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What changed in PAR TECHNOLOGY CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PAR TECHNOLOGY CORP's 2024 and 2025 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 2025 report.

+239 added−221 removedSource: 10-K (2026-02-26) vs 10-K (2025-03-03)

Top changes in PAR TECHNOLOGY CORP's 2025 10-K

239 paragraphs added · 221 removed · 174 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeTo 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.
Biggest changeTo mitigate supply chain risks, we continue to adjust our pricing to reflect market conditions, increase our inventory levels of scarce components, and expand our supplier network by identifying and/or establishing alternative suppliers of our hardware products.
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.
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 Gateway, our front-end technology that reads payment cards and sends customer information to the merchant 5 Table of Contents acquiring bank for processing.
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.
PAR's 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 mission is to enable personalized experiences that connect people to the brands, meals, and moments they love; and our strategy to achieve this mission is grounded in delivering a unified experience across our comprehensive suite of subscription services, hardware, and professional services that simplifies our customers' operations, elevates their customer engagement, and drives their continued success.
Our Mission and Vision Our mission is to enable personalized experiences that connect people to the brands, meals, and moments they love; and our strategy to achieve this mission is grounded in delivering a unified experience across our comprehensive suite of subscription services, hardware, and professional services that simplifies our customers' operations, elevates their customer engagement, and drives their continued success.
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.
To proactively attract diverse talent and broaden our candidate pool, we continue to 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.
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 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.
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.
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 provides 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.
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.
We continually 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.
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.
Our SaaS solutions are extensible and built on open application programming interfaces (“API”) enabling integration by more than 600 integration partners, including leading industry brands, to extend the reach and capabilities of our SaaS solutions and those of our integration partners.
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).
Item 1. BUSINESS Overview PAR is a leading foodservice technology company providing omnichannel cloud-based software and hardware solutions to the restaurant industry in three major restaurant categories – quick service, fast casual, and table service – and to the retail industry, including convenience and fuel retailers (C-Stores).
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.
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 $48.9 million, $41.7 million, and $38.5 million, for the years ended December 31, 2025, 2024, and 2023, respectively.
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.
Our Chief Executive Officer and Chief Human Resources Officer 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.
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.
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.
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.
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, 2025, we employed 1,809 people worldwide, 1,800 of whom were full-time.
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.
Research and development expenses were $81.8 million, $67.3 million, and $58.4 million, for the years ended December 31, 2025, 2024, and 2023, respectively. Intellectual Property We rely on various intellectual property laws, confidentiality procedures, and contractual provisions to establish, maintain, and protect our intellectual property.
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
The SEC also maintains a website at http://www.sec.gov that contains reports, proxy statements and other information regarding SEC registrants, including PAR.
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 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 accounted for 21% of our total revenue in 2025.
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.
We offer depot repair, warranty, and overnight Advanced Exchange services from our office in 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. On-site and technical support.
We regularly assess our facilities to ensure compliance with our health and safety guidelines and regulatory requirements. In December 2024, we launched our Headspace Employee Assistance Program (EAP) to our global team for confidential best-in-class meditation and mindfulness support as well as a full suite of work-life services available to PAR’s full-time employees and their families.
We regularly assess our facilities to ensure compliance with our health and safety guidelines and regulatory requirements. We continue to offer the Headspace Employee Assistance Program (EAP) to our global team, providing confidential, best-in-class meditation, mindfulness support, and a full suite of work-life services to full-time employees and their families.
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.
We conduct annual employee engagement surveys to understand the sentiment of our employees and inform our strategies around employee engagement, retention, and total rewards. In 2025, we continued our 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.
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.
We continually strive to enhance and expand our cloud-based solutions to provide full integration of key 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: PAR ENGAGEMENT, which includes the Punchh and PAR Ordering product offerings, is our expanded guest engagement suite of enterprise-grade, AI-powered tools to manage loyalty, marketing and offers, ordering, and guest data across key touchpoints.
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 .
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 review of our career and compensation framework and the creation of a globally unified total rewards operating model.
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.
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 2025, we launched a company-wide mentorship program as well as a focused rising female leaders summit.
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.
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. In 2026, we will invest in the design and launch of an internally focused learning function to accelerate our career development options.
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.
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. Our dedicated sales teams work closely with potential customers to understand their operational challenges and recommend the most effective solutions.
Additionally, 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.
Additionally, as we expand into new markets, we will encounter established competitors and new market entrants, further challenging our ability to compete effectively. 7 Table of Contents Research and Development Product research, innovation, and product development are an integral part of our business.
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.
We also rolled out a career development management toolkit to enable intentional career discussions between managers and employees, enabling ongoing development of talent and internal mobility across the organization.
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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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Our omnichannel solutions are used in more than 150,000 active restaurants and retail locations across the world. PAR’s solutions are designed with flexibility and openness at their core and are engineered to scale and adapt with brands at every stage of growth.
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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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Our solutions integrate with others, yet deliver significant value when used together across our software, hardware, and payments offerings. With intentional innovation as a priority, PAR’s solutions help streamline operations, drive higher engagement, and strengthen guest experiences for restaurants and retailers globally.
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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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When used together, these tools power personalized loyalty programs with rewards and flexible, branded ordering experiences across web, mobile, and kiosk, with dynamic upsells and menu logic that make ordering and reward redemption easy for guests and operators.
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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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Underneath it all, real-time guest identity and behavioral data unify interactions into a single view, which can then be leveraged through targeted campaigns and personalized offers across email, SMS, web, app, and wallets to increase customer lifetime value.
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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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Outside the continental U.S. we provide our professional services directly or through authorized providers. 6 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.
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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.
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We also introduced the Benepass Wellness Program and Lifestyle Spending Account, providing additional funding for personalized wellness needs to every employee. Additionally, as part of our dedication to employees' health, safety, and well-being, PAR established the donor-funded PAR-Sammon Family Employee Assistance Fund (EAF) to provide support during times of need.
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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.
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Talent Acquisition and Attrition : PAR is committed to attracting top talent from diverse sources to meet current and future business needs. In 2025, we implemented a standardized talent selection process to raise hiring standards and introduced AI-powered resume scanning to reduce time-to-fill while helping to minimize bias.
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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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Available Information Our website is located at https://partech.com .
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In 2024 all people leaders were enrolled to attend PAR’s Leadership Academy, which is designed as an annual program for new and developing people leaders to gain the skills necessary for people management at PAR.
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In 2025, we will continue to invest in training and development tools and additional resources such as tracking career development discussions between employees and managers, investing in individual career coaching, and continuing to create custom development content for specific teams and departments to meet employees where they are.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAcquisition 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.
Biggest changeAcquisition 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, new market segments, or new verticals in which we have limited or no prior experience, which may expose us to unfamiliar market dynamics and heightened execution risk; • cybersecurity and data security and protection related considerations, controls and exposures, including risks related to becoming subject to additional rapidly evolving and complex regulatory regimes; • 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. 12 Table of Contents 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.
Even if holders do not elect to convert their Senior Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Senior Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
Even if holders do not elect to convert their Senior Notes, we could be required under applicable accounting rules to reclassify all or a material portion of the outstanding principal of the Senior Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
Additional information about our impairment testing is contained in "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. Ineffective internal controls could have a material adverse effect on our business, financial conditions, and results of operations .
Additional information about our impairment testing is contained in "Note 1 – Summary of Business and Significant Accounting Policies" of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report. Ineffective internal controls could have a material adverse effect on our business, financial conditions, and results of operations .
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.
If we experience a problem (availability, quantity, quality, or pricing) with one or more of our suppliers that 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.
Bribery 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.
Bribery 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, 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 and regulatory requirements of numerous foreign jurisdictions, including 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.
If we determine an impairment has occurred at any point in time, we will be required to reduce goodwill or identifiable intangible assets on our balance sheet, which could adversely impact our financial condition and results of operations.
If we determine an impairment has occurred at any point in time, we will be required to reduce goodwill or identifiable intangible assets on our balance sheet, which could materially and adversely impact our financial condition and results of operations.
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.
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; 20 Table of Contents • 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.
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.
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, 2025.
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.
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 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.
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 .
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. 10 Table of Contents • Cost of products and components .
These risks could result in operational inefficiencies that materially and adversely affect our business, financial condition, results of operations, and cash flows due to: • unforeseen and unbudgeted costs; • reduced, delayed, or cancelled orders (bookings) for our subscription services, a decrease in sites actively using our subscription services or a decrease in subscription service revenue or annualized recurring revenue (ARR) from our subscription services, or an increase in customer churn; • reduced, delayed, or cancelled hardware sales and installations; and • customer payment delays.
These risks 15 Table of Contents could result in operational inefficiencies that materially and adversely affect our business, financial condition, results of operations, and cash flows due to: • unforeseen and unbudgeted costs; • reduced, delayed, or cancelled orders (bookings) for our subscription services, a decrease in sites actively using our subscription services or a decrease in subscription service revenue or annualized recurring revenue (ARR) from our subscription services, or an increase in customer churn; • reduced, delayed, or cancelled hardware sales and installations; and • customer payment delays.
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.
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 13 Table of Contents 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.
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.
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 and uncertainties with respect to U.S. and foreign trade policies (including new or increased tariffs or other trade 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, hostilities in the Middle East) 19 Table of Contents and global pandemics 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; • 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.
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.
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 efficiency and effectiveness of our operations by streamlining information flow.
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.
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, we have increased our inventory levels of components to satisfy anticipated customer requirements.
Unchecked security defects or vulnerabilities, may result in a material failure of our or our third-party providers\integrators cloud applications and information technology systems, substantial service disruptions, unauthorized access or denial of access, data loss or misappropriation of information, which in turn could result in breach of contract claims, indemnity obligations, governmental investigations and penalties, and reputational damage, which could have a material and adverse effect on our business, financial condition, results of operations and cash flows.
Unchecked security defects or vulnerabilities, may result in a material failure of our or our third-party providers\integrators cloud applications and information technology systems, substantial service disruptions, unauthorized access or denial of 14 Table of Contents access, data loss or misappropriation of information, which in turn could result in breach of contract claims, indemnity obligations, governmental investigations and litigation, indemnity obligations, and reputational damage, which could have a material and adverse effect on our business, financial condition, results of operations and cash flows.
We believe that our products and services do not infringe the intellectual property rights of third parties; however, we cannot guarantee that third parties will not assert infringement or misappropriation claims against us with respect to our current or future products and services, or that any such assertions will not require us to enter into royalty arrangements or settlement agreements, or result in costly litigation or in our being unable to use certain intellectual property.
We believe that our products and services do not infringe the intellectual property rights of third parties; however, third parties have asserted infringement, misappropriation, and other related claims against us in the past and we cannot guarantee that third parties will not assert such claims against us with respect to our current or future products and services, or that any such assertions will not require us to enter into royalty arrangements or settlement agreements, or result in costly litigation or in our being unable to use certain intellectual property.
Additionally, if we are unable to utilize our NOLs or other deferred tax assets due to changes in tax laws or insufficient future taxable income, we could face an increased cash tax liability, which could have a materially adverse effect on cash flows and financial condition.
Additionally, if we are unable to utilize our NOLs or other deferred tax assets due to changes in 18 Table of Contents tax laws or insufficient future taxable income, we could face an increased cash tax liability, which could have a materially adverse effect on cash flows and financial condition.
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 .
We have expanded the regions where we sell our hardware products, and we continue to adjust our pricing to reflect market conditions, increase our inventory levels of scarce components, and expand our supplier network by identifying and/or establishing alternative suppliers of our hardware products. • Cost of labor and labor shortages .
Any one of these 18 Table of Contents consequences or other negative effects could have a material adverse effect on our financial condition, cash flows or results of operations.
Any one of these consequences or other negative effects could have a material adverse effect on our financial condition, cash flows or results of operations.
In addition, the market for technology stocks or the stock market in general may experience uneven investor confidence, which may cause the trading price for our common stock to decline for reasons unrelated to our operating performance.
In addition, the market for technology stocks or the stock market in general has experienced and may continue to experience uneven investor confidence, which may cause the trading price for our common stock to decline for reasons unrelated to our operating performance.
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.
In addition, our international employees, including our employees located in India, Canada, New Zealand, Australia, and Serbia, and third-party consultants, including consultants located in the Philippines, Ukraine, Poland, and Nicaragua, provide software development and support services.
Infringement assertions from third parties may involve patent holding companies or non-practicing entities or other patent owners who have no relevant product revenue, and therefore our viable and supportable defenses may provide little or no deterrence to these entities or patent owners in bringing intellectual property rights claims against us.
Infringement assertions and related causes of action from third parties have involved, and may in the future involve, patent holding companies or non-practicing entities or other patent owners who have no relevant product revenue, and therefore our viable and supportable defenses may provide little or no deterrence to these entities or patent owners in bringing intellectual property rights claims against us.
The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, with jurisdictions around the world applying, or considering applying, laws and regulations related to intellectual property, cybersecurity, export controls, privacy, data security, and data protection to AI, or general legal frameworks on AI, such as the Colorado AI Act, which begins to apply in 2026, or the EU AI Act, parts of which apply beginning in 2025.
The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, with jurisdictions around the world applying, or considering applying, laws and regulations related to intellectual property, cybersecurity, export controls, privacy, data security, and data protection to AI, or general legal frameworks on AI, such as the Colorado AI Act, which goes into effect in June 2026, or the EU AI Act, parts of which went into effect in 2025.
Our certificate of incorporation and bylaws contain certain provisions that may discourage, delay, or prevent a change in our management or control over us.
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.
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.
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.
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.
For the years ended December 31, 2025, 2024, and 2023, 16.9%, 12.5%, and 8.5%, respectively, of our total consolidated revenues were derived from sales outside of the United States.
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.
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, including because of increased demand for hardware products and components from AI data center construction around the world.
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.
For example, we make significant estimates and assumptions when accounting for revenue 17 Table of Contents recognition, the recognition and measurement of assets acquired and liabilities assumed in business combinations and asset acquisitions at fair value, stock-based compensation, identifiable intangible assets and goodwill, valuation allowances for receivables, and valuation of excess and obsolete inventories.
Acquisitions are an element of our growth strategy, which subjects us to risks commonly associated with acquisition transactions, which could materially and adversely affect our business, financial condition, results of operations, and cash flows. We expect to continue to expand our business through acquisitions of complementary companies, products, and technologies.
Acquisitions are an element of our growth strategy, which subjects us to risks commonly associated with acquisition transactions, which could materially and adversely affect our business, financial condition, results of operations, and cash flows. We expect to continue expanding our business through acquisitions of complementary companies, products, and technologies, including those in new or adjacent verticals.
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 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.
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.
Aggregate sales of hardware, subscription services, and professional services to the one customer and their respective franchisees accounted for 21% of our consolidated revenues for the year ended December 31, 2025.
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 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.
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.
Certain areas of our business have and could continue to experience supply chain challenges, including: shortages, shipping delays, and increased costs due to price increases for hardware products and components (including as a result of increased demand from AI data center construction around the world) 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.
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.
Our goodwill was approximately $898.0 million at December 31, 2025 and our intangibles were $203.4 million at December 31, 2025. Identifiable intangible assets are primarily a result of business acquisitions and internally developed capitalized software.
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 .
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.
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.
We cannot assure that we will be successful in achieving or sustaining profitability in the future, among other things: • our investments in new products, new features for existing products—including the development of AI-native products, advanced AI tooling and capabilities, and related infrastructure—may require significantly greater capital than anticipated, or these initiatives may not deliver the expected commercial success, incremental revenue, or business growth; • 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. 16 Table of Contents 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.
We test our goodwill and identifiable intangible assets for impairment annually, or more frequently if an event occurs or circumstances change that would indicate possible impairment. We describe the impairment testing process and results of this testing more thoroughly in “Item 7.
We test our goodwill and identifiable intangible assets for impairment annually, or more frequently if an event occurs or circumstances change that would indicate possible impairment. We describe the impairment testing process more thoroughly in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates.” Our estimates are subject to uncertainties.
Our use of AI could have a material adverse effect on our business, financial condition, and results of operations.
Macroeconomic conditions and geopolitical events could have a material adverse effect on our business, financial condition, results of operations, and cash flows .
Risks Related to Our Business and Operations We face extensive competition in our markets, and our failure to compete effectively could result in decreased demand for our products and services and/or price reductions, which could materially and adversely affect our ability to achieve and sustain profitability and harm our business, financial condition, and results of operations.
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. 9 Table of Contents Risks Related to Our Business and Operations We face extensive competition in our markets, and our failure to compete effectively could result in decreased demand for our products and services and/or price reductions, which could materially and adversely affect our ability to achieve and sustain profitability and harm our business, financial condition, and results of operations.
The trading price of our common stock may experience price and volume volatility, which could impair our ability to finance strategic transactions using our common stock and could result in losses for our shareholders .
The trading price and volume of our common stock has experienced, and may continue to experience, volatility, which could result in losses for our shareholders. Additionally, such volatility could limit our ability to finance strategic transactions, including acquisitions, using our common stock, potentially impacting our ability to pursue valuable opportunities.
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.
Furthermore, certain of our suppliers have and may continue to limit the allocation of hardware products and components to us and could decide to discontinue business with us (including as a result of increased demand from AI data center construction around the world), 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. 11 Table of Contents While we have been able to secure favorable terms from most of our suppliers, this is not the case with all of our suppliers.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates.” Our estimates are subject to uncertainties.
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”.
To offset increased costs, we have and may in the future increase the prices of our hardware products and installation, repair, and field services.
Unfavorable pricing, quantity, and delivery terms negatively impact our gross margins associated with hardware sales and Advanced Exchange, depot repair, and field services. To offset increased costs, we have and may in the future increase the prices of our hardware products and installation, repair, and field services.
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”.
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 . In connection with the preparation of our financial statements, we use certain estimates and assumptions based on historical experience and other factors.
We cannot provide assurance that any transaction will be completed; whether we decide to pursue a transaction will depend on numerous factors, some of which are beyond our control. Such factors include the interest of potential acquisition targets or acquirers, sources of financing and terms, market conditions, and industry trends.
Such factors include the interest of potential acquisition targets or acquirers, sources of financing and terms, market conditions, and industry trends. Even if a transaction is completed, there can be no assurance that the transaction will be successful or have a positive effect on shareholder value.
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.
In addition, our financial results and operations could be adversely affected, including the diversion of management’s attention from our operations and the execution of other strategies. 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.
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.
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 cannot provide assurance that any transaction will be completed; whether we decide to pursue a transaction will depend on numerous factors, some of which are beyond our control.
Transactions involving newly issued common stock or other securities convertible into our common stock, if converted, could result in dilution, possibly substantial, to our shareholders. Dilution may have a negative impact on the price of our common stock if investors react unfavorably to a transaction or if the dilution causes a significant decrease in our earnings per share.
Additionally, dilution may have a negative impact on the price of our common stock if investors react unfavorably to a transaction involving the issuance of shares. Our evaluation or completion of strategic transactions may negatively impact our business and stock price .
We do not intend to disclose developments or provide updates with respect to potential strategic transactions unless and until disclosure is appropriate or required. Accordingly, speculation regarding potential strategic transactions could cause our stock price to significantly fluctuate.
Furthermore, the public announcement of a strategic transaction may negatively impact our operating results if investors react unfavorably to the announcement or if we are not able to realize the anticipated benefits of the transaction. We do not intend to disclose developments or provide updates with respect to potential strategic transactions unless and until disclosure is appropriate or required.
We use AI technologies in our product development, our internal operations, and the products and services we offer, and we intend to further expand our AI use and capabilities to remain competitive; however, ineffective or deficient AI practices by us or third parties could lead to bias or inaccurate information and decision-making, misuse or infringement of intellectual property rights, or operational inefficiencies; moreover, AI technologies can lead to unauthorized disclosure of sensitive information.
However, our expanding use of AI—and that of third parties—carries risks, including the potential for bias or inaccurate outputs leading to flawed decision-making, misuse or infringement of intellectual property rights, operational inefficiencies, and unauthorized disclosure of sensitive information.
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.
For the year ended December 31, 2025, one customer accounts for a significant portion of our revenues.
Removed
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.
Added
We have taken steps to minimize the impact of these factors.
Removed
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.
Added
Natural disasters, pandemics, or other natural or manmade disasters or outbreaks could negatively impact our business and operations.
Removed
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.
Added
Our use of AI could have a material adverse effect on our business, financial condition, and results of operations. We actively develop AI-native products and sophisticated AI tooling, integrating advanced AI technologies across our product development, internal operations, and customer solutions.
Removed
Even if a transaction is completed, there can be no assurance that the transaction will be successful or have a positive effect on shareholder value. In addition, our financial results and operations could be adversely affected, including the diversion of management’s attention from our operations and the execution of other strategies.
Added
We are committed to significantly expanding these capabilities with the clear ambition to establish and maintain PAR's role as an AI innovation leader within our industry.
Added
The issuance of newly issued shares of our common stock or securities convertible into our common stock could dilute existing shareholders by reducing each share’s percentage ownership of the company, thereby decreasing current shareholders’ proportionate interest in future earnings, assets, and voting power, and potentially lowering the market price of our common stock.
Added
Accordingly, speculation regarding potential strategic transactions could cause our stock price to significantly fluctuate. The trading price and volume of our common stock has experienced, and may continue to experience, volatility, which could result in losses for our shareholders .

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+0 added−0 removed12 unchanged
Biggest changeGovernance As part of our overall enterprise risk management program, we prioritize the identification and management of cybersecurity risk at several levels.
Biggest changeRisk Factors” which should be read in conjunction with the foregoing information. 21 Table of Contents Governance As part of our overall enterprise risk management program, we prioritize the identification and management of cybersecurity risk at several levels.
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.
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 awareness and vigilance among our workforce.
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.
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-four (24) years of experience in the cybersecurity and technology industry. The Vice President of Information Security & Privacy reports to our Chief Financial Officer.
Together, the three individuals have a complementing set of responsibilities to align, implement and govern cybersecurity policies, standards and technolo gy controls throughout PAR.
Together, the three individuals have a complementing set of responsibilities to align, implement, and govern cybersecurity policies, standards, and technology controls throughout PAR.
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.
The Vice President of Information Security & Privacy works closely with the Vice President of IT, who is responsible for PAR's information technology, and with the Chief Technology Officer (CTO), who is responsible for software engineering across most of PAR’s products.
National Institute of Standards and Technology (NIST) and the CIS Critical Security Controls.
National Institute of Standards and Technology ("NIST") and the Center for Internet Security ("CIS") Critical Security Controls.
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.
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.

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 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.
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 incorporated herein by reference.
We do not believe that we have any pending litigation that would have a material adverse effect on our financial condition or results of operations. Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II
We do not believe that we have any pending litigation that would have a material adverse effect on our financial condition or results of operations. Item 4. MINE SAFETY DISCLOSURES Not applicable. 22 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 23 PART II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 23 Item 6. [Reserved] 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 42 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 22 PART II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 23 Item 6. [Reserved] 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 42 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny declaration and payment of future dividends to holders of our common stock will be at the sole discretion of our board of directors and will depend on many factors, including our financial condition, results of operations, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that our board of directors deems relevant.
Biggest changeAny declaration and payment of future dividends to holders of our common stock will be at the sole discretion of our board of directors and will depend on many factors, including our financial condition, results of operations, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that our board of directors deems relevant. 23 Table of Contents 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 193 companies on an annual basis.
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.
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, 2026, there were 258 holders of record of our common stock.
The 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.
The performance graph assumes the investment of $100 on December 31, 2020 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, 2025 (assuming reinvestment of all dividends).
Removed
Issuer Purchases of Equity Securities Under our equity incentive plan, employees may elect to have us withhold shares to satisfy minimum statutory federal, state, and local tax withholding obligations arising from the vesting of their awards.
Added
Historical stock price performance should not be relied upon as an indication of future stock price performance.
Removed
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.
Removed
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.

Item 7. Management's Discussion & Analysis

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

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Biggest changeFinancial 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.
Biggest changeRESULTS OF OPERATIONS Results of operations for the years ended December 31, 2025, 2024, and 2023 were as follows: Consolidated Results Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Revenues, net: Subscription service $ 291,170 $ 207,422 $ 122,597 63.9 % 59.3 % 44.3 % 40.4 % 69.2 % Hardware 106,410 87,040 103,391 23.4 % 24.9 % 37.4 % 22.3 % (15.8) % Professional service 57,967 55,520 50,726 12.7 % 15.9 % 18.3 % 4.4 % 9.5 % Total revenues, net $ 455,547 $ 349,982 $ 276,714 100.0 % 100.0 % 100.0 % 30.2 % 26.5 % Gross margin Subscription service 159,143 110,903 58,862 34.9 % 31.7 % 21.3 % 43.5 % 88.4 % Hardware 24,366 21,117 23,072 5.3 % 6.0 % 8.3 % 15.4 % (8.5) % Professional service 14,517 14,104 7,512 3.2 % 4.0 % 2.7 % 2.9 % 87.8 % Total gross margin 198,026 146,124 89,446 43.5 % 41.8 % 32.3 % 35.5 % 63.4 % Operating expenses: Sales and marketing 48,911 41,708 38,513 10.7 % 11.9 % 13.9 % 17.3 % 8.3 % General and administrative 122,707 108,898 72,139 26.9 % 31.1 % 26.1 % 12.7 % 51.0 % Research and development 81,771 67,258 58,356 18.0 % 19.2 % 21.1 % 21.6 % 15.3 % Amortization of identifiable intangible assets 13,408 8,452 1,858 2.9 % 2.4 % 0.7 % 58.6 % >200 % Adjustment to contingent consideration liability — (600) (9,200) — % (0.2) % (3.3) % (100.0) % (93.5) % Gain on insurance proceeds — (495) (500) — % (0.1) % (0.2) % (100.0) % (1.0) % Total operating expenses 266,797 225,221 161,166 58.6 % 64.4 % 58.2 % 18.5 % 39.7 % Operating loss (68,771) (79,097) (71,720) (15.1) % (22.6) % (25.9) % (13.1) % 10.3 % Other (expense) income, net (1,118) 1,146 (485) (0.2) % 0.3 % (0.2) % (197.6) % Loss on extinguishment of debt (5,791) (6,560) (635) (1.3) % (1.9) % (0.2) % (11.7) % >200 % Interest expense, net (6,055) (10,167) (6,931) (1.3) % (2.9) % (2.5) % (40.4) % 46.7 % Loss from continuing operations before income taxes (81,735) (94,678) (79,771) (17.9) % (27.1) % (28.8) % (13.7) % 18.7 % (Provision for) benefit from income taxes (2,923) 4,768 (1,848) (0.6) % 1.4 % (0.7) % (161.3) % Net loss from continuing operations $ (84,658) $ (89,910) $ (81,619) (18.6) % (25.7) % (29.5) % (5.8) % 10.2 % Net income from discontinued operations 197 84,923 11,867 — % 24.3 % 4.3 % (99.8) % >200 % Net loss $ (84,461) $ (4,987) $ (69,752) (18.5) % (1.4) % (25.2) % >200 % (92.9) % Historical results from our Government segment are reported as discontinued operations.
Accounting for Business Combinations We account for acquired businesses using in accordance with ASC Topic 805, Business Combinations , which requires that acquired assets and assumed liabilities be recorded at their respective fair values on the date of acquisition.
Accounting for Business Combinations We account for acquired businesses in accordance with ASC Topic 805, Business Combinations , which requires that assets acquired and liabilities assumed be recorded at their respective fair values on the date of acquisition.
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.
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 2025 and 2024.
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.
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. 26 Table of Contents 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.
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.
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, installations and implementations, and on-site and technical support.
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.
Other Operating Expenses: Amortization of Intangible Assets / Contingent Consideration / Insurance Proceeds Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Amortization of identifiable intangible assets $ 13,408 $ 8,452 $ 1,858 2.9 % 2.4 % 0.7 % 58.6 % >200 % Adjustment to contingent consideration liability $ — $ (600) $ (9,200) — % (0.2) % (3.3) % N/A (93.5) % Gain on insurance proceeds $ — $ (495) $ (500) — % (0.1) % (0.2) % N/A (1.0) % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Amortization of identifiable intangible assets was $13.4 million for the year ended December 31, 2025, an increase of $5.0 million as compared to $8.5 million for the year ended December 31, 2024.
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.
Our non-current contractual obligations are $413.1 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $16.7 million, interest payments of $9.1 million and principal payments of $380.0 million related to long-term debt, and facility leases of $7.4 million.
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.
As of December 31, 2025, we had cash and cash equivalents of $79.6 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 $27.2 million for the year ended December 31, 2025, compared to $25.2 million for the year ended December 31, 2024.
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.
Sales and Marketing Expenses ("S&M") Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Sales and marketing $ 48,911 $ 41,708 $ 38,513 10.7 % 11.9 % 13.9 % 17.3 % 8.3 % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 S&M expenses were $48.9 million for the year ended December 31, 2025, an increase of $7.2 million or 17.3% compared to $41.7 million for the year ended December 31, 2024.
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.
Ops. Year-over-year improvement of $5.3 million Adjusted EBITDA Year-over-year improvement of $29.3 million 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.
Loss on extinguishment of debt Adjustment reflects loss on extinguishment of debt related to the conversion of the 2024 Notes and a portion of the 2026 Notes. Discontinued operations Adjustment reflects income from discontinued operations related to the disposition of our Government segment.
Loss on extinguishment of debt Adjustment reflects loss on extinguishment of debt related to the conversion of the 2024 Notes and a portion of the 2026 Notes, and related to the early repayment of the Credit Facility. Discontinued operations Adjustment reflects income from discontinued operations related to the divestiture of our Government segment.
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.
Refer to "Note 5 – Leases" and “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 additional information.
This adjustment facilitates a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results. Transaction costs Adjustment reflects non-recurring professional fees incurred in transaction due diligence and integration, including costs incurred in the acquisitions of Stuzo, TASK Group, and Delaget.
This adjustment facilitates a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results. 35 Table of Contents Non-GAAP Measure or Adjustment Definition Usefulness to management and investors Transaction costs Adjustment reflects non-recurring professional fees incurred in transaction due diligence and integration, including costs incurred in the acquisitions of Stuzo, TASK Group, and Delaget.
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.
Interest Expense, Net Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Interest expense, net $ (6,055) $ (10,167) $ (6,931) (1.3) % (2.9) % (2.5) % (40.4) % 46.7 % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Interest expense, net was $6.1 million for the year ended December 31, 2025, a decrease of $4.1 million or 40.4% as compared to $10.2 million for the year ended December 31, 2024.
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.
Discussions related to year-over-year comparisons between 2024 and 2023 are included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 3, 2025. 2025 Operating Performance Highlights Organic - Year-over-year growth of 15.0% Total - Year-over-year growth of 15.7% GAAP - Year-over-year improvement of 120 basis points (bps) Non-GAAP - Year-over-year improvement of 90 basis points (bps) Net Loss from Cont.
There was no impact on our prior period ARR as a result of applying a constant currency as the exchange rate effects only began with the TASK Group Acquisition in 2024. Active sites represent locations active on our subscription services as of the last day of the respective reporting period.
There was no impact to ARR as of December 31, 2023 as the exchange rate effects only began with the TASK Group Acquisition in 2024. Active sites represent locations active on our subscription services as of the last day of the respective reporting period.
Severance Adjustment reflects severance tied to non-recurring restructuring events included in cost of sales, sales and marketing expense, general and administrative expense, and research and development expense. Regulatory matters Adjustment reflects non-recurring expenses related to our efforts to resolve regulatory matters. Litigation expense Adjustment reflects the release of a loss contingency and settlement expenses for legal matters.
Severance Adjustment reflects severance tied to non-recurring restructuring events included in cost of sales, sales and marketing expense, general and administrative expense, and research and development expense. Litigation expense Adjustment reflects non-recurring legal fees incurred in connection with certain litigation matters and the release of a loss contingency and settlement expenses for certain legal matters.
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.
Included in operating expenses for the year ended December 31, 2024 was a $0.6 million reduction to the 31 Table of Contents fair value of the contingent consideration liability for certain post-closing revenue focused milestones from the MENU Acquisition. There was no comparable adjustment to contingent consideration liability for the year ended December 31, 2025.
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.
Other (Expense) Income, Net Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Other (expense) income, net $ (1,118) $ 1,146 $ (485) (0.2) % 0.3 % (0.2) % (197.6) % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Other expense, net was $1.1 million for the year ended December 31, 2025, a change of $2.3 million as compared to other income, net of $1.1 million for the year ended December 31, 2024.
Discontinued Operations In determining whether a group of assets disposed of (or is to be disposed of) should be presented as a discontinued operation, the Company analyzes whether the group of assets disposed of represented a component of the entity; that is, whether it had historic operations and cash flows that were discrete both operationally and for financial reporting purposes.
For these and other reasons, actual results may vary significantly from estimated results. 40 Table of Contents Discontinued Operations In determining whether a group of assets disposed of (or is to be disposed of) should be presented as a discontinued operation, the Company analyzes whether the group of assets disposed of represented a component of the entity; that is, whether it had historic operations and cash flows that were discrete both operationally and for financial reporting purposes.
This adjustment facilitates a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends. 36 Table of Contents Non-GAAP Measure or Adjustment Definition Usefulness to management and investors Gain on insurance proceeds Adjustment reflects the gain on insurance proceeds due to the settlement of legacy claims.
This adjustment facilitates a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends. Gain on insurance proceeds Adjustment reflects the gain on insurance proceeds due to the settlement of legacy claims.
Other income (expense), net Consists of foreign currency transaction gains and losses and other miscellaneous non-operating income (expense). Benefit from (Provision for) Income Taxes Consists of U.S. federal and state income tax as well as international income taxes in various foreign jurisdictions.
Other (expense) income, net Consists of foreign currency transaction gains and losses and other miscellaneous non-operating income and expenses. 27 Table of Contents (Provision for) Benefit from Income Taxes Consists of U.S. federal and state income tax, international income taxes in various foreign jurisdictions, and interest and penalties related to income taxes.
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.
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.
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.
Subscription service margin as a percentage of subscription service revenue for the year ended December 31, 2025, increased to 54.7% as compared to 53.5% for the year ended December 31, 2024.
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.
Financial Statements and Supplementary Data" for additional information. 28 Table of Contents Revenues, Net Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Revenues, net: Subscription service $ 291,170 $ 207,422 $ 122,597 63.9 % 59.3 % 44.3 % 40.4 % 69.2 % Hardware 106,410 87,040 103,391 23.4 % 24.9 % 37.4 % 22.3 % (15.8) % Professional service 57,967 55,520 50,726 12.7 % 15.9 % 18.3 % 4.4 % 9.5 % Total revenues, net $ 455,547 $ 349,982 $ 276,714 100.0 % 100.0 % 100.0 % 30.2 % 26.5 % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Total revenues were $455.5 million for the year ended December 31, 2025, an increase of $105.6 million or 30.2% compared to $350.0 million for the year ended December 31, 2024.
The increase was substantially driven by an $81.2 million gain on sale of PGSC and RRC. The residual amount represents PGSC and RRC operating income, offset by a provision for income taxes relating to the gain on sale of PGSC and RRC.
The residual amount represents PGSC and RRC operating income, offset by a provision for income taxes relating to the gain on sale of PGSC and RRC.
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.
The greater amount of cash used in investing activities during the year ended December 31, 2024 was largely driven by $309.4 million of cash consideration paid in connection with the Stuzo Acquisition, the TASK Group Acquisition, and the Delaget Acquisition (net of cash acquired), 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.
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.
Over the next 12 months our total contractual obligations are $77.2 million, consisting of purchase commitments for normal operations (purchase of inventory, software licensing, use of external labor, and third-party cloud services) of $48.6 million, interest payments of $6.1 million and principal payments of $20.0 million related to long-term debt, and facility lease obligations of $2.4 million.
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.
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.
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.
Included in operating expenses for the year ended December 31, 2024 was $0.5 million in insurance proceeds received from the settlement of a legacy insurance claim. There was no comparable gain for the year ended December 31, 2025.
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 residual increase of $22.6 million from Engagement Cloud subscription services was driven by organic growth in both active sites and average revenue per site through cross-selling initiatives, upselling, and price increases.
Amounts 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.
(in thousands) Year Ended December 31, Reconciliation of Net Loss to Adjusted EBITDA 2025 2024 2023 Net loss $ (84,461) $ (4,987) $ (69,752) Discontinued operations (197) (84,923) (11,867) Net loss from continuing operations (84,658) (89,910) (81,619) Provision for (benefit from) income taxes 2,923 (4,768) 1,848 Interest expense, net 6,055 10,167 6,931 Depreciation and amortization 49,018 37,907 27,014 Stock-based compensation 30,645 24,487 14,291 Contingent consideration — (600) (9,200) Litigation expense 3,749 — (808) Transaction costs 3,682 8,454 2,273 Gain on insurance proceeds — (495) (500) Severance 1,089 2,769 253 Loss on extinguishment of debt 5,791 6,560 635 Impairment loss 3,555 225 — Other expense (income), net 1,118 (1,146) 485 Adjusted EBITDA $ 22,967 $ (6,350) $ (38,397) (in thousands, except per share amounts) Year Ended December 31, Reconciliation between GAAP and Non-GAAP diluted net income (loss) per share 2025 2024 2023 Diluted net loss per share $ (2.09) $ (0.14) $ (2.53) Discontinued operations — (2.49) (0.43) Diluted net loss per share from continuing operations (2.09) (2.63) (2.96) Non-recurring income taxes — (0.19) — Non-cash interest 0.06 0.07 0.08 Acquired intangible assets amortization 0.96 0.84 0.66 Stock-based compensation 0.76 0.72 0.52 Contingent consideration — (0.02) (0.33) Litigation expense 0.09 — (0.03) Transaction costs 0.09 0.25 0.08 Gain on insurance proceeds — (0.01) (0.02) Severance 0.03 0.08 0.01 Loss on extinguishment of debt 0.14 0.19 0.02 Impairment loss 0.09 0.01 — Other expense (income), net 0.03 (0.03) 0.02 Non-GAAP diluted net income (loss) per share $ 0.15 $ (0.73) $ (1.96) Diluted weighted average shares outstanding 40,473 34,155 27,552 37 Table of Contents (in thousands) Year Ended December 31, Reconciliation between GAAP and Non-GAAP Subscription Service Gross Margin Percentage 2025 2024 2023 Subscription Service Gross Margin Percentage 54.7 % 53.5 % 48.0 % Subscription Service Gross Margin $ 159,143 $ 110,903 $ 58,862 Depreciation and amortization 31,115 25,312 22,373 Stock-based compensation 628 282 317 Severance — 152 — Impairment loss 3,555 — — Non-GAAP Subscription Service Gross Margin $ 194,441 $ 136,649 $ 81,552 Non-GAAP Subscription Service Gross Margin Percentage 66.8 % 65.9 % 66.4 % LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity are cash and cash equivalents.
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 $6.6 million for the year ended December 31, 2024 related to the induced conversion of a portion of the 2026 Notes.
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.
Cash provided by financing activities was $12.3 million for the year ended December 31, 2025, compared to $278.5 million for the year ended December 31, 2024.
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.
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. The market approach incorporates the use of the quoted price and public company methods utilizing public market data for our company and comparable companies.
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.
Subscription service revenues were $291.2 million for the year ended December 31, 2025, an increase of $83.7 million or 40.4% compared to $207.4 million for the year ended December 31, 2024.
Revaluing our ending ARR as of December 31, 2024 using currency rates determined at the beginning of 2025, our Inorganic Engagement Cloud ARR would be $85.1 million and Inorganic Operator Cloud ARR would be $24.1 million.
Revaluing our ending ARR as of December 31, 2025 using exchange rates determined at the beginning of 2026, our Engagement Cloud ARR would be $186.7 million and Operator Cloud ARR would be $130.5 million.
Research and Development Consists of uncapitalized engineering and product development personnel costs associated with improvements to our platform and the development of new product offerings and expenses associated with the use of third-party software directly related to the development of our products and services. 27 Table of Contents Amortization of Identifiable Intangible Assets Consists of amortization expense related to acquired intangible assets including customer relationships, non-competition agreements, and trade names.
Research and Development Consists of uncapitalized engineering and product development personnel costs associated with improvements to our platform and the development of new product offerings and expenses associated with the use of third-party software directly related to the development of our products and services.
Additionally, these measures may not be comparable to similarly titled measures disclosed by other companies. Non-GAAP Measure or Adjustment Definition Usefulness to management and investors Non-GAAP subscription service gross margin percentage Represents subscription service gross margin percentage adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance.
Non-GAAP Measure or Adjustment Definition Usefulness to management and investors Non-GAAP subscription service gross margin percentage Represents subscription service gross margin percentage adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, severance, and impairment of capitalized software development costs.
The increase primarily consists of an increase in amortizable intangible assets stemming from the Stuzo Acquisition and TASK Group Acquisition.
The increase was driven by an increase in amortizable intangible assets stemming from the Stuzo Acquisition, the TASK Group Acquisition, the Delaget Acquisition, and the GoSkip Asset Acquisition.
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.
Refer to “Note 1 – Summary of Business and 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 additional information regarding our accounting policies and other disclosures required by GAAP.
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.
Organic S&M expense increased by $0.5 million, primarily driven by an increase in commission expense due to year-over-year sales growth. 30 Table of Contents General and Administrative Expenses ("G&A") Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 General and administrative $ 122,707 $ 108,898 $ 72,139 26.9 % 31.1 % 26.1 % 12.7 % 51.0 % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 G&A expenses were $122.7 million for the year ended December 31, 2025, an increase of $13.8 million or 12.7% compared to $108.9 million for the year ended December 31, 2024.
Refer to "Note 13 - Income Taxes" of the notes to consolidated financial statements in "Part II, Item 8.
Refer to "Note 13 – Income Taxes" of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report for additional information about our income taxes and effective tax rate.
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.
The decrease was primarily driven by the replacement of the Credit Facility with the 2030 Notes, which bear a lower interest rate. 32 Table of Contents Taxes Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 (Provision for) benefit from income taxes $ (2,923) $ 4,768 $ (1,848) (0.6) % 1.4 % (0.7) % (161.3) % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 The provision for income taxes was $2.9 million for the year ended December 31, 2025, a change of $7.7 million as compared to a benefit from income taxes of $4.8 million for the year ended December 31, 2024.
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.
Professional service revenues were $58.0 million for the year ended December 31, 2025, an increase of $2.4 million or 4.4% compared to $55.5 million for the year ended December 31, 2024.
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.
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.
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.
Research and Development Expenses ("R&D") Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Research and development $ 81,771 $ 67,258 $ 58,356 18.0 % 19.2 % 21.1 % 21.6 % 15.3 % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 R&D expenses were $81.8 million for the year ended December 31, 2025, an increase of $14.5 million or 21.6% compared to $67.3 million for the year ended December 31, 2024.
The income tax effect of the below adjustments, with the exception of non-recurring income taxes, were not tax-effected due to the valuation allowance on all of our net deferred tax assets. 35 Table of Contents Our non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
Our non-GAAP financial measures reflect adjustments based on one or more of the following items below. The income tax effect of the below adjustments, with the exception of non-recurring income taxes, were not tax-effected due to the valuation allowance on all of our net deferred tax assets.
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.
Acquired intangible assets amortization Adjustment reflects amortization expense of acquired developed technology included within cost of sales and amortization expense of other acquired intangible assets. 36 Table of Contents The tables below provide reconciliations between net loss and adjusted EBITDA, diluted net loss per share and non-GAAP diluted net income (loss) per share, and subscription service gross margin percentage and non-GAAP subscription service gross margin percentage.
The change was substantially driven by a reduction in the Company's valuation allowance which resulted from the establishment of deferred tax liabilities related to the Stuzo Acquisition and Delaget Acquisition. 33 Table of Contents Net Income from Discontinued Operations Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Net income from discontinued operations $ 84,923 $ 11,867 $ 10,753 24.3 % 4.3 % 4.1 % >200 % 10.4 % For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Net income from discontinued operations was $84.9 million for the year ended December 31, 2024, an increase of $73.1 million as compared to $11.9 million for the year ended December 31, 2023.
Net Income from Discontinued Operations Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Net income from discontinued operations $ 197 $ 84,923 $ 11,867 — % 24.3 % 4.3 % (99.8) % >200 % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Net income from discontinued operations was $0.2 million for the year ended December 31, 2025, a decrease of $84.7 million as compared to $84.9 million for the year ended December 31, 2024.
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.
The increase was substantially driven by a $4.1 million increase in hardware repair services and field operations, partially offset by a $1.6 million decrease in implementation revenues as a result of offering discounts and incentives on SaaS implementations to facilitate the adoption of our recurring subscription service revenue streams. 29 Table of Contents Gross Margin Year Ended December 31, Gross Margin Percentage Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Gross margin Subscription service $ 159,143 $ 110,903 $ 58,862 54.7 % 53.5 % 48.0 % 120 bps 550 bps Hardware 24,366 21,117 23,072 22.9 % 24.3 % 22.3 % (140) bps 200 bps Professional service 14,517 14,104 7,512 25.0 % 25.4 % 14.8 % (40) bps 1,060 bps Total gross margin $ 198,026 $ 146,124 $ 89,446 43.5 % 41.8 % 32.3 % 170 bps 950 bps For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Total gross margin as a percentage of revenue for the year ended December 31, 2025, increased to 43.5% as compared to 41.8% for the year ended December 31, 2024.
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.
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.
Adjustment to Contingent Consideration Liability Reflects a reduction to the fair market value of the contingent consideration liability related to the acquisition of MENU Technologies A.G. in July 2022 (the “MENU Acquisition”). Gain on Insurance Proceeds Consists of insurance proceeds from the settlement of legacy insurance claims.
Amortization of Identifiable Intangible Assets Consists of amortization expense related to acquired intangible assets including customer relationships, non-competition agreements, and trade names. Adjustment to Contingent Consideration Liability Reflects a reduction to the fair market value of the contingent consideration liability related to the acquisition of MENU Technologies A.G. in July 2022 (the “MENU Acquisition”).
We exclude these non-cash and non-recurring adjustments for purposes of calculating non-GAAP diluted net loss per share because management does not view these costs as part of our core operating performance. These adjustments facilitate a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends.
Non-recurring income taxes Adjustment reflects a partial release of our deferred tax asset valuation allowance resulting from the Stuzo Acquisition and Delaget Acquisition. We exclude these non-cash and non-recurring adjustments for purposes of calculating non-GAAP diluted net income (loss) per share because management does not view these costs as part of our core operating performance.
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.
We cannot provide assurance that any additional financing or strategic alternatives will be available to us on acceptable terms or at all.
The change was substantially driven by increases in foreign currency transaction gains and other miscellaneous expenses. 32 Table of Contents Loss on Extinguishment of Debt Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2024 2023 2022 2024 2023 2022 2024 vs 2023 2023 vs 2022 Loss on extinguishment of debt $ (6,560) $ (635) $ — (1.9) % (0.2) % — % >200 % N/A For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Loss on extinguishment of debt was $6.6 million for the year ended December 31, 2024, related to the induced conversion of a portion of the 2026 Notes.
Loss on Extinguishment of Debt Year Ended December 31, Percentage of total revenue Increase (decrease) (in thousands) 2025 2024 2023 2025 2024 2023 2025 vs 2024 2024 vs 2023 Loss on extinguishment of debt $ (5,791) $ (6,560) $ (635) (1.3) % (1.9) % (0.2) % (11.7) % >200 % For the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Loss on extinguishment of debt was $5.8 million for the year ended December 31, 2025 related to the early repayment of the Credit Facility.
Active Sites Year Ended December 31, Increase (decrease) (in thousands) 2024 2023 2022 2024 vs 2023 2023 vs 2022 Engagement Cloud: Organic 83.2 70.8 69.9 17.4 % 1.3 % Inorganic* 36.5 — — N/A N/A Total Engagement Cloud 119.7 70.8 69.9 68.9 % 1.3 % Operator Cloud: Organic 29.0 25.3 21.3 14.7 % 19.0 % Inorganic** 25.7 — — N/A N/A Total Operator Cloud 54.8 25.3 21.3 116.4 % 19.0 % *Inorganic Engagement Cloud active sites includes PAR Retail and Plexure active sites only as of December 31, 2024. **Inorganic Operator Cloud active sites represents TASK and Delaget active sites only as of December 31, 2024.
Active Sites Year Ended December 31, Increase (decrease) (in thousands) 2025 2024 2023 2025 vs 2024 2024 vs 2023 Engagement Cloud: Organic 121.2 119.7 70.8 1.3 % 68.9 % Inorganic* 0.6 — — N/A N/A Total Engagement Cloud 121.8 119.7 70.8 1.8 % 68.9 % Operator Cloud: Organic 60.1 54.8 25.3 9.8 % 116.4 % Total Operator Cloud 60.1 54.8 25.3 9.8 % 116.4 % *Inorganic Engagement Cloud active sites includes GoSkip active sites only as of December 31, 2025. 34 Table of Contents Non-GAAP Financial Measures In addition to disclosing financial results in accordance with GAAP, this Annual Report contains references to the non-GAAP financial measures below.
For certain arrangements, particularly those involving managed platform development services and transaction-based payment processing, we must determine whether we are acting as a principal or an agent. This assessment is based on our level of control over the services before they are transferred to the customer, our pricing discretion, and our responsibility for fulfillment.
This assessment is based on our level of control over the services before they are transferred to the customer, our pricing discretion, and our responsibility for fulfillment. 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.
Other Non-Operating Expenses Interest expense, net Consists of interest incurred on our 2026 Notes, 2027 Notes, and Credit Facility, offset by interest earned from cash held in money market accounts and on our marketable securities. Loss on extinguishment of debt Represents the loss on inducement of our 2026 Notes and 2024 Notes.
Other Non-Operating Expenses Interest expense, net Consists of interest incurred on the 2026 Notes, 2027 Notes, and 2030 Notes, as well as on the credit facility with Blue Owl Capital Corporation as administrative agent and collateral agent and Blue Owl Credit Advisors, LLC as lead arranger and bookrunner (the "Credit Facility") prior to its repayment in January 2025 and on the 4.500% Convertible Senior Notes due 2024 (the "2024 Notes") prior to the induced conversion in October 2023, offset by interest earned from cash held in money market accounts and on our marketable securities.
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.
Professional service margin as a percentage of professional service revenue for the year ended December 31, 2025, was relatively unchanged at 25.0% as compared to 25.4% for the year ended December 31, 2024.
The increase primarily consists of a $8.7 million inorganic increase in G&A expense stemming from post-acquisition operations of PAR Retail and TASK Group and a $7.1 million organic increase in compensation costs, including variable compensation.
The increase was substantially driven by a $10.8 million increase in inorganic G&A expense stemming from post-acquisition operations of the Delaget product line and the inclusion of approximately six additional months of TASK Group G&A expense and two additional months of PAR Retail G&A expense in the current period.
The increase consists of an inorganic increase in S&M expense of $3.4 million stemming from post-acquisition operations of PAR Retail and TASK Group while organic S&M expense decreased by $0.2 million.
The increase was substantially driven by a $6.7 million increase in inorganic S&M expense stemming from post-acquisition operations of the Delaget product line and the inclusion of approximately six additional months of TASK Group S&M expense and two additional months of PAR Retail S&M expense in the current period.
The table below presents our ARR on a constant currency basis, calculated using the exchange rates from 2024. For acquisitions made during each period, the constant currency rate applied is the exchange rate at the date of each acquisition's closure.
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 33 Table of Contents periods presented. The table below presents our ARR on a constant currency basis, calculated using the exchange rates set at the beginning of 2025.
GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied. Valuations based on estimates are reviewed for reasonableness and adequacy on a consistent basis.
We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied. Valuations based on estimates are reviewed for reasonableness and adequacy on a consistent basis. However, because these estimates are inherently uncertain, actual results could differ. Our estimates are also subject to uncertainties, including those associated with market conditions, risks, and trends.
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.
The increase in cash used in operating activities of $1.9 million was due to additional net working capital requirements substantially driven by an increase in accounts receivable resulting from revenue growth. Cash used in investing activities was $13.1 million for the year ended December 31, 2025, compared to $180.1 million for the year ended December 31, 2024.
Assessing the stand-alone selling price for each distinct performance obligation may involve significant judgment. Key pricing factors taken into consideration include our discounting policies, transaction size and volume, target customer demographic, price lists, as well as both historical and current sales and contract prices.
Key pricing factors taken into consideration include our discounting policies, transaction size and volume, target customer demographic, price lists, as well as both historical and current sales and contract prices. 39 Table of Contents For certain arrangements, particularly those involving managed platform development services and transaction-based payment processing, we must determine whether we are acting as a principal or an agent.
Other (income) expense, net Adjustment reflects foreign currency transaction gains and losses and other non-recurring income and expenses recorded in other (income) expense, net in the accompanying statements of operations. Non-recurring income taxes Adjustment reflects a partial release of our deferred tax asset valuation allowance resulting from the Stuzo Acquisition and Delaget Acquisition.
Impairment loss Adjustment reflects impairment loss related to the discontinuance of the Brink POS trademark and the write-off of capitalized software development costs related to the PAR Clear product. Other expense (income), net Adjustment reflects foreign currency transaction gains and losses and other non-recurring income and expenses recorded in other (expense) income, net in the accompanying statements of operations.
Non-cash interest Adjustment reflects non-cash amortization of issuance costs and discount related to the Company's long-term debt. Acquired intangible assets amortization Adjustment reflects amortization expense of acquired developed technology included within cost of sales and amortization expense of other acquired intangible assets.
These adjustments facilitate a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends. Non-cash interest Adjustment reflects non-cash amortization of issuance costs and discount related to the Company's long-term debt.
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.
These increases were substantially driven by the timing of tier-one enterprise customer hardware refresh cycles and the onboarding of Operator Cloud customers purchasing hardware. Hardware revenues will continue to be affected by the timing of the aforementioned drivers.
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.
We will continue to evaluate all applicable provisions of the legislation and their impact on our consolidated financial statements for the fiscal year ended December 31, 2026 and beyond. 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.
The residual increase of $7.6 million from Engagement Cloud subscription services was driven by a 17.4% organic increase in active sites. Operator Cloud subscription services increased $24.2 million of which revenues of $3.2 million was driven by an inorganic increase in revenues stemming from the post-acquisition operations of the TASK product line.
The residual increase of $9.6 million from Operator Cloud subscription services was primarily driven by organic growth in active sites. Hardware revenues were $106.4 million for the year ended December 31, 2025, an increase of $19.4 million or 22.3% compared to $87.0 million for the year ended December 31, 2024.
The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs as well as improved gross margins stemming from post-acquisition operations of PAR Retail.
The increase was substantially driven by operating efficiencies in hosting and customer support costs relative to the growth in subscription service revenues for both Engagement Cloud and Operator Cloud, as well as improved margin contributions stemming from post-acquisition operations of the Delaget product line and the inclusion of approximately two additional months of PAR Retail product line results in the current period.
If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded based on that difference. The Company has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test.
If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded based on that difference. 41 Table of Contents Recent Accounting Pronouncements Not Yet Adopted Refer to “Note 1 – Summary of Business and Significant Accounting Policies” of the notes to consolidated financial statements in "Part II, Item 8.
The increase was substantially driven by increased Engagement Cloud subscription service revenues of $60.0 million, of which $52.4 million was driven by inorganic increases in revenues of $34.6 million and $17.8 million stemming from the post-acquisition operations of the PAR Retail and Plexure product lines, respectively.
The increase was driven by increased Engagement Cloud subscription service revenues of $53.8 million, of which $31.2 million was attributable to inorganic revenue growth due to the inclusion of approximately six additional months of revenue from the Plexure product line and two additional months of revenue from the existing PAR Retail business in the current period, and from customer contracts acquired in the GoSkip Asset Acquisition (now integrated into the PAR Retail product line).
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.
Refer to "Item 1A. Risk Factors" of this Annual Report for additional information. The accounting policies and estimates summarized below are those that we consider critical, due to the significant judgments and assumptions involved and their potential impact on our financial condition and results of operations.
The increase consists of an inorganic increase in R&D expense of $9.6 million driven by post-acquisition operations of PAR Retail and TASK Group while organic R&D expense decreased by $0.7 million as we continue to reinforce efficiency in our R&D function.
Organic R&D expense increased by $5.0 million, primarily driven by an increase in development costs as we continue to invest in improving and diversifying our product and service offerings.
Removed
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.
Added
We use these key performance indicators and non-GAAP financial measures to evaluate our performance. 25 Table of Contents Macroeconomic Environment The tariff and supply chain environment is complex and evolving.
Removed
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.
Added
Beginning in the second quarter of 2025, the U.S. government implemented a series of significant new tariffs, including on imports from several countries where we source certain components and hardware products. Other countries have responded with retaliatory actions or plans for retaliatory actions.

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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 changeWe 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.
Biggest changeWe 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. We have experienced and will continue to experience fluctuations in our net loss as a result of gains (losses) on these foreign currency transactions and the remeasurement of monetary assets and liabilities.
These 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.
These 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. Accordingly, changes in exchange rates may negatively affect our revenue and net loss as expressed in U.S. dollars.
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.
Despite the effects of interest rate and market value changes on the Senior Notes’ fair value, we have no financial statement risk associated with changes in interest rates related to the Senior Notes because they bear interest at fixed rates.
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
As described in "Note 10 – Debt" of the notes to consolidated financial statements in "Part II, Item 8. Financial Statements and Supplementary Data" of this Annual Report, the Credit Facility was paid in full on January 30, 2025, and the Credit Agreement was terminated. 42 Table of Contents
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.
Interest Rate Risk As of December 31, 2025, we had $20.0 million, $265.0 million, and $115.0 million in aggregate principal amount outstanding on the 2026 Notes, the 2027 Notes, and the 2030 Notes, respectively. Refer to "Note 17 – Subsequent Events" of the notes to consolidated financial statements in "Part II, Item 8.
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.
In particular, the fair value of the Senior Notes changes when interest rates change or the market price of our stock fluctuates, with the fair value of the Senior Notes generally increasing as our stock price increases and generally decreasing as our stock price declines.
Removed
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.
Added
As of December 31, 2025, the impact of foreign currency exchange rate changes on our revenues and net loss was not material. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
Added
Additionally, as of December 31, 2025, we estimated that a 10 percent change in exchange rates against the U.S. dollar would not have a material impact on earnings, cash flows, or fair values over a one-year period, and we have not engaged in any foreign currency hedging transactions.
Added
Financial Statements and Supplementary Data" of this Annual Report for further information on the remaining principal amount outstanding on the 2026 Notes. We carry the Senior Notes at face value less amortized debt issuance costs on the on the consolidated balance sheets.
Added
The fair value of the Senior Notes are subject to interest rate risk, market risk, and other factors due to their conversion features.
Added
At December 31, 2025 , a hypothetical 10 percent change in interest rates would not have a material impact on earnings or cash flows over a one-year period. The Credit Facility contained a variable interest rate, presenting interest rate exposure based on the rate selected by management.

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