Few merchant markets are more competitive these days than hospitality, particularly restaurants, a state of affairs that only gained intensity with the onset of the pandemic. But at the same time, the drive among eateries to install modern payment-processing technology has lent impetus to many point-of-sale technology providers and processors specializing in this industry. On Thursday afternoon came the latest evidence of how these providers are faring.
Restaurant POS specialist Toast Inc. reported that in its September quarter it exceeded $100 billion in annualized processing volume for the first time in its nearly 11-year history. Meanwhile, it saw its payments volume for the quarter grow 53%, to $25.2 billion. The bulging volume helped the Boston-based company shave its net loss to $98 million, compared to $254 million the year-ago period, on a 55% increase in revenue, to $752 million.
The performance helped buoy the company’s shares, which have lost about 49% of value since the start of the year. The shares were trading at $20 early Friday, up about a dollar from the open and about 58% from six months ago. Toast went public in September 2021.
The company, which says it serves 74,000 locations, up from 52,000 a year ago, combines point-of-sale hardware and software and digital ordering with add-on services such as payroll and marketing, along with loans through Toast Capital.
In this sense, it competes closely with Square, the Block Inc. unit whose products have a heavy concentration in restaurants. But hospitality has grown hotly competitive in general, particularly since the Covid pandemic struck, forcing eateries to adopt newer technologies and services such as contactless payments and curbside service. Now more eateries are adopting or upgrading payments technology as they re-open for indoor dining.