Executive Summary

Q3 2025 beat on revenue and EPS vs Wall Street: revenue $119.18M vs $112.27M consensus; non-GAAP diluted EPS $0.06 vs -$0.02 consensus. ARR reached $298.4M, up $12M sequentially (≈17% annualized), and operating cash flow turned positive at ~$8–8.4M, signaling improving profitability and working capital discipline . Revenue/EPS consensus from S&P Global: $112.27M and -$0.02, respectively; actuals $119.18M and $0.06*.
Strength came from subscription services (up 25% y/y; 16% organic), PAR Ordering’s biggest win quarter to date (six new customers incl. a 400+ site chain), and accelerating enterprise deployments (Burger King pacing to 2025 target). Hardware revenue rose on pull-in ahead of tariffs, but hardware/professional services margins compressed due to tariffs and non-period items .
Non-GAAP subscription service GM% was 66.2% (down 60 bps y/y), but excluding a fixed-profit acquired contract, non-GAAP subscription GM% exceeded 70% (+150 bps y/y). Management expects hardware and professional services margins to return to the mid-20% range as pricing actions flow through .
Management reiterated mid-teens organic ARR growth as a baseline and said 2025 revenue is “on track to deliver nearly $450M,” with Q4 ARR expected to uptick on late-quarter rollouts. The pipeline/backlog and AI-native product strategy (Coach AI live; marketing assistant coming) are key catalysts into 2026 .

What Went Well and What Went Wrong

What Went Well
- ARR momentum and cash generation: ARR rose to $298.4M (+$12M q/q), and operating cash flow turned positive (~$8–8.4M in Q3) as OpEx leverage improved (non-GAAP OpEx 43.4% of revenue exiting Q3) .
- Enterprise execution and multi-product wins: “Our Burger King implementation cadence during the quarter accelerated dramatically with high efficiency,” and PAR Ordering had “our biggest win quarter… six new customer wins… including a 400+ location enterprise chain,” validating Better Together cross-sell .
- AI-native platform progress: “PAR AI is different. It’s built-in, not bolted on,” with Coach AI live, and a marketing intelligence assistant due later this year; early customers are eliminating traditional BI tools and saving time .
What Went Wrong
- Margin headwinds: Hardware margin fell to 17.8% (25.5% y/y) on tariffs; professional services margin to 17.6% (29.2% y/y) due to non-period reclass/incentives; management expects normalization to mid-20% ranges .
- Slight non-GAAP subscription GM% dip: 66.2% vs 66.8% y/y due to an acquired fixed-profit contract (renegotiation in 2027); excluding it, non-GAAP sub GM% >70% (+150 bps y/y) .
- GAAP losses persist: Net loss from continuing operations was $(18.18)M and GAAP diluted EPS was $(0.45), though non-GAAP diluted EPS improved to $0.06; litigation expense also impacted non-GAAP adjustments .

Financial Results

Key P&L, ARR, and mix (chronological: oldest → newest)

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Total Revenue ($M)	$96.754	$103.859	$112.404	$119.183
Subscription Service Revenue ($M)	$59.909	$68.410	$71.903	$74.763
Hardware Revenue ($M)	$22.650	$21.843	$26.864	$29.895
Professional Service Revenue ($M)	$14.195	$13.606	$13.637	$14.525
GAAP Net Loss from Continuing Ops ($M)	$(20.664)	$(24.547)	$(21.040)	$(18.177)
GAAP Diluted EPS (Cont. Ops)	$(0.58)	$(0.61)	$(0.52)	$(0.45)
Non-GAAP Diluted EPS	$(0.09)	$(0.01)	$0.03	$0.06
Adjusted EBITDA ($M)	$2.423	$4.540	$5.541	$5.840
Total ARR ($M, period-end)	$244.7	$282.1	$286.7	$298.4

Segment mix and KPIs

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Subscription GM% (GAAP)	55.3%	57.8%	55.3%	55.3%
Subscription GM% (Non-GAAP)	66.8%	69.1%	66.4%	66.2%
Hardware Margin %	25.5%	24.6%	27.3%	17.8%
Prof. Service Margin %	29.2%	25.4%	28.7%	17.6%
Engagement Cloud ARR ($M)	151.8	164.9	167.5	176.8
Operator Cloud ARR ($M)	92.9	117.2	119.2	121.6
Engagement Active Sites (000s)	—	120.6	119.1	121.0
Operator Active Sites (000s)	—	59.0	57.4	58.2
Revenue Mix (% Sub / HW / PS)	—	—	—	62.7% / 25.1% / 12.2%

Estimates vs Actual (S&P Global)

Metric	Consensus (Q3’25)	Actual (Q3’25)
Revenue ($M)	112.27*	119.18*
Primary EPS ($)	-0.02*	0.06*

Values retrieved from S&P Global.
Note: Company-reported non-GAAP diluted EPS was $0.06 and Adjusted EBITDA $5.84M .

Guidance Changes

Metric	Period	Previous Guidance/Commentary	Current Guidance/Commentary	Change
Total Revenue	FY 2025	Not quantified	“On track to deliver nearly $450 million in revenue… ~two-thirds recurring SaaS”	Introduced outlook
Organic ARR Growth	Ongoing	Target mid-teens (Q2 call)	“Mid-teens organically or higher” as baseline	Maintained
Non-GAAP Subscription GM%	2H25 baseline	66–67% baseline	66.2% in Q3; excluding fixed-profit contract >70%; renegotiation in 2027	Maintained baseline; color on upside ex-contract
Hardware Margin Outlook	Forward	Not specified	Expect mid-20% range as tariff pricing flows through	New color
Professional Services Margin Outlook	Forward	Not specified	Expect mid-20% range going forward	New color

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/Technology	Q1: AI-first focus; dev velocity gains; Coach AI preview . Q2: AI embedded; Better Together outcomes .	PAR AI launched; “built-in, not bolted on”; Coach AI live; marketing assistant coming; early customers replacing BI .	Accelerating productization and adoption
Supply chain/tariffs	Q1: Limited China exposure; evaluating tariffs . Q2: Hardware pull-ins; tariff uncertainty .	Hardware margin hit by U.S. tariffs; pricing actions implemented .	Near-term headwind; mitigation in place
Product performance	Q1: PAR OPS launch; Engagement/Ordering momentum . Q2: Record multi-product wins; Ordering growth .	Ordering’s biggest win quarter; PAR Retail momentum; BK installs accelerated .	Broad-based strength
Regional/international	Q1: TASK global focus; RBI partnerships . Q2: TASK backlog; global tier-one pursuits .	BK Canada franchisee onboarding incl. French support; TASK moving from RFP to development on large opportunity .	Building global credentials
Regulatory/legal	Q1/Q2: Tariffs monitored; convert refi .	Litigation expense within non-GAAP adjustments; tariff pricing flowing through .	Contained
R&D execution	Q1/Q2: Dev capacity trade-offs to pursue tier-ones; OPS innovation .	Continued investment; AI features reducing support/BI load .	Focused investment for scale
Macro/vendor consolidation	Q2: Multi-product RFPs; consolidation trend .	More RFP activity; customers consolidating vendors; 70%+ multi-product engagement deals .	Tailwind

Management Commentary

“PAR AI is different. It’s built-in, not bolted on… This approach turns every PAR product into an active decision engine…” (Savneet Singh, CEO) .
“Our Burger King implementation cadence during the quarter accelerated dramatically with high efficiency…” .
“This was our biggest win quarter for PAR Ordering to date… including a 400+ location enterprise chain” .
“Q3 operating cash flow was positive… $8 million for the quarter” (CFO); earnings presentation cites $8.4M .
“Excluding [the fixed-profit] contract… non-GAAP subscription service margin was over 70%… up 150 bps vs prior year” (CFO) .
“In 2025, we’re on track to deliver nearly $450 million in revenue, approximately two-thirds of which is recurring SaaS” (CEO) .

Q&A Highlights

Pipeline/backlog visibility: Backlog refilled despite record rollouts, giving greater confidence; late-stage tier-one deals moving from RFP to development .
M&A stance: Opportunistic, accretive tuck-ins prioritized; multiples for targets compressed more than PAR’s; disciplined use of equity .
Macro and deal timing: Early 2025 softness; franchisees delayed rollouts but momentum improved late Q3 and into October (best month); vendor consolidation a tailwind .
Margin outlook: Hardware/pro services margins to normalize to mid-20% as pricing and mix adjust; sub GM% >70% ex fixed-profit contract .
Payments: Less impacted by SMB pricing disruption; enterprise is more transparent; attachment grows via Ordering .
Operator Cloud ARR: Sequential growth was back-end weighted; no meaningful churn .

Estimates Context

Q3 2025 results vs S&P Global consensus: revenue beat by ~6% ($119.18M vs $112.27M); primary EPS beat (0.06 vs -0.02). Adjusted EBITDA reported $5.84M; consensus EBITDA was $5.76M*. Values retrieved from S&P Global. Company-reported revenue/EPS/Adjusted EBITDA: $119.18M / $0.06 non-GAAP diluted / $5.84M .

Guidance Changes (Implications)

Baseline mid-teens organic ARR growth is reaffirmed; Q4 expected to uptick as late-quarter deployments and Ordering momentum flow through .
Revenue “nearly $450M” sets 2025 anchor and positions 2026 for potential acceleration given backlog, tier-one pursuits, and AI-led cross-sell .
Margin normalization in hardware/pro services and >70% sub GM% ex-contract support EBITDA leverage into 2026 as mix shifts further to software .

Key Takeaways for Investors

Revenue and EPS beat with accelerating ARR and positive operating cash flow indicate improved execution and leverage; look for Q4 ARR acceleration to validate second-half inflection .
Watch PAR Ordering and PAR Retail: Ordering delivered its biggest win quarter, including a 400+ site flip from a market leader; Retail added four enterprise wins and is driving record engagement metrics .
AI-native differentiation (“built-in, not bolted on”) is resonating; Coach AI is live and marketing assistant is due this year—early adopters reducing reliance on BI and support .
Margin headwinds from tariffs/non-period items appear temporary; pricing actions and mix should lift hardware/pro services back to mid-20% margins, while sub GM% >70% ex-contract underscores structural profitability .
Backlog/pipeline visibility (including developments with tier-ones) and BK rollout cadence are key 2026 catalysts; management reiterated M&A will remain accretive and product-led .
2025 revenue “nearly $450M” with ~two-thirds recurring positions the model for further operating leverage as OpEx ratio falls (43.4% exiting Q3) .
Risk checks: GAAP losses persist; litigation expense, tariff volatility, and acquired contract economics are watch items—renegotiation opportunity in 2027 .

Additional relevant Q3-period product updates:

Launched PAR Catering, a next-gen enterprise catering solution integrated with the broader ordering suite .
Krystal selected PAR Punchh for a new loyalty program as it scales nationally, highlighting engagement platform momentum .

Notes on S&P Global consensus:

Revenue Consensus Mean (Q3’25): $112.27M*; Primary EPS Consensus Mean (Q3’25): -$0.02*; Actuals: Revenue $119.18M*, EPS $0.06*. Values retrieved from S&P Global. [Company-reported revenue/EPS cited in tables above.]

Citations:

Press release and 8-K (financials, KPIs, reconciliations):
Q3 2025 call transcript (performance, margins, cash flow, pipeline, AI):
Q2/Q1 2025 releases and calls (trend context):
Q3 product/brand PRs:

PAR TECHNOLOGY CORP (PAR)·Q3 2025 Earnings Summary