Toast, Inc 10-Q for FY2021 Q3

Toast, Inc. (TOST)

10-Q 2021-11-09 For: 2021-09-30

Added on April 10, 2026

About this 10-Q

Toast, Inc filed this 10-Q on November 9, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $486.38M; up 105.4% from $236.76M a year earlier
Net loss: $252.5M; compared with a net loss of $62.61M a year earlier
Diluted EPS: -$1.05; compared with -$0.31 a year earlier

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Delaware		45-4168768
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

401 Park Drive,	Suite 801
Boston,	Massachusetts	02215
(Address of principal executive offices)		(Zip code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value of $0.000001 per share	TOST	New York Stock Exchange


		Page
Part I. Financial Information		1
Item 1.	Financial Statements (unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Comprehensive Loss	4
	Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)	5
	Consolidated Statements of Cash Flows	9
	Notes to Consolidated Financial Statements	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 4.	Controls and Procedures	56

Part II. Other Information		58
Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	58
Item 2.	Recent Sales of Unregistered Securities and Use of Proceeds	107
Item 3.	Defaults Upon Senior Securities	108
Item 4.	Mine Safety Disclosures	108
Item 5.	Other Information	108
Item 6.	Exhibits	109
	Signatures	111


	September 30, 2021		December 31, 2020
Assets:
Current assets:
Cash and cash equivalents	$	1,301,619	$	581,824
Accounts receivable, net of allowance for doubtful accounts of $2,568 and $4,438, respectively, at September 30, 2021 and December 31, 2020	52,730		32,633
Merchant cash advances and loans receivable, net of allowance for uncollectible loans of $3,668 and $4,454, respectively, at September 30, 2021 and December 31, 2020	409		872
Inventories	38,665		19,330
Costs capitalized to obtain revenue contracts, net	23,931		16,794
Prepaid expenses and other current assets	79,561		21,611
Total current assets	1,496,915		673,064
Property and equipment, net	42,381		44,111
Intangible assets	17,188		6,835
Goodwill	74,738		35,887
Restricted cash	2,694		1,214
Security deposits	806		1,633
Non-current costs capitalized to obtain revenue contracts, net	18,755		12,612
Other non-current assets	3,776		600
Total non-current assets	160,338		102,892
Total assets	$	1,657,253	$	775,956
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit):
Current liabilities:
Accounts payable	$	33,696	$	30,554
Current portion of deferred revenue	46,865		42,680
Accrued expenses and other current liabilities	206,218		63,172
Total current liabilities	286,779		136,406
Long-term debt, net of discount	—		171,709
Derivative liabilities	—		37,443
Warrants to purchase preferred stock	—		11,405
Warrants to purchase common stock	308,195		—
Deferred revenue, net of current portion	12,832		15,533
Deferred rent, net of current portion	16,106		18,536
Other long-term liabilities	23,867		7,007
Total long-term liabilities	361,000		261,633
Total liabilities	647,779		398,039
Commitments and Contingencies (Note 19)
Convertible preferred stock, $0.000001 par value—no shares authorized, issued or outstanding as of September 30, 2021; 257,245,680 authorized and 253,832,025 shares issued and outstanding at December 31, 2020; total liquidation value of $849,970 at December 31, 2020.	—		848,893
Stockholders’ Equity (Deficit):
Preferred stock- par value $0.000001; 100,000,000 shares authorized, no shares issued or outstanding	—		—
Common stock, $0.000001 par value— no shares authorized, issued and outstanding as of September 30, 2021; 570,000,000 shares authorized, 219,755,430 shares issued and outstanding as of December 31, 2020	—		—
Class A common stock, $0.000001 par value- 7,000,000,000 shares authorized, 25,000,000 shares issued and outstanding as of September 30, 2021; no shares authorized, issued and outstanding at December 31, 2020	—		—
Class B common stock, $0.000001 par value- 700,000,000 shares authorized, 479,406,030 shares issued and outstanding as of September 30, 2021; no shares authorized, issued and outstanding at December 31, 2020	—		—
Treasury stock, at cost— 225,000 shares outstanding at September 30, 2021 and December 31, 2020	(665)		(665)
Accumulated other comprehensive income	45		228
Additional paid-in capital	2,113,107		145,327
Accumulated deficit	(1,103,013)		(615,866)
Total stockholders’ equity (deficit)	1,009,474		(470,976)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	1,657,253	$	775,956


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue:
Subscription services	$	45,803	$	27,406	$	113,844	$	72,193
Financial technology solutions	404,224		188,195		983,699		450,265
Hardware	31,051		18,148		80,005		48,335
Professional services	5,301		3,008		12,579		9,806
Total revenue	486,379		236,757		1,190,127		580,599
Costs of revenue:
Subscription services	18,016		10,388		41,044		29,205
Financial technology solutions	327,235		145,945		779,111		358,402
Hardware	42,109		21,914		93,521		63,336
Professional services	14,585		9,282		35,276		33,655
Amortization of acquired technology and customer assets	1,180		908		3,147		2,695
Total costs of revenue	403,125		188,437		952,099		487,293
Gross profit	83,254		48,320		238,028		93,306
Operating expenses:
Sales and marketing	56,622		32,216		130,480		104,326
Research and development	39,700		34,274		112,978		78,658
General and administrative	40,633		20,481		105,095		73,558
Total operating expenses	136,955		86,971		348,553		256,542
Loss from operations	(53,701)		(38,651)		(110,525)		(163,236)
Other income (expense):
Interest income	8		137		61		819
Interest expense	(247)		(5,661)		(12,403)		(6,846)
Change in fair value of warrant liabilities	(198,389)		(202)		(214,881)		60
Change in fair value of derivative liability	—		(18,208)		(103,281)		(18,208)
Loss on debt extinguishment	—		—		(49,783)		—
Other income (expense), net	(39)		104		42		325
Loss before (provision for) benefit from income taxes	(252,368)		(62,481)		(490,770)		(187,086)
(Provision for) benefit from income taxes	(129)		(127)		3,623		(69)
Net loss	$	(252,497)	$	(62,608)	$	(487,147)	$	(187,155)
Net loss per share attributable to common stockholders, basic and diluted	$	(1.05)	$	(0.31)	$	(2.22)	$	(0.94)
Weighted average shares used in computing net loss per share, basic and diluted	239,358,805		200,579,529		219,746,454		199,245,332

Net loss	$	(252,497)	$	(62,608)	$	(487,147)	$	(187,155)
Other comprehensive income (loss):
Foreign currency translation	(69)		(24)		(183)		5
Comprehensive loss	$	(252,566)	$	(62,632)	$	(487,330)	$	(187,150)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended September 30, 2021


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


Nine Months Ended September 30, 2021
	Convertible Preferred Preferred Stock			Class A and Class B Common Stock			Treasury Stock	Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income			Total Stockholders' Equity (Deficit)
	Shares	Amount		Shares	Amount				Shares					Amount
Balances at December 31, 2020	253,832,025	$	848,893	219,755,430	$	—		225,000		$	(665)	$	145,327		$	(615,866)	$	228	$	(470,976)
Repurchase of common stock	—	—		(4,750)	—			—		—		—			—		—		—
Issuance of common stock in connection with business combination	—	—		569,400	—			—		—		14,857			—		—		14,857
Exercise of common stock options	—	—		4,340,713	—			—		—		4,187			—		—		4,187
Exercise of common stock options in connection with promissory notes repayment	—	—		—	—			—		—		13,540			—		—		13,540
Issuance of common stock upon vesting of restricted stock units	—	—		52,790	—			—		—		—			—		—		—
Vesting of restricted stock	—	—		—	—			—		—		3,354			—		—		3,354
Stock-based compensation (1)	—	—		—	—			—		—		95,755			—		—		95,755
Conversion of preferred stock warrants into common stock warrants and issuance of common stock upon net exercise of common stock warrants	—	—		860,422	—			—		—		43,297			—		—		43,297
Conversion of preferred stock	(253,832,025)	(848,893)		253,832,025	—			—		—		848,892			—		—		848,892
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions	—	—		25,000,000	—			—		—		943,898			—		—		943,898
Cumulative translation adjustment	—	—		—	—			—		—		—			—		(183)		(183)
Net loss	—	—		—	—			—		—		—			(487,147)		—		(487,147)
Balances at September 30, 2021	—	$	—	504,406,030	$	—		225,000		$	(665)	$	2,113,107		$	(1,103,013)	$	45	$	1,009,474


Nine Months Ended September 30, 2020
	Convertible Preferred Preferred Stock			Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Deficit
	Shares	Amount		Shares	Amount		Shares	Amount
Balances at December 31, 2019	209,608,075	$	446,555	214,901,400	$	—	200,000	$	(460)	$	56,010	$	(385,921)	$	(55)	$	(330,426)
Cumulative adjustment due to adoption of ASC 606	—	—		—	—		—	—		—		18,258		—		18,258
Repurchase of common stock	—	—		(220,940)	—		25,000	(205)		(70)		—		—		(275)
Issuance of Series F preferred stock	44,301,220	402,368		—	—		—	—		—		—		—		—
Exercise of stock options	—	—		3,146,345	—		—	—		1,158		—		—		1,158
Vesting of restricted stock	—	—		—	—		—	—		294		—		—		294
Stock-based compensation	—	—		—	—		—	—		58,357		—		—		58,357
Cumulative translation adjustment	—	—		—	—		—	—		—		—		5		5
Net loss	—	—		—	—		—	—		—		(187,155)		—		(187,155)
Balances at September 30, 2020	253,909,295	$	848,923	217,826,805	$	—	225,000	$	(665)	$	115,749	$	(554,818)	$	(50)	$	(439,784)


Three Months Ended September 30, 2021
	Convertible Preferred Preferred Stock			Class A and Class B Common Stock			Treasury Stock	Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income			Total Stockholders' Equity (Deficit)
	Shares	Amount		Shares	Amount				Shares					Amount
Balances at June 30, 2021	253,832,025	$	848,893	223,761,525	$	—		225,000		$	(665)	$	235,921		$	(850,516)	$	114	$	(615,146)
Repurchase of common stock	—	—		(750)	—			—		—		—			—		—		—
Exercise of warrants	—	—		860,422	—			—		—		43,297			—		—		43,297
Conversion of preferred stock	(253,832,025)	(848,893)		253,832,025	—			—		—		848,892			—		—		848,892
Exercise of common stock options	—	—		952,808	—			—		—		1,139			—		—		1,139
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions	—	—		25,000,000	—			—		—		943,898			—		—		943,898
Stock-based compensation	—	—		—	—			—		—		36,897			—		—		36,897
Vesting of restricted stock	—	—		—	—			—		—		3,063			—		—		3,063
Cumulative translation adjustment	—	—		—	—			—		—		—			—		(69)		(69)
Net loss	—	—		—	—			—		—		—			(252,497)		—		(252,497)




Balances at September 30, 2021	—	$	—	504,406,030	$	—		225,000		$	(665)	$	2,113,107		$	(1,103,013)	$	45	$	1,009,474


Three Months Ended September 30, 2020
	Convertible Preferred Preferred Stock			Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Deficit
	Shares	Amount		Shares	Amount		Shares	Amount
Balances at June 30, 2020	253,909,295	$	848,945	215,718,820	$	—	225,000	$	(665)	$	78,734	$	(492,210)	$	(26)	$	(414,167)
Repurchase of common stock	—	—		(13,250)	—		—	—		(70)		—		—		(70)
Issuance cost of Series F preferred stock	—	(22)		—	—		—	—		—		—		—		—
Exercise of common stock options	—	—		2,121,235	—		—	—		803		—		—		803
Vesting of restricted stock	—	—		—	—		—	—		81		—		—		81
Stock-based compensation (1)	—	—		—	—		—	—		36,201		—		—		36,201
Cumulative translation adjustment	—	—		—	—		—	—		—		—		(24)		(24)
Net loss	—	—		—	—		—	—		—		(62,608)		—		(62,608)


Balances at September 30, 2020	253,909,295	$	848,923	217,826,805	$	—	225,000	$	(665)	$	115,749	$	(554,818)	$	(50)	$	(439,784)


Net increase in cash, cash equivalents, cash held on behalf of customers and restricted cash	747,460		467,544
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(183)		5
Cash, cash equivalents, cash held on behalf of customers and restricted cash at beginning of period	593,676		159,389
Cash, cash equivalents, cash held on behalf of customers and restricted cash at end of period	$	1,340,953	$	626,938
Reconciliation of cash, cash equivalents, cash held on behalf of customers and restricted cash
Cash and cash equivalents	$	1,301,619	$	611,907
Cash held on behalf of customers	36,640		12,853
Restricted cash	2,694		2,178
Total cash, cash equivalents, cash held on behalf of customers and restricted cash	$	1,340,953	$	626,938
Supplemental disclosures of cash flow information
Cash paid for interest	$	13,226	$	—

Non-cash items in investing and financing activities
Purchase of property and equipment included in accounts payable and accrued expenses	$	148	$	8,868
Contingent consideration included in purchase price	1,876		—
Deferred payments included in purchase price	5,357		—
Common stock issued in acquisition	14,857		—
Conversion of convertible preferred stock into Class B common stock upon initial public offering	848,893		—
Issuance of Class B common stock upon exercise of common stock warrants	43,297		—
Issuance of common stock warrants upon debt extinguishment	125,111		—
Deferred offering costs included in accounts payable and accrued expenses	2,298		—
Stock-based compensation included in capitalized software	545		—


	Amount
Cash consideration, net of cash acquired	$	23,528
Fair value of common stock issued	14,857
Fair value of settled stock option awards	1,343
Fair value of contingent consideration	1,876
Liabilities settled on behalf of xtraCHEF	1,271
Deferred payments for indemnity claims and working capital funds, net of adjustments (1)	5,357
Total purchase price	$	48,232


	Amount
Property and equipment	$	22
Intangible assets	13,500
Goodwill	38,851
Net working capital	(221)
Deferred tax liability	(3,920)
Net assets acquired	$	48,232


	Fair Value Measurement at September 30, 2021 Using
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	183,000	$	—	$	—	$	183,000
	$	183,000	$	—	$	—	$	183,000
Liabilities:
Warrants to purchase common stock	—		—		308,195		308,195
Contingent consideration	—		—		2,293		2,293
	$	—	$	—	$	310,488	$	310,488


	Nine Months Ended September 30, 2021 (1)
Risk-free interest rate	1.1		%
Contractual term (in years)	5.69
Expected volatility	53.3		%
Expected dividend yield	—		%
Exercise price	$	17.15


	September 30, 2021		December 31, 2020
Accrued transaction-based costs	$	107,502	$	14,226
Accrued payroll and bonus	13,711		12,185
Customer funds obligation	36,640		10,638
Accrued expenses	18,337		7,989
Accrued commissions	11,403		7,493
Sales return and allowance	8,032		4,137
Product warranty liability	4,468		2,362
Deferred rent	1,572		1,290
Sales taxes payable	1,825		849
Servicing loan guarantee liability	838		509
Other liabilities	1,890		1,494
	$	206,218	$	63,172


	December 31, 2020
Issuance Date	Contractual Term	Class of Stock	Balance Sheet Classification	Shares Issuable Upon Exercise	Exercise Price		Fair Value of Warrant Liability
December 7, 2015	10.5 years	Series B	Liability	255,910	$	0.40	$	2,943
August 9, 2016	10 years	Series B	Liability	400,000	$	0.40	4,601
December 28, 2017	10 years	Series C	Liability	214,500	$	1.40	2,317
January 23, 2018	8 years	Series C	Liability	131,625	$	1.40	1,544
				1,002,035			$	11,405


	Preferred Stock Authorized	Preferred Stock Issued and Outstanding	Carrying Value		Liquidation Preference		Common Stock Issuable Upon Conversion
Series A Preferred Stock	18,072,290	18,072,290	$	1,500	$	1,500	18,072,290
Series B Preferred Stock	76,536,695	75,803,515	29,449		29,621		75,803,515
Series C Preferred Stock	38,773,865	36,643,445	50,965		51,154		36,643,445
Series D Preferred Stock	33,223,530	33,223,530	114,827		115,000		33,223,530
Series E Preferred Stock	45,788,025	45,788,025	249,784		250,000		45,788,025
Series F Preferred Stock	44,851,275	44,301,220	402,368		402,695		44,301,220
	257,245,680	253,832,025	$	848,893	$	849,970	253,832,025


	Fair Value Measurement at December 31, 2020 Using
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	142,000	$	—	$	—	$	142,000
	$	142,000	$	—	$	—	$	142,000
Liabilities:
Warrants to purchase preferred stock	$	—	$	—	$	11,405	$	11,405
Derivative liabilities	—		—		37,443		37,443
	$	—	$	—	$	48,848	$	48,848


	Preferred Stock Warrant Liability		Common Stock Warrant Liability		Derivative Liability		Contingent Consideration Liability
Balance as of December 31, 2020	$	11,405	$	—	$	37,443	$	—
Fair value at issuance	—		125,111		—		—
Fair value on the acquisition date	—		—		—		2,013
Change in fair value and other adjustments	38,284		176,692		103,281		280
Settlement	(43,297)		—		(140,724)		—
Conversion of preferred stock warrants into common stock warrants upon the IPO	(6,392)		6,392		—		—
Balance as of September 30, 2021	$	—	$	308,195	$	—	$	2,293


	Preferred Stock Warrant Liability		Derivative Liability
Balance as of December 31, 2019	$	3,187	$	—
Fair value at issuance	—		30,161
Change in fair value and other adjustments	(60)		18,324
Balance as of September 30, 2020	$	3,127	$	48,485


	December 31, 2020
Convertible notes	$	200,000
Accrued paid in kind interest	4,533
Less: Unamortized discount	(32,824)
Long-term debt, net of discount	$	171,709


	September 30, 2021	December 31, 2020
Conversion of shares of preferred stock (as if converted to common stock)	—	253,832,025
Options to purchase Class A common stock, Class B common stock and common stock	61,307,085	58,035,220
Restricted stock units	10,637,265	—
Warrants to purchase preferred stock (as if converted to warrants to purchase common stock)	—	1,002,035
Warrants to purchase Class B common stock	8,245,210	—
Shares available for future grant under the Stock Plans	58,225,697	33,435,380
	138,415,257	346,304,660


			Shares
Nonvested as of January 1, 2020			1,877,710
Exercise of stock options			321,400
Repurchases			(185,190)
Vested			(917,120)
Nonvested as of December 31, 2020			1,096,800
Exercise of stock options			412,810
Exercise of stock options in connection with promissory notes repayment			14,267,650
Repurchases			(4,750)
Vested			(10,715,855)

Nonvested as of September 30, 2021			5,056,655


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (1)

Outstanding as of December 31, 2020	58,035,220	$	2.08	8.27	$	447,365
Granted	9,804,500	$	16.87
Exercised	(4,340,713)	$	1.19
Forfeited	(2,191,922)	$	4.35
Outstanding as of September 30, 2021	61,307,085	$	4.43	7.87	$	2,790,996
Options vested and expected to vest as of December 31, 2020	58,035,220	$	2.08	8.27	$	447,365
Options exercisable as of December 31, 2020	57,620,665	$	2.08	8.26	$	445,547
Options vested and expected to vest as of September 30, 2021	61,307,085	$	4.43	7.87	$	2,790,996
Options exercisable as of September 30, 2021	61,307,085	$	4.43	7.87	$	2,790,996


	RSU	Weighted Average Grant Date Fair Value

Unvested balance as of December 31, 2020	158,370	$	2.21
Granted	10,713,085	22.21
Vested	(52,790)	2.21
Forfeited	(181,400)	21.44
Unvested balance as of September 30, 2021	10,637,265	$	22.02


	Nine Months Ended September 30, 2020
Risk-free interest rate	0.30		%
Expected volatility	60		%
Expected dividend yield	—		%
Weighted-average fair value of common stock	$	3.16
Weighted average fair value per share of options granted	$	0.60


	September 30, 2021		December 31, 2020
United States	$	42,044	$	43,904
Ireland	299		207
India	38		—
	$	42,381	$	44,111


Year ended December 31,	Amount
2021 (remaining 3 months)	$	6,257
2022	23,609
2023	13,653
2024	13,029
2025	13,098
Thereafter	47,027
	$	116,673


	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in billions)	2021		2020		% Growth		2021		2020		% Growth
Gross Payment Volume (GPV)	$	16.5	$	7.4	123	%	$	39.9	$	17.8	124	%


	As of September 30,
(dollars in millions)	2021		2020		% Growth
Annualized Recurring Run-Rate (ARR)	$	543.8	$	308.1	77	%


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2021		2020		2021		2020
Revenue:
Subscription services	$	45,803	$	27,406	$	113,844	$	72,193
Financial technology solutions	404,224		188,195		983,699		450,265
Hardware	31,051		18,148		80,005		48,335
Professional services	5,301		3,008		12,579		9,806
Total revenue	486,379		236,757		1,190,127		580,599
Costs of revenue:
Subscription services	18,016		10,388		41,044		29,205
Financial technology solutions	327,235		145,945		779,111		358,402
Hardware	42,109		21,914		93,521		63,336
Professional services	14,585		9,282		35,276		33,655
Amortization of acquired technology and customer assets	1,180		908		3,147		2,695
Total costs of revenue(1)	403,125		188,437		952,099		487,293
Gross profit	83,254		48,320		238,028		93,306
Operating expenses:
Sales and marketing(1)	56,622		32,216		130,480		104,326
Research and development(1)	39,700		34,274		112,978		78,658
General and administrative(1)	40,633		20,481		105,095		73,558
Total operating expenses	136,955		86,971		348,553		256,542
Loss from operations	(53,701)		(38,651)		(110,525)		(163,236)
Other income (expense):
Interest income	8		137		61		819
Interest expense	(247)		(5,661)		(12,403)		(6,846)
Change in fair value of warrant liability	(198,389)		(202)		(214,881)		60
Change in fair value of derivative liability	—		(18,208)		(103,281)		(18,208)
Loss on debt extinguishment	—		—		(49,783)		—
Other income (expense), net	(39)		104		42		325
Loss before income taxes	(252,368)		(62,481)		(490,770)		(187,086)
(Provision for) benefit from income taxes	(129)		(127)		3,623		(69)
Net loss	$	(252,497)	$	(62,608)	$	(487,147)	$	(187,155)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
Costs of revenue	$	5,270	$	2,250	$	6,523	$	3,169
Sales and marketing	10,337		7,445		13,276		9,094
Research and development	8,627		17,422		35,138		19,622
General and administrative	12,118		9,084		42,284		26,472
Total stock-based compensation expense	$	36,352	$	36,201	$	97,221	$	58,357


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(dollars in thousands)	2021		2020		Amount		%		2021		2020		Amount		%
Subscription services	$	45,803	$	27,406	$	18,397	67	%	$	113,844	$	72,193	$	41,651	58	%
Financial technology solutions	404,224		188,195		216,029		115	%	983,699		450,265		533,434		118	%
Hardware	31,051		18,148		12,903		71	%	80,005		48,335		31,670		66	%
Professional services	5,301		3,008		2,293		76	%	12,579		9,806		2,773		28	%
Total revenue	$	486,379	$	236,757	$	249,622	105	%	$	1,190,127	$	580,599	$	609,528	105	%


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Adjusted EBITDA	$	(9.7)	$	(0.3)	$	4.5	$	(86.3)


	Payments Due by Period
(in thousands)	Total		Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years
Operating lease commitments (1)	$	116,673	$	24,573	$	28,710	$	26,232	$	37,158
Purchase commitments (2)	246,881		242,866		4,015		—		—
Total	$	363,554	$	267,439	$	32,725	$	26,232	$	37,158


Exhibit Number			Description
3.1			Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 27, 2021).
3.2			Second Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 27, 2021).
4.1			Form of common stock certificate of the Registrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-259104), filed with the Securities and Exchange Commission on September 13, 2021).
10.1			Form of Indemnification Agreement between the Registrant and each of its directors and executive officers (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-259104), filed with the Securities and Exchange Commission on September 13, 2021).
10.2#			Amended and Restated 2014 Stock Option and Grant Plan, as amended, and forms of award agreements thereunder (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-259104), filed with the Securities and Exchange Commission on August 27, 2021).
10.3#			2021 Stock Option and Incentive Plan, and forms of award agreements thereunder (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-259104), filed with the Securities and Exchange Commission on September 13, 2021).
10.4#			2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-259104), filed with the Securities and Exchange Commission on September 13, 2021).
10.5#			Severance and Change in Control Policy (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-259104), filed with the Securities and Exchange Commission on August 27, 2021).
10.6#			Toast, Inc. Chief Executive Officer Severance Letter (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-259104), filed with the Securities and Exchange Commission on August 27, 2021).
31.1*			Certification of the Principal Executive Officer, pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Certification of the Principal Financial Officer, pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**			Certification of the Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**			Certification of the Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*			Inline XBRL Instance Document.
101.SCH*			Inline XBRL Taxonomy Extension Schema Document.
101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*			Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).


#			Indicates management contract or compensatory plan, contract or agreement.
*			Filed herewith.
**			Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.