Start Time: 17:00 January 1, 0000 5:46 PM ET Toast, Inc. (NYSE:TOST) Q2 2024 Earnings Conference Call August 06, 2024, 17:00 PM ET Company Participants Michael Senno - SVP, Finance and Strategy, Treasury and IR Aman Narang - CEO and Co-founder Elena Gomez - CFO Conference Call Participants Tien-Tsin Huang - JPMorgan Dan Dolev - Mizuho William Nance - Goldman Sachs Stephen Sheldon - William Blair Tim Chiodo - UBS Harshita Rawat - Bernstein Josh Baer - Morgan Stanley Matthew Coad - Autonomous David Hynes - Ca ...

Toast (TOST) came out with quarterly earnings of $0.02 per share, beating the Zacks Consensus Estimate of a loss of $0.02 per share. This compares to loss of $0.19 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 200%. A quarter ago, it was expected that this restaurant software provider would post a loss of $0.16 per share when it actually produced a loss of $0.15, delivering a surprise of 6.25%. Over the last four quarters, t ...

Financial Performance - Total revenue for the three months ended June 30, 2024, was $1,242 million, a 27% increase from $978 million in the same period of 2023[76] - Subscription services revenue increased by 37% to $166 million for the three months ended June 30, 2024, compared to $121 million in the prior year[76] - Financial technology solutions revenue grew by 27% to $1,023 million for the three months ended June 30, 2024, up from $808 million in the same period of 2023[76] - Annualized Recurring Run-Rate (ARR) reached $1,473 million, reflecting a 29% increase from $1,140 million in the previous year[71] - For the three months ended June 30, 2024, the company reported a net income of $14 million, compared to a net loss of $98 million for the same period in 2023[91] - Adjusted EBITDA for the six months ended June 30, 2024, was $148 million, a significant increase from a loss of $3 million in the same period in 2023[91] - Financial technology solutions revenue for the six months ended June 30, 2024, reached $1,896 million, compared to $1,482 million for the same period in 2023, marking a 28% increase[93] - The company achieved a gross profit of $330 million from Subscription Services and Financial Technology Solutions for the three months ended June 30, 2024, compared to $259 million in the same period in 2023, reflecting a 27% increase[95] Costs and Expenses - Total costs of revenue for the three months ended June 30, 2024, were $956 million, a 24% increase from $770 million in the same period of 2023[78] - Sales and marketing expenses increased by 15% to $115 million for the three months ended June 30, 2024, compared to $100 million in the prior year[81] - Research and development expenses decreased by 5% to $87 million for the three months ended June 30, 2024, down from $92 million in the same period of 2023[82] - General and administrative expenses decreased by 22% to $75 million for the three months ended June 30, 2024, compared to $96 million in the same period of 2023[83] Cash Flow and Liquidity - Free cash flow for the six months ended June 30, 2024, was $75 million, a turnaround from a negative cash flow of $(26) million in the same period in 2023[97] - As of June 30, 2024, the company had cash and cash equivalents of $691 million, an increase from $605 million as of December 31, 2023[98] - The company has a share repurchase program authorized for up to $250 million, with $36 million spent to repurchase 1 million shares during the six months ended June 30, 2024[105] - The total available funds under the senior secured credit facility remained at $330 million as of June 30, 2024, with no amounts drawn or outstanding[104] - The company believes that existing cash and cash equivalents, along with available borrowing capacity, will be sufficient to meet working capital needs for at least the next 12 months[107] Market and Risk Factors - The company is exposed to financial market risks, including changes in interest rates and foreign currency exchange rates, with no material changes in market and credit risk since the last annual report[108] Shareholder Information - As of June 30, 2024, the total fully diluted share count was 635 million, including 560 million Class A and B common stock, 36 million options, 28 million unvested restricted stock units, 7 million warrants, and 4 million shares reserved for charitable donations[106] Other Financial Metrics - Interest income increased by 11% to $10 million for the three months ended June 30, 2024, compared to the previous year[85] - The change in fair value of warrant liability for the three months ended June 30, 2024, was a gain of $1 million, compared to a loss of $26 million in the same period in 2023[91] - As of June 30, 2024, Toast has approximately 120,000 Locations, a 29% year-over-year increase, processing approximately $143 billion in gross payment volume (GPV) over the trailing 12 months[67]

Financial Performance - GAAP operating income was $5 million in Q2 2024, compared to a GAAP operating loss of $(80) million in Q2 2023[1][2] - Net income was $14 million in Q2 2024, compared to a net loss of $(98) million in Q2 2023[1][2] - Adjusted EBITDA was $92 million in Q2 2024, compared to $15 million in Q2 2023[1][2] - Adjusted EBITDA for Q2 2024 was $92 million, a significant improvement from $15 million in Q2 2023[27] - Net cash provided by operating activities was $124 million and Free Cash Flow was $108 million in Q2 2024, compared to $50 million and $39 million, respectively, in Q2 2023[2] - Net cash provided by operating activities for the three months ended June 30, 2024, was $124 million, compared to $50 million for the same period in 2023[13] - Net cash used in investing activities for the six months ended June 30, 2024, was $33 million, compared to $54 million for the same period in 2023[13] - Net cash provided by financing activities for the six months ended June 30, 2024, was $47 million, compared to $46 million for the same period in 2023[13] - Total cash, cash equivalents, cash held on behalf of customers, and restricted cash at the end of June 30, 2024, was $864 million, compared to $622 million at the end of June 30, 2023[13] - Free cash flow for Q2 2024 was $108 million, a substantial increase from $39 million in Q2 2023[35] - Net cash provided by operating activities in Q2 2024 was $124 million, compared to $50 million in Q2 2023[35] Revenue and Profit Metrics - Annualized recurring run-rate (ARR) grew 29% year-over-year to $1.5 billion as of June 30, 2024[1][2] - Gross Payment Volume (GPV) increased 26% year-over-year to $40.5 billion in Q2 2024[2] - Gross Payment Volume (GPV) for Q2 2024 reached $40.5 billion, a 26% increase compared to $32.1 billion in Q2 2023[26] - Total Annualized Recurring Run-Rate (ARR) grew to $1.473 billion in 2024, up 29% from $1.140 billion in 2023[26] - Non-GAAP Subscription Services Gross Profit increased to $127 million in Q2 2024, up from $90 million in Q2 2023[31] - Non-GAAP Financial Technology Solutions Gross Profit remained steady at $217 million in Q2 2024, compared to $177 million in Q2 2023[32] - For Q3 2024, Toast expects Non-GAAP subscription services and financial technology solutions gross profit to be in the range of $345 million to $355 million, representing 23-27% growth compared to Q3 2023[4] - For full year 2024, Toast expects Non-GAAP subscription services and financial technology solutions gross profit to be in the range of $1,340 million to $1,360 million, representing 27-29% growth compared to 2023[4] Operational Metrics - Added approximately 8,000 net new locations in Q2 2024, bringing total locations to approximately 120,000, a 29% year-over-year increase[1][2] - A live location (Location) is defined as a unique site using Toast Point of Sale with transaction volumes above a minimum threshold[25] Expense Management - Non-GAAP Sales and Marketing Expenses decreased to $97 million in Q2 2024 from $84 million in Q2 2023[33] - Non-GAAP Research and Development Expenses were $63 million in Q2 2024, down from $66 million in Q2 2023[34] - Non-GAAP General and Administrative Expenses reduced to $55 million in Q2 2024 from $61 million in Q2 2023[34] AI and Innovation - Toast launched an AI innovation hub in June 2024, with 57% of surveyed restaurants reporting already using or wanting to use AI-powered experiences[6] Definitions and Key Metrics - Adjusted EBITDA is defined as net income (loss) adjusted for stock-based compensation, depreciation, amortization, and other non-operating items[15] - Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit excludes stock-based compensation and depreciation/amortization expenses[16] - Gross Payment Volume (GPV) is a key metric representing the total dollars processed through the Toast payments platform[22] - Annualized Recurring Run-Rate (ARR) is calculated using subscription and payment processing services, excluding Toast Capital and SaaS credits[23]

Lauri Patterson Introduction & Investment Thesis I had last written about Toast (NYSE:NYSE:TOST) in May, where I held my "buy" rating on the stock after it reported its Q1 FY24 earnings, where revenue and Adjusted EBITDA grew 31% and 435% YoY, respectively. My bullish thesis was predicated on my belief that the company is continuing to scale into new locations while building a strong sales organization to drive a higher number of product modules per customer, enabling it to unlock operating leverage. Since ...

Toast (TOST) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock. Shares of this restaurant software provider have returned +3.4% over the past month versus the Zacks S&P 500 composite's +1.1% change. The Zacks Internet - Software industry, to which Toast belongs, has lost 6.4% over this period. Now the key question is: Where could the stock be headed in the near term? While media r ...

Toast (TOST) closed the most recent trading day at $26, moving +1.25% from the previous trading session. The stock exceeded the S&P 500, which registered a gain of 0.08% for the day. Elsewhere, the Dow saw a downswing of 0.12%, while the tech-heavy Nasdaq appreciated by 0.07%. The investment community will be closely monitoring the performance of Toast in its forthcoming earnings report. The company is scheduled to release its earnings on August 6, 2024. In that report, analysts expect Toast to post earning ...

Toast Inc. (TOST, Financial) is a $13 billion market cap payment solutions company that is tailored toward restaurants of any size, with the vast majority of its presence coming from the United States. With more than a billion dollars in annual revenue, Toast also offers software solutions to these restaurants and capital financing via Toast Capital, where clients can obtain loans directly and have accumulated approximately $1 billion in loan originations. This is done at a lower credit risk as Toast Capita ...

Toast's restaurant management software is more popular than ever, but the fast-growing business is still losing money. Shares of Toast (TOST 2.49%) recently got a little bump from a positive analyst note. Dan Dolev at Mizuho upgraded his rating on the stock to outperform and raised his price target to $33 per share. Dolev's new price target implies a 21% gain over the next 12 months if the rest of the stock market begins viewing the restaurant software company in the same light as he does. Is now a good tim ...

The case for Toast There are several growth opportunities that management has identified and is already investing in. It continues to add locations in its core business at a healthy pace, and 20% of new locations come from referrals. Do you like to eat out? You might have noticed recently that more and more restaurants have shiny new hardware to take orders and accept payment, whether fast food or sit-down style. Toast (TOST 2.49%) is one of the most popular versions, and it's growing quickly. Its stock is ...