Toast, a provider of payments processing services to the restaurant industry, topped $100 billion in annualized payments in the third quarter for the first time since it was founded more than a decade ago.
“We surpassed $100 billion in annualized (gross payment volume) for the first time,” CEO Chris Comparato told analysts on an earnings conference call Thursday. “These results are a testament to the consistent execution of our core strategy, driving location growth, deepening our ability to serve all segments of the restaurant industry, and delivering product innovation.”
The number of locations using the company’s services jumped to 74,000 in the quarter, up 40% from the year-earlier period, the company said in the Nov. 10 press release. The company's founders launched Toast services in 2012 at a bar they frequented, according to CNBC.
The Boston-based company combines point-of-sale hardware with software for payroll administration and marketing, among other services. Toast also offers loans for restaurants through a lending program.
“Our community grew rapidly as we added more restaurants to our platform and as the percentage of live customers on our platform using four or more modules continued to increase,” the CEO said during the call. “The industry continues to rebound from the impact of COVID-19,” he added, noting that the company’s gross payment volume mirrored that recovery in the third quarter.
Still, Toast reported a third-quarter net loss that narrowed to $98 million, from a loss of $254 million in the year-earlier quarter. Some analysts suspect it may achieve profitability on an adjusted basis next year.
Toast operates in a competitive industry spurred on by the pandemic shift to digital tools. Rivals include Block-owned Square and industry heavyweights Oracle and NCR.
Toast’s revenue jumped 55% to $752 million, and the company expects it to climb further, to as much as $760 million for the fourth quarter. The results show we are “increasing share even in our more established markets,” Comparato said.
More than 50% of its customers use more than four of Toast’s products, such as online ordering, gift cards, payroll processing and Toast devices, according to Chief Financial Officer Elena Gomez.
Comparato noted Toast’s restaurant clients have their share of challenges in the current economic climate. In a September poll of its restaurant customers, Toast documented some of their troubles, including labor shortages and higher prices for goods due to inflation.
“One in three restaurants said they've had a difficult time hiring in 2022 and almost 40% started tracking the prices of key ingredients,” Comparato said. “The survey also highlighted employee scheduling as one of our customers' biggest technology pain points.”
