The number of retailers Toast works with pales compared to the roughly 100,000 restaurants it serves, but Narang said the company is making progress with non-restaurants.

The CEO said he sees opportunity among grocery, convenience and liquor stores because few of them are using a modern payments vendor.

“Within retail, there are some very specific needs, and there isn't a great cloud provider that has taken over the space,” Narang said in response to a question from an analyst on Tuesday’s call.

He sees the biggest growth potential in the retail sector, he said. Toast plans to invest in adding even more non-restaurants in the coming years.

“The team has done a great job of identifying segments of the market where we have a right to win without distracting from our ability to scale in our core market segments,” Narang said during prepared remarks in Tuesday’s call.

Toast signed up roughly 8,000 new locations during the second quarter, a record for a single quarter, Narang said.

The company also plans to use generative artificial intelligence — which can write short prompts and analyze data — to help its business customers with marketing and menu creation, Narang told an analyst in Tuesday’s earnings call. 

Generative AI can create marketing materials for companies that can’t afford to hire a marketing firm, and help restaurants sift through payment data to decide what items are the most profitable, and organize their menus accordingly, he said.

Toast reported net income of $14 million for the second quarter of 2024, compared with a loss of $98 million for the year-earlier period. Second-quarter revenue rose to $1.24 billion, up 27% from the year-ago quarter.

By Patrick Cooley on Aug 7, 2024
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