Good afternoon. My name is Johanna, and I will be your conference operator today. At this time, I would like to welcome everyone to the FY 2020 First Quarter Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Chris Byrnes. You may begin, sir.

Thank you, Johanna, and good afternoon, everyone. I hope during these crazy days that everyone is safe, healthy, along with their families. I'd like to take the opportunity to welcome you today also to the call for PAR's 2020 first quarter results review. Complete disclosure of our results today can be found in our press release issued this afternoon as well as in our related Form 8-K furnished to the SEC. To access the press release and the financial results details, please see the Investor Relations and News section of our website at www.partech.com. At this time, I'd like to take care of certain details in regards to the call today. Participants on the call should be aware that we're recording the call this afternoon, and it will be available for playback. Also, we are broadcasting the conference call via the worldwide web, so please be advised if you ask a question, it will be included in both our live conference and any future use of recording. I'd also like to remind participants that this conference call includes forward-looking statements that reflect management's expectations based on currently available data. However, actual results are subject to future events and uncertainties, especially during these times, for example, statements relating to our business and financial condition and to our expectations are subject to the uncertainties about the future impact of the COVID-19 pandemic, and there can be no assurance that the COVID-19 pandemic will not have a material or adverse effect on our business. The information on this conference call related to projections or other forward-looking statements may be relied upon and subject to the safe harbor statement included in the earnings release this afternoon and in our annual and quarterly filings with the SEC. Joining me on the call today is 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?

Thank you, Chris, and good afternoon, everyone. Thank you for joining our call today. I hope that all of you and your families are staying healthy and safe. These are unprecedented times, so we will be taking somewhat of a different approach to our commentary today. On today's call, we'll not only review our business performance and financial results for the first quarter. We'll also share with you the impact that the coronavirus pandemic has had in our business, what we are doing to address the associated challenges and how the strength of our business model positions us for long-term success. To begin and to review our Q1 performance, our total revenues grew 22.4% to $54.7 million and reported GAAP net loss of $10.9 million, a loss per share of $0.61, as compared to a net loss of $2.7 million and a loss per share of $0.17 in the same period last year. On an adjusted basis, the non-GAAP net loss for the quarter was $5.1 million and a loss per share of $0.28 versus a net loss of $1.5 million and a loss per share of $0.09 in Q1 2019. Details on the GAAP to non-GAAP adjustments are included in today's press release. Bryan will give additional color on the numbers for the quarter. Now to address the current business environment. Our company is addressing the challenges associated with COVID-19, with the same seriousness, intellectual rigor and fact-based analysis that we've employed for over 50 years since PAR was founded. We are focused on 3 things: the health and safety of our team members, demonstrating leadership by continuing to solve our customers' most pressing issues and building long-term value to shareholders. Our unique capabilities include an adaptable business model and a robust client base that has shaped PAR's leading…

Thank you, Savneet, and good afternoon, everyone. I would now like to take this opportunity to provide some additional details surrounding our first quarter results. As Savneet previously stated, we reported revenues of $54.7 million for the quarter, up 22.4% from $44.7 million reported for Q1 2019. Our net loss was $10.9 million or $0.61 per diluted share for the quarter versus a net loss of $2.7 million or $0.17 loss per diluted share for Q1 2019. Unfavorable year-over-year results from operations was primarily driven by corporate financing charges, including an $8.1 million loss on extinguishment of debt related to the partial repurchase of the 2024 notes and an additional $1.8 million of interest expense related to the 2024 notes and the 2026 notes. Operating segment revenue for the three months ended March 31, 2020, were $37.4 million for the Restaurant/Retail segment, an increase of 27% from $29.6 million reported for Q1 2019, and $17.3 million for the Government reporting segment and increased 15% from the $15.1 million reported for Q1 2019. Restaurant/Retail revenue for Q1 2020 by business line consisted of $19.9 million for core, which included $3.5 million for Drive-Thru; $17.5 million for Brink, which included $2.2 million for Restaurant Magic. Restaurant/Retail revenue for Q1 2019 by business line was $18.7 million for core, $9.5 million for Brink and $1.4 million for SureCheck. Government revenue for Q1 2020 by business line consisted of $8.1 million for ISR, $8.5 million for Mission Systems and $0.1 million for product sales compared to Q1 2019 revenue by business line of $6.3 million for ISR, $8.5 million for Mission Systems and $0.3 million in product sales. Product revenue for the quarter was $18.6 million, up $3.1 million or 20% compared to Q1 2019. Our hardware sales in the Restaurant/Retail reporting segment were…

Thanks, Bryan. Now to complete review our segment performance for the first quarter. Annual recurring revenue for Brink at the end of Q1 was $22.2 million, an increase of $6.6 million and a 42% increase from a year ago and a $3 million increase from the sequential fourth quarter. This AR number is built off restaurants being invoiced as of March 15, 2020. In the quarter, we completed the installation of 970 new stores of Brink. New bookings in the quarter totaled 725 sites, and our open order backlog now stands at 1,180 stores. This lower bookings number is directly related to the initial spread of COVID-19. As the spread intensified, we saw a meaningful amount of new business [indiscernible] and purchase decisions put on hold for the time being. Unfortunately, a significant number of these deployments have been delayed due to new safety guidelines instituted by restaurants to limit who is physically allowed inside their stores. We believe this situation is temporary, and we are proactively working with our customers to employ solutions as safely as possible. Regarding churn, we ended the quarter on a positive note with an annualized rate of 4.9% for the quarter. We are proud of the work we completed in 2019 continues to result in lower churn. We will continue to invest aggressively in R&D for Brink in 2020 as we make the necessary move to an agile development environment, which will allow us for faster release of new versions and a much more seamless experience for our customers. Now shifting to Restaurant Magic's performance in the quarter. ARR for Restaurant Magic at the end of March was $8.6 million, a 28% increase from Q1 2019. In the quarter, we implemented 507 new store sites and now have 5,408 active restaurants utilizing Restaurant Magic.…

Johanna, we're ready for Q&A now.

[Operator Instructions] Your first question comes from the line of Adam Wyden of ADW Capital.

Hey guys, really remarkable. Thank you for taking my questions. So a lot going on in the restaurant industry. Can you talk a little bit about the competitive environment in enterprise? I mean, obviously, work from home and quarantine has hurt your customers, given most of them are focusing on SMB, and the lion's share of their revenues are from merchant processing. And we've heard that your largest competitor, I guess, has laid off their entire enterprise sales team. I'd imagine there'd be some positive implications for pricing as well since they were kind of giving away SaaS in exchange for merchant processing, and obviously, the availability of talent. I mean can you provide some color on some of this?

Sure. So I won't talk about individual competitor, but do it categorically. I would say that we feel, relative to competition, we are probably in the strongest suit in that our base of customers are larger than enterprise and they're still open. And that has led to the opportunity for us to acquire talent faster and potentially better than we could have historically. And it, in many ways, proved out our model of our focus on sort of high-quality, high enterprise customers as a stickier place to be. So we have seen a number of competitors pull out of our, let's call it, the enterprise market. And we think that market has actually expanded for us during this time. At the same time, I do believe that our ability to win will still be tied to our ability to deliver on the solutions that we've talked about for the last couple of quarters. And so I feel we're sort of hitting an interesting point where we're getting through the big technology development we need to, to really accelerate and be agile. At the same time, we do see competition retreating, which has led to sort of the opportunities that growing and our available talent are growing as well.

Great. Yes. It's super, super exciting. And that was helpful. It's kind of our understanding that you guys signed up to kind of four-figure unit change with payments. Obviously, I'm not expecting to confirm that, but was hoping you might be able to give us some color on payments, the progress you've made thus far on payments and kind of the opportunity going forward.

Sure. I can't provide too much color on this. But I can say we are excited the opportunity to expand our payment business. I think part of our challenge in the payments business will be that the table service market in 2020 will be, I think, relatively small, which was a big part of our payment plan. That said, we've been encouraged that a couple of our larger organizations are interested in taking or looking at our payment products. So I'd say we feel encouraged out of our existing base, picking up the product and maybe expanding it further than at least I had expected. And the balance of that is that the table service market probably won't be here in 2020 with COVID-19. So we feel encouraged by where we are. We've got a lot of work to do before we can really get it out there. But from a customer adoption perspective, I think all of us feel like there's a really big opportunity there.

All right. I have two more questions. You've talked a lot about your microservices, kind of, replatforming, which has kind of been the bottleneck to basically rolling out more units per quarter. Obviously, your bottleneck now is actually being able to get into the restaurant. Can you talk a little bit about kind of the progress you've made on microservices and kind of your ability to kind of replatform? And how that kind of will be manifested in terms of rolling out more units once kind of the restaurants open up?

Sure. I think we are incredibly happy where we are in the transition to being agile to microservices and honestly, just a more modern infrastructure. We've got an amazing leader at Brink who's really driven this from the top, and it's spread throughout the ethos of the organization. We're probably still a quarter or so away from really running, maybe a quarter and a half, but we're already seeing great progress. You can see it in our numbers. You can see it in the quality of talent that we've attracted. And I think that's – I hate to say that this crisis is good for anything, but in many ways, we, as a firm, sort of [indiscernible] on this idea that our goal is not just survive, it's to thrive during this time. And so we're taking the time to continue to push very, very hard on our R&D spend. We did not cut $1 of R&D spend related to the microservice project, and we'll continue to get that right because, as you suggested, it's been the only reason we haven't grown the business faster. It's the only reason. So we are into that work today. And I think we're still a quarter or so away from really being up the job maybe, but there's real signs of progress.

Well, I mean, look, obviously, you guys with me on this call for a few years now. I mean it's super exciting now that we have basically an intersection of your ability to take on these customers and now, I guess, these QSR customers realizing that they actually need that product. And I think it kind of leads me to my next question, which is, I look at your customers, and I say to myself, wow, they're super well capitalized. Popeyes comped 30%. Jack in the Box has 93% off-premise. On some level, just talking to some of these QSRs that we talked to, COVID/the pandemic on some level should accelerate the adoption of Brink because it allows to get the loyalty and the online ordering and obviously, the Drive-Thru. And I think on some level, people might have been dragging their feet before and seems like not having it is kind of at a risk to your sales in this kind of world. So super exciting on that front and thinks that the kind of the intersection of the microservices and now these guys are realizing that they need this, I think the growth will be explosive once they're letting – let you out into the restaurants. But I want to ask about something else. The company has not really ever broken out Brink from core. And we saw in the proxy that finally, you broke out core in terms of hardware and service. And I was pretty stunned actually, you guys generated $11 million in operating profit, and that wasn't really with your Drive-Thru consumables business, which is just – I'm sure just kicking brand. So if I put those two together, that's like a $15 million operating profit business, a lot of that is service and consumables. So I mean that's got to be worth at least $120 million. Government's ramping back up and put $100 million on that. That's $220 million. Assuming Brink and Restaurant Magic – I mean Brink and Restaurant Magic exit Q1 was about $31 million. Assuming we're in our houses for the rest of our lives, you guys only get to $35 million or $40 million at the end of this year. I mean, at today's share price, I mean, Brink effectively is the cheapest enterprise SaaS company that's actually growing in the market today, your closest comp light speed with almost 100% SMB exposures trading for 15x ARR. I guess my question to you is what do you think people are missing? I mean some of the disruptors like Wayfair or [Cheng] are skyrocketing because people think their competitors will go out of business. I mean, clearly coming out of pandemic, we should be in that bucket. I mean why do you think PAR isn't in that bucket? And I mean what are we doing to kind of solve this valuation disconnect?

Sure. So I'd say, listen, I think we, as a business, got sort of thrown out with restaurants, right? I think there was just something that everything tied to the restaurant would struggle business. And I think what investors or all of us are missing is the fact that we have a very, very resilient client base. And these are the best organizations in the world. And in many ways, we can actually accelerate these organizations. We have certain organizations that depend on us for their mobile apps, their online ordering. And so I think what was lost was that we were just considered another restaurant tech company without maybe this rigor around who do we actually service. And so I think that's what happened. How do we sort of rectify the valuation gap if there is one? Listen, I think we execute, right? We installed more stores this quarter in quite some time. We'll continue to push to growth during this time, and we'll start telling our story. I think I can't stress to you what a shock the COVID experience was to see our customer sales drop so specifically. But now we've seen it rally back. And so I think we, ourselves, are coming to terms with, we've got to keep winning in this environment. We've got to be aggressors. And I think that will help bridge this valuation gap. So it's part us executing and part us getting – telling the story.

So I mean, high level, just to summarize, I mean your peers who are merchant processors, they're – they have exposure to table service, their ARR is down, yet they trade at 15x ARR. And you trade at three or whatever the number is, and you're resilient. So are you confident that the market will eventually see the valuation disconnect? I mean is that what you're saying? I mean – obviously, I know $10 where we were last quarter is a little bit different than we are up here. But I mean, are you confident that the market is going to be able to see the valuation disconnect, I mean, obviously, as you continue to execute and get bigger?

I think so. I do think markets eventually get relatively efficient, and it's just a function of how soon we can bridge that gap. But I'd say we – the fact that we, as a management team, as a company, are cognizant of that also puts some more focus on it.

Well, look, I mean, I got to imagine that there's – you spoke to M&A on a couple of occasions. I'm sure there's probably some really interesting assets out there both domestically and internationally. So getting your cost of capital to a point where you can execute on another Restaurant Magic, I got to imagine, is a priority for you.

We definitely see the M&A landscape expanding. I think I said this on our call, but the number one, reason we don't go forward M&A has been price historically. And I think – and maybe that was my own arrogance or luck, but I would assume that we have a higher quality business model than others in that we service this enterprise customer base. We are truly enterprise software where I think many were getting multiple servicing small businesses and not realizing that that business movement will have churn in any type of recession and obviously a corporate pandemic recession. And so we are looking to be opportunistic when and if the opportunity comes, but we're going to stay very disciplined. And obviously we are product people. We're not going to sort of acquire something to acquire something. We need a product that works, a culture that meshes with us, and one that we truly believe we can scale. And if we see that, we will be incredibly aggressive.

Yes. Well, look, its super exciting having been an investor and bystander, just looking back to where we were in early 2018, I mean, where the company is and where it's going. I'm just – I'm very happy and pleased that I've been able to be part of the journey. And I hope that you guys figure out a way to get your cost of capital up because I think there's probably a lot of M&A to do. So congratulations on a wonderful job, and I look forward to seeing more.

Thank you.

Your next question comes from the line of Andrew Scutt of Roth Capital.

Hey, guys. Thanks for taking my question. I just want to say congrats on the quarter. You guys are executing really well until the COVID popped up, so great to see that. My first question for you guys is just revolving around Brink. As far as the installs go, do you just have any idea of what the kind of the rate of the rebound is going to be once everything starts opening up? And secondly, do you kind of see the activation run rate kind of normalizing to what you guys had in the quarter moving forward?

So on your first question I think it's really hard. We don't have good visibility on where things are going to – when things develop up. I'd say a couple of our largest rollouts are on pause, not because customer actually wants it on pause, it's just there's a mandate that we can't actually enter stores yet and help them install and rollout. So there's a bit of a limitation, some tied to, call it, regulatory compliance and some of it tied to customers. So we don't have great visibility yet. I would expect that as states reopen, we will see some rebound. And I think that rebound can come for two reasons. The first is it's no doubt in my mind that customers that have Brink have clearly seen those stores outperform versus stores that didn't have Brink, whether it be for online ordering, mobile access, so on and so forth. Second, as I mentioned, the chains that we service have really fought back. We have a number of chains there have, I'm sure, are doing better this year than last year. And I'm guessing there. But I think we've seen real progress in these organizations. And so I think if your sales are back or close to where they were, you want to push forward on any technology initiatives because this crisis has only heightened the need for what we offer, not put it down. So I think you'd see some accelerated – some pull forward of demand. Now that's all tempered by the ability for us to enter stores when states reopen and for the restaurant organizations themselves to feel confident on their own businesses going forward. So we're there. To your second question, if things are to reopen, of course, I think we'll go back to where we're in. I think we'll do better, right? We missed the last two weeks of last quarter, which is generally the biggest weeks of the quarter. And so I hope we can get back there provided that the country gets back there.

Great, thanks. And then just another quick question. Really healthy backlog on Brink once again, just – are you able to give a breakdown between new and existing customers or just a rough estimate there?

We can't do that now. I would say most of the backlog, though, is still probably existing logos we've signed. We don't put something in backlog until we have a purchase order. So it's real backlog. It's not sort of something that we can't tie to an individual store. So it's predominantly existing logos that we're – for signing individual franchisees.

Great, thanks. That's all for me.

Our next question comes from the line of Ishfaque Faruk.

Hi, good afternoon, guys. Congrats on a good quarter. A couple of questions from me. And I apologize in advance because I missed the first few minutes of the call. And that is, Savneet, can you give a sense for what's your outlook for the second quarter is? I know like your Q1 numbers are terrific, but your Q2 numbers, especially for Brink bookings, can you give a sense for that?

Yes. If you look at through the last answer [indiscernible] we just – we don't really know. It will be, obviously, I think just like [indiscernible] probably one of our slowest summers. But like I said, we're seeing a rebound every single day. And it's a little bit hard to [indiscernible] stores. We're able to book stores [indiscernible] and install them. So I won't really have good visibility [indiscernible] three or four weeks on how the [indiscernible] shaping up. But right now, I'd say it's just very slow business – on pause or close to pause. But the [indiscernible] are that we're having real conversations with customers around when they want to [indiscernible].

What I'd add to that is that from our standpoint, what's helped Brink also in the attachment that we have in the hardware that we've seen over actually in the past, call it, four quarters, that's one thing, is roll out, depending on the phasing when that comes back in, that's where our risk is, right, on the revenue top side. But we are happy to see how our customers have fared over the past, call it, four to six weeks, as Savneet mentioned earlier, that we're approximately 85% of them is still open. So from a servicing standpoint, we're feeling a little bit better than you are from the product standpoint going forward in Q2.

And Savneet, like you mentioned, you guys are able to do bookings, right, but you already have a pretty sizable backlog, right? As Q2 progresses, right, and you add like more bookings, right, how fast do you think your team will be able to get those bookings activated as soon as possible? Can you give a sense for like maybe the run rate on a monthly basis maybe?

So we feel we've cleared most of the bottlenecks and be able to get stores out the door quickly. Our service team has really been revamped and has [indiscernible]. It is honestly going to be more tied to the economy being up and then our customers opening up. That it is something tied to us. So we have a number of chains, how we have many bookstores that they want rolled out, we want rolled out. They have a moratorium on work right now and so we need to sort of work with them to figure out how they want to [indiscernible]. So once things get back to any form of normal, we should be able to install at least what we did the last quarter and hopefully a lot more, but it's now more tied to policies, states reopening, is anything that we can do.

Got it. Thank you, guys.

Your next question comes from the line of [indiscernible] of Slingshot Capital.

I just want to find out from you guys about the Brink POS. Is it a self-serve SaaS product? Or just to paraphase, can a customer deploy Brink without having any formal training?

[Kelvin] thanks for joining. So it can be a self-service product. Today, most of our terminals are installed by an installer, but we are working very hard to make it as self-service as possible. So most large chains do have it installed because that install generally encompasses more than just Brink, the terminal, the peripherals and other stuff that they're rolling out. And so it hasn't been historically like this. But there's no doubt that COVID has dramatically accelerated our own focus on how do we make this as seamless as possible. So you can – it can be installed by an individual. We've had people do that. But I'd say most of our installs are still very much tied to someone coming into the store.

All right, thank you. Just want to find out as well. I missed the earlier part of this earnings call. I think since more QSR senior executives are actually staying at home these days, you find it easier to reach out to them and discuss whether Brink could help them during this period or even post COVID-19?

I would say, during the COVID experience, it's not the best time to go pitch to the CIOs, the CEOs right now as they were going from seeing sales drop 40%, 50%, 60%, in some cases, overnight. And so what we've become as a resource for our existing customers and one that we sort of had in the finish line on helping them provide services. And so we created a program called PARk it, which is a virtual drive-thru, it's pickup, and we're giving this to our customers to help them survive. So I think what we've found is that this experience has, in many ways, bound us not physically, but like emotionally to our customers and the pains that they've gone through and ourselves. And so we are trying to stand by them, I guess, in a virtual sense, help them deal with this crisis. And I think they'll see that our intent is sincere, and our product has worked and will convert them going forward. So for those of us – for those customer – those potential customers that are not our existing customers, I think for them, it's much more of a – I'm sure some of them are saying, "Gosh, I wish I installed this or pushed this out in 2019, 2018," because they would have been limited in some of the opportunities to fight back during COVID, whether it be online ordering, third-party delivery, so on and so forth. So my hope is that the way that we've carried ourselves, the character that our team has pushed forward, the empathy we've shown has come through to our customers and our potential customers and then our solutions have delivered the value that we – that they have.

All right. Thank you very much. Just one last question, obviously I'm just figuring out for the restaurants in terms of the unit economic. So obviously, QSRs care a lot about protecting their bottom line and, of course, the sales as well. So just by installing Brink, could you talk about maybe some form of cost savings? Or how fast would they get ROI on installing Brink?

So it's not something we disclose. And I'd say Brink – in general, I think, buying the point-of-sale has changed a lot. And I think point-of-sale is going to be invested to the past. It's going to be – we're moving to a world of the platform, right? And I think, historically, when you would install a point-of-sale system, it was the world of the CTO and the CIO. And today, that decision is very much the CEO, CIO, the whole team. And the ROI is significant in that, a) I think it's been proven that a modern technology-enabled restaurant outperformed one that is not sort of up-to-date. And I think you can look at all the great organizations that we service and others and see their sales growth versus those that haven't sort of adapted to change. And I think that, that ROI is self-explanatory now. At the same time, there are endless reasons on the cost savings side, including the data integrity issues of having multiple point of sales systems, the ability to actually have data to go push out promotions, save money on the back office. And so I guess we don't have [links] to the equation to say, hey, you're going to save, pay us ex-amount per year and you'll make this much, because, again, it's very chain dependent. But I think that the conversation is very – is not so much tied to anymore to ROI. It's about why we're the right solution for something that we're looking at. Does that answer your question?

Yes. Excellent. Yes, So I think very great results this quarter, and I look forward to the rest of the year. Thank you very much.

Thanks.

Your next question comes from the line of Adam Wyden of ADW Capital.

Sorry, guys. I didn't mean to – I forgot there was one last question I didn't ask. So I mean, obviously, you spoke about getting the baby out with the bath water in restaurants. And this is stock that's been the target of a lot of short sellers. I think it might be helpful for you guys to talk about kind of what the investment that is required on behalf of a restaurant to actually adopt Brink? I think in your conversations, you mentioned that actually, a base hardware for QSR is only a few thousand dollars. And it's also – I think from our research, it also seems like some of the larger chains are effectively soft dollaring the investment and basically providing the money upfront or over a 10-year period to finance the hardware. So I think it might be helpful for you to kind of talk about the capital investment required to do Brink because I think a lot of guys are walking around saying, well, all the restaurant isn't making any money, they can't take Brink. And it might be helpful to kind of outline how much dollars and what the franchisors are doing to basically subsidize that. And also what initiatives you guys are doing to basically defray that cost such that once you're open and microservices is going, we can do $2,000, $3,000 a quarter.

Sure. So today, I'd say, to get Brink launched in organizations, you sign up for, obviously, our software product. Historically, it's about $2,000 a year, depending on how many terminals you have. And the actual cost of physical terminal is – fairly because it not so different than a computer. You're anywhere from $700 to $2,000, and depending on how many our terminals, whether you had a kitchen system. For the quick service and fast casual customers that we service, it's maybe $5,000 to $10,000 if you're really doing a lot. But in many cases, it is relatively small CapEx. Now, in today's world, you may say, "Hey, I don't want to do any CapEx, I don't want to do my terminal." But I think what we've realized at Brink is, a) we can install Brink on pretty much anything, any Windows device, and so you don't necessarily need to make the harbor purchase [of fee], as I suggested. The customers now say, "Hey, I need all this technology to grow my revenue [indiscernible]." We don't – I think the customer's mind is much more focused, obviously, focused on cost and they don't want to sort of spend the CapEx. But how fast they can get paid back given all the stuff that they can launch. And what we're seeing from, call it, the concept level, is a lot of focus on trying to push out one standardized platform because it provides an immense value to them. So we'll see certain concepts put out through financial incentives to convince customers, it's either the franchisees to move to our products faster. We've also seen, let's call it, instead of [indiscernible] we've seen other sales. And if you don't rollout the [indiscernible] point-of-sale system, we're not going to give you the new loyalty app. And so the commitment from the concepts are – is significant, and that's because they're getting real value from it. So I think the upfront cost isn't nearly as high as many people think. And I think the push from the concept level is significant given the value they get.

Right. And it sounds like also with the balance sheet, some of the things that your peers were doing vis-à-vis giving the hardware for free in exchange for payment. I mean you've got – you mean, you've got a really big balance sheet now. I mean, presumably, if the restaurant doesn't want to make the investment or the franchisor isn't giving the hardware for free, like one of your big QSR chains, you guys are in a position to work with these customers to defray the upfront costs as well, right?

Correct.

[Indiscernible] from a high level. Yes, of course. I think we are looking for ways to make [indiscernible] to our customers. And we'll finally do that. And of course, we are, I think, very excited that competition has become more rational. And I used to say that if competitors are irrational, it's still our reality. And today, I think that a rational customer, we could be the ones who are pushing on rope here.

Great. This is super exciding. All right. That's it from me.

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

Hi. Thank you. This is Ryan Bressner on for Samad here. Just a couple of questions here, if I may. First, you talked a little bit earlier about the broader environment, but if I could just maybe follow-up on that. How are your customers thinking about store re-openings in the context of the broader consumer behavior in terms of demand recovery out of this? What's the thought there?

I think our customers are still figuring out. I don't think there's anyone that says this is our to go forward plan. There's still a lot of wait and see. And I think that we and see – honestly just try to see how do consumers react when states reopen. And so we got our first couple of states, we'll see how the data goes. We'll see how the restaurants respond after that. So right now, unfortunately, we just don't have enough information to answer that intelligently. I think the – what we have seen that might be encouraging is that our large organizations that we're rolling out, we're in active dialogue with them about when do we restart, how do we restart, how do we do it safely? And so I don't think they've said this is the date yet, but I think the plans that they're hopefully in active planning with us to figure out when that may be.

Okay. Thank you. Helpful. Just secondly, how have efforts to – can you give some more color on how efforts to cross-sell Restaurant Magic have been going? And also in your comments about PARk it earlier, how do you view this particular opportunity in drive-thru evolving after COVID? And how is that playing out?

Yes, good question. So on the Restaurant Magic side, I'm very encouraged and I think we're still extremely early. We closed on Restaurant Magic at the end of December, and I think we've barely scratched the surface of building up the team and the efforts there. So we've signed three customers together already. And as I mentioned, we have in pilot in one of our largest logos that they were not in before. So that partnership, I think will continue to get better. We're very, very, very early stage right now, and it's still very early. And obviously, with COVID, the focus has been – not been so much on trying to partner up right now. As it relates to PARk it, I think, call it, traditional drive-thru after we get through this crisis, we'll no doubt see more acceleration. We got into the drive-thru because we truly believe it was where we're going to see everyone from coffee shops to pizza chains start to expand into. I think this crisis will make that go faster. On PARk it, in some of the, just call it, the virtual drive-thru and personal pickup, I would be shocked if you were an organization that had any decent size of quantity of stores, if you didn't have something like this by the end of the year. I think there's no CEO or CIO who is not going to build some sort of product in the fear this may happen again. And so I think we'll see a lot of interest here. And our competitors are all working on solutions to sort of make this as easy as possible for that.

Okay. Thank you. And maybe just finally, on M&A, are there any verticals in particular you've seen opportunity evolving in? And how would you proceed there?

Unfortunately, I'm not sure exactly what we're looking for, but we've sort of created always at sort of the high level, which is we'll only buy something where we truly believe there's a value to the end customer. So it's not just to consolidate to consolidate. If we brought that product in, can we add more value to our customers? Then we look at it and say, if we brought that product in, how does it actually integrate into Brink and Restaurant Magic? Does it actually create more – create a better product? And so if you kind of look at that lens, there's a ton of stuff that we think is interesting today, right? At a very, very high level, all the off-premise dining areas and places we want to be a part of that will continue to grow even after the world hopefully goes back to normal. So we're looking at stuff like that. And at the same time, I think it's not lost on us that having more scale and point-of-sale may make sense as well. So I think our M&A efforts are across the board.

Okay. Thank you. Appreciate your time.

Of course.

And there are no further questions from the phone line.

Well, thank you, everyone, for joining this afternoon. We'll be certainly available in the coming days and weeks for callbacks and follow-up. And please stay healthy to you and your families. And again, thank you for your time today.

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