PAR Technology Corporation (NYSE:PAR) Q2 2025 Earnings Call Transcript

PAR Technology Corporation (NYSE:PAR) Q2 2025 Earnings Call Transcript August 8, 2025

PAR Technology Corporation misses on earnings expectations. Reported EPS is $0.03 EPS, expectations were $0.04.

Christopher R. Byrnes: Thank you, Lisa. Good morning, everyone, and thank you for joining us today for PAR Technology’s 2025 second quarter financial results call. Earlier this morning, we released our financial results. The earnings release is available on the Investor Relations page of our website at partech.com, where you can also find the Q2 financials presentation as well as in our related Form 8-K furnished to the SEC. During the call this morning, we will reference non-GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items. A description and timing of these items, along with a reconciliation of non-GAAP measures to the most comparable GAAP measures can be found in our earnings release.

I’d also like to remind participants that this conference call may include forward-looking statements that reflect management’s expectations based on currently available data. However, actual results are subject to future events and uncertainties. The information on this conference call related to projections or other forward-looking statements may be relied upon and subject to the safe harbor statement included in our earnings release this morning and in our annual and quarterly filings with the SEC. Finally, I’d like to remind everyone that this call is being recorded, and it will be made available for replay via a link available on the Investor Relations section of our website. Joining me on the call today is PAR’s CEO and President, Savneet Singh; and Bryan Menar, PAR’s Chief Financial Officer.

I’d now like to turn the call over to Savneet for the formal remarks portion of the call, which will be followed by general Q&A. Savneet?

Savneet Singh: Thanks, Chris, and good morning, everyone. Thank you for joining us today. We reported $112.4 million in revenues in the quarter, an increase of 44% year-over-year. We also continue to expand our profitability. Adjusted EBITDA came in at $5.5 million. This number includes $450,000 of accounting charges for non-period deferred contract costs, which when further backed out, brings our EBITDA to $6 million for the quarter. Subscription services revenue increased by 60% in the quarter to $72 million from last year and 21% organic when compared to Q1 2024. We delivered ARR of approximately $287 million, up 49% year-over-year and achieved organic ARR growth of 16%, showing positive momentum across our platform as we just restarted our major rollout and are prepping for several multiproduct rollouts later this year and early 2026.

These results reflect the growing demand for unified technology in the food service industry and the better outcomes our solutions can deliver for brands. Now to dig into our business with further detail. Total Operator Cloud ARR ended at $119 million and grew 42% in the quarter, with organic growth of 13% when compared to the same period last year. This growth is slower than our historical trend due to the mid- quarter restart of BK, which only hit scale starting in June. Crucially, we have significant committed rollout visibility through Q4, which will markedly increase POS growth in the second half of the year. As we mentioned on last quarter’s call, in Q2, we restart — in Q2, we restarted the Burger King implementation of PAR POS and initiated the rollout of PAR OPS to their stores.

We continue to receive very positive feedback from corporate and franchisee stakeholders alike, and this successful partnership was ultimately crucial to us also contracting with Popeyes Louisiana Kitchen with PAR OPS. Outside of Burger King, we’re seeing strong mid-market traction with 17 new direct POS logos signed in Q2 alone, continuing the trend from last quarter. All of these deals were multiproduct, proving the strength of our product and better together value proposition versus up-and-coming point solution competitors or SMB providers trying to crack the enterprise. Our thesis that delivering outcomes of efficient operations and higher sales is playing out quickly in the mid-market and beginning to gain traction in the enterprise with proof points like PAR OPS and RBI.

Our back-office product suite, which we retitled from Data Central to PAR OPS earlier this year is proving to be one of the most exciting areas of innovation and growth at PAR. PAR OPS delivered a strong sales quarter with 3 new customer deals. We also kicked off our implementation with Popeyes Louisiana Kitchen and Burger King. We believe that a key better together enhancement has been the addition of the Delaget product suite, which we believe will drive our flywheel with strong multiproduct adoption. As an example of this, Coach AI, our AI-powered intelligent assistant pulls real-time POS data, drive-through timer information and voice of the customer guest metrics to give in-store operators actionable intelligence to maximize efficiency.

It is a clear enhancement of both the POS and back-office experience. We’re at the point where PAR OPS itself is becoming a hero product within the PAR portfolio that is capable of driving cross-sell. The PAR OPS product suite has a significant late-stage pipeline covering multiple existing and prospective Tier 1 and 2 customers, and we are trending towards both 2025 and 2026 being record years for this product line. Separately, with respect to our TASK POS platform, we have aggressively repositioned our focus to pursue global Tier 1 deals and realize the value that the PAR umbrella brand brings to go-to-market efforts. We have gotten extremely compelling feedback from the biggest and fastest-growing brands that our TASK POS platform architecture is the best in the world for global brands pursuing international expansion.

Because of what we — because of that, we’ve taken the important measure to add investment to this business while pausing projected rollouts to focus on building out the product for the slate of late-stage Tier 1 prospective customers. A recent example of TASK potential was the recent launch of Wingstop’s inaugural store in Australia this past quarter. We believe the near-term trade-off of growth for product build-out will set PAR up for massive success in the future. We anticipate rolling out our accrued multimillion dollar backlog of tasks starting in Q1 2026. We believe our decision to run a double-pronged POS strategy with PAR POS for domestic brands and TASK for global brands will ensure we cover the maximum amount of enterprise concepts.

There is no one-size-fits-all with point-of-sale software. And with our current portfolio, we cover both domestic and global enterprise QSR brands while also building a pathway toward continued expansion in other hospitality verticals. Now on to payments. In the second quarter, PAR’s payment business started a major shift in operating model, moving from 99% card- present transactions to now accepting and selling card-not-present transactions with the cross-sell of our PAR wallet, ordering and retail solutions. Due to the shift in timing around the attaching payments with PAR POS rollouts, we saw a slower-than-normal quarter in Q2. The second half of this year should return payments back to the growth as we’ve signed some significant 500-plus location card-not-present payment deals that we will announce very soon.

We continue to see PAR payments as a key and strategic growth driver for PAR with a much larger and future TAM, given the addition of new sales channels and outlets. In short, Operator Cloud is uniquely positioned and hedged in the market to service both the dual me of revenue maximization and operational efficiency. While our business may not be consistent quarter-to-quarter, the 2025 pipeline keeps us very confident about the long-term growth with nearly $50 million in prospective ARR within just POS and back office. Further, our point-of-sale products have over $20 million of ARR tied to already contracted rollouts, giving high future visibility and confidence. It’s important to note that the aforementioned pipeline number does not even include 2 mega Tier 1 deals we are pursuing.

Moving to the Engagement Cloud. In Q2, we continued to strengthen our market position, driven by a robust customer demand and strong strategic innovation. We exceeded internal targets with engagement ARR increasing 55%, including 18.5% organic growth compared to Q2 last year. For enterprise restaurants, the growth trajectory of digital engagement and loyalty programs significantly outpaced traditional sales channels. Despite broader industry headwinds and consumer spending, brands remain committed to enhancing their digital strategies with PAR’s Punchh ordering and wallet platforms being key focus points of investment. In today’s competitive market, where customer acquisition costs continue to rise, loyalty programs have shifted from optional extras to essential tools.

They’re critical not only for driving repeat business, but also for building lasting emotional connection with guests. Our platforms powered by a better together approach, uniquely position restaurants to capitalize on these opportunities and drive superior outcomes. As a result, we have begun winning multiproduct deals at an impressive rate. In Q2, we signed 10 new engagement mid-market and enterprise customer deals. 70% of these deals included multiple products, including Punchh, ordering and payments. Let me reiterate that point. 70% of our deals with Punchh now include a second product. When last year Q2, 0 deals did this. This is an enormous change at PAR. Critical to this multiproduct evolution is the expansion of PAR ordering. We closed 6 new ordering deals this quarter, demonstrating momentum and growing demand for our comprehensive offerings.

What’s particularly noteworthy is that 100% of new Q2 ordering deals were cross-sells into our existing base. What largely drove that trajectory change in the cross-sell within the Engagement Cloud was our launch of a new suite of products, PAR Engagement, which unifies 4 central pillars: marketing, ordering, loyalty and data into one integrated solution. Even more exciting than our recent wins is our product momentum. The industry is ready to move beyond online ordering 1.0 and is actively seeking innovation. Our development team velocity underscores this. Storypoint commitments have doubled compared to last year, meaning we’re now launching twice the product volume. The perfect example of this are the embedded AI-driven tools proven to boost check size via intelligent upsell and drive higher one-to-one personalization through Smart Segment Builder.

We feel that our ordering product is now best-in-class versus the legacy peers focused on driving cash flow returns versus product outcomes. Similar to Operator Cloud, Engagement Cloud ended the quarter with a pipeline of over $50 million, providing strong visibility for future growth. Now turning to PAR Retail. PAR Retail delivered another strong quarter and is quickly becoming the second pillar of our multi- vertical strategy. Our flywheel in convenience and fuel is starting to accelerate. In Q2, we secured 4 high-value enterprise wins. Historically, in the C-store industry, deals are chunky. In an average year, we would close 2 to 4 total. Our speed this year highlights the growing trend amongst operators, a move towards consolidation with a single trusted technology partner.

And we’re building momentum and are actively engaged with 8 more enterprise opportunities with the potential to close in the back half of this year. Additionally, this quarter, we completed the integration of our new self-checkout product, Skip. This is adding an extremely healthy ARPU white space and tight synergy to drive better outcomes for our customers. Our largest customers are already in talks to expand their relationship with self-checkout. In comparison to restaurant, we see that while C-store deals move slower, they are highly strategic, long-term multiproduct relationships that drive massive future potential to higher ARPU and expand within the PAR ecosystem. Just as important as new customer wins in C-stores is the expansion among existing customers.

A standout example is EG Group, one of the largest global forecourt operators. Since launching on PAR retail, EG has scaled significantly, currently performing at nearly 3x its original program metrics. More importantly, they are now actively evaluating additional PAR products, including self-checkout to drive further operational efficiencies and open new revenue streams. This kind of expansion, combined with the momentum we have winning new logos, demonstrates the beginning of our long-term flywheel in the convenience and fuel industry. We are clearly viewing the potential of this industry to becoming a meaningful driver of PAR’s growth overall. Moving to hardware. We had a stronger-than-planned quarter in hardware revenues with an increase of 33.5%.

Clearly, there are a number of our hardware customers who accelerated their purchase ahead of tariffs being assigned. The continued uncertainty around tariffs will increase volatility into global trade policies and supply chains. We will constantly evaluate the current environment, and we’ll take the necessary steps to mitigate the impact on our business to the best of our ability. In summary, Q2 was a validation of PAR’s platform strategy and market position. Q2 saw 27 new logos signed with PAR, of whom 19 were multiproduct. Across foodservice, we are seeing a definitive shift in buying behavior towards unified enterprise-grade solutions an environment in which PAR is uniquely well positioned as an industry leader. While our quarter-to-quarter movements are never linear, our 2025 pipeline of new deals stands near $100 million, which gives us great confidence around long-term durable growth.

What’s more, we feel even more excited that when looking at pipeline, we exclude our largest deals from these accounts in order not to be over reliant on a deal or 2, giving us even more confidence on our long-term potential. Bryan will now review the numbers in more detail, and I’ll come back at the end. Bryan?

Bryan A. Menar: Thank you, Savneet, and good morning, everyone. In Q2, we continue to execute to our plan of driving organic growth across our products and the verticals we serve while also driving incremental bottom line improvement. Subscription services continue to fuel our organic growth and represented 64% of total Q2 revenue. The growth from higher-margin revenue streams resulted in a consolidated non-GAAP gross margin of $59.3 million, an increase of $20.8 million or 54% compared to Q2 prior year. We managed the growth while continuing to drive efficient operating expenses. As a result, we reported $9.9 million improvement in adjusted EBITDA compared to Q2 prior year. Now to the financial details. Total revenues were $112 million for Q2 2025, an increase of 44% compared to the same period in 2024, driven by subscription service revenue growth of 60%, inclusive of 21% organic growth.

Net loss from continuing operations for the second quarter of 2025 was $21 million or $0.52 loss per share compared to a net loss from continuing operations of $24 million or $0.69 loss per share reported for the same period in 2024. Non-GAAP net income for the second quarter of 2025 was approximately $1 million or $0.03 income per share, a significant improvement compared to a non-GAAP net loss of $8 million or $0.23 loss per share for the prior year. Adjusted EBITDA for the second quarter of 2025 was $5.5 million, an improvement of $9.9 million compared to the same period in 2024. Sequentially, adjusted EBITDA improved by $1 million in the first quarter of 2025. Q2 adjusted EBITDA of $5.5 million included $450,000 of accounting charges for non-period deferred contract costs.

Removing these non-period charges, adjusted EBITDA would have been $6 million. Now for more details on revenue. Subscription service revenue was reported at $72 million, an increase of $27 million or 60% from the $45 million reported in the prior year and now represents 64% of total PAR revenue. Organic subscription service revenue grew 21% compared to prior year when excluding revenue from our trailing 12-month acquisitions. ARR exiting the quarter was $287 million, an increase of 49% from last year’s Q2, with Engagement Cloud up 55% and Operator Cloud up 42%. Total organic ARR was up 16% year-over-year. Hardware revenue in the quarter was $27 million, an increase of $7 million or 34% from the $20 million reported in the prior year. The increase was primarily driven by continued penetration of hardware attachment into our expanding software customer base.

Professional service revenue was reported at $13.6 million, relatively unchanged from the $13.2 million reported in the prior year. Now turning to margins. Gross margin was $51 million, an increase of $19 million or 59% from the $32 million reported in the prior year. The increase was driven by subscription services with gross margin dollars of $40 million, an increase of $16 million or 67% from the $24 million reported in the prior year. GAAP subscription service margin for the quarter was 55.3% compared to 53.1% reported in Q2 of the prior year. Excluding the amortization of intangible assets, stock-based compensation and severance, total non- GAAP subscription services margin for Q2 2025 was 66.4%, consistent with the 66.4% for Q2 2024. Sequentially, the margin decrease from Q1’s margin of 69% was primarily driven to favorable Q1 adjustments and Q2 product mix.

We expect adjusted subscription service margin baseline to be between 66% and 67% for the second half of 2025. Hardware margin for the quarter was 27.3% versus 22.8% in the prior year. The improvement in margin year-over-year was substantially driven by favorable product mix as well as year-over-year reduction in expense as we aligned our hardware-related workforce with organizational priorities. We continue to monitor the uncertainties in light of continuing changes to global tariff policies, which may have adverse effects on our hardware revenue and hardware gross margin. We are continuing to evaluate and implement mitigating actions, including potential supply chain resiliency movements and cost or pricing measures if needed as the tariff environment evolves.

Professional service margin for the quarter was 28.7% compared to 27.5% reported in the prior year. Increase primarily consists of margin improvement from field operations and repair services, substantially driven by improved cost management and reduction in third-party spending. In regard to operating expenses, GAAP sales and marketing was $12 million, an increase of $2 million from the $10 million reported in the prior year. The increase was primarily driven by inorganic increases related to our acquisitions, while organic sales and marketing expenses increased $0.6 million year-over-year. GAAP G&A was $32 million, an increase of $6 million from the $25 million reported in the prior year. The increase was once again primarily driven by inorganic increases, while organic G&A expenses increased by $1.5 million year-over-year, primarily due to certain noncash or nonrecurring expenses, of which $1.1 million are non- GAAP adjustments.

GAAP R&D was $21 million, an increase of $5 million from the $16 million recorded in the prior year. The increase was primarily driven by inorganic expenses, while organic R&D expenses increased $2.1 million year-over-year. Operating expenses, excluding non-GAAP adjustments was $54 million, an increase of $11 million or 26% versus Q2 2024. But when excluding inorganic growth, operating expenses only increased $2.4 million or 6%. The organic increases was primarily driven by a continued investment in R&D expense. Exiting Q2, non-GAAP OpEx as a percent of total revenue was 47.9%, a 680 basis point improvement from 54.7% in Q2 of the prior year as we continue to scale efficiently and demonstrate strong operating leverage. Now to provide information on the company’s cash flow and balance sheet position.

As of June 30, 2025, we had cash and cash equivalents of $85 million and short-term investments of $0.6 million. For the 6 months ended June 30, cash used in operating activities from continuing operations was $24 million versus $33 million for the prior year. Q2 cash used in operating activities of $6.6 million improved noticeably from Q1. We expect operating cash flow to continue to improve back to positive for the remainder of the year as we continue to drive incremental profitability and we reduce our net working capital needs. Cash used in investing activities was $8 million for the 6 months ended June 30 versus $73 million for the prior year. Investing activities included $4 million of net cash consideration in connection with the tuck-in acquisition of Go Skip and capital expenditures of $2 million for developed technology costs associated with our software platforms.

Cash provided by financing activities was $11 million for the 6 months ended June 30 versus $192 million for the prior year. Financing activities primarily consisted of the net proceeds from the 2030 notes of $111 million, of which $94 million was utilized to repay the credit facility in full. As noted in our performance and remarks, we are pleased with the team’s ability to continue to drive meaningful organic growth and incremental profitability while also making the appropriate investments for sustained growth as we move forward with the next phase of our transformation. Our focus on delivering best-of-breed products that truly provide exponential value when bundled together has allowed us to continue to build a healthy pipeline with both multiproduct opportunities as well as accelerated cross-sell penetration.

I will now turn the call back over to Savneet for closing remarks prior to moving to Q&A.

Savneet Singh: As we wrap up this morning, I want to talk about PAR’s trajectory for the balance of the year. Our most significant growth potential continues to be in POS. It remains critical to restaurant operations, is one of our highest ARPU products, has incredibly sticky retention and is our best pathway for cross-selling. Despite this opportunity, the POS business has progressed slower than we initially forecasted for 2025. This delay impacts short-term revenue opportunities in POS and payments. Our win rates remain very high, but deal rollouts have been slower and deal signings of larger deals delayed, not lost. Critically, while macroeconomic pressures impact the timing of adoption, they do not change the eventual need for the tech upgrades, given major recent changes in restaurant software.

Legacy systems do not have the capacity to run AI-driven tools and in the battle for efficiency, the tech-forward concepts will always win the day. Said differently, the revenue will come just a little slower than expected. And as I mentioned, our signed but not yet fully rolled out POS deals are worth over $20 million on their own today. These deals are already won, not in pipeline. We remain highly confident in our long-term growth prospects with the strongest sales pipeline we’ve seen in the past 5 years and the combination of PAR POS and TASK ensuring we have the largest POS TAM than we’ve ever had. Currently, we have active advanced stage discussions with 3 top 20 restaurant brands, 2 of whom are global top 10 brands. Securing any one of these would significantly accelerate our growth trajectory alongside the $50 million operator pipeline I mentioned earlier.

Even aside from these major POS opportunities, our business remains — our business maintains a steady and reliable growth rate exceeding 15%. In short, just 1 or 2 Tier 1 POS deals will provide accelerated growth off that base for years to come, alongside the many multiproduct rollouts we have planned for later this year and 2026. So while we continue to target 20% growth in organic ARR as our North Star in everything we do, we expect this year to end in the mid-teens, driven by the slower POS and payment rollouts we’ve seen in the first half of this year. While the second half looks very strong and Burger King is rolling out as planned following the June ramp-up, the slower first half will make this target harder to achieve. There is certainly plenty of opportunity for us to claw back to our goal for the year, but we want to be prudent in setting expectations.

I wanted to close the call on a personal note. I’ve now been the CEO of PAR for over 6.5 years. I take tremendous pride in what we’ve accomplished, but also believe we are only as good as the future value we can create today. I know many of you have built a financial position in PAR, but have also taken a personal bet on me and our leadership team. We are reminded of this every day and are driven to deliver by the belief you have in us. We do not take this lightly. PAR is a representation of myself and the team I represent, and I take the responsibility as a pillar of not only my career, but my life. Our culture is one of relentless accountability, urgency and ownership. We treat your capital like it’s our own. We know that every dollar we spend is yours, not ours, and never forget that.

Above all, we believe there is one metric and one metric alone that matters, shareholder return over the long run, and we never lose sight of that responsibility. We’re a company built on the idea that nothing is given and everything is earned. We do not make decisions driven by quarterly results and always consider long-term value. Whether that’s price increases, accelerating go-lives when you’re leaving a multiproduct angle on the table or instituting taxes on third-party systems, there are ultimately always levers we choose not to pursue or pull because we do not believe in the trade-off. The long term must always win. We want to continue to partner with investors that believe in our long-term story and strategy. This is one of grit and seeing around corners, one of converting a legacy hardware business burning cash into a profitable enterprise software platform with a deep moat and flywheel.

We did this by biding our time for the right opportunities and striking when the window was right in the M&A markets and building products from long-term payoff perspective. There’s a reason PAR is not focused on consolidating legacy companies focused on profit versus growth. It does not sync with our formula of best-in-class and better together. So let me be clear. Our foundation is strong and our future path is certain. Whether by contracted future rollouts or late-stage Tier 1 pipeline, the future is bright. A game isn’t decided by where it stands at half time, and we have a proven team of intense competitors at PAR that are geared up to maximize long-term value for shareholders. We treat this opportunity as it is the one that will define our legacy.

That mindset has driven us for the last 6.5 years, and will power us forward. Thank you for taking a bet on PAR. We intend to continually preview right. Operator, please open the line for questions.

Q&A Session

Operator: [Operator Instructions] The first question today is going to come from Mayank Tandon of Needham.

Mayank Tandon: I wanted to start, Savneet, with some of the comments you made towards the end of the call regarding the growth ramp. So just to be clear, given the BK rollout timing, it’s nice to hear that it’s back on track and some of the deals that are now go live, should we still expect subscription growth to reaccelerate from the first half? So any directional guidance you can provide on that would be helpful. And also any comments around what we should think about on the services and the hardware side, just so we have our models in a good spot.

Bryan A. Menar: Mike, this is Bryan. Thanks for the question. I’ll take that first and then Savneet can finish it up. But in regards to the acceleration, yes, like when we talk about year-over-year growth and what Savneet was talking about at the end of the script there, is because of Q1 and Q2 slowing down because of the rollouts, we have that ripple effect as you go through Q3 and Q4 because it’s still in your metric. Year-over-year growth is actually a lagging indicator. Incrementally, right, if you go from quarter-to-quarter, we’re expecting now we’re seeing accelerated growth incrementally from Q3 into Q4. So hopefully, that answers your question there, and I’ll let Savneet answer your questions on the services and hard work.

Savneet Singh: Yes. So the back half looks very strong. It’s more about — we’re starting from a lower error base than we expected. So getting to the 20% will be a little bit harder, but there are a lot of levers to do that. I just want to be prudent in setting expectations. And as you heard, we’ve got a ton of contracted revenue that just needs to get rolled out. And so it’s more about when that hits and the timing of that. On the hardware side, we had a spike in Q2, we think — we assume driven by the uncertainty around tariffs and some people pulling ahead. And so I expect hardware to come down in Q3 to sort of more traditional levels, same in Q4. If there’s more aggressive tariff talk, you’ll see a spike again because I think our customers clearly want to get ahead of that.

But right now, I think we’re at a point where there seems to be some stability in the buying cycle there. And on the services side, I think it will be consistent. You’ll see some pickup just because we do have, as Bryan mentioned, incremental revenue growth is — dollar revenue growth in the second half of the year is much larger than the first half of the year. So you have more installs, more PS type work on that side.

Mayank Tandon: Got it. That’s helpful. And then as my follow-up, Savneet, again, great to hear about the multiproduct wins, the record number there. Could you maybe give us any thoughts around what are the scope and size of these deals relative to those single product deals? In other words, what is the ARPU uplift that you can typically capture from these type of wins?

Savneet Singh: It’s a great question. So when they come from the Operator Cloud, and I’ll give you the average at the end, but when they come to the Operator Cloud, you’re usually taking a POS deal that’s anywhere from $2,400 to $3,000 a year, and you’re adding another $1,600 of back office. And if it’s payments, you’re adding another $2,000 to $3,000 as well. So it is, call it, a 60% to doubling of the revenue base depending on which product has been attached. So it’s very, very impactful. We had an example of a small chain we signed in Q1. It’s about 100 stores. Normally, 100 stores picking us for POS will be, call it, ARPU per store of around $2,500. This client will be $700,000 or $800,000 a year customer, right? So paying us $7,000 or $8,000 because they hit the full product suite.

And so it has a meaningful impact. That hasn’t flown through our P&L yet. This has been a very new trend for us. On the Engagement Cloud, it’s a little bit smaller. The average loyalty customer is, call it, anywhere from $80 to $100 a month, sometimes a little bit bigger than that and growing, obviously. And when they add ordering, it’s around the same, depending on which modules they pick. So it’s a doubling on that side. So it is a really, really meaningful impact to the P&L and again, something we’re looking forward to having flow into the P&L at the end of this year and next year.

Operator: And the next question will come from the line of Stephen Sheldon of William Blair.

Stephen Hardy Sheldon: So Savneet, you mentioned 2 mega Tier 1 deals that you’re currently pursuing in the Operator Cloud. I know there are probably limitations on what you can say, but any more context on those, when decisions are potentially going to get made and what PAR solutions those brands might be considering? Is POS on the table for those considerations?

Savneet Singh: Yes, there are POS deals. Like I said 3 top 20 brands, 2 top 10 brands, all POS related and at least one of them, we hope to be multiproduct, maybe 2. But — so it’s all POS driven. Timing on 2 of them we expect in 2025. One of them will be — I’m expecting ’26, the customer will say ’25. So they are big. But the bigger point, I think what we’re making here is that by adding TASK to the PAR platform, we’re now able to do these global deals that really are impacting our pipeline. And so we stopped — we’ve offensively stopped most TASK rollouts this year, again, muting our growth a bit for reinvesting aggressively in the TASK platform to not only have these deals, but have more of these global brands that historically we’ve not been able to participate in. So short answer is 2025 for 2, 2026 for 1 is our guess and all POS.

Bryan A. Menar: And I just want to add one thing, Stephen, to that, I just want to make sure from the remarks that we had in the script, too, the amounts that we’re talking about pipeline in there excluded these because we didn’t want to kind of distort what we’re talking about here. So we have a healthy pipeline across our products, across the verticals we’re serving. And these are other additional actual jobs that are actually our focus for the long-term strategic growth.

Stephen Hardy Sheldon: Got it. Yes, that’s helpful. And then just looking at the active sites between operator and engagement, it seemed like both were maybe down just a touch sequentially. I mean any context on that, what drove that?

Savneet Singh: Yes, absolutely. So on the Engagement side, you’ll see a nice pickup in Q3. We’re signing deals and so we start collecting revenue, but they haven’t gone live yet. So it’s just a timing issue on the Engagement side. I said the Engagement side had really, really strong ARR growth. And so you’ll see the results flow into the next Q. So I’m super excited there. We had some smaller churn there that candidly was needed churn, nothing — historical rates, nothing different than historical rates and obviously stuff that we think was good churn for us. On the Operator Cloud side, it’s just the second half of the year, the sites get really rolling.

Bryan A. Menar: In the first half, it was really due to the rollouts being delayed that caused that issue in regards to what we saw for growth rates year- over-year.

Operator: And the next question is coming from the line of Andrew Harte of BTIG.

Andrew James Harte: Savneet, I really appreciate the comments on Better Together. It sounds like the multiproduct sales cycle really starts with POS. But I guess, can you talk about what are the most common add-ons? I think something you talked about in your prepared remarks was PAR OPS having really great momentum. Do you see that as cross-sell or an upsell or net new? Just help us understand the sales cycle starting with POS and then what you go with from there.

Savneet Singh: That’s a great question. So generally, in the Operator Cloud side, you’re attaching payments and back office. Obviously, a lot of my commentary on the excitement of PAR OPS is because we sort of figured that bundle out really well, and it’s always product related. Once we deliver product functionality, we’re able to sort of build that pipeline up. So it’s usually — you’re attaching one of those 2 there. On the Engagement side, it’s really PAR Ordering. It’s attaching our online ordering product, which is now really best-in-class and going to start taking real share. And so on that side, it’s PAR Ordering. What I think is going to be more exciting in the coming years will be adding product 3, 4, 5 and 6. That’s what’s next, and we’re gearing up for that.

Andrew James Harte: And then I would love to hear your thoughts on the online ordering space, especially with the Olo deal announced a couple of months ago. It feels like PAR has a great opportunity to effectively compete in online ordering with MENU as an upsell as you just kind of talked about. So would love to hear your thoughts on the online ordering space. And then maybe just your continued appetite to probably do M&A. It sounds like there was another tuck-in this quarter as well.

Savneet Singh: So yes, absolutely. I mean PAR Ordering has been an incredible bright spot for the year. Our ability to — our velocity of product is incredible there. We’re shipping almost every few weeks. The confidence we have in being best-in-class there is just super high. What’s been fun is that we’ve done this in stealth of night with a small team and now the results and the wins are there. And so we won 6 logos this quarter. I think we’re going to have some great wins in Q3 and in Q4 — and for the first time, we feel we’re ready to go and start poaching the big guys. So PAR Ordering is in a really strong — you can see just from the numbers of wins — the deals we’re winning. And what gives us a huge advantage here is that the integration of PAR Ordering within loyalty in particular, but also within POS and other parts of PAR, it gives us an advantage that we don’t believe anybody can compete with.

And so at that scale, where we have the largest loyalty business in the industry and attaching ordering to that, it is a better product. And so we expect a lot more to happen here. Now we’re early, but we feel pretty good about it. The other thing I’d sort of add there is, I mentioned this in the script, but the growth in PAR Ordering is also pulling in future payments revenue. And so that will be another lever that we think we’ll get to later this year. And that’s a very, very juicy revenue stream. So yes, I think we feel really good. The fact that we’re releasing every quarter now the number of wins, we expect to have a bunch of new press releases coming out with wins in the second half of the year. And these are logos you’ll recognize.

Bryan A. Menar: And then, Andrew, just I think in your reference to make sure I clear up for you on the tuck-in acquisition, it was GoSkip you referenced the cash flow section, which was a tuck-in at the end of Q1, and that is in our retail vertical.

Operator: And then our next question will be coming from the line of Will Nance of Goldman Sachs.

William Alfred Nance: I wanted to come back to the ARR growth. I heard you on where you’re expecting to end the year as some of the pushouts. But it sounds like on an incremental basis, you are expecting some acceleration. And so I was just wondering if you could kind of go through the puts and takes, Burger King restarting, some things getting pushed out. What does it sort of take? Or what’s the line of sight? Do you have a sense for when we could see ARR growth kind of back in that 20% range? Like do we need to lap the first half of 2025 when things were going a little bit slower to kind of see the full acceleration? Or could we see it sooner?

Savneet Singh: The earliest you’d see it is Q4, but I think it will be a little bit after that. That’s why I made the comments, although there’s a lot of good stuff happening. So it’s — as you can see, the quarter-to-quarter is a little hard for us to forecast. The puts and takes are pretty simple. Burger King is going great. But from the baseline of ARR we’re at now, we’re — even though we’re going to add a bunch of ARR, probably what we hope to add because it’s starting at a lower base, the comparison will look lower. And so this is more about rollout we had planned that over $20 million of contract revenue going a little bit slower than we expected, and I think very much tied to the macroeconomic uncertainty where we saw people say, “Hey, let’s push out the roll out a month or 2.” So still contracted, still guaranteed to pay PAR with the contract, but we need those deals to continue to accelerate.

And so I think that’s been the main headwind, if you will. The other one is our decision, which is purposeful to not take TASK revenue live and focus on these global Tier 1 deals. That was a nice chunk of revenue that we could have taken on, as I mentioned at the end of the script, like we could have done on a very short- term basis, but we decided to make the right — we think the right thing so we can hopefully win one of these global Tier 1 deals and make that ROI there. And the last one I mentioned is that the multiproduct deals that we do they do slow down the single product sale. And we’ve continued to make the decision, which is the multiproduct is so powerful. The economics are so much better for our shareholders that we’ll always do that.

And so we’ll get faster and faster at that, but they do slow down stuff a little bit. Now to the part of like what could get us there, the rollout accelerations absolutely can come through, and we’ve seen those turn on a dime in the past, but we want to be careful, but those can absolutely come through. Number two is Delaget and the PAR OPS having a strong end of the year because Delaget becomes organic by the end of the year. And I think the third thing is the winning of these — any one of these larger deals that are in the pipeline, we would hope to start billing in 2025. And so there are a number of levers that can get us there, but we want to be careful and not getting ahead of ourselves. So we’re still shooting for it, but I wanted to be transparent of sort of like, hey, the first half because of the POS side became a little bit slower.

And so we want to be careful.

Bryan A. Menar: And what I’ll just add to that, Savneet right and everything we just talked about there in regards from a business perspective. And I think, Will, what you’re referencing is also the pure math of it. And you’re right, when you’re lapping in Q1 and Q2 of next year and over what happened in the first half of this year, the math goes in your favor at that point in time as well on top of what Savneet just laid out for you.

William Alfred Nance: Got it. That’s very clear. And if I could just follow up on the TASK side at the risk of asking a potentially dumb question, like why can’t you do both on this? So it seems like you’re delaying kind of implementations of clients already signed to focus on like go-to- market and people that are not signed. So what’s sort of the connection there? And like why is it you can implement some of the book while you’re going after some of these newer opportunities?

Savneet Singh: It’s primarily debt capacity, right? When you’re implementing a new deal, you’re configuring there’s a ton of work upfront. And so when you’re winning a Tier 1 deal, you’re doing a bunch of work in advance to win that deal. You’re setting up the menus, the labs, the back end. And so it’s a small team. And we made a decision to have those really unfortunately, tough conversations with customers and make those investments in the product. And so it’s just about scaling up the team so that we can we can do both. To be honest, we didn’t expect this to happen so fast. That’s really the thing here. It’s a wonderful problem, I guess, which is we didn’t think this has come so quickly in these global deals. And as a result, we didn’t have the team ready to do that.

So we’re adding more expense to grow that team. And then we just need to get the existing team to get hopefully crack on the Tier 1 deals. And then we’ll go back and take that revenue live because I do think we’ll still be able to roll out those deals, but we can’t do both right now with the size of the team we have.

William Alfred Nance: Okay. No, that’s clear. I appreciate it. And at the risk of — I’ll take the liberty of maybe asking a quick one here. Are these like in- house to out-of-house conversions? Or are these like competitive situations? I’m sure they’re competitive RFPs, but are they using an existing vendor? Or are these — a lot of the industry on in-house technology?

Savneet Singh: Everyone is on some legacy products primarily. There are — there is certainly — in our Tier 1 pipeline, there are certainly in-house technology being used, but I want to be careful what I say there.

Operator: And the next question will be coming from the line of Samad Samana of Jefferies.

Samad Saleem Samana: Maybe first, just stepping back, Savneet, like as we — you mentioned macro a couple of times and you mentioned payments was maybe a little bit lower. Was that more related to what you’ve seen out of maybe some of the QSRs talking about like cross currents? And is that what impacted payments? Or was there something else that we need to know about there? And then I have a follow-up question as well.

Savneet Singh: It’s 2 things really. So one is POS going slower impacts payments because they’re usually bundled together. So that’s the big driver there. And the second is the point you mentioned, which is there’s definitely a slowdown in sort of QSR. And so that’s the second part. But the first part is the more important one for the first half so far.

Samad Saleem Samana: Understood. And then if you think about like the record $100 million pipeline, obviously, it’s very impressive. You guys are also bigger than ever. You have more product than ever. So is there a way to both weight that maybe relative to what you would have offered historically? Obviously, $100 million again is a big number. And then maybe related to that, of that $100 million, what — like what would you look at maybe like the 12-month horizon looking like in terms of converting that from pipeline to bookings or revenue?

Savneet Singh: Yes. So let’s say in a few ways. So I’ll first thing, which is the — that the pipeline doesn’t include what’s already contracted to roll out. So as I mentioned, on the POS side alone, there’s $20 million that needs to be rolled out that’s contracted already. I don’t have it off hand, but there’ll be big numbers for loyalty, retail so on and so forth. So you’ve got a lot of coverage just from what’s already contracted out. Generally, when we look at pipeline, you’re looking at what you can sign within the next 12 months and you’re weighting it down over there. So it is a conservative view of our pipeline already because we want to make sure that they’re there. So from a pipeline coverage perspective, so not only is the pipeline larger than it’s ever been from a pipeline coverage perspective, i.e., coverage to hit your growth rates, it’s also higher than we’ve had historically in the past.

And the last thing, Bryan mentioned this, we’ve removed these sort of mega Tier 1 deals just because they make the pipeline looks almost too big. And so you’ve got that also as a nice tailwind.

Operator: [Operator Instructions] Our next question will come from the line of Charles Nabhan of Stephens.

Charles Joseph Nabhan: I wanted to double-click on your comments around the gross margin. I know some of the sequential — the sequential decrease is due to some nonrecurring benefits in the first quarter. But as we think about that range of 66% to 67% in the back half of the year and beyond, can you maybe talk about the puts and the takes, whether we could expect fourth quarter to be maybe a little higher, how we should think about ’26 as well as the impact of payments and MENU, which have historically been diluted to subscription gross margin?

Bryan A. Menar: Sure. I’ll take this one. This is Bryan. Thanks for the question. You’re correct, right? Part of the 69% and then sequential down, we referenced this, I think, in the Q1 call, right, about at least 1% of that, 100 basis points was due to some favorability one-timers in Q1 at 68%. And then the remainder of the majority is actually product mix of where the actual growth came from both ARR and subscription services revenue in Q2. That mix is not going to change noticeably in Q3 and Q4. That’s why the range that was given for Q2 and Q4. But our longer-term goal of getting it back up closer to 70% is still out there, right? It’s just at that baseline where we’re at right now with the mix. It’s going be tough to get there. So that’s why we want to manage your expectation there for both Q3 and Q4.

Charles Joseph Nabhan: Got it. Okay. And as a follow-up, I wanted to get your perspective on AI. First as a disruptive force to the industry. And then secondly, as an opportunity, not just externally as a means of — as an opportunity to enhance your product set and value proposition to customers, but also as a means of improving your internal efficiency. So any perspective on that, I think, would be helpful.

Savneet Singh: Absolutely. I mean I think if you’d ask anybody, any employee at PAR, PAR is all in on AI. I think lots of people say that. I think we have focused on being execution-oriented there. So instead of sort of processizing about how amazing AI is going to be, we really break it down into projects and what we can deliver. Every department leader at PAR has to deliver a plan on AI and what is an AI- first version of their organization look like and then working backwards, how do we get there from where we are today. So we’re seeing meaningful success right now in 2 areas, which would be on the development side, our development efficiency, our ability to not increase development headcount while still shipping more product than ever before is crystal clear, whether you measure in story points or you measure it as commits, you’re seeing tremendous, tremendous acceleration of velocity over there.

And we are still not even halfway through what we want to get done on that side. The other part of the world we’re seeing that is on support, where not only are we using tooling to make our teams better to understand types of calls, call volume, we’re also building out our agents so that we can start answering in a more automated fashion. And we’re there. What’s amazing about that, though, it has also become an amazing tool for our internal team. So our sales teams no longer need to figure out a complex configuration or track down a hardware piece. It’s all done through an internal AI PAR agent. So those are the 2 big areas we see meaningful ability to control costs and cut costs. Where you’ll see it going forward, and I think the more important part of AI for us will be delivery to our customers.

At PAR, AI is built in. It’s not bolted on. We’re building it natively within our products because we control the workflow. And I think having the workflow is going to matter because we’ve got proprietary data, you’re already in our products. And so our ability to connect your restaurant and your systems through AI is far better than somebody coming in from the outside. And so I think we have an incredible advantage that we are looking to take advantage of. I mentioned on the call, one of our first products coming out later this quarter it’s called Coach AI. And it’s a great example of using AI to pull data across the POS, the back office, the drive-through to give actionable insights to the operators say, hey, hey, do this, cut this, what about this?

It’s becoming the agent for the store. These are really, really big changes to the Operator. And so that’s where we’re most excited. But we started on the internal because we believe that we have to be AI in the internal in order to be external to our customers.

Operator: And the next question will come from the line of Eric Martinuzzi of Lake Street.

Eric Martinuzzi: Yes. Just from a macro perspective, been seeing some headlines about lower foot traffic at QSR. Just curious to know if you’ve seen any lift in the Engagement Cloud pipeline that you could say was kind of tied to that where people are saying, okay, I’ve got to pull whatever levers are available to me.

Savneet Singh: Yes, absolutely. We’re seeing a lot of strength in the Engagement side pipeline. So we’ll see if that converts. What’s been exciting is the Engagement side of the business has been growing without that, but we certainly see a lot more interest in loyalty. What’s critical about that is that the loyalty engagements we have today, it’s not about, okay, let me go send a bunch of discounts to get you to come back in the store. It’s about building these personal connections. And why I love that is that it actually ingrain the loyalty in the workflow of the customer, the customer being you and I as a customer of that restaurant versus us always selling tools to the internal. And why that’s powerful is that then you can then connect in PAR Ordering, PAR Wallets and do so much more.

So the simple answer is absolutely, there’s a lot more demand for engagement in a world where there is absolutely a lot of volatility and short-term volatility from the macroeconomics in the QSR and fast casual space. But I think the long-term trend here is going to continue because the value of these loyalty programs in good and bad markets is undeniable.

Operator: And our next question will be coming from the line of George Sutton of Craig-Hallum.

George Frederick Sutton: Savneet, you had mentioned that the point-of-sale process was slow or sales process was slow. I’m curious how much is that driven by your actual focus on trying to sign multiproduct deals? Obviously, it’s kind of a long-term gain for some short-term pain. I’m just curious how significant is that?

Savneet Singh: So it’s not significant, but it’s 10% or 15%, there’s some impact for sure because you’re trying to bundle the second product. But I just want to be clear, it’s not the sales side. It’s getting the deals rolled out because when we roll out a deal, there’s a CapEx for the restaurantur, usually the hardware and services. And so that’s been slower than we expected. And then some of the sales that have been slower. Again, all these deals will come in the door. I think the stuff might be tied to the multiproduct that you mentioned or just macroeconomic uncertainty. But what I think is most important to get is the — it’s not that the pipeline is just strong. It’s actually the signed deals are there. They just got to get out the door.

Bryan A. Menar: And we have seen the acceleration of rollouts happen at the very end of Q2 in the last month.

George Frederick Sutton: Understand. And on your online ordering 2.0 thesis relative to 1.0, can you just talk about the metrics behind that, what you are seeing in terms of any of the improved metrics for the customers?

Savneet Singh: Generally, I think when you bundle as we’ve been doing on ordering within loyalty, you see an increase in a few areas. You see an increase in conversion, which is wildly important as I’m sure you’re like me, there’s tons of abandoned carts all over the Internet. You see an increase in basket size and then you see an increase in long-term customer value. I can come back to you with specifics on that. It’s probably too early, right, just because we’ve had this real sales the last, call it, 6 months. But that’s what’s been crazy, crazy, exciting. And I’ll give you some examples that I think are just really neat. When you now use our online ordering products, upfront, you can say I have these 3 allergies and the menu gets updated just a bit for you. Things like that, that we added so much functionality that we just think it’s going to be hard for anyone to compete with us when you combine that loyalty data within the ordering suite.

Operator: And the next question will be coming from the line of Adam Lindon of ABW Capital.

Adam David Wyden: So you talked a little bit about TASK and 2 questions on TASK. One is you talked about a Q1 ’26 rollout for TASK. And then you also talked about having to do, I guess, stuff for people in the pipeline. Is that affecting your gross margin? I mean even if there’s not additional G&A or resources, I mean, are you spending additional money that’s running through the P&L today with the idea that you’re going to get this business?

Savneet Singh: Correct. So we’ve increased the investment in TASK. It’s not a singular rollout for TASK. We had a multimillion dollar backlog of TASK customers to roll out in 2025. We’ve pushed most of that to 2026 so that we can build out for these potential global Tier 1 deals that we’re chasing. And so the short answer is yes. But I just want to clear, it’s not one deal. It’s the backlog of deals we’ve already signed that needs to get out of the door.

Adam David Wyden: Got it. So you’re hosting and piloting and spending money basically allowing basically the stuff that’s already been signed on TASK and also the new stuff in the pipeline, you’re also spending money with the hope that these guys take it on and they start billing. So that’s obviously going to be affecting your gross margin on the TASK side now?

Savneet Singh: Yes. I look at it more at configuration, building integrations, things like that. The hosting is absolutely, but it’s that other core R&D work that hits both the COGS line and the R&D line.

Adam David Wyden: Okay. And then you said $100 million, not including the super Tier 1. I mean, is there any way you can try and quantify what that could look like? Would it be a global deal? Would it be a singular market deal? I mean, is there any way you can sort of bracket that? Because I think you said that you would expect to hear 2 of them in ’25 and in ’26. Is there any sort of way you could attempt to quantify? I mean, obviously, that there’s a probability element to it. But if, in fact, you did win 1 or 2 of those, how do you think about what those could be?

Savneet Singh: They’re very large. I mean the reason I don’t put them in the pipeline is that they sway the pipeline numbers so significantly that I don’t want the sales team getting lazy thinking we got plenty of coverage. The 2 of them are global deals. So they are not one country deal, they’re global deals. And one of them is, call it, North America. And so — but these deals would be up there with our largest or many multiples of our largest customer now.

Adam David Wyden: Right. So it’s not just a singular market. You would be getting like a geography, you get like in North America or you get the globe for 2 of these. So these things could be in theory, they could be very large. And then my other question is, obviously, the company has been acquisitive. You’re seeing other people like DoorDash buy SevenRooms and Thoma Bravo buying Olo. I mean you’ve been the acquirer of choice and you’ve done a phenomenal job doing it. But I think now when I look at the stock where it is right now, I think you’re trading at, I don’t know, under 5x ARR on 2026. I mean I have to sort of think about what the ’26 ARR is. But I mean, you’re trading at effectively a multiple that’s likely lower than anything you’re going to buy.

I mean, how do you think about sort of the delta between sort of what I would consider other vertical software companies like a Guidewire or a ServiceTitan or an Axon, which has a hardware and software component, even something like Agilysys. I mean, how do you think about sort of doing M&A with your multiple here? And I guess the question is, would you at this point consider being the acquiree — because it feels like the market is not really appreciating sort of the value of this platform.

Savneet Singh: So on the last part, we’re for sale every day. And there’s nothing that would prevent someone from coming into PAR at any time. And if it creates value for shareholders that we believe beats the long-term value, I think myself and the Board would be super supportive of that. And we’ve always said that. As I said in the script, we are highly aligned to you as a shareholder and care only about driving returns. So if that drives a return, it’s always there. But nothing will stop that. Does it make it a lot more attractive? Of course, if our multiples are, it certainly makes us probably more attractive. But I think what makes us more attractive is our business has never been in a better position from a competitive standpoint, from a market standpoint.

And so I think that’s what should drive anyone’s decision. On your first point, we feel there’s plenty of M&A to be done. Comparing us to Guidewire and these other major companies, yes, it obviously [ pisses ] me off I think we’ve got longer — more growth and prospects in front of us. But I think at the same time, we are — our M&A is relative to our category. And so it’s very hard for anyone that we want to acquire to argue that they deserve a higher multiple than PAR. And said differently, I think we would set the tone of valuation based off where we are trading. And sure, there are random things out there that are out of our range, but that’s usually not the stuff that we want or we are chasing. We’re looking for blocking and tackling products that we can integrate quickly, build AI on top of.

We’re not looking for the Silicon Valley start-up that has $500,000 of revenue and wants $0.5 billion of price. We’re looking for pure enterprise software. And so to me, valuation is a relative game to the category you’re looking to acquire. And in our category, we still feel very, really good.

Adam David Wyden: Got it. So — but I mean there — I mean, I guess what I would say is like for the time being, because I think a lot of people on this call, I know you probably can’t comment about Party A and all this stuff and proxies and this and that, but I think there was some expectation that you guys would look to do transformational M&A as you talked about in the past. And so I think is it fair to assume that given where your cost of capital is, you’re going to be doing primarily tuck-ins and not really big things. I mean is that sort of fair? I mean, because obviously, bigger things are — have higher premiums and whatnot. I mean, is it fair to assume that your focus will be on tuck-in M&A, I mean, because these other things are trading at much higher multiples. I mean bigger assets trade at bigger multiples generally.

Savneet Singh: Yes. I mean, listen, I think we are not bidding for Olo. That’s — as I mentioned, PAR Ordering is doing great. While there’s probably incredible synergies between our companies, we feel great where we are and our ability to take share. M&A for us, as I said to you many times, it’s not as programmatic as it sounds. It’s very opportunistic, and it’s very product led. Today, our pipeline is heavy focused on what you call tuck-in, I call them capabilities that will allow tremendous cross-sell. But there are still plenty of large assets that if we could buy them accretively, we would go after. And again, bigger assets trade for bigger multiples. But in our category, there are not things that are going to trade higher than us that are generally large because we set that time on valuation because, hey, if you went public as an example, you’re going to trade lower than we trade because generally, we are the bigger platform, and we’ve got — we present better metrics.

So again, it is hard to be precise because we’re fishing in a pool that we kind of know everybody. And so I don’t think the larger players in our space say, Oh, I expect to trade at Palantir multiple. They expect to trade at the multiples that our category trades at, and that’s where we feel. So we still feel really good about the M&A pipeline, and I don’t think that’s going to change. But thank you for the call, Adam, and I’ll pass it back to the operator.

Operator: Thank you. This does conclude today’s Q&A session. I would like to turn the call back over to Chris now for closing remarks.

Christopher R. Byrnes: Thanks, Lisa, and thanks to everyone for joining us today. We look forward to speaking and updating most of you in the coming days and weeks. Thank you, and have a nice day.

Operator: This concludes today’s conference call. You all may disconnect.