Good afternoon. My name is Cole, I will be your conference operator today. At this time, I would like to welcome everyone to the Toast Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I'll now turn the call over to Michael Senno, Senior Vice President of Finance and Strategy, Treasury, and Investor Relations. You may begin your conference. Thank you, Cole. Welcome to Toast Earnings Conference Call for the first quarter ended March 31st, 2023. On today's call, our CEO, Chris Comparato, and CFO, Elena Gomez, will open with prepared remarks. They will then be joined by our COO, Aman Narang, for our Q&A session. Before we start, I'd like to draw your attention to the Safe Harbor statement included in today's press release. During this call, we'll make statements related to our business that may be considered forward-looking within the meaning of the Securities Exchange Act of 1934. All statements other than statements of historical facts are forward-looking statements, including those regarding management's expectations of future financial and operational performance and operational expenditures, location growth, future profit and margin outlook, expected growth, and business outlook, including our financial guidance for the second quarter and full year of 2023. Forward-looking statements reflect our views only as of today. Except as required by law, we undertake no obligation to update or revise these forward-looking statements. Please refer to the cautionary language in today's press release and our SEC filings for a discussion of the risks and uncertainty that could cause actual results to differ materially from our expectations. During this call, we will discuss certain non-GAAP financial measures. These non-GAAP measures are not intended to be a substitute for our GAAP results. Please refer to our earnings release and SEC filings for detailed reconciliations of these non-GAAP measures to the most comparable GAAP measures. Unless otherwise stated, all references on this call to cost of revenue, gross profit and gross margin, sales and marketing expense, research and development expense, and general and administrative expense are on a non-GAAP basis. Finally, both the press releases and a replay of this call, including the accompanying investor presentation, will be available on our Investor Relations website at investors.toasttab.com. With that, let me turn the call over to Chris. Thank you, Michael, thank you everyone for joining us this afternoon. First quarter results marked a strong start to the year, coming in ahead of expectations across the board. Our consistent execution delivered solid top-line growth of over 50% and significant year-over-year margin improvement, and is a function of our continued focus on our core strategy, driving location growth, more deeply serving all segments of the restaurant industry, and pushing the industry forward through continued product innovation. The restaurant industry is undergoing a generational shift to cloud-based technology, and Toast is at the forefront of that change. We are uniquely positioned to help restaurants of all sizes and types start, manage, grow, and expand their businesses. While there remains some uncertainty in the broader macro environment, consumer spending at our restaurants remains healthy. The restaurant industry has proven its durability over time, we believe it will continue to navigate challenges as they have many times in the past. Turning to our Q1 results. On a year-over-year basis, total revenue grew 53% to $819 million, ARR increased 55% to $987 million, and GPV was up 50% to $26.7 billion. The same time, Q1 adjusted EBITDA improved to a $17 million loss compared to a $45 million loss in the previous year, driving an over 600 basis points improvement in adjusted EBITDA margin. Our ability to deliver sustained top-line momentum while rapidly moving towards profitability is a testament to our commitment to balancing investments in key growth areas with efficiency and cost discipline as we scale the business. On the back of our strong Q1, we raised full-year revenue guidance 4% at the midpoint, which implies 37% year-over-year growth and increased our adjusted EBITDA guide with the midpoint of the range at breakeven. That increase is a result of the momentum we're seeing in the business and our commitment to the efficiency and cost discipline I just mentioned. Elena will provide more details about our outlook shortly. We continue to see healthy location growth, adding over 5,500 net new locations in Q1 and ending the quarter with approximately 85,000 total live locations. Our go-to-market strategy continues to efficiently drive strong ARR growth through both increased penetration with traction across the TAM and healthy ARPU growth. In the SMB space, our differentiated localized sales efforts continue to scale. We see that as we're in markets longer and rep tenure increases, we can move markets into flywheel status, meaning higher inbound volume, higher win rates, and greater penetration. In one Mid-Atlantic city where the rep tenure is above average at two plus years, the market tipped into a rapid growth stage and increased the number of locations by over 60% in two years to reach over 20% penetration amongst SMB restaurants. When it hit flywheel status, we saw lead volume increase, and it has remained elevated versus prior levels. This is one example of the growing number of flywheel markets, and with only a small fraction of the SMB TAM in flywheel markets today, there's still tremendous opportunity ahead. As rep tenure and time in market increases, we expect more markets to benefit from the flywheel effect our go-to-market approach creates, enabling us to scale efficiently. Let me highlight some of our recent customer wins from across the TAM. In SMB, as Wisconsin Dells-based Buffalo Phil's planned for this year's busy season and with positive referrals from other local restaurants, they shifted to Toast, adopting 13 modules that span every pillar of the Toast offering. In the front of the house, Buffalo Phil's will use Toast Go handhelds to work their multi-level dining space and banquet hall, Mobile Order & Pay for additional table efficiency, and Toast Tables for managing their active wait list, as well as several other modules to provide an enhanced guest experience. Back of house, our payroll and team management solution will streamline onboarding and scheduling with their sizable seasonal employee base. Our kitchen display systems will power smoother kitchen operations. They'll also use xtraCHEF to provide better invoice visibility and help ensure too much inventory isn't left over as the busy season wanes. While the SMB market is an obvious sweet spot for us, we're making good progress across different parts of the TAM and across restaurant types. Down market, in the small SMB space, we're optimizing pricing and packaging to meet the needs of that customer segment and leveraging an e-commerce sales motion and self-service onboarding to efficiently grow in this segment. In the regional mid-market space, Toast recently added eight more locations to Denver-based TAG Restaurant Group, bringing the group's full footprint of more than 12 locations onto Toast. Toast was initially serving the fast casual side of TAG's portfolio and then expanded to higher-end FSR locations to allow TAG to have a single technology platform across its portfolio. TAG saw the benefits of a partner who could seamlessly support all operations across its various restaurant types and is adding modules, including third-party delivery, API integrations for our partner network, multi-location management for easy menu updates, invoicing, and Toast Go handheld devices for its full service locations. Moving further up market, in the first quarter, we signed a 300+ location national QSR chain that wanted a more innovative technology partner with top-notch integration functionality, ease of use, and better overall reporting visibility across its entire operating ecosystem. The breadth of these customer wins are clear examples of the power of our restaurant-specific integrated POS and software strategy and the range of customer sizes and types that we can serve. At only 10% market share for U.S. restaurant locations, we're still very early in penetrating the domestic TAM. We expect to continue adding locations at a healthy clip, are investing to most effectively serve each segment of the TAM, and we are uniquely positioned to capitalize on the big opportunity ahead of us. Our focus on the restaurant industry is a key differentiator and tenet of our product strategy. We are building the specific features and capabilities to meet the unique needs of different segments and types of restaurants, enabling us to deeply penetrate the entire TAM. Our Toast for Hotels product, which integrates seamlessly into hotels' property management systems, is a clear example of this motion in action. This product has opened up our ability to better serve hotel restaurants, and we're seeing great momentum. In the first quarter, we signed family-owned Pacific Northwest cornerstone McMenamins, which selected Toast for its entire portfolio of 57 pubs and breweries, many of which are located on McMenamins' hotel properties. McMenamins was attracted to Toast to help streamline operations and to leverage our powerful partner integrations. They look forward to implementing our all-in-one solution and using products including PMS integration, Toast Go handhelds, and Mobile Order & Pay to provide food and beverage access in more areas of their unique properties, from room service to garden picnics. McMenamins will also use xtraCHEF to modernize their approach to inventory management and Toast Online Ordering in our kitchen display systems for additional efficiency. We are truly excited about the opportunities to transform guest hospitality experiences. Another example of where we're investing to further our abilities to more deeply serve each part of the TAM is in enterprise. We're adding enhanced reporting APIs, specific features for QSRs like POS screens designed to help staff enter orders faster, and improved multi-location management functionality aimed at making menu changes across hundreds or thousands of locations easier and faster. Toast now has a P2PE listed payment solution, which when deployed, will meet the unique payment security requirements of this segment, and we believe the progress we're making to better serve this customer segment will enable us to further penetrate enterprise. Our product strategy is anchored around building out a suite of solutions tailored for each of our restaurant stakeholders, restaurant operators, guests, employees, and suppliers. An example of this is the recent launch of Toast Tables, our reservation and waitlist management solution. Tables broadens our ability to engage guests and provides our restaurant customers with more nimble ways to manage their operations through a single platform solution. This differentiated offering is seamlessly integrated with the rest of the Toast platform and allows restaurants to manage operations with one vendor at an affordable monthly price. Toast Tables is off to a fantastic start. In March alone, Toast Tables powered over 450,000 unique bookings, and since going beta just a year ago, has reached thousands of restaurant locations, a feat that took other reservation providers many years to achieve. Toast Tables is emblematic of our ability to quickly innovate on evolving customer needs. Over a short period, a small team was able to build a solution, get it in the hands of several customers for testing and feedback before going beta and going live. Our vertical focus provides us the room to innovate and tailor features to the specific needs of restaurants, while our go-to-market engine and large customer base provide us a rapid feedback loop and the ability to scale new products quickly and efficiently. As we've expanded our product and grown our customer base, we've become smarter about the varying rates customers will adopt our products. This is especially true with the growth and development of our upsell team. This team has grown significantly over the last year, and it has allowed us to better balance both customer growth and product adoption. We're able to be more strategic about what products do best as part of the upfront sales motion versus at varying times in a customer's journey on Toast. With our consistent innovation engine, differentiated distribution motion, and growth of our upsell team, we will continuously evaluate and refine this land and expand approach. Our teams are operating at full steam, and the progress we've had to start the year is proof that our focused strategy to grow locations and be the trusted platform for the restaurant industry, continue to innovate, and invest to more deeply serve all segments of the restaurant industry, including building out enterprise and international, is paying off. We recently had our brand launches in Canada, Ireland, and the U.K., marking another early step to unlock the significant opportunity outside of the U.S. As we execute on this growth strategy, we also remain focused on efficiency and cost discipline, putting us on track to sustain healthy growth and deliver adjusted EBITDA profit as the year progresses. Before closing, I want to thank our customers and our employees. We're off to a great start this year. The team is executing in all the right places to go after the large opportunity ahead of us while operating with efficiency as a North Star. I'll turn the call over to Elena. Thanks, Chris. Thank you everyone for joining. I want to start by thanking the entire Toast team for your hard work and steady execution. Our consistent momentum drove another solid quarter with both revenue and adjusted EBITDA exceeding the high end of our guidance ranges. We continued to balance strong top-line growth with disciplined investments evidenced by our fifth consecutive quarter of adjusted EBITDA margin improvement. We remain in the early stages of an incredible opportunity to be the trusted technology partner of the restaurant industry. With our leading software and payment platform, differentiated go-to-market strategy, and focused execution, we believe we have a long runway of sustained top-line growth and margin expansion ahead. In Q1, we added over 5,500 net new locations, increasing the total number of live locations on our platform to approximately 85,000. Our go-to-market engine is executing at a high level and seeing success across the full breadth of the restaurant TAM, leading to the continued market share gains. In addition to the strength in SMB, as Chris discussed, we're also gaining momentum upmarket with key wins in the middle market segment, picking up traction in hotels, and leveraging our e-commerce motion to gain share downmarket. Q2 is typically a seasonally strong quarter for location growth, and combined with a strong pipeline and consistent go-to-market execution, we anticipate net new location adds in Q2 to be north of 6,500. Looking further ahead, with the combination of consistent sales rep productivity, growth of flywheel markets, and traction across more parts of the TAM, we expect quarterly net location adds to be closer to the 6,000 range in the second half of the year compared to the 5,500 quarterly adds we saw in last year's second half. Total revenue grew 53% year-over-year to $819 million in the first quarter. ARR, which is our core operational metric, ended Q1 at $987 million, up 55% year-over-year. Subscription services revenue grew 70% year-over-year in the first quarter, benefiting from healthy location growth and higher ARPU. SaaS ARPU on an ARR basis increased 16% year-over-year and 3% quarter-over-quarter. I want to provide some context on ARPU growth going forward. Overall, we continue to focus on driving total ARR growth through a combination of both locations and sustainable ARPU expansion over the long term. Over the last two years, we drove a step function change in SaaS ARPU and doubled our location count. This provided a tailwind to SaaS ARPU and revenue growth. Looking specifically at SaaS ARPU, it increased nearly 60% since the end of 2020 as we expanded from a point-of-sale offering to an integrated platform and shifted to selling the product on a platform basis. At the same time, we ramped several key new products, all of which led to landing much higher ARPU at booking. In addition, as Chris discussed, as we develop our upsell motion, we have become more sophisticated about optimizing the mix of products we land at booking. Our upsell team allows us to be more nimble about what we sell upfront and how we grow with customers over time, ensuring we phase in products at the right time for different customers. The investments we're making to expand across the TAM, coupled with adding products and features that are unique to restaurants, underpin our 2 strategic growth vectors, locations and ARPU. The combination of these two are key to driving total ARR as we further penetrate the $55 billion market opportunity. We expect there will be a balance between the two of these in any given year, and as we comp against the step-up in ARPU growth, we anticipate more moderate ARPU growth in 2023. We remain incredibly confident in the large and growing long-term SaaS ARPU opportunity as we continuously refine both our new business and upsell motions and further differentiate ourselves through ongoing product innovation. At over $2,000 of ARPU for the full featured product, Toast Tables is a great example of our ability to expand the ARPU opportunity and address more of the restaurant's tech spend. Our long-term confidence is underpinned by the fact that we have a growing base of customers generating high SaaS ARPU. A great example of this is a Midwest brewery offering craft beer and food generates about average annual GPV and over $20,000 in SaaS ARPU. This customer is using a total of nine modules, including Online Ordering, Mobile Order & Pay, and Toast Tables. In addition, the customer is leveraging multiple Toast Go handhelds and a number of KDS to streamline operations. As we expand the platform, there are multiple paths we can offer customers to reach high SaaS ARPU. Approximately 10% of our locations have SaaS ARPU above $10,000. That's nearly double the percentage from a previous year. At the end of Q1, 42% of locations were taking 6-plus modules, which is up from 36% in the previous year. Moving to FinTech solutions, first quarter revenue grew 54% to $673 million, and gross profit was up 65% year-over-year to $150 million. GPV growth remains healthy and increased 50% year-over-year to $26.7 billion in Q1. Average annualized GPV per processing location was approximately $1.4 million, up 11% year-over-year and flat quarter-over-quarter. Q1 year-over-year revenue growth benefited from the comparison to Omicron in 2022. We expect GPV growth to moderate for the balance of the year. Our non-payment FinTech products, led by Toast Capital, drove approximately $26 million of gross profit in Q1. Demand for our Toast Capital offering remained strong in the quarter as we continue to provide eligible customers fast, flexible access to capital. In the quarter, Toast Capital originations totaled approximately $175 million or 70 basis points of GPV. We remain uniquely positioned to manage the risk profile of the portfolio, thanks to our restaurant POS and payment processing data. That enables us to assess and monitor the health of a restaurant to inform our underwriting process and pricing and prudently balance risk while growing the product to help our customers grow. For example, Dudley's Sport and Ale, a sports bar and rooftop in Northern Virginia, used a portion of funding received through a Toast Capital loan to build a new pergola on the roof, adding 16 tables to the rooftop. The pergola paid for itself over the span of three and a half weeks and has contributed to a daily sales volume increase of over 10% month-over-month so far. This is a great example of our unique ability to provide our customers access to capital, which in turn benefits our business as customers leverage those loans to increase sales and drive growth. In short, when our customer sales grow, we grow. Net, net take rate increased 56 to 56 basis points, with other FinTech products contributing about 10 basis points, which was similar to Q4. Looking ahead, we anticipate Toast Capital will grow slower than the sequential GPV growth as Q2 is a seasonally strong for GPV. Keep in mind, Q1 benefits from higher debit mix, while the mix of credit should increase through the course of the year. Overall, we continue to expect net take rate to be in the low 50 basis points range in the near term. In Q1, total gross profit grew nearly 87% year-over-year and was up 10% quarter-over-quarter to $189 million, resulting in a total gross margin of 23%. Looking at our recurring streams, subscription and FinTech gross profit totaled $229 million in the first quarter, up 71% year-over-year. Turning to customer acquisition costs, hardware revenue increased year-over-year due to both strong new bookings and upsells to existing customers as restaurants prepare for peak season. Hardware margins were down slightly versus the prior year. On the sales and marketing side, expenses were up 46% in the first quarter due to growth in the sales team over the past year, as well as the timing of certain expenses like payroll tax, which reset in Q1 each year. We expect growth in sales and marketing to slow through the rest of the year as we lap investments we made to scale the sales team over the past year. As Chris mentioned, the launch of Toast Tables is the latest example of how R&D investments are driving product innovation that is further enhancing the Toast platform and expanding our ARPU potential. We're also investing to support our expansion up market and into the mid-market and enterprise segments. These investments will further differentiate our platform and unlock deeper penetration across the restaurant TAM, as proven by the progress we've made in the hotel segment with Toast for Hotel Restaurants and in our ability to offer a tailored set of products and services amongst QSRs. Overall, we remain excited about our product pipeline and ability to drive sustained ARPU and location growth over the long term. In Q1, total general and administrative expenses increased 45% year-over-year. Excluding bad debt and credit related expenses, G&A expenses grew 18% year-over-year, and we expect growth to moderate as the year progresses as we remain focused on driving efficiencies and managing headcount. Bad debt and credit-related expenses totaled $15 million in Q1. The majority of this is due to the reserves related to Toast Capital. Total Q1 adjusted EBITDA was negative $17 million and margin was negative 2.1%, an over 600 basis points improvement from prior year. Excluding bad debt and credit-related expenses, total OpEx growth slowed to 35% year-over-year. We expect that growth to moderate as the year progresses as we focus on containing headcount growth to our most critical growth areas and driving efficiency across the business. Now let me turn to guidance. For the second quarter, we expect revenue to be in the range of $920 million-$950 million, representing 39% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be in the range of - $10 million-$0, representing over 150 basis points of sequential margin improvement at the midpoint. Based on our strong Q1 performance and Q2 guidance, we increased our full year 2023 revenue expectations by 4% at the midpoint. We now expect full year revenue to be in the range of $3.71 billion-$3.8 billion, a 37% year-over-year increase at the midpoint. Our updated full year adjusted EBITDA guidance range is - $10 million to +$10 million. At the midpoint, this implies we will be break even for the full year and profitable for the second half of the year. We also expect free cash flow to turn positive as the year progresses. The increase in our adjusted EBITDA guidance is a function of both the momentum we're seeing in the business and our relentless focus on a scalable, lean cost structure. Across the business, we are balancing investments in the massive opportunity to be the technology backbone of the restaurant industry while staying laser focused on operating efficiencies to drive share gains, durable growth, and consistent margin expansion. In closing, Q1 was a great start to the year, posting strong financial results and building on the momentum coming out of 2022. We're well positioned to drive sustained ARPU and location growth and create long-term shareholder value. I want to thank all of our employees, customers, and partners for helping us support our continued success. I'll turn the call back over to the operator to start our Q&A. Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. As an additional parameter, please keep your questions to one question and one follow-up question. We'll pause here briefly as questions are registered. Our first question is from Josh Baer with Morgan Stanley. Your line is now open. Great. Thanks for the question and nice quarter. You're talking about momentum both in the mid-market, up-market, as well as down market. A couple questions there. How are you balancing product and go-to-market investments for those different segments? Second, how should we think about the mix shift ahead and any potential impacts on GPV per location? I can jump in, Josh. Good question. You know, I think we're taking a real balanced approach. I mean, our core engine continues to hum at the next level. When you look at the core SMB, we continue to be quite confident in that hyperlocal go-to-market engine and how well it's performing. At the same time, we're encouraged about what we're seeing in mid-market and enterprise. I think you're going to continue to see us expand our TAM, just make sure that we're measured in how we go up market. We're seeing some good pull, we continue to be a little bit measured in our progress up market. The unit economics look really good, again, we. You know, our core engine's humming up market. We're seeing good demand. I'd say down market, we want to make sure that we don't lose that section of TAM. When you see us push out e-commerce and self-service onboarding, it's to make sure that the entirety of the restaurant TAM in the U.S. is addressable by Toast. At the end of the day, we think we're well-positioned to now address The entirety of the TAM, given the expansion examples that we've shown you. Yeah. Just to build on what Chris said, Josh, as well, we're gonna always keep unit economics in mind. We're gonna come back to the payback period that we talk about, which is in the mid-teens, and that's how we're balancing those investments across the segments and pay particular attention to making sure that we always come back to that in a balanced approach, in a balanced way. Awesome. Thank you. Thank you, Josh. Our next question is from Rayna Kumar with UBS. Your line is now open. Good afternoon. Thanks for taking my question. Last quarter, you announced the acquisition of Delphi Display Systems. could you talk about the integration and how that's progressing and if it's helping you win share up-market? Yeah, I can take that. The integration of Delphi is progressing on track. We're excited about the team's progress. Ken and the team are doing a great job. As you'll recall, they were already a partner of Toast, we were already collaborating quite a bit in the field. The acquisition of Delphi is part of the continued commitment that we've made to help QSRs of all sizes drive speed of service, unlock revenue, unlock drive-thru, and become more efficient operations. We're excited about this. It adds internal and external digital menu boards with order coordination within the Toast platform. We're very excited about it. We are seeing opportunities to increase the lead volume from Toast to Delphi, but I think it's important that it's still early in the integration process, and we're gonna make sure that strategically we make all the right moves early so that it becomes a foundational component for our go-to-market across the QSR and enterprise space. Overall, we're happy with where it is and, you know, we look forward to reporting some wins to you in future quarters. Got it. Just a follow-up on international. Can you just give us an update on how your international expansion is going? You've talked about investing roughly $10 million-$20 million towards that segment of the market. Do you expect investments to further ramp up this year? Yeah. You know, we're taking a very measured approach on international, but early. You know, we're early in our investment there. Early traction has been really solid, I would say. It's not gonna contribute meaningfully to revenue this year, now we've got the foundation in place. We've done some brand awareness, which is what you guys saw over the last couple of months. Now we're really focused on honing the go-to-market strategy and continuing, you know, to build this awareness and then of course, build out the platform and the on the product side. We're not gonna split out the investment, but, you know, it's fair to say we'll invest a little bit more, but we're gonna take a very measured approach on further investment. Great. Thank you. Thank you, Rayna. Our next question is from Tien-Tsin Huang with JP Morgan. Your line is now open. Great. Thank you so much. Really great results here. It sounds like stronger location addition expectations relative to ARPU, where you see maybe a little bit of moderation, which is not surprising. Any call-outs on what specifically is driving this? Is it momentum in certain geos or restaurant types and locations? Just any additional color would be great. Thanks. Sure. look, as Chris and Elena mentioned on the call, we had a strong quarter on net adds, right? Are expecting a record quarter in Q2. Really proud of the way the team is executing across the board. We, you know, fundamentally continue to see the same trend we have mentioned in previous calls, where restaurant density and rep tenure in our flyable markets drive improved productivity. A good example of this in the IR deck is, you know, this Mid-Atlantic region where you can see as you get more density in restaurants, you see the productivity improve. Our competitive win rates are strong, right? We win a majority of the time when we get into the decision, regardless of whether it's QSRs, FSRs, new restaurant openings versus existing. Really at the macro level, those trends have been largely consistent with previous quarters. You know, I think we're seeing strong growth in our core SMB segment, right? While growing into new segments, as Chris mentioned on the call, including, you know, down-market e-commerce, as well as some really great wins in mid-market as well. Terrific. That's great to hear. Just maybe to build on that a little bit. You mentioned the growth in the upsell teams, and it's driving good balance there in terms of when to promote. Are you seeing any sort of change in or surprise, maybe I should ask, in terms of the types of add-ons or services that, you know, restaurants are looking to add? I don't know if it's just things that are further from the core, like, say, payroll or things that are closer to the core, if you follow my question. Yeah, it's a great question. I mean, look, I think I'll give you one anecdotal example. We see that when a brand new restaurant's opening up, a new location, this could be, you know, an expansion of even an existing restaurant within our within our customer base, we tend to see higher attach of payroll. Whereas if a customer that's already open, we see, we call those restaurant switchers, right, on Toast. We see lower attachments of payroll up front, and then our upsell team takes over and is able to, you know, upsell more of the platform over time. You know, I think but overall, I'll just go back to if you look at our ARR year-over-year, it's up 60% and both locations and ARPU are contributing. You know, at the highest level, we see across our key products, Employee Cloud, xtraCHEF, some of our guest products like Tables, as Chris and Elena mentioned on the call, we still see lots of opportunity to continue to scale Attach. You know, new business ARPU on booking is still in the mid-$5,000 range. Of course, you know, our upsell motion continues to become a bigger factor in terms of the composition of revenue growth, and we expect that to complement ARPU at initial booking. Got it. No, it's really interesting. Thank you for your thoughts. Thanks for disclosing the subscription and the payment AR. That's great to see. Thanks. Our next question is from Will Nance with Goldman Sachs. Your line is now open. Hey, guys. Good afternoon. I wanted to maybe follow up on some of the flywheel markets that you guys have talked about. I think you mentioned a greater reliance on inbound channels in these markets. I wonder if you provide any color on how customer acquisition costs vary between flywheel and non-flywheel markets. Then, you know, looking forward, you mentioned, you know, e-commerce and more self-service, you know, kind of being a focus in the future. Maybe you could just talk about how you're thinking about the outlook for customer acquisition costs in more mature markets in a steady state, and maybe how that differs from, you know, some of these markets when they're in more growth mode. Yeah. It's a good question. I mean, look, I think back to what I just shared, we continue to see that our strongest growth in our densest markets, right? This is what we call flywheel markets. Basically, when you've got higher restaurant density, you've got higher rev tenure, you've got higher brand awareness, that's what drives greater productivity. It's really. We see this by the way in all of our markets as we're getting more and more market share. We're not seeing any impact in terms of productivity. In fact, we're seeing the strongest, our strongest productivity in those markets. You know, we've got a good mix, you know, whether it's urban markets, suburban markets, tier one cities, smaller cities, we're seeing a good mix of markets where we're seeing this effect. Of course, as you've got more markets where you've got stronger productivity, you know, and a lot of that's also driven by stronger customer referrals, you expect to see better unit economics in those markets relative to markets where we're investing and don't have the same level of rep productivity. I think in terms of your question on e-commerce and mid-market, you know, those are markets that are still a small portion of our overall customer base and even our overall growth rate. The most of our growth is still coming from our core SMB TAM. In those segments, I think we are learning, but as Elena and Chris mentioned, you know, we're very focused on unit economics across all of our segments. Even in the lower of the market, we're looking at things like, you know, self-service on purchase, self-service on onboarding, to make sure the unit economics of those customers are healthy, even if the ARPU is lower. Yeah. One way to think about it, Will, is to look at the entirety of the U.S. TAM and make sure that we're adapting our go-to-market motion, our onboarding motion, our self-service motion to support that sub-segment of the U.S. TAM. The conclusion is that the entirety of the U.S. TAM is now becoming more readily available to Toast. That's really the strategy behind that, because we don't wanna look at the U.S. TAM and say, "Well, geez, this section's unaddressable because we can't adapt the platform or adapt our motions." What we're seeing is high confidence that we can adapt our motions and we can adapt the platform so that customers of all sizes and types can subscribe and onboard to Toast. That's really what where that's coming from. Got it. Appreciate the detail. Then maybe, separate question, you know, in the same vein of growing locations and expanding ARPU. On the payment side, there's been a kind of a lot out there in the market on price increases, just in the acquiring space overall. I think some of your competitors are putting through some fairly large price increases. I guess, can you maybe talk about the desire to kind of pull that lever and keep pace with some of the market increases versus maybe marketing against it and using it for taking market share in the restaurant space? Yeah. That's a great question. Look, we're always optimizing pricing and packaging for new customers, we've done, well, we're always optimizing. We've not done any wholesale pricing changes for our customer base. I think one thing we're testing right now is a usage-based fee. This is on our digital ordering suite, and this is fairly common in the industry. We see this as a near-term opportunity for us and you should expect to hear more from us on this in the future. In terms of a wholesale price increase, that's not something we've done. Understood. Appreciate you taking the questions. Yeah. Thanks. Thank you, Will. Our next question is from Timothy Chiodo with Credit Suisse. Your line is now open. Great. Thank you for taking the question. Strong locations guide that you gave for the next three quarters, I'm sure that transparency was appreciated. Can you talk a little bit about what you're expecting in terms of any changes at all or the composition across the three buckets of gross adds, meaning brand new restaurants, new locations added from your existing customers, and then, of course, the restaurants that are switching over to you from either a legacy or a competitor? Is there anything that you're seeing changing there? Then there's a follow-up on new business formation. Look, I think, you know, maybe I'll give you a little bit of a boring answer here, but the mix of NROs versus existing restaurants in our base is relatively even, right? There's not anything material that's changed here. One thing just to keep in mind is when we talk about new restaurant openings, some of that is expansion from existing customers. As our base goes up, that can play a bigger role and contribute to our growth. I think we're able to successfully win new restaurant formations as well as existing restaurants that already have a POS platform in place. Our win rates on switchers, right? One thing I call it is our win rate on switchers does go up with rep tenure. That is a tailwind as we get into more of these flywheel markets that we should expect. In terms of mix on QSRs, you know, the mix of QSRs is up from a year ago. That's tied to our push in QSR as we announced a year ago. It's good to see the product team's focus here in that segment. That's allowed us to really gain share faster in the segment. You know, one example of this is actually, Chris and Elena shared some customer stories. We have a customer called Golden Krust out of White Plains that started off with 30 locations, just recently expanded to 111 locations with us. What they really valued in the platform is all of our third-party integrations into Uber and DoorDash that's built in from into our platform, as well as some of the improvements we've made into our enterprise menu management capability. I think you should expect to see the mix of QSRs continue to tick up in our mix. Overall, beyond that, you know, nothing else to report. Okay, great. Thank you. The brief but related follow-up is just around when we look at some of the macro data from the Fed, et cetera, that shows accommodations in food services, just the number of new applications being put in at levels that are way higher than they were pre-COVID. Would you say in general that you're seeing across your core markets an uptick in new restaurant formation? Is it relatively similar? Is it higher, lower relative to maybe what you saw back in 2018, 2019-ish period? Yeah, I think we've seen an elevated level of new restaurant openings in our portfolio for a while now, right? I think that's been going on for a little bit post-COVID. That trend, I think, is not new at this point. Excellent. Yeah. Point was more around it persisting. That sounds like it is. Thank you for taking those two questions. I appreciate it. Thanks. Thank you, Tim. Our next question is from Stephen Sheldon with William Blair. Your line is now open. Hey, thanks. I'll echo the congrats on the quarter. In terms of market share, I guess how much room do you see there to continue replacing legacy vendors, you know, MICROS, Aloha, et cetera, as you think about the next few years? On that front, have you seen any uptick in interest or conversations from restaurants on some of the legacy vendors, especially given the cybersecurity issues that one of them recently faced? I guess, has that driven any acceleration in replacement opportunities for Toast? Sure. When we go back to what I said earlier, when we get into a decision, we win a majority of the time and really compete well both against on-premise and cloud vendors. You know, we continue to see the same dynamic where it is really the biggest thing that we see is with the customer density and rep tenure in our strongest flywheel markets continues to be the biggest driver of rep productivity. Of course, as Chris mentioned on the call, it's driven by awareness, top funnel referrals, you know, stronger close rates. The biggest thing that the team is focused on is to get more of our markets into this flywheel dynamic we've talked about. Like, I think as Lena mentioned, we had a strong quarter on net locations adds in Q1, expect a record quarter in Q2. Obviously, you know, that speaks to just the great execution from the team across both legacy providers as well as cloud providers. Hey, Stephen, this is Chris. Some of those examples I gave in my script, you know, Buffalo Phil's, McMenamins, the TAG Restaurant Group, those were all examples of displacing legacy, by the way. We still think there's plenty of legacy out there to go after, but now we've obviously built a strong muscle to compete against both cloud as well as legacy. The examples that I did mention today were all legacy displacements. Perfect. That's really helpful. Just as we think about adjusted EBITDA over the rest of the year, it seems like you may hit the positive inflection point potentially a little sooner than expected. Just curious if, you know, relative to what you guided to last quarter, has investment spending plans, have those changed at all, or is it really just about stronger top line trends, continued efficiency, and you're still planning more or less the same amount of spend on all the different growth initiatives that you, I guess, have underway? Yeah, I mean, I think it's a little bit of both, right? On the top line, you see the momentum and the strong start to the year, and Aman and Chris sort of touched on not only the rep tenure in flywheel markets and how those are progressing. We also are seeing, you know, solid GPV trends ahead of our expectations in Q1 and then in April in line with what we typically see. When you kind of put that together, and then you factor in a little of the macro backdrop, and then you look at the expense line, look, we've continued to deliver on adjusted EBITDA margin improvement. Like I said on the script, five quarters in a row, that discipline's gonna continue for the balance of the year. You'll see OpEx moderate as the year goes on. We're gonna lean into the investments where we have high conviction and where we feel like there's gonna be a strong return. Then, you know, we'll scale back investments if they do not meet the hurdles of high ROI. We are being very cautious and targeted in our investments, and that's what you'll see throughout the year. Great. Thank you. Our next question is from Jeff Cantwell with Wells Fargo. Your line is now open. Thanks. Can you talk some more about your international launch? It seems like that's big news. What is that actually going to look like? For example, you know, your sales team's already there in each of those markets equally, or are you putting more emphasis in one particular market at the outset? What's your thinking about how quickly you can scale in each of those markets? I'm just trying to kind of get a feel for strategy for the pacing, any color, you know, as you think about this next leg of your growth. Thanks. Yeah. It's fair. You know, we set out and started with investment in English-speaking countries, and we're really focused right now on honing the go-to-market motion, understanding the landscaping, getting brand awareness out there. Canada is very much like our U.S. market, so we're seeing really great traction there. We'll continue to obviously spend time in the U.K. and Ireland. So far the focus is hone the go-to-market motion, build out the platform. Today, only our core platform elements of our platform are available. We seek to continue to expand the platform that's available to the market, and over time, you'll see that drive more meaningful growth. I think that's, you know, like I said on the call or prior question, it's not going to have a meaningful contribution in the near term, but over the long term, we think of it as a, as a great opportunity for this business. Okay, great. Which leads to my follow-up, which is, you know, just how do you think about balancing this move internationally with your ongoing drive to improve your profitability over time? I'm curious if there's a way to grow internationally while also expanding from wide margins and profitability. Thanks. Yeah. I mean, I think the, you know, the one thing is that relative to our total investment in the business, it's not, it's not material. That said, you know, like I said earlier, we're really focused on making sure before we continue to invest, we sort of see proven results. That, you know, we're early in that journey. I think towards the back half of the year we'll have a better feel for that. So far, we're really encouraged by what we're seeing. The demand is, you know, healthy. We're gonna continue to look at that very carefully. I think we got to balance and understand what will that business look like at a steady state, obviously, and that's what we're thinking about, and making sure that when we come back to payback periods and unit economics, we try to focus on balancing the whole picture for the company, right? It's gonna take some time. We've got to scale that business. Great. Thanks very much, and congrats on the results. Thank you. Thank you, Jeff. Our next question is from Josh Beck with KeyBanc. Your line is now open. Yeah. Thank you for the question. You know, I wanted to go back to really some of the macro commentary. It feels pretty benign from some of the comments that you've made. You know, when I look at the GPV per location as a same-store sales proxy, it's kind of been running in the high single digit range. You know, other probably more, you know, broader consumer payments companies have indicated in March and April they saw things maybe slow or skew towards more non-discretionary categories. Just curious if you've had, you know, any observations that are worth, you know, calling out at the same store sales level as we think about building out the models here. Yeah. Hey, Josh. You know, demand was solid. When we look at Q1 trends, demand was solid pretty much as expected. You know, GPV came in ahead of our expectations for the quarter, and GPV per location was up 11%. As a reminder, Q1 last year was impacted by Omicron. We're pleased with what we saw across the quarter. Within the quarter, similar to other reports that you're mentioning, you know, March was slightly lower, but April is consistent with our expectations. We continue to see consumers moving more spend to services like dining out versus retail. We believe that the industry trends with restaurant sales are outperforming overall retail. That's encouraging. We also think that consumer spend on dining in past economic slowdowns has been pretty resilient. Those are some comments on what we're seeing. I think the other thing is it's important to note that, you know, the value of our platform to restaurants becomes even more durable, you know, during tough times because we help restaurants drive operational efficiencies, and then we help restaurants drive revenue. We feel like we're in a pretty good spot, noting the dynamic both from consumers in restaurants and both are incredibly resilient. Yeah. I mean, just to build on that, April is in line with what we expected. And just a reminder, May and June, you know, are big months for us, particularly Mother's Day and Memorial Day weekend. Just keep that in mind. So far, April is in line with what we typically see. Very helpful. You know, I found the stat on, I believe you said about 10% of locations are greater than 10K in R2, and I believe that mix almost doubled, you know, you said year-over-year. You know, how should we think about maybe what is a ceiling there? When you were mentioning the moderation in SaaS ARR per location, you know, should we be thinking about the type of level that we're in now, which I think was about a five-point decel from last quarter as a good- You know, proxy, should we be looking maybe more at, like, the nominal growth? Just any more context there would be appreciated. Yeah. No, that's a great question. Yeah. At the highest level, to answer that question just directly, you know, we think about it on, you know, for the full year, I would expect that to moderate, you know, somewhere in the ±10% for the full year. We think that's incredibly healthy, especially when you put it in context to the step-up that we had over the last quarter, well, last two years, actually. You know, I think on my script I said it was over 60%, over 50% growth over two years. We know that that's not gonna continue. 10% growth on an annualized basis is still very healthy. When you just zoom out and think about the bigger opportunity, all the innovation we're talking about, that's why we have so much conviction about the growth in ARR. We're seeing momentum in locations. We're seeing our upsell team do really well. We're seeing our ability to go back and sell to our install base more consistently. When you look at all that proof point that you mentioned, that 10% of our customers are spending more than $10,000, that's just, you know, that cohort of customers. On my script, I had a customer that's spending 20K in SaaS ARPU. We're starting to see enough proof points of customers really, you know, leveraging the breadth of the platform, and we're gonna continue to hone this muscle over time. I would point you back to, you know, our North Star continues to be growth in ARR. We've got two vectors of growth, whether it's locations or in ARPU. We feel incredibly confident about both of those. Excellent. Thanks Elena and Chris. Thank you, Josh. Our last question will be from Dave Koning with Baird. Your line is now open. Yeah. Hey, guys. Appreciate it. I guess another question on profitability. It looks like the last couple quarters, and really the guidance for the year I think too, assumes incremental EBITDA margins something around low double digits on revenue growth or I guess incremental on GP growth, maybe closer to 35%, 30%-35%. I mean, is that kind of in the ballpark, and is that kind of now a little bit of a pattern that we should expect going forward? I didn't hear the first metric you said. What was growing? Yes, the incremental EBITDA margin. Oh. Yeah I think on revenue growth of, like, yeah, low double digits. Yeah, I mean, I would just point you back to our guidance as, you know, as the best way to think about that. Obviously, we're gonna try to continue to deliver. We see the momentum in the business. We wanna be balanced with the macro as well. Yeah, you should see consistent margin improvement from us in the same way you've seen for the last five quarters. All right. Thank you. Just maybe a quick follow-up. Did you give monthly trends? I know the 50% GPV growth, but did you give kind of month by month, January through March? No, we don't give that level of detail. Overall, the quarter was strong. Yeah, gotcha. All right, thanks. Nice job. Thank you. Thank you. I would now like to turn the call back over to the presenters for any closing remarks. No closing remarks. We thank you all, and have a great day. This concludes today's conference call. You may now disconnect your line.