Summary
PAR Technology reported second quarter fiscal 2026 revenue of $133.4 million, up 18.7% from the prior-year quarter. First-half revenue rose 19.0% to $257.4 million. Gross profit increased 11.0% to $56.6 million, but gross margin fell to 42.4%, down 3.0 percentage points. The operating loss narrowed 25.5% to $12.9 million, and operating margin improved to negative 9.7%, up 5.7 percentage points. Net loss narrowed 19.7% to $16.9 million, and diluted loss per share was $0.41, an improvement of $0.11. For the first six months, net loss narrowed 27.2% to $33.1 million, and diluted loss per share improved by $0.33 to $0.80. The CEO said the quarter showed acceleration in revenue and a continued steep increase in profitability, with a strong pipeline to hit second-half targets and set up for 2027. Management also said the company continues to invest in its platform and is balancing profitability with long-term spending.
Management pointed to ARR of $338.0 million at quarter end, up 17% year over year. Organic ARR was $323.6 million, up 12.3%, and inorganic ARR tied to the Bridg product line was $14.4 million. Active sites totaled 174.3 thousand, made up of 145.9 thousand organic sites and 28.4 thousand inorganic sites. Adjusted EBITDA was $14.3 million, an improvement of $8.7 million from the prior-year quarter and $5.3 million sequentially from the first quarter. Adjusted EBITDA margin was 10.7%, a year-over-year improvement of 580 basis points. The investor deck described the second quarter as the sixth consecutive quarter of growth, with adjusted EBITDA up 158% year over year from the prior-year quarter and 60% sequentially from the first quarter. Non-GAAP subscription service gross margin was 65.1%, down 130 basis points. PAR said it is on track to deploy PAR Intelligence to 50,000 sites by year end. The company also changed how it reports ARR and active sites, presenting both on a total basis instead of splitting them by product line.
Cash generation turned positive. Operating cash flow was $7.2 million in the quarter, an improvement of $13.85 million from the prior-year quarter, when it was negative. For the first six months, operating cash flow was negative $9.4 million, an improvement of $14.38 million. Capital expenditures were $0.5 million in the quarter, down 41.7%, and $0.8 million for the first half, down 35.0%. Deferred revenue was $23.2 million, down 4.9% from the prior-year quarter, and remaining performance obligations were $22.6 million, down 5.2%. Both deferred revenue and remaining performance obligations fell year over year even as revenue grew. Management said the improvement in operating cash flow was primarily driven by better profitability from core operations.
Guidance moved higher. For the third quarter ending September 30, 2026, PAR expects adjusted EBITDA in the range of $13.5 million to $14.5 million. For the full fiscal year 2026, the company raised its outlook and now expects adjusted EBITDA of $50.0 million to $53.0 million, up from the prior range of $44.0 million to $47.0 million. PAR also raised its full-year total revenue outlook. The third-quarter figures cover the next quarter, while the wider ranges cover the full fiscal year. The raised outlook reflects the second quarter results.
Risks remain. Management flagged tariffs and supply chain uncertainty, including new Section 301 duties of 10 to 12.5 percent on products from 80 countries and an expired 10% global tariff. Hardware margin pressure came from excess and obsolete inventory and from product mix. The company also noted increased demand for hardware products and components from AI data center construction, which creates uncertainty about availability and pricing. Interest expense rose on a higher debt balance after the March 2026 issuance of the 2031 Notes. The quarter included a non-cash impairment charge tied to a Stuzo trademark, plus litigation and severance costs. PAR listed $78.7 million of contractual obligations over the next 12 months. Total active sites rose 16.4%, helped by the Bridg addition, while the organic site base was lower than a year earlier.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $133.4M | $124.0M | +7.6% | $112.4M | +18.7% |
| Gross profit | $56.6M | $54.5M | +3.8% | $51.0M | +11.0% |
| Gross margin | 42.4% | 44.0% | -1.6 pp | 45.4% | -3.0 pp |
| Research & development | $22.5M | $22.0M | +2.4% | $20.9M | +7.5% |
| Sales & marketing | $11.6M | $12.3M | -5.9% | $12.3M | -5.8% |
| General & administrative | $26.3M | $30.7M | -14.4% | $31.7M | -17.1% |
| Total operating expenses | $69.5M | $68.4M | +1.6% | $68.3M | +1.7% |
| Operating income (loss) | -$12.9M | -$13.9M | +7.1% | -$17.3M | +25.5% |
| Operating margin | -9.7% | -11.2% | +1.5 pp | -15.4% | +5.7 pp |
| Net income (loss) | -$16.9M | -$16.2M | -4.5% | -$21.0M | +19.7% |
| Net margin | -12.7% | -13.0% | +0.4 pp | -18.7% | +6.1 pp |
| Diluted EPS | -$0.41 | -$0.39 | -$0.02 | -$0.52 | +$0.11 |
| Customers | 12,380 | 12,380 | ±0.0% | 13,938 | -11.2% |
Risks
The tariff environment remains complex and evolving: after the U.S. Supreme Court invalidated IEEPA tariffs on February 20, 2026, the administration imposed a time-limited 10% global tariff that expired July 24, 2026 and then immediately imposed new Section 301 duties of 10 to 12.5 percent on products from 80 countries, with refund litigation continuing. Management anticipates increased supply chain challenges and commodity cost volatility that may adversely affect hardware revenue and hardware gross margin.
Increased demand for hardware products and components from AI data center construction around the world continues to create uncertainty as to whether these products will be available, or available in needed quantities and quality, or at favorable or competitive prices. The company discloses that hardware revenue rose 30.6% in the quarter and 32.1% year to date, concentrating more of the top line in this supply-exposed category.
Hardware gross margin decreased to 20.3% from 27.3% in the quarter (down 700 bps) and to 20.9% from 26.1% year to date (down 520 bps), driven by a $1.5 million charge recorded in the second quarter of 2026 related to a discontinued product, higher excess and obsolete inventory expense, and a shift in hardware product mix. Total gross margin decreased to 42.4% from 45.4% in the quarter (down 300 bps).
Hardware revenue growth was substantially driven by the timing of tier-one enterprise customer hardware refresh cycles and the onboarding of subscription service customers purchasing hardware, and management states hardware revenues will continue to be affected by the timing of these drivers. Organic active sites decreased 2.6% to 145.9 as of June 30, 2026 versus the prior year, while total active sites rose 16.4% only including 28.4 inorganic Bridg sites.
An intangible asset impairment loss of $5.4 million was recorded in the quarter and year to date, related to the write-off of an indefinite-lived trademark acquired in the Stuzo Acquisition, compared to no such loss in the prior-year periods. The charge highlights valuation risk on acquired intangibles from the company's acquisition program.
Interest expense, net increased 140.5% to $3.4 million in the quarter and 74.8% to $5.3 million year to date, driven by a higher outstanding principal balance following the March 2026 issuance of the 2031 Notes, which carry a higher interest rate than the company's other convertible notes. Non-current contractual obligations total $509.4 million, including $433.0 million of long-term debt principal and $50.4 million of interest payments.
The company re-emphasises that the trading price and volume of its common stock has experienced and may continue to experience volatility, which could limit its ability to finance strategic transactions, including acquisitions, using its common stock and thereby impact its ability to pursue valuable opportunities.
SaaS KPIs
All quarters →Adjusted EBITDA
Non-GAAP Subscription Service Gross Margin Percentage
Annual Recurring Revenue (ARR)
Subscription Service Gross Margin Percentage (GAAP)
Summary, forecast, risks and KPIs are extracted from PAR TECHNOLOGY CORP's SEC filings for Q2 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.