Par Technology Corp Q4 FY2023 Earnings Call

Good day and thank you for standing by. Welcome to Par Technology Fiscal Year 2023 Fourth Quarter Financial Results Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Byrnes, Senior Vice President of Investor Relations and Business Development. Please go ahead.

Thank you for your patience. I apologize for the difficulties this morning. I'll start from the beginning. We welcome everyone to the call this morning for the fiscal 2023 fourth quarter and year-end financial results. This morning, we released our financial results. The earnings release is available on the Investor Relations page of our website at partech.com, along with the Q4 financial presentation and our related Form 8-K furnished to the SEC. During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items. I’d also like to remind participants that this conference call may include forward-looking statements reflecting management's expectations based on currently available data. However, actual results are subject to future events and uncertainties. Information related to projections or other forward-looking statements may be relied upon as subject to the safe harbor statement included in our earnings release this afternoon and in our annual and quarterly filings with the SEC. Finally, I'd like to remind everyone that this call is being recorded and will be made available for replay via a link on the Investor Relations section of our website. Joining me on the call today are PAR's CEO and President, Savneet Singh, and Bryan Menar, PAR's Chief Financial Officer. I'd now like to turn the call over to Savneet for the formal remarks portion of the call, which will be followed by general Q&A. Savneet?

Thanks, Chris, and thank you all for joining us on today's call. 2023 was a foundational year, setting us up for a value creation flywheel that we believe will take flight in 2024 and beyond. The acceptance of our products by the industry's largest customers and the building blocks of an M&A strategy we intend to use regularly are now in place. I'll touch on these ideas later and begin with our results. For the fourth quarter, subscription ARR grew by 23% compared to Q4 2022. Our growth came across our products and was delivered without relying on the significant customer wins we touched on last quarter, as that revenue will begin later this year. Operator Solutions ARR grew by 45% to $60.2 million in Q4 compared to the same period last year. Operator Solutions ARPU increased by 15% from the same period last year due to higher value deals, API monetization, price increases, and the launch of power payment services. We expect this trajectory to continue. Churn was 4.8% for the year in 2023 for Brink. Operator Solutions growth is being driven by increased win rates at Brink, and we believe accelerated market acceptance of cloud solutions and a pivot away from legacy providers. This came down in Q4 as we announced the signing of Burger King, by far our largest Brink and now MENU customer, with our products to be rolled out across our 7,000-plus stores in North America. This deal validates our Tier One enterprise reach and sets us up nicely to win traditional Tier One projects with similar scope. From where we sit today, the deal pipeline for Brink is the largest and highest quality we have seen since beginning the PAR turnaround in 2018. While pipeline is just pipeline, we see a real commitment from brands across the country to accelerate their move to the cloud. We believe that at the enterprise level, PAR is not only the best choice but the simplest. Our ability to integrate deeply into their existing ecosystems and provide solutions to vendor consolidation, data integrity, and enterprise scale positions us well for continued market share growth. We continue to see Brink as the major cross-sell driver for PAR. The POS relationship will open avenues for all of our other products. Burger King will be a strong revenue driver for PAR over the next two years and when fully implemented, it will deliver upwards of $23 million of annualized subscription revenue. This number barely scratches the surface of the additional modules we hope to sell into Burger King over time. The rollout begins in earnest in Q2 this year, and we would expect on our next call to have details on the pace of this rollout as we work closely to align with Burger King on their timing. We feel confident in executing against Burger King's timelines and once we have visibility from the customer, we will report back to the market. While payments are nested within the Operator Solutions business, this product line has some strong highlights in the quarter. In Q4, we saw ARR from PAR payment services more than double from Q4 2022 and we expect this growth trajectory to continue. Q4 was seasonally strong, achieving our highest gross processing volume annual run rate of $2.1 billion. This growth is driven by the continued adoption of PAR Pay from brands such as Pita Pit, Zippy's, and Ono Hawaiian Barbeque, to name a few. Brands are increasingly benefiting from operational efficiencies, cost savings, and increased customer engagement by leveraging PAR Pay across the operator and engagement suite of products. In Q4, our Apple Wallet loyalty solution won silver in the category of Most Innovative Enterprise Product of the Year from the Best in Biz Awards, giving us confidence in the aggressive growth plans we have. This, coupled with payment innovations such as pay-at-the-table and SMS text links, ensures that PAR is executing against the mantra of best-in-class plus better together. Looking forward, as we natively embed PAR Pay to drive unique experiences, we are leading to the strongest pipeline we have ever had. Crucially, we received payments uptake on Brink, Punchh, and MENU Deals, offering us multiple avenues to grow deal value. We anticipate continued positive momentum in customer adoption. Moving to Guest Engagement ARR, it grew 8.2% in the quarter compared to Q4 '22 and totals approximately $54 million. Punchh continued to show strong execution in business revitalization, evidenced by the wins we recently announced with Bob Evans, Insomnia Cookies, and most recently, BRINK POS. These wins don’t hit revenue until later in '24 but show how Punchh has turned around from the beginning of '23. In total, we signed 12 new logos in Q4 and over 40 for the fiscal year '23, continuing to strengthen our position of best-in-class market dominance in loyalty and offers. Additionally, major platform investments are beginning to show improvements as speed, uptime, and general scalability are at all-time highs to meet our customers' growth and focus on the enterprise. It was also the lowest churn quarter of the year with less than 0.5% gross trend. We've invested in our platform to better support our customers' business requirements and are proactively adding features to increase our addressable market and ability to raise prices in renewal cycles. These investments will also help us potentially digest future acquisitions as we intend to run tightly on one platform. Moreover, as flagged above, Punchh has begun to establish itself as a verified cross-sell driver of payments, which we expect to accelerate in '24. An important piece of Guest Engagement is our online ordering engine, MENU. As we've discussed, domestic menu revenue will begin in Q1 and will continue to grow throughout '24. Two weeks ago, we celebrated the launch of the first full MENU solution at Beef O Brady's, a chain of nearly 200 stores. What makes this win exciting is that Beef O Brady's is a win back for Punchh, as this customer turned from Punchh years ago, again highlighting the power of unified ordering and loyalty. This quarter, we have an aggressive rollout plan with multiple customers, including an 800-store chain. Furthermore, the new customer pipeline for '24 will drive additional logo signings. We spent the majority of '23 investing in converting MENU into a product we can scale in the United States and are seeing this work validated. MENU highlights our attempts to build a platform out of our products. PAR Pay is built into almost every MENU deal, and I believe virtually every MENU customer signing is a Punchh or Brink customer. The vision of tying MENU and selling it to existing PAR logos is still in the early phases but is starting to become a reality, as most customers today are also customers of another PAR product. This creates a roadmap for future acquisitions. Our Back Office and Data Central also delivered a solid quarter. Reported ARR of $13 million in Q3 was a 19% increase from last year's Q4. We now have more than 7,700 stores active and in the quarter signed two additional new concepts, along with a large franchisee of Burger King. ARPU increased more than 8% from last year's Q4, and we are seeing an accelerated pipeline as we close our attached Data Central with Brink sales. For '24, we intend to work aggressively to bundle Data Central and payments within Brink, creating a closer go-to-market motion. For example, there are obvious advantages in pairing Brink reporting with more powerful Data Central reporting. This serves as both the gateway to the wider Data Central product as well as an immediate revenue stream. In the coming quarters, we will be moving Data Central revenues within Operator Solutions to simplify our reporting as well. We believe this connection between Data Central and Brink will accelerate the Data Central pipeline and win rates, allowing us to rationalize sales-specific resources. Touching on expenses, I feel confident in our expense control as we continue not to expand our R&D expense beyond additions for Burger King, which we believe is very high ROI spend. For '24, we anticipate growing OpEx in single digits, maintaining operating leverage while continuing revenue and margin growth. As I mentioned, we'll have a couple of quarters of growth to prepare for our significant rollout. But overall, the rest of the business continues to run with fixed resources, delivering on long-term growth. Our headwind in costs is almost exclusively within our MENU business unit, which drove the majority of our loss in fiscal year '23. On the other hand, Brink, Punchh, and Data Central grew their revenue with almost no net new headcount. In '24, we will not have this headwind as MENU revenue finally comes to fruition, and we have worked aggressively to reduce headcount this quarter. My confidence in our commitment to moving to the real 40 is that we have absorbed the cost of MENU and Burger King in advance of the revenue impact. That will reverse in 2024. This gives me great confidence that there is more we can take from our expense base without jeopardizing our growth, making the setup for '24 exciting. Bryan will now read the numbers, and I'll come back at the end with concluding messages. Bryan?

Thank you, Savneet, and good morning, everyone. Total revenues were $107.7 million for the three months ended December 31, 2023, an increase of 10.3% compared to the three months ended December 31, 2022, with growth coming from subscription service and contract revenue, partially offset by hardware and professional service revenue. Net loss for the fourth quarter of 2023 was $18.6 million or $0.67 loss per share compared to a net loss of $13.5 million or $0.50 loss per share reported for the same period in 2022. Adjusted net loss for the fourth quarter of 2023 was $9.3 million or $0.33 loss per share compared to an adjusted net loss of $7 million or $0.26 loss per share for the same period in 2022. Adjusted EBITDA for the fourth quarter of 2023 was a loss of $4.5 million compared to an adjusted EBITDA loss of $2.8 million for the same period in 2022, driven by a reduction in professional service margin and increased R&D investments in advance of our large customer ramp, partially offset by increased margin contribution from subscription services. Now for more details on revenue. Hardware revenue in the quarter was $24.4 million, a decrease of $5.2 million or 17.5% from the $29.6 million reported in the prior year. Q4 2022 was a historically strong quarter for us to lap. We continue to be optimistic regarding our hardware business as we launch new products to address demands from legacy hardware customers, as well as attach hardware sales within our expanding software customer base. Subscription services revenue was reported at $32.9 million, an increase of $5 million or 18% from the $27.9 million reported in the prior year. The increase was primarily driven by increased subscription services revenue from our Operator Solutions business of $3.9 million, driven by a 19% increase in active sites and a 15% increase in average revenue per site. The residual increase was driven by increased subscription services revenue of $0.6 million from our Guest Engagement business. The annual recurring revenue exiting the quarter was $137 million, an increase of 23% from last year’s Q4, with Operator Solutions up 45%, Guest Engagement up 8%, and Back Office up 19%. Professional services revenue was reported at $12.6 million, a decrease of $0.9 million or 6.5% from the $13.5 million reported in the prior year. Of the professional services revenue in the quarter, $7.5 million consisted of recurring revenue primarily from our hardware support contracts. Contract revenue from our Government business was $37.8 million, an increase of $11.1 million or 41.7% from the $26.7 million reported in the fourth quarter of 2022. The increase in contract revenue was driven by an $11.8 million increase in government's ISR Solutions product line, substantially due to the continued growth of Counter-s UAS task orders. Contract backlog associated with our government business continues to be strong and appropriately funded. As of December 2023, backlog was $326 million, a decrease of 2% compared to $333.9 million as of December 2022. Total funded backlog as of December 2023 was $73.2 million. Now turning to margins. Hardware margin for the quarter was 29% versus 23.8% in Q4 2022. The improvement in margin year-over-year was substantially driven by improved inventory management and price increases. Our focus on demonstrating value for our pricing with improved operational efficiency enabled us to enhance hardware margins in the latter half of the year and finish 2023 with full-year hardware margins of 22%. Subscription services margin for the quarter was 48.1% compared to 53.1% reported in the fourth quarter of 2022. The decrease in margin is driven by absorbing the initial investment into the Burger King rollout while also absorbing the early-stage growth of MENU and PAR payment services. Excluding the amortization of intangible assets, total adjusted subscription services margin for the three months ended December 31 was 65% compared to 72% in the fourth quarter of 2022. Professional services margin for the quarter was 10.4% compared to 23.3% recorded in the fourth quarter of 2022. The decrease in margin was driven by declines in margins from implementation services and hardware service repair. We expect professional services margins to transition back to the mid-teens for 2024. Government contract margins were 5.8% as compared to 4.3% for Q4 2022. The team continues to manage direct labor to adequately support task orders and improve margins. In regards to operating expenses, GAAP sales and marketing was $9.3 million, an increase of $0.3 million from the $9.2 million reported for Q4 2022. GAAP G&A was $18.6 million, an increase of $1.9 million from the $16.7 million reported in Q4 of 2022. The increase was driven by an increase in M&A due diligence as well as higher stock-based compensation. Net R&D was $14.5 million, a decrease of $0.4 million from the $14.9 million recorded in Q4 2022. Non-GAAP R&D increased by $1.3 million or 9%, driven by investments in our larger customer rollout. Total non-GAAP operating expenses were $37.5 million, an increase of $2.4 million or 7% versus Q4 2022, primarily driven by R&D expenses as we continue to invest responsibly in our large enterprise customer rollout that Savneet discussed earlier. Net interest expense was $1.8 million compared to $1.8 million recorded in Q4 2022. Now to provide information on the company's cash flow and balance sheet position. For the year ended December 31, cash used in operating activities was $17.1 million versus $43.1 million for the prior year. The reduction in cash burn compared to the prior year was due to management of net working capital, primarily resulting from improved inventory management. Cash used in investing activities was $7.8 million for the year ended December 31 versus $66.7 million for the prior year. Investing activities during the year ended December 31, 2023 included $1.9 million of cash consideration for a payments tuck-in acquisition for the rights to merchant payment commissions from one of our restaurant tech partners, capital expenditures of $5.8 million for internal use software, and $5.3 million for developed technology costs associated with our restaurant retail software platforms, partially offset by $5 million of proceeds from net sales of short-term held-to-maturity securities. Cash used in financing activities was $1.6 million for the year ended December 31 compared to $2.6 million for the prior year, driven by stock-based compensation-related transactions. Day sales outstanding for the restaurant and retail segment increased from 53 days as of December 31, 2022, to 57 days as of December 31, 2023. We expect DSO levels to remain near historical levels of the lower 50-day range. Day sales outstanding for the government segment decreased from 55 days as of December 31, 2022, to 51 days as of December 31, 2023. I will now turn the call back over to Savneet for closing remarks prior to moving to Q&A.

Thanks, Bryan. Let me wrap with a few key messages. What's clear to me is that as we bring our products closer together, our ability to cross-sell is increasing. The tight integration with menu, as an example, has led to 70% of MENU Deals including PAR Pay. Even more interesting, every MENU Deal has come from an existing Punchh or Brink customer. Historically, words like consolidation and bundling have had negative connotations, and I believe for good reason. Past attempts to consolidate did not revolve around industry-leading products, necessitating customers to trade off functionality for simplicity. This is explicitly what we are not doing at PAR. Our products must stand on their own, be best-in-class integrated, and when unified, deliver surprise and delight. As the years progress, I believe we will see standardization around the platform that will allow development to take place on top of that system of record, ultimately enhancing innovation and true technical outcomes. As mentioned in the opening, we believe the shareholder value creation flywheel is a strong concept. I believe the flywheel starts with the land and expand strategy with our current category, followed by the cross-sell of additional products and then the addition of accretive M&A to bolster our platform capabilities and expand our total addressable market (TAM). Each new product and acquisition allows us to drive higher returns on capital because we can leverage our existing go-to-market infrastructure. The acquisition of Punchh and MENU were strategic moves that have set the stage for future growth. Now we are ready to set the machine in motion. As we scale, it enables us to invest further in integration and thereby restart the flywheel. 2023 marked substantial evidence of the first step in this flywheel, achieving significant progress in landing our platform in the enterprise. The signing of Burger King as a Brink customer, followed by our seamless integration with MENU, is a prime example of the flywheel commencing. The next part of the flywheel is focused on accretive cash flow and M&A. Throughout the latter half of 2023, we ramped up our corporate development efforts and believe we will deliver accretive and cash-generating M&A in short order. As the market continues to shift toward platform-like solutions, individual point solutions must adapt to integrate with platforms like PAR. Today, the market has recognized that the value is in platform solutions, not standalone offerings, creating strong acquisition multiples for desirable targets. We feel some of these targets are excellent fits for PAR, which is why our ramp-up efforts are intensifying. What I find most appealing about these potential deals is that they all comprise cash-flowing businesses with substantial synergy with PAR, addressing product gaps or allowing us to leverage our existing cost base. Our ramp-up in M&A infrastructure should yield results in the near future, accelerating our flywheel. Finally, I want to express that working at PAR has never felt more like Day 1. From my perspective, the restaurant market is rapidly adopting our products at an unprecedented rate. I believe we are equipped to execute not only an aggressive organic growth plan but also to initiate the acquisition machine we envision. Our team is structured effectively to ensure we stay on track with our plan, balancing short-term objectives with long-term growth. The excitement internally is palpable, and we believe our success will only be limited by our ambition. I am enthusiastic about our current setup, as we continue to grow at our current rates with our existing core business, improve our margins as our emerging low-margin products scale, and maintain tight G&A costs. Our core products—Brink, Punchh, Payments, and Data Central—have operated with near flat headcount in '23, and the headwinds associated with MENU and Burger King investments should reverse in '24. In other words, our revenue should continue to grow while our product unit economics improve with scale, and our G&A costs remain controlled as revenue compensates for the costs we bore in '23. Any additional M&A would then significantly enhance cash flow to the bottom line, underscoring the importance of this foundation. Aside from our incremental hiring for Burger King, we foresee minimal new hires needed to achieve our growth plans, and we feel confident that the efficiency of this organizational structure will only improve as we continue to consolidate our teams. Today, we are still a relatively small business with less than $150 million of ARR, but we believe we possess the foundation to accomplish much more, and our team is excited to execute on that potential. With that, I'll open the call for Q&A. Operator?

Our first question comes from Mayank Tandon from Needham.

Thank you. Good morning. Savneet, great to see all these new logo wins outside of Burger King over the last several months. I wanted to start with— I know you're not providing formal guidance, but just based on your comments, I'd like to get a sense of your expectations for ARR growth. Can you sustain the current levels in '24? Or should we expect some acceleration given you've had these new wins, most notably, as you mentioned, Bob Evans, Hooters, etc.? Just want to get a sense of your expectations for 2024.

Yes, I think we feel confident we'll maintain and potentially grow a lot of it depending on the sequencing of the Burger King rollout. We don't have that today. But even without that and assuming conservative numbers, we feel really good about maintaining growth and possibly exceeding it. I believe we are set up for success on that rollout. There's additional opportunity beyond what we have now. So we feel very optimistic and I think there are more wins to come that we will announce. The growth we've seen in '23 did not come from any of the recently announced logos over the last three to six months.

Let me ask you this way. I think in the past, you've mentioned you can grow ARR between 20% and 30%. Is that still the target model for the company? And on that note, is subscription revenue tracking along the ARR growth trajectory? Is that a fair way to think about it?

Yes. I believe that’s a good way to frame it. Once we have clarity about the timing and details of the Burger King rollout, I will have more specific guidance. But as it stands, we feel solid about our targets.

Got it. And then just as a quick follow-up regarding leverage in the model, great commentary around that. Based on your comments, is it reasonable to think that you could potentially reach EBITDA profitability at some point in 2024, or given some of your comments, are we looking more to 2025 due to timing of some of these leverage points?

That will depend primarily on Burger King's rollout since we've significantly ramped up costs to support both MENU and Brink. We feel optimistic about potentially achieving that by the end of the year unless Burger King decides to delay the rollout significantly to '25. However, we believe the rollout will proceed as planned and it will create a positive impact on our bottom line.

Our next question comes from the line of Stephen Sheldon from William Blair.

Hey, good morning. Lots to discuss here as always. Just on Burger King, what are some of the key milestones we should be monitoring for implementation? It sounds like there are quite a few moving pieces. Additionally, what risks do you see in that process that you are most concerned about? What must you get right considering the implementation?

Everything is on track; I'd say it’s going even better than expected on all fronts, so we're feeling great. The key metric to track is simply how many stores go live, which is fundamental to our success. We haven't started rolling out yet, but many stores are being tested successfully right now. The rollout is a two-year process, and the main variable is how much is realized in '24 versus '25, which we do not have concrete details on yet, but we are optimistic.

Got it. I assume Burger King is included in those strong Operator Solutions bookings of 3,400 new site bookings. Could you clarify how many of those were related to Burger King versus other customers?

Burger King accounts for a minimal portion of that, maybe 100 or 150, while the remainder is from other logos.

Excellent. And sticking with Operator Solutions, I noticed an increase in ARR per active site—around a 7% to 8% sequential growth. Can you provide more details on what’s driving that? Payments adoption certainly plays a role, but is there also pricing uplift or other factors?

It's approximately a 50-50 split between payments and pricing uplift, and that trend is likely to continue. The deal sizes we’re engaging in are significantly larger than before, which has resulted in higher ARPU. We are confident about pricing strategies as Brink's premium product is gaining recognition.

Our next question comes from the line of Eric Martinuzzi from Lake Street Capital Markets.

Yes, I wanted to dive deeper into the $2.3 million figure for transaction due diligence related to M&A work. Can you provide insight into the direction of these efforts? Are they focused more on Engage, Operator Solutions, or back office?

From the numbers, it’s apparent we are significantly active in the M&A process, which is why I raised it because it's meaningful. As far as where that M&A activity is concentrated, we see the most activity in Guest Engagement and Operator Solutions, although M&A is often opportunistic and can develop quickly.

You indicated that these potential targets are cash positive; does that mean that post-acquisition, they would be cash-flow-generating?

Correct. Every business we consider is soundly profitable. If any target isn't fully cash positive, it is approaching that stage, which is a focus for us. We won't consider acquiring any money-losing entities. We have already made significant investments where we absorbed costs during the development of MENU, which has contributed to our current headwinds.

Our next question comes from the line of George Sutton from Craig Hallum.

This is Adam on for George. Savneet, on the last earnings call, you mentioned that three large QSR brands were considering Brink. Could you provide an update on those potential customers?

I can't disclose specifics until an official announcement is made, but the number has increased to more than three. Our pipeline is significantly larger than in the past. We have about three logos considered near-term within our funnel, and another four that are medium-term. The funnel is robust, and RFP processes are more competitive than ever, so it bodes well for potential business.

Great. Regarding MENU, can we get an update on the development of features and the integration process? How complete is it?

We have reached product parity and reduced costs significantly. We had our first U.S. go-live at Beef O Brady’s two weeks ago, and another customer is set to go live shortly. The product is evolving nicely, and while we've faced operational challenges, our core business is now running much more efficiently.

Lastly, regarding the Burger King rollout, did most of the scaling from headcount and cost occur during Q4, or should we expect to see that continue into Q1?

Most of the scaling occurred in Q4, though some will continue into Q1. We're scaling about 140 temporary positions to support the integration. These costs are substantial but won't be ongoing as revenue starts coming in.

Our next question comes from the line of Samad Samana from Jefferies.

You’ve effectively aligned the cost structure with the current business model. It looks like the subscription part of the business may now be profitable factoring in expenses. Am I interpreting that correctly? Is that the message you intended with the new disclosures?

Yes, that disclosure is intended to provide transparency regarding how quickly we're rationalizing the cost base. We are working hard to ensure the business is growing profitably outside of menu-associated losses.

Additionally, Samad, the slides you're referring to exclude G&A and focus on looking at it from a noncash perspective.

Thank you. And what’s your expectation on the impact of MENU and payments regarding gross margins? Do you anticipate a permanent headwind from payments, or do you believe margins can return to higher levels?

We are definitely aiming to return to the 70s in margins and higher over time. We recognize payments on a net basis, so our payment margins will be similar to our software margins. MENU, however, may take a couple of years before returning to stable margins, but it's not destined to be a permanent leg down. The growth of other businesses, outside of MENU and payments, is solid, and their performance can bring us back to previous margin levels.

Our next question comes from the line of Anja Soderstrom from Sidoti.

You mentioned that the cloud transition from on-premise has accelerated. Is security a significant factor in this shift?

While security is certainly part of the conversation, the key driver is that legacy providers are losing market share more rapidly than before. The primary reason is that older products, even those on the cloud, restrict innovation opportunities. The ability to leverage modern technology is crucial for success, as seen in the stock performance of restaurants investing in cutting-edge solutions, while those that have not kept pace have suffered.

Our next question comes from the line of Andrew Hart from BTIG.

When considering 2024, how do you see the various components of ARR growth playing out? Operator Solutions, especially with Burger King, will likely be a major factor. However, could you share your thoughts on the performance expected from Guest Engagement and Back Office?

We expect to see an acceleration in Guest Engagement driven by Punchh and MENU with new logo wins expected. Punchh has secured several logos in the second half of '23, which will drive increased growth over this year. MENU will officially begin generating revenue soon. The expected growth for that business may not reach 30% due to its size, but we anticipate positive momentum. Back Office has been growing around 19% this year, and we foresee its continued growth through bundling within Brink and potential acquisition opportunities emerging. The signing of Brink enables other products to grow more rapidly. Every Brink customer signed in '24 is likely to add complementary products as well. That's why we prefer to consolidate these units; with Brink landing, expansion becomes simpler and more effective. I would also like to highlight the strategic positioning of our government business.

Thank you. At this time, I am showing no further questions. I would like to turn the conference back over to Savneet Singh for closing remarks.

Thanks, everybody, for your time. I look forward to connecting next quarter, and please feel free to reach out with any questions.

This concludes today's conference call. Thank you for participating. You may now disconnect.