Restaurant point of sale (POS) provider Toast has attributed its strong quarterly performance to location additions and balancing top-line growth while optimizing operational efficiency.
Third-quarter (Q3) earnings results announced on Tuesday (Nov. 7) showed a 37% year over year (YoY) surge in revenue to about $1 billion. Additionally, the total number of locations increased to around 99,000, marking a 34% YoY increase. In total, Q3 2023 saw the addition of over 6,500 net new locations to the company’s portfolio.
Commenting on the results on an earnings call, outgoing Toast CEO Chris Comparato highlighted the company’s “customer-centric mission to be the trusted restaurant technology partner” as part of efforts to better serve a wide range of restaurant businesses. “We have also evolved into a multiproduct platform company with solutions to help restaurants drive growth, build deeper connections and experiences with guests, improve operations and manage their costs,” Comparato said.
Toast COO Aman Narang, who co-founded the firm in 2011 and will take the CEO reins in January, further emphasized the firm’s commitment to building products that help restaurants thrive and run their businesses more efficiently, especially in an uncertain macroeconomic environment.
He pointed to the recent launch of ToastNow as an example of how the company is delivering value to its customers. The app, which allows operators to manage their restaurants on the go, offers real-time insight into performance data, facilitating a range of tasks, including kitchen volume management, menu adjustments, and communication with staff, all from their mobile devices.
“This is something our customers have been asking for and allows us to build an even deeper connection with restaurant operators,” Narang noted, adding that early adoption levels show that about 20% of locations are already on Toast Now only a week after the Nov. 1 launch.
Prior to that in September, the ResTech company unveiled Toast for Cafes and Bakeries, adding to the company’s portfolio of specialized products like Toast for hotel restaurants and Toast for quick-service restaurants (QSRs).
“Cafes and bakeries serve a variety of customer needs, from a regular morning coffee to lunch catering or an on-the-go snack. It is a segment of the market that we’re excited about and represents a meaningful growth opportunity for Toast,” Narang said.
The company also debuted Toast Catering & Events in August, making available a new digital tool integrated with its POS to help restaurants manage catering orders and plan events.
According to Narang, customers like 320 Market Café, a family-owned on-gourmet market with two locations in Pennsylvania, have found this product very useful, saving their employees around eight hours of manual work each week.
In fact, before 320 joined Toast, the process of adding a new retail SKU took over 20 minutes, which slowed down their ability to serve guests and generate revenue. “[Now, they] can tag a new product and have it on the retail floor in minutes, track sales data in real time and take down their corkboard of paper catering orders in a digital system that they can manage from anywhere,” Narang explained.
Overall, despite declining consumer spending, the company said it remains confident in the resilience and determination of the restaurant industry. Looking ahead, Toast plans to broaden its footprint in the U.S. restaurant market, with a focus on opportunities within the small and medium-sized business (SMB) sector, large restaurant chains, and international markets.