Toast(TOST) - 2024 Q3 - Quarterly Report

Revenue Growth - Gross Payment Volume (GPV) for the three months ended September 30, 2024, was $41.7 billion, a 24$33.7 billion in the same period in 2023[80] - Total revenue for the three months ended September 30, 2024, was $1,305 million, a 26$1,032 million in the same period in 2023[85] - Subscription services revenue for the three months ended September 30, 2024, was $189 million, a 44$131 million in the same period in 2023[85] - Financial technology solutions revenue for the three months ended September 30, 2024, was $1,067 million, a 25$856 million in the same period in 2023[85] - Subscription services revenue for the three months ended September 30, 2024 was $189 million, an increase of 44$131 million in the same period in 2023[104] - Financial technology solutions revenue for the three months ended September 30, 2024 was $1,067 million, an increase of 25$856 million in the same period in 2023[104] Cost and Expense Management - Total costs of revenue for the three months ended September 30, 2024, were $983 million, a 22$806 million in the same period in 2023[87] - Sales and marketing expenses for the three months ended September 30, 2024, were $119 million, a 19$100 million in the same period in 2023[90] - Research and development expenses for the three months ended September 30, 2024, were $89 million, a 2$87 million in the same period in 2023[91] - General and administrative expenses for the three months ended September 30, 2024, were $80 million, an 18$98 million in the same period in 2023[92] Financial Performance Metrics - Annualized Recurring Run-Rate (ARR) as of September 30, 2024, was $1,554 million, a 28$1,218 million in the same period in 2023[80] - Adjusted EBITDA for the three months ended September 30, 2024 was $113 million, compared to$35 million in the same period in 2023, reflecting improved financial performance[101] - Non-GAAP subscription services and financial technology solutions gross profit for the three months ended September 30, 2024 was $378 million, compared to$280 million in the same period in 2023[105] Cash Flow and Liquidity - Free cash flow for the nine months ended September 30, 2024 was $172 million, compared to$12 million in the same period in 2023, reflecting improved cash flow trends[108] - Cash and cash equivalents and marketable securities as of September 30, 2024 were $1,272 million, an increase from$1,124 million as of December 31, 2023[109] - Net cash provided by operating activities for the nine months ended September 30, 2024 was $213 million, compared to$43 million in the same period in 2023[108] - Net cash provided by operating activities increased during the nine months ended September 30, 2024, driven by a lower net loss and increased non-cash adjustments, partially offset by cash severance charges and higher working capital usage[113] - Net cash used in investing activities decreased during the nine months ended September 30, 2024, primarily due to net cash inflows from marketable securities, partially offset by increased capital expenditures[113] - Net cash provided by financing activities decreased during the nine months ended September 30, 2024, driven by cash outflows related to Warrant Repurchase and share repurchases, partially offset by increased cash inflows from common stock issuance[113] - The company repurchased approximately 2 million shares of Class A common stock for an aggregate amount of $56 million during the nine months ended September 30, 2024[116] - The 2021 senior secured credit facility has a minimum liquidity covenant of$250 million, with total available funds of $330 million as of September 30, 2024, and no amounts drawn or outstanding[115] - The company does not anticipate material changes in net working capital requirements, liquidity, or cash flows in the near term, other than disclosed items[114] - The company believes its existing cash, cash equivalents, and available borrowing capacity will be sufficient to meet working capital needs for at least the next 12 months[118] Warrant Liability and Other Financial Items - The change in fair value of warrant liability for the three months ended September 30, 2024 was$(19) million, a decrease of 106% compared to the same period in 2023, driven by increased stock prices and a reduction of outstanding warrants[95] - The change in fair value of warrant liability for the nine months ended September 30, 2024 was $(32) million, an increase of 640$15 million, compared to $0 in the same period in 2023, primarily due to the extinguishment of warrants[96] Share and Equity Information - The fully diluted share count as of September 30, 2024, was 628 million shares, including 565 million Class A and B common stock, 32 million options, 25 million unvested restricted stock units, 2 million warrants, and 4 million shares reserved for charitable donations[117] Market and Operational Metrics - As of September 30, 2024, approximately 127,000 Locations, an increase of 28$151 billion of gross payment volume in the trailing 12 months[76] Risk Management - The company is exposed to financial market risks, including interest rates, foreign currency exchange rates, and credit risk, with no material changes since the 2023 Annual Report[119]