Toast Posts Greater-than-Expected Q4 Loss; Shares Decline Over 15%

Toast (NYSE: TOST), the all-in-one digital technology platform built for restaurants, has reported a wider-than-expected loss in the fourth quarter of 2021. Meanwhile, revenues beat expectations.

Following the mixed results, shares of the company plunged 15.4% in the extended trading session on Tuesday after closing 2.5% higher on the day.

Results in Detail

Toast reported a loss of $0.23 per share in the fourth quarter against the Street’s estimated loss of $0.12 per share. The company had recorded a loss of $0.31 per share in the same quarter last year.

Total revenue of $512 million more-than-doubled on a year-over-year basis and topped analysts’ expectations of $487.91 million. Continued strength in gross payment volume (GPV) and the addition of new locations acted as tailwinds.

Segment-wise, subscription services revenue came in at $54 million, up 86% year-over-year, while financial technology solutions revenue grew 117% to $421 million. Additionally, hardware and professional services revenues stood at $31 million and $6 million, up 94% and 50%, respectively.

As of December 31, 2021, annualized recurring run-rate (ARR) grew 74% year-over-year to $568 million, while GPV came in at $17 billion during the quarter, up 125%.

Adjusted EBITDA was negative $45 million, compared to negative $7 million in the same quarter last year.

For 2021, Toast recorded a loss of $1.68 per share, compared to a loss of $1.25 per share a year ago. Total revenue stood at $1.71 billion, up 107% year-over-year. GPV was $57 billion, up 124%.

Official Comments

The CEO of Toast, Chris Comparato, said, “We had a record quarter and year as a result of strong focus on our customers and consistent execution. Restaurants of all sizes run their business on Toast and we are committed to being the trusted platform of choice for the restaurant industry.”

Outlook

For the first quarter of 2022, the company projects revenue in the range of $469 million to $499 million versus the consensus estimate of $463.02 million.

For 2022, total revenue is forecast in the range of $2.349 billion to $2.409 billion. The consensus estimate for the same is pegged at $2.28 billion.

Wall Street’s Take

Following the disappointing results, Mizuho Securities analyst Dan Dolev maintained a Hold rating on the stock and a price target of $24 (14.65% downside potential).

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 3 Buys and 3 Holds. The average Toast price target of $38 implies 35.14% upside potential. Shares have lost 55% over the past year.

Bloggers Weigh In

TipRanks data shows that financial blogger opinions are 85% Bullish on TOST, compared to a sector average of 69%.

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