Toast, Inc. · NYSE:TOST
Toast — Q2 2023 Earnings Presentation
27 slides from Toast's earnings presentation, Aug 8, 2023
Slide 1: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results 1
Slide 2: Disclaimer
Disclaimer This presentation includes certain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the future results of operations, financial condition, business strategy, plans and objectives of management for futur
Slide 3: Our Mission
Our Mission To empower the restaurant © 2023 Toast, Inc. All Rights Reserved. community to delight their guests, do what they love, and thrive. 3
Slide 4: Investment Highlights
Investment Highlights Large and Growing TAM Purpose-built for restaurants, one of the largest vertical markets © 2023 Toast, Inc. All Rights Reserved. Differentiated Product Offering Cloud-based, all-in-one digital technology platform with integrated payment processing Proven Durable Growth Experienci
Slide 5: The Restaurant Industry Is One Of The Largest Industries
860K Locations in the US1 The Restaurant 22M Industry Is One © 2023 Toast, Inc. All Rights Reserved. Locations Globally2 Of The Largest Industries In U.S. And $900B+ Annual U.S. Sales Globally (~4% of GDP)3 12M+ Employees in the US4 1 IBISWorld, 2021. 2 Euromonitor International Consumer Foodservice
Slide 6: Restaurants are Complex Businesses
Restaurants are Complex Businesses © 2023 Toast, Inc. All Rights Reserved. Integrated Payroll & HR Reporting & Waitlists Kitchen Point of Sale Websites Payments Analytics Operations Takeout Benefits Reservations Kiosk Marketing Financial Accounting Inventory & Loans Drive Thru Scheduling Table Manag
Slide 7: Better Together: We Benefit the Entire Restaurant Ecosystem
Better Together: We Benefit the Entire Restaurant Ecosystem Higher tips, better Improved service employee experience quality © 2023 Toast, Inc. All Rights Reserved. Happy Happy Employees Guests Improved wage Memorable & tailored & benefits access experiences Lower turnover, improved Restaurant Great
Slide 8: The Toast Platform: Powering Restaurants
The Toast Platform: Powering Restaurants Point of Sale & Financial Technology Marketing & Digital Ordering & Team Supply Chain & Restaurant Operations Solutions Loyalty Delivery Management Accounting SOFTWARE HARDWARE ● Payment Processing ● Gift Cards ● Online Ordering ● Payroll & Team ● xtraCHEF Li
Slide 9: Enabling More Service Models for Customers to Grow Their Business
Enabling More Service Models for Customers to Grow Their Business SERVICE MODELS Table Counter Takeout / Catering & Future Curbside Hybrid1 Wholesale Drive-thru Service Service Delivery Events Opportunities © 2023 Toast, Inc. All Rights Reserved. ● Toast Tables ● Kiosk ● Online ordering ● Online ord
Slide 10: Toast Catering & Events: Helping Restaurants Streamline Catering and Event Management
Toast Catering & Events: Helping Restaurants Streamline Catering and Event Management Toast Catering & Events provides end-to-end management and is designed to… © 2023 Toast, Inc. All Rights Reserved. ● Customize for every occasion with custom banquet event orders, lead management, quotes and estima
Slide 11: This Is Just The Beginning For Toast
This Is Just The Beginning For Toast Massive TAM 6% $110B+ © 2023 Toast, Inc. All Rights Reserved. Global TAM $55B US TAM $15B SAM1 $1.1B Q2 2023 ARR Sources: U.S. Bureau of Labor Statistics, IBISWorld, National Restaurant Association (2021 State of the Restaurant Industry), Freedonia Group. Note: G
Slide 12: Our Differentiated Go-To-Market Strategy
Our Differentiated Go-To-Market Strategy • Hyper-localized go-to-market motion th Approx. 3/4 © 2023 Toast, Inc. All Rights Reserved. of new locations come through • Focus on building strong customer communities inbound channels • Improving sales productivity from increasing category position th Appr
Slide 13: Second Quarter Results
Second Quarter Results 13 © 2023 Toast, Inc. All Rights Reserved.
Slide 14: Integrated Software and Payments Model
Integrated Software and Payments Model Recurring Financial Technology Subscription Services Solutions © 2023 Toast, Inc. All Rights Reserved. $ One-Time Hardware Professional Services 14
Slide 15: Rapid and Sustainable Growth
Rapid and Sustainable Growth Total Revenue ($M) Annualized Recurring $978 Subscription Services Run-Rate (ARR) $819 Revenue $769 $752 © 2023 Toast, Inc. All Rights Reserved. Financial Technology $675 Solutions Gross Profit Subscription ARR Recurring Financial Technology Solutions COGS $ Payments ARR
Slide 16: ARR, our Core Operational Metric, Also Scaling Rapidly
ARR, our Core Operational Metric, Also Scaling Rapidly Annualized Recurring Run-Rate* (ARR)($M) $1,140 $987 $901 $868 © 2023 Toast, Inc. All Rights Reserved. $787 % Total YoY Growth: 59% 60% 59% 55% 45% 16 Note: Numbers may not tie due to rounding. See Appendix for definition of ARR. * Annual Recurr
Slide 17: New Location Adds Accelerate to a Quarterly Record
New Location Adds Accelerate to a Quarterly Record Record >7,500 net adds © 2023 Toast, Inc. All Rights Reserved. 17
Slide 18: Sustained GPV and Subscription ARPU Momentum
Sustained GPV and Subscription ARPU Momentum Total GPV ($B) % of Locations Using 6+ Elective Products1 © 2023 Toast, Inc. All Rights Reserved. % YoY Growth: 62% 53% 49% 50% 38% 18 1 Analysis based on the adoption rate of SaaS modules offered on the Toast platform on top of Point of Sale and Payment P
Slide 19: Rapid Gross Profit Expansion
Rapid Gross Profit Expansion Total Non-GAAP Gross Profit ($M) © 2023 Toast, Inc. All Rights Reserved. Attractive gross Recurring margin from (Subscription + Payments) recurring streams $0 One-Time (Hardware + Prof. Services) Total Non-GAAP $125 $164 $172 $189 $225 Gross Profit: % YoY Growth: 33% 78%
Slide 20: Achieved Adjusted EBITDA Profitability
Achieved Adjusted EBITDA Profitability © 2023 Toast, Inc. All Rights Reserved. Adj. EBITDA ($M) $(33) $(19) $(18) $(17) $15 20 Note: Please refer to the Appendix of this presentation and our Earnings Release for Q2 2023 for reconciliation of Non-GAAP measures presented on this page.
Slide 21: Appendix
Appendix 21 © 2023 Toast, Inc. All Rights Reserved.
Slide 22: Defining Key Terms
Defining Key Terms Gross Payment Volume (GPV) • Sum of total dollars processed through the Toast payments platform across Toast Processing Locations in a given period. Annualized Recurring Run-Rate (ARR) • Sum of twelve times the subscription component of MRR and four times the trailing-three-month
Slide 23: Quarterly Gross Profit GAAP to Non-GAAP Reconciliation
Quarterly Gross Profit GAAP to Non-GAAP Reconciliation $M 3 Months Ended Jun-2022 Sep-2022 Dec-2022 Mar-2023 June-2023 Gross Profit $113 $151 $158 $174 $208 © 2023 Toast, Inc. All Rights Reserved. Stock-based compensation expense and related payroll tax 8 9 10 11 11 Depreciation and amortization 4 4
Slide 24: Quarterly Adj. EBITDA GAAP to Non-GAAP Reconciliation
Quarterly Adj. EBITDA GAAP to Non-GAAP Reconciliation $M 3 Months Ended Jun-2022 Sep-2022 Dec-2022 Mar-2023 June-2023 Net (loss) income $(54) $(98) $(99) $(81) $(98) © 2023 Toast, Inc. All Rights Reserved. Stock-based compensation expense and related payroll tax 59 58 62 68 74 Depreciation and amort
Slide 25: Quarterly Free Cash Flow GAAP to Non-GAAP Reconciliation
Quarterly Free Cash Flow GAAP to Non-GAAP Reconciliation $M 3 Months Ended Jun-2022 Sep-2022 Dec-2022 Mar-2023 June-2023 Net cash provided by (used in) operating activities $(21) $(69) $(19) $(55) $50 © 2023 Toast, Inc. All Rights Reserved. Purchases of property and equipment (5) (6) (3) (2) (2) Cap
Slide 26: Quarterly Non-Payments Financial Technology Solutions Gross Profit Reconciliation
Quarterly Non-Payments Financial Technology Solutions Gross Profit GAAP to Non-GAAP Reconciliation $M 3 Months Ended Jun-2022 Sep-2022 Dec-2022 Mar-2023 June-2023 © 2023 Toast, Inc. All Rights Reserved. Financial technology solutions revenue $562 $628 $640 $674 $808 Less: Financial technology soluti
Slide 27: Quarterly GAAP Gross Profit to Non-GAAP Fintech + Subscription Gross Profit
Quarterly GAAP Gross Profit to Non-GAAP Fintech + Subscription Gross Profit Reconciliation $M 3 Months Ended Jun-2022 Sep-2022 Dec-2022 Mar-2023 June-2023 © 2023 Toast, Inc. All Rights Reserved. GAAP Gross Profit $113 $151 $158 $174 $208 Hardware revenue (30) (27) (27) (31) (41) Professional service