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How Toast Makes Money—Financial & Key Business Statistics

Updated quarterly. Last updated: September 24, 2021.


Toast Overview

Ticker TOST
Industry IT Services
CEO Chris Comparato
Year Founded 2011
IPO Date Sept. 21, 2021
TTM Revenue $1.1 billion
TTM Adj. EBITDA $6.4 million
TTM FCF $7.0 million

What Toast Does—Its Products and Services

Toast provides restaurants with a single platform that helps them run their business.

Specifically, they help them with five things:

  • Point of Sale (POS)
  • Operations
  • Digital ordering and delivery
  • Marketing and loyalty programs
  • Team management

Toast's product portfolio


How Toast Makes Money—Its Business Model

Financial highlights

Revenue breakdown

Toast has four revenue sources:

  • Subscription services–Fees charged to customers for access to their SaaS products like its POS and kitchen display system.
  • Financial technology solutions–Fees earned from processing payments (orders). It's calculated as a percentage of the total transaction (order) amount, plus a fixed per-transaction fee.
  • Hardware–Earned from the sale of terminals, tablets, handhelds, and related devices and accessories.
  • Professional services–Fees earned from installing their hardware and software.

Gross profit per product


Toast's Key Business Metrics

Toast uses two metrics to measure the health of its business:

  • Gross payment volume (GPV)
  • Annualized recurring run-rate (ARR)

Gross payment volume (GPV)

Gross payment volume is the total amount of dollars processed through the Toast payments platform across all restaurant locations in a given period.  

Fees from processing payments make up the largest chunk of its revenue. So the more dollars they process, the more money they make.

Annualized recurring run-rate (ARR)

Their explanation of this metric is a mouthful. And frankly, it's confusing as hell. If you want to bend your brain, read their explanation on page 24 of its S-1.


Competitors

Toast did us a solid and listed its biggest competitors on this page.

  • Square ($SQ).
  • Clover
  • Aloha, part of NCR. NCR is a public company, ticker $NCR. Its market cap is ~$5.0 billion.
  • Micros, part of Oracle. Oracle is a public company, ticker $ORCL. Its market cap is ~$242 billion.
  • Sunday. They just raised a series A.