Toast Reports a Robust 2023 And Fourth Quarter As Dining Maintains Its Rebound

Shares in restaurant point-of-sale specialist Toast Inc. were trading modestly up early Friday following the company’s release late Thursday of December-quarter and full-year results indicating double-digit increases in client locations and payments volume and offering further evidence of the hospitality industry’s recovery from the 2020 pandemic.

The results came as Toast contends for market share in an increasingly competitive restaurant POS market that has attracted a raft of big-name payments rivals, including Block Inc.’s Square for Restaurants, Shift4 Inc., Oracle Micros, and Fiserv Inc.’s Clover. Toast’s most recent client acquisitions include Caribou Coffee and Choice Hotels International.

The 12-year-old, Boston-based Toast, which supplies pay-at-table devices as well as payments-processing services, reported locations served reached 106,000 in the quarter, up 34% year-over-year, while gross payment volume grew 32% to $33.7 billion. This helped drive revenue to $1 billion, up 35%. The performance also allowed Toast to cut its net loss to $36 million from $99 million a year ago.

That news helped boost Toast’s stock to nearly $22 per share in early Friday trading, up almost 20% year-to-date. Toast went public in September 2021 at $40 per share.

For the full year, the company saw revenue of $3.9 billion, a 42% jump over 2022, with gross payment volume climbing 38% to $126.1 billion. It registered a gross profit of $834 million, up 63%, while cutting its net loss from $275 million to $243 million.

Toast earlier this month announced a a plan to cut expenses that will include shedding an estimated 550 jobs by year’s end. The plan will involve charges of $45 million to $55 million, the company estimates, mostly for severance and mostly incurred in the first quarter.

This action comes on the heels of the company’s Jan. 1 appointment of co-founder Aman Narang as chief executive officer, taking over from Chris Comparato. Both men remain on the company’s board.

Recent months have not been without missteps at Toast. Last summer, the company rescinded a plan to levy a 99-cent fee on online orders of $10 or more. The fee, meant to be paid by a restaurant’s customers, was intended to fund software development but raised widespread protests from clients.