Toast Delivers Strong Results and Guidance
Event
Toast announced its Q1/C22 results and financial outlook last night.
Impact: SLIGHTLY POSITIVE for LSPD
Results ahead of expectations. Toast delivered total revenue of $535mm, up 90% y/y, and well ahead of consensus at $490.5mm. Adj. EBITDA loss of $45mm was also better than consensus at $58.1mm of EBITDA loss. Toast's gross payments volume (GPV) came in at $17.8bln, up 98% y/y, after growing 125% y/y in Q4/21. Toast also revised its 2022 total revenue outlook to $2,500mm-$2,550mm, up from $2,349mm- $2,409mm, which is 6% ahead of consensus at the midpoint. Toast noted that the current macro backdrop has not had a significant negative impact on consumer spending. In fact, Toast is confident that consumer spending will continue to ramp as consumers return to physical restaurants. Total locations grew to 62k, up from 57k q/q. ~60% of Toast's locations are now signed up for 4+ products as restaurants look for ways to boost sales and increase efficiency.
Lightspeed read-through: slightly positive. Recall that Toast nearly generates all of its revenue from the United States hospitality market, whereas Lightspeed's hospitality customers are predominantly located in Europe. Nonetheless, Toasts results mirror consumer spending changes seen by many industry stakeholders. These same consumer spending changes have also been observed in European consumers, which we believe is supportive of Lightspeed. We believe that Toast's strong top-line growth, GPV, and outlook all reflect positively on Lightspeed's hospitality segment. As U.S. consumer spending remains strong and restrictions are fully lifted, we believe spending towards hospitality services will continue to accelerate throughout the year. We also believe that Toast's healthy net location additions and growing mix of locations with 4+ products reflect the importance of technology in operating restaurants. As the tight labour market and elevated inflation persist, we believe that restaurateurs are leaning on technology to optimize their operations. Consequently, we believe that this reflects positively on Lightspeed's ARPU