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Toast Announces Fourth Quarter and Full Year 2021 Financial Results

·10 min read

Fourth quarter revenue grew 111% year-over-year to $512 million
Annualized recurring run-rate (ARR) as of December 31, 2021 grew 74% year-over-year to $568 million
Fourth quarter gross payment volume (GPV) grew 125% year-over-year to $17 billion

BOSTON, February 15, 2022--(BUSINESS WIRE)--Toast (NYSE: TOST), the all-in-one digital technology platform built for restaurants, today reported financial results for the fourth quarter and fiscal year ended December 31, 2021.

"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 Chris Comparato, CEO, Toast. "We had a record quarter and year as a result of strong focus on our customers and consistent execution. Restaurants of all sizes run their business on Toast and we are committed to being the trusted platform of choice for the restaurant industry."

Financial Highlights for the Fourth Quarter of 2021

  • Revenue for the fourth quarter of 2021 was $512 million, an increase of 111% from the fourth quarter of 2020.

  • ARR as of December 31, 2021 was $568 million, an increase of 74% as compared to December 31, 2020.

  • GPV for the fourth quarter of 2021 was $17 billion, an increase of 125% from the fourth quarter of 2020.

  • Gross profit for the fourth quarter of 2021 was $73 million, an increase of 55% from the fourth quarter of 2020.

  • Non-GAAP gross profit for the fourth quarter of 2021 was $82 million, an increase of 52% from the fourth quarter of 2020.

  • Net income for the fourth quarter of 2021 was $2 million, as compared to net loss of $61 million in the fourth quarter of 2020.

  • Adjusted EBITDA for the fourth quarter of 2021 was $(45) million, as compared to $(7) million in the fourth quarter of 2020.

  • Net cash used in operating activities for the fourth quarter of 2021 was $(32) million, as compared to $(28) million for the fourth quarter of 2020.

  • Free Cash Flow for the fourth quarter of 2021 was $(34) million, as compared to $(32) million for the fourth quarter of 2020.

Financial Highlights for the Full Year 2021

  • Revenue for the full year 2021 was $1,705 million, an increase of 107% from the prior fiscal year.

  • GPV for the full year 2021 was $57 billion, an increase of 124% from the prior fiscal year.

  • Gross profit for the full year 2021 was $314 million, an increase of 124% from the prior fiscal year.

  • Non-GAAP gross profit for the full year 2021 was $341 million, an increase of 114% from the prior fiscal year.

  • Net loss for the full year 2021 was $487 million, as compared to net loss of $248 million for the prior fiscal year.

  • Adjusted EBITDA for the full year 2021 was $(42) million, as compared to $(94) million for the prior fiscal year.

  • Net cash provided by (used in) operating activities for the full year 2021 was $2 million, as compared to $(125) million for the prior fiscal year.

  • Free Cash Flow for the full year 2021 was $(17) million, as compared to $(161) million for the prior fiscal year.

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 March 31, 2022, Toast expects to report:

  • Revenue in the range of $469 million to $499 million

  • Adjusted EBITDA in the range of $(65) million to $(55) million

For the full year ending December 31, 2022, Toast expects to report:

  • Revenue in the range of $2,349 million to $2,409 million

  • Adjusted EBITDA in the range of $(240) million to $(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 5:00 p.m. Eastern Time on Tuesday, February 15, 2022 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.

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 on March 9, 2022 at 11:20-11:55am ET

  • Morgan Stanley Technology, Media & Telecom Conference on Monday, March 7, 2022 at 2:30pm-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 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, Toast’s Annual Report on Form 10-K for the year ended December 31, 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 OPERATIONS
(in millions, except share and per share amounts)
(unaudited)

Three Months Ended December 31,

Year Ended December 31,

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 $118 million related to change in warrant liability, which is also reflected in diluted weighted average shares during the three months ended December 31, 2021.

TOAST, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share amounts)
(unaudited)

December 31,

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

Goodwill

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, $0.000001 par value—0 and 257,245,680 shares authorized,

0 and 253,832,025 shares issued and outstanding at December 31, 2021 and 2020, respectively; total liquidation value of $0 and $850 at December 31, 2021 and 2020, respectively

849

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—0 and 570,000,000 shares authorized,

0 and 219,755,430 shares issued and outstanding as of December 31, 2021 and 2020, respectively

Class A common stock, $0.000001 par value- 7,000,000,000 shares authorized, 167,732,925 shares issued and outstanding as of December 31, 2021; no shares authorized, issue and outstanding at December 31, 2020

Class B common stock, $0.000001 par value- 700,000,000 shares authorized, 339,437,440 shares issued and outstanding as of December 31, 2021; no shares authorized, issued and outstanding at December 31, 2020

Treasury stock, at cost- 225,000 shares outstanding at December 31, 2021 and 2020,

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

TOAST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

Three Months Ended December 31,

Year Ended December 31,

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

)