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Toast Announces Third Quarter 2021 Financial Results

11/09/2021

Third quarter revenue grew 105% year-over-year to $486.4 million

Annualized recurring run-rate (ARR) as of September 30, 2021 grew 77% year-over-year to $543.8 million

Third quarter gross payment volume (GPV) grew 123% year-over-year to $16.5 billion

BOSTON--()--Toast (NYSE: TOST), the all-in-one platform built for restaurants, today reported financial results for the third quarter ended September 30, 2021.

In the third quarter, we delivered strong results across the board,” said Chris Comparato, CEO, Toast. “Toast’s performance is a result of our relentless focus on driving restaurant success with our all-in-one technology platform, unique go-to-market strategy and powerful business model. As restaurants invest more in technology to meet new expectations from guests, employees and partners, Toast is uniquely positioned to capture a growing share of its market opportunity.”

Financial Highlights for the Third Quarter of 2021

  • Revenue for the third quarter of 2021 was $486.4 million, an increase of 105% from the third quarter of 2020.
  • ARR as of September 30, 2021 was $543.8 million, an increase of 77% as compared to September 30, 2020.
  • GPV for the third quarter of 2021 was $16.5 billion, an increase of 123% from the third quarter of 2020.
  • Gross profit for the third quarter of 2021 was $83.3 million, an increase of 72% from the third quarter of 2020.
  • Non-GAAP gross profit for the third quarter of 2021 was $88.5 million, an increase of 75% from the third quarter of 2020.
  • Net loss for the third quarter of 2021 was $252.5 million, as compared to $62.6 million in the third quarter of 2020.
  • Adjusted EBITDA for the third quarter of 2021 was $(9.7) million, as compared to Adjusted EBITDA of $(0.3) million in the third quarter of 2020.
  • Net cash (used in) provided by operating activities for the third quarter of 2021 was $(17.2) million, as compared to $11.2 million for the third quarter of 2020.
  • Free Cash Flow for the third quarter of 2021 was $(21.1) million, as compared to Free Cash Flow of $0.4 million for the third quarter of 2020.

For more information on the non-GAAP financial measures and key metrics discussed in this press release, please see the sections titled “Key Business Metrics” and “Non-GAAP Financial Measures,” as well as the reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures at the end of this press release.

Outlook

For the fourth quarter ending December 31, 2021, Toast expects to report:

  • Revenue in the range of $465 million to $495 million
  • Adjusted EBITDA in the range of $(50) million to $(40) million

For the full year ending December 31, 2021, Toast expects to report:

  • Revenue in the range of $1,655 million to $1,685 million
  • Adjusted EBITDA in the range of $(46) million to $(36) million

The outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. See cautionary note regarding “Forward-looking Statements” below.

Conference Call Information

Toast will host a live video webcast at 5:00 p.m. Eastern Time on Tuesday, November 9, 2021 to discuss the results. The live video webcast can be accessed through Toast’s investor relations website at http://investors.toasttab.com. A replay of the webcast will be available for a period of 90 days after the call.

Toast has used, and intends to continue to use, its Investor Relations website (http://investors.toasttab.com), as well as the Toast Newsroom (https://pos.toasttab.com/news), as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Information on or that can be accessed through Toast’s Investor Relations website, or that is contained in any website to which a hyperlink is provided herein is not part of this press release, and the inclusion of Toast’s Investor Relations website address, and any hyperlinks are only inactive textual references.

About Toast

Toast is the all-in-one platform built for restaurants of all sizes. Toast provides a single platform of software as a service (SaaS) products and financial technology solutions that give restaurants everything they need to run their business across point of sale, operations, digital ordering and delivery, marketing and loyalty, and team management. By serving as the restaurant operating system across dine-in, takeout, and delivery channels, Toast helps restaurants streamline operations, increase revenue and deliver amazing guest experiences. For more information, visit www.toasttab.com.

Forward-looking Statements

This press release contains “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when Toast or its management is discussing its beliefs, estimates or expectations. Such statements generally include the words “believes,” “plans,” “intends,” “targets,” “may,” “could,” “should,” “will,” “expects,” “estimates,” “suggests,” “anticipates,” “outlook,” “continues,” or similar expressions. These statements are not historical facts or guarantees of future performance, but represent the beliefs of Toast and its management at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside Toast’s control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. Forward-looking statements include, without limitation, statements about expected financial positions or growth; results of operations; cash flows; guidance on financial results for the fourth fiscal quarter and full year of 2021; statements about future operating results; the expectations of demand for Toast’s products and growth of its business; the growth rates in the markets in which Toast compete; Toast’s investments in technology and infrastructure; Toast’s ability to deliver innovative solutions; Toast’s ability to attract and retain customers; financing plans; business strategy; operating plans; competitive positions; and growth opportunities for existing products.

The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in Toast’s filings with the Securities and Exchange Commission (“SEC”), including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations'' in the final prospectus for Toast’s initial public offering filed on September 22, 2021, Toast’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2021 that will be filed following this earnings release, and Toast’s subsequent SEC filings. Toast can give no assurance that the plans, intentions, expectations or strategies as reflected in or suggested by those forward-looking statements will be attained or achieved. The forward-looking statements in this release are based on information available to Toast as of the date hereof, and Toast disclaims any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing Toast’s views as of any date subsequent to the date of this press release.

TOAST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

(in thousands, except share and per share amounts)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

Subscription services

$

45,803

 

 

$

27,406

 

 

$

113,844

 

 

$

72,193

 

Financial technology solutions

 

404,224

 

 

 

188,195

 

 

 

983,699

 

 

 

450,265

 

Hardware

 

31,051

 

 

 

18,148

 

 

 

80,005

 

 

 

48,335

 

Professional services

 

5,301

 

 

 

3,008

 

 

 

12,579

 

 

 

9,806

 

Total revenue

 

486,379

 

 

 

236,757

 

 

 

1,190,127

 

 

 

580,599

 

Costs of revenue:

 

 

 

 

 

 

 

Subscription services

 

18,016

 

 

 

10,388

 

 

 

41,044

 

 

 

29,205

 

Financial technology solutions

 

327,235

 

 

 

145,945

 

 

 

779,111

 

 

 

358,402

 

Hardware

 

42,109

 

 

 

21,914

 

 

 

93,521

 

 

 

63,336

 

Professional services

 

14,585

 

 

 

9,282

 

 

 

35,276

 

 

 

33,655

 

Amortization of acquired technology and customer assets

 

1,180

 

 

 

908

 

 

 

3,147

 

 

 

2,695

 

Total costs of revenue

 

403,125

 

 

 

188,437

 

 

 

952,099

 

 

 

487,293

 

Gross profit

 

83,254

 

 

 

48,320

 

 

 

238,028

 

 

 

93,306

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

56,622

 

 

 

32,216

 

 

 

130,480

 

 

 

104,326

 

Research and development

 

39,700

 

 

 

34,274

 

 

 

112,978

 

 

 

78,658

 

General and administrative

 

40,633

 

 

 

20,481

 

 

 

105,095

 

 

 

73,558

 

Total operating expenses

 

136,955

 

 

 

86,971

 

 

 

348,553

 

 

 

256,542

 

Loss from operations

 

(53,701

)

 

 

(38,651

)

 

 

(110,525

)

 

 

(163,236

)

Other income (expense):

 

 

 

 

 

 

 

Interest income

 

8

 

 

 

137

 

 

 

61

 

 

 

819

 

Interest expense

 

(247

)

 

 

(5,661

)

 

 

(12,403

)

 

 

(6,846

)

Change in fair value of warrant liabilities

 

(198,389

)

 

 

(202

)

 

 

(214,881

)

 

 

60

 

Change in fair value of derivative liability

 

 

 

 

(18,208

)

 

 

(103,281

)

 

 

(18,208

)

Loss on debt extinguishment

 

 

 

 

 

 

 

(49,783

)

 

 

 

Other income (expense), net

 

(39

)

 

 

104

 

 

 

42

 

 

 

325

 

Loss before (provision for) benefit from income taxes

 

(252,368

)

 

 

(62,481

)

 

 

(490,770

)

 

 

(187,086

)

(Provision for) benefit from income taxes

 

(129

)

 

 

(127

)

 

 

3,623

 

 

 

(69

)

Net loss

$

(252,497

)

 

$

(62,608

)

 

$

(487,147

)

 

$

(187,155

)

Net loss per share attributable to common stockholders, basic and diluted

$

(1.05

)

 

$

(0.31

)

 

$

(2.22

)

 

$

(0.94

)

Weighted average shares used in computing net loss per share, basic and diluted

 

239,358,805

 

 

 

200,579,529

 

 

 

219,746,454

 

 

 

199,245,332

 

 

 

 

 

 

 

 

 

Net loss

$

(252,497

)

 

$

(62,608

)

 

$

(487,147

)

 

$

(187,155

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

Foreign currency translation

 

(69

)

 

 

(24

)

 

 

(183

)

 

 

5

 

Comprehensive loss

$

(252,566

)

 

$

(62,632

)

 

$

(487,330

)

 

$

(187,150

)

TOAST, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share amounts)

 

 

September 30,
2021

 

December 31,
2020

Assets:

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,301,619

 

 

$

581,824

 

Accounts receivable, net of allowance for doubtful accounts of $2,568 and $4,438, respectively, at September 30, 2021 and December 31, 2020

 

52,730

 

 

 

32,633

 

Merchant cash advances and loans receivable, net of allowance for uncollectible loans of $3,668 and $4,454, respectively, at September 30, 2021 and December 31, 2020

 

409

 

 

 

872

 

Inventories

 

38,665

 

 

 

19,330

 

Costs capitalized to obtain revenue contracts, net

 

23,931

 

 

 

16,794

 

Prepaid expenses and other current assets

 

79,561

 

 

 

21,611

 

Total current assets

 

1,496,915

 

 

 

673,064

 

Property and equipment, net

 

42,381

 

 

 

44,111

 

Intangible assets

 

17,188

 

 

 

6,835

 

Goodwill

 

74,738

 

 

 

35,887

 

Restricted cash

 

2,694

 

 

 

1,214

 

Security deposits

 

806

 

 

 

1,633

 

Non-current costs capitalized to obtain revenue contracts, net

 

18,755

 

 

 

12,612

 

Other non-current assets

 

3,776

 

 

 

600

 

Total non-current assets

 

160,338

 

 

 

102,892

 

Total assets

$

1,657,253

 

 

$

775,956

 

Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit):

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

33,696

 

 

$

30,554

 

Current portion of deferred revenue

 

46,865

 

 

 

42,680

 

Accrued expenses and other current liabilities

 

206,218

 

 

 

63,172

 

Total current liabilities

 

286,779

 

 

 

136,406

 

Long-term debt, net of discount

 

 

 

 

171,709

 

Derivative liabilities

 

 

 

 

37,443

 

Warrants to purchase preferred stock

 

 

 

 

11,405

 

Warrants to purchase common stock

 

308,195

 

 

 

 

Deferred revenue, net of current portion

 

12,832

 

 

 

15,533

 

Deferred rent, net of current portion

 

16,106

 

 

 

18,536

 

Other long-term liabilities

 

23,867

 

 

 

7,007

 

Total long-term liabilities

 

361,000

 

 

 

261,633

 

Total liabilities

 

647,779

 

 

 

398,039

 

Commitments and contingencies

 

 

 

Convertible preferred stock, $0.000001 par value—no shares authorized, issued or outstanding as of September 30, 2021; 257,245,680 authorized and 253,832,025 shares issued and outstanding at December 31, 2020; total liquidation value of $849,970 at December 31, 2020.

 

 

 

 

848,893

 

Stockholders’ Equity (Deficit):

 

 

Preferred stock- par value $0.000001; 100,000,000 shares authorized, no shares issued or outstanding

 

 

 

 

 

Common stock, $0.000001 par value— no shares authorized, issued and outstanding as of September 30, 2021; 570,000,000 shares authorized, 219,755,430 shares issued and outstanding as of December 31, 2020

 

 

 

 

 

Class A common stock, $0.000001 par value- 7,000,000,000 shares authorized, 25,000,000 shares issued and outstanding as of September 30, 2021; no shares authorized, issued and outstanding at December 31, 2020

 

 

 

 

 

Class B common stock, $0.000001 par value- 700,000,000 shares authorized, 479,406,030 shares issued and outstanding as of September 30, 2021; no shares authorized, issued and outstanding at December 31, 2020

 

 

 

 

 

Treasury stock, at cost— 225,000 shares outstanding at September 30, 2021 and December 31, 2020

 

(665

)

 

 

(665

)

Accumulated other comprehensive income

 

45

 

 

 

228

 

Additional paid-in capital

 

2,113,107

 

 

 

145,327

 

Accumulated deficit

 

(1,103,013

)

 

 

(615,866

)

Total stockholders’ equity (deficit)

 

1,009,474

 

 

 

(470,976

)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)

$

1,657,253

 

 

$

775,956

 

TOAST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

Nine Months Ended September 30,

 

 

2021

 

 

 

2020

 

Cash flows from operating activities:

 

 

 

Net loss

$

(487,147

)

 

$

(187,155

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

 

15,617

 

 

 

9,498

 

Stock-based compensation

 

95,210

 

 

 

58,357

 

Amortization of costs capitalized to obtain revenue contracts

 

17,596

 

 

 

10,818

 

Change in fair value of derivative liability

 

103,281

 

 

 

18,208

 

Change in fair value of warrant liabilities

 

214,881

 

 

 

(60

)

Change in deferred income taxes

 

(3,920

)

 

 

 

Loss on debt extinguishment

 

49,783

 

 

 

 

Non-cash interest on convertible notes

 

11,771

 

 

 

6,404

 

Other

 

305

 

 

 

256

 

Changes in operating assets and liabilities:

 

 

 

Account receivable, net

 

(20,083

)

 

 

(8,425

)

Factor receivable, net

 

153

 

 

 

2,568

 

Merchant cash advances repaid

 

537

 

 

 

8,233

 

Prepaid expenses and other current assets

 

(31,867

)

 

 

8,395

 

Costs capitalized to obtain revenue contracts, net

 

(30,876

)

 

 

(17,580

)

Inventories

 

(19,336

)

 

 

698

 

Accounts payable

 

8,207

 

 

 

(6,289

)

Accrued expenses and other current liabilities

 

106,306

 

 

 

8,276

 

Deferred revenue

 

1,484

 

 

 

(2,268

)

Other assets and liabilities

 

2,068

 

 

 

3,436

 

Net cash provided by (used in) operating activities

 

33,970

 

 

 

(86,630

)

Cash flows from investing activities:

 

 

 

Cash paid for acquisition, net of cash acquired

 

(26,142

)

 

 

 

Capitalized software

 

(5,712

)

 

 

(6,479

)

Purchases of property and equipment

 

(10,570

)

 

 

(35,385

)

Other

 

 

 

 

233

 

Net cash used in investing activities

 

(42,424

)

 

 

(41,631

)

Cash flows from financing activities:

 

 

 

Proceeds from issuance of Class A common stock upon initial public offering, net of underwriter discounts

 

950,360

 

 

 

 

Payment of deferred offering costs

 

(4,044

)

 

 

 

Repayments of secured borrowings

 

 

 

 

(8,544

)

Extinguishment of convertible notes

 

(244,528

)

 

 

 

Change in customer funds obligations, net

 

26,002

 

 

 

6,138

 

Proceeds from issuance of long-term debt

 

 

 

 

194,850

 

Proceeds from exercise of stock options

 

17,727

 

 

 

1,158

 

Proceeds from issuance of Series F preferred stock

 

 

 

 

402,368

 

Proceeds from exercise of restricted stock

 

10,397

 

 

 

265

 

Repurchase of restricted stock

 

 

 

 

(155

)

Repurchase of common stock

 

 

 

 

(275

)

Net cash provided by financing activities

 

755,914

 

 

 

595,805

 

Net increase in cash, cash equivalents, cash held on behalf of customers and restricted cash

 

747,460

 

 

 

467,544

 

Effect of exchange rate changes on cash and cash equivalents and restricted cash

 

(183

)

 

 

5

 

Cash, cash equivalents, cash held on behalf of customers and restricted cash at beginning of period

 

593,676

 

 

 

159,389

 

Cash, cash equivalents, cash held on behalf of customers and restricted cash at end of period

$

1,340,953

 

 

$

626,938

 

Reconciliation of cash, cash equivalents, cash held on behalf of customers and restricted cash

 

 

 

Cash and cash equivalents

$

1,301,619

 

 

$

611,907

 

Cash held on behalf of customers

 

36,640

 

 

 

12,853

 

Restricted cash

 

2,694

 

 

 

2,178

 

Total cash, cash equivalents, cash held on behalf of customers and restricted cash

$

1,340,953

 

 

$

626,938

 

Supplemental disclosures of cash flow information

 

 

 

Cash paid for interest

$

13,226

 

 

$

 

Non-cash items in investing and financing activities

 

 

 

Purchase of property and equipment included in accounts payable and accrued expenses

$

148

 

 

$

8,868

 

Contingent consideration included in purchase price

 

1,876

 

 

 

 

Deferred payments included in purchase price

 

5,357

 

 

 

 

Common stock issued in acquisition

 

14,857

 

 

 

 

Conversion of convertible preferred stock into Class B common stock upon initial public offering

 

848,893

 

 

 

 

Issuance of Class B common stock upon exercise of common stock warrants

 

43,297

 

 

 

 

Issuance of common stock warrants upon debt extinguishment

 

125,111

 

 

 

 

Deferred offering costs included in accounts payable and accrued expenses

 

2,298

 

 

 

 

Stock-based compensation included in capitalized software

 

545

 

 

 

 

Non-GAAP Financial Measures

In this press release, Toast refers to non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with United States generally accepted accounting principles (“GAAP”). Toast uses certain non-GAAP financial measures, as described below, to understand and evaluate its core operating performance. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of Toast’s financial performance and should not be considered substitutes for, or superior to, the financial information prepared and presented in accordance with GAAP. Toast believes that these non-GAAP financial measures provide useful information about its financial performance, enhance the overall understanding of its past performance and future prospects, and allow for greater transparency with respect to important metrics used by Toast’s management for financial and operational decision-making.

In the tables below, Toast has provided reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. These non-GAAP financial measures should not be considered substitutes for financial measures calculated in accordance with GAAP, and the financial results that Toast calculates and presents in the table in accordance with GAAP, as well as the corresponding reconciliations from those results, should be carefully evaluated.

The following are the non-GAAP financial measures referenced in this press release and presented in the tables below:

  • Adjusted EBITDA is defined as net income (loss), adjusted to exclude stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, interest income, interest expense, other income (expense) net, acquisition expenses, fair value adjustments on warrant and derivative liabilities, expenses related to COVID-19 pandemic initiatives resulting from a reduction of workforce in 2020 and early termination of leases, loss on debt extinguishment, and income taxes.
  • Non-GAAP Costs of Revenue are defined as costs of revenue excluding stock-based compensation expense.
  • Non-GAAP Gross Profit is defined as gross profit excluding stock-based compensation expense.
  • Non-GAAP Sales and Marketing Expenses are defined as sales and marketing expenses excluding stock-based compensation expense.
  • Non-GAAP Research and Development Expenses are defined as research and development expenses excluding stock-based compensation expense.
  • Non-GAAP General and Administrative Expenses are defined as general and administrative expenses excluding stock-based compensation expense.
  • Free Cash Flow is defined as net cash provided by (used in) operating activities reduced by purchases of property and equipment and capitalization of internal-use software costs.

Adjusted EBITDA, Non-GAAP Costs of Revenue, Non-GAAP Gross Profit, Non-GAAP Selling and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses, and Free Cash Flow do not purport to represent profitability and liquidity measures as defined in accordance with GAAP. These measures are provided to investors and others to improve the quarter-to-quarter and year-to-year comparability of Toast's financial results and to ensure that investors understand the information Toast uses to evaluate the performance of its businesses.

Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations since they do not include the impact of certain expenses and cash flows that are reflected in our consolidated statements of comprehensive loss and consolidated statements of cash flows. Thus, our Adjusted EBITDA, Non-GAAP Costs of Revenue, Non-GAAP Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses, and Free Cash Flow should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

Key Business Metrics

In addition, Toast also uses the following key business metrics to help it evaluate its business, identify trends affecting its business, formulate business plans, and make strategic decisions:

  1. Gross Payment Volume (“GPV”) is defined as the sum of total dollars processed through the Toast payments platform across all restaurant locations in a given period. GPV is a key measure of the scale of Toast’s platform, which in turn drives its financial performance. As Toast customers generate more sales and therefore more GPV, Toast generally sees higher financial technology solutions revenue.
  1. Annualized Recurring Run-Rate (“ARR”) is defined as a key operational measure of the scale of Toast’s subscription and payment processing services for both new and existing customers. To calculate ARR, Toast first calculates recurring run-rate on a monthly basis. Monthly Recurring Run-Rate (“MRR”) is measured on the final day of each month for all restaurant locations live on the Toast platform as the sum of (i) Toast’s monthly subscription services fees, which is referred to as the subscription component of MRR, and (ii) Toast’s in-month adjusted payments services fees, exclusive of estimated transaction-based costs, which is referred to as the payments component of MRR. MRR does not include fees derived from Toast Capital or related costs. ARR is determined by taking the sum of (i) twelve times the subscription component of MRR and (ii) four times the trailing-three-month cumulative payments component of MRR. Toast believes this approach provides an indication of its scale, while also controlling for short-term fluctuations in payments volume. ARR may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with the Toast platform, pricing, competitive offerings, economic conditions, or overall changes in its customers’ and their guests’ spending levels. ARR is an operational measure, does not reflect Toast’s revenue or gross profit determined in accordance with GAAP, and should be viewed independently of, and not combined with or substituted for, Toast’s revenue, gross profit, and other financial information determined in accordance with GAAP. Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of Toast’s future or expected results.

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(dollars in billions)

2021

2020

% Growth

2021

2020

% Growth

Gross Payment Volume (GPV)

$

16.5

$

7.4

123

%

$

39.9

$

17.8

124

%

 

 

As of September 30,

 

(dollars in millions)

 

2021

2020

% Growth

Annualized Recurring Run-Rate

$

543.8

$

308.1

77

%

Toast, Inc.

Reconciliation from Non-GAAP to GAAP Results

(unaudited) (in thousands)

 

Adjusted EBITDA

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(dollars in thousands)

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

Net loss

$

(252,497

)

 

$

(62,608

)

 

$

(487,147

)

 

$

(187,155

)

Stock-based compensation expense and related payroll tax

 

36,372

 

 

 

36,201

 

 

 

97,359

 

 

 

58,357

 

Depreciation and amortization

 

6,673

 

 

 

3,118

 

 

 

15,617

 

 

 

9,498

 

Interest income

 

(8

)

 

 

(137

)

 

 

(61

)

 

 

(819

)

Interest expense

 

247

 

 

 

5,661

 

 

 

12,403

 

 

 

6,846

 

Other (income) expense, net

 

39

 

 

 

(104

)

 

 

(42

)

 

 

(325

)

Acquisition expenses

 

 

 

 

 

 

 

1,113

 

 

 

 

Change in fair value of warrant liability

 

198,389

 

 

 

202

 

 

 

214,881

 

 

 

(60

)

Change in fair value of derivative liability

 

 

 

 

18,208

 

 

 

103,281

 

 

 

18,208

 

Reduction of workforce

 

 

 

 

154

 

 

 

 

 

 

10,127

 

Termination of leases

 

922

 

 

 

(1,092

)

 

 

922

 

 

 

(1,092

)

Loss on debt extinguishment

 

 

 

 

 

 

 

49,783

 

 

 

 

Provision for (benefit from) income taxes

 

129

 

 

 

127

 

 

 

(3,623

)

 

 

69

 

Adjusted EBITDA

$

(9,734

)

 

$

(270

)

 

$

4,486

 

 

$

(86,346

)

 

 

 

 

 

 

Non-GAAP Costs of Revenue

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollars in thousands)

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

Costs of Revenue

$

403,125

 

 

$

188,437

 

 

$

952,099

 

 

$

487,293

 

Stock-based compensation expense

 

5,270

 

 

 

2,250

 

 

 

6,523

 

 

 

3,169

 

Non-GAAP Costs of Revenue

$

397,855

 

 

$

186,187

 

 

$

945,576

 

 

$

484,124

 

 

 

 

Non-GAAP Gross Profit

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollars in thousands)

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

Gross profit

$

83,254

 

 

$

48,320

 

 

$

238,028

 

 

$

93,306

 

Stock-based compensation expense

 

5,270

 

 

 

2,250

 

 

 

6,523

 

 

 

3,169

 

Non-GAAP gross profit

$

88,524

 

 

$

50,570

 

 

$

244,551

 

 

$

96,475

 

 

 

 

Non-GAAP Sales & Marketing Expenses

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollars in thousands)

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

Sales and marketing expenses

$

56,622

 

 

$

32,216

 

 

$

130,480

 

 

$

104,326

 

Stock-based compensation expense

 

10,337

 

 

 

7,445

 

 

 

13,276

 

 

 

9,094

 

Non-GAAP sales and marketing expenses

$

46,285

 

 

$

24,771

 

 

$

117,204

 

 

$

95,232

 

 

 

 

Non-GAAP Research and Development Expenses

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollars in thousands)

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

Research and development expenses

$

39,700

 

 

$

34,274

 

 

$

112,978

 

 

$

78,658

 

Stock-based compensation expense

 

8,627

 

 

 

17,422

 

 

 

35,138

 

 

 

19,622

 

Non-GAAP research and development expenses

$

31,073

 

 

$

16,852

 

 

$

77,840

 

 

$

59,036

 

 

 

 

Non-GAAP General & Administrative Expenses

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollars in thousands)

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

General and administrative expenses

$

40,633

 

 

$

20,481

 

 

$

105,095

 

 

$

73,558

 

Stock-based compensation expense

 

12,118

 

 

 

9,084

 

 

 

42,284

 

 

 

26,472

 

Non-GAAP general and administrative expenses

$

28,515

 

 

$

11,397

 

 

$

62,811

 

 

$

47,086

 

 

 

 

Free Cash Flow

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollars in thousands)

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

(17,248

)

 

$

11,189

 

 

$

33,970

 

 

$

(86,630

)

Purchases of property and equipment

 

(2,250

)

 

 

(8,811

)

 

 

(10,570

)

 

 

(35,385

)

Capitalized software

 

(1,625

)

 

 

(1,977

)

 

 

(5,712

)

 

 

(6,479

)

Free Cash Flow

$

(21,123

)

 

$

401

 

 

$

17,688

 

 

$

(128,494

)

TOST-FIN

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