Group 1 - The core argument is that Toast Inc. (TOST) is more than just a point-of-sale company, indicating that the market may be underestimating its broader capabilities [1] - The analysis emphasizes a focus on the underlying business and financial metrics rather than market narratives, suggesting a disciplined approach to investment evaluation [1] Group 2 - The author has over 15 years of market experience and an economics degree, which adds credibility to the analysis presented [1]

Group 1 - The article discusses the investment strategy of a boutique family office fund led by Amrita, focusing on sustainable, growth-driven companies that aim to maximize shareholder equity [2] - Amrita has a background in high-growth supply-chain start-ups and has experience working with venture capital firms, which has contributed to her ability to maximize returns for clients [2] - The newsletter "The Pragmatic Optimist," co-founded by Amrita, emphasizes democratizing financial literacy and simplifying complex macroeconomic concepts for better understanding [2] Group 2 - The article mentions that the analyst has a beneficial long position in the shares of TOST, indicating a personal investment interest in the company [3] - It is noted that the article expresses the author's own opinions and is not receiving compensation for it, highlighting the independence of the analysis [3] - Seeking Alpha's disclosure emphasizes that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [4]

Group 1: Roblox - Roblox is a free online platform with 98 million users, experiencing significant growth and recently hitting a new 52-week high after strong quarterly earnings [3][4] - The platform is available on all gaming devices and is increasingly attracting users over 13 years old, expanding its growth potential [4] - Revenue has nearly doubled over the past three years, with a year-over-year growth of 29% in the first quarter [5] - The community of content creators on Roblox is projected to earn over $1 billion in compensation this year, incentivizing more content creation [6] - Roblox aims to capture 10% of the annual spending on video game content, referencing a $180 billion industry estimate for 2024 [7] - The trailing-12-month revenue for Roblox is $3.8 billion, with a growth rate exceeding 20% year over year, targeting $18 billion in annual revenue within the next decade [8] Group 2: Toast - Toast is experiencing strong demand for its cloud-based solutions in the restaurant industry, recently hitting a new high after robust quarterly growth [10] - The company added 6,000 net new locations in the first quarter, with revenue increasing by 31% year over year to $1.7 billion [11] - Toast's platform is adaptable to various restaurant types, gaining momentum across the industry [12] - The platform offers tools that simplify restaurant management, including kitchen displays and real-time analytics, which enhance service and reduce costs [13] - Toast has only captured 10% of the 1.4 million restaurant locations in its addressable market, indicating significant growth potential [14]

Summary of Toast (TOST) FY Conference Call - May 13, 2025 Company Overview - **Company**: Toast, Inc. (TOST) - **Industry**: Payments and IT services, specifically focused on restaurant management software and point of sale systems Key Points and Arguments Market Share and Growth - Toast has increased its market share in the U.S. restaurant sector from **10% to 15%** over the last two years [12][16] - The company aims to continue expanding its market share by leveraging social proof and increasing visibility among restaurant owners [16][18] - Productivity among account executives (AEs) has improved, indicating effective execution and product performance [19][22] Focus on Restaurants - Toast maintains a strong focus on the restaurant sector, having chosen to specialize rather than diversify into other areas [20] - The company has seen success in enterprise solutions, with notable clients like Applebee's and Topgolf, indicating growth potential in larger chains [21][42] Macro Environment and Resilience - Toast tracks various metrics such as same-store sales, new openings, and churn to gauge the health of the restaurant industry [24][25] - Historical data suggests that restaurants tend to perform better than retail during economic downturns, providing confidence in Toast's resilience [26][27] Profitability and Capital Allocation - The leadership team emphasizes long-term growth and capital allocation aligned with strategic goals, focusing on core business while exploring new opportunities [31][32] - Toast is prepared to adjust discretionary spending in response to economic pressures while ensuring long-term investments are not compromised [32][33] Competitive Landscape - Toast is enhancing its pricing strategy and sales approach to maintain a competitive edge in the market [34][35] - The company tracks win rates and customer satisfaction metrics to assess product effectiveness and market positioning [40] AI and Technological Innovations - Toast is investing in AI technologies, such as Sous Chef and Toast IQ, to enhance operational efficiency and customer experience [61][71] - The AI initiatives aim to provide restaurant operators with tools to optimize operations and improve customer interactions [69][70] Consumer Opportunities - The company sees potential in consumer-facing applications, leveraging data to enhance customer experiences and drive demand for restaurants [75][79] - Toast is exploring ways to integrate consumer services with its existing platform to create a seamless experience for users [81][82] International Expansion - Toast aspires to grow its international presence, focusing on markets with high potential for restaurant operations [91][92] - The company aims to achieve product parity with the U.S. offerings in international markets while being strategic about market entry [93] Additional Important Insights - Toast's capital business is designed to balance risk while providing necessary funding to SMB restaurants, especially in challenging economic conditions [86][88] - The company is committed to maintaining strong relationships with restaurant staff and franchisees, which helps drive its growth through word-of-mouth and community support [48][49] This summary encapsulates the key insights and strategic directions discussed during the Toast FY Conference Call, highlighting the company's focus on growth, innovation, and resilience in the restaurant technology sector.

Core Insights - Toast reported revenue of $1.34 billion for the quarter ended March 2025, reflecting a year-over-year increase of 24.4% [1] - The company's EPS was $0.20, a significant improvement from -$0.15 in the same quarter last year [1] - Revenue met the Zacks Consensus Estimate, but there was a slight negative surprise of -0.27% [1] - EPS exceeded expectations with a surprise of +5.26% compared to the consensus estimate of $0.19 [1] Key Performance Metrics - Gross Payment Volume (GPV) was reported at $42.2 billion, slightly below the estimated $42.38 billion [4] - Subscription Annualized Recurring Run-Rate reached $883 million, surpassing the average estimate of $867.78 million [4] - The number of locations served by Toast was 140,000, close to the estimated 140,163 [4] - Total Annualized Recurring Run-Rate (ARR) was $1.71 billion, matching the average estimate [4] - Payments Annualized Recurring Run-Rate stood at $830 million, slightly above the estimate of $824.03 million [4] - Revenue from financial technology solutions was $1.08 billion, aligning with the average estimate [4] - Revenue from subscription services was $209 million, exceeding the average estimate of $201.35 million [4] - Revenue from hardware and professional services was $46 million, falling short of the estimated $53.03 million [4] Stock Performance - Toast's shares have returned +3.4% over the past month, compared to the S&P 500 composite's +11.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

分组1 - Toast reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, compared to a loss of $0.15 per share a year ago, representing an earnings surprise of 5.26% [1] - The company posted revenues of $1.34 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.27%, and this is an increase from year-ago revenues of $1.08 billion [2] - Over the last four quarters, Toast has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] 分组2 - The stock's immediate price movement will depend on management's commentary on the earnings call and the sustainability of earnings expectations [3][4] - Toast shares have declined about 2.4% since the beginning of the year, while the S&P 500 has seen a decline of 4.3% [3] - The current consensus EPS estimate for the coming quarter is $0.22 on revenues of $1.52 billion, and for the current fiscal year, it is $0.91 on revenues of $6.04 billion [7] 分组3 - The Zacks Industry Rank indicates that the Internet - Software sector is currently in the top 37% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-40819 Toast, Inc. (Exact name of registrant as specified in its charter) (Registrant's telephone number, including area code) Secu ...

Financial Data and Key Metrics Changes - In Q1 2025, the company added over 6,000 net locations, with total locations reaching approximately 40,000, a 25% year-over-year increase [9][28] - Recurring gross profit streams grew 37% year-over-year, with adjusted EBITDA increasing to $133 million and GAAP operating income at $43 million [9][26] - Annual Recurring Revenue (ARR) grew 31%, while total FinTech and subscription gross profit increased by 37% year-over-year [26][27] - Subscription revenue rose by 38%, and gross profit grew by 45%, benefiting from improved ARR to revenue conversion [29] - Payments ARR grew 31%, with Gross Payment Volume (GPV) at $42 billion, a 22% year-over-year increase [30] Business Line Data and Key Metrics Changes - The company reported a 5% increase in SaaS Average Revenue Per User (ARPU) on an ARR basis [29] - Non-payment fintech solutions, particularly Toast Capital, contributed $47 million in gross profit, with solid growth in originations [31] - Operating expenses, excluding bad debt and credit-related expenses, increased by 12%, primarily due to a 25% rise in sales and marketing expenses [32] Market Data and Key Metrics Changes - The company is on track to cross 10,000 locations across international, food and beverage retail, and enterprise in 2025 [16] - The company continues to see strong momentum in international markets, with guest attached doubling over the past year for recent locations [19] Company Strategy and Development Direction - The company aims to scale locations and market share in the U.S. restaurant business while demonstrating that new markets can drive material growth [11][16] - The focus is on increasing customer adoption of the platform and driving differentiation through data and AI [20] - The company plans to continue investing in high-priority areas while gradually expanding margins [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the macro environment, noting stable consumer trends and strong sales productivity [49][51] - The company raised its full-year outlook based on strong Q1 performance and momentum heading into Q2 [34][28] - Management remains optimistic about the resilience of restaurants in a dynamic macro environment [27][78] Other Important Information - The company achieved a 32% adjusted EBITDA margin, exceeding medium-term margin goals [33] - Free cash flow for Q1 was $69 million, with expectations to mirror adjusted EBITDA for the full year [33] Q&A Session Summary Question: Discussion on payback periods for large enterprise wins - Management highlighted that enterprise deals, like Applebee's, have attractive payback periods due to large ARR booked [41] Question: Insights on macro trends and same-store sales - Management noted that same-store sales and consumer trends remain stable, contributing to confidence in future net adds [49][51] Question: Update on AI solutions rollout - Management indicated that AI solutions like Sous Chef and ToastIQ are still early in development but show promising early results [57][63] Question: Impact of tariffs on hardware costs - Management stated that incremental costs from tariffs are manageable and reflected in guidance, with a diversified supply chain reducing reliance on China [114][115] Question: Location growth algorithm and market share - Management confirmed that the share between new and existing locations remains balanced, with core business being the primary growth engine [118]

Financial Data and Key Metrics Changes - In Q1 2025, the company added over 6,000 net locations, with total locations reaching approximately 40,000, a 25% year-over-year increase [6][22] - Recurring gross profit streams grew 37% year-over-year, with adjusted EBITDA increasing to $133 million and GAAP operating income at $43 million [6][22] - Annual Recurring Revenue (ARR) grew 31%, with SaaS ARR increasing by 32% year-over-year [22][24] - Total gross payment volume (GPV) was $42 billion, growing 22% year-over-year, although GPV per location decreased by 3% [26] Business Line Data and Key Metrics Changes - Subscription revenue increased by 38%, and gross profit grew by 45%, benefiting from improved ARR to revenue conversion [24][25] - Payments ARR grew 31%, while fintech gross profit increased by 32% in Q1 [26] - Non-payment fintech solutions, particularly Toast Capital, contributed $47 million in gross profit, with solid growth in originations [27] Market Data and Key Metrics Changes - The company is deepening its penetration in the core U.S. market while also expanding into new geographies and verticals [7][22] - International markets are expected to cross 10,000 locations in 2025, with strong momentum in customer adoption [13][16] - Customer sentiment remains strong, with the average gross profit per location in international markets being higher than industry averages [59] Company Strategy and Development Direction - The company aims to scale locations and market share in the U.S. restaurant business while demonstrating that new markets can drive material growth [8][12] - Focus on increasing customer adoption of the platform and driving differentiation through data and AI [16][18] - The company plans to continue investing in high-priority areas while gradually expanding margins [19][30] Management's Comments on Operating Environment and Future Outlook - Management remains confident in navigating the macro environment, with stable consumer trends observed [22][43] - The company has raised its full-year outlook based on strong Q1 performance and anticipates record net adds in Q2 [8][30] - Management is prepared to manage costs effectively in the event of a recession while continuing to invest in growth [72][73] Other Important Information - The company repurchased $17 million in shares in Q1 and expects free cash flow to broadly mirror adjusted EBITDA for the full year [29][30] - The company is focused on building an AI-first culture to enhance customer impact and drive future monetization [57][92] Q&A Session Summary Question: Can you discuss the payback periods on large enterprise wins like Applebee's? - Management expressed excitement about the Applebee's deal, noting that payback periods for enterprise deals are attractive due to large ARR booked [33][36] Question: How is the macro environment affecting same-store sales and new business formation? - Management indicated that same-store sales remain stable and new business formations are also stable, contributing to confidence in future net adds [42][43] Question: What is the strategy regarding pricing in the current macro environment? - Management emphasized a balanced approach to pricing, focusing on ARR growth while being mindful of customer needs during economic fluctuations [47][48] Question: Can you provide an update on the rollout of AI solutions like Sous Chef and Toast IQ? - Management stated that it is early in the rollout process, but they are focused on driving customer impact and expect monetization to follow over time [51][57] Question: How is the company managing costs in light of potential tariff impacts? - Management noted that incremental costs from tariffs are manageable and that they have diversified their supply chain to mitigate risks [110][112] Question: What is the outlook for location growth and market share? - Management indicated that the core business continues to drive the majority of growth, with new segments expected to contribute more over time [115][102]

Toast Announces First Quarter 2025 Financial Results Booked Applebee's, Toast's largest deal in company history Added over 6,000 net new Locations in first quarter 2025 Annualized recurring run-rate (ARR) as of March 31, 2025 grew 31% to $1.7 billion Net income was $56 million and Adjusted EBITDA was $133 million in first quarter For the full year ending December 31, 2025, Toast expects to report: Toast considers Non-GAAP subscription services and financial technology solutions gross profit to be its recurr ...