TOST Q2 2023 Earnings

Call Details

• Call Title: Toast, Inc. Class A Q2 2023 Earnings Call
• Date: August 8, 2023 at 9:00 PM UTC
• Management Team:
  • Michael Senno (Senior Vice President of Finance and Strategy, Treasury and Investor Relations)
  • Chris Comparato (Chief Executive Officer)
  • Aman Narang (Chief Operating Officer)
  • Elena Gomez (Chief Financial Officer)

Call Summary

Financial Performance

• Total revenue was $978M in Q2, representing 45% year-over-year growth as stated on the call.
• GPV was $32.1B in Q2, which management said was up 38% year-over-year.
• ARR was $1.1B in Q2, which was described as up 45% year-over-year and above the $1B milestone.
• Total non-GAAP gross profit was reported as $225M in Q2, stated as up 80% year-over-year, with a gross margin of 23%.
• Adjusted EBITDA was positive $15M in Q2 on a non-GAAP basis, compared with a $33M loss in the prior year, delivering a 1.5% adjusted EBITDA margin.
• Free cash flow was positive $39M in Q2, which was described as the first positive quarterly free cash flow since becoming a public company.

ARR / Recurring Revenue Growth

• ARR increased to $1.1B, described as up 45% year-over-year and more than double from two years prior.
• Total ARPU was cited as over $12K on an ARR basis for the quarter, driven by double-digit year-over-year SaaS ARPU gains.
• SaaS ARR growth on an ARR basis was stated at 55% year-over-year for Q2.
• SaaS ARPU growth for the quarter was stated as 14% year-over-year.
• Management reiterated the company objective to drive ~10% year-over-year ARR-per-location growth on an ARR basis as they exit 2023.
• Subscription and FinTech recurring gross profit was stated as $267M in Q2 and cited as up 58% year-over-year, presented as a key recurring metric for Rule of 40 calculations.