Summary
PAR Technology reported revenue of $124.0 million for fiscal 2026 Q1, up 19.4% from the prior-year quarter. Gross margin was 44.0%, down 2.6 percentage points. The operating loss was $13.9 million, up 11.8% as the loss narrowed. The net loss was $16.2 million, up 33.6% as the loss narrowed. Diluted EPS was -$0.39, up $0.21 as the loss narrowed. Operating margin was -11.2%, up 4.0 percentage points. Adjusted EBITDA, a non-GAAP measure, was $8.9 million, up $4.4 million from the prior-year quarter and up $1.9 million sequentially from Q4 2025. Non-GAAP diluted EPS was $0.10, compared with negative $0.01 in the prior-year quarter.
Cash flow and recurring revenue indicators were mixed. Operating cash flow was negative $16.6 million, up 3.1% from the prior-year quarter. Capital expenditures were $0.32 million, down 22.3%. Deferred revenue was $31.9 million, up 1.5%. Remaining performance obligations were $31.4 million, up 1.1%. Those modest increases suggest near-term backlog growth stayed steady rather than accelerating. Management said the reduction in cash used in operating activities was driven by improved core profitability, partly offset by higher inventory to support anticipated customer demand.
ARR totaled $330.1 million, total growth of 16% and organic growth of 11% from $283.6 million reported in Q1 2025. Engagement Cloud ARR was $198.3 million, and Operator Cloud ARR was $131.8 million. Active sites were 139.0 thousand for Engagement Cloud and 60.3 thousand for Operator Cloud. The Bridg acquisition added $14.4 million of ARR in Q1 2026. Quarterly subscription service revenues increased 15% year over year, including organic growth of 14%. Non-GAAP subscription service gross margin was 65.6%, down 350 basis points. PAR announced PAR Intelligence in April 2026, an agentic AI layer embedded across the platform. Management tied subscription service growth to cross-selling, upselling, and price increases, with Operator Cloud growth from higher active sites. Hardware revenue growth came from tier-one enterprise refresh cycles and onboarding of Operator Cloud customers. Professional service revenue rose on installation work for Tier 1 Operator Cloud customers.
The company issued guidance for the first time. For the second quarter ending June 30, 2026, adjusted EBITDA is guided to a range of $9.5 million to $11.5 million. For fiscal year 2026, adjusted EBITDA is guided to a range of $44.0 million to $47.0 million. Management said the outlook is based on assumptions and subject to risk, and that a reconciliation of adjusted EBITDA to net loss is not available on a forward-looking basis without unreasonable efforts because certain items are unknown or out of the company's control. Management stated that execution is translating into improved profitability while the company continues to invest in durable growth. The company also said PAR Intelligence expands the addressable market and embeds AI into mission critical workflows.
Risks center on tariffs, supply chains, and product mix. The tariff and supply chain environment remains complex. A Supreme Court ruling on February 20, 2026 held that IEEPA does not authorize the President to impose tariffs, but a replacement 10% global ad valorem tariff took effect on February 24, 2026 and faces legal challenge. In March 2026, the U.S. Trade Representative was directed to open new investigations for country-specific tariffs. Increased demand for hardware components from AI data center construction could affect availability and pricing. Subscription service margin fell on mix, while hardware margin faced tariff-related costs, and pricing actions taken in the third quarter of 2025 have not fully offset the pressure. Severance tied to restructuring also weighed on operating expenses. The company said it continues to monitor global trade policy and supply chain pressures.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $124.0M | $120.1M | +3.2% | $103.9M | +19.4% |
| Gross profit | $54.5M | $49.5M | +10.2% | $48.3M | +12.7% |
| Gross margin | 44.0% | 41.2% | +2.8 pp | 46.5% | -2.6 pp |
| Research & development | $22.0M | $21.8M | +0.8% | $19.8M | +11.2% |
| Sales & marketing | $12.3M | $12.4M | -0.7% | $11.8M | +4.3% |
| General & administrative | $30.7M | $30.0M | +2.3% | $29.3M | +4.8% |
| Total operating expenses | $68.4M | $67.5M | +1.3% | $64.1M | +6.7% |
| Operating income (loss) | -$13.9M | -$18.1M | +23.1% | -$15.8M | +11.8% |
| Operating margin | -11.2% | -15.0% | +3.8 pp | -15.2% | +4.0 pp |
| Net income (loss) | -$16.2M | -$20.9M | +22.6% | -$24.4M | +33.6% |
| Net margin | -13.0% | -17.4% | +4.4 pp | -23.4% | +10.4 pp |
| Diluted EPS | -$0.39 | -$0.52 | +$0.13 | -$0.60 | +$0.21 |
| Customers | 12,380 | 13,938 | -11.2% | 13,938 | -11.2% |
Risks
MD&A states the tariff and supply chain environment remains complex and evolving, with new IEEPA tariffs, retaliatory actions, a February 20 2026 Supreme Court ruling, a replacement 10% global ad valorem tariff effective February 24 2026 subject to legal challenge, and USTR investigations for a second round of country-specific tariffs. The company anticipates increased supply chain challenges, commodity cost volatility, and adverse effects on hardware revenue and hardware gross margin.
Hardware margin decreased to 21.6% for Q1 2026 from 24.6% for Q1 2025 due to product mix and higher tariff-related costs, and pricing adjustments initiated in Q3 2025 have not fully offset the impact. Total gross margin decreased to 44.0% from 46.5% for Q1 2026 versus Q1 2025.
MD&A notes increased demand for hardware products and components from AI data center construction creates uncertainty about whether products will be available in needed quantities and quality or at favorable or competitive prices. This may adversely affect hardware revenue and hardware gross margin.
Subscription service margin decreased to 55.6% for Q1 2026 from 57.8% for Q1 2025 because lower-margin product and service offerings represented a greater proportion of revenue, consistent with a mix shift that began in Q2 2025. Non-GAAP subscription service gross margin percentage decreased to 65.6% from 69.1%.
Hardware revenue increased 33.9% in Q1 2026 versus Q1 2025, primarily driven by timing of tier-one enterprise customer hardware refresh cycles and onboarding of Operator Cloud customers purchasing hardware. MD&A states hardware revenues will continue to be affected by the timing of these drivers.
Organic Engagement Cloud active sites decreased 12.9% to 105.0 thousand as of March 31 2026 from 120.6 thousand as of March 31 2025, while total Engagement Cloud active sites increased 15.3% to 139.0 thousand only because of inorganic active sites from Bridg. This indicates possible pressure in the organic Engagement Cloud customer base.
The Risk Factors section states the trading price and volume of common stock has experienced and may continue to experience volatility, which could limit ability to finance strategic transactions, including acquisitions, using common stock. Cited factors include macroeconomic conditions, tariffs and trade restrictions, geopolitical conflicts, fluctuations in revenue, gross margins, earnings, ARR, performance of major customers, and analyst expectations.
SaaS KPIs
All quarters →Adjusted EBITDA
Non-GAAP Subscription Service Gross Margin Percentage
Annual Recurring Revenue (ARR)
Active Sites (Engagement Cloud)
Active Sites (Operator Cloud)
Engagement Cloud ARR
Operator Cloud ARR
Summary, forecast, risks and KPIs are extracted from PAR TECHNOLOGY CORP's SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.