Toast, Inc. (TOST) Earnings Call Transcript & Summary

All right. Thanks, everybody, for joining. Feel free to have a seat. My name is Tien-Tsin Huang. I follow the payments and IT services sector at JPMorgan. And super excited to have Toast and Aman Narang here, CEO, Co-Founder. I've gathered a lot of great questions from all of you. I'm hoping to get through all of them. And I was just telling Aman straight up, I share with you, high respect to the company, to him and the leadership that he's put in to drive the mission of Toast and all the work we do following payments and thinking about point-of-sale software and systems and verticalizing. I mean, Toast has checked all the boxes and done really well. So hats off to you, Aman, for doing that. And thank you for the time.

Of course, thank you. Thanks for having us. And nice easy commute here.

I was just going to say I think commute is kind of easy. I think maybe you could even walk here. Before we get into the questions, I thought we'd ask -- I think I've asked your peers and Chris in the past, this question. Sort of your favorite local restaurant in Boston, always looking for good Toast restaurant. I don't know if you're allowed to say that, but I have to ask you before we get to...

It has be a Toast restaurant. I've been in Boston for 25 years now, and the restaurant game in Boston has really changed. And I kind of think like there's so many puts and takes. I like near Harvard Square. I like Pammy's a lot. If you like small plates, they do a great job. In Somerville, there is a place called Sarma, if you like Mediterranean. It's a great spot. And then in the Seaport, I like Barbacana which is one of that own, very early customers. In fact, the guy who runs Barbacana got 4 or 5 restaurants now. He was the Chief Operating Officer of Barbara Lynch Group. And he's actually a big part of why we started Toast because we were trying to figure out whether we should build a business in restaurants, and we met with him and his team and got a lot of ideas and initial product from him. And I can keep going. That's like -- I can give you 20 more.

No, that's good. It is noted. We're always looking to try different spots. I'm tired of the same old spots, Aman. So it's good to have that.

But let's start with sort of -- you're always talking to restaurants, you're on the ground. You're seeing a lot of the trends as they emerged. I had written down here that you've grown your share from 10% to 15% in the last 2 years. So where is the next -- in the next 3 to 5, where do you think that share is going to come from? And I know you just updated us on results last week, and you talked about record adds in the second quarter. So maybe you can touch upon that and so the better bigger picture over the next 3 to 5, where do you see the share coming from?

I think -- so this is in restaurants. So you talked about 10% to 15% in the U.S. in restaurants. One of the things that was really encouraging was if you look at the start this year, we always talk about getting markets into the flywheel. And the idea is the more share you have, the more visibility you have, the easier it is to get additional restaurant tours to consider Toast because so much of it is based upon social proof. Where you can -- the best sales pitch is not me going in and pitching Toast, but actually taking someone to the restaurant nearby and saying, talk to the owner about what Toast can do for you. And so we've talked about how important it is to get more and more restaurants in the flywheel. And we're seeing that. We're seeing more markets enter flywheel. We're seeing our flywheel markets continue to have above-average productivity. And these are markets with over 20% share. So we think they're predictors of what's going to happen for the rest of the markets. There's also a lot of energy on looking at markets that are not in flywheel to say why not? And what are the things that we can do on the sales strategy side to continue to drive more penetration. And I think a lot of the effort and the focus, like one of the positive things we've seen this year is year-over-year, we saw AE productivity in terms of locations up, which we're really proud of because at our scale to be able to get productivity up. That's what gave us the conviction to talk about the rest of the year in Q2. And I think that speaks to obviously our execution on the ground. It speaks to our product because in our core business, if you look at like what has gotten us here, right, it's like this maniacal focus on restaurants. And there was -- I got a lot of questions about like is that the right strategy? Should you go horizontal and do more than restaurants. And for a decade, we recently launched retail 2 years ago, there was -- we said, no, we're going to just focus on restaurants and make sure we solve for restaurants better than everybody else. And that mindset continues in the R&D team, which is like what are the ways in which AI can help restaurants? What are the ways in which we can innovate to continue to increase the value proposition and improve the value proposition, just like we have with things like our handheld or we were the first ones to launch a cloud all-in-one that was purpose-built. And so I think those things are like fundamentally, that's the most important driver is the product. right, and the value proposition for customers. And then enterprise, that's another big part of our growth story longer term, where 2, 3 years ago, we didn't really have a lot of penetration and now starting to see some good success. We now Applebee's and Topgolf recently. And that's an the area where our penetration, it's about 200,000 locations is low. And we think that overtime, there is lots of opportunity there.

In terms of the productivity being higher, Aman, thinking about the second quarter record adds, can you be a little bit more specific where are you seeing some of that growth coming a little bit above? Is it more in the core? Is it some of the new?

Yes. So specifically, the productivity, I mean the productivity in the core. And so as we set the plan this year, we wanted our core U.S. restaurant team really focusing on restaurants. That's why we split out the retail team. And I think it's been overall had really positive effects. So in our core, we've seen productivity over above last year. And then in some of these new segments, retail and international and enterprise, we're actually ahead of plan. that's positive as well. And so I think splitting up the team was a good call.

Yes. So I did want to talk about that later. But just thinking about the macro side, I get that question so much. I'm sure you're going to get it all day today, too. But what signals do you see? What are you paying attention to? How healthy are restaurants?

Yes, it's a good question. I mean, certainly, we -- the one thing that we do a nice job of like really tracking all of the data. Our sales team is very data-driven. And we, as a leadership team, get a weekly update that goes pretty deep on not just some of the output, but some of the input metrics that drive our business. And so we're looking at all the things you can expect, like we're looking at same-store sales, we're looking at new openings. We're looking at conversion and win rate. We're looking at churn. We're looking at capital defaults, like all the metrics that matter to our business to understand what's going on. And we've also studied historically what has happened in restaurants. If you go look at -- not that now is comparable necessarily, but you look at 2008, you look at 2001, and you can start -- you can get some perspective on -- at least the data I've looked at says that retail sales were down maybe like 10% or so with restaurants is low single digits even in those tough times. And so that's the other thing that gives us confidence that if you expect history to repeat itself, even if there was a slowdown, I think we have -- that's what gives us confidence that we can manage through it. And so far, if you look at where we are through the balance of the year, like we haven't seen anything material in the business in terms of our input metrics that we're tracking, whether it's all the metrics I talked about, like this productivity, GPV, all that is in line with our expectations. Now as we've shared, it was down year-over-year, like low single digits. So you look at like this COVID boom that happened. I think there's some like post-COVID, there's a bit of a normalization that's happening, but I think it's normalized. It's not like you're seeing this or this, you're seeing it went up and then there's a couple of points of -- it was lower, and that's -- we've seen that in narrow band like every -- once we saw that dip, it's just been in the same range.

Yes. You've seen that for quite some time. So that's not necessarily new. Okay. No, that's great to hear. And look, you guys have been winning a lot of share. So I think that's always helped that stayed on. But before we get into the selling side of it, just -- to the extent that the macro does pressure the topline, Aman, I'm just curious, your commitment to protecting the bottom line and profitability. You've overperformed on some of your margin targets in general. But tell us how much discretion do you have to protect the bottom line and what's nonnegotiable for Toast?

Yes, Tien-Tsin, it's a good question. I think one of the things that we are doing a good job of is making sure that we have clarity and alignment as a leadership team on where we want to be 3, 5, 10 years from now and making sure that our capital allocation is aligned with that in terms of where we're investing, what we're tracking. And so you've heard us talk about the TAM expansion in a material way. You've heard us talk about AI as one of the things we're trying to do there. And so we want to be balanced about making sure that our long-term investments are not compromised. We use like -- if part of the book zones to win, we try to use a Horizons framework in terms of how we invest in the business. So the Horizon 1 business is like this core restaurant SMB business. You think Horizon 2 businesses like our international business, our retail business, enterprise. And then Horizon 3 is things like our consumer efforts, AI efforts and such. And so if there was a slowdown, I think we would certainly make sure we go back and look at and make sure everything we're investing in is above the fold. If there's any discretionary spend areas that we can cut, we'll look at that. We also have -- in our guidance, I think we've factored in to make sure that we can absorb some of that as well. And so I think we -- Elena and team and I, I think we feel confident, and we've studied, as I said, previous recessions in terms of what happens. So that gives us -- I think we're pretty confident that we can manage through it. And we don't want to compromise against what's most important to drive long-term growth and long-term scale in the business.

How about competitively, we're hearing all these updates from your peers. We cover several of them. I think they're trying to narrow the product gap versus Toast within restaurant, food and bev. Are you seeing any change there, especially on the pricing side? Is there pricing discipline across the group? I'll stop there and then I have a follow-up.

Yes. I think there's -- even before you look at competition, there's a lot of work that our team can do to actually continue to get better and better in terms of how we use pricing as a tool. Our sales team has a lot of autonomy now and more so, I think, than they've had in the past in terms of looking at all the variables. So you think about any deal, there's upfront sales and marketing CAC, hardware services and then there's recurring fees around software and payments. And I think we're doing a better job of managing across those variables to optimize what is best for Toast. And I think we've done a better job than we have in the past. That continues to be a focus area for our go-to-market team as opposed to looking at these variables in isolation. And so I think that's been positive. So I think our pricing muscle continues to get better, whether it's for new business or existing customers. And then I think the market is always -- I remember when we started this business, and it was like it's hard to raise capital. And the feedback was, hey, this market is like really competitive. There's lots of players, like how are you going to stand out? And we just walked in. I mean, I remember, we were like walking in a bunch of restaurants around here, like right on here Harvard Square and Cambridge team walk in, they were all using a lot of these legacy solutions. And the reason cloud hadn't taken off, this is in 2013, was because like solving for the needs of this vertical had a lot of complexity to do it well. And I think that focus is what allowed us to be successful. And as the market evolves, and I think people continue to invest to -- within the restaurant sector, our job, R&D team's job is to continue -- and my job is to continue to invest to make the platform better and better. So we track as a North Star metric, our win rate. That's one of the most important metrics that we track in addition to things like ARPU to understand whether or not the product roadmap in our core business and all the investments we're making is translating into outcomes for our go-to-market team and then, of course, more importantly, our customers, so things like NPS, things like attach rates of our products. That's the other variable that we track very closely. But we're doing a lot, for example, in AI now. We're doing a lot to continue to invest in the platform to add more value. And so those things, I think, have allowed us to continue to have really strong win rates and productivity. So if you look at a long-winded way to say, if you look at our -- where we are relative to where we were 2, 3 years ago, if anything, our win rates have gotten better. in this market. We win a majority of the time when we're in a competitive cycle.

Okay. Good. So let's do enterprise really quick. That was a popular question from investors. You did announce Applebee's, Topgolf as well. And so curious, tell us what have you learned from these wins? Why did they choose Toast? And remind us of the implementation timeline for these 2?

Yes. So we had talked about launching an enterprise business pre-COVID in 2019. And then when COVID hit, we said we need to focus. And so we got our focus back within the SMB. And really just -- I think it was maybe 2, 3 years ago, 2.5 years ago, we said it's time to launch back in upmarket and enterprise. And that required, as we have shared with many of you, the biggest gap was really building out the above-store capabilities to support these larger chains. So we've had success in multiunits for a long time, but not the larger chains. And so we invested in like really above-store management of menus and config and there's a bunch of work on our API architecture on security and compliance and all the things that enterprise groups need. And I think that's really what is starting to pay off. If you look at some of the wins we've had over the past year, 1.5 years, it's Marriott, MTY, Choice Hotels, Hilton, Potbelly, Perkins, Applebee's Topgolf's a bunch of others as well. And I think this is a testament to the product team's execution and a commitment to say we can solve for the needs of larger chains as well. And what we hear typically from a lot of these groups is you'll see pull from franchisees because if you're a franchisee or you've seen Toast in the SMB environment, you typically -- a natural question, if let's say I'm a franchisee is you're going to go talk to the servers to say, hey, how do you like Toast? Like does it help you run -- be more efficient, like it help productivity? Does it help you with tips? And one of the things that's been really positive for Toast, right, and this is actually a big headwind early on was the restaurant communities and the servers and the kitchen staff that work in restaurants know Toast really well and like Toast. And in fact, help drive our flywheel. And so that often is something in our favor where a lot of the staff that work even in the enterprise chains know and are familiar with Toast and like Toast. And so the franchisees will bring it up in that context. And then it's about can we support them, right, for the things beyond the 4 walls of a restaurant. And we still have work to do. Like we -- it's good to see that we've made progress, but we still don't have -- we haven't fully built out our drive-thru capability. We think there is an opportunity in the next couple of years with voice AI, where at least what I'm seeing is the technology is starting to get there. And so there's this unique window, I think, over the next 2, 3 years where you can leapfrog what's out there in terms of building out not just like what it takes to power a drive-thru, but leveraging more some of the AI technology. And I've seen examples, by the way, we're picking up a phone, like maybe not in like drive-thru quite yet, but picking up a phone, it works remarkably well. So if you're a restaurant, you want to pick up your phone, you can leverage -- start to leverage AI now, and it will do a nice job of like ordering online, booking a table, like all these hours, like all the things that you call a restaurant for, like -- we're not that far off because there's not a lot of ambient noise when you call, and it's -- we're getting there for that. And so the question is, what else could you do with it? And one of the use cases, obviously, the big one is drive-thru. Another one is in the restaurant, like are there ways where you can have voice AI augment the server. So there's a lot of opportunity to innovate and do more than just replicate what's out there today.

At the drive-thru, I think all the AI we hear is arguing from my family about what we're going to order. So I'm not going to come out from that. I do want to -- let me think. Before we go into AI, I do want to hit that. I do think it's important to ask, I'm just thinking on the enterprise, just to stay with it and close it out, just payments attached. How important is payments attached? I think Applebee's is not attaching payments I'm curious how that impacts growth and margins. And does this make you more competitive if that's not something that has to be included?

Yes. I think like the the team does a nice job of looking at the unit economics on a deal-by-deal basis because these are large deals. So like, for example, Applebee's, we're really happy with payback periods and margins and ARPU on that deal. And if you go look at like a lot of these enterprise chains, the reason they have adopted our payments quite a bit is because it actually works really well as part of the platform natively. And often, when they don't, it's because they've got another partner they're working with and they want to focus right now on the point of sale. And so we're open-minded either way, like whatever is best for our customers is how we look at it. One thing I think we need to do a better job sharing with all of you is as we get into beyond these SMB restaurants. And you look at more material growth out of retail, out of national, out of enterprise, some of the unit economics are different, right? And like retail, I think, is the closest to the U.S. SMB business in restaurants, like GPV per store is, if anything, slightly higher than the TAM. We're seeing really good -- it's like the focus there on that team has been remarkable. And like we've seen -- it feels a lot like the early days of the restaurant business when you see like us in some of these markets in the U.S. In enterprise, like the deal value, as you can imagine, our mid-market even the deal value in terms of ARR you're booking, you got hundreds of locations. The payback periods are never an issue because you've got a small sales team selling lots and lots of units. And we're exploring what are the ways in which we can drive ARPU long term and margins long term upmarket in enterprise. And so we're looking at everything from innovation like voice AI, like I talked about, we're looking at guest products because one of the areas where I think we can drive both win rate and ARPU upmarket is our guest suite. You think about like most chains, they want a compelling online ordering, kiosk, CRM solution. And then also, I think enterprise support is another area. We haven't done much there, but I think there's an opportunity there long term to create a differentiated support offering for enterprise chains because a lot of that often is in-house and it doesn't necessarily need to be often folks feel like they see the value of having Toast be a good partner there. And so I think ultimately, like in all these areas, we're managing and looking carefully at payback periods and margins. And we feel like a lot of these areas are very accretive to the business, right? Ultimately, like across all of these, the reason we're investing and the reason we think these are good businesses to be in is because if you look at the core of what we're selling, it's not that different than what we sell into an SMB restaurant. Like G&A, the OpEx costs, we -- it's in our best interest, I believe, to continue to invest to scale because that's where the leverage will come from longer term.

Good. Good. Now I feel like we should -- since it's a tech conference, we should talk about AI a little bit more. So let's skip on that -- skip ahead to that. I'm just trying to make sure we use your time wisely. So I think with AI, I thought Sous-Chef. It was interesting when you talked about it at Investor Day and the AI assistant for restaurant operators. You just also announced ToastIQ. How do these things work together for those maybe less familiar? And help us understand the monetization around AI, both from a customer standpoint, but also from a retention standpoint.

Yes. What's interesting is like the AI in this world is changing so quickly that what was relevant a year ago, and I'm sure many of you know this 6 months ago, it's like changed in terms of just how fast these LLMs and these models are evolving. And so what you could do with AI even a year ago versus what you can do today is changing. And so as an example, with Sous-Chef, when we first launched it, we felt like you think of the average restaurant tour, they're not technologists. They don't have CIOs on staff. And often, when they call us, it's like very -- our support team, they are very basic questions like how do I turn off online ordering, something very basic like that or I can't find this report. Like I know I could do it in the past, I just don't remember how to get to this view where I can see like short employees in terms of who have the highest check size or something. It's really basic questions that there's a lot of support volume and things that you would expect to be self-service. And part of the reason is because the turnover in restaurants and employees is pretty high. And so often, they got to get up to speed on this new platform, we got a new GM, a new staff member. And so the vision behind Sous-Chef was, can we give people a language interface to be able to interact with the back end of Toast. So you can do things like the same questions you call support for ask Sous-Chef using a language interface, just like you in ChatGPT, right? So you can go and say, what happened with sales yesterday or why was fraud up or who are the employees that had the best productivity and upsell on these items that I know we wanted to promote as specials. And so there's a whole host of questions about offering that language interface, I think, is -- makes Toast more accessible and powerful. The other thing there's a buzzword going around in an AI, I think, MCP and the highest level, as I understand it, is like it's an API that LLMs can use to talk to these back ends. And so within Toast, one of the things we're looking at is how do we enable all of our platform VMCP so that you can't -- you don't just access reports, you can actually start to do -- run actions. And overtime, this is like the agentic piece where you can actually do more and more complex actions. And the idea would be basic action would be 86 item, right? Just talk to as opposed to go find the SKU in the menu or turn off online ordering because I'm really busy or help me myriad of use cases around just managing the back end of Toast, there are so many of those. And then over time, you can even do more complex things like you can say, hey, if I'm slower then if traffic is slow, generate a campaign and send out offers like in realtime, right, whether it's social or Google or text or e-mail. And those are types of things where I think having that language interface is really powerful. I actually think one of the biggest opportunities long term is restaurants don't have the technology or the tools to to try to optimize their yield. And so what ends up happening is you've got -- you try to live and die by your sales forecast like because you've got your -- how your staff and your food you purchased. And really, once you've gotten there, you trying to maximize your dining room capacity, your kitchen capacity and you want to -- every incremental sales dollar is really valuable unless you're full. And so -- but then they don't have the technology to enable all that, right? You can run happy hours and the basic ways to try to optimize your sales. There's not a lot of technology. You look at other categories like you look at airlines or hotels and very data-driven to help make sure these -- the yield on a flight or hotel is optimized. And I think there is opportunity like where AI can help with those types of use cases because you imagine you can go in and say, hey, anytime I'm slow, which the platform can tell you, find ways to get more people in with special offers in real time as an example. So that's like Sous-Chef, the vision is like make it more agentic, make it more -- the interface where you can only get data and insights, but actually manage the back end with the voice with the language interface. And then ToastIQ is just more of the intelligence layer across the platform. And so it's -- as an example, one of the things that we were recently testing into is on our terminals and our handheld, I mean, e-commerce has had this for a long time. The ability to recommend what items to suggest to help maximize check size. A lot of servers today from the point of sale, the online ordering might have it, but the terminals typically don't. And so there's tech you can bring to life that just says, what are the items most likely to pair with those items with the data, what's most popular. Overtime, you can -- when people book on things like Toast Tables or through one of our partners, if you know who the guest is at the table, one of the things I talk internally about in terms of long-term vision is you all remember the show cheers, everybody knows your name. And so this concept of a cheers experience, where not only can you recommend what's popular in the menu, you can recommend what's you Tien-Tsin like on the menu. So there's a lot of opportunity again for AI to play a role there long term. And ToastIQ is really the intelligence layer across all of our products to help with the employee experience, the guest experience, all the constituents.

And is there a monetization path for some of these things in your mind?

Absolutely. I think the monetization, like anything else is driven by value. And so we are really focused on -- what I enforce -- we as a leadership keep reinforcing is AI is like going through this rapid -- it's very clear AI is here to stay and it's going to make a huge impact in the next decade. That being said, like it's like not clear where we're in the hype cycle and what is real and what is not. And so the team is very, very focused on outcomes for customers. We always talk about this internally, which is like the whole point of doing all of this is to show that it's creating outcomes for customers that customers care about. And the way to measure that is a simple measure I love is you took it away, how many people freak out? It tells you freak out is the wrong word, but how many people will be unhappy that you took this product away. And so we're very focused right now on usage, adoption, activation and customer feedback from the beta customers that are using it. And I think overtime, if we can solve for that, the monetization, I think my guess is what we'll end up having is a basic tier where everyone has access to a lot of these tools and the premium tier that does more that we'll monetize.

Okay. Good. I do want to -- we're almost out of time. Time goes by so quickly. So on the consumer opportunity is something that's always been of interest to me, Aman. I think you guys mentioned it at Investor Day. You just mentioned the example of Cheers and knowing what to curate for me as an individual. Why can't -- it's very clear that the SMB platform on the restaurant side is moving to enterprise, and we can talk about that more. But I feel like the consumer side could be really interesting to the extent that you have that data, you can curate content and even agentic commerce can help you do checkout in any channel. So how big of a priority is that for you, Aman?

Our -- like if you look at like Back to the Horizon framework, our core Horizon 1 and 2 investments and focus is we think -- and I'm not providing short-term guidance here, but long term, we think we can power many multiples of our current locations if we are global, if we do multi-vertical well in the verticals where we think we can be relevant with our strategy of go vertical deep approach. So a very simple business, it's not necessarily the right approach. But you go to a lot of these sub verticals. I think that's a big opportunity. You look at core, we think we can gain a lot of share. As we continue to gain scale, all of our opportunities where the scale and the data can play a role become more and more powerful. And so whether it's consumer or supplier or employee, those opportunities are more powerful and the more scale we have. In fact, I'd argue the biggest challenge we have when it comes to consumer is just supply, right? It's great that we have, whatever, 140,000 locations globally, but that's still not like still a fraction, right, of like all of the locations. And so our strategy on consumer is to go back and say, what are the things -- and it is a focus for us. It's a Horizon 3 focus. It is a focus for us. And we're looking at what are the things that Toast can uniquely do well in the market. Like what would we want to be known for, right, in the market if we had the Toast app in your pocket. It's we call it local. And the things that jump out to us are bringing people in store. That's where I think we can play a role because we've got this really powerful data advantage, back to what I talked about the yield optimization to help restaurants drive demand. And so the pieces we look at very carefully are we're looking at things like a reservation book, a waitlist, that's why we launched at Toast Tables. We think that can be an anchor to things like yield optimization and offers. And then in-store, it can power the choose experience because you have to identify the guest. And it's awkward to have to like check in on NFC or people don't -- we may get there someday, but the best way to do that is ahead of the meal, if you know who the guest is. And then I think to your point, I think post purchase, it's this powerful experience where you can just walk out and leave because you've got a card on file as part of the transaction. And you can even ask the guests we do this today, how do to go? And from that data, you can interject if it was not a good experience or encourage people to share in Google, which people care about on social. And there's a bunch of use cases off of that, that we're looking at as well, but that's the primary driver, which is how do we bring people in store. And that starts with discovery, booking, ordering and paying.

I'm going to keep asking you about it. I do think it's interesting, but I'm glad you're taking a disciplined and methodical approach to it, but it does feel like there's some interesting opportunity out there. So we have 2.5 minutes left. Okay. I wanted -- 2 things real quick, international and then capital. So maybe quickly on capital. You have the trust on SMB restaurants. There's a lot of need for capital. Your willingness to extend that capital in this macro environment.

Yes. We have always done, I think, a really nice job of building out the capital business in ways where it's always been from day 1, it's not about how much money we lend. It's about making sure we balance that with -- while managing risk. And so if you look at like the penetration of capital as a result, like -- in fact, our Board will push us to say could we go faster. And we're trying to be really balanced to make sure that we are doing a great job of managing risk. That's like core to how we operate. And of course, we work with partners as well. And so they demand that of us as well. And so I think if there was a slowdown, I think we are tracking all leading indicators. We know which levers to pull. And you've heard this before, but the good thing is because the Toast platform, the way it's built and the way the capital at this platform works is you can really log in a Toast. It will tell you based upon your sales volume and all the data we know what loans are available to you and then the loans are paid back as part of the payment stream. And so the biggest thing we're trying to always assess is what are the odds, especially going about business because that's what really matters for our capital defaults. And the team does a nice job of that.

Yes. No, we have a lot of data. You can also be there to help when things are tougher, but I'm sure you'll be selective.

And I think that's a really good point where we -- some of the stories you hear is a lot of these small business owners don't have the ability to get this capital easily from another provider. And so that's actually a really good point to continue to make sure that if there was a tougher environment that we are really balanced about leaning in as well.

Okay. Let's close out international. That was another popular question we got from investors. Just I've seen it in London. I know -- I've heard you talk about product parity and getting those countries into product parity with the U.S. That's an ambition. But it does feel like it's more English-speaking in terms of focus. Can you get into another gear on growth in international?

We certainly aspire to, I think, longer term. If you go and look at the ecosystem of what people are using globally, whether it's in Western Europe, parts of North America, Australia and New Zealand, other markets that are like Singapore, Dubai, et cetera, you see lots of opportunity. And I think our balance is how much can we -- it goes back to how much can you do well. And that's always like the hardest thing to solve for. And I don't think our international growth is constrained on capital. It's leadership and execution, like how many great people can we bring in that can execute at a high level and open up the opportunity faster. Emily knows the team knows, we push as hard as we can to open up the opportunity globally because I do think that fundamentally, if you go visit restaurants in countries we're not in, especially restaurants that had above-average GPV, just like in the U.S., that's where we shine. The more successful restaurants that have more complex operations. They can absolutely benefit from a platform like Toast. And so we're going to be strategic in terms of making sure that we open up markets in a way that we're set up for success because the counter argument to this is you don't want to end up in 20 markets, you're #4 in all the markets either. And so we're trying to balance the 2 things. And -- but our aspiration absolutely over time will be to open up more markets.

All right. Good. No, I think we covered a lot. I have a lot more other questions, but hey, topline has been great. You guys are already at the midterm margin target. So I didn't want to dig in too much on that, but I'm glad we got to cover some of these subjects.

Thank you so much.

Thank you. Thank you.