On November 7, 2023, Toast Inc (TOST, Financial), a comprehensive digital technology platform for the restaurant industry, released its financial results for the third quarter ending September 30, 2023. The company has shown robust growth in key financial metrics, with a notable 40% year-over-year increase in ARR, which now stands at $1,218 million. This growth was driven by the addition of over 6,500 net new locations and continued growth in Average Revenue Per User (ARPU).
Toast Inc (TOST, Financial) reported a significant 37% increase in revenue, reaching $1,032 million for the quarter. The company's gross profit also saw a substantial rise, up 50% to $226 million, with non-GAAP gross profit at $244 million, a 49% increase from the previous year. This improvement in profitability is reflected in the Adjusted EBITDA, which was $35 million for the quarter, compared to a negative $(19) million in Q3 2022.
Despite these gains, Toast Inc (TOST, Financial) experienced a net loss of $(31) million, which is an improvement from the net loss of $(98) million reported in the same quarter of the previous year. The company also reported positive cash flow, with net cash provided by operating activities at $47 million and Free Cash Flow at $37 million, marking a significant turnaround from the negative cash flows reported in Q3 2022.
Toast Inc (TOST, Financial) CEO Chris Comparato commented on the results, stating:
"Toast delivered solid results in the third quarter. ARR grew 40% to over $1.2 billion with our consistent go-to-market execution driving strong net location additions combined with continued ARPU growth. Our focus on balancing durable top line growth with efficiency led to our seventh consecutive quarter of Adjusted EBITDA margin expansion."
Looking ahead, Toast Inc (TOST, Financial) provided an optimistic outlook for Q4 2023, with expected revenue in the range of $1.00 billion to $1.03 billion and Adjusted EBITDA between $5 million and $15 million. For the full year, the company anticipates revenue between $3.83 billion and $3.86 billion, with Adjusted EBITDA ranging from $38 million to $48 million.
Additionally, the company announced the appointment of Aman Narang as CEO, effective January 1, 2024, taking over from Chris Comparato. Both Comparato and Narang will remain on the Board, with Mark Hawkins set to become Chair.
Toast Inc (TOST, Financial) continues to innovate, with significant updates to its platform, including the launch of a new mobile app and an enhanced point-of-sale (POS) experience. The company is also committed to sustainability, launching Food Waste Reduction features and partnering with ReFED with a $1 million commitment to fight food waste.
Investors and interested parties can access the live webcast of Toast's conference call through the investor relations website, with a replay available for 90 days post-call.
For a detailed understanding of Toast Inc (TOST, Financial)'s financials, including reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures, readers are encouraged to review the full earnings release and financial statements.
Explore the complete 8-K earnings release (here) from Toast Inc for further details.
