Toast(TOST) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenue for the three months ended June 30, 2024, was $1,242 million, a 27$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$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$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$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]