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Toast Inc - Ordinary Shares (TOST) 6 Aug 24 2024 Q2 Earnings call transcript

AInvestWednesday, Aug 7, 2024 7:08 pm ET
1min read

Toast Inc., a leading provider of technology solutions for the restaurant industry, held its second-quarter 2024 earnings call, highlighting a strong performance with significant growth and strategic investments. The call, led by Senior Vice President of Finance Michael Senno, featured CEO and Co-Founder Aman Narang and CFO Elena Gomez, who shared insights into the company's financial performance, strategic initiatives, and future outlook.

Financial Performance and Growth

Toast reported a record 8,000 net location adds in the second quarter, marking a 29% year-over-year increase in recurring gross profit streams. The company achieved GAAP income profitability ahead of expectations, demonstrating a robust financial health. Adjusted EBITDA reached $92 million, and the company expects to increase its full-year outlook based on its strong first-half performance.

Strategic Initiatives and Expansion

Toast's mission is to help restaurants delight their guests, do what they love, and thrive. The company is well-positioned to scale, with a focus on expanding its offerings for restaurants and entering new markets. Aman Narang emphasized the company's ability to scale across U.S. SMB and mid-market restaurants while laying the foundation for international and enterprise growth.

Toast's strategy includes scaling its location base, expanding its product offerings, and entering new adjacencies. The company has seen success in its international expansion, with notable growth in the U.K., Canada, and Ireland. Toast's digital storefront suite has been a particular success, with approximately 30% of book locations upgrading to the Pro tier, which includes the new website product.

Financial Outlook and Guidance

Elena Gomez provided a detailed financial outlook for the third quarter and the full year, with expectations for increased subscription and fintech gross profit and adjusted EBITDA. The company is on track for a strong second half of the year and aims to sustain high growth and margin expansion over the long term.

Investor Interactions

During the call, several key shareholders and investors asked questions about the company's macroeconomic outlook, product development, and international expansion. These interactions provided valuable insights into the concerns and expectations of influential stakeholders, shedding light on the company's relationship with its investors and the broader market perception of Toast's performance and growth prospects.

Conclusion

Toast's second-quarter earnings call showcased a strong financial performance, strategic initiatives, and a positive outlook for the future. The company's focus on scaling, innovation, and expansion across various market segments positions it well for continued growth and success in the restaurant technology industry. With a clear vision and a solid financial foundation, Toast is poised to capitalize on the opportunities ahead and deliver shareholder value.

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