Toast (TOST) Credit Suisse 26th Annual Technology Conference summary

Macro environment and restaurant value

• Consumer demand remained unchanged; payment-volume seasonality matched prior years, with a typical Q4 tick down after higher summer volumes in Q2 and Q3.

• Restaurants’ key needs are efficient revenue growth, labor management and retention, and back-office cost control amid thin margins.

• A mid-market chain reported saving 150–250 labor hours weekly with 23 handhelds; payroll and tip automation can reduce manual work, while food-cost tools help optimize supplier spending.

Market opportunity and go-to-market

• The U.S. has 860,000 restaurants; management expects cloud adoption across the market over the next 10 years, with adoption speeds varying by segment.

• Segment focus spans enterprise at 200+ units, mid-market at 50–200, SMB at 1–50, and very small businesses; enterprise progress is measured, while mid-market and SMB sales show traction.

• SMB regional mid-market penetration is 9% of the addressable market; 25%–33% of restaurants onboard themselves today.

• New locations come from a balanced mix of new restaurants, existing customers expanding, and restaurants switching from legacy or newer cloud providers.

• Penetration in flywheel markets is expected to exceed 20%; Boston and New York are each close to 20% after 10 years of selling, with no saturation target set.

Growth and profitability

• Flywheel markets benefit from rep productivity, referrals, and community partners; management sees room for continued penetration and ARR growth without increasing rep counts.

• The growth team, launched in 2021, targets existing-customer upsell through Toast Shop, product-led growth leads, local reps, and customer success; early productivity was encouraging.

• Long-term plans emphasize durable growth and improving margins; both SaaS and fintech can support profitability at scale.

• Adjusted EBITDA profitability was targeted by the end of 2023; stock-based compensation as a share of revenue is intended to decline over time, with GAAP profitability a longer-term objective.