TOST Q3 2024 Earnings

Call Details

• Call Title: Toast, Inc. Class A Q3 2024 Earnings Call
• Date: November 7, 2024 at 10:00 PM UTC
• Management Team:
  • Michael Senno (Senior Vice President of Finance)
  • Aman Narang (CEO and Co-founder)
  • Elena Gomez (Chief Financial Officer)

Call Summary

Financial Performance

• The company added a record 8,000 net locations in Q2, bringing total locations to about 120,000, up 29% year over year.
• Total recurring gross profit streams (subscription and FinTech) increased 29% year over year and totaled $344M in Q2.
• Adjusted EBITDA was $92M in Q2 and represented a 27% margin on recurring gross profit streams.
• GAAP operating income reached $5M in the quarter, representing earlier-than-expected GAAP profitability.
• Gross payment volume (GPV) was $40.5B in the quarter, up 26% year over year.
• GPV per location declined about 3% year over year, which management described as a consistent, narrow-band trend.
• Net take rate was 54 bps in the quarter, with core net take rate flat year over year at 45 bps.

Guidance

• Third quarter guidance for total subscription and FinTech gross profit growth is 23% to 27% year over year.
• Third quarter adjusted EBITDA is guided to $70M to $80M.
• Full-year guidance was raised to 27% to 29% growth in FinTech and subscription gross profit.
• Full-year adjusted EBITDA guidance was raised to $285M to $305M.
• At the midpoint of full-year guidance, recurring gross profit margin is expected to be 22%, which management said is a 16 percentage point improvement versus 2023.
• The company expects to be around breakeven on a GAAP basis for the remainder of the year.
• Guidance assumes increased operating expense in the second half to fund targeted reinvestments while capturing restructuring savings realized in H1.