Okay, so welcome to the Sidoti September Small Cap Conference, the second day. We're kicking it off with PAR Technology, ticker PAR. I'm Anja Soderstrom, the senior equity analyst at, here at Sidoti, covering the company. It's my pleasure to have Savneet Singh, the president and CEO, back with us here. This is gonna be conducted as a fireside chat, and if you would like to participate with your own questions, you can just use the Q&A function at the bottom of your screen. And with that, I want to wish you welcome, Savneet, and maybe you can start with giving a quick overview of what PAR is, for those who are new to the story. Sure. PAR is provides enterprise software for hospitality organizations in the United States. The way you'll find us is either as the point-of-sale system, online ordering system, loyalty system, or Back Office system in your traditional large quick service or fast casual restaurant. We've been around for 50 years, but the company's sort of been reinvented the last four or five years, under the vision of something called unified commerce. And it's the idea that as software is eating the restaurant, our goal as PAR is to connect all of these disparate systems that a restaurant may use into one unified system, allowing them to kind of take control back of their operations. And I think the foundational thesis is that software continues to eat more and more of the manual workflow of a restaurant, and much of that workflow plugs into a point-of-sale system. And that's really the crux of what we do. So we sell software, hardware, and services, all to the enterprise restaurant end market. You mentioned fast casual and enterprise restaurants. Maybe you can explain for the audience what those are and who else you serve, and how they tend to fare in this kind of economic environment. Sure. Our core market historically has been, you know, these QSR, quick-service restaurants and fast casual. These are the, you know, things like fast food, you know, out to things like CAVA or Sweetgreen. They are restaurants that have more locations, historically very efficient operations, usually franchise organizations. The alternative would be what we call casual dining or table-service restaurants, which would be like your, you know, your family meal at an Olive Garden or, you know, a more traditional sort of in-room dining experience. In our market, which is quick service and fast casual, although we're growing into the table service market, it's an incredible end market because it's really, really durable. We sell to restaurant organizations that have been around for decades. We sell to franchisee groups who never intend to sell their businesses. And they tend to do really well in challenging times of economic duress. When you've got people watching their paychecks or people watching their bank accounts, they tend to trade down for food. And just like you see a change from, in a grocery store, from fresh produce to canned or frozen, in restaurants, you see that change from casual dining down to quick service. So instead of going to Olive Garden, you might decide to pick up something at your local McDonald's. And so these businesses are durable, I think, during all economic climates, but they're extremely durable during, you know, recessionary type climates. And we've seen that in our business. We've seen how resilient the customer base has been, which we've been a nice benefactor with ourselves. Thank you. You also mentioned Unified Commerce Platform. What does that mean for the enterprise restaurants? So in the last five or six years, restaurants have started to adapt software very quickly. They've upgraded their point-of-sale systems, they've added online ordering systems, loyalty systems. They've probably added an AI tool. They've added a Back Office system. You know, they've just all of a sudden had so many different things to plug into their restaurant. And every time they add a new system, it creates another potential point of failure, where you're creating an integration into a point-of-sale system, and those are two companies that probably never envisioned working together at some point, but then built an integration to service their customer. And, you know, when you have two or three or four products, it's doable. When you've got 15, it gets harder and harder, particularly when there's a problem and something breaks. So think about the average restaurant. They'll have a MENU You know, my way of kind of convincing investors or even our customers about this is, really, when you talk to restaurant CIOs, they'll tell you that their budgets have grown meaningfully from now till, call it, five years ago. They'll tell you their teams have grown. They'll tell you the amount of software they acquire is more. But they'll also tell you their lives are, like, 10x harder now because they're managing dozens and dozens of vendors, and they can't focus on actually delivering a great guest experience anymore. And so what unified commerce is, this idea of connecting those systems so that there's one source of truth for data, there's one MENU Who do you compete against mainly, and how do you win? In the enterprise segment where we play, it's primarily NCR, Oracle, who each have, you know, very, very large market share, you know, over 100,000 restaurants, respectively, each. And and I think that we've got a bunch of other disparate players. There's a long tail of legacy players, a couple upstarts, but, you know, I would say those are the two that we play the most. You know, we win... We're, we're in the enterprise software business, and so my view of that is product wins. In the end, when you're going through a year-long sales cycle, convincing a large enterprise to change their their point-of-sale system, it's almost like changing your ERP system. It's a huge commitment. When they do that, you know, we can have the best sales team, the best marketing, but they're really picking the product. And in the end, our product is, we believe, the best product for this enterprise market. We have the functions. We not only have the features, the functions, we have the integrations, and I think we have the roadmap for to build a future for them. So in the end, it's kind of using our product versus the alternatives. It's the product that sort of wins the day with our customers. And generally, that's either a combination of, we have the features, functions that they need, we have the integrations that they need, or our roadmap better aligns to the roadmap that they see their own journey going on. Generally, when we lose, it's only to incumbency, and, you know, those losses stink, but they're also the ones that come back later when they realize that they have to make a change. And so it's, we're not in a market where we're competing against Silicon Valley every single day trying to disrupt. We're competing against, you know, what I call Silicon Valley 1.0. Okay, thank you. And I have a few questions here from the audience. One is, has the increasing minimum wage pushed restaurants to adopt automation, such as ordering and paying from kiosks at their tables? Yes, it's plus plus. So it's the wage inflation, it's the food inflation, it's the energy cost. All of that has put a lot of pressure on restaurants to be more efficient. That has led to, you know, we think, a growth in back-office software. Back-office software is sort of a category that includes your COGS and your labor. And so it's led to, yes, some automation, but also I think in the first wave, it's not so much automation, it's the optimization of what you have today. How are you organizing your labor staff? How are you, or, you know, what, how efficient are you on your COGS? It's a lot of focus on optimizing, and I think without question, it's going to push us into things like AI and robotics and things like that. Okay, thank you. Another question here is, Chick-fil-A, a long-term partner with you on the hardware side, recently modernized their POS system with Ditto. What would it take for you to convert this type of customer to the Brink POS platform? You know, I would say Ditto is more of a, you know, an endpoint tool. It's a tool to deliver faster Wi-Fi and connectivity. So it's not so much modernizing the point-of-sale system as it is the network infrastructure of the actual stores. You know, I think for us to win an organization, you know, like a Chick-fil-A, it's to continue to demonstrate that we, that we work well with their peers. This is a market that is very much looks around to see what everybody else is doing. And if we can do a good job winning their peers, delivering that ROI, I think we'll find our way into these mega, you know, mega chains. And I think, you know, that's happening. We continue to see our pipeline grow. We continue to see organizations that we thought would be two or three years from being a PAR customer, become a PAR customer now. So we're really excited about that opportunity. But to be honest, I think that, you know, for us to win that chain is these types of chains, I don't want to talk about any one specific chain is exactly what we're doing now, which is continuing to win in business, continuing to show that we're an open ecosystem, and then, you know, really, really, really continuing to get proof points of ROI in other organizations. Okay, thank you. Payments is starting to become a meaningful contributor to your revenue. What value proposition do you offer your customers in terms of payments, and when do you anticipate to see some meaningful contribution? Payments, yeah, I'll go reverse. You know, we expect this year we'll have payments ARR, you know, north of $10 million. We've said $10-$15 million. And so I think it's becoming meaningful quickly. The value we add to our payments, our customers with payments is a fewfold. The first is, we are simplicity. When our customers buy payments, it's a really complicated process. The average restaurant cannot actually tell you how much they spend on payments. You know, when we go to pitch a payments customer, it's oftentimes say: "Here's my statements for the last, you know, two months. Help me figure out what I'm paying." It is really complex, and so what we offer is, hey, we're gonna not come in and rip you off, as everybody else has done in payments. We're gonna provide tremendous simplicity for, for you and your infrastructure. The second thing we do is we say: Hey, we'll take your payment data, we'll combine it with the POS data, so that you have complete, transparency in what you have, you know, what's, what's in your organization. So what does that mean? That means that we can tie together loyalty orders, non-loyalty orders. We can help you figure out who your non-loyal customer, your non-loyalty signups are. The third thing we can do is price, which is generally, you know, PAR's in 20,000, Brink is in 23,000-ish restaurants. We can get a better price than most restaurants can on their own because we are in more restaurants than they can, and so that allows us to bring down their price. And then I think the last part of that is this idea of unified commerce, which is, gosh, it is really frustrating to have a different POS vendor, a different payment gateway vendor, a different payment processing vendor, and a different device vendor for the actual devices that you use for payments. That's really complicated. And if you can make that one, you know, it's one—you're calling the same support line, you're dealing with the same people. And so it's also, I think, the opportunity to improve your SLAs, but improve your quality of service. In terms of your other services, you have mentioned on your last earnings call that Punchh is recovering while other products are accelerating. Can you talk about the puts and takes for the different demand for your platform? Sure. So we break our reporting into three segments: Operator Solutions, which is Brink and Payments. Guest Engagement, which is Punchh and our newly acquired MENU and online ordering product that is very tiny today, and then our Back Office. Operator Solutions, Brink and Back Office are growing really nicely this year. Both, you know, I think, Operator Solutions is up 37%-38% year-over-year, and Back Office is up, I think, around 24%-25%. And then Punchh and guest Engagement was up around, I wanna say 8%-10%. And, you know, we expect that to kind of continue as we go. It's been a really nice to see the stabilization and some acceleration of Punchh earlier than we expected. I think that is really, I think, testament to the quality of the Punchh product, us building out the pipeline. Also, it's really a testament to the stability of restaurants. In the beginning of the year, really the end of Q4, the Punchh pipeline started to slow down meaningfully because I think restaurants, while they were doing okay, there was insecurity about the future. When you choose Punchh to be your loyalty program, while it's a spend item, it's really more of a commitment from a restaurant to redo their long-term plans. When you launch a loyalty program, you know, everybody from your franchisee to your district manager, all the way up to the CEO, have to get behind that and say, "Okay, now we're doing this big loyalty program. We're going to do ad campaigns, we're going to do stuff." And so, things slowed down a little bit, but we feel like we've kind of, we've found ourselves on some good footing now and starting to see some nice uptick there. On the other parts of our business, we kind of talked about Back Office. Back Office, because of the pressures on inflation, is doing really well. And then on the point-of-sale side and payment side, you know, we just continue to take share. We're growing really fast. We expect to continue to hopefully keep that pace up. And that's just, you know, a lot of the work within the last couple of years to build out Brink. We're getting the benefits of today. Okay, thank you. In terms of cross-sell and upsell opportunity, can you walk us through that and, and where you are with now, where you could see it potentially ahead? Sure. So, we've—if you think of our three segments, we've got a ton of white space amongst them. The way I like to think about it is, Punchh is in something like 70,000 sites, Brink is in 23,000 sites, and Back Office is in, call it seven or eight thousand sites. And so there's, while there's overlap, there's a ton of white space. Where we will see the most opportunity to cross-sell and upsell will be in payments and will be in our, our online ordering business, which, which we're just getting started. And so I think that, you know, our pipeline in online ordering, as an example, is really robust. And almost every single customer in that pipeline is an existing Punchh or Brink customer. So we're finding a way to monetize our acquisitions by selling them into their base. In a similar way, when we acquired Punchh two, you know, call it two to 2.5 years ago, we were able to bring in Punchh to a lot of the Brink customers who didn't have Punchh. And so our playbook is generally to use the Brink base and then push our products into that base going forward. And so we think there's a lot of opportunity to cross-sell and upsell. You know, I would suspect that historically, almost all of our revenue has been net new customers. I think as we get more and more penetration within Brink in particular, you know, that will move from 100 to 0 to 75, 25, to hopefully 50/50 at some point. Another question here from the audience: Among the largest restaurant enterprises, how far along are they in digitizing their in-store and above-store operations, and how big is the green space? So, the biggest customers, the biggest restaurant companies are also the oldest restaurant companies. They have the largest footprint stores, but they also have the most complicated and oldest infrastructures. We are beginning to see the tipping point. You know, we're starting to see the biggest of brands, you know, do everything from run an RFP to, "Hey, I'm starting to take meetings with the new vendors on-- that exist, including ourselves." So you're starting to see them move. They're really, really early in that transformation. You know, among the top five, 10 gigantic- biggest restaurant chains in the country, you know, maybe one of them is on a cloud POS solution, maybe two max, if that. And so you still have a lot of green space in the mega brands. I think we'll start to see that tipping point come in the near future. You know, the chains below that, which are still very large organizations, are moving much faster. I think they're doing that because they don't have large IT infrastructures. They don't have, you know, the ability to make the investments that these mega chains do, and so they do need us to make that future come forward for them. Okay, thank you. Since you joined, you have been pretty active in the acquisition front. Can you talk about your most recent acquisition, the MENU Digital Ordering, and can we talk more about future acquisitions maybe after that? Sure. MENU is an online ordering platform that we acquired out of Switzerland. It really has kind of three key products underneath it. One is online ordering. Think of online ordering as the e-commerce or the e-commerceization of your, of your, of your brand. It's like the website, but it's so much more. It's connecting that website into the MENU, into the point of sale system, so on and so forth. The second part of the product is called MENU Link, where we take in third-party delivery orders from things like Uber Eats and DoorDash and Rappi and everything else, and inject that into the point-of-sale system and help you run those through your restaurants. The third element is Dispatch, which is really kind of helping you deploy your orders via all the channels of delivery that exist out there. The business was built originally primarily to serve the European customer base, and we discovered it because a number of our large US brands started stumbling across the company for their international stores. And, you know, for a long time, you know, the US market has been dominated by, you know, legacy online ordering providers that were started, you know, 15years, 20 years ago. And we were always sort of curious of, you know, what's going to happen next? Why has there been innovation? And so for us, why we're so excited is MENU is the modern version of online ordering. It's a beautiful system which, you know, allows the brand to really own the UI/UX, where historically, they've had to depend on these templated websites. But it's also got a back end that gives, again, the brand more control over their future. But what we think is more important or equally important is that MENU is natively integrated into Brink, into Punchh. And what that means is that an order in any one of those systems is an order in all of those systems. And so you're not trying to reconcile different MENU items, different taxes, different guests. It beautifully flows through all of our products, and that integration is very powerful. Now, we don't force you to use the product at all, but we're really confident that once you use our products together, you will find far more ROI than you did when you did it on your own. So we're really excited. We brought the business to the United States. I think somewhere in the end of Q1 or middle of Q1, and in a really short period of time, we've seen a ton of pipeline build up. We've won a number of customers. We start rolling out those customers right now, you know, and we started rolling out those customers in September. We'll have more rollouts, a lot more rollouts in Q4, and so you'll start to see the revenue trickle in this quarter, you know, Q4, and then going forward next year. So we're really excited because it'll be a nice revenue ramp, and we've been winning some really exciting deals. ... How are you thinking about future acquisitions? Can we expect you to make more acquisitions? Are you developing more in-house, or? We'll certainly be active in M&A side. M&A's done PAR really well, and doesn't mean it always will do that, but I think we feel really confident today. You know, we are almost always in an M&A conversation. The distinction is now we have the opportunity to be the buyer of choice, but also we can flex our muscle a bit. More historically, we were chasing, you know, companies that had multiple offers. You know, today, you know, a company can always find an alternative, but I don't think they could find an alternative like PAR, where we can continue to build their product vision, hopefully retain a lot of the team and then accelerate the growth. And we are really a benefactor of that money leaving venture market. An enormous benefactor of, I think, private capital, realizing that, you know, when you're selling into restaurant technology, you know, buying a single verticalized product is a tough go. Owning the platform is what you wanna be, and we are one of those platforms you can hitch your wagon to. So we will absolutely be in active M&A, and we always have been, but today, you know, we can sort of hopefully be more aggressive. Okay, thank you. Your churn is quite low. Why is that? To the extent you lost a customer, why is that? Our churn is low, I think, for two reasons. One is the end market. You know, I think fundamentally, when you sell into a good end market, you're gonna have low return. It's not like we're selling into businesses that go out of business all the time. These are big enterprise restaurants. It's not a local restaurant that opens. You know, the average—I think the average restaurant in the United States is open for 2.5 years. The average enterprise restaurant is, you know, a decade or two, and so you've got a good end market. The second part is, I think our products are good, and when you have a good product, customers churn less. So even though we've been able to take price, meaningfully over the last couple of years, even though, we've had our hiccups, our customers have stuck with us, and I think that's because the quality of the products or the quality of the service. And so the churn, I think, will always. You know, I think if you buy anybody in our sector, to be honest, the churn will be relatively low because the end market's good, but I think the quality of the product. The last thing I'd say is, we also focus on the stickiest products in the ecosystem, so we're not building or acquiring products in the areas where I think we see high churn. We really obsess over a product that has low churn and, you know, when it's integrated to our products, we can even bring down that churn, further. The number one reason for churn at PAR is a customer closing a store. It is not an alternative—it's not really going to a competitive POS. It's generally a customer leaving us because they've gone out of business or the brand has decided to rightsize. If they're churning because they're going to an alternative product, it's usually because of a specific feature or functionality we don't do. We had a customer in the loyalty space churn in the beginning of the year, which both we and the customer felt was the right move because they wanted to run a type of loyalty program that we didn't support, i.e., we hadn't built out, and so it made no sense for them to stick with us. That was a business decision that was. I look at it as not so much, "Hey, they hate us, or they hate our products." We just didn't have the right product set that they needed. So it's usually a specific feature or function that causes the churn. Okay, thank you. How should the investors think about the margins going forward and profitability? You know, we're working really hard to try to get to profitability. You know, the best lever we have is, you know, really a commitment to kinda keep our OpEx as flat as possible, which we've done for the last four quarters, and then continuing to grow the top line, you know, in this 20%+. And I think doing that, we'll stumble our way, you know, quickly into profitability. The other part of profitability I think is exciting today is that, is the M&A lever that you mentioned earlier, which is, you know, we're excited about what we're seeing, not just because we're seeing good products, but we're also finding good, profitable businesses that will enhance our profitability faster. And all the while, we're still making a big commitment to invest. You know, as we talked about in our last quarterly call, you know, we're in some big, big RFP processes that require a massive amount of investment, particularly in MENU, because MENU didn't have a U.S. infrastructure, it didn't have U.S. employees. You know, we've had to make a meaningful amount of investment in that space. You know, that's allowed us to go after and potentially win these large deals. We are really, really excited by that, that, that opportunity. You know, there's always that balance, but we're, as an organization, we're very, very committed to getting there quickly. Thank you. When you came on board, you improved the balance sheet and finances for the company. Can you touch on that and your capital, capital allocation priorities? Yeah, I mean, I, you know, just different story. Then, when we took over the company, we had, you know, less than, you know, single-digit millions of dollars liquidity. We were in a really challenged, you know, time. You know, I think there was a real going concern, both from an accounting perspective, but also from a management and board perspective. You know, we worked to shore that up because we believed we had a good product that, you know, had the opportunity to scale, was potentially, you know, managed, if it was managed in a different way and, and, and we invested. Our capital allocation policy is pretty simple. We look to sort of deploy where we can get the highest return. You know, today, what does that mean? You know, I think, you know, we just have three or four options to always deploy our capital. We can continue to invest in our existing operations, and as I mentioned, that amount of reinvestment is focused on, you know, continuing the R&D in our products while not really growing our OpEx. So it's more of the micro decisions of do we invest there or there within the fixed budget of OpEx that we have today. The second opportunity is M&A, and when we look at an M&A deal, we look at if we deploy capital there, no matter what form that capital comes in, you know, will that achieve a higher return than an extra investment in internal operations with a huge margin of safety? Because we assume that whatever we buy, we will not be able to turn over every rock or stone in a 30- to 60-day diligence process. There'll be a lot of stuff that goes wrong, and so we need a huge margin in a stage that we're gonna screw it up, and if it still clears that hurdle, then we'll look at M&A. You know, the third option you have is to sort of look at buying back your shares, and so we sort of say, "Okay, we bought back our shares versus the other two options." And then the fourth option, I think, would be, you know, we have converts outstanding that are, you know, very attractive, you know, whatever makes sense to monetize that. That generally is the least attractive, because I think that's sort of like single-digit or, or maybe low double-digit returns versus the other ones that we think are much higher return. But we look at it all the time, and today, I would say most of that focus is on the M&A, where we see real opportunities to buy stuff very creatively and then build out synergies, you know, once those organizations are rolled into PAR. Thank you. We have another question here from the audience, and we'll see if that's the last question, because I know you have to wrap up a little bit sooner. But you almost completed your first five years as PAR CEO. How do you see PAR evolving in the next five years, and are you still on track to becoming the number one food service transaction platform in the world by 2030? Absolutely. I think we are absolutely committed to the idea. I think we feel really good about our chances. You know, we had a meeting earlier this week, and you know, I was telling you know, some members of our board and our team, you know, it's always been the vision that we wanted to be number one, but you know, now it feels like it's ours for the taking. I think in the past, I would have said, "Well, that company's got a bigger install base, that company's growing faster, that company's got these widgets." You know, today, I think it's on our, it's the bet is on our execution, not on hoping a bunch of other things happen, and that's a bet we wanna take all the time. So we feel really excited about that vision, really excited about potentially that being our path. And we, you know, try to stay pragmatic. We try not to get—believe any of the excitement and stay rooted in that everything's gonna go wrong, and if everything goes wrong, how do we still find a way to win? But from where we sit today, you know, we are making tremendous progress, and I think you'll see that kind of come through in not only these enterprise wins that we're hopefully now participating in, but you'll also see that in the way we're perceived in the market. And then hopefully, that will lead to this flywheel of better talent coming to PAR, more wins, so on and so forth. Okay, thank you so much, Savneet, and thanks, thank you, everyone who participated. If you have... There's a lot of other questions from the audience that we didn't touch on. If you want to touch base with the management team, you can reach out directly to them, or us at Sidoti, and we'll put you in touch with them. I'm sure they're happy to talk to you off the record here. And with that, I'm gonna let you go, Savneet, to your next meeting. I'm just gonna hand it over to you for some closing remarks first. Thanks, everybody. As Anja said, feel free to ping me, or Chris from our IR team if there's any questions, and we'd love to follow up. Thank you.