Toast (TOST) Q3 2024 earnings summary

Executive summary

• Added 7,000 net new locations in Q3 2024, reaching nearly 127,000 total, a 28% year-over-year increase, with strong momentum in US, retail, international, and enterprise segments.

• Revenue for Q3 2024 rose 26% year-over-year to $1.31B, driven by subscription and fintech solutions.

• Net income for Q3 2024 was $56M, a turnaround from a net loss of $31M in Q3 2023; Adjusted EBITDA reached $113M, up from $35M.

• Strategic focus remains on scaling locations, expanding product offerings, entering new adjacencies, and driving operating leverage.

• Launched new products including Branded Mobile App and SMS Marketing, and implemented over a dozen feature updates.

Financial highlights

• Q3 2024 revenue: $1.31B (+26% year-over-year); gross profit for Q3: $322M (up from $226M); ARR increased 28% year-over-year to $1.6B.

• Subscription services revenue grew 44% year-over-year to $189M; financial technology solutions revenue up 25% to $1.07B.

• Gross Payment Volume (GPV) for Q3 2024 was $41.7B, up 24% year-over-year.

• Free cash flow for Q3 2024 was $97M, up from $37M in Q3 2023; cash and marketable securities totaled $1.27B as of September 30, 2024.

• GAAP income from operations was $34M, compared to a loss of $59M in Q3 2023.

Outlook and guidance

• Q4 2024 non-GAAP subscription and fintech gross profit expected between $370M and $380M (32-35% growth year-over-year); Adjusted EBITDA projected at $90M-$100M.

• Full-year 2024 non-GAAP subscription and fintech gross profit expected between $1,395M and $1,405M (32-33% growth); Adjusted EBITDA guidance raised to $352M-$362M.

• Expect continued net location adds in 2024 to exceed 2023, with confidence in further growth in 2025.

• Management expects seasonality to continue impacting fintech solutions revenue, with stronger results in Q2 and Q3.

• Existing cash, equivalents, and credit facility expected to meet working capital needs for at least the next 12 months.