Summary
PAR Technology reported third-quarter revenue of $119.2 million, up 23.2% from the prior-year quarter, and year-to-date revenue of $335.4 million, up 36.9%. Subscription service growth came from higher average revenue per site through cross-selling, upselling, and price increases, and from the Delaget, Plexure, and TASK product lines along with acquired customer contracts. Annual recurring revenue reached $298.4 million, total growth of 22% that included organic growth of 15% from $244.7 million in the third quarter of 2024. ARR increased $11.7 million sequentially from the second quarter of 2025, which the company described as annualized growth of about 17%. Engagement Cloud ARR was $176.8 million and Operator Cloud ARR was $121.6 million. Active Sites as of September 30, 2025 totaled 121.0 thousand in Engagement Cloud and 58.2 thousand in Operator Cloud. The quarter brought the launch of PAR AI, an intelligence layer embedded in the product suite, which management connected to its Better Together multi-product strategy, new market share, and higher average revenue per user with existing customers.
Gross profit was $49.2 million in the quarter, up 14.4%, and $148.5 million year to date, up 46.9%. Total gross margin was 41.3% in the quarter, down 3.2 percentage points from the prior-year quarter, but 44.3% year to date, up 3.0 percentage points. The company attributed the quarterly pressure to hardware margin, where tariffs raised supply chain costs, and to discounts and incentives on SaaS implementations that weighed on professional service margin. It began pricing adjustments during the quarter to offset tariffs in later periods. Operating loss widened to $17.7 million in the quarter, while the year-to-date operating loss narrowed to $50.7 million. Operating margin was negative 14.8% in the quarter, an improvement of 0.9 percentage points, and negative 15.1% year to date, an improvement of 10.5 percentage points.
Net loss narrowed to $18.2 million in the quarter. On a year-to-date basis, the company swung to a net loss of $63.6 million. Diluted loss per share was $0.45 in the quarter and $1.58 year to date. Adjusted EBITDA, a non-GAAP measure, was $5.8 million in the quarter, an increase of $3.4 million from the prior-year quarter, and $15.9 million year to date. Non-GAAP diluted net income per share was $0.06 for the quarter and $0.08 year to date. Non-GAAP subscription service gross margin percentage was 66.2% in the quarter, down 60 basis points, and 67.2% year to date, up 80 basis points.
Operating cash flow was $8.4 million in the quarter, down 4.6%, and negative $15.4 million year to date. Capital expenditures were $1.3 million in the quarter, up 250.5%, and $2.5 million year to date, up 221.2%. Deferred revenue was $33.9 million, up 11.2% from the prior-year quarter, and remaining performance obligations were $33.7 million, up 10.4%. Management said its available cash and cash equivalents should be sufficient to meet operating needs for at least the next 12 months, and the balance sheet still carries long-term debt taken on to replace the Credit Facility.
No quantified revenue or earnings guidance was issued for the next quarter or for the full fiscal year. Management said it remains confident in growing revenue well above its market, making progress on large tier 1 deals, and maintaining financial discipline. Tariffs are the clearest pressure point. The company described the tariff environment as complex and evolving and expects continued pressure on hardware margin, with supply chain moves, cost or pricing measures, and alternative shipping practices as possible mitigations. Hardware revenue also benefited from customer demand pulled forward ahead of anticipated tariff impacts and from the timing of tier-one hardware refresh cycles, drivers that may not repeat. Other risks include macroeconomic uncertainty, weaker consumer spending, acquisition integration, retention of Active Sites and integration partners, and legal matters.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $119.2M | $112.4M | +6.0% | $96.8M | +23.2% |
| Gross profit | $49.2M | $51.0M | -3.5% | $43.0M | +14.4% |
| Gross margin | 41.3% | 45.4% | -4.1 pp | 44.5% | -3.2 pp |
| Research & development | $19.3M | $20.9M | -7.9% | $17.8M | +8.2% |
| Sales & marketing | $12.5M | $12.3M | +1.7% | $10.5M | +18.8% |
| General & administrative | $31.7M | $31.7M | +0.1% | $27.4M | +16.0% |
| Total operating expenses | $66.9M | $68.3M | -2.1% | $58.2M | +14.8% |
| Operating income (loss) | -$17.7M | -$17.3M | -2.0% | -$15.2M | -16.2% |
| Operating margin | -14.8% | -15.4% | +0.6 pp | -15.7% | +0.9 pp |
| Net income (loss) | -$18.2M | -$21.0M | +13.6% | -$19.8M | +8.3% |
| Net margin | -15.3% | -18.7% | +3.5 pp | -20.5% | +5.3 pp |
| Diluted EPS | -$0.45 | -$0.52 | +$0.07 | -$0.56 | +$0.11 |
| Customers | 13,938 | 13,938 | ±0.0% | 3,533 | +294.5% |
Risks
New U.S. tariffs implemented beginning in the second quarter of 2025 on imports from countries where PAR sources components and hardware, plus retaliatory actions, are driving increased supply chain costs. Hardware gross margin decreased to 17.8% for the quarter ended September 30, 2025 from 25.5% in the prior-year quarter, a 770 basis point decline, and management anticipates continued pressure on hardware margin.
Hardware revenue of $29.9 million for the quarter ended September 30, 2025 rose 32.0% year over year, but management attributes much of the increase to customer demand pulled forward in advance of anticipated tariff impacts. This pull-forward could reverse in future periods and make hardware revenue and margin timing-dependent and volatile.
Hardware revenue performance is explicitly tied to the timing of tier-one enterprise customer hardware refresh cycles and the onboarding of Operator Cloud customers purchasing hardware. Dependence on a small set of large refresh cycles creates lumpiness in a segment that was 25.1% of total revenue in the quarter ended September 30, 2025.
Growth is heavily inorganic, with the Delaget, TASK Group, Plexure, Stuzo and GoSkip transactions contributing the majority of the subscription revenue increases and total ARR of $298.4 million as of September 30, 2025 up 21.9% year over year. Amortization of identifiable intangible assets rose 80.1% year to date to $10.0 million, and integration and dilution of organic momentum remain execution risks.
The company replaced its Credit Facility with the 2030 Notes, recognizing a $5.8 million loss on extinguishment of debt for the nine months ended September 30, 2025, and faces $380.0 million of non-current principal payments plus $20.0 million due within 12 months. Operating cash flow was negative $15.4 million for the nine months ended September 30, 2025, though that outflow improved versus the prior-year period.
General and administrative expense for the quarter ended September 30, 2025 included $1.9 million of litigation expense and $3.3 million year to date, which the company treats as non-recurring in its non-GAAP reconciliation. Ongoing legal matters could continue to add costs outside core operating performance.
Professional service gross margin fell to 17.6% for the quarter ended September 30, 2025 from 29.2% in the prior-year quarter, driven by discounts and incentives on SaaS implementations used to facilitate adoption of recurring subscription revenue. Persistent discounting could keep services margins depressed even as subscription revenue scales.
SaaS KPIs
All quarters →ARR
Adjusted EBITDA
Non-GAAP Subscription Service Gross Margin Percentage
Subscription Service Revenue
Organic ARR
Summary, forecast, risks and KPIs are extracted from PAR TECHNOLOGY CORP's SEC filings for Q3 FY2025 (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.