Toast Announces Second Quarter 2023 Financial Results

Toast (NYSE: TOST), the all-in-one digital technology platform built for restaurants, today reported financial results for the second quarter ended June 30, 2023.

“Toast delivered record results in the second quarter. In addition to exceeding $1B in ARR, Toast reached Adjusted EBITDA profitability and positive free cash flow for the first time since IPO as we remain focused on driving lean, durable growth,” said Toast CEO Chris Comparato. “We’re still in the early stages of the opportunity ahead of us, and with proof points including our new Marriott deal and adding a record number of restaurant locations, we are more confident than ever in our ability to penetrate the entire restaurant TAM. Continued product innovation, relentless focus on being a trusted partner to restaurants, and execution on our proven strategy position Toast to deliver value for our customers, shareholders and the entire restaurant community well into the future.”

Financial Highlights for the Second Quarter of 2023

• ARR as of June 30, 2023 was $1.1 billion, up 45% year-over-year.
• Gross Payment Volume (GPV) increased 38% year-over-year to $32.1 billion.
• Total locations increased over 35% year-over-year to approximately 93,000, with net new locations of over 7,500 in Q2 2023.
• Revenue grew 45% year-over year to $978 million.
• Gross profit of $208 million was up 84% year-over-year. Non-GAAP gross profit grew 80% year-over year to $225 million.
• Net loss was $(98) million in Q2 2023 compared to net loss of $(54) million in Q2 2022. Adjusted EBITDA was $15 million in Q2 2023 compared to Adjusted EBITDA of $(33) million in Q2 2022.
• Net cash provided by operating activities of $50 million and Free Cash Flow of $39 million in Q2 2023, compared to net cash (used in) operating activities of $(21) million and Free Cash Flow of $(30) million, respectively, in Q2 2022.

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.

Outlook

For the third quarter ending September 30, 2023, Toast expects to report:

• Revenue in the range of $1,010 million to $1,040 million
• Adjusted EBITDA in the range of $15 million to $25 million

For the full year ending December 31, 2023, Toast expects to report:

• Revenue in the range of $3,810 million to $3,870 million (up from $3,710 million to $3,800 million)
• Adjusted EBITDA in the range of $15 million to $35 million (up from $(10) million to $10 million)

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” below.

Recent Business Highlights

• In June, Toast announced an agreement with Marriott International, to make Toast for Hotel Restaurants technology available to food and beverage outlets within Marriott’s Select service hotels in the United States and Canada. Launched in May 2022, Toast for Hotel Restaurants is designed to meet the unique needs of hotel restaurant operators and offers robust integrations with leading property management systems (PMS).
• To help restaurants seamlessly manage large catering orders and event planning, Toast announced the launch of Toast Catering & Events. The new product is fully integrated with the Toast point-of-sale and supports customizable banquet event orders, fulfillment tools, and lead management functionality.
• Toast selected the location of its new headquarters in Boston’s Seaport District at 333 Summer Street. Toast plans to open the new space in early 2024. The new space will be designed to allow Toast to better support its culture and enable better collaboration and innovation.

Conference Call Information

Toast will host a live conference call at 5:00 p.m. Eastern Time on Tuesday, August 8, 2023 to discuss the results. 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 single platform of software as a service, or SaaS, products and financial technology solutions that give restaurants everything they need to run their business across point of sale, operations, digital ordering and delivery, marketing and loyalty, and team management. By serving as the restaurant operating system across dine-in, takeout, and delivery channels, 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 third fiscal quarter and full year of 2023; future operating results; the expectations of demand for Toast’s products and growth of its business; the growth rates in the markets in which Toast competes; Toast’s investments in technology and infrastructure; success of Toast’s marketing and sales strategies; the agreement between Toast and Marriott International and its impact on Toast’s business and operations; the expected impact of Toast Catering & Events; Toast’s plan regarding its new headquarters in Boston; Toast’s ability to deliver innovative solutions; Toast’s ability to attract and retain customers both in the U.S. and globally; 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, 2022, Toast’s Quarterly Report on Form 10-Q for the three months ended June 30, 2023 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.

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