- Restaurant payments and software company Toast has acquired Delphi Display Systems, Boston-based Toast announced Thursday. The acquired business provides digital menu and drive-thru technology for quick-service restaurants.
- Integrating Delphi “will enable us to offer drive-thru capability on our platform for the first time,” Toast CEO Chris Comparato said during the company’s fourth quarter earnings call Thursday. Adding the capabilities enhances Toast’s offerings for small and large quick-service restaurants, which have come to rely more on drive-thru services during the past few years, he said. Terms of the deal were not disclosed; a Toast spokesperson declined to comment on purchase price or Delphi’s employee headcount.
- Toast’s revenue jumped 50%, to $769 million for the fourth quarter. Still, the company posted a net loss of $99 million for the quarter, compared to net income of $2 million in the year-earlier quarter, according to a press release.
Following the acquisition of Costa Mesa, California-based Delphi, Toast plans to continue to add more capabilities to its quick-service restaurant offering this year, Comparato said during the call with analysts. Toast launched that product suite in the second quarter of last year.
Delphi “is not material to our 2023 (profit and loss statement), but it is important strategically to our QSR offering,” said Chief Financial Officer Elena Gomez. Delphi’s technology has been installed “at tens of thousands of sites globally,” according to a Toast news release on the purchase.
Toast’s client location count reached 79,000 in the quarter, a nearly 40% increase over the year-ago quarter and a 7% rise over the third quarter, according to the release.
In a Thursday note to investor clients, Baird Equity Research analyst David Koning noted Toast’s slower growth in the fourth quarter, with subscription revenue per location up 1%, compared to between 7% and 12% in the prior six quarters.
Toast’s 2022 revenue climbed 60% year over year, to $2.73 billion. For 2023, the company projected full-year revenue ranging between $3.57 billion and $3.66 billion. Toast is expecting to achieve profitability, on an adjusted earnings basis, before interest, taxes, depreciation and amortization, by the end of the year, Comparato said.
The company aims to continue building its international business, a mission it embarked on last year, although Comparato noted it’ll be a “multi-year journey.”
When asked by an analyst about the likelihood of accelerating international expansion through acquisitions, Gomez said Toast’s international M&A philosophy “isn’t different than it is for our overall business.” The company considers whether there’s a purchase it could make that gets it to market faster, or is complementary to Toast’s product plans, she noted.
“Right now, our focus is building off of the foundation we started in 2022, internationally,” she said.