Every atomic assertion extracted from the underlying record, ranked by evidence strength.
Toast is the category killer for F&B point of sale and software.
Opinions expressed by hosts and podcast guests are solely their own opinions.
This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Hosts, podcast guests, their employers, or affiliates may maintain positions in the securities discussed in this podcast.
Toast is a 15% position for Counter Global.
Toast does about $2 billion of recurring gross profit.
Toast has about 35% EBITDA margins.
Toast is still growing very quickly, with 25%+ gross profit growth.
Toast is currently trading at 18 times next year's GAAP PE.
Toast is a durable 20%+ revenue compounder and 30%+ EPS compounder.
Two-thirds of Toast's gross profit comes from payments.
One-third of Toast's gross profit comes from software.
Toast's gross profit is "reoccurring" in nature because customers cannot run their business without it.
Colossus aims to bring business lessons and secrets to investors and operators.
The current market transformation with AI rhymes with the 2015 period when AWS made open-source software widely available.
In 2015, public companies' software multiples collapsed to 3-4 times revenue.
Today, Toast is a very profitable business with 35% EBITDA margins and five unlocked TAMs.
Toast expanded into enterprise, grocery stores, liquor stores, gas stations, and hotels (F&B and retail).
Toast has built an international team and product, live in the UK, Ireland, Australia, and Canada.
Toast has been a 97th percentile grower in public markets for the last three years.
Toast is a modern multi-tenant SaaS solution, allowing rapid deployment of updates and new AI models.
Toast has a Net Promoter Score (NPS) of roughly 50.
95% of Toast respondents indicate they would recommend Toast.
On average, customers use seven Toast modules.
Toast has about a 20% share of the U.S. restaurant market.
Toast serves more than 160,000 locations.
Toast is winning roughly half of all new restaurant openings in the U.S.
Toast's growth is product-led and leads to rapid market share expansion.
Network effects in the restaurant industry are strong, with top players often reaching 40-50% share.
For a $100 dinner order, about 3% is interchange, $2.50 goes to banks/networks, and 49 basis points (50 cents) goes to Toast as net take rate.
Toast's 49 basis points net take rate has been moving up over time.
Toast's net take rate is reasonably under-monetized compared to competitors (75-125 bps).
Toast has about $200 billion of volume on its platform, making it one of the biggest merchants in the US.
Square monetizes at about a 1% gross profit net take rate across its business.
Toast charges customers $300-$500 a month for its software suite.
The average Toast customer pays about $10,000 a year to Toast.
The average Toast customer has $1.3 million of revenue.
Hardware is a loss leader for Toast.
Every Toast customer must have Toast hardware.
Competitors who tried to use iPads for POS failed because iPads don't work well in restaurants.
Toast's hardware is powerful and preferred by customers.
Toast's management says they can maintain 20%+ growth for many years ahead.
Toast's margins have gone from -16% in 2022 to roughly 35% today.
Toast's margins are projected to reach 40%+ and continue growing.
R&D expense in dollar terms has barely grown in the last two years while the business doubled in size.
AI is widening the gap for Toast versus its competitors.
Toast IQ is a conversational AI offering combined with a system of action.
50% of Toast customers actively use Toast AI (Toast IQ) on a weekly basis.
Toast Grow is an automated marketing engine for restaurants.
Toast Grow costs about $500 a month as a SaaS module.
Toast Grow has shown an 8% uplift in total revenue for customers.
Toast Grow offers about a 20X ROI for customers.
A typical restaurant might have 10% margins.
A typical Toast customer has something more like 15% margins.
About half of the market is still on legacy platforms like NCR Aloha and Oracle Micros.
Toast was the first successful scaled cloud-based disruptor in the restaurant POS market.
Square has about 5-10% of the restaurant market.
Clover has about a 15% share of the restaurant market.
Clover is losing share due to lack of innovation.
DoorDash has been piloting POS solutions with its customers.