Toast (TOST) 8 Aug 232023 Q2 Earnings call transcript

Good afternoon. My name is Cole, and I will be your conference operator today. At this time, I would like to welcome everyone to the Toast Earnings Conference Call. [Operator Instructions].

I'll now turn the call over to Michael Senno, Senior Vice President of Finance and Strategy, Treasury and Investor Relations.

conference. your begin may You

CFO, Thank Q&A you, the today's conference for be Narang; Toast are prepared open remarks which Welcome quarter ended to will and Aman second COO, On by Chris earnings Gomez, June will CEO, with our call followed Comparato; Cole. Elena session. XX, call XXXX.

we I'd like the included Statement Harbor press start, to release. to Before in Safe draw your today's attention

within regarding that call, future meaning we'll including related guidance for may historical of those performance growth, profit make operational and full Securities and statements, be the the third margin of the business forward-looking our including and statements, financial forward-looking this quarter the growth During other future XXXX. All expectations outlook, to management's considered facts, and outlook, financial business statements Act. location are and operational year expenditures, our expected statements Exchange of than and

except only to these Forward-looking by materially risks forward-looking statements revise and the cautionary from views refer undertake our statements. or that for law, uncertainty language cause reflect today, could Please as filings expectations. press discussion to a as obligation update our release results today's we and of the required no to in actual and SEC our of differ

earnings a the this we for most our GAAP SEC substitute and measures. be are our certain to to will intended non-GAAP discuss not financial Please filings During these comparable to call, reconciliations non-GAAP release of measures measures. These for non-GAAP results. measures detailed GAAP refer

expense, general non-GAAP margin, and on are research of references and revenue, otherwise expense, administrative to basis. profit and call expense development marketing and all cost stated, Unless and sales gross on this a gross

releases on Investor this press a the available website investor accompanying including call, presentation, both Relations at our will be of investors.toasttab.com. the replay Finally, and

call Chris. With turn me that, to let over the

transformation across strong in and for sustained Michael, the Thank empower joining thank momentum posting love and afternoon. to operating this industry unique to community help of the evidence restaurant you, QX, Toast's board, the what restaurant our results do positioning We thrive. of digital everyone they the and further you us lead

notable achieved and flow of first for speaks public execution positive company, cash and $X posting time this ARR in billion to EBITDA the We free as milestones the adjusted our surpassing a quarter, which strategy. consistent

ended First we're record set QX XX,XXX for in additions location net with approximately location driving and new and growth a focused the on locations. quarterly with over we quarter X,XXX

we Toast space segments point we're serve the to as into June a deal restaurant a and or unlock for Select deeper enterprise clear the the In Marriott restaurant Second, working an naming push we all can space. approved industry. announced TAM Hotels, that vendor proof of restaurant the Service

more serve we're we to newer like the better of segments and customers. up lastly, on Hotel product TAM Toast innovation The product the open the our making. and are continued all examples Events announced offering are Catering Toast and offerings recently & Tables for product And advancements focused of Restaurants

the healthy ARPU year billion, to and two TAM both years ability ago, last the from business more across of up double than penetration our and basis, total year-over-year These increased XX% million GPV up a results. and revenue $X.X ARR quarter, up billion. was translating efforts $XX.X strong to the into second XX% finished In are on $XXX XX% from increased scale growth. evidence through to

of an areas our basis investments dedication over the as improvement our EBITDA adjusted EBITDA margin cost in we in The the combination and adjusted of consistent with XXX line million positive growth we year, million reflecting the efficiency loss balancing scale performance, $XX top a key durable improvement, is line discipline margin. business. growth with and compared to result to and delivered operational point in prior top of Coupled in strong QX $XX

adjusted expect our of On XX% to midpoint to and towards year-over-year $XX on increased first the at target million growth that results our to range back momentum, the $XX the as guide and healthy durable continued raised and growth year we of guidance revenue with driving we long-term EBITDA operating half a march we expansion margin remain We million. margins you. focused previously efficient, shared full

deal A key tenant and Toast TAM. platform capabilities expand team platform is to enables the to in of core Hotel into Hotels sell we Select enterprise the Canada. unlocking product strategy Restaurants U.S. our and our to our opportunity. in were expanding the for Marriott deeper our to position The Marriott Service the announced Toast

of Marriott service, quick unique range The properties, level select from important the platform food meet flexibility needs of formats to ordering. for across Marriott. full-service There's sizes restaurant service and our Select the to in service poolside to Service and different models differentiator another was beverage a dining of

platform of still in number locations look power our to small it's While we've a early, continuing enterprise to forward and forward properties Marriott and go the more Marriott taken moving of segment. live to bringing deeper the already we

way the point and the including the Another stakeholders survey, seamlessly Catering manage service restaurants sale average, product serve the reported the fully our last product Toast In week, Restaurant managing Toast models. catering Events, planning. is numerous and seven restaurant of of deeper restaurant go better last service event restaurants TAM new expanding of the to help by to And Voice into unlocking & announced is are our Industry all models they launch ability support catering. a to large with integrated on we orders

we This calendars are right and invoices catering, the incorporates announced quotes, business. helps last of to to at product integrated directly orders more of SMB estimate product booked, to restaurants we Toast. October order over the that serve as addition invoicing offer builds kitchen bolsters ability once TAM the on the our digital The also and their through payment initial in for direct parts deeply And creates XX% on-premise time. tracking, It with allows and fed to contracts. get events and

our next our for ordering launch optimize Based suite commission customization website customer optimized we've search enhancements online Since we menus, on product digital Other digital design, mobile offers engine suite. ordering ordering enhanced million introduced and customers. includes than more facilitated XXXX, first input, our we recently generation made a in free capabilities. the of XXX orders

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being However, we core day-to-day by and value are made the we a operate, to and a focus community's Digital restaurant our mistake approach a $X.XX efforts constructive feed customers we basis discussions was is Listening this monetizing extensive to for our on from Toast the Channels. the after on guided consumer-facing this in customers our with partner. trusted how how Ordering we relentless suite. decided remove It that ethos of

further strengthen value we to we to customers, our As we provide that products new innovate continue monetize are the and commensurate offering, well-positioned with value. with

of address stakeholders transparency on the do that going we high to we level the partnership customers importance remain with to We will all thoughtful and be forward, the as and we of same pricing, more recognize delivered. considering impact how we've that. We committed always

I up, and to wrap employees. To customers our want thank

driving launching delivering in mission all guides deeper and TAM, on additions, love our do profitability. to We their the aspects underpins of year, and the guests, bar our EBITDA half efforts of first empower goal thrive, new the our delight Our into models the products service adjusted record-location strategy. of the community and and to what raise they to restaurant move

the platform short, customers. In with Toast is resonating

for execute We to we're technology the community the on confident stages tapping continuing opportunity in generate We're our that our the have restaurant early segments, trusted shareholders. across and our all to will momentum and and our customers, partner. of strategy mission value still long-term be massive significant industries

Now, discuss go-to-market performance. I'll over Aman, to turn our call the to

Thank you, afternoon Chris, good and everyone.

added net-restaurant record of the by locations, exceeding quarter. proud performance X,XXX We really I'm over X,XXX quarterly our team's off, First locations. in the prior

growth. drive go-to-market know local in momentum as approach is to which many you Our segment, continues core our to our SMB sustained of

As longer of team the drives rep which increased inbound rates, and and benefit market growth, our we penetration. we're higher in wind productivity, higher markets accounting volume, executive average from the tenure

drive as Chris the a segment, to growth. flywheel in recent us to our our to enterprise. help quarter acts We're This of strong important announcement the business trend into share as continues up SMB Marriott also gain about market, our and hold break as we progress mentioned, in excited efficient and mid-market

look the for live team's as I our pleased we're where onboarding the improve bring focus quarter, well faster really with up at funnel customers processes as As to our set both back go-to-market them success. location continuously stand, book and to and

pillars. product wins a of Let is nine SMB a from the to minutes In few our service across me speak of Urban Phoenix all customer different the that implementing Bistro that quarter will our modules our of restaurant outside leverage Tempo a of segment, couple our full progress. breath platform, spend highlighting

to This operations, in and Order Tables email Kitchen turn cards includes streamline guests System loyalty to our marketing service, Toast and Go Dining front-of-house manage reservations, Rooms, their regulars. Pay to and handhelds kitchen gift Mobile Displaces into to streamline Toast

toast. Tempo restaurants addition, excited more to and or grow Payroll is open has xtraCHEF will Toast In back-of-house operations. three four optimize and use planned to to Tempo with

the Restaurant was guests operations annually, more manage than Services, partnership they saw Northeast. in back-of-house front-of-house efficiently across opportunity Switching in Nine because Nine its platform. to XX with and million Serving than to the Ninety more our the XX the locations Growth more Toast implement mid-market, Pub will service toast & with attracted Restaurant provider, Ninety to both

to plan handheld use POS devices, Systems, terminals experience. the Kitchen they Toast and guest the Go Across to staff and brand, Display enhance

operations. use and multi-location menu updates their into to back-office better API and Additionally, team will visibility their centralize integrations module their management

by listening our to that customers are restaurant our feedback. capabilities the operations, work platform available Customers Moving streamline and team to making to hard is R&D them. we UK, very the markets, encouraged core Ireland, and our our international at help and early Canada, capabilities the of love more customer

Battersea power Toast under great operation and one Toast food as display the will implementing London, Arcade its successfully in the partnership One the use first Arcade cuisines adding Arcade first is is kitchens. the its in new our system the our two in all location model XX Point and food location kitchen Toast iconic the Battersea hall U.K. follow at Centre and example platform the across to with same under roof After entire station, With implement in trucks. location

guest our and our and experience. better partners. key to revenue servers POS several will handhelds orders addition across Arcade In also help to a API is terminals, leveraging additional facilitate integrations more drive use

we the Toast. more with locations, As our expand of team help opportunity upsell their to number restaurant customers has relationship scale our

offering holistic is For motion upsell XXK with perspective, adding half threshold This SaaS on self-service provide that both in dual needs. upsell among after in of customers with exceed e-commerce Toast than platform a Shop, for which locations products of e-commerce and team channel, XX,XXX a team for depending a them more our their ARPUs, our customers. to existing about sales

one joined barbecue Beer, with me in illustrates POS started story our how Let that team how a they leverage upsell Toast. Toast through joint BBQ our Austin, highlight COVID. Texas, ordering multi-location customer sales partners expand to customers boost XXXX. with in online to Slab initially and & Slab

has and reporting streamlining to Slab Parallel and menus, and manage to four Toast XXXX, team. credit expanded capabilities sales, and operations to our centralized and back-office Management upsell time employees. locations with Since Sling and Team our They to added Toast thanks savings

customer. heels grow, has our a of becoming that its Toast, across when example customers great more a growth since is Slab than we with by all XXx grow. the grown SaaS On BBQ's shows ARR locations This

team's I'm start, performance as wrap, the To at incredibly in our this proud quarter. mentioned of I

As we and well-positioned ARR scale to share platform, market drive our both continue are restaurant over growth, we to durable locations in ARPU and time. through invest grow and

in off more hand next to now it our detail. I'm quarter to go Elena Thanks. through

everyone joining. a Thanks, Aman, you I the team. entire give you thank for want and special Toast thank to to also

Your resulted continued above great expectations. dedication results quarter another in and with your execution

and billion and of and $X first across in drive improvement to free QX sixth business. our adjusted of We the adjusted while at efficiency positive in our margin consecutive ARR, ability mark strong time in years. growth cash to This quarter EBITDA two consistently our same quarter EBITDA delivered top-line demonstrating flow passed led our the marks

efficiency lead to our durable we top momentum industry's balance and of the you'll us the bottom-line at growth. proposition to top-line and restaurant We're continue platform. testament and software the value early to growth see drive payments of transformation, and a still stages this digital to scale opportunity is The as industry-leading significant

record net Our execute for go-to-market of X,XXX continuing was location ads with more quarter. teams a expectations. growth after ahead our to quarter are QX than net

the As year. ads seasonally in QX a our the second strongest see quarterly net we lower of reminder, year, is quarter each half and typically

penetrating momentum in of quarterly about for X,XXX second raising to the continued year. the and our ads execution, expectations Given pipeline, segments, strong half our go-to-market we be are net

still was locations a live in Marriott of not to a in live, While year contributor expectations Marriott expect a early. it's of handful meaningful major the not and remainder locations we've as increased factor over we taken for book take time. is the QX, It and our

revenue operational due in Moving ARR, million year-over-year ARPU, metric Total to the results. our core second $XXX integrated we XXK double quarter, our solution grew SaaS power basis, in resonates to ARR and was digit customers. XX% growth look financial quarter. of the year-over-year our as to as which an both is over gains XX% in locations increased which in reminder, at ARPU, ARPU. with on driven Total the year-over-year a by

fee the back rolled Chris for channels. our we As digital ordering recently discussed, consumer

value further value significant over to proposition. can monetize confident expect and provide time. value we and committed to We're growth that adjustments contribute to customer provides innovate platform strengthen we're continue a pricing measured to ARPU to we Our

to basis, second year-over-year location up $XXX a Moving million, billion. to on Average XX% X% was to sequentially. Solutions, per-processing quarter XX% $XX.X X% to GPV GPV FinTech $XXX and grew up and increased profit annualized million year-over-year was revenue gross XX%

with GPV GPV seasonality tailwind in remain inflation. our to growth expectations of trends and from moderating anticipate line stable GPV the looking given moderate and ahead, the we and seasonal

expectations, Defaults approximately the Our Capital to Toast in FinTech to quarter. healthy QX declining bad came products Capital, which million in by with for as nonpayment expense within continue relative slightly debt Toast Toast below profit gross contributing associated to of see recognize we G&A Capital led demand. we contributed $XX first

both helping access grow data position flexible monitor fast, of the As a to capital. to customers reminder, real-time us while allows our health POS risk, our unique with and historical prudently and restaurants access to with balance

take other basis rate was year-of-year rate flat contributed core take was XX net points, products Net payments FinTech and basis points. XX

years, credit increase, core prior the with a consistent expect weigh we which of the mix as progresses. ahead, rate on take Looking will of to seasonally net year

grew to profit of gross a margin $XXX total gross QX, XX% resulting In year-of-year in million, XX%.

year. million our gross total XX% stream, at profit FentTech and subscription year-of-over quarter the up recurring second in Looking $XXX

year-of-year shipping Turning primarily year-over-year ahead due our strong more to acquisitions costs, on customer adding peak margins a ads improved, increased benefiting both hardware from hardware Hardware to customers existing of revenue lower costs and location basis. season.

side, the the sales as marketing lapped scale investments and made expenses sales year-of-year the to On increased team. XX% we

continue in in momentum. sales We grow business to on remaining new while sustained supporting our and both focused unit upsell and team a targeted go-to-market economics manner, scaling

customers product our Shifting off offering R&D, interactions Toast is is example transaction workflows, of Catering our our Toast. including of continued and improved influencing delivering investment recent our launch good Events. disciplined additional builds how & approach drive and products their of a This help simplify innovation, and through volume product guest

reserves representing related the majority increased Bad the with the million $XX credit QX, XX% totaled Toast expenses to expense. and QX, of G&A In year-over-year. to related in expenses debt Capital

to expenses, on credit managing XX% efficiencies continued we year-over-year G&A bad debt and remain expect we and leverage as focused see grew and headcount. Excluding related

delivering million Told scale was profitability. adjusted QX This margin of discipline EBITDA growth cost performance our and adjusted EBITDA was sustained on a business. top we goal as our $XX and line function the was X.X%, of

and grew relative mentioned adjusted our streams, and I streams our to was recurring X.X%. recurring EBITDA FinTech year-over-year profit earlier, Subscription As XX% gross from margin

we two calculate consecutive reminder, Rule of XX, exceeded of the how XX. fifth was for two these a marking As the metrics the the XX%, the combination basis of and Rule we are quarter

had This time a the becoming was cash a benefit quarter a GPV. positive in adjusted the cash in positive from and result capital, marking the flow free EBITDA in quarterly to company. growth Free the million flow public first primarily of we working since quarter, $XX was related

similar largely working in payments, follow we EBITDA GPV should Looking of ahead, we flow adjusted certain a as trajectory trends and tied expect over the seasonality to anticipate quarter-to-quarter cash timing some free trends. but capital time,

let Now, turn guidance. to me

revenue expected of improvement in basis to is growth EBITDA $X.XX billion, midpoint. the at third the year-over-year sequential $XX the quarter, approximately margin of in be at expect Adjusted to be $XX to we XX% range the representing of million, to the $X.XX range million midpoint. XX For billion representing points

increasing $X.XX now Following guidance to are full-year first-half of we full-year the billion at our to be and performance, XX% the revenue billion, our midpoint. solid range a expect in $X.XX year-over-year increase

expect basis an Our the on updated full-year adjusted range to EBITDA million guidance be adjusted as we year. $XX now EBITDA million, $XX for full profitable is to

In closing, and adjusted XXXX flow and QX. cash free record growth with driving profitability we tremendous half the in momentum, EBITDA location finished positive first of

to well-positioned shareholder ahead, long-term restaurant driving are as sustain durable that the while trusted creating opportunity on the and partner capitalize market community's growth We and massive momentum ARR value.

to trust, again for to the Thanks and another quarter team Toast thanks of execution. your for customer our strong base

the turn Q&A. I'll to Now, the operator the call over to begin

Instructions]. [Operator

with question comes Tien-tsin the first Your of from JP line Morgan. Huang

Your now line open. is

Great. for all of afternoon you. question. to Hi. taking Thanks my Good

here. So, is seems mentioned don't I'm learned, everything. that and you have implementing you meeting and just I'd love stakeholders to lessons to lot from the as thanks the a going I Chris, the the mind, sure through and fee of really great and if for Growth expectations you those ask your $X.XX clients, that question withdrawal. guess well. spoke on I

lessons on So can you learned? comment

questions. thanks, Yes, because of bit actually this, also I'm a It's may on Tien-tsin. you of similar question. going background good some a to give have

over to approaches competitors and the mentioned We actually and made increased communicated past online conversion which year, in background, employ. actually and my script, our the which for packaging course tested for fees some ordering of as were I guest discovery. multiple similar several the that we pricing had to So our allowed of significant consumer had better upgrades products,

customers everything; broadly, constructive One customer base the our the us pretty that they good, expanded how is thing about I several voiced tell we about feedback. exactly rollout As love the more that feel the price to quickly And upon we a their structure basically guests. we mistake, and feedback, the mainly change, the pricing made approached ugly. impact bad, change, the recognized about how that we and they

At what foot-fault impact not and call a to pricing does the have packaging ability over leverage an on day, end I'd one our somewhat is this the of module, while on time. this of

pay Our that require and willing to innovation the us consistently they and products that they customers are understand investment, value. for tell

learned a And standpoint, So we structural lesson moving internally these going changes from from learned we're or ask of changes ourselves when to execute more this. questions lot there's we a forward. types pricing

For example, stakeholder? Often, and on the about every happy what is talked the guests impact between restaurants. we happy employees, flywheel happy

questions in how our So trusted mission, being rooted to just our community. right partner restaurant it core on asking mission is key the to is stakeholders our the affects and the

and we've I bit. So But a pricing. it's pretty the going lessons us we packaging in leverage confident in our things think quite future make quite moving question. a actually good learned but stronger to forward, stance learned, but few as to leverage

that's answer, is learning adversity good and through tough a thing. a Yes,

don't quite still location your a upbeat for like expectation sounds is If half. quick you follow-up. It just mind, the second

So it is still, sounds you like this feel good.

did I just location growth. around that days Thank you. make You caught to sure I ago correctly. a XX wanted

team's Really script, I feel really mentioned right good think as That’s our Look, my pipeline bookings. Tien-tsin. or execution. of about our proud I the

as for market of of and number of it’s Toast of our in market, biggest the one talked productivity us from our the we market, reps. about and the for feel win a as as top really we tenure The drivers to As good flywheel to is the in really for half the restaurants tailwind for previous we outlook acts density, it’s growth something a second for calls, growth get more year. everything customers funnel, control. about in the of of terms it well I've the in rates

Our next Jason Bank with Kupferberg from question is of America.

line open. Your is now

a Yes, topic stay guys. nice Thank minute. I the adds net wanted you, to on for numbers here.

there second customer outlook the put part half. wondering, of It much just for And Marriott. any driving the you for doesn't the sound or in that. particular there raised region base like You any

outlook. just any on what's additional higher Thanks. color driving So the

Yes, question. so great

As business really a SMB I is story I this core mentioned, just think our outperforming. in of

I booking is really let's half, executed the think say team a I the in mentioned that and pipeline great well shape. just the first

into all we've team. I our TAM, helpful QSRs, for starting hotels think of well to the been broadening work has done getting some as the that, just – we're after into getting

to lot think of also I this differentiator. being vertical back our restaurants as goes focus key a a on

really As partnership. thrilled what of you half pointed Marriott driving outlook second in That about is the out, like year. it's is not not the we’re the the about,

for sure, For sure.

and you FreedomPay, to And the what that are to address Marriott, talk I just way little cycles side. motion going of payment speaking you're you a bit opportunity, go-to-market expecting that sales So market there, of can of competitive kind the about the with there. think you're kind dynamics going

just that. If all you can Thanks. talk through

Sure. Yes, great no question.

a So let me bit. just zoom little out

past and new few just incremental the these and Marriott, really for platform, the years, up Not our general. mid-market enterprise expand in over So and made as in our enterprise about we've calls, ability but for TAM. open on to talked our underscores opportunities this investments we've work

in in has of the segment. APIs, work including our and more on Some a work and integrations us going enterprise on reporting confident stance given after general, configuration above-store on the our work our hotel work

we terms than are cycles. different little lab a longer in often enterprise relatively it's These structure bit think of targeted still to Greenfield the type in pilot terms bit terms legacy SMB. In started then There's a and it's competition, we certain of a the upmarket deals. in of wins. quite are sales a more a the of in market, record We're of and and These opportunity. go-to

of quarter which Golden locations. Philly XXX And also to Ninety Wetzel's mentioned also Pretzels, already allows about think Pretzel, Krust, is this other when still some at of the Aman Nine which but then enterprise, Marriott, had and won very vendor which is locations. be north approved announced across Restaurant, we've won at us XXX-plus locations. I It's we mean, days certainly early wins we Marriott. last an XXX I announced Marriott we is had

They in So market. our go more good team small work picking execute stance is but after really relatively to they're team, to this up TAM momentum. a confident their It's are on enterprise doing expansion. the

mentioned FreedomPay gives you to FreedomPay, the a like Marriott, regard of really but of in to enterprise Listen, segment with partnership further your work With up that enterprise with certain had opens us still said, I lot upmarket it's question. flexibility customers and TAM. the early a

two there's you know, to payment across on requirements. to FreedomPay. Number these with restaurants, things looking businesses. They with leave it these work solve spa, You one, really unique enterprise important diverse allows often us have flexibly to who payments are customers across hotel,

work So and some some opens gives with us these up to it number TAM flexibility customers. larger one,

then puts deals. for as it of payments. position of to contracts those to two, we enterprise with well on long-term customers. can them POS often locked and section flexibility stronger both flexibility are just allows us go number these large And the partner customers enterprise POS as after for in us have FreedomPay and And into This software, a for largest

That And and platform as being mid-market, our as integrated this core well, the between doesn't well change business, in do going ask does question, for you're said, both what payments. this and SMB, to core listen, our POS regional probably our business?

platform, well always the and to go market on combined Toast option. be to will an quite continue Payments We

leave there. it I'll So

Thanks.

question next Morgan is Our Baer from Josh with Stanley.

now line is open. Your

location already on out next implementation to half as quarter. hoping We're visibility go months of the the back versus was for far could additions. bit and context how in the any I congrats wins? previous going in add or or now think a and about you little talking win question, to in a already the as I much like Great. to how guess, five about talk and about year. strong either live what's XX,XXX Thanks for from go have live won you

Look, ability in specifically, what Josh. guide as we're as been. terms a consistent they to to past, we've but pipeline Hey, don't seen think with I have team's in got we booked are bookings the and of of to continue I the lot execute I Yes. seeing, location and think confidence the mentioned in trends their the

where the strength And that really in our think, we've of the strength that we rep is the is over density, that into past, couple half deeper, talked years the the really markets get things Those business, productivity. customer in tenure I are as we've are first driving year about of increasing. this get we we consistent more core our seen the with in past the saw our SMB

think team other what is and thinking balance, that thing on trying color one expand. some last team with about this to talked we're just we give the I how is lands that, to an versus quarter, sales they the about, initial

location we're team ads, booking number ARPU we're so maximize the with these really rate trying trying also And on win is that locations balance of the the while deals on maximize the and as the platform, right, where front. much to of platform up to booking. And that’s a

the the the I second overall, year. think, level. half at look really so good feel of outlook for about highest the And We

locations. bit or either that's on and for great. a little in comment in the Thank And Okay, back contributed could on how hoping quarter the more then I outlook just you half. more the you. international one was

that Josh. take I'll Yes,

we're really script, we're is pleased, mentioned customers feedback So taking pleased Aman we're knowledge, Canada. this the and internationally. Dublin, and customer in everyone's for And seeing live his really The U.K., positive. on really just signal with we're

the like said, building far, the you progress even And our out location go-to-market But adds that. so year, days, been what impacting team. is I this so in we've not know is though the materially should strong. And it's really really early we're focused on

good and Aman to it very know more in starting our of the can platform patterns Toast And in U.S., the on days playbook. of hands we of see similar that so We're the We we're mentioned, customers. early for get focused that's signal us. international the expanding so a in as

we're in we the end, think the is replicate same loyalty, around zoom ambition markets, really internationally, about by – encouraged why flywheel the if that. our and so drive is international that But to same just out, what we're which

not that really overall, good to contributor be going growth material this and location it's results So about. to a to our but year talking the progress, we're

you. Thank Great.

Will Our next from with question is Goldman Nance Sachs.

is Your open. now line

the year-over-year it a question. appreciate thought guys. was at year-over-year to guidance for up seem base gave that quarter, the guidance. I end ago. taking path you to up higher I ARPU XX%, we at look If you're amounts that per I the quarters glide than Elena, hoping somewhere locations going Hey, what was lot location, ARR being initial I couple too. up guided so was you on the a you to I XX% you think the like But does it on some follow subscription guess XX% that when gave of is this

I a if re-acceleration in upfront I could could the and of ahead? years and the interplay in sale, some you locations location interplay all the per upsell the software guidance. as net between seen we And that something of motion I on there between accelerated about And you am guess the ARR slowdown mentioned more motion. the we’ve upsell little less growth doing location Is talk lead you to wondering would on bit some location growth in ARR a up and and expect guess acceleration per maybe an the location get growth in these per adds? ARR running, the like

that Yes, thanks. question. in a lot There's

Aman and So balancing we're in We're let the the with of with pleased growth already, quarter, growth at XX% in ARPU sort front. SaaS, right balancing location really saying, exactly me ARR our and up mentioned start you're this that. we're by

fundamentals strong fundamentals, to the on SaaS as ARPU goal. our grew Yes, ARPU an ARPU question, and basis? Our year-over-year, that that's The still your fundamentals are thriving XX% we to we've on mentioned. are XX% ARR underlying but SaaS

We is motion and was we couple just so talking North this years, year, to that keep we're over ARPU had upsell the of XX% that and Star hence point, up this this healthy mind. a continue expand this going step ARR moderation But And the about. on to land really motion in and that growth quarter. our build a last the keep on in to

of ARPU dynamics up wondering appreciate talk my if And as could market. I it, move Got I'm you you you question. Marriott, the kind just on through taking

FreedomPay For instance, of deals. I these know you’re on partnering some with

contribution from stream, kind come kind balance in, more ancillary the or you revenue lack and payments higher payments for coming Freedom. software of these of in software of deals there out see to any ARPU do potential of kind a those As is of

Just about think dynamics markets? color, how ARPU any on you

that’s fair question. Yes, a

come have at So we're payback would unit looking really always ARPU of all that periods in. that payback the – entire on I we're we're the to back ARPU what our that first on saying, But do we of deal, even business. and of and same grow larger then it's play exact encouraged if we nature we to time back early about over but on think and focus we ARPU, periods, have have precision role over regardless being economics in start the economics, dynamics SaaS going side. that the by our anticipate be to a ARR customers, will But days always and with, time. payment to, going really to just them follow unit by this the for continue just opportunity segment don't we it an But an we're we're enterprise to that will the really we're

questions you taking the customer and it. the nice appreciate acquisition Got job acceleration. on I

Thank you.

question Dolev is from Our with Dan next Mizuho.

now is line Your open.

really strong congrats. Hey guys, results,

super themselves, you speak an you. that sort adds for and of some Thank there your kind $X.XX very question regarding But that to net Has been issue, are any following fee. I of any seen before strong. know didn't is are try results been get merchants to with promotions – you and attrition aggressive, my obviously the Just, advertise following different customers. have results, obviously there we've strong competitors fee. $X.XX conversations them on know the has

the answer Dan, core the the business and with the good been churn and competitive dynamics No, against Yes $X.XX no. always we're in campaigns throwing for same. been as space opinion past you is in regard remain no question. impact always in a competitive Toast. But hybrid and targets to fee, our Competition I mean, or is there's decade. it's the execution know location to adds mode our

Our rates plowing execution. and forward on win good look just we're

different you. addressed, I sense give you and Got it's addressed. already it, it But a second follow-up the sorry can ARPU and half, us for if apologize was was quick call. I Thank thank in A SaaS a you. if for already been

happy it you, to repeat but for been, Dan. I'm So has

So it just really in SaaS basis as Star as that's time, that's I QX and exit we're a you an ARPU QX that metric on XX%. reminder. we the because XXXX know ARR grew North still say overall but ARR and every XX% our grew XX%, driving to

our are years strong, the as seen mentioned a as mentioned in ARPU what trends the anticipated last and step progresses. it I underlying that is, would And we fundamentals we as the strong. we've that a we are But up reminder, – moderate year two

year. exit towards that ARR on basis the our still we're the XX% driving So of ARPU at

Great. redundant. you. Thank for Thank apologies and you being

is with Blair. next Stephen Our question William from Sheldon

is line now Your open.

about ordering, good or mean Hey, and to think about and of expansion, about catering about from and facilitating I it’s to of thanks more taking ask nice I in monetization that terms questions to throughput to Would GPV should opportunity be it for wanted of just revenue be adding my guess this SaaS kind another subscription results we well thinking side. more see, catering payments the just could here. really really the monetization? monetization. what kind supporting on invoicing, come on the for how additional is additional

one, two Stephen, Hey Number healthy ARPU. things. come it with does

going talked But the and over it what certainly drive rails Elena lever front, on growth to component, similar both on invoicing fronts. time to does about. healthy to that's run another on it's our So is add then the second but ARPU

they this core us love specifically doing our through another SMB TAM. better. is are they business, us an and it processes about or solutions, SMB that as business for going like core just of for often point manual or And deeper our the mentioned thing it's the of customer missing. example what I good one, is, I and what I tell into think are base one they catering, platform And are offering they when integrated restaurants tell XX% they

We're early on the a this going we're help lot life the much So very because it's it's make then and opportunity about still long-term product, ARPU cycle easier, life it's this in us front? customer's the but to to the for product, of early. going excited

Great then profitability to Got see to it. point. the and That's more inflexion level. very follow-up kind a And of helpful. a high

do the especially versus thinking have how letting you of it? back you reinvesting So profitability How you think ramp here right underway, about strategic momentum given into are with now. have initiatives about the you variety of some

Yes, balanced. quite to be it's great It's going a question.

work innovate TAM to efficient obviously we're make decisions and have we, on got said early we every is I a upsell act. have a ahead in grow to ton have our we've and we as and we and running think we how opportunity script, and that massive that how lean I of so as But balancing day. as my and more opportunity

for would guidance that couple point a our near to ago, to profit. we you of recurring I long term our and term then quarters gross point and FinTech guidance the give a on and that's

as to balancing this especially we So into momentum XXXX. lean want profitability over and we certainly we growth we'll be both time. have, But exit

thank Great, you.

from Chiodo Suisse. is Our Credit next Timothy question with

open. Your line is now

your growth to of you. I thank bit about a talk adds. Great, the mix little wanted

on XXX the I brief have any units, to takeaways You few bit And Has of chains, a within locations created overall mix your brand of Pretzel little others. competitive a Philly a payments that and etc., formed new relative then a – shift adds? mentioned share. towards rev larger follow-up growth

yes. Tim, Hey

Just the highest between consistent. well restaurants the certainly existing has when We largely level, opening at we look mix think that and the the do remained new see restaurants are I get our to But existing over tours that or up. – system switch we to Toast. also there's using opening a restaurants current where is do able team legacy cloud are to

– changed the more as mid-market, restaurants. seen of mix about question I’d your new to that market there's been fundamentally opening success that versus say, have the existing has of think in I

share. you. the I revenue for appreciate relates the to that. thank Okay, follow-up potential And

a So clearly payments customers, the the the some of in either enterprise you have the currently have FreedomPay through future, integration will provider. decoupled and or third-party

Toast FreedomPay share payments should many is as in at or there, revenue any sure but might earning cases already of? or that economics be other the relationship you there that mentioned, other processor either any we I'm all That’s existing an think via potentially… there's

the do so not won't would leverage have though, it point it's times, of ARPU Yes, deal. to as To specific SaaS specifics Marriott I but be for into us will want think for of play he and we did FreedomPay that earlier, a customers, Chris's I our there this for get deal, enterprise already meaningful. mention both.

entire it are because not and our wouldn't where extrapolate that's I take enterprise today. FreedomPay to So book, we

you. Okay, Thank great.

Samad from Jefferies. is question next with Our Samana

now open. line Your is

strong Hi, good you. quarter. Maybe for afternoon on the congrats Elena, one first and

Just of of EBITDA quite in and it's OpEx, as the this and actually terms OpEx inflection I quarter dollar think about top growth, both modest margin change the line. the the upside in despite

question And of as So going just I'm should and a Just forward. the follow sales leverage? curious, allowing up that good next and that how grow marketing maybe as that for have we is about should what's couple for think I well. proxy quarters the a dollars R&D

Yes, I quarters. leverage of and business for across the lines think the OpEx the last we've see the leverage we across are shown going really several all is Samad to

fact also little the for a there you would would So to at quarter. into seasonality is And our – business. I that getting side point the bit me specifics guidance the point QX in our on I the of you without to obviously play of payment in

a the OpEx of than So continue different leverage QX. the all say that'll year. we in to expect to drive for balance have of complexion, But across lines the

no you've based want think clarification. based think its philosophy on great. that I a Should into price the the given? increase, It's fee, future? and couple how then And And near right? Okay, There's the follow-up that on assumption of of times should mentioned one we think company for will rest $X.XX maybe just been anticipate at at about we I outlook about when increase that. maybe in a least the comments guess the some just on the pricing. on a point year, about price the we some about

Yes, a let out me bit. little zoom

definitely out, of just first zooming over no So XXXX. element included, But that is reflects change not the know all, it's in our longer obviously our pricing [ph] of guidance a our strategy the you core to time. was EP

right, one profitability. As several think about is years, we is about think the growth next and we one dimensions, two

early TAM. growth, growth, which about, consider talk axis we location in we the have we the When we're always two is

to expand land and which hone to that have so we're and over have that On of strategy our of We top proof we pricing, time. ARPU, cross-sell motion. tenet key ability which have our up-sell, a continuing we points is

about key growth in So pricing, we're I that's the is of but the driving element a really think how wouldn't our our we it what's that over-rotate business. strategy contemplating.

be Great. with working again. Thanks to Good you Elena.

Samad. Thanks,

DA last line comes Peter with Davidson. the question from Our Heckmann of

line now open. Your is

you appropriate it's today. data different contribution pull through think guess, taking again. back that if it's of you more I you over as the But the on of might like generating if environment given little that? Toast of I that Could basis, aspirations something First, for funding, I about reserve have a limit on some business some do the to give think you could profit go macroeconomic a XX% your business, on you that you gross go mean feel Capital a that and in business? to data get like question. bit for quarterly thanks the you typically of and Hi, just

I let Yes, me mean start.

at overall we points performance this out And great restaurants quarter have our a zoom an are why It know me then, with to the take our the them under-banked fast start opportunity and Capital. want to premise in on about access core, Let XX just flexible give to did of rate. and basis have we But and way. contributed Toast Toast to Capital. we capital

been, loans. have from the demand from back better renewing do our expected. see seeing line demand to And customers, the is most only and we continue And existing in their coming have we're rates we default are and part, but also customers proof than for we points not new

to to I really about, we confidence is remember risk, us we've manage we to But important For program? loans. how kind this near it's to grow the how what's the going think that going the giving continue in. because zone are that in terms in So to of the continue been extend stay think we're we term, of to

gives are we factors seeing? data, of is customer. internal factors We seeing? payment the the a and we some have external it internal the external. the are of look which lot as sort One of confidence look us worthiness at the we're access a holistically. reminder, And What to in of What we're credit at

And then we bank with to a partner loan. offer the

balance loans are the off their coming sheet. of So

on light liability So we And the us. make it's our balance origination. of then capped the And sheet for is based really the collections volume at XX% payment daily.

your we levers our macro confidence were to collection. to we’ll So of on debt. in that. We have if lending an to impact manage has have reduce a change to And lot We bad point, the then which the into were change, sort tighten or could visibility of the environment duration, parameters. can

loan And should levers we So program. the where program days the of seen with not that etc., might scale this COVID, come there's different and were the we we've sizes, seen early a to we've to on program now healthy during debt the successfully we different and back we bad And did be a able relaunched the during manage time. on as said kind time that back demand we've the play scale need demand. in actually, relaunched can back and we few

helping we're and confident team And our we've a this feel importantly, business. scale got So very I risk great of managing the grow. more customers

right. That's Thank All you. helpful.

This conference concludes call. today's

You may your line. disconnect now

you. Thank right. All