Summary
PAR Technology closed its second quarter with revenue of $85.1 million, up 23.4% from the same quarter a year earlier. Growth was broad. Restaurant/Retail revenue rose 25.5% and Government revenue rose 17.4%. Software revenue inside Restaurant/Retail climbed 36.6%, and hardware revenue rose 18.9% as domestic and international Tier 1 accounts worked through refresh cycles that COVID-19 had delayed. Service revenue rose 31.6%, with $4.5 million of the increase coming from Punchh SaaS and $2.4 million from Brink POS SaaS. For the six months ended June 30, 2022, revenue of $165.4 million was up 34.0%.
Gross profit of $21.1 million rose 39.8%, and gross margin of 24.8% was up 2.9 percentage points from 21.9%. Service margin improved to 40.9% from 30.3% on a richer SaaS mix and cost work on hosting and customer support. Product margin fell to 14.7% from 22.8%, hurt by a $1.5 million charge for excess and obsolete inventory. Operating loss of $16.1 million narrowed 5.2% from a loss of $17.0 million, and operating margin of negative 18.9% improved 5.7 percentage points. The bottom line moved the other way. Net loss of $18.8 million widened 89.3% from $10.0 million, mostly because the prior-year quarter carried a partial release of a deferred tax asset valuation allowance tied to the Punchh acquisition. Diluted loss per share was $0.70, against $0.39 a year earlier. For the six months, net loss of $34.5 million widened 89.3% from $18.2 million, and diluted loss per share was $1.27 against $0.77.
Software annual recurring revenue ended June at $98.6 million, up 29% from $76.7 million a year earlier. Brink POS ARR of $36.2 million rose 31%, Punchh ARR of $53.2 million rose 32%, and Data Central ARR of $9.2 million rose 4.8%. Contracted ARR, which adds signed but not yet activated sites, was more than $115.0 million. Brink active sites reached 17,728 restaurants, up 34.1%, with 962 activations and 939 bookings in the quarter and a backlog of 1,540 sites. Punchh active sites totaled 62,300, up 28.7%, on 3,522 activations. Management put annualized churn at roughly 4%. On a non-GAAP basis, adjusted EBITDA loss was $5.8 million, wider than the $3.6 million loss a year earlier, and adjusted net loss was $9.8 million, or $0.36 per diluted share, against $9.2 million, or $0.36, in the prior-year quarter.
Cash use improved. Operating cash flow was negative $10.4 million for the quarter, better than negative $29.6 million a year earlier, and negative $31.6 million for the six months, better than negative $33.1 million. Capital expenditures were $0.2 million in the quarter, down 50.0%. Deferred revenue of $13.8 million was down 5.7% year over year, while remaining performance obligations of $18.5 million rose 2.2%. Management said available cash and cash equivalents will cover operating needs for at least the next 12 months. The quarter closed before PAR announced the acquisition of MENU Technologies AG, a restaurant technology company selling omnichannel ordering software, which management said expands its unified commerce offering. The risk list in the filing is long and familiar: component shortages and manufacturing disruptions, logistics challenges, inflation, rising interest rates, a possible recession, weaker consumer confidence, COVID-19 lockdowns in China, the Russia-Ukraine war, and competition for talent. Management framed the quarter as setting the stage for a stronger second half, and the release did not include financial guidance for the third quarter or the full fiscal year.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $85.1M | $80.3M | +6.0% | $69.0M | +23.4% |
| Gross profit | $21.1M | $20.6M | +2.5% | $15.1M | +39.8% |
| Gross margin | 24.8% | 25.7% | -0.9 pp | 21.9% | +2.9 pp |
| Research & development | $10.1M | $10.8M | -6.8% | $8.6M | +16.9% |
| Sales & marketing | $26.4M | $22.4M | +18.0% | $22.9M | +15.0% |
| Total operating expenses | $37.2M | $33.4M | +11.4% | $32.1M | +16.0% |
| Operating income (loss) | -$16.1M | -$12.8M | -25.7% | -$17.0M | +5.2% |
| Operating margin | -18.9% | -15.9% | -3.0 pp | -24.6% | +5.7 pp |
| Net income (loss) | -$18.8M | -$15.7M | -20.4% | -$10.0M | -89.3% |
| Net margin | -22.1% | -19.5% | -2.7 pp | -14.4% | -7.7 pp |
| Diluted EPS | -$0.70 | -$0.58 | -$0.12 | -$0.39 | -$0.31 |
Risks
The filing newly emphasizes that a U.S. or global recession, rising interest rates, inflation in source materials, component parts and labor, and reduced consumer discretionary spending could materially and adversely affect demand for PAR's products and services. The Russia-Ukraine war and geopolitical tensions could add inflationary pressure and supply chain shortages, and mitigation efforts such as higher prices on certain products could make PAR less competitive and reduce sales.
PAR states it may not be able to continue sourcing materials or component parts when required, which could expand the impact of supply shortages and result in longer lead times for delivery, negatively affecting its ability to timely complete customer obligations. A sustained supply chain disruption and continued inflationary pressures could materially and adversely affect results.
Product margin fell to 14.7% in the quarter ended June 30, 2022 from 22.8% in the prior-year quarter, and to 17.3% year to date from 21.5%, primarily driven by a $1.5 million charge for excess and obsolete inventory tied to higher inventory costs in 2022 compared to 2021.
Net loss widened 89.3% to $18.8 million in the quarter ended June 30, 2022 from $10.0 million in the prior-year quarter, and widened 89.3% to $34.5 million year to date from $18.2 million, partly because the prior-year periods included a $12.3 million income tax benefit and a $4.4 million gain on insurance proceeds with no comparable benefit in 2022.
Unfavorable macroeconomic conditions and geopolitical events could harm customers' financial conditions and lead to reduced product adoptions and bookings, delayed or canceled store implementations, reduced or delayed hardware deployments, a reprioritization of restaurant technology investments, and delayed or defaulted customer payments.
SaaS KPIs
All quarters →Subscription Service Revenue
Annual Recurring Revenue (ARR)
Punchh ARR
Punchh New Store Activations
Brink POS ARR
Brink POS Bookings
Brink POS New Store Activations
Customers using software products
Data Central ARR
Punchh Active Sites
Recurring Revenue
Active Restaurant Locations
Brink POS Active Sites
Summary, forecast, risks and KPIs are extracted from PAR TECHNOLOGY CORP's SEC filings for Q2 FY2022 (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.