TOST Q3 2022 Earnings

Call Details

• Call Title: Toast, Inc. Class A Q3 2022 Earnings Call
• Date: November 10, 2022 at 10:00 PM UTC
• Management Team:
  • Michael Senno (Senior Vice President of Finance)
  • Chris Comparato (Chief Executive Officer)
  • Elena Gomez (Chief Financial Officer)
  • Aman Narang (Chief Operating Officer)

Call Summary

Financial Performance

• Total revenue was $752 million in Q3 2022, representing 55% year-over-year growth.
• ARR ended Q3 at $868 million, which is up 60% year-over-year.
• Gross payment volume (GPV) was $25 billion in Q3, up 53% year-over-year, and annualized GPV surpassed $100 billion.
• Total gross profit was $164 million, up 78% year-over-year, and total gross margin was 21.8%.
• Payments gross profit was $134 million in the quarter, up 74% year-over-year.
• Average annualized GPV per processing location was $1.4 million, roughly flat with Q2 and up 8% year-over-year.
• Net new locations added were approximately 5,500 in Q3, bringing total live locations to approximately 74,000.
• Q3 adjusted EBITDA was negative $19 million, a negative 2.6% margin, improving by 230 basis points quarter-over-quarter.

Guidance

• Q4 2022 revenue guidance is $730 million to $760 million, which implies 46% year-over-year growth at the midpoint.
• Q4 2022 adjusted EBITDA is expected to be negative $30 million to negative $20 million.
• Full year 2022 revenue guidance was raised; new range is $2.69 billion to $2.72 billion, implying 59% year-over-year growth at the midpoint.
• Full year 2022 adjusted EBITDA guidance was updated to negative $127 million to negative $117 million, an approximately $30 million improvement at the midpoint versus prior guidance.
• The updated full year guidance implies an adjusted EBITDA margin of negative 4.5% at the midpoint.
• The company expects a seasonal decline in GPV per processing location in Q4 and Q1 consistent with historical patterns.
• The company stated a target to deliver a profitable quarter by the end of 2023 conditional on the macro environment remaining relatively consistent.