Toast Inc (NYSE:TOST) Beats Market Expectations

Toast Inc (NYSE:TOST) stock rose 14.18% (As on August 12, 11:43:55 AM UTC-4, Source: Google Finance) after the company beats the market’s expectations for both topline and bottomline for the second quarter of FY 22. ARR was up 59% to $787 million. GPV remains strong, growing 62% year-over-year to $23 billion in Q2.  Net new location adds further accelerated in Q2 to over 6,000, increasing the number of total live locations on the platform to approximately 68,000. Total ARPU eclipsed 11,000 for the first time driven by strong growth in both our recurring revenue stream, SaaS, and payments. Subscription services revenue increased 100% year-over-year in the second quarter, benefiting from the location growth and increased product adoption as both new and existing customers leverage more of the platform. On the fintech solutions side, revenue grew 59% to $562 million, and gross profit was up 54% year-over-year to $114 million in the quarter. Fintech gross profit benefited from sustained strength in GPV, which increased 62% to $23 billion in Q2. Average annualized GPV per processing location was up 16% year-over-year to $1.4 million. The growth in GPV per processing location is a result of both higher average ticket and the continued rebound in customer transaction, which was slightly below 2019 levels in Q2.

TOST in the second quarter of FY 22 has reported the adjusted loss per share of 11 cents, beating the analysts’ estimates for the adjusted loss per share of 12 cents. The company had reported the adjusted revenue growth of 58 percent to $675 million in the second quarter of FY 22, beating the analysts’ estimates for revenue of $651.28 million. Gross margin contracted by 415 bps to 16.7%. Loss from operation increased to $99 million, from $51 million a year ago. Adjusted EBITDA loss was $33 million versus income of $11 million in 2Q21.

For the third quarter of FY 22, Toast expects Revenue to be in the range of $700 million to $730 million, vs. a consensus of 665.08 million. 3Q Adjusted EBITDA is expected to be in the range of $(40) million to $(30) million.

For fiscal 2022, he company expects revenue of $2.62 billion to $2.66 billion vs. consensus of $2.54 billion (an increase from $2.5 billion to $2.55 billion), and adjusted EBITDA in the range of $(160) million to $(140) million (up from $(195) million to $(175) million.

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