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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Toast Inc | NYSE:TOST | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.21 | 0.83% | 25.52 | 25.79 | 24.9304 | 25.07 | 2,942,817 | 01:00:00 |
Added over 6,000 net new Locations in first quarter 2024
Annualized recurring run-rate (ARR) as of March 31, 2024 grew 32% to $1.3 billion
First quarter net loss was $(83) million and Adjusted EBITDA was $57 million
Toast (NYSE: TOST), the all-in-one digital technology platform built for restaurants, today reported financial results for the first quarter ended March 31, 2024.
“Toast is off to a strong start in 2024. Our first quarter results demonstrate strong topline growth and margin expansion that we will continue to build on throughout the year. We executed well against our priorities: scaling restaurant locations; driving ARR by delivering products customers love; continuing to expand our addressable market; and building operating leverage as we scale,” said Toast CEO and Co-Founder Aman Narang. “With a differentiated business model that scales efficiently, we are positioned for durable growth and ongoing margin expansion, while investing in exciting new growth vectors to expand our long-term opportunity. Thank you to our entire Toast team for a great start to the year. Our confidence and enthusiasm for the future has never been stronger.”
Financial Highlights for the First Quarter of 2024
Percentages may not tie due to rounding. For more information on the non-GAAP financial measures and key metrics discussed in this press release, please see the sections titled “Key Business Metrics” and “Non-GAAP Financial Measures,” as well as the reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures at the end of this press release.
Outlook1
For the second quarter ending June 30, 2024, Toast expects to report:
For the full year ending December 31, 2024, Toast expects to report:
1 A reconciliation of these forward looking Non-GAAP measures to the corresponding GAAP measure is not available without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliations that have not yet occurred, are out of our control, or cannot be reasonably predicted, including but not limited to the change in fair value of our warrant liability and stock-based compensation. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results.
The outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. See cautionary note regarding “Forward-looking Statements” in this press release.
Recent Business Highlights
Conference Call Information
Toast will host a live conference call at 5:00 p.m. Eastern Time on Tuesday, May 7, 2024. The live webcast of the conference call can be accessed through Toast’s investor relations website at http://investors.toasttab.com. A replay of the webcast will be available for a period of 90 days after the call.
Toast has used, and intends to continue to use, its Investor Relations website (http://investors.toasttab.com), as well as the Toast Newsroom (https://pos.toasttab.com/news), as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Information on or that can be accessed through Toast’s Investor Relations website, or that is contained in any website to which a hyperlink is provided herein is not part of this press release, and the inclusion of Toast’s Investor Relations website address, and any hyperlinks are only inactive textual references.
About Toast
Toast is a cloud-based, all-in-one digital technology platform purpose-built for the entire restaurant community. Toast provides a comprehensive platform of software as a service (SaaS) products and financial technology solutions that give restaurants everything they need to run their business across point of sale, payments, operations, digital ordering and delivery, marketing and loyalty, and team management. We serve as the restaurant operating system, connecting front of house and back of house operations across service models including dine-in, takeout, delivery, catering, and retail. Toast helps restaurants streamline operations, increase revenue and deliver amazing guest experiences. For more information, visit www.toasttab.com.
Forward-looking Statements
This press release contains “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when Toast or its management is discussing its beliefs, estimates or expectations. Such statements generally include the words “believes,” “plans,” “intends,” “targets,” “may,” “could,” “should,” “will,” “expects,” “estimates,” “suggests,” “anticipates,” “outlook,” “continues,” or similar expressions. These statements are not historical facts or guarantees of future performance, but represent the beliefs of Toast and its management at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside Toast’s control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. Forward-looking statements include, without limitation, statements about expected financial positions or growth; results of operations; cash flows; guidance on financial results for the second fiscal quarter and full year of 2024; statements about future operating results; the expectations of demand for Toast’s products and growth of its business; statements about new products and offerings and the benefits thereof; the growth rates in the markets in which Toast competes; Toast’s investments in technology and infrastructure; Toast’s ability to deliver innovative solutions; Toast’s ability to attract and retain customers; financing plans; business strategy; operating plans; competitive positions; and growth opportunities for existing products.
The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in Toast’s filings with the Securities and Exchange Commission (“SEC”), including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations'' in Toast’s Annual Report on Form 10-K for the year ended December 31, 2023, Toast’s Quarterly Report on Form 10-Q for the three months ended March 31, 2024 that will be filed following this earnings release, and Toast’s subsequent SEC filings. Toast can give no assurance that the plans, intentions, expectations or strategies as reflected in or suggested by those forward-looking statements will be attained or achieved. The forward-looking statements in this release are based on information available to Toast as of the date hereof, and Toast disclaims any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing Toast’s views as of any date subsequent to the date of this press release.
TOAST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in millions, except per share amounts)
Three Months Ended March 31,
2024
2023
Revenue:
Subscription services
$
151
$
107
Financial technology solutions
873
673
Hardware and professional services
51
39
Total revenue
1,075
819
Costs of revenue:
Subscription services
50
36
Financial technology solutions
683
523
Hardware and professional services
92
85
Amortization of acquired intangible assets
1
1
Total costs of revenue
826
645
Gross profit
249
174
Operating expenses:
Sales and marketing
107
99
Research and development
83
85
General and administrative
74
82
Restructuring expenses
41
—
Total operating expenses
305
266
Loss from operations
(56
)
(92
)
Other income (expense):
Interest income, net
10
8
Change in fair value of warrant liability
(36
)
3
Loss before income taxes
(82
)
(81
)
Income tax expense
(1
)
—
Net loss
$
(83
)
$
(81
)
Net loss per share attributable to common stockholders:
Basic
$
(0.15
)
$
(0.15
)
Diluted
$
(0.15
)
$
(0.16
)
Weighted average shares used in computing net loss per share:
Basic
547
524
Diluted
547
525
TOAST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions, except per share amounts)
March 31, 2024
December 31, 2023
Assets:
Current assets:
Cash and cash equivalents
$
578
$
605
Marketable securities
537
519
Accounts receivable, net
86
69
Inventories, net
120
118
Other current assets
330
259
Total current assets
1,651
1,570
Property and equipment, net
82
75
Operating lease right-of-use assets
34
36
Intangible assets, net
25
26
Goodwill
113
113
Restricted cash
57
55
Other non-current assets
90
83
Total non-current assets
401
388
Total assets
$
2,052
$
1,958
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable
$
49
$
32
Deferred revenue
50
39
Accrued expenses and other current liabilities
614
592
Total current liabilities
713
663
Warrants to purchase common stock
100
64
Operating lease liabilities
30
33
Other long-term liabilities
6
4
Total liabilities
849
764
Commitments and Contingencies
Stockholders’ Equity:
Preferred stock- par value $0.000001; 100 shares authorized, no shares issued or outstanding
—
—
Common stock, $0.000001 par value:
Class A - 7,000 shares authorized; 450 and 429 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Class B - 700 shares authorized; 102 and 114 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
—
—
Accumulated other comprehensive loss
(1
)
—
Additional paid-in capital
2,910
2,817
Accumulated deficit
(1,706
)
(1,623
)
Total stockholders’ equity
1,203
1,194
Total liabilities and stockholders’ equity
$
2,052
$
1,958
TOAST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) (in millions)
Three Months Ended March 31,
2024
2023
Cash flows from operating activities:
Net loss
$
(83
)
$
(81
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
11
6
Stock-based compensation expense
66
63
Amortization of deferred contract acquisition costs
19
14
Change in fair value of warrant liability
36
(3
)
Credit loss expense
15
13
Other non-cash items
(2
)
(1
)
Changes in operating assets and liabilities:
Accounts receivable, net
(22
)
(20
)
Other current assets
(19
)
(6
)
Deferred contract acquisition costs
(30
)
(24
)
Inventories, net
(2
)
(1
)
Accounts payable
16
6
Accrued expenses and other current liabilities
(37
)
(20
)
Deferred revenue
11
3
Other assets and liabilities
1
(4
)
Net cash used in operating activities
(20
)
(55
)
Cash flows from investing activities:
Cash paid for acquisition, net of cash acquired
—
(9
)
Capital expenditures
(13
)
(10
)
Purchases of marketable securities
(145
)
(176
)
Proceeds from the sale of marketable securities
18
7
Maturities of marketable securities
111
147
Other investing activities
—
(1
)
Net cash used in investing activities
(29
)
(42
)
Cash flows from financing activities:
Change in customer funds obligations, net
49
37
Proceeds from issuance of common stock
28
11
Repurchases of Class A common stock
(4
)
—
Net cash provided by financing activities
73
48
Net increase (decrease) in cash, cash equivalents, cash held on behalf of customers and restricted cash
24
(49
)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
—
—
Cash, cash equivalents, cash held on behalf of customers and restricted cash at beginning of period
747
635
Cash, cash equivalents, cash held on behalf of customers and restricted cash at end of period
$
771
$
586
Reconciliation of cash, cash equivalents, cash held on behalf of customers and restricted cash
Cash and cash equivalents
$
578
$
451
Cash held on behalf of customers
136
99
Restricted cash
57
36
Total cash, cash equivalents, cash held on behalf of customers and restricted cash
$
771
$
586
Non-GAAP Financial Measures
In this press release, Toast refers to non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with United States generally accepted accounting principles (“GAAP”). Toast uses certain non-GAAP financial measures, as described below, to understand and evaluate its core operating performance. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of Toast’s financial performance and should not be considered substitutes for, or superior to, the financial information prepared and presented in accordance with GAAP. Toast believes that these non-GAAP financial measures provide useful information about its financial performance, enhance the overall understanding of its past performance and future prospects, and allow for greater transparency with respect to important metrics used by Toast’s management for financial and operational decision-making.
In the tables below, Toast has provided reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. These non-GAAP financial measures should not be considered substitutes for financial measures calculated in accordance with GAAP, and the financial results that Toast calculates and presents in the table in accordance with GAAP, as well as the corresponding reconciliations from those results, should be carefully evaluated.
The following are the non-GAAP financial measures referenced in this press release and presented in the tables below:
Adjusted EBITDA, Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit, Non-GAAP Costs of Revenue, Non-GAAP Gross Profit, Non-GAAP Subscription Services Gross Profit, Non-GAAP Financial Technology Gross Profit, Non-GAAP Hardware and Professional Services Gross Profit, Non-GAAP Non-Payments Financial Technology Solutions Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses, and Free Cash Flow do not purport to represent profitability and liquidity measures as defined in accordance with GAAP. These measures are provided to investors and others to improve the quarter-to-quarter and year-to-year comparability of Toast's financial results and to ensure that investors understand the information Toast uses to evaluate the performance of its businesses.
Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations since they do not include the impact of certain expenses and cash flows that are reflected in our Consolidated Statements of Operations and Consolidated Statements of Cash Flows. Thus, our Adjusted EBITDA, Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit, Non-GAAP Costs of Revenue, Non-GAAP Gross Profit, Non-GAAP Subscription Services Gross Profit, Non-GAAP Financial Technology Gross Profit, Non-GAAP Hardware and Professional Services Gross Profit, Non-GAAP Non-Payments Financial Technology Solutions Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses, and Free Cash Flow should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
Key Business Metrics
In addition, Toast also uses the following key business metrics to help it evaluate its business, identify trends affecting its business, formulate business plans, and make strategic decisions:
1. Gross Payment Volume (“GPV”) is defined as the sum of total dollars processed through the Toast payments platform across Toast Processing Locations in a given period. GPV is a key measure of the scale of Toast’s platform, which in turn drives our financial performance. As Toast customers generate more sales and therefore more GPV, Toast generally sees higher financial technology solutions revenue.
2. Annualized Recurring Run-Rate (“ARR”) is defined as a key operational measure of the scale of Toast’s subscription and payment processing services for both new and existing customers. To calculate ARR, Toast first calculates recurring run-rate on a monthly basis. Monthly Recurring Run-Rate, or MRR, is measured on the final day of each month as the sum of (i) Toast’s monthly billings of subscription services fees, which we refer to as the subscription component of MRR, and (ii) Toast’s in-month adjusted payments services fees, exclusive of estimated transaction-based costs, which we refer to as the payments component of MRR. MRR does not include fees derived from Toast Capital or related costs. MRR is also not burdened by the impact of SaaS credits offered. The MRR calculation includes all locations on the Toast platform and locations on legacy solutions, which have a negligible impact on ARR.
ARR is determined by taking the sum of (i) twelve times the subscription component of MRR and (ii) four times the trailing-three-month cumulative payments component of MRR. Toast believes this approach provides an indication of its scale, while also controlling for short-term fluctuations in payments volume. ARR may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with the Toast platform, pricing, competitive offerings, economic conditions, or overall changes in Toast’s customers’ and their guests’ spending levels. ARR is an operational measure, does not reflect Toast’s revenue or gross profit determined in accordance with GAAP, and should be viewed independently of, and not combined with or substituted for, Toast’s revenue, gross profit, and other financial information determined in accordance with GAAP. Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of Toast’s future or expected results.
Locations
We define a live location, or Location, as a unique location that has used Toast Point of Sale to record transaction volumes above a minimum threshold, and has not been marked as a churned location as of the date of determination. A Location can use Toast payment services, which we refer to as a Toast Processing Location, or for select enterprise customers, not use Toast’s payment services, which we refer to as a Non-Toast Processing Location. Customers of legacy solutions provided by companies that we have acquired, that do not use Toast Point of Sale, are not included in our Location count.
Summary of Key Business Metrics and Non-GAAP Results (unaudited)
Three Months Ended March 31,
(dollars in billions)
2024
2023
% Growth
Gross Payment Volume (GPV)
$
34.7
$
26.7
30
%
As of March 31,
(dollars in millions)
2024
2023
% Growth
Payments Annualized Recurring Run-Rate
$
634
$
503
26
%
Subscription Annualized Recurring Run-Rate
671
484
39
%
Total Annualized Recurring Run-Rate (ARR)
$
1,305
$
987
32
%
Adjusted EBITDA
Three Months Ended March 31,
(dollars in millions)
2024
2023
Net loss
$
(83
)
$
(81
)
Stock-based compensation expense and related payroll tax
62
68
Depreciation and amortization
10
6
Interest income, net
(10
)
(8
)
Change in fair value of warrant liability
36
(3
)
Restructuring and restructuring-related expenses(1)
41
$
—
Acquisition expenses
—
1
Income tax expense
1
—
Adjusted EBITDA
$
57
$
(17
)
(1) Restructuring and restructuring-related expenses include $30 million of severance benefits, $10 million of stock-based compensation expense, and $1 million of accelerated depreciation related to facilities.
Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit
Three Months Ended March 31,
(dollars in millions)
2024
2023
Gross profit (GAAP):
Subscription services
$
101
$
71
Financial technology solutions
190
150
Adjustments:
Stock-based compensation expense and related payroll tax
5
5
Depreciation and amortization
7
3
Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit (Non-GAAP)
$
303
$
229
Non-GAAP Costs of Revenue
Three Months Ended March 31,
(dollars in millions)
2024
2023
Costs of revenue
$
826
$
645
Stock-based compensation expense and related payroll tax
11
11
Depreciation and amortization
8
4
Non-GAAP costs of revenue
$
807
$
630
Non-GAAP Gross Profit
Three Months Ended March 31,
(dollars in millions)
2024
2023
Gross profit
$
249
$
174
Stock-based compensation expense and related payroll tax
11
11
Depreciation and amortization
8
4
Non-GAAP gross profit
$
268
$
189
Non-GAAP Subscription Services Gross Profit
Three Months Ended March 31,
(dollars in millions)
2024
2023
Subscription services gross profit
$
101
$
71
Stock-based compensation expense and related payroll tax
5
5
Depreciation and amortization
7
3
Non-GAAP subscription services gross profit
$
113
$
79
Non-GAAP Financial Technology Solutions Gross Profit
Three Months Ended March 31,
(dollars in millions)
2024
2023
Financial technology solutions gross profit
$
190
$
150
Stock-based compensation expense and related payroll tax
—
—
Depreciation and amortization
—
—
Non-GAAP financial technology solutions gross profit
$
190
$
150
Non-GAAP Hardware and Professional Services Gross Profit
Three Months Ended March 31,
(dollars in millions)
2024
2023
Hardware and professional services gross profit
$
(41
)
$
(46
)
Stock-based compensation expense and related payroll tax
6
6
Depreciation and amortization
—
—
Non-GAAP hardware and professional services gross profit
$
(35
)
$
(40
)
Non-GAAP Non-Payments Financial Technology Solutions Gross Profit
Three Months Ended March 31,
(dollars in millions)
2024
2023
Financial technology solutions gross profit
$
190
$
150
Payments financial technology solutions gross profit
(156
)
(124
)
Non-GAAP non-payments financial technology solutions gross profit
$
34
$
26
Non-GAAP Sales and Marketing Expenses
Three Months Ended March 31,
(dollars in millions)
2024
2023
Sales and marketing expenses
$
107
$
99
Stock-based compensation expense and related payroll tax
(13
)
(15
)
Depreciation and amortization
(1
)
(1
)
Non-GAAP sales and marketing expenses
$
93
$
83
Non-GAAP Research and Development Expenses
Three Months Ended March 31,
(dollars in millions)
2024
2023
Research and development expenses
$
83
$
85
Stock-based compensation expense and related payroll tax
(20
)
(22
)
Depreciation and amortization
(1
)
(1
)
Non-GAAP research and development expenses
$
62
$
62
Non-GAAP General and Administrative Expenses
Three Months Ended March 31,
(dollars in millions)
2024
2023
General and administrative expenses
$
74
$
82
Stock-based compensation expense and related payroll tax
(18
)
(20
)
Acquisition expenses
—
(1
)
Non-GAAP general and administrative expenses
$
56
$
61
Free Cash Flow
Three Months Ended March 31,
(dollars in millions)
2024
2023
Net cash used in operating activities
$
(20
)
$
(55
)
Capital expenditures
(13
)
(10
)
Free Cash Flow
$
(33
)
$
(65
)
Sums may not equal totals due to rounding.
TOST-FIN
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507702120/en/
Media: media@toasttab.com Investors: IR@toasttab.com
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