All right, let's get started. I'm Neil Dalal, a managing director in the technology investment banking team at JP Morgan, and I'm pleased to be joined by Savneet Singh, President and CEO at PAR. So Savneet, just to kick off here, for those not familiar, can you give a quick overview of PAR?
Sure. PAR is a software platform targeted at the enterprise restaurant community. The way we like to think of ourselves is we are that infrastructure layer to large restaurant chains, from everything from online ordering and loyalty, all the way through point of sale and then back office. So, our goal is to kind of unify these core pieces of restaurant technology into one system that if you're running a high growth or enterprise chain, we'd be your, your, your option of choice.
Awesome. So you often describe PAR as a platform company, and selling unified commerce, and that's relative to a lot of component solutions out there in the restaurant tech market. So talk about what it means to be a platform company and how it's an advantage as you go to market.
Yeah, I think platform can take a couple different connotations, but for us, you know, restaurants are interesting. They are retail-like businesses that haven't yet adopted the digital side of the business that most retail businesses have adopted. So, you know, if you think, you know, back just a few years, most restaurant companies didn't have online ordering. They didn't have an integration to Uber Eats or DoorDash. They didn't have a loyalty system. And the pandemic kind of ushered in all this technology all at once. And so restaurants are in this really challenged position where they now think that, you know, digital's out of the box. Like, once you try DoorDash, you really kinda don't go back to going wanting to go back into a store.
Once you use a mobile app, you're never really gonna go back and say, "Okay, I just wanna call in for an order." And so they're dealing with this underlying secular trend of, "Oh, my God, I have to run an amazing restaurant experience," where you, the guest, come in, have this great experience, and at the same time, they've got to beat Amazon.com when they're selling off-premise. And that's really hard because the box of a restaurant hasn't really changed in 40 years. It's still the same four walls, the same set of employees, and relatively same setup. And so the way to bridge that gap is through technology, and the way they've solved that is by adding dozens of different software products to solve each micro need.
They have a different vendor for online ordering, then for loyalty, then for third-party delivery aggregation, and then for supply chain, and so on and so forth. They've kind of plugged all these things in, and they woke up one day and said, "Wow, we now are spending twice as much on software as we ever did before, but none of these products were integrated into each other. And so it's a pretty crappy and disjointed experience for us, but also for our customer." And so our vision of a platform is to say, "Hey, instead of having so many disparate, different products that have all these point-to-point integrations, what if we gave you a platform which then you can build on top of?" And the key point is that we are still a very open platform. It's not closed.
You can innovate, you can use all of our products, you can use one of our products, but the idea of the platform is to kinda simplify for the end restaurant.
Got it. So as you think about that platform, you've expanded into loyalty, into payments, just to pick two areas in recent history. So talk about those two expansions and how they've tracked over the last couple years.
So we got into loyalty in April 2021. We acquired a product called Punchh. It was a really fantastic acquisition for us. We used, you know, we financed it really creatively, but I think what was critical is that we realized back then that for us to sort of fulfill this vision of being a platform, we couldn't just be your in-store technology, which at the time was point-of-sale system. We were really just a point-of-sale software company that had some back-office technology, but we couldn't say, "Hey, let's be your platform," without knowing who your guest was. Punchh at the time was the, and still is, the largest and I think leading provider of loyalty to the enterprise restaurant community. We brought that into PAR, and you know, I would say it worked.
You know, we were able to grow the revenues. We doubled the revenues, I think, within 20 or 24 months. We were able to sort of integrate the team, the technology, the products into one place, such that if you came to PAR and bought our point-of-sale product, you could still buy a competitor's loyalty product, but it would make no sense because our product is not only best of breed, but having two products at PAR gives you this sort of nice impact of getting something you couldn't get elsewhere. And our pitch, whether we build a product or whether we buy a product, is that every additional product you add from our suite of products, you get something more.
So it's not, it's not a play on bundle the products and get something cheaper; it's actually bundle the products and get functionality you couldn't get without that. And so I think it's gone really, really well and opened up a bunch of new opportunities for us, including online ordering and payments. And the payments side was something we built, so payments we didn't acquire. We built out a payments product. And when we started on this journey, when we kinda took over PAR 5.5 years, six years ago, I don't think we envisioned payments being much of our revenue.
We sort of looked at it as, you know, that's a really good place for Square and Toast and those amazing companies that sell down-market, but upmarket, we thought restaurants had direct relationships with processors, banks, so on and so forth, and we didn't think it was there. Fast-forward a few years, we said, "Oh, wow, like, not only can we be competitive both from a pricing and product perspective, but we can also be innovative here." And so we've now worked really hard to build a payments business that not only does processing, verification, gateway-type services, but also adds a unique switch on, a unique twist to it. So, you know, an example in our loyalty products, you...
We now have a product called Single Scan Flow, which with literally one tap, you know, what we call a single scan, you can pay for your transaction, earn points or whatever the unit of, of loyalty is, but also redeem whatever coupon you might have, all in one tap. And so you're not sort of going, "Here's my coupon, here's my credit card, here's my loyalty number." It's all in one tap. And why that's so valuable is that's a whole completely different set of payment rails than your credit card or your online ordering product.
So, we've kind of got into payments by being, again, very product-focused and saying, "Let's just not go there and say, 'Hey, we'll save you a penny on a transaction.' Let's go there and say, 'We'll find a way to create value to your business,' which is really creating value to the end customer.
Very helpful. So let's transition to some of the recent contract wins. You announced wins with Burger King and Wendy's, among others, recently. So when you're pitching these larger chains, and you touched on it a little bit just now, what is the key value prop that you think is helping you win the bigger wins?
I think above all, it's product. You know, we're selling enterprise software, so you know, a good Instagram ad doesn't really do much for that sales process. You've got to win on a product basis. And the way we sort of tell our product teams is: How do you know if you've got the best product? It's because you've got to be the highest price, and if the customers are willing to pay, then you can actually define that you've got the best product. And so if someone comes and says, "Hey, we got the best product," I'm like, "Well, we better have the best price." And so we hold our team to that high bar, and so we win those deals on product. We are in there, the product stacks up head-to-head. Whether the brand is evaluating, consultant evaluate, the product has to work.
But I'd say underneath all of that is our culture. There was a great podcast by one of the CEOs of those companies. When they asked him, somebody asked him: "How did you decide to work with PAR?" You know, his comment was, "The product was, we think the product was the best. We, we tested it out, but we also wanted to associate ourselves with the culture of PAR." And, you know, what he, what he was sort of saying, basically saying in that meeting was, you can text, whether you're texting the CEO or someone on the call center, and it's 2:00 A.M., you'll get a call back one minute later, and we will, we will swarm and solve your problem. And that really does help us in these big brands, because inevitably, something is going to break.
It's technology, it's enterprise software. It is messy, it is hard, and you want the partner who's going to pick up the phone, you know, fly down if they need to, and solve that problem. And we're a little bit lucky in that we aren't competing, you know, primarily against Toast and these amazing businesses that are, you know, from Silicon Valley or like Silicon Valley. We're competing against more of a, the legacy suite of competitors, and they'll just never have that hustle and that DNA that really helps us in these big brands.
So to play on Burger King a little bit more, can you just talk about the status of the rollout and progress against the rollout?
We just started. We started, you know, in earnest in, in the beginning of April, so we're six, seven weeks in. You know, I think on all observable metrics, things are going great, and all- there'll be a ton of encouragement for them to accelerate the rollout, push more towards us. You know, I feel really excited. We've kind of put our best foot forward. I- it's been a great partnership, and so, you know, not only do I- obviously, it's a huge revenue driver for us, our largest contract of all time, so on and so forth, but I think it'll be a great case study for other brands to see how smoothly this has gone and, and to hopefully keep them as a reference customer for future businesses.
That's a good segue to talking about the pipeline. One, just give us an update as to how the pipeline looks today, but also, have any of these wins, Burger King, Wendy's, or any of the others, helped you guys as you think about increasing your pipeline?
So our pipeline's as strong as it's ever been in, you know, the 5.5 years since we've been here. It's never been better. In across all of our products, almost all of our products. It's never been close to as good as it is now. And I don't know if it's directly a result of those wins or is it something else that's driving it, but I can certainly say, you know, we've never seen so much RFP activity, we've never seen so many pilots, we've never had so much interest in our products. And so I think it's kind of a combination of a few things, which is a lot of brands have, you know, held out moving to the cloud, pushing, making these investments today.
I think they're at the point of like, "Man, like, I know I've kind of made it work till now with all this old stuff, but, like, it's going to break sometime, and I should make that investment now and push that forward." And again, think about, you know, today, how different your ordering experience was just five years ago. You know, you weren't ordering on Uber Eats and DoorDash, you weren't ordering on your phone. McDonald's rolled out a loyalty program in 2021, and they're the most sophisticated, best chain in the world, like 2021. And so, you know, no one was thinking about, "Oh, I need to place an order through TikTok." You know, nobody was thinking about, you know, these orders in the metaverse and stuff like that, but it's all happening now.
So I think they all sit there like, "I got to do this eventually." I think a part of it probably was some of these big whales coming in and sort of saying, proving out what we've believed so long, for so long, which is, we got the best product, we have the best X, Y, and Z, and I think that validation helps us, too. So I think it's a combination, but without question, I think it is the healthiest pipeline we've ever seen across our business.
So let's switch gears to M&A. You recently announced two large acquisitions, one of which you closed, Stuzo, and TASK. Talk us through the vision for each of those two deals.
Sure. So I'll go in first. So TASK is a deal targeting to close sometime in Q3. The simplest way to think about TASK is it's PAR, but international. They do everything from point of sale, back office, to loyalty and online ordering. It's an impressive company. We've tracked them for many years. You know, I've tried to acquire the company for three years. They are really well known for being McDonald's loyalty provider outside the United States. They've got a great business there. Any of you that use the McDonald's app in Europe, you'll sort of see it's a really awesome app. And I'd argue it's better than the U.S. app. That's a core of their business, and then they've got customers like Starbucks in different international markets.
And so they've done a really good job of trying to be what PAR wants to be internationally. And the thesis behind this was pretty simple: We wanted an international business, and it thinks because in the United States, there's not a lot of net new growth of big legacy restaurant company stores. You're not going to see a bunch of new locations for any of the top 20, 30 brands outside of, you know, the few that we all know, like Chick-fil-A. Most of these brands are kind of saturated in the markets they want. And so the growth that they have is in two markets. It's in non-traditional food outlets, which would be airports, stadiums, mall, convenience stores, fuel, stuff like that, and you've probably seen a lot of that happening. But it's international.
And so, you know, if you think of the amazing, like, Popeyes and these fast-growing brands, they have way more growth outside the United States than in the United States. And we have been turning down this business. Oh, we win a big brand, and they'll say: "Hey, like, who should we use international?" And we're like: "Here's a bunch of people to use." And so I think a little was like, gosh, we're giving away a lot of money to third parties that we could bring in, in-house. But also, it was defensive in the sense that the decision-makers of these brands, if the growth markets are outside the United States, the decision-makers will eventually move outside the United States.
You know, I think we wanted to make sure we were in those markets because, you know, God forbid, the next CIO of our chain we work with is now working out of Asia, not the United States. We better have a relationship with that person such that we can win, keep our U.S. business, and so it was part defensive that way. But a great product we've known a long time, and, you know, it's awesome. The founders are rolling their, the CEO family are rolling their money into PAR, so it's nice and synergistic that way. TASK, sorry, Stuzo was our other acquisition we did. Great business, great financials. We acquired it for a great price.
That business does effectively what Punchh does, but does it in the convenience store and non-traditional restaurant market. This is a business we've been in for some time. You know, we're approaching sort of 10% of our revenues in that market are coming from c-stores and what we call fuel stops. And it was getting to the point now where, gosh, we're growing pretty fast here, and we are not taking it serious. It's kind of off the side of our desk. And then our POS company started winning deals in that space, and then our back office company started winning deals in that space. And we sort of made this call, which is, either we're going to take this really serious and become super serious about this category or pull out of it.
We went through a bunch of debate, and I think what we realized is, what's the best way to take it serious, is to have some scale, have a team that's focused on it. So, Stuzo is the premier loyalty and offers platform for the convenience store market. They service everything from major fuel retailers like Chevron down to smaller convenience stores. It's an amazing business, very, very high margin... good growth, great culture, and it's taken over the PAR c-store business. So it's been really fun to see that kind of work, work its way, and, you know, I would say it's the first acquisition we've done at PAR, where everything we thought before the deal, we still hold after the deal and think higher of it than we did before we bought it.
Talk a little about the convenience store market, how it compares to the restaurant market, some of the key differences?
So I think there are about 150,000 stores, you know, that are within the TAM of c-stores that are relevant to us. That's less than probably the 400,000 or more restaurants that we could potentially serve with our products. However, what we love about this business is that it is way less competitive. There are not 10,000. Literally, there are 10,000 restaurant technology startups. There's not a fraction of that in this market, and so there's a lot less distraction. And what is neat about this market is convenience stores are amazing businesses. They're some of the greatest compounders we've, you know, we've had over the last, you know, 30, 40 years. You know, there's a reason why Warren Buffett owns them, and great investors have bought these things.
But they're generally family-controlled, long-term thinking, long-term oriented, and so their partnership mentality is really fantastic. So, you know, on the average convenience store chain, we make 2-2.5 times what we make in restaurants. And so even though it's a less quantity of stores, the revenue potential is pretty close to what it is in restaurants. Given the lower barrier to entry, sorry, the lesser competition, we feel like, wow, we can innovate faster. We don't have to deal with a bunch of startups nipping at our heels. And then I think importantly, it's the ability to sell more PAR, PAR stuff that we have today into that market, which was, again, we were kind of falling into it, but it gives us great opportunity to cross-sell into that market.
And then on the TASK and international side. So post-TASK closing, is the strategy to have product and platform parity domestically and internationally? Will it be a different platform internationally? How do you think about it?
We want parity, so I think we don't want multiple products across PAR. So our loyalty will be one, our back office, so on and so forth. The only place that may be different is in the international side. And, you know, the short answer is we're going to figure that out. I think, if you look at history, the vast majority of ERP systems or, you know, restaurant point-of-sale systems have had separate international from U.S. businesses for lots of different technical and non-technical reasons. And so that seems to be the way to go. But we'll, our first sort of responsibility as the two companies combine, is from a product perspective, say: Hey, how do we take the best of both products, build microservices such that we can create one platform for everybody?
But if there's not ROI to doing that, we're not going to do it. And so unless we actually think we can get slimmer, faster, and more efficient, we won't do that, but I think, I think we'll figure that out.
Is it, is the idea going to be focused on chains that have U.S. presence and then expand out with them, or would you go, you know, international, go-to-market motion?
Yeah.
Like, how do you think about that balance?
So, certainly from the PAR side, will be we would pushing our U.S. brands over to that market. Now, they've got pipeline of customers all across the world that they'll continue, but I think we'll be able to flood their pipeline with primarily the big U.S. brands. And for the most part, even in outside the United States, most of the big restaurant conglomerates are still U.S.-based brands. We're, you know, we're the best at unhealthy food.
Got it. Let's shift to financials for a second. Just remind us, as I think there's some opacity in the financials at PAR. Just cut through it. How do you think about your ARR, segment of your ARR?
Sure. So, you know, in reality, our P&L is sort of got three core lines to it. There's one line called contract, which is a government subsidiary that we are, you know, relatively vocal that will not be part of PAR for the long run. It's not relevant to our core business, and, you know, I wouldn't focus a ton on that. Our second line is product, which is our hardware business. So when we sell point-of-sale software, generally, we're attaching hardware, and we have a set of legacy customers that buy hardware only, the biggest one being McDonald's. So if you go to something like 30% or 40% of McDonald's stores in United States, you'll see the PAR logo on the, you know, the device the cashier is banging on.
The third line is professional services, which is installs and implementations, but a lot of that is, for us, hardware servicing. So you break your terminal, you ship it back to us, we fix it and send it back to you. And the last line is subscription services, and that's the most important line of our P&L. That's our software business. It is all recurring. So ARR subscription services are the same thing for us. And that's where obviously the value and the growth has focused, been focused on. That business at the end of Q1, if you add the two acquisitions, was around $225 million, a little north of that, of total ARR, growing 25%. You know, we think there's a really healthy margin profile underneath that.
We feel super excited that business will kind of, you know, exit at a really nice rate. A lot of pipeline behind it, and that's really our core focus. You know, 5.5 years ago, when we took over the company, that subscription services line would've been $5 million or something. You know, today it's all where it is now, and so I think that's the investment, that's the growth. And to me, the way that I sort of value and look at the company is there's an ascribed value to that software business, which is super high retention, you know, high growth, soon-to-be high margin.
And then I think I look at sort of the rest of the sum of the parts, which is there's value in the hardware business, there's value in the government business, which you, I think you can break apart.
So let's stay on the theme of profitability. So when you say soon to be high margin, a question we often get is: What is the path from now-
Sure
... to that high margin state, and how do you get confidence around that?
So we communicate to the Street, we wanna be breaking EBITDA profitable in Q3, and then rapidly move to profitability. And for us, you know, it's been a choice to, you know, in the sense that our OpEx grew 7% in Q1, which we had kind of telegraphed to the Street, which was very much getting preparation, preparation for this Burger King and Wendy's launch. But for the rest of the year, that will work its way back down. So, you know, we're hoping to end 2024 at the same OpEx we ended 2023, which ironically, is the same OpEx we had in 2022.
I think we'll be able to demonstrate almost two years, or 2+ years , rather, of flat OpEx, while our revenues have grown meaningfully, obviously, you know, almost double during that period of time. So we're getting a ton of operating leverage on the core business. We have one product line, which is our online ordering business, which has been all of our burn, and so that's kinda covered up the core profitability of the business inside, which has gone great. We haven't added heads to Brink and Punchh and our core, our back office product. It's all gone in this new business. So you know, we expect to be profitable in Q3. Q4 we'll have some velocity there and obviously all throughout 2024.
you know, I've always sort of said our long-term targets are pretty simple. We want to get our gross margins to the mid-70s, like many good software companies. I think we'll get our OpEx to be, call it 50% of sales, 25% of it to be in R&D, 15% in sales and marketing, and hopefully 10% in G&A. And, you know, we should be a, you know, mid-20s operating business or better. I don't think we're super far off from that. I think, you know, once you inflect to profitability, I think it comes really quickly.
And again, given our discipline on operating expense growth, then you've just got to underwrite the revenue growth, which again, in our sector, everyone is growing, but we're obviously growing faster, and I think there's so much pipeline that I don't foresee that slowing down.
All right, let's shift to competition. So you mentioned you primarily compete against legacy providers. A lot of the SMB-focused providers have talked about moving upmarket.
Yep.
Talk about how you see that dynamic. Are you seeing it at all today, and how do you see it evolving over the future?
So I'd say, you know, if we were to survey our sales team, you know, their top three people, they'd say they'd see at every RFP would be NCR, Oracle, and Global Payments through a product called Xenial, and those would be the three we see absolutely the most. And you know, after that is where you'd see Toast, Square, and some of the other folks. And you know, I think those are all great businesses. They've done very well. The shift from SMB to enterprise is hard because the enterprise, in our opinion, is buying a very different set of product than the SMB. When you're selling to an SMB, the CEO is the same person as a CMO, as a CTO, as a chief kitchen cleaner, everything.
You know, when you're selling to an enterprise, those are all different buyer personas with different budgets and all sorts of different externalities that need to, like, all happen for you to get a sale, and so it's a really different set of products. You know, the demands, you know, no small business is integrating in, you know, into SAP's ERP system or using Braze or Snowflake and all the stuff that we have to do. And so, it's a really different product, and so I think that's why it's been hard for those firms that have done so well downmarket to come upmarket. They haven't been able to cross that chasm. And they're amazing businesses.
You know, in fact, you know, I got into this market 'cause I was an early investor in those businesses, and then I kind of discovered it. I think they'll find their way to it, but I think there's plenty of market, and I think we've got a really nice lead on a bunch of them. So I suspect they'll win a deal here or there, but I don't know if it's as easy as it's been. Listen, they've been at this for a long time. I don't think any of them have not had enterprise on their focus list for... They've all had it on there for some time.
You know, I think our goal is to build a product mode out such that, you know, they'll win a deal here or there, but for the most part, you know, we're still taking share.
So, let's shift to market opportunity a little bit. How many enterprise rooftops or units do you think are addressable by your product set today? And then also, in particular, I think point-of-sale may have one addressable market, but payments may be a different addressable market-
Yep
with some of the comments you making earlier. So how do you think about each component?
So, you know, we think in the United States, there's somewhere between 750,000 and 1 million restaurants. I know our peers think there's, like, 1 million. We think there's probably closer to 800,000. So let's just say there's, you know, call it 800,000 restaurants in the United States. We think half are truly applicable to us, and that's a tight sort of like enterprise, you know, market that we think we are situated for. And, you know, ostensibly, all of our products are really relevant to that because we sell enterprise software. Payments is the one product I'd say is probably relevant to half of that. I don't expect us to win payments at mega brands like a Burger King or, you know, if we ever win McDonald's or anything like that.
But I do think the other most of that base still, it's very relevant. And I said some of this innovation we have in payments allows us to go monetize that market as well, and that's really simplistically how we look at it. And so I've always looked at our TAM as those, call it 400,000 restaurants, times the suite of products we have. But what I think we've kind of shown over time is, you know, there are continually going to be swim lanes and new products that we'll upsell and upsell and upsell, so that the TAM is that, the P, you know, P times Q, the P part of it continues to expand as we add products, build products, and acquire products.
That will also sort of be there, I think, for a long time. And it's hard to sort of see it unless you're really living in that market. But we're still at the really beginning phases of this digital transformation. You know, the vast majority of restaurants, they may have a couple cool products, but most of their operations and workflow is still extremely manual. It...
You know, my favorite question is, when I meet a CIO of a big restaurant organization or conglomerate of restaurants, you know, they'll be so excited to say, "Hey, I use Snowflake, and I've got Braze running," and I don't ask a few questions like, "Are you getting, like, a lot of value?" Like, because I know the data that I send in that system is completely different than what Olo would send and what that guy sends. And so, like, how do you get the value from it? And you ask why or how a bunch, and eventually they're like, "Uh, I don't know." And to me, it's just, like, just how early we are in actually getting that. And as AI becomes a thing in our market, and today it is not.
So like, there's a lot of articles, but it is really not a thing of interest for our customer base. But for that to ever manifest, and it will, there'll be one central platform that this needs to be built off of. And, you know, AI is useful if you've got the appropriate data set underneath it, but if one vendor has the point-of-sale data, one vendor has the loyalty data, one vendor has this, this is like, it's hard to make it all. You have a lot of interesting insights on an individual basis, but you need that collective insight to say, "Okay, look, this menu item is having all these impacts and externalities on all of these other parts of our, our, our ecosystem." So, you know, I think, we're still super early, and so I think that's how we look at TAM.
Obviously, we just bought international business, and so there's 7 million restaurants outside the United States, yet to know really how much are applicable, and we have this growth in sort of food service, non-traditional food service, like c-store. So I think we'll continue to grow the TAM, but from a pure kind of where we are today, it's those 400,000 restaurants.
All right, I'll ask one more before I open up to the audience. As you think about platform going forward and more inorganic expansion, are there obvious product gaps in the platform, or is it more about new verticals, like going through the next c-store?
I don't think we're gonna push to a new vertical yet. I think we've got to make sure we sort of... Again, c-store was, we were already in it. It wasn't like a totally new thing. We just weren't taking it serious enough. You know, I think, there's not a need to have. Everything we've acquired to date, I would say, was a need to have. We were very vocal. You know, 5.5 years ago, when we took over the company, we literally laid out, like, we need to have front of house, we need to have back of house, and we need to have POS. So we went out and acquired that over the next few years.
And it sort of, you know, hopefully, you know, we think playing out the way we'd, you know, better than we expected, given, you know, how fast that happened. But there are definitely products that we would love to have, that when combined with our existing suite of products, we could deliver a really unique set of value back to the end customer, such that we can then capture some of the value for ourselves. So there are a couple of areas that we think are interesting, that, you know, we'll spend time on. But, you know, we just did two deals, so we gotta make sure we don't stretch ourselves too thin. One of our core values is focus, and so we wanna get it right.
But I've also learned, you know, through some sage advice from yourself and others on your team, that M&A is a little bit opportunistic. You know, you can't assume it's gonna be programmatic, and like, "Oh, we're gonna do one deal a year." You know, when the deal is there, you gotta jump, or somebody else will take it. And when the deal's not there, you gotta be really, really patient.
All right, any questions from the audience?
Yeah, could you...? Yeah, thank you. To my knowledge, there are quite a few companies that are selling to the restaurants that do what you do. So how do you guys view yourself in the whole ecosystem? And, which part of the segment that you focus on, and what do you bring to the table that are superior to the alternatives? Thanks.
Sure. So we sell to enterprise restaurants. So the first distinction is we aren't selling to a local restaurant, we're selling to chains. So our customers are everyone from a Sweetgreen all the way up to Burger King, but you won't find us in a single-store restaurant generally. That's number one, and that is a really big categorical difference, because the software to the small business restaurant is really different than the software to Arby's. You know, Arby's is super sophisticated. They've got consultants, Accenture, whatever. They've got CIOs, CMOs, financial officers, compliance, risk, versus the single-store restaurant's got one person that does all those jobs in one. And in that enterprise market, you know, the reason why we win more than anybody else in our category and are growing faster than most everyone in our category, is that we've got a...
It's a product-led business. We have the best product. And what makes it better? It's more modern than what existed today. It's got more referenceable customers than anybody else. You can go call Burger King or go call these customers and have, "Hey, these are real brands that have used it, tested it." But more than anything else, it has proven ROI. And so when we go and sell, it's about proving that we can deliver on the ROI we tell you up front, and the best way to do that is sort of look at the product, test it, feel it, use it as you like, and then obviously talking to customers that have made money. But, you know, in enterprise software, it's sort of hard to say, "Oh, we have these three things, they don't have it," because everybody can build anything. It's software, right?
It's about the culmination of, have you thought about all that workflow and design to make it, you know, make it great? So as an example, we acquired international business. We didn't build international, because when we looked at international, we said, "Okay, we think we could probably build it in a year," which in software terms means 15 months or 16 months. "And then we'll get it in market, and then we're gonna learn a whole bunch of stuff." And so that's probably two years, really, before we're selling, 'cause you get your first customer, you're like: Oh, my God, I didn't know this, I didn't know this. And then you're two years, and by the time you're in that two years, the people that are already in that market are now two years ahead of you, compounding on that knowledge, compounding on that knowledge.
So it's, I think we've kind of built this compounding mode over time now, there. Now, there's a lot of technical things I could answer. We have more integrations than anybody else. We have, I think, the best uptime in the industry. We have, all, you know, more, you know, this sort of one throat to choke, which our restaurant customers really love. But foundationally, it's, it's a product-led business, and like I said, in the enterprise, you can't hide a bad product with a great sales process. Like, the product has to win.
Any other questions? Oh, we'll go there first.
Hey, I had a quick question on the payment side. So you mentioned that for your more upmarket customers, like the McDonald's of the world, it's hard to attach payments, obviously, but for maybe your smaller half, what's your approach to selling payments? Is it mandated, or are you flexible on your in-house versus referral model? Thank you.
It's a great question, and yeah, I would say they're not small, like our—you know, we do payments for Smoothie King, 1,400 stores, a billion-dollar business. So it's a, you know, still decent-sized businesses. So our pitch is relatively simple. We'll go in there and say, "Hey, you've got XYZ payment vendor. We can match or beat their rates." We generally don't rush that. Two, "We can do something that nobody else can do. We can take your payment data, combine it with your loyalty data and your POS data, and give you one platform that has all that together." Now, why is that important? Once I can match your loyalty profile to your credit card, I know who you are.
I can pull up your Facebook profile, but I also know how much you're spending everywhere else through the credit card panel data, and I can actually provide incredible ROI back. A standalone payment company has a hard time doing that because they don't have access to the rest of the data, and so we do sell on that over time. And then the third part is, like, all the other stuff, which is, like, the number one call to our helpdesk is an issue between the payment device and the POS, literally number one call.
And so imagine what happens, which is, like, the customer calls the POS guy and says, "What the hell, it's not working?" And we point the finger at Verifone or whoever, and then they point the finger back at us, and it's like two days of, like, whose fault is it? Versus if it's one vendor, we're all on the same team, we're gonna solve it much faster. And that, of all those reasons I just gave you, like, that's the one that has the most impact on our customers because it simplifies the, the journey for them. And that, again, that unification of vendors is really powerful right now in, in the community we sell to.
I think we had a question up here as well.
Just help me understand the implementation resources, and if that's a governor currently on winning new business. You know, you've got this huge backlog, and I'm, you know, I could have a great product or be super impressed with your product, but I'd be worried that I'm gonna be getting second fiddle or whatever.
Yeah. It's not a governor today. It has been in the past, where we, you know, particularly coming out of the pandemic, did not have the resources or candidly the know-how or the team to do a great job on it. Now we feel incredibly comfortable. You know, the Burger King rollout, we've talked about a lot publicly. You know, that's a two-year rollout across 7,000 stores. That's a huge commitment, and that's just one customer, right? And so not only are we ensuring we can do it, they're vetting the hell out of us to make sure we can do it, 'cause we both gotta hit the same timeline, or there's penalties and stuff like that. And so the alignment is there, but also the vetting of how we're gonna go about it is truly there.
I think what's exciting to us is that, we now feel like it's programmatic. We now feel it's not like these heroic efforts. We've created a ton of technology, people, processes to make it work, and so, you know, we feel pretty good about it. And so on that side, I feel very, very good about it, that we can flex up and down. You know, as, as I mentioned on our call, if expenses go up for, for Burger King, you know, they're gonna come back down over time. And because this was a flex up, and if we don't gain more business, we can flex it back down, or if we gain more business, we'll, we'll keep it.
But we feel today in a really decent spot about having it go live and push forward, and, you know, I think it's not stopping us from winning another deal. And I sort of feel confident that, you know, we've won other deals since Burger King, and, of course, the question comes like: "Hey, how's the rollout gonna work?" And when those firms come in, who are completely objective and sort of say, "Okay, here's a rollout plan, here's how we're managing resources," and we show them a ton of detail, they feel very confident we can hit their goals.
Anything else in the audience?
Yeah, keep going on the competitive front. So in your targeted segment, who do you compete, and yeah, I mean, do you compete with Toast, and so how do you differentiate, and who has a bigger mousetrap, and who is winning? Thanks.
Our three biggest competitors are NCR, Oracle, and Xenial, which is owned by Global Payments. Those are the ones that will probably be in almost every RFP that we do. You know, Toast would be after that, and a bunch, a long tail. You know, I would say we're probably the one that wins the most of those, within those core competitors in the enterprise. I think we probably are the winner by a decent amount. The number one cause of loss is no decision. So it's very rare that we lose when it's head-to-head. When we lose, it's because they decide to stick with their existing product for another year and push it off a year.
But generally, I think we're sort of perceived in that bucket of the, you know, best in class. And obviously, I think our growth show that we're taking more share than anybody else. And so I think we're winning.
All right, we have time for one last question, then I'll take. You know, we've talked about this before. You guys traded a discount to where you think your intrinsic value is. What do you think is most misunderstood about PAR?
You know, I don't—I think there's a couple of things, but I would say that's on us, right? I think, you know, the core part I think that's missed is, you know, we have a really great growth profile, and, you know, I think the last two quarters, our growth has accelerated, it's not decelerated on a bigger base. And so I think that's kind of interesting. You don't see that often in software. You know, put the pandemic stuff to the side, like, we've kind of... We're growing at a really healthy rate, and we have this big backlog, and we feel confident. And so I do think that's still underestimated, how powerful it is to have growth in software. Is hard to do, and there are not a lot of companies that can keep doing that.
I think that's really great. But I think the biggest thing that's misunderstood is just how quickly, once you get to profitability, it goes from there. And there are so many great case studies, but look at, you know, go back 15 years and look at when Salesforce made that inflection, then look at companies today, and you're like: Wow! Like, once they hit profitability, that profitability comes fast. And I think that we're gonna have to demonstrate and prove to the market, are the two things. And the last thing I would say, is I would say, you know, with no hubris or arrogance, like, we're a bit of a unique team in the sense that we're ambitious.
PAR looks literally nothing like it did 5.5 years ago. We had literally $5 million, maybe $5 million or $6 million of recognized subscription services revenue. Today, we're $200 million and something. That happened in a very short period of time. So what I always tell our team, and investors probably don't appreciate, is like: That's gonna happen all over again, because we're gonna take some big swings, take some risks that are calculated, with the obsession of we work for our shareholders, and we have to drive value, and if we think there's something that can drive value, and it's crazy or risky, we'll probably do it, if we think we can make it work.
Awesome. Thanks so much for your time.
Thanks, Neil.