Digitally Enabled
TOST is a LONG
Yesterday at the big Restaurant conference in Las Vegas, Paul Brown of Inspire Brands said: "The restaurant industry is the last really large industry in the United States that has seen virtually no improvements in productivity." The long case for TOST is they are digitizing an industry in desperate need of help. Importantly, the company delivered on a strong first quarter as a public company. Toast, Inc. reported 3Q21 Revenue of $486.4M vs. FS $433.6M and GPV $16.5B, +123% YoY; ARR at the end of September was $543.8M, +77% YoY reported 3Q21 adjusted EBITDA ($9.7M) vs. FS ($43.3M). 4Q21 Guidance is for (A)EBITDA ($50M)-($40M) vs FS ($55.9M) and Revenue $465-495M vs FactSet $447.5M. FY21 Guidance (A)EBITDA ($46M)-($36M) vs FS ($88.7M) and Revenue $1.655-1.685B vs FactSet $1.58B.
See our Pre IPO black book for more details.
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Bonus Content: Click Here to view our Black Book presentation on TOST. |
DASH DRIVING GLOBAL GMV
DASH is a LONG
The long thesis for DASH has been enabling the digitally enabled by growing GMV and new revenue streams with adding advertising to the business model. That is what was delivered yesterday. The company said on the call that they are not disclosing ad revenue and that they are "being careful about how we build it." The company views it as a merchant service and not a way to grow EBITDA. Importantly, those profit dollars will get reinvested back into growth initiatives. The key element to the LONG thesis was potential growth internationally and they delivered on that too.
On the quarter, DASH reports 3Q21 Revenue $1.28B vs FactSet $1.17B; Marketplace GOV $10.4B vs FS $9.96B and guidance $9.3-9.8B; (A)EBITDA $86M vs FactSet $70.7M. The company gave 4Q21 Guidance of (A)EBITDA $0 to $100M vs FactSet $74.3M; Marketplace GOV $10.3-10.7B vs consensus $10.35B. Key operating metrics: Gross margin 52.2% vs FS 55.3%; EBITDA margin 6.7% vs FS 6.0%; Orders 347,000K vs FS 334,738K, +47% YoY; GOV $10.42B vs FS $9.96B, +43.6% YoY and a Take Rate % 12.2% vs FS 12.0%.
Importantly, DASH and Wolt Enterprises have entered into a definitive agreement whereby DoorDash will acquire Wolt in an all-stock transaction. The transaction is valued at approximately €7.0B for all stock. According to the PR, "DoorDash equity issued as part of the transaction will be valued at $206.45 per share, based on DoorDash's 30-day VWAP as of 3-Nov-21." The company has guided the acquisition to be accretive to GOV growth in 2022 and now expects PF (A)EBITDA of $0-$500M in 2022. Currently expect to close the transaction in 1H 2022. The combination of the two companies will build a global platform for "local commerce that connects consumers with the best of their community, drives incremental revenue for merchants, and provides meaningful earning opportunities for Dashers. Upon closing, Miki Kuusi will run DoorDash International, reporting to Tony Xu. Under Miki's leadership, DASH expects to increase our international scale, accelerate product development, and improve investment efficiency.
As the DASH CEO said yesterday - "We expect to continue investing aggressively in the combined team to build our platform and grow our global business."
KKD – the under-appreciated business model
I understand that sugar is not good for you; the KKD donuts are amazing, and so is the DNUT business model. Krispy Kreme reports 3Q21 Revenue of $342.8M vs. FactSet $337.7M and (A) EBITDA $41.4M vs. FactSet $39.6M; EPS $0.06 ex-items vs. FactSet $0.06. The company said they anticipate exceeding their long-term targets in the full year 2022 as we will no longer be lapping the exit of our legacy wholesale business in the U.S.
FY Guidance (Dec 2021):
- Reaffirms revenue $1.34B-$1.38B vs FactSet $1.36B [9 est, $1.35-1.37B]
- Reaffirms adjusted EBITDA $178M-$185M vs FactSet $175.6M [9 est, $153-188.7M]
- Reaffirms Adjusted Net Income of $62M to $68M (growth of 46.4% to 60.6%)
- Reaffirms Organic Revenue growth of 10% to 12%
We will have more details when we update our pre-IPO black book.
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Bonus Content: Click Here to view our Black Book presentation on KKD. |
