PAR Technology (NYSE:PAR) closed fiscal 2025 with what executives repeatedly described as a strong fourth quarter, driven by subscription growth, record bookings, and accelerating annual recurring revenue (ARR) additions in the back half of the year. On the company’s earnings call, management also focused heavily on its efforts to position PAR as an “AI-driven hospitality platform company,” highlighting early commercial traction for new AI products and outlining plans to reinvest operational savings into further AI development.
Fourth-quarter results and full-year performance
PAR reported fourth-quarter revenue of $120.1 million, up 14% year over year, which management said was primarily driven by strength in subscription services and higher hardware revenue. Subscription services revenue totaled $76 million, up 18% from the prior year, and represented 63% of total Q4 revenue.
For the full year, PAR reported revenue of $455.5 million, up $105 million year over year, including what management called 21% organic growth. Subscription services revenue grew 40% for the year, and management said full-year non-GAAP net income improved by more than $30 million year over year.
ARR acceleration and multi-product momentum
PAR exited the quarter with $315.4 million of ARR, with management citing 15% organic growth. CFO Bryan Menar said ARR increased 16% from last year’s Q4, with Engagement Cloud up 19% and Operator Cloud up 12%. Management also pointed to a record $17 million incremental ARR increase in Q4 and said growth in the second half of the year was “more than double” the first half.
Executives emphasized that ARR gains were increasingly driven by cross-sell and broader platform adoption, noting that over 80% of deals were multi-product and that nearly 90% of Q4 operator deals were multi-product. Menar said growth was being driven by both site growth and increased average revenue per user (ARPU), aligning with PAR’s “better together” strategy.
Key wins across restaurants, engagement, and retail
In Operator Solutions, PAR said it was selected by Papa Johns for a long-term partnership spanning 3,200 sites, with plans to roll out PAR POS and PAR OPS. Management characterized the win as strengthening momentum in the pizza category and said PAR expects additional opportunities over time, including potential international expansion and upselling other products such as ordering, payments, and AI features. On the call, management also noted that Q4 bookings exceeded internal expectations and included record performance for PAR POS, with over $25 million booked for PAR POS alone.
PAR cited continued momentum tied to the resumed Burger King rollout and steady performance from Punchh and Plexure, with Plexure benefiting from McDonald’s international expansion, including what management called a successful Japan launch.
In the Engagement Cloud, management highlighted new wins for Punchh, including Shake Shack, and said it expanded into an “eatertainment” vertical with Lucky Strike Entertainment. PAR also said its ordering business added six new brands in the quarter, including Savvy Sliders and Smokey Mo’s. The company pointed to several “firsts” during the quarter, including the first large sale of PAR Catering to Condado Tacos, the first major deployment of PAR Games with Smoothie King, and the first significant sale of PAR Smart Passes.
In retail, management said PAR Retail delivered a strong quarter, noting that one of its largest newer convenience store (C-store) customers exceeded 3.6 million members. PAR said it saw higher visitor frequency, richer customer data, and monetization benefits, and added that three new customers launched on the platform in Q4.
AI products, R&D investment, and operating efficiency plans
CEO Savneet Singh framed the company’s strategy around embedding AI directly into mission-critical workflows, rather than adding surface-level features. PAR said its first AI product, Coach AI, was being used by nearly 1,000 stores with roughly 1,000 active users, and management described enhancements that move the product toward “prescriptive operator recommendations.” PAR also announced a new AI product for retail customers, PAR Drive AI, described as an integrated AI suite built into the platform for C-stores and fuel retailers.
R&D spending increased in the quarter, and management attributed that to several factors, including “aggressive” AI investments, product work tied to pursuing large tier-one opportunities and expansion into newer categories such as pizza and entertainment, and broader modernization efforts across PAR’s products. Singh said R&D was 25% of subscription revenue in Q4, which he characterized as at or ahead of targets, while sales and marketing was 13% of subscription revenue.
Looking to 2026, Singh said investors should expect three things:
- Continued mid-teens organic ARR growth, with a stronger second half than first half, partly due to PAR exiting certain “legacy low-margin” customers in Q1.
- A step change in operational efficiency, including plans to eliminate roughly $15 million of annualized operating expenses through AI-driven automation and scale-related synergies by the end of Q1, while also noting increased AI adoption across R&D teams.
- Reinvestment of some savings into AI platform production, to accelerate delivery of commercializable AI products and improve unified data workflows.
Hardware demand, supply chain costs, and capital allocation
PAR reported Q4 hardware revenue of $28 million, up 7% year over year, which management attributed to hardware attachment into its expanding software base and deployment activity among large enterprise customers. Singh said restaurants are shifting toward edge compute and that PAR expects to introduce its own portfolio later in the year to support the transition. Management also cited continued kiosk expansion and steady demand from enterprise brands including Dairy Queen and Burger King.
At the same time, PAR highlighted cost pressures on components such as solid state drives, memory, and processors, tied to AI infrastructure build-outs and recently implemented U.S. tariff policies. Hardware gross margin declined to 23% from 26% a year earlier. Management said it is pursuing mitigation measures including supplier diversification, product flexibility, procurement planning, and pricing adjustments, and it expects the challenging environment to persist through 2026. Singh also said component constraints could extend further, potentially into 2027.
On capital allocation, management discussed a $100 million share repurchase authorization, saying it wanted the optionality to return capital while also balancing organic investment and potential M&A. Singh said the bar for acquisitions is higher given the company’s view of its current share price, while describing the Bridg acquisition as strategic and attractively priced. Separately, Menar said PAR ended the year with $80 million in cash and cash equivalents and noted that cash used in operating activities increased year over year due largely to higher accounts receivable, which the company expects to normalize as day sales outstanding stabilizes in 2026.
About PAR Technology (NYSE:PAR)
PAR Technology Corp is a provider of enterprise software and hardware solutions for the hospitality, foodservice and retail industries. The company’s platforms are designed to streamline front- and back-of-house operations, covering point-of-sale (POS) systems, kitchen display and dispatch, inventory and labor management, and reporting tools. PAR’s integrated approach enables operators of full-service restaurants, quick-service chains, bars, hotels, casinos and retail outlets to centralize data and automate workflows across multiple sites.
Key offerings include PAR Brink, a cloud-native POS application that supports touchscreen, mobile and tablet devices; PAR Cloud Services, which delivers software updates, reporting and analytics through a subscription model; and hardware solutions such as payment terminals, handheld devices and self-service kiosks.
