PAR Q3 Adjusted EBITDA Rises as ARR Reaches $354.5 Million

PAR posted sharply higher adjusted EBITDA and generated $17.7 million of free cash flow in its fiscal third quarter, as recurring revenue growth and lower operating expenses helped narrow the food-service technology company’s net loss.

For the three months ended September 30, 2026, adjusted EBITDA rose to $17.1 million from $5.8 million a year earlier and $14.3 million in the second quarter. The adjusted EBITDA margin reached 12.5%, improving by 760 basis points year over year and marking the company’s seventh consecutive quarter of adjusted EBITDA growth.

Free cash flow increased to $17.7 million from $5.2 million in the prior-year quarter, making PAR free-cash-flow positive for the year to date. Net cash provided by operating activities climbed to $20.8 million from $8.4 million.

Revenue and recurring business expand

Total net revenue increased 15% to $137.1 million from $119.2 million a year earlier. Subscription-service revenue, PAR’s largest revenue category, rose 15% to $85.9 million. Hardware revenue increased to $34.4 million from $29.9 million, while professional-service revenue grew to $16.9 million from $14.5 million.

Total gross profit rose 22% to $60.1 million from $49.2 million. Operating expenses declined to $65.5 million from $66.9 million, as lower general and administrative costs more than offset higher research and development spending. Sales and marketing expenses were broadly stable.

The GAAP net loss narrowed to $9.0 million from $18.2 million. Interest expense increased to $3.3 million from $1.5 million.

Annual recurring revenue reached $354.5 million at the end of the quarter, up 18.1% from $300.1 million a year earlier. Organic ARR grew 13.3%. PAR calculates ARR on a constant-currency basis and includes recurring subscription fees, software support, managed platform development services and transaction-based payment processing services.

Subscription-service ARR increased 18% year over year, while subscription-service gross profit rose 16%, according to the presentation.

PAR Intelligence deployment remains a priority

Management said PAR remains on track to exceed its goal of deploying PAR Intelligence across 50,000 sites during 2026. The initiative is intended to provide agentic artificial-intelligence capabilities across the company’s platform and unify intelligence among its business units.

PAR is positioning its software, hardware and professional services as an integrated operating platform for food-service customers. Its current operating priorities include scaling AI-powered products and workflows while continuing to expand recurring revenue and improve profitability.

The company cautioned that its outlook remains subject to risks including its ability to develop or acquire products that keep pace with customer needs and emerging technologies, integrate acquisitions, add and retain active sites and manage suppliers. Other uncertainties include inflation, interest rates, consumer discretionary spending, tariffs, trade disputes, geopolitical developments and potential manufacturing or logistics disruptions.