Roughly 100,000 Restaurants Use Toast's Technology, but Investors Might Be Surprised by How Many Restaurants Still Don't -- and Why That's a Good Thing.
In 2011, three friends founded Toast (NYSE: TOST) in the hopes of modernizing the restaurant industry with cloud-based, scalable technology solutions. In 2015, roughly 1,000 restaurants were using the company's products. But as of the third quarter of 2023, 99,000 restaurant locations were using Toast -- nearly a 100x increase in just eight years.
This level of growth is a testament to what Toast has built. It's not the only company working in the space, but its ability to attract new customers (6,500 net new locations in Q3 alone) clearly suggests its products are compelling.
However, there is a very real cost to Toast's growth. New customers tend to purchase the company's hardware when joining. Through the first three quarters of 2023, Toast has generated $106 million in hardware revenue. Unfortunately, its cost of revenue for hardware was $181 million, leaving it with a $75 million gross loss for this segment.
Source Fool.com
