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What changed in PAR TECHNOLOGY CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PAR TECHNOLOGY CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+314 added−361 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-27)

Top changes in PAR TECHNOLOGY CORP's 2024 10-K

314 paragraphs added · 361 removed · 175 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

38 edited+25 added−47 removed9 unchanged
Biggest changeWe may also expand into new markets and encounter additional competitors in such markets. 5 Table of Contents Supply We have agreements for the supply of hardware products and components, including long-term or volume-based purchase agreements with some suppliers, and we have identified alternative sources in the event one or more of our suppliers are not able to perform or fully perform; however, there can be no assurance that we will be able to timely secure alternative product or components or continue our current supplier agreements on similar terms, or at all.
Biggest changeAdditionally, as we expand into new markets, we will encounter established competitors and new market entrants, further challenging our ability to compete effectively. Supply We have agreements for the supply of hardware products and components, including long-term or volume-based purchase agreements with some suppliers.
We offer depot repair, warranty, and overnight Advanced Exchange services from our offices in San Diego, California, Mississauga, Ontario, and our corporate headquarters in New Hartford, New York. Installation and implementation. We offer hardware installation and software implementation services. Training. We offer complete application training to customers’ in-store staff and provide technical training to our customers’ information systems personnel.
We offer depot repair, warranty, and overnight Advanced Exchange services from our offices in San Diego, California, Mississauga, Ontario, and our corporate headquarters in New Hartford, New York. Installation and implementation. We offer hardware installation and software implementation services. Training. We offer application training to customers’ in-store staff and provide technical training to our customers’ information systems personnel.
Our focus on retaining talent is rooted in our employee-first strategy and includes investments in employee engagement, diverse talent sourcing tools, talent management systems, and development. We continue to make appropriate adjustments to ensure competitive compensation, including the implementation of a pay transparency initiative to ensure equity and fairness. Available Information Our website is located at https://partech.com .
Our focus on retaining talent is rooted in our employee-first strategy and includes investments in employee engagement, diverse talent sourcing tools, talent management systems, and development. We continue to make appropriate adjustments to help ensure competitive compensation, including the implementation of a pay transparency initiative designed to ensure equity and fairness. Available Information Our website is located at https://partech.com .
Hardware Our hardware offerings include point-of-sale terminals and tablets, wireless headsets, drive-thru systems, kitchen display systems, payment devices, and other in-store peripherals: Point-of-Sale Hardware. Our POS hardware platforms are designed to reliably operate in harsh environments associated with food service.
Hardware Our hardware offerings include point-of-sale terminals and tablets, wireless headsets, drive-thru systems, kitchen display systems, kiosks, printers, payment devices, and other in-store peripherals: Point-of-Sale Hardware. Our POS hardware platforms are designed to reliably operate in harsh environments associated with food service.
Our SaaS solutions are extensible and built on open application programming interfaces (“API”) enabling integration by more than 500 integration partners, including leading industry brands, to extend the reach and capabilities of our SaaS solutions and those of our integration partners.
Our SaaS solutions are extensible and built on open application programming interfaces (“API”) enabling integration by more than 550 integration partners, including leading industry brands, to extend the reach and capabilities of our SaaS solutions and those of our integration partners.
Operator Solutions , offering front-of-house operator solutions: BRINK POS, an open cloud, point-of-sale solution that provides operators with tools to seamlessly integrate with multiple product offerings - including kiosks, kitchen video systems, and enterprise reporting - through PAR's ecosystem of integration partners.
OPERATOR CLOUD , offering front-of-house and back-of-house operator solutions: PAR POS, an open cloud, point-of-sale solution that provides operators with tools to seamlessly integrate with multiple product offerings - including kiosks, kitchen video systems, and enterprise reporting - through PAR's ecosystem of integration partners.
To proactively attract diverse talent, we engage with universities, professional associations, and industry groups, and we leverage PAR’s robust employee value proposition, which includes our location-flexible philosophy, a collaborative global work environment, and a shared sense of purpose.
To proactively attract diverse talent and broaden our candidate pool, we engage with universities, professional associations, industry groups, and leverage PAR’s robust employee value proposition, which includes our location-flexible philosophy, a collaborative global work environment, and a shared sense of purpose.
We believe our use and reliance on intellectual property laws and our agreements and licenses 8 Table of Contents protect and maintain our rights in our intellectual property; however, there can be no assurance that our trademarks, copyrights, patents, and other intellectual property rights will not be challenged, invalidated, or circumvented; that others will not assert intellectual property rights in technologies that are relevant to our business; or that our intellectual property rights will give us a competitive advantage.
We believe our use and reliance on intellectual property laws and our agreements and licenses protect and maintain our rights in our intellectual property; however, there can be no assurance that our trademarks, copyrights, patents, and other intellectual property rights will not be challenged, invalidated, or circumvented; that others will not assert intellectual property rights in technologies that are relevant to our business; or that our intellectual property rights will give us a competitive advantage.
We partner with numerous vendors that offer in-store peripherals, including kitchen display systems, payment devices, cash drawers, and printers, allowing us to deliver a comprehensive and completely integrated hardware solution. Professional services We provide a comprehensive portfolio of support services to our customers, including hardware repair, installation and implementation, training, and on-site and technical support. Hardware repair.
We partner with numerous vendors that offer in-store peripherals, including payment devices, cash drawers, and printers, allowing us to deliver a comprehensive, integrated hardware solution. Professional Services We provide a comprehensive portfolio of support services to our customers, including hardware repair, installation and implementation, training, and on-site and technical support. Hardware repair.
We value speed, ownership, focus and winning together, which we consider to be the foundation for how we operate and make decisions. Leadership's Role: Our senior management team is responsible for developing and executing our human capital strategy. We seek employees who share a passion for technology and its ability to improve our customers’ businesses.
We value urgency, ownership, delivering outcomes, never settling and winning together, which we consider to be the foundation for how we operate and make decisions. Leadership's Role: Our senior management team is responsible for developing and executing our human capital strategy. We seek employees who share a passion for technology and its ability to improve our customers’ businesses.
Punchh seamlessly integrates with our customers’ existing systems, providing AI-powered tools to deliver omnichannel loyalty experiences and campaigns to engage their customers, create real-time 360-degree insights and drive repeat purchases and higher average spend. MENU, an eCommerce platform for global restaurant brands, powering all digital customer touchpoints from mobile, web, kiosk to delivery marketplaces.
Punchh seamlessly integrates with our customers’ existing systems, providing AI-powered tools to deliver omnichannel loyalty experiences and campaigns to engage their customers, create real-time 360-degree insights and drive repeat purchases and higher average spend. PAR ORDERING, an eCommerce platform powering digital customer touchpoints from mobile, web, kiosk to delivery marketplaces.
PAR PAYMENT SERVICES, our merchant services business that enables electronic payment and processing services for businesses of all sizes to accept electronic payments online or in-person. Par Pay is the front-end technology that reads payment cards and sends customer information to the merchant acquiring bank for processing.
PAR PAY, includes our PAR Payment Services merchant services business that enables electronic payment and processing services for businesses of all sizes to accept electronic payments online or in-person and PAR Pay 5 Table of Contents Gateway, our front-end technology that reads payment cards and sends customer information to the merchant acquiring bank for processing.
The SEC also maintains a website at http://www.sec.gov that contains reports, proxy statements and other information regarding SEC registrants, including PAR.
The SEC also maintains a website at http://www.sec.gov that contains reports, proxy statements and other information regarding SEC registrants, including PAR. 9 Table of Contents
PAR's vision of unified experience is a single platform that provides seamless connections from the restaurants’ backend systems through to their customer-facing channels enabling restaurant enterprises to deliver innovation, differentiated experiences and competitive advantage. It's the setup enterprise restaurants require to support omnichannel journeys and create a unified view of customer interactions, products, and management systems.
Our vision of unified experience is a single platform that provides seamless connections from our customers' backend systems through to their customer-facing channels enabling our customers to deliver innovation, differentiated experiences and competitive advantage. It's the setup enterprise restaurants and retailers require to support omnichannel journeys and create a unified view of customer interactions, products, and management systems.
Our wireless headsets for drive-thru order-taking provide our customers with another means to deliver their products and serve their customers. The PAR G5 ® headset 4 Table of Contents provides clear audio, all-day battery life, and an ergonomic fit. PAR's drive-thru timer systems provide crew and managers near-real-time feedback to improve speed of service and meet performance targets. In-Store Peripherals.
Our wireless headsets for drive-thru order-taking provide our customers with another means to deliver their products and serve their customers. The PAR G5 ® and PAR Clear ® headsets provide clear audio and an ergonomic fit. PAR's drive-thru timer systems provide crew and managers near-real-time feedback to improve speed of service and meet performance targets. In-Store Peripherals.
PAR hardware terminals - PAR WAVE, EVERSERV 600, and PAR PHASE - and tablets are durable and highly functioning, scalable, and easily integrated, offering customers competitive performance at a cost-conscious price.
PAR terminals, including PAR WAVE and PAR PHASE, and our EverServ ® POS tablets are durable and highly functioning, scalable, and easily integrated, offering customers competitive performance at a cost-conscious price.
We continuously strive to enhance and expand our omnichannel solutions to provide full integration of data points that drive guest satisfaction and operational efficiencies for restaurant enterprises across our offerings. 3 Table of Contents Products and Services Subscription services Our subscription services consist of software-as-a-service ("SaaS") solutions, related software support, and transaction-based payment processing services, and are grouped into three categories: Guest Engagement , offering customer facing solutions: PUNCHH, an enterprise-grade customer loyalty and engagement solution that enables customers to deliver personalized promotions to their customers to increase customer lifetime value and same-store sales.
We continually strive to enhance and expand our omnichannel solutions to provide full integration of data points that drive guest satisfaction and operational efficiencies to our customers across our product and service offerings. 4 Table of Contents Our Products and Services Subscription Services Our subscription services consist of software-as-a-service ("SaaS") solutions, related software support, managed platform development services, and transaction-based payment processing services, and are grouped into two product lines: ENGAGEMENT CLOUD , offering customer facing solutions: PUNCHH, an enterprise-grade customer loyalty and engagement solution that enables customers to deliver personalized promotions to their customers to increase customer lifetime value and same-store sales.
MENU provides restaurant brands with the tools they need to grow their digital business, manage orders from all channels and for all order types, orchestrate their delivery operations, and fully control their digital experience to retain a direct customer relationship.
PAR Ordering provides customers with the tools they need to grow their digital business, manage orders from substantially all channels and order types, orchestrate their delivery operations, and fully control their digital experience to retain a direct customer relationship.
Our mission is to create an environment that reflects our values of speed, ownership, focus and winning togethe r where our employees thrive. Our strategy is to seek to hire the best talent, give them the responsibility and authority they deserve, and let them make the decisions on how to best execute.
Our mission is to create an environment that reflects our values of urgency, ownership, delivering outcomes, never settling and winning together where our employees thrive. Our strategy is to seek to hire the best talent, give them the responsibility and authority they deserve, and let them make the decisions on how to best execute.
On-site and technical support. We offer on-site support in the continental U.S. through our field tech service network, and 24-hour help desk support from our diagnostic service centers located in New Hartford, New York and Tampa, Florida. Outside of the continental U.S., we provide our professional services either directly or through authorized providers.
On-site and technical support. We offer on-site support in the continental U.S. through our field tech service network, and 24-hour help desk support from our diagnostic service centers located in New Hartford, New York and Tampa, Florida.
We have longstanding relationships with several of the largest brands in the Restaurant/Retail segment, including as an approved provider of restaurant technology solutions and related support to McDonald's Corporation and its franchisees since 1980 and to Yum! Brands since 1983; these two brands represent 17% of our total revenue.
We have longstanding relationships with several of the largest brands in the restaurant space, including as an approved provider of restaurant technology solutions and related support to McDonald's Corporation and its franchisees since 1980, to Yum! Brands since 1983, and to Dairy Queen since 2018. McDonald's Corporation represented 15% of our total revenue in 2024.
We regularly assess our facilities to ensure compliance with our health and safety guidelines and regulatory requirements. Talent Acquisition and Attrition : PAR works diligently to attract the best talent from a diverse range of sources to meet the current and future demands of our business.
Talent Acquisition and Attrition : PAR works diligently to attract the best talent from a diverse range of sources to meet the current and future demands of our business.
We design our employee compensation and benefits programs to be competitive, reinforce our commitment to diversity, equity and inclusion (“DEI”), and consistent with our values, to incentivize and reward outstanding performance. Our Chief Executive Officer and Sr.
We design our employee compensation and benefits programs to be competitive and consistent with our values, to incentivize and reward outstanding performance.
Government Regulation We are subject to a variety of laws and regulations in the United States and other jurisdictions that involve matters central to the business of our Restaurant/Retail segment, including privacy, data security and personal information, content, data retention and deletion and our Government segment, including the formation, administration and performance of U.S.
Government Regulation We are subject to a variety of laws and regulations in the United States and other jurisdictions that involve matters central to our business, including privacy, data security and personal information, content, data retention and deletion as well as U.S. and foreign laws and regulations that impact the operations of our business, including employee matters, import/export controls, trade restrictions, including tariffs, anti-corruption and bribery.
Employee Engagement and Talent Management/Development: Consistent with our employee-first strategy, we believe that our employees should have the opportunity to have a forum to communicate their feedback, concerns and suggestions. We conduct semi-annual employee net promoter engagement surveys.
Our employees should feel a sense of belonging and want to be part of the PAR team. 8 Table of Contents Employee Engagement and Talent Management/Development: Consistent with our employee-first strategy, we believe that our employees should have the opportunity to communicate their feedback, concerns and suggestions. We conduct annual employee engagement surveys, and quarterly “pulse” surveys.
A failure, or alleged failure, by us to comply with any of these laws or regulations could have a material adverse effect on our business, financial condition, and results of operations.
A failure, or alleged failure, by us to comply with any of these laws or regulations could have a material adverse effect on our business, financial condition, and results of operations. For additional information about government regulation and laws applicable to our business, refer to the risks described in "Part I, Item 1A. Risk Factors".
Combined, they offer a comprehensive payment processing solution that allows our customers to accept a variety of payments methods including debit and credit cards, near-field communication ("NFC") contactless, mobile devices, digital wallets and gift cards.
Combined PAR Payment Services and PAR Pay Gateway offer a comprehensive payment processing solution that allows our customers to accept a variety of payments methods including debit and credit cards, near-field communication contactless, mobile devices, digital wallets and gift cards. PAR OPS, includes Data Central and Delaget product offerings that leverage business intelligence, analytics, and automation technologies to streamline operations.
To mitigate these risks, we have expanded our supplier network and, we have in the past, and may in the future, increase our inventory levels of scarce products and components and adjust our pricing to reflect market conditions. Research and Development Product research, innovation, and product development are an integral part of our business.
To mitigate supply chain risks, we continue to expand our supplier network, including identifying and/or establishing alternative suppliers of our hardware products, increase our inventory levels of scarce components and adjust our pricing to reflect market conditions. 7 Table of Contents Research and Development Product research, innovation, and product development are an integral part of our business.
Our employee-first strategy is designed to provide a diverse, inclusive and safe environment where our employees enjoy coming to work each day to support our customers and grow our business. As of December 31, 2023, we had 1,802 full-time employees and 39 part-time employees.
Human Capital We prioritize finding, developing and rewarding extraordinary talent. Our employee-first strategy is designed to provide an inclusive and safe environment where our employees enjoy coming to work each day to support our customers and grow our business. As of December 31, 2024, we employed 1,585 people worldwide, 1,581 of whom were full-time.
Data Central provides customers with the necessary tools to achieve peak operational and financial efficiency; it serves as the central hub of restaurant intelligence by collecting information from point-of-sale, inventory, supply, payroll and accounting systems to provide actionable insights and a comprehensive view of a restaurant’s operations.
Serving as the central hub of restaurant intelligence, PAR OPS aggregates data from point-of-sale, inventory, supply, payroll, and accounting systems to deliver actionable insights and a comprehensive view of operations.
Our compensation philosophy aims to attract, retain and incentivize top performers in a highly competitive market for talent, who can deliver competitive financial returns to shareholders through the achievement of short-term and long-term performance targets. To support our meritocratic, pay-for-performance strategy, we execute annual performance and 360 performance reviews with the intent to incentivize and motivate our employees.
Our compensation philosophy aims to attract, retain and incentivize top performers in a highly competitive market for talent using short-term and long-term performance targets. To support our meritocratic, pay-for-performance strategy, we reward employees for achieving performance targets and contributing to our culture by living our values day in and day out.
Vice President, Human Resources regularly update the compensation committee of our board of directors on key areas of our human capital strategy, including the following: Diversity, Equity and Inclusion : Our commitment to DEI is simple: it’s about community and belonging. We aim to represent the diversity we see in all our customers and their communities.
Our Chief Executive Officer and Vice President, Commercial Finance regularly update the compensation committee of our board of directors on key areas of our human capital strategy, including the following: Culture : Our commitment to culture is simple: it’s about community and belonging. We want to understand and integrate our employees’ unique perspectives and voices every day.
Markets and Distribution We sell our products and services to enterprise restaurants, franchisees, and other restaurant outlets and to convenience stores and other retail customers, including amusement parks, movie theaters, cruise lines, spas, casinos, and other ticketing and entertainment venues through dedicated internal sales teams and channel partners.
Outside the continental U.S. we provide our professional services either directly or through authorized providers. 6 Table of Contents Sales and Marketing We sell our products and services to enterprise restaurants, franchisees, and other restaurant outlets and to C-Stores and other retail customers, including amusement parks, cinemas, cruise lines, spas, casinos, and other ticketing and entertainment venues.
While we believe our open integration platform, omnichannel cloud-based software and hardware solutions, with enterprise-grade products and purpose-built hardware, combined with our advanced development capabilities, extensive domain knowledge and expertise, excellent product reliability, direct sales team, and responsive customer service and support, are competitive advantages, the rapid and increased adoption of new technologies (including artificial intelligence), introduction of new product and service offerings, and aggressive pricing are among some of the factors and strategies that can affect our ability to successfully compete.
Many of our larger customers have approved several suppliers of software and hardware similar to one or more of our products. Our open integration platform, enterprise-grade omnichannel cloud-based software and hardware solutions, combined with our development capabilities, extensive domain knowledge and expertise, excellent product reliability, direct sales teams, and responsive customer service and support, are some of our competitive advantages.
We provide enterprise restaurants, franchisees, and other restaurant outlets in the three major restaurant categories - quick service, fast casual, and table service - with operational efficiencies through a data-driven network with integration capabilities from point-of-sale to the kitchen, to fulfillment.
Our product and service offerings include point-of-sale, customer engagement and loyalty, digital ordering and delivery, operational intelligence, payment processing, hardware, and related technologies, solutions, and services. We provide enterprise restaurants, franchisees, and other foodservice outlets with operational efficiencies through a data-driven network with integration capabilities from front- and back-of-house to customer fulfillment.
Additionally, we face competition from companies who have greater financial and technical resources, more relevant product and service offerings, and larger established customer bases. Furthermore, we expect that our industry will continue to attract new market entrants, including smaller emerging companies.
Some of these competitors have greater financial and technical resources, more relevant product and service offerings, and larger established customer bases. This competitive landscape can impact our market share and growth potential. As competition intensifies, both from existing competitors and new market entrants, we must continually innovate and adapt to maintain our competitive edge.
We continuously evaluate customer needs and new technologies to enable us to develop innovative and relevant products and product enhancements. Research and development expenses were $58.4 million, $48.6 million, and $34.6 million, for the years ended December 31, 2023, 2022, and 2021, respectively.
Research and development expenses were $67.3 million, $58.4 million, and $48.6 million, for the years ended December 31, 2024, 2023, and 2022, respectively. Intellectual Property We rely on various intellectual property laws, confidentiality procedures, and contractual provisions to establish, maintain, and protect our intellectual property.
In 2023, we continued to invest in our annual talent roadmap for all employees, including expanding our annual 360 feedback experience to all full-time employees and facilitating an updated talent review of director level and above employees with our executive team to better understand the landscape of our talent globally.
Our Annual Talent Roadmap includes a performance review, and 360 feedback annually for all employees, as well as a robust talent review of director level and above employees with our executive team. We offer a voluntary mentoring program and a women’s development program annually that employees can nominate themselves for.
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Item 1. BUSINESS The Company PAR Technology Corporation (NYSE: PAR), through its consolidated subsidiaries – ParTech, Inc. (“ParTech”) and PAR Government Systems Corporation (“PAR Government”), operates in two distinct reporting segments, Restaurant/Retail and Government. Restaurant/Retail Segment We provide leading omnichannel cloud-based software and hardware solutions to the restaurant and retail industries.
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Item 1. BUSINESS General PAR is a global foodservice technology company providing leading omnichannel cloud-based software and hardware solutions to the restaurant industry in three major restaurant categories – quick service, fast casual, and table service –, and the retail industry, including convenience and fuel retailers (C-Stores).
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Our product and service offerings include point-of-sale, customer engagement and loyalty, digital ordering and delivery, operational intelligence technologies, payment processing, hardware, and related technologies, solutions, and services. Our omnichannel solutions are used by more than 700 restaurant customers and can be found in more than 70,000 active restaurant locations.
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Our omnichannel solutions are used in more than 140,000 active restaurants and retail locations in more than 110 countries. 2024 Business Highlights • Stuzo Acquisition: In March 2024 we acquired Stuzo, LLC, a digital engagement software provider to C-Stores.
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Back Office , offering back-of-house operator solutions: DATA CENTRAL, a back-office solution that leverages business intelligence and automation technologies to manage labor, food costs, and inventory, and perform enterprise reporting.
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With the acquisition of Stuzo, we expanded into an adjacent vertical and became a leader in technology for convenience and fuel retailers. • Divestiture of Government Segment: In June 2024 we divested PAR Government Systems Corporation (“PGSC”) and in July 2024 we divested Rome Research Corporation (“RRC”) resulting in the divestiture of our Government segment; beginning with the quarter ended June 30, 2024, we operate in a single reportable segment. • TASK Group Acquisition: In July 2024 we acquired TASK Group Holdings Limited ("TASK Group"), an Australia-based global foodservice transaction platform, offering international unified commerce solutions, including interactive customer engagement and seamless integration, tailored for major brands worldwide.
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Many of our larger customers have several approved suppliers of software and hardware similar to one or more of our products.
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The TASK Group’s transaction management platform, TASK, is used by some of the world’s largest foodservice brands including, Starbucks Corporation and Guzman y Gomez, and its loyalty customer engagement platform, Plexure, is used by McDonald’s Corporation in 63 markets.
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Many of the products and components used by us have been, and may in the future be, subject to industry-wide shortage and significant pricing fluctuations.
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With the addition of TASK Group, we serve the top enterprise foodservice brands across the globe with a unified commerce approach from front-of-house to back-of-house. • Delaget Acquisition: In December 2024 we acquired Delaget, LLC, a leading provider of restaurant analytics and business intelligence solutions.
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We have experienced a shortage in the number of suppliers and those suppliers' availability of certain products and components, for example, certain batteries, chipsets, or hardware devices, which has, and can again, result in significant fluctuations in the price of products and components.
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Delaget’s comprehensive platform delivers data analytics, loss prevention, and operational insights that help restaurant operators streamline operations and improve profitability.
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Government Segment PAR’s Government segment provides technical expertise and development of advanced systems and software solutions for the U.S. Department of Defense ("DoD"), the intelligence community ("IC") and other federal agencies. Additionally, we provide support services for satellite command and control, communication, and information technology ("IT") systems at several DoD facilities worldwide.
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PAR RETAIL, a digital engagement software solution for convenience and fuel retailers (C-Stores) with an industry-leading guest engagement platform serving major brands in the space. PAR Retail enables retailers to deliver seamless, personalized experiences across mobile, web, and in-store channels.
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The Government segment has three principal contract offerings: intelligence, surveillance, and reconnaissance solutions, mission systems operations and maintenance, and commercial software products for use in analytic and operational environments that leverage geospatial intelligence data. Intelligence, Surveillance, and Reconnaissance ("ISR") PAR's ISR group provides a variety of IC support services, systems integration, situational awareness solutions, and mission readiness support.
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By leveraging data-driven insights, PAR Retail helps businesses increase customer engagement, drive loyalty program participation, and grow same-store sales with innovative, integrated technology solutions. PLEXURE, an international customer engagement and loyalty platform that delivers hyper-personalized marketing campaigns and promotions in real-time.
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Our core competencies reside in mobile geospatial applications; counter, small, unmanned aerial systems ("C-sUAS"); and data science offerings. Our substantive, in-depth expertise in these domains enables us to provide government customers and industry partners with key technologies that support a variety of applications ranging from strategic enterprise systems to tactical in-the-field dismounted users.
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Leveraging advanced data analytics and machine learning, Plexure seamlessly integrates with existing systems to provide actionable insights and enhance the customer experience. By driving engagement across multiple channels, Plexure helps increase customer lifetime value, boost repeat transactions, and improve same-store sales performance through tailored, data-driven solutions.
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Additionally, we provide integration, testing and operational readiness support in line with these competencies. PAR's ISR group also provides systems engineering support and software-based solutions to the DoD research and development laboratories, intelligence customers, and operational commands. Our internal expertise ranges from theoretical and experimental studies to development and fielding of operational capabilities.
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By simplifying complex data into intuitive dashboards and reports, PAR OPS equips customers with the tools to achieve peak operational and financial efficiency, driving better decision-making and performance across their business. TASK, an enterprise-grade technology solution, delivers powerful solutions to streamline operations and drive efficiency for hospitality and retail businesses.
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Our ISR group members are: • experienced developers and subject-matter experts in the DoD full motion video; • developers of geospatial and imagery data management, visualization, and exploitation solutions; • designers and developers of large-scale data science and multi-media analysis systems; • leading the development of technologies to train and test artificial intelligence systems; • designers of mobile, tactical situational awareness applications for Android, iOS, and Windows; • architects and integrators of advanced C-sUAS systems-of-systems; • builders of solutions for privacy, compliance and governance for sensitive customer data; and • experienced in the development of live, virtual, constructive training for tactical operations.
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Specializing in point-of-sale, kitchen management, and inventory systems, TASK offers a transaction management platform that integrates seamlessly with existing infrastructure. Designed for scalability and reliability, TASK empowers businesses to optimize workflows, enhance service delivery, and elevate the customer experience through innovative, data-driven solutions.
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We are actively engaged in the development of applications that support teams with real-time, tactical edge (mobile) situational awareness and distributed communications needs. PAR's ISR group has a strong legacy in the advanced research, development, and productization of geospatial information assurance technology involving steganography, steganography analysis, digital watermarking, and digital media forensics.
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Our dedicated sales teams work closely with potential customers to understand their operational challenges and recommend the most effective solutions.
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These enabling 6 Table of Contents technologies are used to provide increased protection and security of geospatial data and are increasingly applied to the identification of fabricated deep-fake media. PAR’s ISR group integrates and tests a broad range of government and industry research and development solutions.
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Our sales teams are organized in two main areas: enterprise customer sales, focused on tier-one (brands operating 500 or more sites) and tier-two (brands operating 50-499 sites) customers; these customers are generally driven by requests for proposals and have longer sales cycles, where we aid our sales team with premier support and pre-sales engineers; and sales to customers with small to medium-size businesses, where we focus on providing simplified solutions and quicker implementation of our products.
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The group is expanding through the development and implementation of C-sUAS systems in support of force protection efforts. Additionally, we design, integrate, and operate antenna data collection solutions for experimentation, demonstration, and test support.
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We also leverage a network of channel partners, including resellers, distributors, and integrators, as a cost effective means of extending our selling opportunities. Sales and marketing expenses were $41.7 million, $38.5 million, and $34.9 million, for the years ended December 31, 2024, 2023, and 2022, respectively.
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We also provide technical engineering and analysis services to intelligence community customers, supporting development and deployment of advanced prototypes and quick reaction systems, including applications for high performance computing platforms (e.g., Cray exascale computers). Mission Systems ("MS") PAR's MS group provides a wide range of technical and operational services to sustain mission critical components of the DoD's Information Network (“DoDIN”).
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We also believe our customer base is a competitive advantage; our customers are primarily enterprise and fast-growing brands and typically choose our products when opening new stores and locations.
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These services include continuous satellite and teleport facility operations and maintenance, engineering and installation services including inside and outside plant services, and maintenance of infrastructure and information systems for very low, low, high, and very high frequencies, and ground-based radio transmitter/receiver facilities, including high tower antennas up to 1200 feet.
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However, several factors can affect our ability to successfully compete, including rapid adoption of new technologies such as AI in product development and as a component of products and services, the constant introduction of new product and service offerings, and aggressive pricing strategies. We face competition from companies both within our market segment and from those targeting lower market tiers.
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We operate and maintain satellite communications and teleport facilities with ultra-high, super high, and extremely high frequency satellite communication earth terminals, and support telecommunications architectures such as fixed submarine broadcast systems and high frequency global communications systems.
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We have alternative sources in the event one or more of our component suppliers are not able to perform or fully perform; and we hold safety stocks of single source hardware products in quantities that we believe are sufficient to protect against possible supply chain disruptions.
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The DoD communications earth stations operated by PAR Government are the primary communications systems utilized by the national command authority and military services to exercise command and control of the nation’s air, land, and naval forces and to provide support to allied coalition forces.
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We continuously evaluate customer needs and new technologies to enable us to develop innovative and relevant products and product enhancements. We leverage AI to assist in the generation of code and other product-related artifacts which assists in driving efficiency and innovation in our development process.
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PAR’s MS group supports globally-deployed operational forces by providing reliable 24/7/365 support services for a variety of satellite communication systems. We provide satellite control center operations and mission planning for DoD Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance ("C4ISR") operations.
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Understanding the “pulse” of our employees through these surveys is critical to inform our strategies around employee engagement, retention and total rewards. In 2024, we introduced quarterly “Living Our Values” awards. Employees submit examples where PAR values are demonstrated by a coworker, enabling them to be selected as a quarterly Living Our Values winner.
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We provide satellite ground system support, including operations and maintenance, sustainment, upgrades, communications security management, anomaly response/resolution, process improvement, emergency response and disaster recovery. Our experience also includes mission planning and operations training. PAR’s MS group provides comprehensive, dependable, and secure information systems support services to the DoD and other federal agencies.
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Winning recipients are recognized in front of their peers for their efforts and accomplishments, in addition to custom swag and spot bonuses. We offer a variety of programs to support employee growth and development at PAR. In 2024, we launched the PAR Career Framework which maps employees worldwide to a job-level structure.
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These services include information technology infrastructure library based, tier 0 to 3 service desk operations for thousands of users, network system administration, database administration, information assurance/system security, information security training, and government network management. We also perform maintenance, monitoring, upgrades, planning, testing, and integration and configuration services, to include security systems including intrusion detection systems.
Added
This career mapping drives consistency and intentional career discussions between managers and employees, enabling ongoing development of talent and internal mobility across the organization. Additionally, it provides an objective and equitable process for integrating incoming talent both organically via hiring and inorganically via M&A activity.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBribery Act and other anti-corruption regulations, and other regulatory or contractual limitations on our ability to sell our products and services in certain foreign markets, and the risks and costs of non-compliance with such laws and regulations, including fines, penalties, criminal sanctions against us, our officers or employees, prohibitions on the conduct of our business, and damage to our reputation; • compliance by international employees with accounting practices generally accepted in the United States, including adherence to our accounting policies and internal controls; • increased financial accounting and reporting burdens and complexities; • government sanctions that may interfere with our ability to sell into certain countries; • import and export license requirements, tariffs, trade agreements, taxes and other trade barriers and trade protection measures; • increased risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of financial statements and irregularities in financial statements; • reduced protection of our intellectual property rights in certain countries and practical difficulties and costs of enforcing those rights abroad; • difficulties in managing international employees and exposure to different employment practices and local labor conditions and regulations, including labor issues faced by suppliers or immigration and labor laws which may adversely impact our access to technical and professional talent; • compliance with the laws of numerous foreign taxing jurisdictions and overlapping of different tax regimes; • sales and customer service challenges associated with operating in different countries; • difficulties in receiving payments from different geographies, including difficulties associated with currency fluctuations, payment cycles, transfer of funds, or collecting accounts receivable; and • increased management, travel, infrastructure, and legal compliance costs associated with having international operations.
Biggest changeBribery Act and other anti-corruption laws, and other regulatory or contractual limitations governing our operations and sale of products and services in foreign jurisdictions, and the risks and costs of non-compliance with such laws and regulations, including fines, penalties, criminal sanctions against us, our officers or employees, prohibitions on the conduct of our business, and damage to our reputation; • compliance with the EU AI Act and similar laws and regulations of other foreign jurisdictions governing the development, adoption, and use of AI, which could result in significant additional costs or result in fines or other penalties for failing to comply; • geopolitical events, such the Russia-Ukraine war, tensions with China and between China and Taiwan, hostilities in the Middle East, including the Israel conflict(s), and uncertainty relating to new or increased tariffs or other trade restrictions implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries, which could result in reduced economic activity, increased costs in operating our business, or other potentially adverse economic outcomes; • compliance by international employees with accounting practices generally accepted in the United States, including adherence to our accounting policies and internal controls; • increased financial accounting and reporting burdens and complexities; • increased risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of financial statements and irregularities in financial statements; • reduced protection of our intellectual property rights in certain countries and practical difficulties and costs of enforcing those rights abroad; • difficulties in managing international employees and exposure to different employment practices and local labor conditions and regulations, including labor issues faced by suppliers or immigration and labor laws which may adversely impact our access to technical and senior management; • compliance with the laws of numerous foreign taxing jurisdictions and overlapping of different tax regimes; • sales and customer service challenges associated with operating in different countries; • difficulties in receiving payments from different geographies, including difficulties associated with currency fluctuations, payment cycles, transfer of funds, or collecting accounts receivable; and • increased management, travel, infrastructure, and legal compliance costs associated with having international operations.
Interruptions or delays in these services, including those which may be caused by natural disasters or malicious actors, have, and may in the future, result in service disruptions, resulting in our failure to meet service level commitments or milestones, exposing us liability, reputational damage, and potential loss of customers.
Interruptions or delays in these services, including those which may be caused by natural disasters or malicious actors, have, and may in the future, result in service disruptions, resulting in our failure to meet service level commitments or milestones, exposing us to liability, reputational damage, and potential loss of customers.
Global privacy legislation, enforcement, and policy activity are rapidly expanding and creating a complex data privacy and data protection compliance environment and the potential for significant liability in the event of a data incident.
Global data privacy and data protection legislation, enforcement, and policy activity are rapidly expanding and creating a complex compliance environment and the potential for significant liability in the event of a data incident.
If we experience a problem (quantity, quality, or pricing) with one or more of our suppliers, and we are not able to cover or adequately cover from other sources, it could lead to a shortage of products and components and extended lead times for the delivery and installation of our hardware products or adversely affect our performance of Advanced Exchange, depot repair and field services, which could negatively impact our ability to satisfactorily and timely meet our contractual and customer obligations.
If we experience a problem (availability, quantity, quality, or pricing) with one or more of our suppliers, and we are not able to cover or adequately cover from other sources, it could lead to a shortage of hardware products and components and extended lead times for the delivery and installation of our hardware products or adversely affect our performance of Advanced Exchange, depot repair and field services, which could negatively impact our ability to satisfactorily and timely meet our contractual and customer obligations.
Such events could also cause delays or disruptions in access to our subscription services or third-party providers’ software and systems; cause supply chain disruptions, resulting in shortages or delays in shipments of products and components; create health and safety risks to our employees and distract employee productivity; and result in changes in consumer spending choices and customer investment decisions, any one of which could harm our business and results of operations.
Such events could also cause delays or disruptions in access to our subscription services or third-party providers’ software and systems; cause supply chain disruptions, resulting in shortages or delays in shipments of hardware products and components; create health and safety risks to our employees and distract employee productivity; and result in changes in consumer spending choices and customer investment decisions, any one of which could harm our business and results of operations.
Acquisition transactions are subject to risks including: • the diversion of our management’s time and focus from operating PAR’s business; • difficulties in obtaining required regulatory or stakeholder approvals; • equity or debt financing transactions to finance an acquisition, including potential dilution from the issuance of our capital stock or the incurrence of additional debt or the failure to obtain satisfactory financing terms; • the failure of our due diligence to identify significant issues associated with or arising out of an acquisition transaction, including issues related to the acquisition target (such as quality of product or technology and financial reporting, accounting practices, and internal controls) or country specific laws and regulations; • our inability to fully realize the expected financial or strategic benefits of an acquisition transaction including within the timeframe we expected; • unforeseen costs, cost overruns, or unanticipated investments; • failure to successfully integrate and further develop the acquired business, product, or technology; • employee retention costs and expenses, including compensation and benefit costs and retention payments to executive officers and key employees; • difficulties coordinating and managing geographically separate organizations, and with foreign acquisitions, the need to integrate operations across different cultures and languages and to comply with country specific laws and regulations; • difficulties entering geographic markets or new market segments in which we have no or limited experience; • cybersecurity and data security and protection related considerations, controls and exposures; • inability to retain customers and suppliers of the acquired business, and on terms similar to, or better than, those in place with the acquired business; • assumed and unknown liabilities; and • failure to maintain our internal controls and systems.
Acquisition transactions are subject to risks including: • the diversion of our management’s time and focus from operating PAR’s business; • difficulties in obtaining required regulatory or stakeholder approvals; • equity or debt financing transactions to finance an acquisition, including potential dilution from the issuance of our capital stock or the incurrence of additional debt or the failure to obtain satisfactory financing terms; • the failure of our due diligence to identify significant issues associated with or arising out of an acquisition transaction, including issues related to the acquisition target (such as quality of product or technology and financial reporting, accounting practices, and internal controls) or country specific laws and regulations; • our inability to fully realize the expected financial or strategic benefits of an acquisition transaction including within the timeframe we expected; • unforeseen costs, cost overruns, or unanticipated investments; • failure to successfully integrate and further develop the acquired business, product, or technology; • employee retention costs and expenses, including compensation and benefit costs and retention payments to executive officers and key employees; • difficulties coordinating and managing geographically separate organizations, and with foreign acquisitions, the need to integrate operations across different cultures and languages and to comply with country specific laws and regulations; • difficulties entering geographic markets or new market segments in which we have no or limited experience; • cybersecurity and data security and protection related considerations, controls and exposures; 12 Table of Contents • inability to retain customers and suppliers of the acquired business, and on terms similar to, or better than, those in place with the acquired business; • assumed and unknown liabilities; and • failure to maintain our internal controls and systems.
Furthermore, the implementation processes of these new systems may create change management risks that require effective internal controls to mitigate. Our failure to maintain an effective internal control environment could have a material adverse effect on our ability to accurately and timely report our financial results.
Furthermore, the implementation processes of these systems may create change management risks that require effective internal controls to mitigate. Our failure to maintain an effective internal control environment could have a material adverse effect on our ability to accurately and timely report our financial results.
These laws and regulations are evolving and the application, interpretation, and enforcement of these laws and regulations are often uncertain; nevertheless, our failure or perceived failure to adequately address data privacy and data protection concerns, or to comply with applicable laws and regulations could damage our reputation, discourage current or potential customers from using our products and services, and result in costly governmental investigations, enforcement actions or litigations, breach of contract claims, indemnity obligations, additional insurance costs, complaints by private individuals, and/or the payment of penalties to consumers or governmental entities, which could have a material and adverse effect our business, financial condition, results of operations and cash flows.
These laws and regulations are evolving and the application, interpretation, and enforcement of these laws and regulations are often uncertain; nevertheless, our failure or perceived failure to adequately address data privacy and data protection concerns, or to comply with applicable laws and regulations could damage our reputation, discourage current or potential customers from using our products and services, and result in costly governmental investigations, enforcement actions or litigation, breach of contract claims, indemnity obligations, additional insurance costs, complaints by private individuals, and/or the payment of penalties to consumers or governmental entities, which could have a material and adverse effect our business, financial condition, results of operations and cash flows.
Competition for top talent in the restaurant/retail and technology industries is intense. If we cannot effectively recruit, develop, and retain qualified employees to drive our Restaurant/Retail segment’s operational and strategic goals and develop and convert opportunities our business could suffer.
Competition for top talent in the restaurant/retail and technology industries is intense. If we cannot effectively recruit, develop, and retain qualified employees to drive our operational and strategic goals and develop and convert opportunities our business could suffer.
If the manner and timing of how we fix identified security defects and vulnerabilities to our cloud applications and information technology systems is wrong or the manner and timing of how our third-party service providers/integrators, or third-party network providers fix defects and vulnerabilities in their cloud applications and information technology systems is wrong, or our customers do not implement or timely implement security updates or version upgrades provided by us or our third-party service 15 Table of Contents providers\integrators, then our and our third-party service providers\integrators cloud applications and information technology systems, and the information technology systems of our customers may be left vulnerable to delays and disruptions to access, which may result in our customer’s being unable to conduct their businesses.
If the manner and timing of how we fix identified security defects and vulnerabilities to our cloud applications and information technology systems is wrong or the manner and timing of how our third-party service providers/integrators, or third-party network providers fix defects and vulnerabilities in their cloud applications and information technology systems is wrong, or our customers do not implement or timely implement security updates or version upgrades provided by us or our third-party service 14 Table of Contents providers\integrators, then our and our third-party service providers\integrators cloud applications and information technology systems, and the information technology systems of our customers may be left vulnerable to delays and disruptions to access, which may result in our customer’s being unable to conduct their businesses.
We cannot assure that we will be successful in achieving or sustaining profitability in the future, among other things: • our investments in new products and new features for our existing products, may require more investment than planned or our new products or new features may not achieve the expected commercial success and generate additional revenue or advance the growth of our business; • we may not realize the anticipated revenue contributions or operational synergies of our acquired businesses or achieve our targeted growth rates or improve our market share; and • we may not be able to control expenses at the levels planned due to internal and external factors, such as a recession or slowed economic growth, inflationary pressures, and geopolitical events, many of which are beyond our control.
We cannot assure that we will be successful in achieving or sustaining profitability in the future, among other things: • our investments in new products and new features for our existing products, may require more investment than planned or our new products or new features may not achieve the expected commercial success and generate additional revenue or advance the growth of our business; • we may not realize the anticipated revenue contributions or operational synergies of our acquired businesses or achieve our targeted growth rates or improve our market share; and 16 Table of Contents • we may not be able to control expenses at the levels planned due to internal and external factors, such as a recession or slowed economic growth, inflationary pressures, and geopolitical events, many of which are beyond our control.
For example, our certificate of incorporation and bylaws, collectively: • authorize the issuance of undesignated preferred stock that could be issued by our board of directors to thwart a takeover attempt; • provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office; • permits only the board of directors, or the chairman of the board of directors or the president pursuant to a resolution approved by a majority of the then authorized number of our directors to call special meetings of shareholders; • prohibit shareholder action by written consent except by unanimous written consent of all shareholders; and 23 Table of Contents • establish advance notice requirements for nominations of candidates for elections as directors or to bring other business before an annual meeting of our shareholders.
For example, our certificate of incorporation and bylaws, collectively: • authorize the issuance of undesignated preferred stock that could be issued by our board of directors to thwart a takeover attempt; • provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office; • permits only the board of directors, or the chairman of the board of directors or the president pursuant to a resolution approved by a majority of the then authorized number of our directors to call special meetings of shareholders; • prohibit shareholder action by written consent except by unanimous written consent of all shareholders; and • establish advance notice requirements for nominations of candidates for elections as directors or to bring other business before an annual meeting of our shareholders.
If we fail to realize expected benefits or synergies from our acquisitions, such as cost-savings and earnings accretion, or if we decrease our liquidity by using a significant portion of our available cash to finance acquisitions, incur additional indebtedness or issue additional equity securities to finance acquisitions or incur or assume 13 Table of Contents unanticipated liabilities, losses or costs associated with our acquisitions, our business, financial condition, results of operations, and cash flows could be materially and adversely affected.
If we fail to realize expected benefits or synergies from our acquisitions, such as cost-savings and earnings accretion, or if we decrease our liquidity by using a significant portion of our available cash to finance acquisitions, incur additional indebtedness or issue additional equity securities to finance acquisitions or incur or assume unanticipated liabilities, losses or costs associated with our acquisitions, our business, financial condition, results of operations, and cash flows could be materially and adversely affected.
We have and will continue to incur substantial expenses associated with identifying and evaluating potential strategic alternatives, including legal, accounting, and financial advisor fees. Furthermore, the public announcement of a strategic transaction may negatively impact our operating results if we are not able to realize the anticipated benefits of the transaction.
We have and will continue to incur substantial expenses associated with identifying, evaluating, and negotiating potential strategic transactions, including legal, accounting, and financial advisor fees. Furthermore, the public announcement of a strategic transaction may negatively impact our operating results if we are not able to realize the anticipated benefits of the transaction.
We are subject to data privacy and data protection laws and regulations in the United States and abroad, some of which place restrictions on our ability to process personal data across our business.
We are subject to data privacy and data protection laws and regulations (including AI laws and regulations) in the United States and abroad, some of which place restrictions on our ability to process personal data across our business.
Furthermore, certain of our suppliers could decide to discontinue business with us or limit the allocation of products and components to us, which could result in our inability to fill our supply needs, jeopardizing our ability to fulfill our contractual obligations, which could in turn, result in a decrease in sales and cash flows, contract penalties or terminations, and damage to customer relationships and our reputation.
Furthermore, certain of our suppliers could decide to discontinue business with us or limit the allocation of hardware products and components to us, which could result in our 11 Table of Contents inability to fill our supply needs, jeopardizing our ability to fulfill our contractual obligations, which could in turn, result in a decrease in sales and cash flows, contract penalties or terminations, and damage to customer relationships and our reputation.
Our ability to raise funds through debt or equity issuances and otherwise access the credit and capital markets at the times and in the amounts needed and on acceptable terms will depend on our financial condition and the condition of the capital markets at such time.
Our ability to raise funds through debt or equity issuances, refinance our indebtedness and otherwise access the credit and capital markets at the times and in the amounts needed and on acceptable terms will depend on the capital markets and our financial condition at such time.
In particular, the shift to a widespread remote working environment, including additional remote development teams, and the addition of new infrastructures, increases the opportunities available to malicious actors, and, as such, increases the risk of a cyber-attack potentially occurring which may result in the disruption of access to or the interruption of the operation of our cloud applications and information technology systems, or the cloud computing platforms and cloud applications of our third-party providers/integrators.
In particular, the shift to a widespread remote working environment, including additional remote development teams, and the addition of new infrastructures, as well as the emergence and maturation of AI capabilities, increases the opportunities available to malicious actors, and, as such, increases the risk of a cyber-attack potentially occurring which may result in the disruption of access to or the interruption of the operation of our cloud applications and information technology systems, or the cloud computing platforms and cloud applications of our third-party providers/integrators.
Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows. 16 Table of Contents There are risks related to our information technology systems, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows .
Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows. There are risks related to our information technology systems, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows .
A sustained loss of the software development services provided by international employees and third-party consultants could negatively impact our software development efforts, adversely affect our competitive position, harm our reputation, impede our ability to achieve and maintain profitability, and negatively impact our business, financial condition, and results of operations. 14 Table of Contents Natural disasters, pandemics, or other natural or manmade disasters or outbreaks could negatively impact our business and operations.
A sustained loss of the software development services provided by our international employees and third-party consultants could negatively impact our software development efforts, adversely affect our competitive position, harm our reputation, impede our ability to achieve and sustain profitability, and negatively impact our business, financial condition, results of operations, and cash flows. 13 Table of Contents Natural disasters, pandemics, or other natural or manmade disasters or outbreaks could negatively impact our business and operations.
A number of factors can impact the trading price of our common stock, including: • the impact of uncertainties, volatility, and economic disruption created by macroeconomic conditions and geopolitical events, including, inflation, recession, interest rate fluctuations, actual or anticipated military or political conflicts (including the Russian-Ukraine war, tensions with China and between China and Taiwan, the Israel-Hamas conflict and other hostilities in the Middle East) and global pandemics (such as COVID-19) or other public health crises, on our business, our customers, and the industries in which we operate; • actual or anticipated fluctuations in our financial condition and results of operations (including, shortfalls or changes in expectations about, our revenue, margins, earnings, Annualized Recurring Revenue (“ARR”), sales of our product and service offerings or other key performance metrics; • the performance and prospects of major customers; • our quarterly or annual financial results or those of other companies operating in our industries; • the lack of earnings guidance; 22 Table of Contents • investor perception of us and the industries in which we operate; • the contents of published research reports about us or the industries in which we operate or the failure of securities analysts to cover our common stock; • any increased indebtedness we may incur in the future; • actions by institutional shareholders; • operating and stock performance of other companies that investors deem comparable to us (and changes in their market valuations) and overall performance of the equity markets; • announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, or capital commitments; and • litigation and governmental investigations.
A number of factors can impact the trading price of our common stock, including: • the actual or perceived impact of uncertainties, volatility, and economic disruption created by macroeconomic conditions and geopolitical events, including, inflation, recession, interest rate fluctuations, actual and potential shifts in U.S. and foreign trade policies, including new or increased tariffs or other trade 19 Table of Contents restrictions implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries, actual or anticipated military or political conflicts (including the Russian-Ukraine war, tensions with China and between China and Taiwan, the Israel-Hamas conflict and other hostilities in the Middle East) and global pandemics (like COVID-19) or other public health crises, on our business, our customers, and the industries in which we operate; • actual or anticipated fluctuations in our financial condition and results of operations (including, shortfalls or changes in expectations about, our revenue, gross margins, earnings, annual recurring revenue (“ARR”), sales of our product and service offerings or other key performance metrics; • the performance and prospects of major customers; • our quarterly or annual financial results or those of other companies operating in our industries; • the lack of earnings guidance; • investor perception of us and the industries in which we operate; • the contents of published research reports about us or the industries in which we operate or the failure of securities analysts to cover our common stock; • any increased indebtedness we may incur in the future; • actions by institutional shareholders; • operating and stock performance of other companies that investors deem comparable to us (and changes in their market valuations) and overall performance of the equity markets; • announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, or capital commitments; and • litigation and governmental investigations.
Our future success depends on our ability to anticipate and identify changes in customer needs and/or relevant 10 Table of Contents technologies, quickly respond to customer requirements, and rapidly and effectively introduce new and innovative products, features, and functions, while maintaining the integrity, quality, and competitiveness of our existing products.
Our future success depends on our ability to anticipate and identify changes in customer needs and/or relevant technologies (including AI), quickly respond to customer requirements, and rapidly and effectively introduce new and innovative products, features, and functions, while maintaining the integrity, quality, and competitiveness of our existing products and services.
This could result in reduced sales, breach or termination of contracts, and damage to our reputation and relationships with our customers, which could have a negative impact on our business, financial condition, and results of operations.
This could result in reduced sales, breach or termination of contracts, and damage to our reputation and relationships with our customers, which could have a material adverse effect on our business, financial condition, and results of operations.
Certain provisions of our certificate of incorporation and bylaws and Delaware law may discourage a takeover of our company. Our certificate of incorporation and bylaws contain certain provisions that may discourage, delay, or prevent a change in our management or control over us.
Our certificate of incorporation and bylaws contain certain provisions that may discourage, delay, or prevent a change in our management or control over us.
It is possible that a court may find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, in which case we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition, or results of operations and result in a diversion of the time and resources of our management and board of directors.
It is possible that a court may find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, in which case we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition, or results of operations and result in a diversion of the time and resources of our management and board of directors. 20 Table of Contents Certain provisions of our certificate of incorporation and bylaws and Delaware law may discourage a takeover of our company.
Significant reductions, delays or cancellations of hardware sales and professional services to one of these customers and its franchisees would reduce our revenue and operating income and could materially and adversely affect our business, results of operations, and cash flows.
Significant reductions, delays or cancellations of hardware sales, subscription services, and professional services to this customer and its franchisees would reduce our revenue and operating income and could materially and adversely affect our business, results of operations, and cash flows.
For the years ended December 31, 2023, 2022, and 2021, 5.7%, 5.5%, and 7.3%, respectively, of our total consolidated revenues were derived from sales outside of the United States.
For the years ended December 31, 2024, 2023, and 2022, 12.5%, 8.5%, and 7.5%, respectively, of our total consolidated revenues were derived from sales outside of the United States.
Further, in some instances, we are dependent on single-source suppliers for certain of our products and components, which may subject us to other significant risks, including higher prices, reduced control over product or component delivery schedules, or inadequate inventory.
Further, in some instances, we are dependent on single-source suppliers for our hardware products, which may subject us to other significant risks, including inadequate inventory, higher prices, and reduced control over delivery schedules.
We are in the process of implementing new enterprise performance management and equity administration systems and combining our customer relationship management (CRM) and enterprise resource planning (ERP) systems into a single pre-existing CRM and ERP system, all of which are intended to improve the efficiency and effectiveness of our operations by streamlining information flow.
We are in the process of combining our customer relationship management (CRM) and enterprise resource planning (ERP) systems into a single pre-existing CRM and ERP system, both of which are intended to improve the 15 Table of Contents efficiency and effectiveness of our operations by streamlining information flow.
The markets for our subscription services and hardware products are characterized by rapid technological advances, intense competition among existing and emerging competitors, fluid and evolving industry practices, disruptive technology developments (including artificial intelligence), and frequent new product introductions; any one of these factors, including that one or more of our competitors may successfully use and deploy products incorporating artificial intelligence, could create downward pressure on pricing and gross margins and could adversely affect sales to our existing customers, as well as our ability to attract and sell to new customers.
The markets for our products and services are characterized by rapid technological advances, intense competition among existing and emerging competitors, fluid and evolving industry practices, disruptive technology developments (including the use and integration of AI into products and service offerings), and frequent new product introductions; any one of these factors, could create downward pressure on pricing and gross margins and could adversely affect sales to our existing customers, as well as our ability to attract and sell to new customers.
Our products or product updates may contain coding, configuration or manufacturing errors that can negatively impact their functionality, performance, operation, and integration capabilities, and expose us to product liability, performance issues, warranty claims, and harm to our reputation, which could adversely affect our business, financial condition, results of operations, and cash flows.
Our products or product updates may contain coding, configuration or manufacturing errors that can negatively impact their functionality, performance, operation, and integration capabilities, and expose us to product liability, performance issues, warranty claims, and harm to our reputation, which could adversely affect our business, financial condition, results of operations, and cash flows. 10 Table of Contents Macroeconomic conditions and geopolitical events could have a material adverse effect on our business, financial condition, results of operations, and cash flows .
Our ability to successfully execute our operational plans and strategies, achieve our business and/or development objectives, or increase the scope or range of our service or product offerings under customer contracts, is dependent on our ability to attract, develop, and retain engineers, security and product architects, sales representatives, technical staff, and other skilled employees.
Our ability to successfully execute our operational plans and growth strategies, achieve our business and/or development objectives, or increase the scope or range of our service or product offerings is dependent, in part, on our ability to attract, develop, and retain skilled employees, including data security and product architects, engineers and technical personnel and sales representatives.
The loss of one of these customers’ purchases of hardware and professional services, or a significant reduction, delay, or cancellation of purchases of hardware and professional services by one of these customers, could materially and adversely affect our business, results of operations, and cash flows.
The loss of this customer's purchase of hardware, subscription services, and professional services, or a significant reduction, delay, or cancellation of purchases of hardware, subscription services, and professional services by this customer, could materially and adversely affect our business, results of operations, and cash flows.
If we fail to achieve and sustain profitability, our financial condition could be materially and adversely impacted and the market price of our common stock could decline. For the year ended December 31, 2023, two customers account for a significant portion of our revenues in the Restaurant/Retail segment.
If we fail to achieve and sustain profitability, our financial condition could be materially and adversely impacted and the market price of our common stock could decline. For the year ended December 31, 2024, one customer accounts for a significant portion of our revenues.
A material decline in consumer confidence could result in consumers choosing to dine out less frequently or reduce the amount they spend on meals while dining out, which could negatively impact our customers’ sales and, in turn, result in reduced, delayed, or cancelled orders (bookings) or a decrease in active sites, revenue, or annual recurring revenue (ARR) from our subscription services, or an increase in customer churn; or reduced, delayed or cancelled hardware sales and installations.
A material decline in consumer confidence could result in consumers dining out less, spending less on meals, or altering the source or mix of their purchasing choices, which could negatively impact our customers’ sales and, in turn, result in reduced, delayed, or cancelled orders (bookings) or a decrease in active sites, revenue, or annual recurring revenue (ARR) from our subscription services, or an increase in customer churn; or reduced, delayed or cancelled hardware sales and installations.
Our goodwill was approximately $489.7 million at December 31, 2023 and our intangibles were $94.9 million at December 31, 2023. Identifiable intangible assets are primarily a result of business acquisitions and internally developed capitalized software.
Our goodwill was approximately $887.5 million at December 31, 2024 and our intangibles were $237.3 million at December 31, 2024. Identifiable intangible assets are primarily a result of business acquisitions and internally developed capitalized software.
For example, we make significant estimates and assumptions when accounting for revenue recognition, stock-based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment including right-to-use assets and liabilities, identifiable intangible assets and goodwill, valuation allowances for receivables, valuation of excess and obsolete inventories, and measurement of contingent consideration at fair value.
For example, we make significant estimates and assumptions when accounting for revenue recognition, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, identifiable intangible assets and goodwill, valuation allowances for receivables, and valuation of excess and obsolete inventories.
In such an event of default, holders of the Senior Notes with the defaulted indebtedness could elect to declare all principal, together with accrued and unpaid interest, due and payable, which would materially and adversely affect our financial condition and results of operations.
In such an event of default, holders of the Senior Notes with the defaulted indebtedness could elect to declare all principal, together with accrued and unpaid interest, due and payable, which would materially and adversely affect our financial condition and results of operations. 17 Table of Contents We make estimates and assumptions in connection with the preparation of our financial statements, and any changes to those estimates and assumptions could adversely affect our results of operations, cash flows and financial condition .
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default under the indentures governing the Senior Notes.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
Most of our suppliers of products and components are located internationally, including in South Korea, China, and Taiwan, and are susceptible to hostilities in those regions and trade barriers and tariffs, which could increase the cost or availability of certain products and components to us that we may not be able to offset.
Most of our suppliers of hardware products and components are located internationally, including in South Korea, China, and Taiwan, and are susceptible to hostilities in those regions and tariffs and other restrictions on trade between the United States and countries where our hardware products and components are sourced, which could increase the cost or restrict the availability of hardware products and components to us that we may not be able to offset or cover from another source.
Economic instability or regulatory or political conditions, including inflation, recession or slowed economic growth, elevated or fluctuating interest rates, or actual or anticipated military or political conflicts (including the Russian-Ukraine war, tensions with China and between China and Taiwan, the Israel-Hamas conflict and other hostilities in the Middle East) in the United States and in other countries and regions in which we, our customers, suppliers, and our other third-party providers conduct business, and the impact of such conditions or insecurities, including inflated costs of goods, services, and labor, and muted or decreased consumer confidence and discretionary spending, could materially and adversely impact the cost and demand for our products and services, our ability to perform our contractual obligations, and execute our operational and growth strategies. • Cost of products and components .
Economic instability or regulatory or political conditions in the United States and in other countries and regions in which we, our customers, suppliers, and our other third-party providers conduct business, and the impact of such conditions or insecurities, including inflated costs of goods and muted or decreased consumer confidence and discretionary spending, could materially and adversely impact the cost and demand for our products and services, our ability to perform our contractual obligations, and execute our operational and growth strategies. • Cost of products and components .
We depend on third-party suppliers to deliver products and components in sufficient quantities, at reasonable prices, and timely so that we can timely deliver and install our hardware products and perform our Advanced Exchange, depot repair and field services.
We depend on third-party suppliers to deliver hardware products and components in sufficient quantities, at reasonable prices, and timely so that we can timely deliver and install our hardware products and perform our Advanced Exchange, depot repair and field services. We have agreements for the supply of hardware products and components, including long-term or volume-based purchase agreements with some suppliers.
We have never paid dividends on our common stock and have no plans to pay dividends on our common stock in the foreseeable future.
Risks Related to the Ownership of our Common Stock We have not paid dividends in the past and we do not anticipate paying dividends in the foreseeable future. We have never paid dividends on our common stock and have no plans to pay dividends on our common stock in the foreseeable future.
If our operating subsidiaries are unable to generate sufficient cash flow from operations to service our debt under the Senior Notes, we may be required to adopt one or more alternatives to secure cash flow, such as selling assets or obtaining additional capital; any sale of assets or transaction to raise capital could be on terms that may be onerous or highly dilutive.
If our operating subsidiaries are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
Our indebtedness under the Senior Notes, could, among other things, restrict or limit our ability to plan and react to changes in our business and our industries; place us at a disadvantage compared to our competitors who have less debt; and limit our ability to borrow additional amounts to fund acquisitions, for working capital, and for other general corporate purposes. 20 Table of Contents A conversion of the Senior Notes, or a fundamental change under the Senior Notes, if triggered, may materially and adversely affect our financial condition and results of operations .
Our indebtedness could, among other things, restrict or limit our ability to plan and react to changes in our business and our industries; place us at a disadvantage compared to our competitors who have less debt; and limit our ability to borrow additional amounts to fund acquisitions, for working capital, and for other general corporate purposes.
Macroeconomic conditions and geopolitical events could have a material adverse effect on our business, financial condition, results of operations, and cash flows .
Our use of AI could have a material adverse effect on our business, financial condition, and results of operations.
If a fundamental change occurs, holders of the Senior Notes may require us to repurchase all or a portion of their Senior Notes in cash.
A conversion of the Senior Notes, or a fundamental change under the Senior Notes, if triggered, may materially and adversely affect our financial condition and results of operations . If a fundamental change occurs, holders of the Senior Notes may require us to repurchase all or a portion of their Senior Notes in cash.
The GDPR and the UK GDPR impose substantial fines for breaches of data protection requirements, which can be up to four percent of annual worldwide revenues or 20 million Euros, whichever is greater. • various state data privacy and data protection laws, including the California Consumer Privacy Act ("CCPA"), as amended by the California Privacy Rights Act ("CPRA"), the Illinois Biometric Information Privacy Act ("BIPA"), the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Utah Consumer Privacy Act, Connecticut’s Act Concerning Personal Information Privacy and Online Monitoring, the New York SHIELD Act, and the regulations implementing these laws, establish data privacy rights to their respective residents (including in California, where residents have a private right of action for violations of the CCPA and CPRA) and regulate how we may collect, use, process and store personal data.
For example: • various state data privacy and data protection laws, including the California Consumer Privacy Act ("CCPA"), as amended by the California Privacy Rights Act ("CPRA"), the Illinois Biometric Information Privacy Act ("BIPA"), the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Utah Consumer Privacy Act, Connecticut’s Act Concerning Personal Information Privacy and Online Monitoring, the New York SHIELD Act, and the regulations implementing these laws, establish data privacy rights to their respective residents (including in California, where residents have a private right of action for violations of the CCPA and CPRA) and regulate how we may collect, use, process and store personal data. • the General Data Protection Regulation ("GDPR") and the United Kingdom’s Data Protection Act 2018 ("UK-GDPR"), impose requirements relating to the processing of personal data, the information provided to individuals regarding the processing of their personal data, the security, confidentiality, minimization, and retention of personal data, notifications in the event of personal data breaches and the use of third-party processors.
If we fail to meet these contractual commitments, we may be contractually obligated to pay penalties or provide service credits for a portion of the service fees paid by our customers. As such these contractual commitments have, and may in the future, adversely impact our revenues, ARR, and margins earned on our subscription services.
Our subscription services agreements typically include service level commitments or milestones. If we fail to meet these contractual commitments, we may be contractually obligated to pay penalties or provide service credits for a portion of the service fees paid by our customers.
We have incurred operating losses in each of the last several years, including for the year ended December 31, 2023. For us to achieve profitability, we must operate our business consistent with our capital allocation strategy, which focuses on the allocation of our capital to revenue generating activities, while controlling expenses.
For us to achieve and sustain profitability, we must operate our business consistent with our capital allocation strategy, which focuses on the allocation of our capital to revenue generating activities, while controlling expenses.
We have long-term or volume-based purchase agreements with some suppliers and we do have alternative sources identified in the event one or more of our suppliers are not able to perform or fully perform; however, we cannot assure that products and components will be available or in needed quantities and quality or at favorable or competitive prices.
We have alternative sources in the event one or more of our component suppliers are not able to perform or fully perform; and we hold safety stocks of single source hardware products in quantities that we believe are sufficient to protect against possible supply chain disruptions; however, we cannot assure that hardware products and components will be available or available in needed quantities and quality or at favorable or competitive prices.
While we have been able to obtain cost reductions and avoid unfavorable changes to terms with some of our suppliers, this is not the case with all of our suppliers, and we may not be successful in maintaining favorable terms or securing favorable terms from other suppliers in the future, which could negatively impact gross margins in our hardware sales and Advanced Exchange, depot repair, and field services.
While we have been able to secure favorable terms from most of our suppliers, this is not the case with all of our suppliers. Unfavorable pricing, quantity, and delivery terms negatively impact our gross margins associated with hardware sales and Advanced Exchange, depot repair, and field services.
Our most critical accounting estimates are described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates”.
In connection with the preparation of our financial statements, we use certain estimates and assumptions based on historical experience and other factors. Our most critical accounting estimates are described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates”.
Labor costs, including wages and costs of benefits, remain higher than pre-COVID. High labor costs have a direct negative impact on our results of operations and could negatively influence our customers’ investment choices, including whether and when to invest in our products and services.
High labor costs have a direct negative impact on our results of operations and could negatively influence our customers’ investment choices, including whether and when to invest in our products and services. Additionally, fewer participants in the labor market may dampen businesses’ and consumers’ ability and desire to invest and spend, which could also negatively influence our customers’ investment choices.
Revenues from our Restaurant/Retail segment constituted 67% of our total consolidated revenues for the year ended December 31, 2023. Aggregate sales of primarily hardware and professional services to the two customers and their respective franchisees constituted 17% of our consolidated revenues for the year ended December 31, 2023.
Aggregate sales of hardware, subscription services, and professional services to the one customer and their respective franchisees constituted 15% of our consolidated revenues for the year ended December 31, 2024.
These price increases could make us less competitive, result in reduced sales, and loss of potential new customers, and cause damage to our reputation and relationships with our customers, which could have a negative impact on our business, financial condition, and results of operations. 12 Table of Contents Inventory management is also an area of focus as we balance the need to maintain strategic inventory levels to ensure competitive lead times against the risk of product and component inventory shortages and customer requirements.
These price increases could make us less competitive, result in reduced sales, and loss of potential new customers, and cause damage to our reputation and relationships with our customers, which could have a negative impact on our business, financial condition, and results of operations.
Our international operations subject us to a variety of risks and challenges, including: • compliance with a variety of local laws and regulations governing our foreign operations, including the General Data Protection Regulation (“GDPR”) in the European Union, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K.
Our business, financial condition, and operations could suffer due to a variety of international risks including: • compliance with the General Data Protection Regulation (“GDPR”), the United Kingdom's Data Protection Act (the "UK-GDPR") and similar laws and regulations governing data privacy and data protection, the U.S. Foreign Corrupt Practices Act, the U.K.
Each of these results could have a material adverse effect on our business, financial condition, results of operations, and liquidity. 19 Table of Contents Financial Related Risks We may not be able to achieve profitability, which could have a material adverse effect on our financial condition and the trading price of our common stock .
Financial Related Risks We may not be able to achieve and sustain profitability, which could have a material adverse effect on our financial condition and the trading price of our common stock . We have incurred operating losses in each of the last several years, including for the year ended December 31, 2024.
Inventory management is on-going and we may experience similar scenarios in the future, which could negatively impacting our financial condition, results of operations and ability to achieve and sustain profitability. If we are unable to recruit, develop, and retain qualified employees, our business, financial condition, and results of operations may be materially and adversely harmed.
If we are unable to recruit, develop, and retain skilled employees, our business, financial condition, and results of operations may be materially and adversely harmed.
Our ability to make scheduled payments or to refinance the Senior Notes depends on our performance, which is subject to economic, financial, competitive, geopolitical, and other factors that may be beyond our control.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including our 2.875% Convertible Senior Notes due 2026 (the “2026 Notes”), our 1.50% Convertible Senior Notes due 2027 (the “2027 Notes”), and our 1.00% Convertible Senior Notes due 2030 (the "2030 Notes", and together with the 2026 Notes and the 2027 Notes, the "Senior Notes"), depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
Our failure to meet service level commitments or milestones under customer contracts may result in our customer contracts being less profitable, and expose us to liability and reputational harm . Our subscription services agreements typically include service level commitments or milestones.
If we fail in these efforts, our business, financial condition, and results of operations could suffer, and our ability to achieve and sustain profitability could be adversely impacted. Our failure to meet service level commitments or milestones under customer contracts may result in our customer contracts being less profitable, and expose us to liability and reputational harm .
Our customers are impacted by consumer confidence, which is influenced, in part, by general economic conditions, which may negatively affect consumer discretionary spending.
Any of the forgoing events could adversely impact our business, including our costs of sales and operating results. • Changes in consumer confidence . The restaurant/retail industries depend on consumer discretionary spending. Our customers are impacted by consumer confidence, which is influenced, in part, by general economic conditions, which may negatively affect consumer discretionary spending.
The global COVID-19 pandemic, the hurricanes and related floods in south eastern United States, and the wild fires in western United States, and any future natural or manmade disaster or pandemic could have an adverse impact in countries or regions in which we conduct our business or offer and sell our services and products or our customers conduct their businesses and, in turn, decrease the demand for our services or products.
Our business is susceptible to losses and interruptions caused by flooding, hurricanes, earthquakes, power shortages, telecommunications failures, pandemics and other natural or manmade disasters any one of which could have an adverse impact in countries or regions in which we conduct our business or offer and sell our services and products or our customers conduct their businesses and, in turn, decrease the demand for our services or products.
We have disclosed that our board of directors and management periodically evaluate strategic alternatives to maximize value for our shareholders, including strategic acquisitions, sales of non-strategic assets or businesses (including, for example, a sale of PAR Government Systems Corporation and/or one or more of its subsidiaries), and other transactions.
Our evaluation or completion of strategic transactions may negatively impact our business and stock price . Our board of directors and management periodically evaluate strategic transactions to maximize value for our shareholders, including strategic acquisitions, sales of non-strategic assets or businesses, capital markets and other transactions.
We have employees in India and Serbia, and third-party consultants in Germany, Philippines, Ukraine, and other locations outside of the U.S. that provide software development and support services.
In addition, our international employees, including our employees located in Australia, New Zealand, Canada, India, and Serbia, and third-party consultants, including consultants located in Germany, Poland, and Ukraine, provide software development and support services.
Any such consequence or other negative effect could have a material adverse effect on our business, financial condition, and results of operations. 21 Table of Contents Risks Related to the Ownership of our Common Stock We have not paid dividends in the past and we do not anticipate paying dividends in the foreseeable future.
Any such consequence or other negative effect could have a material adverse effect on our business, financial condition, and results of operations. Our financial results may be impacted by changes in tax law or changes in our tax position. We are subject to taxation in the United States and various foreign jurisdictions in which we operate.
Removed
Item 1A. RISK FACTORS The following risk factors could have a material adverse effect on our business, results of operations, financial condition, cash flows and stock price, and could cause our future results to be materially different than we currently anticipate. These risk factors should be read in conjunction with “Part I, Item I, Business,” "Part II, Item 7.
Added
Item 1A. RISK FACTORS Investing in our common stock involves a high degree of risk. The risks described below are not the only risks or uncertainties we face.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes in "Part II, Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Added
The occurrence of any of the following risks or additional risks and uncertainties not presently known to us, or that we currently believe to be immaterial, could materially and adversely affect our business, results of operations, financial condition, cash flows, and stock price.
Removed
If we fail in these efforts, our business, financial condition, and results of operations could suffer, and our ability to achieve and sustain profitability could be adversely impacted. Our Government segment has been focused on niche offerings reflecting its expertise, primarily in the areas of ISR, systems engineering and evaluation, satellite and telecommunications services, and management technology/systems services.
Added
Customers also typically have the right to terminate their agreements and pursue damages claims for serious or repeated failures to meet service level commitments. These contractual commitments have, and may in the future, adversely impact our revenues, ARR, and gross margins earned on our subscription services.
Removed
Many of our competitors in the Government segment are larger and have substantially greater financial resources and broader capabilities in management technology. Our Government segment also competes with smaller companies, many of which are designated by the government for preferential “set aside” treatment, that target particular segments of the government market and may have superior capabilities in a particular segment.
Added
Certain areas of our business could experience supply chain challenges, including shortages, shipping delays, and increased costs due to price increases for hardware products and components and in shipping costs; changes in U.S. and foreign trade policies, including new or increased tariffs, potential sanctions and counter-sanctions, particularly with or involving China, South Korea, and Taiwan could result in increased costs; however, we have taken steps to minimize the impact of these factors.
Removed
These companies may be better positioned to obtain contracts through competitive proposals. Consequently, there are no assurances we will continue to win government contracts as a prime contractor or subcontractor, and our failure to do so would reduce our revenue and operating income and could adversely affect our business, results of operations, and financial condition.
Added
We have expanded the regions where we sell our hardware products, and we continue to build our supplier network, including identifying and/or establishing alternative suppliers of our hardware products, increase our inventory levels of scarce components and adjust our pricing to reflect market conditions. • Cost of labor and labor shortages .
Removed
Certain areas of our business could experience supply chain challenges, including shortages, shipping delays, and increased costs due to price increases for products and components and in shipping and transportation costs; while the areas of our business most vulnerable to 11 Table of Contents these factors did not experience significant adverse effects in 2023 and, notwithstanding that we have expanded the countries and regions in which we sell our hardware products and have added suppliers to mitigate risks associated with single-source suppliers, macroeconomic and geopolitical trends and events will continue to pose a risk to our business, including our costs of goods and operating results. • Cost of labor and labor shortages .
Added
Inventory management is an area of focus as we balance the need to maintain strategic inventory levels to ensure competitive lead times against the risk of hardware product and component inventory availability and shortages and customer requirements.
Removed
Additionally, fewer participants in the labor market may dampen businesses’ and consumers’ ability and desire to invest and spend, which could also negatively influence our customers’ investment choices. Any of the forgoing events could adversely impact our business, including our costs of goods and operating results. • Changes in consumer confidence . The restaurant/retail industries depend on consumer discretionary spending.
Added
We hold safety stocks of single source hardware products in quantities that we believe are sufficient to protect against possible supply chain disruptions and, in some instances, increase our inventory levels of components to satisfy anticipated customer requirements.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese cybersecurity reports to the audit committee include various information, such as updates on the cybersecurity threat landscape, risk assessments, mitigation plans, notable incidents, the status of projects to strengthen our information security systems, engagement of third parties (e.g., consultants and auditors) and third-party tools, and our employee-training programs.
Biggest changeOur audit committee, typically in joint session with our board of directors, meets quarterly with the Vice President of Information Security & Privacy, the Vice President of Information Technology, and/or the CTO who provide updates to it on, among other things, cybersecurity threat landscape, risk assessments, mitigation plans, notable incidents, the status of projects to strengthen our information security systems, engagement of third parties (e.g., consultants and auditors) and third-party tools, and our employee-training programs.
Additionally, our internal audit team conducts regularly scheduled audits of our IT and business systems. The results of these reviews are reported to senior management and the audit committee as part of the quarterly reporting process discussed above.
Our internal audit team conducts regularly scheduled audits of our IT and business systems. The results of these audits are reported to senior management and the audit committee as part of the quarterly reporting process discussed above.
Risk Management and Strategy We implement enterprise-wide information security policies and security awareness training to promote compliance and enhance security awareness and vigilance among our workforce. This training is distributed to all employees and includes interactive training on the acceptable use of technology, secure software development practices and phishing simulations.
This training is distributed to all employees and includes interactive training on the acceptable use of technology, secure software development practices and phishing simulations.
Removed
Item 1C. CYBERSECURITY Governance Our board of directors oversees our risk management programs, strategies and processes. The board of directors also assigns certain oversight responsibilities to its committees and has assigned the audit committee to oversee our guidelines, policies and practices regarding risk assessment and risk management as they relate to cybersecurity.
Added
Item 1C. CYBERSECURITY Risk Management and Strategy Cybersecurity risk management is an integral part of our overall enterprise risk management program. Our cybersecurity risk management program, which is managed by PAR’s Information Security & Privacy team, is designed to identify, assess and manage risks from cybersecurity threats, and it provides a framework for handling cybersecurity threats and incidents.
Removed
Our cybersecurity team is led by our Senior Director of Cybersecurity who has over 15 years of direct cybersecurity experience that includes incident response, security operations and management.
Added
The program is also aligned with the risk assessment framework that has been established by our internal audit team.
Removed
This team is responsible for implementing and maintaining corporate and platform-wide cybersecurity, data protection, and third-party risk practices in coordination with our security steering committee, whose members include, our Senior Director of Cybersecurity, professionals working in cybersecurity and product and technology security and representatives from finance, internal audit, compliance and legal.
Added
Our cybersecurity risk management framework includes steps for assessing the severity of a cybersecurity threat (including an escalation process for potentially material cybersecurity threats and incidents to an internal committee comprised of members of senior management), identifying the source of a cybersecurity threat (including whether the cybersecurity threat is associated with a third-party service provider), and implementing cybersecurity countermeasures and mitigation strategies.
Removed
The security steering committee meets quarterly to review our risk profile, threat detection, and remediation strategies, as well as our overall cybersecurity posture and health. Our audit committee, typically in joint session with the full board of directors, meets quarterly with our Senior Director of Cybersecurity and receives reports regarding our systems and data security.
Added
The internal committee is responsible for assessing the materiality of cybersecurity threats and incidents, and it informs members of senior management and the audit committee of our board of directors of material cybersecurity threats and incidents. PAR’s cybersecurity risk management program leverages industry-recognized security frameworks, including the U.S.
Removed
We use various internal organizational cybersecurity and privacy safeguards, controls and procedures for the discovery, identification, classification, assessment, and management of cybersecurity incidents and material risks associated with our corporate business systems, our product and service offerings, and third-party supplier relationships.
Added
National Institute of Standards and Technology (NIST) and the CIS Critical Security Controls.
Removed
Incident response plans and procedures are in place for the detection and response to cybersecurity incidents and events that may adversely affect the confidentiality, integrity or availability of our corporate business systems, our product and service offerings and third-party supplier dependencies.
Added
We require our vendors to comply with our privacy and cybersecurity requirements, and we perform risk assessments of vendors, including their ability to protect data from unauthorized access. We implement enterprise-wide information security policies and security awareness training to promote compliance and enhance security 21 Table of Contents awareness and vigilance among our workforce.
Removed
Our incident response plan includes a materiality assessment framework used for escalation protocols, navigation of materiality assessment determinations and procedures for post determination actions. Our incident response team includes our Senior Director of Cybersecurity, representatives from legal and delegates from our product engineering teams and corporate information technology teams.
Added
Based on the information available as of the date of this Annual Report, we believe that risks from cybersecurity threats, including as a result of previous cybersecurity incidents, have not materially affected us, including our business, strategy, results of operations or financial condition, and as of the date of this Annual Report, we are not aware of any material risks from cybersecurity threats that are reasonably likely to do so.
Removed
The incident response team will engage third-party incident management experts, including outside legal counsel, as necessary.
Added
However, we cannot eliminate all risks from cybersecurity threats or provide assurances that PAR will not be materially affected by cybersecurity risks in the future. Additional information on cybersecurity risks we face is discussed in "Item 1A. Risk Factors” which should be read in conjunction with the foregoing information.
Removed
Our Senior Director of Cybersecurity will provide updates to the internal audit team and our senior management team regarding any such incident until it has been addressed. 24 Table of Contents Our cybersecurity team implements various security processes, standard operating procedures and tools that aid in the prevention, detection, investigation, response and remediation of vulnerabilities and risks.
Added
Governance As part of our overall enterprise risk management program, we prioritize the identification and management of cybersecurity risk at several levels.
Removed
These include, but are not limited to, endpoint and cloud threat detection and response systems, network application and API security services, cloud security posture management solutions, enterprise data loss prevention ("DLP") and governance services, cloud-native security scanners and source code analysis tooling.
Added
Our board of directors has overall oversight responsibility for our risk management, and delegates cybersecurity risk management oversight to the audit committee, which is responsible for overseeing that management has processes in place designed to identify and evaluate cybersecurity risks and that management has implemented processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Removed
The cybersecurity team is responsible for the continuous monitoring, reporting and response to threats and vulnerabilities discovered through the deployment and operation of these tools. If any deficiencies relating to our internal controls over financial reporting are discovered, the Senior Director of Cybersecurity is required to report them to our internal audit team.
Added
Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to provide that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cybersecurity programs.
Removed
As part of our risk management process, our cybersecurity team conducts routine vulnerability and application security assessments, penetration testing, security and compliance audits, and ongoing risk assessments.
Added
Our cyber risk assessment program is managed by our Information Security & Privacy team, which is led by our Vice President of Information Security & Privacy, who has over twenty-three (23) years of experience in the cybersecurity and technology industry. The Vice President of Information Security & Privacy reports to our Chief Financial Officer.
Added
The Vice President of Information Security & Privacy oversees multiple teams that are operationally responsible for PAR’s cybersecurity, including IT Security, Cloud Security, and Development, Security & Operations, each of which provides regular updates to the Vice President of Information Security & Privacy regarding threat intelligence, cyber incidents, and cyber risk mitigation strategies as part of their responsibilities.
Added
The Vice President of Information Security & Privacy works closely with the Vice President of IT, who is responsible for PAR's information technology and digital transformation strategy, and with the Chief Technology Officer (CTO), who is responsible for software engineering across most of PAR’s SaaS products.
Added
Together, the three individuals have a complementing set of responsibilities to align, implement and govern cybersecurity policies, standards and technolo gy controls throughout PAR.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition to these principal properties, we have leasehold interests in small office spaces located in Australia, Canada, India, United Arab Emirates, England, Switzerland, Serbia, Spain, and other locations within the U.S. We are currently operating in a substantially remote work environment and believe our current facilities are adequate for our present needs.
Biggest changeWe also use this space to assemble certain of our hardware products and for research and development, sales, and professional services. In addition to this principal property, we have leasehold interests in small office spaces located in Australia, New Zealand, Japan, Poland, Canada, India, United Arab Emirates, England, Switzerland, Serbia, and other locations within the U.S.
If and when our property needs change, we believe the capacity of our current facilities and ability to obtain suitable additional facilities on commercially reasonable terms will satisfy our business requirements.
We are currently operating in a substantially remote work environment and believe our current facilities are adequate for our present needs. If and when our property needs change, we believe the capacity of our current facilities and ability to obtain suitable additional facilities on commercially reasonable terms will satisfy our business requirements.
Removed
Our Restaurant/Retail segment also uses this space to assemble certain of our hardware products and for research and development, sales, and professional services. The Government segment's principal offices are located in 13,324 square feet of leased office space at 160 Brooks Road, Second Floor, Rome, New York from which it conducts sales, administrative, and research and development activities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS The information set forth in "Note 13 – Commitments and Contingencies" of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report is incorporated herein by reference.
Biggest changeItem 3. LEGAL PROCEEDINGS The information set forth in "Note 14 – Commitments and Contingencies" of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report is 22 Table of Contents incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe performance graph assumes the investment of $100 on December 31, 2018 in our common stock, the Russell 2000 and the Russell 2000 Technology indices. The cumulative total shareholder returns shown below represent the value that such investments would have had on December 31, 2023 (assuming reinvestment of all dividends).
Biggest changeThe cumulative total shareholder returns shown below represent the value that such investments would have had on December 31, 2024 (assuming reinvestment of all dividends). Historical stock price performance should not be relied upon as an indication of future stock price performance.
When we withhold these shares, we are required to remit to the appropriate taxing authorities the market price of the awards withheld, which could be deemed a purchase of shares by us on the date of withholding. For the three months ended December 31, 2023, there were no shares withheld.
When we withhold these shares, we are required to remit to the appropriate taxing authorities the market price of the awards withheld, which could be deemed a purchase of shares by us on the date of withholding. For the three months ended December 31, 2024, there were no shares withheld.
The actual number of holders of our common stock is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers, banks, and other nominees. 25 Table of Contents Dividend Policy We have never paid cash dividends on our common stock.
The actual number of holders of our common stock is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers, banks, and other nominees. Dividend Policy We have never paid cash dividends on our common stock.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Trading Market Our common stock is listed on the New York Stock Exchange under the symbol “PAR”. According to the records of our transfer agent, as of February 23, 2024, there were 267 holders of record of our common stock.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Trading Market Our common stock is listed on the New York Stock Exchange under the symbol “PAR”. According to the records of our transfer agent, as of February 24, 2025, there were 302 holders of record of our common stock.
Performance Graph The performance graph below shows the cumulative total shareholder return on our common stock compared to the cumulative total shareholder return on the Russell 2000 index and the Russell 2000 Technology index, a published peer industry group of 190 companies on an annual basis.
Performance Graph The performance graph below shows the cumulative total shareholder return on our common stock compared to the cumulative total shareholder return on the Russell 2000 index and the Russell 2000 Technology index, a published peer industry group of 57 companies on an annual basis. 23 Table of Contents The performance graph assumes the investment of $100 on December 31, 2019 in our common stock, the Russell 2000 and the Russell 2000 Technology indices.
Removed
Historical stock price performance should not be relied upon as an indication of future stock price performance. 26 Table of Contents Item 6. RESERVED Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe tables below provide reconciliations between net loss and EBITDA, adjusted EBITDA, and adjusted net loss, as well as between diluted net loss per share and adjusted diluted net loss per share. 34 Table of Contents Year Ended December 31, in thousands 2023 2022 2021 Reconciliation of Net Loss to EBITDA and Adjusted EBITDA Net loss $ (69,752) $ (69,319) $ (75,799) Provision for (benefit from) income taxes 1,988 1,252 (9,424) Interest expense 6,931 8,811 18,147 Depreciation and amortization 27,481 26,095 21,421 EBITDA $ (33,352) $ (33,161) $ (45,655) Stock-based compensation expense (1) 14,427 13,426 14,615 Regulatory matters (2) — 415 50 Contingent consideration (3) (9,200) (4,400) — Litigation expense (4) (808) 525 790 Transaction costs (5) 2,273 1,300 3,612 Gain on insurance proceeds (6) (500) — (4,400) Severance (7) 253 525 — Loss on extinguishment of debt (8) 635 — 11,916 Impairment loss (9) — 1,301 — Other expense – net (10) 489 1,224 1,279 Adjusted EBITDA $ (25,783) $ (18,845) $ (17,793) 1 Adjustments reflect total stock-based compensation expense for the years ended December 31, 2023, 2022 and 2021 of $14.4 million, $13.4 million and $14.6 million, respectively. 2 Adjustment reflects non-recurring expenses related to our efforts to resolve regulatory matters of $0.4 million and $0.1 million for the years ended December 31, 2022 and 2021, respectively. 3 Adjustments reflect non-cash reductions to the fair market value of the contingent consideration liability of $9.2 million and $4.4 million related to the MENU Acquisition as of the years ended December 31, 2023 and 2022, respectively. 4 Adjustment reflects the release of a loss contingency for a legal matter of $0.8 million for the year ended December 31, 2023 and settlement expenses for legal matters of $0.5 million and $0.8 million for the years ended December 31, 2022 and 2021, respectively. 5 Adjustment reflects non-recurring professional fees incurred in transaction due diligence of $2.3 million for the year ended December 31, 2023, and acquisition expenses incurred in the MENU Acquisition of $1.3 million and Punchh Acquisition of $3.6 million for the years ended December 31, 2022 and 2021, respectively. 6 Adjustment represents the gain on insurance stemming from a legacy claim of $0.5 million and $4.4 million for the years ended December 31, 2023 and 2021, respectively. 7 Adjustment reflects the severance included in general and administrative expense and research and development expense of $0.3 million and $0.5 million for the years ended December 31, 2023 and 2022, respectively. 8 Adjustment reflects loss on extinguishment of debt of $0.6 million related to the induced conversion of the 2024 Notes during the year ended December 31, 2023, and $11.9 million related to the repayment of the Owl Rock Term Loan during the year ended December 31, 2021. 9 Adjustment reflects impairment loss included in research and development expense related to the impairment of internally developed software costs not meeting the general release threshold as a result of acquiring go-to-market software in the MENU Acquisition. 10 Adjustment reflects foreign currency transaction gains and losses, rental income and losses, and other non-recurring expenses recorded in other expense, net in the accompanying statements of operations. 35 Table of Contents Year Ended December 31, in thousands 2023 2022 2021 Reconciliation of Net Loss/Diluted Net Loss per share to Adjusted Net Loss/Adjusted Diluted Loss per Share: Net loss / diluted earnings per share $ (69,752) $ (2.53) $ (69,319) $ (2.55) $ (75,799) $ (3.02) Provision for (benefit from) income taxes (1) — — — — (10,417) (0.42) Non-cash interest expense (2) 2,093 0.08 1,997 0.07 8,727 0.35 Acquired intangible assets amortization (3) 18,074 0.66 17,111 0.63 13,802 0.55 Stock-based compensation expense (4) 14,427 0.52 13,426 0.49 14,615 0.58 Regulatory matters (5) — — 415 0.02 50 — Contingent consideration (6) (9,200) (0.33) (4,400) (0.16) — — Litigation expense (7) (808) (0.03) 525 0.02 790 0.03 Transaction costs (8) 2,273 0.08 1,300 0.05 3,612 0.14 Gain on insurance proceeds (9) (500) (0.02) — — (4,400) (0.18) Severance (10) 253 0.01 525 0.02 — — Loss on extinguishment of debt (11) 635 0.02 — — 11,916 0.47 Impairment loss (12) — — 1,301 0.05 — — Other expense – net (13) 489 0.02 1,224 0.05 1,279 0.05 Adjusted net loss/diluted loss per share $ (42,016) $ (1.52) $ (35,895) $ (1.32) $ (35,825) $ (1.43) Weighted average common shares outstanding 27,552 27,152 25,088 1 Adjustment reflects a partial release of our deferred tax asset valuation allowance of $10.4 million related to the Punchh Acquisition for the year ended December 31, 2021.
Biggest changeAmounts presented in the reconciliations and other tables presented herein may not sum due to rounding. 37 Table of Contents (in thousands) Year Ended December 31, Reconciliation of Net Loss to Adjusted EBITDA 2024 2023 2022 Net loss $ (4,987) $ (69,752) $ (69,319) Discontinued operations (84,923) (11,867) (10,753) Net loss from continuing operations (89,910) (81,619) (80,072) Provision for (benefit from) income taxes (4,768) 1,848 1,134 Interest expense, net 10,167 6,931 8,811 Depreciation and amortization 37,907 27,014 25,643 Stock-based compensation 24,487 14,291 13,261 Regulatory matters — — 415 Contingent consideration (600) (9,200) (4,400) Litigation expense — (808) 525 Transaction costs 8,454 2,273 1,300 Gain on insurance proceeds (495) (500) — Severance 2,769 253 525 Loss on extinguishment of debt 6,560 635 — Impairment loss 225 — 1,301 Other (income) expense, net (1,146) 485 1,068 Adjusted EBITDA $ (6,350) $ (38,397) $ (30,489) (in thousands, except per share amounts) Year Ended December 31, Reconciliation between GAAP and Non-GAAP diluted net loss per share 2024 2023 2022 Diluted net loss per share $ (0.14) $ (2.53) $ (2.55) Discontinued operations (2.49) (0.43) (0.40) Diluted net loss per share from continuing operations (2.63) (2.96) (2.95) Non-recurring income taxes (0.19) — — Non-cash interest 0.07 0.08 0.07 Acquired intangible assets amortization 0.84 0.66 0.63 Stock-based compensation 0.72 0.52 0.49 Regulatory matters — — 0.02 Contingent consideration (0.02) (0.33) (0.16) Litigation expense — (0.03) 0.02 Transaction costs 0.25 0.08 0.05 Gain on insurance proceeds (0.01) (0.02) — Severance 0.08 0.01 0.02 Loss on extinguishment of debt 0.19 0.02 — Impairment loss 0.01 — 0.05 Other (income) expense, net (0.03) 0.02 0.04 Non-GAAP diluted net loss per share $ (0.73) $ (1.96) $ (1.73) Diluted weighted average shares outstanding 34,155 27,552 27,152 38 Table of Contents Year Ended December 31, Reconciliation between GAAP and Non-GAAP Subscription Service Gross Margin Percentage 2024 2023 2022 Subscription Service Gross Margin Percentage 53.5 % 48.0 % 51.4 % Depreciation and amortization 12.2 % 18.1 % 21.9 % Stock-based compensation 0.1 % 0.3 % — % Severance 0.1 % — % — % Non-GAAP Subscription Service Gross Margin Percentage 65.9 % 66.4 % 73.3 % LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity are cash and cash equivalents.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed under "Forward-Looking Statements" and "Part I, Item 1A. Risk Factors" above. The following section generally discusses year-over-year comparisons between 2023 and 2022.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed under "Forward-Looking Statements" above and "Part I, Item 1A. Risk Factors" above. The following section generally discusses year-over-year comparisons between 2024 and 2023.
We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three to five years.
We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three to seven years.
Although we believe the assumptions and estimates it has made have been reasonable and appropriate, they are based, in part, on historical experience, information obtained from the management of the acquired companies and future expectations. For these and other reasons, actual results may vary significantly from estimated results.
Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based, in part, on historical experience, information obtained from the management of the acquired companies and future expectations. For these and other reasons, actual results may vary significantly from estimated results.
We cannot provide assurance that any additional financing or strategic alternatives will be available to us on acceptable terms or at all. 37 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements are based on the application of accounting principles generally accepted in the United States of America.
We cannot provide assurance that any additional financing or strategic alternatives will be available to us on acceptable terms or at all. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements are based on the application of accounting principles generally accepted in the United States of America.
Refer to “Note 9 – Debt” of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report for details.
Refer to “Note 10 – Debt” of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report for details.
Recent Accounting Pronouncements Not Yet Adopted Refer to “Note 1 – Summary of Significant Accounting Policies” of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report for details. 42 Table of Contents
Recent Accounting Pronouncements Not Yet Adopted Refer to “Note 1 – Summary of Significant Accounting Policies” of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report for details.
ARR is the annualized revenue from our subscription services, which includes subscription fees for our SaaS solutions, related support, and transaction-based fees for payment processing services. We calculate ARR by annualizing the monthly recurring revenue for all active sites as of the last day of each month for the respective reporting period.
ARR is the annualized revenue from our subscription services, which includes subscription fees for our SaaS solutions and related support, managed platform development services, and transaction-based fees for payment processing services. We generally calculate ARR by annualizing the monthly recurring revenue for all active sites as of the last day of each month for the respective reporting period.
Actual results could differ from these estimates. Our estimates are subject to uncertainties, including those associated with market conditions, risks and trends. Refer to "Item 1A. Risk Factors" of this Annual Report for additional information. Refer to "Note 1 - Summary of Significant Accounting Policies" for additional information regarding our accounting policies and other disclosures required by GAAP.
Our estimates are subject to uncertainties, including those associated with market conditions, risks and trends. Refer to "Item 1A. Risk Factors" of this Annual Report for additional information. Refer to "Note 1 - Summary of Significant Accounting Policies" for additional information regarding our accounting policies and other disclosures required by GAAP.
As part of this evaluation, the board of directors and management periodically consider strategic alternatives to maximize value for our shareholders, including strategic transactions such as an acquisition, or a sale or spin-off of non-strategic company assets or businesses, including a sale of PAR Government Systems Corporation and/or one or more of its subsidiaries.
As part of this evaluation, the board of directors and management periodically consider strategic alternatives to maximize value for our shareholders, including strategic transactions such as an acquisition, or a sale or spin-off of non-strategic company assets or businesses.
Included in operating expenses for the year ended December 31, 2023 was a $9.2 million reduction to the fair value of the contingent consideration liability for certain post-closing revenue focused milestones from the acquisition of MENU Technologies A.G. (the "MENU Acquisition") compared to a $4.4 million reduction for the year 31 Table of Contents ended December 31, 2022.
Included in operating expenses for the year ended December 31, 2024 was a $0.6 million reduction to the fair value of the contingent consideration liability for certain post-closing revenue focused milestones from the MENU Acquisition compared to a $9.2 million reduction for the year ended December 31, 2023.
Cash used in investing activities was $7.8 million for the year ended December 31, 2023, compared to $66.7 million for the year ended December 31, 2022.
Cash used in investing activities was $180.1 million for the year ended December 31, 2024, compared to $7.8 million for the year ended December 31, 2023.
Other Operating Expenses: Amortization of Intangible Assets / Contingent Consideration / Insurance Proceeds Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Amortization of identifiable intangible assets $ 1,858 $ 1,863 $ 1,825 0.4 % 0.5 % 0.6 % (0.3) % 2.1 % Adjustment to contingent consideration liability (9,200) (4,400) — (2.2) % (1.2) % — % 109.1 % N/A Gain on insurance proceeds $ (500) $ — $ (4,400) (0.1) % — % (1.6) % N/A (100.0) % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Amortization of identifiable intangible assets was $1.9 million for the year ended December 31, 2023, which remained relatively unchanged as compared to $1.9 million for the year ended December 31, 2022.
Other Operating Expenses: Amortization of Intangible Assets / Contingent Consideration / Insurance Proceeds Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Amortization of identifiable intangible assets $ 8,452 $ 1,858 $ 1,863 2.4 % 0.7 % 0.7 % >200 % (0.3) % Adjustment to contingent consideration liability (600) (9,200) (4,400) (0.2) % (3.3) % (1.7) % (93.5) % 109.1 % Gain on insurance proceeds $ (495) $ (500) $ — (0.1) % (0.2) % — % (1.0) % N/A For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Amortization of identifiable intangible assets was $8.5 million for the year ended December 31, 2024, an increase of $6.6 million as compared to $1.9 million for the year ended December 31, 2023.
Interest Expense, Net Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Interest expense, net $ (6,931) $ (8,811) $ (18,147) (1.7) % (2.5) % (6.4) % (21.3) % (51.4) % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Interest expense, net was $6.9 million for the year ended December 31, 2023, a decrease of $1.9 million or 21.3% as compared to $8.8 million for the year ended December 31, 2022.
Interest Expense, Net Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Interest expense, net $ (10,167) $ (6,931) $ (8,811) (2.9) % (2.5) % (3.4) % 46.7 % (21.3) % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Interest expense, net was $10.2 million for the year ended December 31, 2024, an increase of $3.2 million or 46.7% as compared to $6.9 million for the year ended December 31, 2023.
Sales and Marketing Expenses ("S&M") Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Sales and marketing $ 38,513 $ 34,900 $ 24,166 9.3 % 9.8 % 8.5 % 10.4 % 44.4 % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 S&M expenses were $38.5 million for the year ended December 31, 2023, an increase of $3.6 million or 10.4% compared to $34.9 million for the year ended December 31, 2022.
Sales and Marketing Expenses ("S&M") Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Sales and marketing $ 41,708 $ 38,513 $ 34,900 11.9 % 13.9 % 13.3 % 8.3 % 10.4 % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 S&M expenses were $41.7 million for the year ended December 31, 2024, an increase of $3.2 million or 8.3% compared to $38.5 million for the year ended December 31, 2023.
EBITDA represents net loss before income taxes, interest expense and depreciation and amortization. Adjusted EBITDA represents EBITDA as adjusted to exclude certain non-cash and non-recurring charges, including stock-based compensation, acquisition expenses, certain pending litigation expenses and other non-recurring charges that may not be indicative of our financial performance.
Adjusted EBITDA Represents net loss before income taxes, interest expense and depreciation and amortization adjusted to exclude certain non-cash and non-recurring charges that may not be indicative of our financial performance.
Other Expense, Net Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Other expense, net $ (489) $ (1,224) $ (1,279) (0.1) % (0.3) % (0.5) % (60.0) % (4.3) % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Other expense, net was $0.5 million for the year ended December 31, 2023, an increase of $0.7 million as compared to $1.2 million for the year ended December 31, 2022.
Other Income (Expense), Net Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Other income (expense), net $ 1,146 $ (485) $ (1,068) 0.3 % (0.2) % (0.4) % (54.6) % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Other income (expense), net was $1.1 million for the year ended December 31, 2024, an increase of $1.6 million as compared to ($0.5) million for the year ended December 31, 2023.
Adjusted net loss and adjusted diluted net loss per share represents net loss and net loss per share excluding amortization of acquired intangible assets, certain non-cash and non-recurring charges, including stock-based compensation, acquisition expense, certain pending litigation expenses and other non-recurring charges that may not be indicative of our financial performance.
Non-GAAP diluted net loss per share Represents net loss per share excluding amortization of acquired intangible assets and certain non-cash and non-recurring charges that may not be indicative of our financial performance.
We do not have any off-balance sheet arrangements or obligations. We expect our available cash and cash equivalents will be sufficient to meet our operating needs for at least the next 12 months.
We expect our available cash and cash equivalents will be sufficient to meet our operating needs for at least the next 12 months.
Hardware revenues were $103.4 million for the year ended December 31, 2023, a decrease of $11.0 million or 9.6% compared to $114.4 million for the year ended December 31, 2022.
Hardware revenues were $87.0 million for the year ended December 31, 2024, a decrease of $16.4 million or 15.8% compared to $103.4 million for the year ended December 31, 2023.
Revenue Recognition Restaurant/Retail The Company's revenue in the Restaurant/Retail segment is derived from three types of revenue: hardware sales, subscription services, and professional services. ASC Topic 606 : Revenue from Contracts with Customers requires the Company to distinguish and measure performance obligations under customer contracts. Contract consideration is allocated to all performance obligations within the arrangement or contract.
Revenue Recognition The Company's revenue is derived from three types of revenue: hardware sales, subscription services, and professional services, which may be sold separately or bundled together in a single contract. ASC Topic 606, Revenue from Contracts with Customers requires the Company to distinguish and measure performance obligations under customer contracts.
Over the next 12 months our total contractual obligations are $35.9 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $27.1 million, interest payments of $7.4 million related to the Senior Notes, and facility leases of $1.4 million.
Over the next 12 months our total contractual obligations are $58.9 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $42.7 million, interest payments on long-term debt of $13.4 million and facility lease obligations of $2.8 million.
A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including revenue growth, operating income margin and discount rate. These assumptions vary between the 41 Table of Contents reporting units.
The income approach incorporates the use of a discounted cash flow (DCF) analysis. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including revenue growth, operating income margin and discount rate.
Our non-current contractual obligations are $414.2 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $10.5 million, interest payments of $15.7 million and principal payments of $385.0 million related to the Senior Notes, and facility leases of $3.0 million.
Our non-current contractual obligations are $435.9 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $31.1 million, interest payments of $22.7 million and principal payments of $375.0 million related to long-term debt, and facility leases of $7.1 million.
Cash used in financing activities was $1.6 million for the year ended December 31, 2023, compared to cash provided by financing activities of $2.6 million for the year ended December 31, 2022. Cash used in financing activities for the year ended December 31, 2023, was substantially driven by stock based compensation related transactions.
Cash provided by financing activities was $278.5 million for the year ended December 31, 2024, compared to cash used in financing activities of $1.6 million for the year ended December 31, 2023.
Subscription service revenues were $122.6 million for the year ended December 31, 2023, an increase of $25.1 million or 25.7% compared to $97.5 million for the year ended December 31, 2022.
Subscription service revenues were $207.4 million for the year ended December 31, 2024, an increase of $84.8 million or 69.2% compared to $122.6 million for the year ended December 31, 2023.
Our actual cash needs will depend on many factors, including our rate of revenue and ARR growth, the timing and extent of spending to support our product development and corporate development efforts, the timing of introductions of new products and enhancements to existing products, market acceptance of our products, and the factors described above in this Part II, Item 7.
Refer to "Note 17 - Subsequent Events" for further information on extinguishment of the Credit Facility and the private offering of the 2030 Notes. 39 Table of Contents Our actual cash needs will depend on many factors, including our rate of revenue growth, growth of our SaaS revenues, the timing and extent of spending to support our product development and acquisition integration efforts, the timing of introductions of new products and enhancements to existing products, market acceptance of our products, and the factors described above in Part II, Item 7.
Loss on Extinguishment of Debt Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Loss on extinguishment of debt $ (635) $ — $ (11,916) (0.2) % — % (4.2) % N/A (100.0) % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Loss on extinguishment of debt was $0.6 million for the year ended December 31, 2023, related to the induced conversion of the 4.500% Convertible Senior Notes due 2024 (the "2024 Notes").
Loss on extinguishment of debt was $0.6 million for the year ended December 31, 2023 related to the induced conversion of the 4.500% Convertible Senior Notes due 2024 (the "2024 Notes").
General and Administrative Expenses ("G&A") Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 General and administrative $ 68,992 $ 66,319 $ 59,832 16.6 % 18.6 % 21.2 % 4.0 % 10.8 % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 G&A expenses were $69.0 million for the year ended December 31, 2023, an increase of $2.7 million or 4.0% compared to $66.3 million for the year ended December 31, 2022.
General and Administrative Expenses ("G&A") Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 General and administrative $ 108,898 $ 72,139 $ 69,770 31.1 % 26.1 % 26.6 % 51.0 % 3.4 % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 G&A expenses were $108.9 million for the year ended December 31, 2024, an increase of $36.8 million or 51.0% compared to $72.1 million for the year ended December 31, 2023.
Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, the carrying amount of property, plant and equipment including right-to-use assets and liabilities, identifiable intangible assets and goodwill, valuation allowances for receivables, valuation of excess and obsolete inventories, and measurement of contingent consideration at fair value.
Significant items subject to these estimates and assumptions include revenue recognition, the recognition and measurement of assets acquired and liabilities assumed in business combinations at fair value, identifiable intangible assets and goodwill, valuation allowances for receivables, classification of discontinued operations, and valuation of excess and obsolete inventories. Actual results could differ from these estimates.
As of December 31, 2023, we had cash and cash equivalents of $37.4 million and short-term investments of $37.2 million. Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less, including money market funds.
As of December 31, 2024, we had cash and cash equivalents of $108.1 million. Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less, including money market funds. Cash used in operating activities was $25.2 million for the year ended December 31, 2024, compared to $17.1 million for the year ended December 31, 2023.
Other expense, net substantially includes rental income, net of applicable expenses, foreign currency transactions gains and losses and other non-operating income (expense). The change was substantially driven by sales and use tax expense and other miscellaneous expenses.
Other income (expense), net substantially includes foreign currency transactions gains and losses and other miscellaneous non-operating income (expense).
Gain on insurance proceeds was $0.5 million for the year ended December 31, 2023, in connection with our settlement of a legacy claim. There was no comparable gain for the year ended December 31, 2022 .
Included in operating expenses for the year ended December 31, 2024 was $0.5 million in insurance proceeds from the settlement of legacy insurance claims compared to $0.5 million in insurance proceeds from the settlement of a legacy insurance claim for the year ended December 31, 2023.
Contract margin as a percentage of contract revenue for the year ended December 31, 2023, decreased to 6.4% compared to 8.1% for the year ended December 31, 2022.
Hardware gross margin as a percentage of hardware revenue for the year ended December 31, 2024, increased to 24.3% as compared to 22.3% for the year ended December 31, 2023.
Taxes Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 (Provision for) benefit from income taxes $ (1,988) $ (1,252) $ 9,424 (0.5) % (0.4) % 3.3 % 58.8 % (113.3) % 32 Table of Contents For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 The provision for income taxes of $2.0 million for the year ended December 31, 2023 was substantially due to foreign jurisdiction tax obligations.
Taxes Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Benefit from (provision for) income taxes $ 4,768 $ (1,848) $ (1,134) 1.4 % (0.7) % (0.4) % 63.0 % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 The benefit from (provision for) income taxes was $4.8 million for the year ended December 31, 2024, an increase of $6.6 million as compared to $(1.8) million for the year ended December 31, 2023.
Cash used in investing activities for the year ended December 31, 2023, included $1.9 million of cash consideration, net of cash acquired, for the rights to ongoing payment facilitator referral commissions from a privately held restaurant technology company (the "Q4 2023 Acquisition") and capital expenditures of $5.5 million for internal use software and $5.3 million for developed technology costs associated with our Restaurant/Retail software platforms, partially off-set by $5.0 million of proceeds from net sales of short-term held-to-maturity securities.
Cash used in investing activities for the year ended December 31, 2024, included $309.4 million of cash consideration paid in connection with the Stuzo Acquisition, TASK Group Acquisition, and Delaget Acquisition (net of cash acquired) and capital expenditures of $5.8 million for developed technology costs associated with our software platforms, partially offset by $96.1 million of cash consideration received in connection with the disposition of PGSC and RRC and $36.7 million of proceeds from net sales of short-term held-to-maturity investments.
Professional service margin as a percentage of professional service revenue for the year ended December 31, 2023, decreased to 14.8% as compared to 18.7% for the year ended December 31, 2022. The decrease was substantially driven by decreases in margins for implementation services and hardware service repair, partially offset by an increase in margin on our installation services.
Professional service gross margin as a percentage of professional service revenue for the year ended December 31, 2024, increased to 25.4% as compared to 14.8% for the year ended December 31, 2023. The increase primarily consists of increased gross margins for hardware service repair and field operations substantially driven by improved cost management.
The residual increase was substantially driven by increased subscription service revenues from our Guest Engagement services of $10.0 million driven by a 1.3% increase in active sites and a 6.7% increase in average revenue per site.
The residual increase of $21.0 million from Operator Cloud subscription services was driven by a 14.7% organic increase in active sites and a 14.7% organic increase in average revenue per site equally driven by cross-selling initiatives, upselling, and price increases.
The increase was substantially driven by Government segment's Intelligence, Surveillance, and Reconnaissance solutions ("ISR Solutions") product line revenues due to continued Counter small Unmanned Aircraft System tasks orders. 29 Table of Contents Gross Margin Year Ended December 31, Gross Margin Percentage Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Gross margin Hardware $ 23,072 $ 22,186 $ 24,173 22.3 % 19.4 % 23.0 % 4.0 % (8.2) % Subscription service 58,862 50,075 23,998 48.0 % 51.4 % 38.3 % 17.5 % 108.7 % Professional service 7,512 9,456 8,113 14.8 % 18.7 % 19.0 % (20.6) % 16.6 % Contract 8,864 7,576 5,837 6.4 % 8.1 % 8.0 % 17.0 % 29.8 % Total gross margin $ 98,310 $ 89,293 $ 62,121 23.6 % 25.1 % 22.0 % 10.1 % 43.7 % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Total gross margin as a percentage of total revenue for the year ended December 31, 2023, decreased to 23.6% as compared to 25.1% for the year ended December 31, 2022.
Gross Margin Year Ended December 31, Gross Margin Percentage Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Gross margin Subscription service $ 110,903 $ 58,862 $ 50,075 53.5 % 48.0 % 51.4 % 5.5 % (3.4) % Hardware 21,117 23,072 22,186 24.3 % 22.3 % 19.4 % 2.0 % 2.9 % Professional service 14,104 7,512 9,456 25.4 % 14.8 % 18.7 % 10.6 % (3.9) % Total gross margin $ 146,124 $ 89,446 $ 81,717 41.8 % 32.3 % 31.1 % 9.5 % 1.2 % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Total gross margin as a percentage of total revenue for the year ended December 31, 2024, increased to 30 Table of Contents 41.8% as compared to 32.3% for the year ended December 31, 2023.
Financial Statements and Supplementary Data" for additional information. 28 Table of Contents Segment Revenue by Product Line as Percentage of Total Revenue Year Ended December 31, Percentage of total revenue Increase (decrease) In thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Hardware $ 103,391 $ 114,410 $ 105,014 24.9 % 32.2 % 37.1 % (9.6) % 8.9 % Subscription service 122,597 97,499 62,649 29.5 % 27.4 % 22.1 % 25.7 % 55.6 % Professional service 50,726 50,438 42,688 12.2 % 14.2 % 15.1 % 0.6 % 18.2 % Total Restaurant/Retail $ 276,714 $ 262,347 $ 210,351 66.5 % 73.7 % 74.4 % 5.5 % 24.7 % Mission systems 35,583 35,458 38,311 8.6 % 10.0 % 13.5 % 0.4 % (7.4) % ISR 102,153 56,141 33,188 24.6 % 15.8 % 11.7 % 82.0 % 69.2 % Commercial software 1,373 1,849 1,026 0.3 % 0.5 % 0.4 % (25.7) % 80.2 % Total Government $ 139,109 $ 93,448 $ 72,525 33.5 % 26.3 % 25.6 % 48.9 % 28.8 % Total revenue $ 415,823 $ 355,795 $ 282,876 100.0 % 100.0 % 100.0 % 16.9 % 25.8 % Revenues, Net Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Revenues, net: Hardware $ 103,391 $ 114,410 $ 105,014 24.9 % 32.2 % 37.1 % (9.6) % 8.9 % Subscription service 122,597 97,499 62,649 29.5 % 27.4 % 22.1 % 25.7 % 55.6 % Professional service 50,726 50,438 42,688 12.2 % 14.2 % 15.1 % 0.6 % 18.2 % Contract 139,109 93,448 72,525 33.5 % 26.3 % 25.6 % 48.9 % 28.8 % Total revenues, net $ 415,823 $ 355,795 $ 282,876 100.0 % 100.0 % 100.0 % 16.9 % 25.8 % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Total revenues were $415.8 million for the year ended December 31, 2023, an increase of $60.0 million or 16.9% compared to $355.8 million for the year ended December 31, 2022.
Financial Statements and Supplementary Data" for additional information. 29 Table of Contents Revenues, Net Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Revenues, net: Subscription service $ 207,422 $ 122,597 $ 97,499 59.3 % 44.3 % 37.2 % 69.2 % 25.7 % Hardware 87,040 103,391 114,410 24.9 % 37.4 % 43.6 % (15.8) % (9.6) % Professional service 55,520 50,726 50,438 15.9 % 18.3 % 19.2 % 9.5 % 0.6 % Total revenues, net $ 349,982 $ 276,714 $ 262,347 100.0 % 100.0 % 100.0 % 26.5 % 5.5 % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Total revenues were $350.0 million for the year ended December 31, 2024, an increase of $73.3 million or 26.5% compared to $276.7 million for the year ended December 31, 2023.
Refer to "Key Performance Indicators and Non-GAAP Financial Measures" below for important information on key performance indicators and non-GAAP financial measures, including ARR, active sites, and adjusted subscription service gross margin, used by us to evaluate Restaurant/Retail segment performance. 27 Table of Contents RESULTS OF OPERATIONS Results of operations for the years ended December 31, 2023, 2022, and 2021 were as follows: Consolidated Results Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Net revenues: Hardware $ 103,391 $ 114,410 $ 105,014 24.9 % 32.2 % 37.1 % (9.6) % 8.9 % Subscription service 122,597 97,499 62,649 29.5 % 27.4 % 22.1 % 25.7 % 55.6 % Professional service 50,726 50,438 42,688 12.2 % 14.2 % 15.1 % 0.6 % 18.2 % Contract 139,109 93,448 72,525 33.5 % 26.3 % 25.6 % 48.9 % 28.8 % Total revenues, net $ 415,823 $ 355,795 $ 282,876 100.0 % 100.0 % 100.0 % 16.9 % 25.8 % Gross margin Hardware 23,072 22,186 24,173 5.5 % 6.2 % 8.5 % 4.0 % (8.2) % Subscription service 58,862 50,075 23,998 14.2 % 14.1 % 8.5 % 17.5 % 108.7 % Professional service 7,512 9,456 8,113 1.8 % 2.7 % 2.9 % (20.6) % 16.6 % Contract 8,864 7,576 5,837 2.1 % 2.1 % 2.1 % 17.0 % 29.8 % Total gross margin 98,310 89,293 62,121 23.6 % 25.1 % 22.0 % 10.1 % 43.7 % Operating expenses: Sales and marketing 38,513 34,900 24,166 9.3 % 9.8 % 8.5 % 10.4 % 44.4 % General and administrative 68,992 66,319 59,832 16.6 % 18.6 % 21.2 % 4.0 % 10.8 % Research and development 58,356 48,643 34,579 14.0 % 13.7 % 12.2 % 20.0 % 40.7 % Amortization of identifiable intangible assets 1,858 1,863 1,825 0.4 % 0.5 % 0.6 % (0.3) % 2.1 % Adjustment to contingent consideration liability (9,200) (4,400) — (2.2) % (1.2) % — % 109.1 % N/A Gain on insurance proceeds (500) — (4,400) (0.1) % — % (1.6) % N/A (100.0) % Total operating expenses 158,019 147,325 116,002 38.0 % 41.4 % 41.0 % 7.3 % 27.0 % Operating loss (59,709) (58,032) (53,881) (14.4) % (16.3) % (19.0) % 2.9 % 7.7 % Other expense, net (489) (1,224) (1,279) (0.1) % (0.3) % (0.5) % (60.0) % (4.3) % Loss on extinguishment of debt (635) — (11,916) (0.2) % — % (4.2) % N/A (100.0) % Interest expense, net (6,931) (8,811) (18,147) (1.7) % (2.5) % (6.4) % (21.3) % (51.4) % Loss before (provision for) benefit from income taxes (67,764) (68,067) (85,223) (16.3) % (19.1) % (30.1) % (0.4) % (20.1) % (Provision for) benefit from income taxes (1,988) (1,252) 9,424 (0.5) % (0.4) % 3.3 % 58.8 % (113.3) % Net loss $ (69,752) $ (69,319) $ (75,799) (16.8) % (19.5) % (26.8) % 0.6 % (8.5) % Beginning with this Annual Report, we retroactively split our "Selling, general and administrative" financial statement line item ("FSLI") into two FSLIs, "Sales and marketing" and "General and administrative".
Financial Statements and Supplementary Data" of this Annual Report for additional information about our income taxes and effective tax rate. 28 Table of Contents RESULTS OF OPERATIONS Results of operations for the years ended December 31, 2024, 2023, and 2022 were as follows: Consolidated Results Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Revenues, net: Subscription service $ 207,422 $ 122,597 $ 97,499 59.3 % 44.3 % 37.2 % 69.2 % 25.7 % Hardware 87,040 103,391 114,410 24.9 % 37.4 % 43.6 % (15.8) % (9.6) % Professional service 55,520 50,726 50,438 15.9 % 18.3 % 19.2 % 9.5 % 0.6 % Total revenues, net $ 349,982 $ 276,714 $ 262,347 100.0 % 100.0 % 100.0 % 26.5 % 5.5 % Gross margin Subscription service 110,903 58,862 50,075 31.7 % 21.3 % 19.1 % 88.4 % 17.5 % Hardware 21,117 23,072 22,186 6.0 % 8.3 % 8.5 % (8.5) % 4.0 % Professional service 14,104 7,512 9,456 4.0 % 2.7 % 3.6 % 87.8 % (20.6) % Total gross margin 146,124 89,446 81,717 41.8 % 32.3 % 31.1 % 63.4 % 9.5 % Operating expenses: Sales and marketing 41,708 38,513 34,900 11.9 % 13.9 % 13.3 % 8.3 % 10.4 % General and administrative 108,898 72,139 69,770 31.1 % 26.1 % 26.6 % 51.0 % 3.4 % Research and development 67,258 58,356 48,643 19.2 % 21.1 % 18.5 % 15.3 % 20.0 % Amortization of identifiable intangible assets 8,452 1,858 1,863 2.4 % 0.7 % 0.7 % >200 % (0.3) % Adjustment to contingent consideration liability (600) (9,200) (4,400) (0.2) % (3.3) % (1.7) % (93.5) % 109.1 % Gain on insurance proceeds (495) (500) — (0.1) % (0.2) % — % (1.0) % N/A Total operating expenses 225,221 161,166 150,776 64.4 % 58.2 % 57.5 % 39.7 % 6.9 % Operating loss (79,097) (71,720) (69,059) (22.6) % (25.9) % (26.3) % 10.3 % 3.9 % Other income (expense), net 1,146 (485) (1,068) 0.3 % (0.2) % (0.4) % (54.6) % Loss on extinguishment of debt (6,560) (635) — (1.9) % (0.2) % — % >200 % N/A Interest expense, net (10,167) (6,931) (8,811) (2.9) % (2.5) % (3.4) % 46.7 % (21.3) % Loss from continuing operations before income taxes (94,678) (79,771) (78,938) (27.1) % (28.8) % (30.1) % 18.7 % 1.1 % Benefit from (provision for) income taxes 4,768 (1,848) (1,134) 1.4 % (0.7) % (0.4) % 63.0 % Net loss from continuing operations $ (89,910) $ (81,619) $ (80,072) (25.7) % (29.5) % (30.5) % 10.2 % 1.9 % Net income from discontinued operations 84,923 11,867 10,753 24.3 % 4.3 % 4.1 % >200 % 10.4 % Net loss $ (4,987) $ (69,752) $ (69,319) (1.4) % (25.2) % (26.4) % (92.9) % 0.6 % Historical results from our Government segment are reported as discontinued operations.
Professional service revenues were $50.7 million for the year ended December 31, 2023, which remained relatively unchanged compared to $50.4 million for the year ended December 31, 2022. Contract revenues were $139.1 million for the year ended December 31, 2023, an increase of $45.7 million or 48.9% compared to $93.4 million for the year ended December 31, 2022.
Hardware revenues will continue to be affected by the timing of the aforementioned drivers. Professional service revenues were $55.5 million for the year ended December 31, 2024, an increase of $4.8 million or 9.5% compared to $50.7 million for the year ended December 31, 2023.
The market approach incorporates the use of the quoted price and public company methods utilizing public market data for our company and comparable companies for each of our two reporting segments. Restaurants/Retail: We performed a quantitative assessment to test our Restaurant/Retail reporting unit impairment as of October 1, 2023.
The market approach incorporates the use of the quoted price and public company methods utilizing public market data for our company and comparable companies.
Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of our future or expected results. Active sites represent locations active on our subscription services as of the last day of the respective reporting period.
Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of our future or expected results. Our reported ARR is based on a constant currency, using the exchange rates established at the beginning of the year and consistently applied throughout the period and to comparative periods presented.
Discussions related to year-over-year comparisons between 2022 and 2021 are included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2022, filed with the SEC on March 21, 2023. 2023 Performance Highlights • Annual Recurring Revenues ("ARR") grew to $136.9 million - a 22.8% increase from $111.4 million reported for the year ended December 31, 2022. • Active sites expansion ◦ Operator Solutions active sites expanded to 23.3 thousand - a 19.5% increase from the 19.5 thousand reported for the year ended December 31, 2022. ◦ Back Office active sites expanded to 7.7 thousand - an 10.0% increase from the 7.0 thousand reported for the year ended December 31, 2022.
Discussions related to year-over-year comparisons between 2023 and 2022 are included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Recast Sections of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on January 6, 2025. 2024 Operating Performance Highlights Organic - Year-over-year growth of 20.7% Total - Year-over-year growth of 101.6% GAAP - Year-over-year 5.5% improvement Non-GAAP - Year-over-year 0.5% decline Net Loss from Cont.
Research and Development Expenses Year Ended December 31, Percentage of total revenue Increase (decrease) in thousands 2023 2022 2021 2023 2022 2021 2023 vs 2022 2022 vs 2021 Research and development $ 58,356 $ 48,643 $ 34,579 14.0 % 13.7 % 12.2 % 20.0 % 40.7 % For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 R&D expenses were $58.4 million for the year ended December 31, 2023, an increase of $9.7 million or 20.0% compared to $48.6 million for the year ended December 31, 2022.
The residual increase was substantially driven by a $18.6 million increase in certain non-cash or non-recurring expenses consisting of $10.4 million in stock-based compensation, $6.3 million in costs related to transaction due diligence, $1.0 million in depreciation and amortization, $0.7 million in severance, and $0.2 million in asset impairment expense. 31 Table of Contents Research and Development Expenses ("R&D") Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Research and development $ 67,258 $ 58,356 $ 48,643 19.2 % 21.1 % 18.5 % 15.3 % 20.0 % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 R&D expenses were $67.3 million for the year ended December 31, 2024, an increase of $8.9 million or 15.3% compared to $58.4 million for the year ended December 31, 2023.
Contracts typically require payment within 30 to 90 days from the shipping date or installation date, depending on the Company's terms with the customer. The primary method used to estimate a stand-alone selling price, is the price that the Company charges for the particular good or service sold by the Company separately under similar circumstances to similar customers.
The Company evaluated the potential performance obligations and evaluated whether each performance obligation met the ASC Topic 606 criteria to be considered a distinct performance obligation. The primary method used to estimate a stand-alone selling price is the price that the Company charges for the particular good or service sold by the Company separately under similar circumstances to similar customers.
The decrease was substantially driven by decreases in hardware revenues from terminals of $6.7 million and kitchen display systems of $5.3 million, both substantially driven by a decrease in sales volume.
The decrease was substantially driven by decreases in hardware revenues from terminals of $7.2 million, kitchen display systems of $2.9 million, peripherals (scanners, printers, payment devices) of $2.6 million, and tablets of $2.5 million. These decreases were substantially driven by the timing of tier one enterprise customer hardware refresh cycles and timing of onboarding of Operator Cloud customers buying hardware.
Goodwill Fair values of the reporting units are estimated using a weighted methodology considering the output from both the income and market approaches. The income approach incorporates the use of a DCF analysis.
Interest is allocated to discontinued operations if the interest is directly attributable to the discontinued operations or is interest on debt that is required to be repaid as a result of the disposal. 41 Table of Contents Goodwill Fair values of the reporting unit are estimated using a weighted methodology considering the output from both the income and market approaches.
Subscription service margin as a percentage of subscription service revenue for the year ended December 31, 2023, decreased to 48.0% as compared to 51.4% for the year ended December 31, 2022. The decrease was substantially driven by absorbing the initial growth of MENU and PAR Payment Services, which are both early stage products.
Subscription service gross margin as a percentage of subscription service revenue for the year ended December 31, 2024, increased to 53.5% as compared to 48.0% for the year ended December 31, 2023.
Refer to "Note 1 - Summary of Significant Accounting Policies" within "Item 8.
Refer to "Note 4 - Discontinued Operations" within "Item 8.
Management believes that adjusting its net loss and diluted net loss per share to remove non-recurring charges provides a useful perspective with respect to the Company's results of operations and provides supplemental information to both management and investors by removing items that are difficult to predict and are often unanticipated.
We believe that adjusting our diluted net loss per share to remove non-cash and non-recurring charges provides a useful perspective with respect to the Company's operating performance as well as comparisons to past and competitor operating results. Stock-based compensation Consists of non-cash charges related to our employee equity incentive plans.
None of its contracts as of December 31, 2023 or December 31, 2022 contained a significant financing component. Inventories The Company’s inventories are valued at the lower of cost and net realizable value, with cost determined using the weighted average cost method.
Where we conclude that we are the principal, we recognize revenue on a gross basis; otherwise, revenue is recorded net of certain pass-through costs. 40 Table of Contents Inventories The Company’s inventories are valued at the lower of cost and net realizable value, with cost determined using the weighted average cost method.
Non-GAAP Financial Measures Within this Annual Report, the Company makes reference to adjusted subscription service gross margin, EBITDA, adjusted EBITDA, adjusted net loss, and adjusted diluted net loss per share which are non-GAAP financial measures. Adjusted subscription service gross margin represents subscription service gross margin adjusted to exclude amortization from acquired and internally developed software.
The tables below provide reconciliations between net loss and adjusted EBITDA, diluted net loss per share and non-GAAP diluted net loss per share, and subscription service gross margin percentage and non-GAAP subscription service gross margin percentage.
Removed
The increase was substantially driven by increased subscription service revenues from our Operator Solutions services of $13.5 million driven by a 19.5% increase in active sites and a 14.5% increase in average revenue per site.
Added
Ops. Year-over-year increase of $8.3 million Adjusted EBITDA Year-over-year improvement of $32.0 million 25 Table of Contents Refer to "Key Performance Indicators and Non-GAAP Financial Measures" below for important information on key performance indicators, such as annual recurring revenue (ARR), and non-GAAP financial measures, including non-GAAP subscription service gross margin percentage and adjusted EBITDA.
Removed
Hardware margin as a percentage of hardware revenue for the year ended December 31, 2023, increased to 22.3% as compared to 19.4% for the year ended December 31, 2022. The increase in margin was substantially driven by improved inventory management resulting in lower excess and obsolescent inventory charges during the year ended December 31, 2023.
Added
We use these key performance indicators and non-GAAP financial measures to evaluate our performance. 2024 Corporate Development Highlights • Stuzo Acquisition: In March 2024, the Company acquired Stuzo, LLC for approximately $190.0 million.
Removed
Subscription service margin for the year ended December 31, 2023, included $22.2 million of amortization of acquired and internally developed technology compared to $21.4 million of amortization of acquired and internally developed technology for the year ended December 31, 2022.
Added
The purchase consideration was approximately $170.5 million paid in cash, subject to certain adjustments (including customary adjustments for Stuzo cash, debt, debt-like items, and net working capital), and $19.2 million paid in shares of Company common stock. ◦ Private Placement of Common Stock: In connection with, and to partially fund the Stuzo Acquisition, in March 2024, the Company issued and sold 5,174,638 shares of its common stock at $38.65 per share.
Removed
Excluding the amortization of acquired and internally developed technology, adjusted subscription service gross margin was 66.1% compared to 73.3% for the years ended December 31, 2023 and 2022, respectively (refer to "Non-GAAP Financial Measures" below for important information regarding adjusted subscription service gross margin, a non-GAAP financial measure).
Added
Net proceeds from the private placement were approximately $194.4 million, net of issuance costs of $5.5 million. • Divestiture of PAR Government Systems Corporation: In June 2024, the Company divested PAR Government Systems Corporation ("PGSC") for a cash purchase price of $95.0 million, before customary post-closing adjustments. • Divestiture of Rome Research Corporation: In July 2024, the Company divested Rome Research Corporation ("RRC") for $7.0 million, before customary post-closing adjustments, completing the divestiture of PAR's Government segment.
Removed
The decrease in contract margin was substantially driven by the Air Force Research Laboratory Counter-small Unmanned Aircraft System contract within the Government segment's ISR Solutions product line having a lower contracted margin than historical contracts.
Added
In advance of the divestiture, the Government segment's results were classified as discontinued operations beginning with the quarter ended June 30, 2024, and PAR now operates in a single reportable segment. • TASK Group Acquisition: In July 2024, the Company acquired TASK Group for approximately $245.5 million.
Removed
The increase was substantially driven by a $1.9 million increase in sales and marketing efforts for MENU driven by the year ended December 31, 2022 only 30 Table of Contents having approximately five months of post-acquisition MENU S&M expenses.
Added
The purchase consideration was approximately $131.5 million paid in cash and $114.0 million paid in shares of Company common stock. ◦ Credit Facility: In connection with, and to partially fund the TASK Group Acquisition, in July 2024, the Company entered into a credit agreement (the "Credit Agreement"), with Blue Owl Capital Corporation, as administrative agent and collateral agent, and Blue Owl Credit Advisors, LLC, as lead arranger and bookrunner, that provides for a term loan in an initial aggregate principal amount of $90.0 million (the "Credit Facility" and, the loans thereunder, the “Term Loans”). • Delaget Acquisition: In December 2024, the Company acquired Delaget, LLC for approximately $125.1 million.
Removed
The residual increase was substantially driven by an increase in purchased services and higher compensation costs associated with additional personnel as we continue to support the growth of our business.
Added
The purchase consideration was approximately $16.9 million paid in cash, subject to certain adjustments (including customary adjustments for Delaget cash, debt, debt-like items, and net working capital), and $108.2 million paid in shares of Company common stock.
Removed
The increase was substantially driven by a $4.3 million increase in internal technology infrastructure costs substantially driven by an increase in purchased services as we continue to support the growth of our business, partially offset by a $1.3 million decrease in employee benefit expenses.
Added
Refer to “Note 2 – Acquisitions”, “Note 4 – Discontinued Operations”, “Note 10 – Debt”, and "Note 11 – Common Stock" of the notes to consolidated financial statements in "Part II, Item 8.
Removed
The increase was substantially driven by an increase in R&D expense related to our offerings for Guest Engagement of $9.4 million, of which $6.2 million was driven by higher compensation costs associated with additional personnel as we continue to improve and diversify our product and service offerings.
Added
Financial Statements and Supplementary Data" of this Annual Report for additional information about the private placement of common stock, Stuzo Acquisition, divestiture of PGSC & RRC, Credit Facility, TASK Group Acquisition, and Delaget Acquisition. 26 Table of Contents COMPONENTS OF RESULTS OF OPERATIONS Revenues Subscription Service Consists of revenue from software-as-a-service ("SaaS") solutions, related software support, managed platform development services, and transaction-based payment processing services.
Removed
The residual increase of $3.2 million was driven by the year ended December 31, 2022 only including approximately five months of post-acquisition MENU R&D expenses.
Added
Hardware Consists of revenue from the sale of point-of-sale terminals and tablets, wireless headsets, drive-thru systems, kitchen display systems, kiosks, printers, payment devices, and other in-store peripherals. Professional Service Consists of revenue from hardware support, installation and implementation, and on-site and technical support.
Removed
There was no comparable loss for the year ended December 31, 2022.
Added
Cost of Sales Subscription Service Consists of expenses directly related to the delivery of our software, including customer support and infrastructure management personnel costs, hosting and cloud infrastructure costs, amortization of capitalized and acquired developed technology, third-party software licensing fees, and payment processing fees.
Removed
The change was substantially driven by a $1.7 million increase in interest revenue from our short-term investments during the year ended December 31, 2023.
Added
Hardware Consists of expenses directly related to the production, procurement, and delivery of hardware products sold to customers, including manufacturing and procurement personnel costs, freight charges, excess and obsolete inventory expenses, and allocated overhead. Professional Service Consists of the personnel costs of our deployment team associated with delivering these services and costs related to hardware repairs and advanced exchange contracts.
Removed
The provision income taxes of $1.3 million for the year ended December 31, 2022 was substantially due to foreign jurisdiction tax obligations.
Added
Operating Expenses Sales and Marketing Consists of employee-related costs incurred for personnel that support sales and marketing activities, as well as general marketing and event costs. General and Administrative Consists of employee-related costs incurred for management and administrative functions, including finance, legal, human resources, and information technology.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese primary currencies are the Great British Pound, the Euro, the Swiss Franc, the Serbian Dinar, the Australian dollar, the Singapore dollar, the Canadian dollar, the Indian Rupee and the Chinese Renminbi. Accordingly, changes in exchange rates may negatively affect our revenue and net income (loss) as expressed in U.S. dollars.
Biggest changeThese primary currencies are the Great British Pound, the Euro, the Swiss Franc, the Serbian Dinar, the Australian dollar, the New Zealand dollar, the Singapore dollar, the Canadian dollar, the Indian Rupee, the Japanese Yen, the Polish Zloty, and the Chinese Renminbi.
We have experienced and will continue to experience fluctuations in our net income (loss) as a result of gains (losses) on these foreign currency transactions and the remeasurement of monetary assets and liabilities. As of December 31, 2023, the impact of foreign currency exchange rate changes on our revenues and net income (loss) was not material.
We have experienced and will continue to experience fluctuations in our net income (loss) as a result of gains (losses) on these foreign currency transactions and the remeasurement of monetary assets and liabilities. As of December 31, 2024, the impact of foreign currency exchange rate changes on our revenues and net income (loss) was not material.
We carry the Senior Notes at face value less amortized debt issuance costs on the on the consolidated balance sheets. Since the Senior Notes bear interest at fixed rates, we have no financial statement risk associated with changes in interest rates.
We carry the Senior Notes at face value less amortized debt issuance costs on the on the consolidated balance sheets. Since the Senior Notes bear interest at fixed rates, we have no financial statement risk associated 42 Table of Contents with changes in interest rates.
The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Interest Rate Risk As of December 31, 2023, we had $120.0 million, and $265.0 million in aggregate principal amount outstanding on the 2026 Notes and the 2027 Notes, respectively.
The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Interest Rate Risk As of December 31, 2024, we had $20.0 million, $265.0 million, and $90.0 million in aggregate principal amount outstanding on the 2026 Notes, the 2027 Notes, and the Credit Facility respectively.
We also have foreign currency risk related to foreign currency transactions and monetary assets and liabilities, including intercompany balances denominated in currencies that are not the functional currency.
Accordingly, changes in exchange rates may negatively affect our revenue and net income (loss) as expressed in U.S. dollars. We also have foreign currency risk related to foreign currency transactions and monetary assets and liabilities, including intercompany balances denominated in currencies that are not the functional currency.
However, the fair value of the Senior Notes changes when the market price of our common stock fluctuates or interest rates change. 43 Table of Contents
However, the fair value of the Senior Notes changes when the market price of our common stock fluctuates or interest rates change. The Credit Facility contained a variable interest rate, presenting interest rate exposure based on the rate selected by management.
Added
As described in "Note 17 – Subsequent Events", the Credit Facility was paid in full on January 30, 2025 and the Credit Agreement was terminated. Refer to "Note 17 - Subsequent Events" for further information on extinguishment of the Credit Facility. 43 Table of Contents

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