Slide 1: Second Quarter 2022 Financial Results
Second Quarter 2022 Financial Results
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 © 2022 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 © 2022 Toast, Inc. All Rights Reserved. Differentiated Product Offering Cloud-based, all-in-one digital technology platform with integrated payment processing Proven Durable Growth at Scale
Slide 5: The Restaurant Industry Is One Of The Largest
860K Locations in the US1 The Restaurant 22M © 2022 Toast, Inc. All Rights Reserved. Industry Is One Locations Globally2 Of The Largest Industries In U.S. And ~$800B Annual U.S. Sales in 2021 Globally (~3% of GDP)3 11M+ Employees in the US4 1 IBISWorld. 2 Euromonitor International Consumer Foodservi
Slide 6: Restaurants are Complex Businesses
Restaurants are Complex Businesses © 2022 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 © 2022 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: Better Together
The Toast Platform: Better Together Full Suite of Toast Products Continued Runway for Growth 3 Base Products © 2022 Toast, Inc. All Rights Reserved. • Point of Sale • Toast Hardware Payment Processing 15+ Elective Products Point of Sale Digital Ordering & Delivery Team Management Fintech Products To
Slide 9: Acquisition of Sling Strengthens Our Team Management Product Suite
Acquisition of Sling Strengthens Our Team Management Product Suite Scheduling adds a high engagement product to Team Management Suite complement our Team Management suite… ● Deepen relationship with restaurant employees with Toast Payroll a high engagement product used ~4x per day1 Payroll and Tax F
Slide 10: This Is Just The Beginning For Toast
This Is Just The Beginning For Toast Massive TAM 6% © 2022 Toast, Inc. All Rights Reserved. $110B+ Global TAM $55B US TAM $15B SAM1 $0.8B Q2 2022 ARR Sources: U.S. Bureau of Labor Statistics, IBISWorld, National Restaurant Association (2021 State of the Restaurant Industry), Freedonia Group. Note: G
Slide 11: Our Differentiated Go-To-Market Strategy
Our Differentiated Go-To-Market Strategy • Hyper-localized go-to-market motion Approx. 2/3rd © 2022 Toast, Inc. All Rights Reserved. of new locations come through inbound channels • Focus on building strong customer communities Approx. 1/5 th • Improving sales productivity from increasing category p
Slide 12: Second Quarter Financial Results
Second Quarter Financial Results © 2022 Toast, Inc. All Rights Reserved.
Slide 13: Integrated Software and Payments Model
Integrated Software and Payments Model Recurring Financial Technology Subscription Services Solutions © 2022 Toast, Inc. All Rights Reserved. $ One-Time Hardware Professional Services 13
Slide 14: Rapid and Sustainable Growth at Scale
Rapid and Sustainable Growth at Scale ($M) $800 Total Revenue Annualized Recurring Run- $700 $675 Rate (ARR) Subscription Services © 2022 Toast, Inc. All Rights Reserved. Revenue $600 $535 $512 Financial Technology $486 Solutions Gross Profit Subscription ARR $500 $426 $400 Recurring Financial Techn
Slide 15: ARR, our Core Operational Metric, Also Scaling Rapidly
ARR, our Core Operational Metric, Also Scaling Rapidly Annualized Recurring Run-Rate (ARR)($M) $787 © 2022 Toast, Inc. All Rights Reserved. $637 $568 $544 $494 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 118% 76% 74% 66% 59% % YoY Growth: 15 Note: % YoY grow th may not tie due to rounding. See Appendix for defini
Slide 16: New Location Adds Accelerate to Another Quarterly Record
New Location Adds Accelerate to Another Quarterly Record 80k 10.000k 70k 68k 9.000k 62k 8.000k © 2022 Toast, Inc. All Rights Reserved. 60k 57k >6,000 for the first 52k quarter ever 7.000k 50k 48k 6.000k 40k 5.000k 4.000k 30k 3.000k 20k 2.000k 10k 1.000k 0k .000k Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Net New
Slide 17: Strong GPV and Subscription ARPU Growth
Strong GPV and Subscription ARPU Growth Gross Payment Volume ($B) % of Locations Using 4+ Elective Products1 © 2022 Toast, Inc. All Rights Reserved. $23.3 61% 60% 59% $17.8 57% $17.1 $16.5 55% $14.4 51% 48% 46% 44% Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 %
Slide 18: Rapid Gross Profit Expansion
Rapid Gross Profit Expansion Total Non-GAAP Gross Profit ($M) $169 $134 © 2022 Toast, Inc. All Rights Reserved. $116 $101 $109 Attractive gross Recurring (Subscription + Payments) margin from $0 recurring revenue One-Time ($8) ($17) (Hardware + Prof. Services) ($34) ($33) ($45) Q2-21 Q3-21 Q4-21 Q1-
Slide 19: Sales Rep Productivity
Positioned to Increase S&M Efficiency Following Recent Investments Investment in Sales Team Takes Time to Scale: Tenure and Investing to Build More Flywheel Markets: Efficiency and productivity are correlated, and both positioned to increase going productivity in less developed territories improves
Slide 20: R&D Investments Position Team to Support Continued Scale and Growth
R&D Investments Position Team to Support Continued Scale and Growth Research & Development Expense (Non-GAAP basis) as a % of Recurring Revenue © 2022 Toast, Inc. All Rights Reserved. Accelerated investment to rebuild and scale team amid significant growth Efficiently invest in R&D to drive continue
Slide 21: Balanced R&D Investment Prioritizing Scale and Durable Growth
Balanced R&D Investment Prioritizing Scale and Durable Growth Breakdown of 1H22 Research & Development Expense R&D Investment Framework (Non-GAAP basis) ● Core Products & Platform (Majority of ARR) © 2022 Toast, Inc. All Rights Reserved. Emerging ● New and existing products in the fintech and core r
Slide 22: Appendix
Appendix © 2022 Toast, Inc. All Rights Reserved.
Slide 23: Defining Key Terms
Defining Key Terms Gross Payment Volume (GPV) • Sum of total dollars processed through the Toast payments platform across all restaurant locations in a given period Annualized Recurring Run-Rate (ARR) © 2022 Toast, Inc. All Rights Reserved. • Sum of twelve times the subscription component of MRR and
Slide 24: Quarterly Gross Profit GAAP to Non-GAAP Reconciliation
Quarterly Gross Profit GAAP to Non-GAAP Reconciliation $M 3 Months Ended Jun-2021 Sep-2021 Dec-2021 Mar-2022 Jun-2022 Gross Profit $89 $83 $73 $89 $113 © 2022 Toast, Inc. All Rights Reserved. Stock-based compensation expense and related payroll tax 1 5 6 8 8 Depreciation and amortization 4 4 3 4 4 N
Slide 25: Quarterly Adj. EBITDA GAAP to Non-GAAP Reconciliation
Quarterly Adj. EBITDA GAAP to Non-GAAP Reconciliation $M 3 Months Ended Jun-2021 Sep-2021 Dec-2021 Mar-2022 Jun-2022 Net (loss) income $(135) $(254) $2 $(23) $(54) Stock-based compensation expense and related payroll tax 56 36 46 53 59 © 2022 Toast, Inc. All Rights Reserved. Depreciation and amortiz
Slide 26: Quarterly Free Cash Flow GAAP to Non-GAAP Reconciliation
Quarterly Free Cash Flow GAAP to Non-GAAP Reconciliation $M 3 Months Ended Jun-2021 Sep-2021 Dec-2021 Mar-2022 Jun-2022 Net cash provided by (used in) operating activities $57 $(17) $(32) $(47) $(21) © 2022 Toast, Inc. All Rights Reserved. Purchases of property and equipment (2) (2) (1) (2) (5) Capi