All right. We're gonna get started. Kicking us off today is, Toast. We've got the whole team here. So Chris Comparato, current CEO, Aman, incoming CEO, Elena, CFO. Thank you all for joining us. Really happy to have the whole team up here.
Glad to be here.
Thanks, Will.
You know, maybe we can start with the management transition you guys announced earlier this week. You know, Chris, what factored into the decision to leave the CEO seat, and maybe why is now the right time?
I'll hit a few factors. You know, the first is to set some context, and it's really around the opportunity. When we think about our opportunity, we have an opportunity to transform an industry over decades, and we think very long term about this opportunity, and we talk about internally building a generational company. In that lens, as a management team, we often talk about sustainable leadership. In that lens of a multi-decade opportunity, how do you build sustainable leadership as a management team moving forward? We spent a lot of time talking about succession planning, and we look at our bench across the management team. It's been a very stable, solid, strongly performing bench, but we're always looking at the next tier in terms of the players, but then also the players' readiness to step into the next opportunity.
And, you know, that's a growing muscle that you'll continue to see. The board does the same thing for the CEO role. So, looking... You know, that's probably their number one job, which is to make sure that the CEO is performing well. But then we also have a succession plan for the CEO, and I had, I had signaled to our board a while back that we should really think about succession planning at the next level, and that I was not gonna be a CEO for life, but I was really on a tour of duty. And in that lens, how do we make sure that we have a strong succession plan at the CEO level? So that's on the context. On the timing, there were a few factors that we looked at from a timing perspective. Number one, you know, how is the company performing?
We wanted to make sure that the company was performing in a strong, stable manner. You know, we're operating quite well operationally, but then also financially. The second factor on timing was you want the distance from the IPO, and we felt like the minimum was two years since IPO, and this September is two years since our IPO. And we felt like that was extremely important because you want, you know, space as a strong public company to show performance. And then the third thing that we talked about is we wanted a warm start for any new CEO stepping into the role. So as a board, we said we should plan for a transition time where there's overlap, and that was critically important to us so that a new CEO doesn't have a cold start to the job, especially as a public company.
So we ran a process over quite, quite a long time. We looked at external candidates, internal candidates, and the good news is we landed on Aman. You know, Aman started the company back in 2012. Some comments on Aman. We've known each other for 17 years, so we know how to execute together. You know, he's got tremendous management team followership, and as an inner circle, we work really well together. He knows our customer base intimately, and it's a very complex customer base, but Aman knows our customer base extremely well. Then the last point is he's got a founder's mindset, and, you know, as a co-founder, but then also 10 years in, just having a founder's mentality, where you balance raising the bar on execution with always planting new bets on innovation.
That's super important to us because, again, it's a generational opportunity, and we need to continue to innovate at scale. So those were some of the factors. We couldn't be more excited about where we landed, and we're anxious to get into the transition and then start the year strong.
Great. I mean, Aman, it'd be great to get your perspective. It's not often you see a founder returning to the company.
Mm-hmm.
So, you know, maybe you could talk through what your focus areas would be as CEO.
Yeah. Well, not returning. I've been-
Well, returning.
I actually did get this question from a few investors yesterday, asking: "Hey, you know, you don't see something like this." But look, first off, it's been an awesome journey over the past decade. In fact, Chris mentioned I met Chris at Endeca 17 years ago, and it's just been terrific working with you and learning from you. And you know, I've been intimately involved over the past decade working on the business, working on the priorities, setting the strategy for the business and so have a good sense of where we're headed. And you know, feel really good, as Chris mentioned, about how the business is performing. And so as you think about our vision, our mission, our purpose, our strategy, there's nothing fundamental that's changing. You know, we have an opportunity here to build what we believe is a generational company.
And to do that, you've got to make sure that you've got the right team in place, you've got the right execution in place, and those are things we're gonna continue to be maniacally focused on. And, you know, one topic that has come up a few times is this balance of this opportunity in front of us and the growth and balancing that, you know, with the need for profitability, and that's something that we're gonna continue to work on as we grow and scale. But, you know, in terms of priorities and focus, I've been. I'll just reinforce, I've been very involved with the past decade, working in the business, working closely with Chris and Elena, and that'll continue.
Makes sense. So maybe we can, you know, maybe take a step back. Chris, would you maybe give us a reminder on who Toast is and the problems that restaurants face today, and maybe the ones that Taste- Toast aims to solve?
Sure, I'll try to make it pretty brief. So Toast is a restaurant-specific, all-in-one platform with software, financial technology solutions, and hardware to help the restaurant industry improve operations. You know, at our heart, our mission is to empower the restaurant community to delight their guests, do what they love, and thrive. It's an extremely large industry, but it's a complex industry with a diversity of restaurant types. So we pride ourselves on powering a solution across many different restaurant types, and we still feel like we're in the infancy of this opportunity. Today, roughly 10% of restaurants in the U.S. leverage Toast. But the problems that we're trying to solve are pretty difficult. You know, the restaurant industry operates on thin margins. The restaurant industry tries as much as possible to drive revenue and drive orders through their service models into the restaurant.
Inside the restaurant, you know, team productivity and operational improvements are difficult. And then when you start to think about optimizing this small business, there's a lot of levers that you can play with. So the problems are pretty wide and deep, and as we go deeper into the total addressable market, which Aman's gonna get into, we find more interesting problems to solve. So what's a good example? You know, recently we announced, you know, Toast for catering and invoicing. You know, 60% of SMB restaurants in the U.S. offer catering, but through point solutions or manual processes. That's one example amongst many, where as we go deeper, we unlock value, and we unlock more opportunity. But we're excited because, as I mentioned, we're still in the infancy of this opportunity, you know, to help this entire industry transform.
I always tell Toasters, "It's not often in your career you have an opportunity to change the world and change an industry." So we take that on, and we're doing it across restaurants of all different types.
Maybe, Aman, could we spend just a minute double-clicking on the market opportunity in restaurants? People tend to refer to restaurants as a monolith, but it's obviously a very diverse kind of market. How do you kind of slice it up? How does the competitive landscape differ across the various segments?
Yeah, great question. Well, look, I think it's, as Chris mentioned, we've built this vertically focused platform, built for restaurants, and what we've learned over the past decade is just to your point, the diversity that exists within the restaurant ecosystem. The way we think about that internally is our core business is really in what we call SMB, small business. We've got a business downmarket in vSMB, or very small business, and then we've got a business in our mid-market, restaurant chains and then enterprise, and then we've got in the beginnings of a business internationally. SMB is where I'd say the bulk of the locations are, and that's where we, you know, that's really what's fueling and driving the bulk of our growth.
One thing we've talked about is as we get into these markets that are very local, as we get penetration, as we get share, you start to see this flywheel, where word of mouth spreads. You know, we get, you know, I think something like three-quarters of our demand is inbound. One out of five of our leads are referrals, and this really speaks with, you know, a testament of the product and the platform that we offer. And as we get into these markets, you start to see, right, not just better productivity of our reps or AEs that are in these markets, but you actually see a better funnel in terms of inbound funnel that's coming in. So really, the SMB business is at the crux of, you know, our growth.
From a product standpoint, the only thing I'll add is, you know, we started off focusing on a certain segment of the restaurant, and over time, you've seen this announcement for Toast for QSR restaurants or Toast for hotel restaurants. So, within the diversity, even in SMB, we're gradually expanding the platform to support many different restaurant types. Within the mid-market space, and this is a gradual progression going upmarket, we, you know, we've been having really good success. You saw wins like, you know, Ninety Nine Restaurants recently, or Golden Krust or Whataburger, and, you know, I think our platform is ready to take on that segment of the market as well. This is really anything from 15 units up to maybe a couple hundred units. We're seeing really great success.
And then upmarket and enterprise, you know, you saw the announcement of Marriott, and I think there's probably more legacy, right? So if you think of the mix of cloud and legacy from a point of sale platform, from a point of sale perspective, there's more legacy upmarket, and the transition has been slower, and so getting wins like Marriott is a big proof point. And what we see upmarket is people love what we're able to do within the four walls of a restaurant in terms of, you know, improving speed of service or improving throughput. Where we are continuing to build out our platform is things like above store management, things like enterprise security reporting, and, you know, compliance, and that's. That'll come over time, and you're starting to see, you know, some really good, good signals in the market there, upmarket as well.
And then the low end of the market, I'd say, that's a smaller part of the market, and that's really, really more about pricing and packaging and self-service. This is what we call vSMB, and that's been a good, good growth factor for us as well. And so I think over time, I think we've got a lot of confidence that we can address the whole market, and we're gradually going, building out capability on some of that product and some of that pricing and packaging, both on the low end of the market as well as upmarket. And, you know, to your point about the competition, you know, I think the only thing I'd add is, as you go upmarket, you just see that the penetration of cloud is lower, right?
Makes sense. Maybe we can spend a little bit more time on the enterprise segment. You announced a signature win recently with Marriott. Could you maybe unpack some of the specifics of that win and specifically the strategy of unbundling payments from the software? Is this a special case for hospitality, or is this a blueprint for maybe for future enterprise deals?
Yeah, I'll jump into this. So, Marriott's a clear proof point that the work we've put into the enterprise platform is paying off. You know, this journey started a couple of years ago, and to Aman's point, we've invested in the platform in terms of scalability, quality, infrastructure, but then everything above store. So when it comes to above store reporting, APIs, the ability to control and publish menus or prices or promotional campaigns. So a lot of that work has been paying off, and it was a clear proof point to then unlock hospitality. In fact, the biggest need was to have PMS APIs. So, the heart of a hotel operation is the property management system, so we knew that we had to unlock our APIs so that a restaurant within a hotel property can run seamlessly.
In talking to some hotel operators for years, you know, they were looking to unlock guest experiences. Whether they were turning their lobby into a happy hour, whether we were powering the restaurant on site, whether they wanted to take drinks on the pool deck or at the tiki hut, we knew that there was an opportunity to drive amazing guest experiences within hospitality, so long as we get that interface work done. Fast forward, we accomplished that interface work. Marriott had approached us and had interest in us becoming an approved vendor. Over a pretty long process of going through tests, pilots, labs, you know, we were pleased to announce that we became an approved vendor. It's very early, so I will say that it's very early in our relationship with Marriott.
We are taking hotels live every week, but it's gonna be a long journey. But it excites us because this further unlocks the hospitality opportunity. In terms of FreedomPay, FreedomPay was a requirement that Marriott imposed, but if you unpack that requirement, for us, it was an opportunity to decouple payments. And within these large hospitality venues, there's a certain segment of the TAM that's within the segment that Aman mentioned on enterprise, where they're complex, multi-venue environments, where you're running loyalty and marketing across the platform. It may be retail, restaurants, QSR. And in those environments, decoupling payments is critically important. And often, some of these enterprises are running POS contracts, but then running payment contracts separately.
So it actually gives us more flexibility because now we can enter into an opportunity and position great software, whereas in the past, we weren't able to get into that opportunity because we were not decoupling payments from software. So for us, this gives us a little bit more flexibility upmarket for a certain segment to go after those opportunities. The other thing is it doesn't preclude us from positioning payments when those contracts come up for renewal. So we feel like we're in a very strong position in the upmarket enterprise space to continue to position bundled payments, but it gives us a lot of flexibility. So we're excited about the partnership. Our relationship with FreedomPay is very good, and like I said, we're using Marriott as a proof point to make sure that that works well.
Makes sense. Maybe switching gears to international. You know, the rollout in international markets is ongoing. I think you mentioned expanding into some more locations with some of your initial customers in the U.K. So maybe a question for the group, what are you looking for to accelerate the investments in international, and how far are we from seeing, you know, international markets contribute meaningfully to net adds?
Yeah, that's a great question. I can-- I'll take that, and feel free to chime in. You know, at the highest level, we're, we're in, like you said, live in, in three countries. The customer reception has been really positive across all of the restaurants outside the U.S. Where we've been focused in the last year is really building out the go-to-market team, and that's going well. The idea there is if we can see the same patterns we see in the U.S., which early signals do suggest that, then that gives us the opportunity to continue to invest. As far as the product itself, you know, we've gone live with core elements of our platform. We're gonna build upon that over the next year, so that presents an opportunity for us as well.
But so far, even with the core elements of our platform, it's gone incredibly well. I think as we think about investing for the future, as long as we continue to see that signal, that gives us proof points, that we would continue to invest. As far as, you know, the contribution, I would say, in the near term, it won't be meaningful, but over the long term, absolutely. That's, that's the thesis we have, that as long as we can see the similar pattern, as long as we can continue to have success. And the thesis is a lot of the competitors we see in international are the same ones that we have success with here in the U.S. And so as long as that thesis plays out, we're gonna continue to view that as a long-term, growth opportunity.
The only thing I'd add is when you visit these markets and you sit with the team and you sit with these restaurant operators, we see a lot of signal. And, you know, especially in the restaurant industry, they always tell you what they love and, and what they dislike about pain points in the platform. And having recently been over there, we're seeing some of the similar signals to what we saw in 2015. They're seeing the value proposition of an all-in-one platform, but they have much less of the platform than we have in the U.S. In fact, they told me, "Chris, we hit your marketing site. When are you bringing all of that stuff over to the international markets?" So that gives us really good signal. We're also seeing the diversity of restaurant types right out of the gate.
You know, I mentioned this in earnings. A chain like Paris Baguette, which we operate in the U.S. and Canada, now has international locations, and it's all about ease of use, throughput, and simplicity, and they're seeing that same value proposition internationally. And then I contrast that with fine dining or dining, and I had mentioned Arcade Food Hall over in the U.K., very complex operation, and they love the ability to unfold our platform to accomplish their complexity. Multiple revenue centers, multiple menus, prices at different levels, and then different guest experiences within one restaurant. That's super complex. And they said, "Toast, you're helping us accomplish this complexity versus point solutions." So we're starting to see the signals that really emulate where we were in early 2015. The competitive landscape's quite similar, but we're excited about it.
But again, it's quite early, and we need to make sure that we execute at a high level.
Makes a lot of sense. So I wanted to maybe talk about monetization a little bit. Elena, SaaS ARPU has expanded really nicely over the last several years. The percentage of locations that are using six or more modules, I think, has doubled over the last two years, roughly. And I think the guidance for this year is a roughly 10% increase in SaaS ARPU. So maybe could you break down some of the moving pieces between, you know, maybe frontload, backload, upsell, and then maybe to a lesser extent, price? What's been the biggest factor, and how do you view the drivers of ARPU going forward?
Yeah, it's a great question. So, first, I'll just start by giving some context, and I'll talk a little bit about near term and long term. How we think about ARPU, first of all, is based on a ARR basis. That's just primarily 'cause that's our North Star internally and how we manage the business. And just to give some numbers around it, in Q2, we had 55% growth in ARR. So that's a really important metric for us. And then, when you look at ARPU in Q2, it was 14%. So as you think about the balance of the year, you know, we're still marching towards that 10%. That's our ambition.
And the context underneath that is, you know, the step up that you mentioned, that we saw over the last couple of years, was a combination of a few factors. One was we were really focusing the go-to-market motion on positioning the breadth of the platform at the land. And we learned through that, that not every customer wants to land everything all up front, and so we're honing that land and expand motion over time. And then in addition to that, you know, as we think about the longer term, the upsell team is relatively new, so we have an opportunity to optimize that over the long term. And it's the things we just talked about. What do customers want us to land?
And an example of that might be a restaurant who wants to land with us and may not wanna make that switch to payroll in that moment. They might say, "I'm gonna land with the platform, and then in a few months, or at the next opportunity, I'll do payroll." So it's just an example of a very different land and expand motion. But we're continuing to hone that. And then, when you think about the longer term opportunity, and you think about the percentage of sales that restaurants spend on tech, we believe we're well positioned to capture more of that over time through continuing, like I said, to hone this land and expand motion, to continue to work on upsell, to talk to our customers at renewal.
And some of the proof points that we look at that give us that confidence are, A, the early signal with the upsell team, but then also 10% of our customers are already paying us $10,000 a year in SaaS alone. And so when we look underneath the hood at those specific customers, what you see is there's really multiple ways to get to that 10K. It could be a restaurant that's got a, you know, a big format and maybe more Toast handhelds. It could be a restaurant that really payroll and xtraCHEF are really important.
So there's multiple ways to get to that ARPU, and we're looking at that as a proof point to say we think we can move our book over time, as we hone this land and expand motion to a much higher SaaS ARPU. So we think the opportunity is massive. We think upsell will play a bigger role over the long term.
Makes sense. And maybe we can double click on pricing power for a second. I think, Chris, you said one of the learnings from the online ordering fee episode was that customers told you they're willing to accept price increases, and I think the letter to customers seems to hint at future price increases. So, how are you thinking about pricing power in the business going forward?
Yeah. So to Elena's point, you know, when we think about ARR, there's multiple levers that drive ARR. Number one, location growth, and we think we spend a lot of time thinking about location growth. Number two, as a team, we talk a lot about ARPU, and whether it's ARPU upfront or ARPU that's upsold downstream, we think about ARPU. The third piece is packaging, and then the fourth piece is pricing. When we step into pricing, I think our customer base understands that innovation requires investment, and they understand, in talking to customers, they understand that investment will translate to price. I think you've got to be careful, as we learned in the online ordering situation, that you've got to make sure that you're maintaining trust when you push out price.
But we feel pretty confident in our stance, whether it's the price for a module or the price for a package or how we position it, we feel pretty confident that as we innovate, we'll continue to drive price. And, and it could be at different moments in time. You know, every customer has a different journey, so it could be that if we didn't do it up front, well, then maybe it's at renewal, because some of our older cohorts don't even know what modules are available to them at what price. So I think there's work to do, but we feel pretty confident in our stance that over time, we can drive pricing based on the innovation engine that we've built.
But we just have to continue to be super smart about maintaining that trust equation and then positioning pricing increases at the right time.
Makes sense. So we've talked a lot about software. I wanted to maybe switch over to the fintech side. Elena, inflation has been a really helpful force for a lot of payments companies. As we've seen inflation ease, I think restaurant sales have sort of slowed recently. You know, I think Toast GPV per location was relatively stable year-over-year in the second quarter. How are you thinking about GPV trends going forward?
Yeah, this is a great question. So, no real change from, from our earnings, you know, a few weeks ago in terms of the, what we're seeing in, in terms of GPV in, in sort of a stable spot. But as you think about, you know, going forward, the inflation tailwind that we've benefited from over the last, last couple of years, obviously, that's gonna moderate, and that'll play out in our, in our GPV. But the one thing we look at is same-store sales. And when you look at that, both transactions and GPV per location are growing at a healthy clip. But then, of course, you got to balance that with new customers coming on board. And then as we get to deeper parts of the TAM, the mix could be a bit different.
And so that's sort of balancing the overall GPV, but on the whole, I would say GPV is relatively stable.
Got it. Aman, the Toast go-to-market has always been a big differentiator. You were a really disruptive force, and that, in some cases, forced competitors to consider a more direct sales approach in the SMB part of the market. Could you talk about how Toast approaches go-to-market differently from its competitors?
Yeah, sure will. So first off, our go-to-market is segmented. So depending on the segment of market, we've got a different approach. Mid-market enterprise versus SMB and down-market, we've got an e-commerce experience. And I think when we, you know, this is right from the early days of Toast, one of the questions we asked ourselves is, you know, "Do you want to focus on an inside model, or do you want to focus on an outside model for our core SMB business?" And what we realized, as you pointed out earlier, restaurants are hyperlocal, and what's going on in Boston, San Francisco, is very different than what's going on in, you know, Boise, Idaho, or Chicago or Austin or whatever it may be. And the markets are also different.
You've got, you know, markets that are very, you know, dense, and you've got markets that are rural and suburban. So stepping back and saying, "What's an approach and model that can work across all this diversity?" was really core to our approach early on. And what we found is, and it's something we've talked about, the single biggest predictor that we see in our business is as we get more market share, as we get more restaurant density in the market, as we get more tenure on our AEs, that's the single biggest predictor across the funnel. Top of funnel, inbound, win rate, and rep productivity.
And so we've almost got this program that's, in fact, not almost, we've got a program in the sales team that says, "You've got, you've got to become the mayor, right, of these communities." And what that really means is really get to know the restaurant community, right? Really make sure you aren't just focused on sales and, and being transactional. You've got to make sure our customers, your customers are being successful, and that ultimately will pay dividends. And so that's been really core from day one in terms of how we approach go-to-market. We talked about how as we get share, we in fact describe them as emerging markets, growth markets, and flywheel. Flywheel markets are where we've got enough scale, where it starts to provide a tailwind for us.
And the number of markets that we have that are in flywheel is still in the teens, so there's a lot of runway, we believe, to continue to invest and to continue to scale and to continue to get leverage, right, in our go-to-market model as we continue to scale. And I think, of course, a lot of this is also the product and the service model, right? And so just continuing to make sure, to Chris's point earlier, that we continue to build a platform that's hyper-focused on the needs of this industry, right, and solving to help them better run a better business, to drive top, to drive throughput, to drive incremental demand, and that, that...
Making sure our sales go-to-market engine really understands, right, that at the end of the day, they're consultants to these restaurants to help them run a better business is important to how we operate.
Makes sense. Maybe a more near-term focused question. You mentioned a couple, you know, dynamics that improves the go-to-market. What's been driving sort of the recent acceleration and, you know, the acceleration you talked about in the back half of the year in net location adds?
Yeah. Like, as I, as I said, the biggest thing is really, you know, what we've been doing in our core business, right? In SMB, we believe there's a plenty of runway, and so continuing to invest there and make sure the team is performing well. We're seeing some early traction internationally. It's still early, but good signals there. We're seeing, you know, with, with Marriott, when it's not really contributing right now, but we believe there's. We, we have an opportunity to make that, over time, a contributor to net location adds. And, you know, the business overall is performing well. We're seeing, you know, healthy churn, as we've talked about in the past. All those dynamics are really driving the net adds.
Makes sense. Elena, maybe on take rate, you know, it's been relatively stable when we exclude the impact of Toast Capital over the last several quarters. I think for the near term, you called out a seasonally higher credit mix in the second half, which tends to drive down take rate. But maybe longer term, what are the moving pieces going forward in the take rate? And then how do we think about mix-related impacts as you push up market?
Yeah, so really good question. So to your point, the take, the take rate we've seen, is going to be relatively in that same zone in sort of the mid- to low 50s%. And just a reminder that credit plays a bigger role as the year goes on. But long term, you know, improving and, and increasing the take rate over the long term is, is certainly a goal. And it's a combination of several factors, a lot of dynamics. One is, just improving, our cost infrastructure, and, and as we scale, you know, processing over $130 billion in, in GPV, you can just imagine that, that, that gives us an opportunity to work with our partners to scale the cost per transaction.
And then there's an element of pricing, and Chris talked about pricing power and the importance of that and that, how that plays out. And then there's really our opportunity to drive more digital products. And if we can do that, then that's also a way to drive more of that card-not-present activity. And an example of that is invoicing, which Chris talked about earlier. You know, if we can give our customers those invoices, and they process on our rails, that's an opportunity to drive more GPV. So, there's ways over time, these are long term, certainly, but we feel there's an opportunity to drive that up over time.
Makes sense. Then I did want to hit on Toast Capital. You know, this has expanded to be a really nice contributor to the business, attractive incremental margins. I was wondering if you could talk about Toast's underwriting advantage for that product. I mean, on the underwriting side, you see so much data about the inner workings of the customers. So how, how do your underwriting models use that alternative data to make credit decisions?
Yeah, no, that's the crux of the answer, really, is the power of the data we have. So just to give some context, we offer loans to our customers, and it's grounded in the fact that we have access to their payment volume data. And we also know our customers are typically underbanked, and so that presents an opportunity, and through that data, we can see their creditworthiness. We have a lot of insight into their activity. So that's the premise. And then managing risk is really important to us as well. And so the way the product is set up is customers will pay us back through their payment volume, so we have some predictability. And then obviously the data, that's what we use to underwrite.
And then actually, we work with a bank to actually issue the capital, and so it's really balance sheet light for us at the highest level. And then in a situation where, let's say, the market turned and we decided it wasn't the opportunity to loan, we have levers to, you know, increase the hurdles to offer loans. We can shut down the program if we wanted to. In fact, I think in COVID, we slowed the program down and didn't really see material impact to our bad debt. And so we're managing all of that. And the tenure of the loan matters a lot, and we're offering different loan formats. The other thing I'll say is, over the last year, we've introduced 270- and 360-day loans.
We're approaching that year anniversary. So, you know, you should start to see Toast Capital be more of a steady versus a surge as we launch new products. But overall, we're really excited about the program. We think we're managing the risk incredibly well. Default rates have been in line with our expectations, and most importantly, we're really helping our customers get access to capital in a low-friction manner.
Makes a lot of sense. In the last couple minutes, I wanted to maybe hit on Toast Tables, one of the, I think, larger modules you guys have released recently. How are you guys differentiating yourselves from some of the incumbents in that space, and what has the customer acceptability been to that product?
Sure. So Toast Tables includes wait lists and reservations native to the platform for Toast. It's similar to other patterns we've seen, which is we certainly want to give flexibility to our customer base on how they run certain business processes, reservations being one example. We've got a good partnership with OpenTable, and they've had a good integration with Toast. But a lot of customers then have to manage processes, for example, managing tables separately. They've often said, if we can have a native platform that, since we have table management within the platform, we can reduce cycles to manage two separate solutions and do it native within Toast. So it actually cuts down on their time and their ability to manage reservations quite easily, because now we've got the source of table management.
We also know how those tables are operating. We know the status, of course, firing. We also understand the guest data, so we can better optimize what that reservation profile looks like. But we want to give the flexibility of choice. Today, we've got a few thousand restaurants that are leveraging Toast Tables. It's a high ARPU product for us. It's a flat fee, not per cover. But again, we want to give them the flexibility of choice, and, you know, what restaurants are telling us is that it's extremely valuable because even if we're cutting down on cycles to manage different platforms, it's much more native and easy to use internally as they run reservations and they manage their tables. And then it's directly connected into our guest data, and restaurants want to maintain their guest data set so that they understand what guests are doing across their platform.
So there's different benefits, but we'll continue to position flexibility of choice, but then also continue to invest in that product so that restaurants take advantage of it.
Makes sense.
Only to add, Chris, is like first-party digital experiences. This is something our customers have been asking us for a very long time. You know, and reservations and waitlist is just one more example of that, where, you know, whether it's what guests want in terms of being able to, like, order your coffee right on your phone and pick it up or... And it's cost effective. And then to Chris's point earlier, having this all really tightly integrated into the platform just creates a tremendous amount of value.
Like, just one small example of this that was an anecdote from a customer that we talked to, said, "Not only is it awesome that our website allows you to, you know, book a table, when we're in the restaurant, it's really valuable to know, within the Toast platform, when the next table is going to open up." So if someone walks in and says, "Hey, how long is the wait?" They have a better perspective by having the wait list and reservation platform being native to the platform. And so that, this interoperability and this integration has really been, you know, really from day one, a core part of our guest thesis.
Great. Well, we've covered a lot of ground. I think we are out of time with that. So guys, thank you so much for joining us.
Thank you.
Thank you.