charging your car for 10 minutes, like you're probably going to go buy your pizza or your dinner there. And so that will be a really big kind of shift and trend to watch. I think the other one, which is more recent, has been the value orders we've seen in restaurants have been extreme. And what's been unique about it is normally in a value-based economy, the QSR market has been the net winner because the food is easy to produce, it's cheaper, it's faster. They've got great delivery mechanisms through drive-through and third-party delivery. And in the last 12, 15 months, they've actually, I think not once, the winners in that category have been the casual dining, full-service dining firms that were able, things like Chili's and Applebee's, bringing down their price point where it was basically close to equivalent pricing to go have a sit-down meal at a Chili's and Applebee's than going to a normal QSR. And so you actually saw share shift move from QSR to full-service dining, which is -- which almost never happens in an environment when people are value-based. I wonder if that switches back now this year because the QSR businesses do have more ability to bring down price quickly. And so I think that's a trend that we're watching. It's a trend we're observing. But the last trend we're seeing is certainly some stabilization in the restaurant market. Last year was a brutal market for the restaurant category. An incredible amount of our chains had negative same-store sales traffic, I think 50-plus percent. So that was an incredible statistic. Now they were able to manage revenue with price increases and the businesses certainly continue to prosper. But that was an amazing change to see. And a lot of it happened after the Liberation Day when you saw these crazy spikes down in traffic into the QSR category. Q4 of last year, you saw that the stabilization in the holiday period was quite strong. And we're continuing to kind of see that stabilization. Now we're not seeing like this, like it going rocketing back upwards, but I think that's a good sign both for our business, but also, I think it's really good for the U.S. economy.

Really interesting. Well, look, in conclusion, just curious, what's next for PAR? You've had a lot of different acts throughout the years, but they've all augmented the same platform strategy. What's the next thing?

For us, it's pretty simple. We've got a really simple plan. First and foremost is build and ship these AI products super cost-effectively, kind of prove not only that our business is protected by AI, but this is actually going to be a massive accelerant to our business. The second is actually take your own medicine. So we're going to use AI to go cut $15 million of costs internally. It's a super aggressive target, but if you don't mandate, it will never happen. And so we're going to become really, really operationally efficient through that. And I think the third is just this interesting story of we're not -- year-over-year, we're a much bigger business, but we're not planning to decelerate. And I think that includes not winning any new large deals, it doesn't include any of these products working. And so I think the point being that the business itself is just doing really, really well without any of these investment ideas working, and we certainly think these investment ideas are going to work.

Great. Any final questions? Awesome. Savneet, thanks very much.

Thanks, [ Neil ].