Toast Announces Fourth Quarter and Full Year 2021 Financial Results
Toast (NYSE: TOST) reported a robust fourth quarter for 2021, with revenue soaring 111% year-over-year to $512 million. The annualized recurring run-rate (ARR) reached $568 million, marking a 74% increase. Gross payment volume (GPV) also surged, hitting $17 billion for the quarter, a 125% increase. However, the net loss for the year deepened to $487 million from $248 million. The outlook for Q1 2022 anticipates revenue between $469 million and $499 million and an adjusted EBITDA loss ranging from $(65) million to $(55) million.
- Fourth quarter revenue increased by 111% to $512 million.
- ARR grew by 74% year-over-year to $568 million.
- Fourth quarter GPV increased by 125% to $17 billion.
- Gross profit for Q4 2021 rose to $73 million, up 55%.
- Full year net loss expanded to $487 million from $248 million.
- Adjusted EBITDA for Q4 was $(45) million, worsening from $(7) million.
Fourth quarter revenue grew
Annualized recurring run-rate (ARR) as of
Fourth quarter gross payment volume (GPV) grew
“The restaurant industry was tested again in 2021, but as evidenced by our growth there is tremendous demand for the Toast platform as restaurant operators navigate the new normal,” said
Financial Highlights for the Fourth Quarter of 2021
-
Revenue for the fourth quarter of 2021 was
, an increase of$512 million 111% from the fourth quarter of 2020. -
ARR as of
December 31, 2021 was , an increase of$568 million 74% as compared toDecember 31, 2020 . -
GPV for the fourth quarter of 2021 was
, an increase of$17 billion 125% from the fourth quarter of 2020. -
Gross profit for the fourth quarter of 2021 was
, an increase of$73 million 55% from the fourth quarter of 2020. -
Non-GAAP gross profit for the fourth quarter of 2021 was
, an increase of$82 million 52% from the fourth quarter of 2020. -
Net income for the fourth quarter of 2021 was
, as compared to net loss of$2 million in the fourth quarter of 2020.$61 million -
Adjusted EBITDA for the fourth quarter of 2021 was
, as compared to$(45) million in the fourth quarter of 2020.$(7) million -
Net cash used in operating activities for the fourth quarter of 2021 was
, as compared to$(32) million for the fourth quarter of 2020.$(28) million -
Free Cash Flow for the fourth quarter of 2021 was
, as compared to$(34) million for the fourth quarter of 2020.$(32) million
Financial Highlights for the Full Year 2021
-
Revenue for the full year 2021 was
, an increase of$1,705 million 107% from the prior fiscal year. -
GPV for the full year 2021 was
, an increase of$57 billion 124% from the prior fiscal year. -
Gross profit for the full year 2021 was
, an increase of$314 million 124% from the prior fiscal year. -
Non-GAAP gross profit for the full year 2021 was
, an increase of$341 million 114% from the prior fiscal year. -
Net loss for the full year 2021 was
, as compared to net loss of$487 million for the prior fiscal year.$248 million -
Adjusted EBITDA for the full year 2021 was
, as compared to$(42) million for the prior fiscal year.$(94) million -
Net cash provided by (used in) operating activities for the full year 2021 was
, as compared to$2 million for the prior fiscal year.$(125) million -
Free Cash Flow for the full year 2021 was
, as compared to$(17) million for the prior fiscal year.$(161) million
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 first quarter ending
-
Revenue in the range of
to$469 million $499 million -
Adjusted EBITDA in the range of
to$(65) million $(55) million
For the full year ending
-
Revenue in the range of
to$2,349 million $2,409 million -
Adjusted EBITDA in the range of
to$(240) million $(200) 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
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.
Upcoming Conference Participation
Toast management will participate in the following investor conferences during the first quarter of fiscal 2022. Webcasts of company presentations can be found on Toast's Investor Relations website at https://investors.toasttab.com/overview/.
-
Wolfe Fintech Forum onMarch 9, 2022 at11:20-11:55am ET -
Morgan Stanley
Technology, Media & Telecom Conference onMonday, March 7, 2022 at2:30pm-3:00pm ET
About Toast
Toast is a cloud-based, all-in-one digital technology platform built for restaurants of all sizes. Toast provides a single platform of software as a service, or 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 first fiscal quarter and full year of 2022; 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share amounts)
(unaudited)
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenue: |
|
|
|
|
|
|
|
||||||||
Subscription services |
$ |
54 |
|
|
$ |
29 |
|
|
$ |
169 |
|
|
$ |
101 |
|
Financial technology solutions |
|
421 |
|
|
|
194 |
|
|
|
1,406 |
|
|
|
644 |
|
Hardware |
|
31 |
|
|
|
16 |
|
|
|
112 |
|
|
|
64 |
|
Professional services |
|
6 |
|
|
|
4 |
|
|
|
18 |
|
|
|
14 |
|
Total revenue |
|
512 |
|
|
|
243 |
|
|
|
1,705 |
|
|
|
823 |
|
Costs of revenue: |
|
|
|
|
|
|
|
||||||||
Subscription services |
|
22 |
|
|
|
11 |
|
|
|
63 |
|
|
|
40 |
|
Financial technology solutions |
|
341 |
|
|
|
150 |
|
|
|
1,120 |
|
|
|
509 |
|
Hardware |
|
58 |
|
|
|
22 |
|
|
|
152 |
|
|
|
85 |
|
Professional services |
|
17 |
|
|
|
12 |
|
|
|
52 |
|
|
|
45 |
|
Amortization of acquired technology and customer assets |
|
1 |
|
|
|
1 |
|
|
|
4 |
|
|
|
4 |
|
Total costs of revenue |
|
439 |
|
|
|
196 |
|
|
|
1,391 |
|
|
|
683 |
|
Gross profit |
|
73 |
|
|
|
47 |
|
|
|
314 |
|
|
|
140 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Sales and marketing |
|
60 |
|
|
|
35 |
|
|
|
190 |
|
|
|
138 |
|
Research and development |
|
50 |
|
|
|
30 |
|
|
|
163 |
|
|
|
109 |
|
General and administrative |
|
79 |
|
|
|
39 |
|
|
|
189 |
|
|
|
113 |
|
Total operating expenses |
|
189 |
|
|
|
104 |
|
|
|
542 |
|
|
|
360 |
|
Loss from operations |
|
(116 |
) |
|
|
(57 |
) |
|
|
(228 |
) |
|
|
(220 |
) |
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Interest income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Interest expense |
|
— |
|
|
|
(6 |
) |
|
|
(12 |
) |
|
|
(13 |
) |
Change in fair value of warrant liability |
|
118 |
|
|
|
(8 |
) |
|
|
(97 |
) |
|
|
(8 |
) |
Change in fair value of derivative liability |
|
— |
|
|
|
11 |
|
|
|
(103 |
) |
|
|
(7 |
) |
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
(50 |
) |
|
|
— |
|
Other income (expense), net |
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Income (loss) before (provision for) benefit from income taxes |
|
3 |
|
|
|
(61 |
) |
|
|
(490 |
) |
|
|
(248 |
) |
(Provision for) benefit from income taxes |
|
(1 |
) |
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Net income (loss) |
|
2 |
|
|
|
(61 |
) |
|
|
(487 |
) |
|
|
(248 |
) |
Redemption of Series B Preferred |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Net income (loss) attributable to common stockholders |
|
2 |
|
|
|
(62 |
) |
|
|
(487 |
) |
|
|
(249 |
) |
Net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
||||||||
Basic |
|
0.00 |
|
|
$ |
(0.31 |
) |
|
$ |
(1.68 |
) |
|
$ |
(1.25 |
) |
Diluted(1) |
$ |
(0.23 |
) |
|
$ |
(0.31 |
) |
|
$ |
(1.68 |
) |
|
$ |
(1.25 |
) |
Weighted average shares used in computing net income (loss) per share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
500,773,515 |
|
|
|
202,543,389 |
|
|
|
289,584,001 |
|
|
|
199,982,965 |
|
Diluted |
|
505,880,367 |
|
|
|
202,543,389 |
|
|
|
289,584,001 |
|
|
|
199,982,965 |
|
(1) Reflects adjustment to net income of
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share amounts)
(unaudited)
|
|
||||||
|
|
2021 |
|
|
|
2020 |
|
Assets: |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
809 |
|
|
$ |
582 |
|
Marketable securities |
|
457 |
|
|
|
— |
|
Accounts receivable, net |
|
55 |
|
|
|
33 |
|
Inventories |
|
42 |
|
|
|
19 |
|
Deferred costs, net |
|
30 |
|
|
|
17 |
|
Prepaid expenses and other current assets |
|
92 |
|
|
|
22 |
|
Total current assets |
|
1,485 |
|
|
|
673 |
|
Property and equipment, net |
|
41 |
|
|
|
44 |
|
Operating lease right-of-use assets |
|
79 |
|
|
|
— |
|
Intangible assets |
|
16 |
|
|
|
7 |
|
|
|
74 |
|
|
|
36 |
|
Restricted cash |
|
8 |
|
|
|
1 |
|
Deferred costs, non-current |
|
25 |
|
|
|
12 |
|
Security deposits |
|
1 |
|
|
|
2 |
|
Other non-current assets |
|
6 |
|
|
|
1 |
|
Total non-current assets |
|
250 |
|
|
|
103 |
|
Total assets |
$ |
1,735 |
|
|
$ |
776 |
|
Liabilities, Convertible Preferred Stock and Stockholders’ Deficit |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
|
40 |
|
|
|
30 |
|
Operating lease liabilities |
|
22 |
|
|
|
— |
|
Deferred revenue |
|
44 |
|
|
|
43 |
|
Accrued expenses and other current liabilities |
|
246 |
|
|
|
63 |
|
Total current liabilities |
|
352 |
|
|
|
136 |
|
Long-term debt |
|
— |
|
|
|
172 |
|
Derivative liabilities |
|
— |
|
|
|
37 |
|
Warrants to purchase preferred stock |
|
— |
|
|
|
11 |
|
Warrants to purchase common stock |
|
181 |
|
|
|
— |
|
Deferred revenue, non-current |
|
12 |
|
|
|
16 |
|
Operating lease liabilities, non-current |
|
77 |
|
|
|
— |
|
Deferred rent, non-current |
|
— |
|
|
|
19 |
|
Other long-term liabilities |
|
22 |
|
|
|
7 |
|
Total liabilities |
|
644 |
|
|
|
398 |
|
Convertible preferred stock,
0 and 253,832,025 shares issued and outstanding at |
|
— |
|
|
|
849 |
|
Stockholders’ Equity (Deficit): |
|
|
|
||||
Preferred stock- par value |
|
— |
|
|
|
— |
|
Common stock,
0 and 219,755,430 shares issued and outstanding as of |
|
— |
|
|
|
— |
|
Class A common stock, |
|
— |
|
|
|
— |
|
Class B common stock, |
|
— |
|
|
|
— |
|
respectively |
|
— |
|
|
|
— |
|
Accumulated other comprehensive loss |
|
(1 |
) |
|
|
— |
|
Additional paid-in capital |
|
2,194 |
|
|
|
145 |
|
Accumulated deficit |
|
(1,102 |
) |
|
|
(616 |
) |
Total stockholders’ equity (deficit) |
|
1,091 |
|
|
|
(471 |
) |
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) |
$ |
1,735 |
|
|
$ |
776 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
2 |
|
|
$ |
(61 |
) |
|
$ |
(487 |
) |
|
$ |
(248 |
) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
5 |
|
|
|
18 |
|
|
|
21 |
|
|
|
27 |
|
Stock-based compensation |
|
45 |
|
|
|
28 |
|
|
|
140 |
|
|
|
86 |
|
Amortization of deferred costs |
|
12 |
|
|
|
5 |
|
|
|
30 |
|
|
|
15 |
|
Change in fair value of derivative liability |
|
— |
|
|
|
(11 |
) |
|
|
103 |
|
|
|
7 |
|
Change in fair value of warrant liability |
|
(118 |
) |
|
|
8 |
|
|
|
97 |
|
|
|
8 |
|
Change in deferred income taxes |
|
1 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
50 |
|
|
|
— |
|
Credit loss expense |
|
3 |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
Non-cash interest on convertible notes |
|
— |
|
|
|
1 |
|
|
|
12 |
|
|
|
8 |
|
Charitable contribution stock-based expense |
|
19 |
|
|
|
— |
|
|
|
19 |
|
|
|
— |
|
Change in fair value of contingent consideration |
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Other non-cash items |
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Account receivable, net |
|
(4 |
) |
|
|
(4 |
) |
|
|
(23 |
) |
|
|
(13 |
) |
Merchant cash advances repaid |
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
9 |
|
Prepaid expenses and other current assets |
|
(12 |
) |
|
|
10 |
|
|
|
(45 |
) |
|
|
18 |
|
Deferred costs |
|
(25 |
) |
|
|
(8 |
) |
|
|
(56 |
) |
|
|
(25 |
) |
Inventories |
|
(4 |
) |
|
|
(5 |
) |
|
|
(23 |
) |
|
|
(4 |
) |
Operating lease right-of-use assets |
|
3 |
|
|
|
— |
|
|
|
16 |
|
|
|
— |
|
Accounts payable |
|
7 |
|
|
|
5 |
|
|
|
15 |
|
|
|
(6 |
) |
Accrued expenses and other current liabilities |
|
32 |
|
|
|
(6 |
) |
|
|
145 |
|
|
|
(3 |
) |
Deferred revenue |
|
(3 |
) |
|
|
(6 |
) |
|
|
(2 |
) |
|
|
(8 |
) |
Operating lease liabilities |
|
(3 |
) |
|
|
— |
|
|
|
(16 |
) |
|
|
— |
|
Other assets and liabilities |
|
3 |
|
|
|
(3 |
) |
|
|
(1 |
) |
|
|
4 |
|
Net cash (used in) provided by operating activities |
|
(32 |
) |
|
|
(28 |
) |
|
|
2 |
|
|
|
(125 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
Cash paid for acquisition |
|
— |
|
|
|
— |
|
|
|
(26 |
) |
|
|
— |
|
Capitalized software |
|
(1 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(8 |
) |
Purchases of property and equipment |
|
(1 |
) |
|
|
(2 |
) |
|
|
(12 |
) |
|
|
(28 |
) |
Purchase of marketable securities |
|
(469 |
) |
|
|
— |
|
|
|
(469 |
) |
|
|
— |
|
Proceeds from the sale of marketable securities |
|
5 |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
Maturities of marketable securities |
|
5 |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
Other |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Net cash used in investing activities |
|
(461 |
) |
|
|
(4 |
) |
|
|
(503 |
) |
|
|
(36 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of Class A common stock upon initial public offering, net of underwriter discounts |
|
— |
|
|
|
— |
|
|
|
950 |
|
|
|
— |
|
Payment of deferred offering costs |
|
(1 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
— |
|
Repayments of secured borrowings |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(9 |
) |
Extinguishment of convertible notes |
|
— |
|
|
|
— |
|
|
|
(245 |
) |
|
|
— |
|
Change in customer funds obligations, net |
|
(2 |
) |
|
|
(2 |
) |
|
|
24 |
|
|
|
4 |
|
Proceeds from issuance of long-term debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
195 |
|
Proceeds from exercise of stock options |
|
3 |
|
|
|
2 |
|
|
|
21 |
|
|
|
3 |
|
Proceeds from issuance of restricted stock |
|
— |
|
|
|
— |
|
|
|
10 |
|
|
|
— |
|
Proceeds from issuance of Series F Preferred |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
402 |
|
Redemption of Series B Preferred |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Proceeds from exercise of common stock warrants |
|
3 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Other proceeds from financing activities |
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
Net cash provided by (used in) financing activities |
|
3 |
|
|
|
(1 |
) |
|
|
759 |
|
|
|
594 |
|
Net (decrease) increase in cash, cash equivalents, cash held on behalf of customers and restricted cash |
|
(490 |
) |
|
|
(33 |
) |
|
|
258 |
|
|
|
433 |
|
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
2 |
|
Cash, cash equivalents, cash held on behalf of customers and restricted cash at beginning of period |
|
1,341 |
|
|
|
627 |
|
|
|
594 |
|
|
|
159 |
|
Cash, cash equivalents, cash held on behalf of customers and restricted cash at end period |
$ |
851 |
|
|
$ |
594 |
|
|
$ |
851 |
|
|
$ |
594 |
|
Reconciliation of cash, cash equivalents, cash held on behalf of customers and restricted cash |
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents |
$ |
809 |
|
|
$ |
582 |
|
|
$ |
809 |
|
|
$ |
582 |
|
Cash held on behalf of customers |
|
34 |
|
|
|
11 |
|
|
|
34 |
|
|
|
11 |
|
Restricted cash |
|
8 |
|
|
|
1 |
|
|
|
8 |
|
|
|
1 |
|
Total cash, cash equivalents, cash held on behalf of customers and restricted cash |
$ |
851 |
|
|
$ |
594 |
|
|
$ |
851 |
|
|
$ |
594 |
|
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
||||||||
Cash paid for interest |
$ |
— |
|
|
$ |
5 |
|
|
$ |
13 |
|
|
$ |
5 |
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
|
||||||||
Purchase of property and equipment included in accounts payable and accrued expenses |
$ |
1 |
|
|
$ |
6 |
|
|
$ |
1 |
|
|
$ |
5 |
|
Common stock issued in acquisition |
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
— |
|
Contingent consideration included in purchase price |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Deferred payment included in purchase price |
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
Conversion of convertible preferred stock into Class B common stock upon initial public offering |
|
— |
|
|
|
— |
|
|
|
849 |
|
|
|
— |
|
Issuance of Class B common stock upon exercise of common stock warrants |
|
12 |
|
|
|
— |
|
|
|
56 |
|
|
|
— |
|
Issuance of common stock warrants upon debt extinguishment |
|
— |
|
|
|
— |
|
|
|
125 |
|
|
|
— |
|
Deferred offering costs included in accounts payable and accrued expenses |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Stock-based compensation included in capitalized software |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
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
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.
For the quarter ended
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, expenses associated with early termination of leases, loss on debt extinguishment, charitable contribution stock-based expense, and income taxes.
- Non-GAAP Costs of Revenue are defined as costs of revenue excluding stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, and expenses related to COVID-19 pandemic initiatives resulting from a reduction of workforce in 2020.
- Non-GAAP Gross Profit is defined as gross profit excluding stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, and expenses related to COVID-19 pandemic initiatives resulting from a reduction of workforce in 2020.
- Non-GAAP Sales and Marketing Expenses are defined as sales and marketing expenses excluding stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, and expenses related to COVID-19 pandemic initiatives resulting from a reduction of workforce in 2020.
-
Non-GAAP Research and Development Expenses are defined as research and development expenses excluding stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, and expenses related to COVID-19 pandemic initiatives resulting from a reduction of workforce in 2020. - Non-GAAP General and Administrative Expenses are defined as general and administrative expenses excluding stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, expenses related to COVID-19 pandemic initiatives resulting from a reduction of workforce in 2020, acquisition expenses, expenses associated with early termination of leases, and charitable contribution stock-based 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,
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 Operations 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,
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:
- 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.
-
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.
Summary of Key Business Metrics and Non-GAAP Results
(unaudited)
|
Three Months Ended |
|
|
|
Year Ended |
|
|
||||||||
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
||
(dollars in billions) |
|
|
|
|
% Growth |
|
|
2021 |
|
|
2020 |
|
% Growth |
||
Gross Payment Volume (GPV) |
$ |
17.1 |
|
$ |
7.6 |
|
125 % |
|
$ |
57.0 |
|
$ |
25.4 |
|
124 % |
|
As of
|
|
|
||||
(in millions) |
|
2021 |
|
|
2020 |
|
% Growth |
Annualized Recurring Run-Rate (AAR) |
$ |
568 |
|
$ |
326 |
|
74 % |
|
Three Months Ended |
|
Year Ended |
||||||||||||
(in millions) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net income (loss) |
$ |
2 |
|
|
$ |
(61 |
) |
|
$ |
(487 |
) |
|
$ |
(248 |
) |
Stock-based compensation expense and related payroll tax |
|
46 |
|
|
|
28 |
|
|
|
144 |
|
|
|
86 |
|
Depreciation and amortization |
|
5 |
|
|
|
18 |
|
|
|
21 |
|
|
|
27 |
|
Interest income |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
Interest expense |
|
— |
|
|
|
6 |
|
|
|
12 |
|
|
|
13 |
|
Other (income) expense, net |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
Acquisition expenses |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Change in fair value of warrant liability |
|
(118 |
) |
|
|
8 |
|
|
|
97 |
|
|
|
8 |
|
Change in fair value of derivative liability |
|
— |
|
|
|
(11 |
) |
|
|
103 |
|
|
|
7 |
|
Reduction of workforce |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10 |
|
Termination of leases |
|
— |
|
|
|
4 |
|
|
|
1 |
|
|
|
3 |
|
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
50 |
|
|
|
— |
|
Charitable contribution stock-based expense |
|
19 |
|
|
|
— |
|
|
|
19 |
|
|
|
— |
|
Provision for (benefit from) income taxes |
|
1 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
Adjusted EBITDA |
$ |
(45 |
) |
|
$ |
(7 |
) |
|
$ |
(42 |
) |
|
$ |
(94 |
) |
Non-GAAP Costs of Revenue |
Three Months Ended |
|
Year Ended |
||||||||
(in millions) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
||||
Costs of Revenue |
$ |
439 |
|
$ |
196 |
|
$ |
1,391 |
|
$ |
683 |
Stock-based compensation expense and related payroll tax |
|
6 |
|
|
4 |
|
|
13 |
|
|
7 |
Depreciation and amortization |
|
3 |
|
|
3 |
|
|
14 |
|
|
9 |
Reduction of workforce |
|
— |
|
|
— |
|
|
— |
|
|
3 |
Non-GAAP Costs of Revenue |
$ |
430 |
|
$ |
189 |
|
$ |
1,364 |
|
$ |
664 |
Non-GAAP Gross Profit |
Three Months Ended |
|
Year Ended |
||||||||
(in millions) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
||||
Gross profit |
$ |
73 |
|
$ |
47 |
|
$ |
314 |
|
$ |
140 |
Stock-based compensation expense and related payroll tax |
|
6 |
|
|
4 |
|
|
13 |
|
|
7 |
Depreciation and amortization |
|
3 |
|
|
3 |
|
|
14 |
|
|
9 |
Reduction of workforce |
|
— |
|
|
— |
|
|
— |
|
|
3 |
Non-GAAP gross profit |
$ |
82 |
|
$ |
54 |
|
$ |
341 |
|
$ |
159 |
Non-GAAP Sales and Marketing Expenses |
Three Months Ended |
|
Year Ended |
||||||||
(in millions) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
||||
Sales and marketing expenses |
$ |
60 |
|
$ |
35 |
|
$ |
190 |
|
$ |
138 |
Stock-based compensation expense and related payroll tax |
|
11 |
|
|
7 |
|
|
24 |
|
|
16 |
Depreciation and amortization |
|
1 |
|
|
— |
|
|
1 |
|
|
1 |
Reduction of workforce |
|
— |
|
|
— |
|
|
— |
|
|
3 |
Non-GAAP sales and marketing expenses |
$ |
48 |
|
$ |
28 |
|
$ |
165 |
|
$ |
118 |
|
Three Months Ended |
|
Year Ended |
||||||||
(in millions) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
||||
Research and development expenses |
$ |
50 |
|
$ |
30 |
|
$ |
163 |
|
$ |
109 |
Stock-based compensation expense and related payroll tax |
|
12 |
|
|
10 |
|
|
48 |
|
|
30 |
Depreciation and amortization |
|
1 |
|
|
1 |
|
|
3 |
|
|
1 |
Reduction of workforce |
|
— |
|
|
— |
|
|
— |
|
|
2 |
Non-GAAP research and development expenses |
$ |
37 |
|
$ |
19 |
|
$ |
112 |
|
$ |
76 |
Non-GAAP General & Administrative Expenses |
Three Months Ended |
|
Year Ended |
||||||||||||
(in millions) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses |
$ |
79 |
|
|
$ |
39 |
|
|
$ |
189 |
|
|
$ |
113 |
|
Stock-based compensation expense and related payroll tax |
|
16 |
|
|
|
6 |
|
|
|
58 |
|
|
|
33 |
|
Depreciation and amortization |
|
— |
|
|
|
14 |
|
|
|
3 |
|
|
|
16 |
|
Reduction of workforce |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Acquisition expenses |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Termination of leases |
|
— |
|
|
|
4 |
|
|
|
1 |
|
|
|
3 |
|
Charitable contribution stock-based expense |
|
19 |
|
|
|
— |
|
|
|
19 |
|
|
|
— |
|
Non-GAAP general and administrative expenses |
$ |
44 |
|
|
$ |
15 |
|
|
$ |
107 |
|
|
$ |
59 |
|
Free Cash Flow |
Three Months Ended |
|
Year Ended |
||||||||||||
(in millions) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
||||||||
Net cash (used in) provided by operating activities |
$ |
(32 |
) |
|
$ |
(28 |
) |
|
$ |
2 |
|
|
$ |
(125 |
) |
Purchases of property and equipment |
|
(1 |
) |
|
|
(2 |
) |
|
|
(12 |
) |
|
|
(28 |
) |
Capitalized software |
|
(1 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(8 |
) |
Free Cash Flow |
$ |
(34 |
) |
|
$ |
(32 |
) |
|
$ |
(17 |
) |
|
$ |
(161 |
) |
TOST-FIN
View source version on businesswire.com: https://www.businesswire.com/news/home/20220214005895/en/
Media: media@toasttab.com
Investors: IR@toasttab.com
Source:
FAQ
What were Toast's fourth quarter revenue and growth percentage for 2021?
What is Toast's expected revenue range for Q1 2022?
What was Toast's net loss for the full year 2021?
How much did Toast's gross payment volume grow in Q4 2021?