Q2 2024 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$24.19Last close (Aug 6, 2024)
Post-Earnings Price$24.00Open (Aug 7, 2024)
Price Change
$-0.19(-0.79%)
- Toast added a record 8,000 net locations in Q2, mainly from their core U.S. SMB and mid-market business, and expects to add more new locations in 2024 than in 2023, even off a bigger base.
- The company is expanding into adjacent markets like food and beverage retail, booking 1,000 new customers in this segment, representing a significant growth opportunity as many are still using legacy on-prem solutions.
- Toast is leveraging AI to enhance its offerings, such as incorporating generative AI in guest marketing tools and developing benchmarking tools using data from over 120,000 restaurants, which has been well received and is driving product adoption.
- Same-store sales are declining year-over-year, resulting in a 3% decrease in GPV per location in Q2, a trend that is expected to persist into the next quarter, potentially indicating weakening restaurant industry conditions that could negatively impact Toast's financial performance.
- Churn rates have increased slightly, now slightly above 10% annualized, up from the prior year, which may signal challenges in customer retention and could affect Toast's ability to grow its ARR.
- Toast anticipates lower net location additions in the second half due to seasonality, and acknowledges that GPV per location is not expected to improve, which, combined with dynamic macroeconomic conditions, could slow growth and affect financial outcomes.