TOAST, INC., 10-K filed on 3/1/2022
Annual Report
v3.22.0.1
Cover Page - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2021
Feb. 22, 2022
Document Information [Line Items]    
Document Type 10-K  
Document Annual Report true  
Document Period End Date Dec. 31, 2021  
Current Fiscal Year End Date --12-31  
Document Transition Report false  
Entity File Number 001-40819  
Entity Registrant Name TOAST, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 45-4168768  
Entity Address, Address Line One 401 Park Drive  
Entity Address, Address Line Two Suite 801  
Entity Address, City or Town Boston  
Entity Address, State or Province MA  
Entity Address, Postal Zip Code 02215  
City Area Code 617  
Local Phone Number 297-1005  
Title of 12(b) Security Class A common stock, par value of $0.000001 per share  
Trading Symbol TOST  
Security Exchange Name NYSE  
Entity Well-known Seasoned Issuer No  
Entity Voluntary Filers No  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
ICFR Auditor Attestation Flag false  
Entity Shell Company false  
Entity Public Float $ 12  
Documents Incorporated by Reference Portions of the registrant's Definitive Proxy Statement relating to the 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant's fiscal year ended December 31, 2021.  
Entity Central Index Key 0001650164  
Amendment Flag false  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus FY  
Common Class A    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   230,941,841
Common Class B    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   278,034,562
v3.22.0.1
Audit Information
 12 Months Ended
Dec. 31, 2021
Audit Information [Abstract]  
Auditor Name Ernst & Young LLP
Auditor Location Boston, Massachusetts
Auditor Firm ID 42
v3.22.0.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Current assets:    
Cash and cash equivalents $ 809,000 $ 582,000
Marketable securities 457,000 0
Accounts receivable, net 55,000 33,000
Inventories 42,000 19,000
Deferred costs, net 30,000 17,000
Prepaid expenses and other current assets 92,000 22,000
Total current assets 1,485,000 673,000
Property and equipment, net 41,000 44,000
Operating lease right-of-use assets 79,000  
Intangible assets 16,000 7,000
Goodwill 74,000 36,000
Restricted cash 8,000 1,000
Deferred Costs, Noncurrent 25,000 12,000
Security deposits 1,000 2,000
Other non-current assets 6,000 1,000
Total non-current assets 250,000 103,000
Total assets 1,735,000 776,000
Current liabilities:    
Accounts payable 40,000 30,000
Operating lease liabilities 22,000  
Deferred revenue 44,000 43,000
Accrued expenses and other current liabilities 246,000 63,000
Total current liabilities 352,000 136,000
Long-term debt 0 172,000
Derivative liabilities 0 37,000
Warrants 181,000 11,000
Deferred revenue, non-current 12,000 16,000
Operating lease liabilities, non-current 77,000  
Deferred rent, non-current 0 19,000
Other long-term liabilities 22,000 7,000
Total liabilities 644,000 398,000
Commitments and Contingencies
Convertible preferred stock, $0.000001 par value—no shares authorized, issued or outstanding as of September 30, 2021; 257,245,680 authorized and 253,832,025 shares issued and outstanding at December 31, 2020; total liquidation value of $849,970 at December 31, 2020. 0 849,000
Stockholders’ Equity (Deficit):    
Preferred stock- par value $0.000001; 100,000,000 shares authorized, no shares issued or outstanding 0 0
Common stock 0 0
Treasury stock, at cost— 225,000 shares outstanding at September 30, 2021 and December 31, 2020 0 0
Accumulated other comprehensive income (1,000) 0
Additional paid-in capital 2,194,000 145,000
Accumulated deficit (1,102,000) (616,000)
Total stockholders’ equity (deficit) 1,091,000 (471,000)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) 1,735,000 776,000
Common Class A    
Stockholders’ Equity (Deficit):    
Common stock 0 0
Common Class B    
Stockholders’ Equity (Deficit):    
Common stock $ 0 $ 0
v3.22.0.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Convertible preferred stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Convertible preferred stock, authorized (in shares) 0 257,245,680
Convertible preferred stock, issued (in shares) 0 253,832,025
Convertible preferred stock, outstanding (in shares) 0 253,832,025
Convertible preferred stock, liquidation preference $ 0 $ 850
Stockholders’ Equity (Deficit):    
Preferred stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Preferred stock, authorized (in shares) 100,000,000 100,000,000
Preferred stock, issued (in shares) 0 0
Preferred stock, outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Common stock, authorized (in shares) 0 570,000,000
Common stock, issued (in shares) 0 219,755,430
Common stock, outstanding (in shares) 0 219,755,430
Treasury stock (in shares) 225,000 225,000
Common Class A    
Stockholders’ Equity (Deficit):    
Common stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Common stock, authorized (in shares) 7,000,000,000 0
Common stock, issued (in shares) 167,732,925 0
Common stock, outstanding (in shares) 167,732,925 0
Common Class B    
Stockholders’ Equity (Deficit):    
Common stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Common stock, authorized (in shares) 700,000,000 0
Common stock, issued (in shares) 339,437,440 0
Common stock, outstanding (in shares) 339,437,440 0
v3.22.0.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Revenue:      
Total revenue $ 1,705,000 $ 823,000 $ 665,000
Costs of revenue:      
Amortization of acquired technology and customer assets 4,000 4,000 2,000
Total costs of revenue 1,391,000 683,000 603,000
Gross profit 314,000 140,000 62,000
Operating expenses:      
Sales and marketing 190,000 138,000 128,000
Research and development 163,000 109,000 64,000
General and administrative 189,000 113,000 83,000
Total operating expenses 542,000 360,000 275,000
Loss from operations (228,000) (220,000) (213,000)
Other income (expense):      
Interest income 0 1,000 2,000
Interest expense (12,000) (13,000) 0
Change in fair value of warrant liability (97,000) (8,000) (1,000)
Change in fair value of derivative liability (103,000) (7,000) 0
Loss on debt extinguishment (50,000) 0 0
Other income (expense), net 0 (1,000) 0
Loss before income taxes benefit (490,000) (248,000) (212,000)
Benefit from income taxes 3,000 0 3,000
Net loss (487,000) (248,000) (209,000)
Redemption of Series B Preferred Stock 0 (1,000) 0
Net loss attributable to common stockholders $ (487,000) $ (249,000) $ (209,000)
Net loss per share attributable to common stockholders - basic (in dollars per share) $ (1.68) $ (1.25) $ (1.08)
Net loss per share attributable to common stockholders - diluted (in dollars per share) $ (1.68) $ (1.25) $ (1.08)
Weighted average shares of common stock outstanding - basic (in shares) 289,584,001 199,982,965 194,820,145
Weighted average shares of common stock outstanding - diluted (in shares) 289,584,001 199,982,965 194,820,145
Subscription services      
Revenue:      
Total revenue $ 169,000 $ 101,000 $ 62,000
Costs of revenue:      
Cost of revenue 63,000 40,000 25,000
Financial technology solutions      
Revenue:      
Total revenue 1,406,000 644,000 532,000
Costs of revenue:      
Cost of revenue 1,120,000 509,000 453,000
Hardware      
Revenue:      
Total revenue 112,000 64,000 55,000
Costs of revenue:      
Cost of revenue 152,000 85,000 82,000
Professional services      
Revenue:      
Total revenue 18,000 14,000 16,000
Costs of revenue:      
Cost of revenue $ 52,000 $ 45,000 $ 41,000
v3.22.0.1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Statement of Comprehensive Income [Abstract]      
Net loss $ (487) $ (248) $ (209)
Other comprehensive loss:      
Unrealized losses on marketable securities, net of tax effect of $0 (1) 0 0
Total other comprehensive loss (1) 0 0
Comprehensive loss $ (488) $ (248) $ (209)
v3.22.0.1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical)
$ in Millions
 12 Months Ended
Dec. 31, 2021
USD ($)
Statement of Comprehensive Income [Abstract]  
Unrealized losses on marketable securities, tax $ 0
v3.22.0.1
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($)
$ in Millions
Total
Cumulative adjustment for adoption new accounting standard
Common Stock
Treasury Stock
Additional Paid-in Capital
Accumulated Deficit
Accumulated Deficit
Cumulative adjustment for adoption new accounting standard
Accumulated Other Comprehensive Loss
Temporary equity, beginning balance (in shares) at Dec. 31, 2018 163,820,050              
Temporary equity, beginning balance at Dec. 31, 2018 $ 197              
Convertible Preferred Preferred Stock                
Issuance of preferred stock (in shares) 45,788,025              
Issuance of preferred stock $ 250              
Temporary equity, ending balance (in shares) at Dec. 31, 2019 209,608,075              
Temporary equity, ending balance at Dec. 31, 2019 $ 447              
Beginning balance (in shares) at Dec. 31, 2018     197,010,040 200,000        
Beginning balance at Dec. 31, 2018 (158)   $ 0 $ 0 $ 19 $ (177)   $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock in connection with business combination (in shares)     543,300          
Issuance of common stock in connection with business combination 3       3      
Repurchase of common stock (in shares)     111,375          
Exercise of common stock options (in shares)     17,459,435          
Exercise of common stock options 1       1      
Stock-based compensation expense 33       33      
Unrealized loss on marketable securities 0              
Net loss (209)         (209)    
Ending balance (in shares) at Dec. 31, 2019     214,901,400 200,000        
Ending balance at Dec. 31, 2019 $ (330) $ 18 $ 0 $ 0 56 (386) $ 18 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Accounting Standards Update [Extensible Enumeration] Accounting Standards Update 2014-09              
Issuance of preferred stock (in shares) 44,301,220              
Issuance of preferred stock $ 403              
Redemption of Series B preferred stock (in shares) (77,270)              
Issuance cost of Series F preferred stock $ (1)              
Temporary equity, ending balance (in shares) at Dec. 31, 2020 253,832,025              
Temporary equity, ending balance at Dec. 31, 2020 $ 849              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Repurchase of common stock (in shares)     (1,011,880) 25,000        
Redemption of Series B preferred stock (1)       (1)      
Exercise of common stock options (in shares)     5,865,910          
Exercise of common stock options 4       4      
Stock-based compensation expense 86       86      
Unrealized loss on marketable securities 0              
Net loss (248)         (248)    
Ending balance (in shares) at Dec. 31, 2020     219,755,430 225,000        
Ending balance at Dec. 31, 2020 $ (471) $ 1 $ 0 $ 0 145 (616) $ 1 0
Ending balance (Accounting Standards Update 2016-13) at Dec. 31, 2020           (616)    
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-02 Accounting Standards Update 2016-02              
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 Accounting Standards Update 2016-13              
Conversion of preferred stock (in shares) (253,832,025)              
Conversion of preferred stock $ (849)              
Temporary equity, ending balance (in shares) at Dec. 31, 2021 0              
Temporary equity, ending balance at Dec. 31, 2021 $ 0              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Issuance of common stock in connection with business combination (in shares)     569,400          
Issuance of common stock in connection with business combination $ 15       15      
Repurchase of common stock (in shares)     (35,665)          
Exercise of common stock options (in shares) 6,307,785   6,307,785          
Exercise of common stock options $ 7       7      
Exercise of common stock options in connection with promissory notes repayment 14       14      
Issuance of common stock upon vesting of restricted stock units (in shares)     53,570          
Vesting of restricted stock 4       4      
Stock-based compensation expense [1] 141       141      
Issuance of common stock upon net exercise of common stock warrants (in shares)     1,140,931          
Issuance of common stock upon net exercise of common stock warrants 56       56      
Conversion of preferred stock (in shares)     253,832,025          
Conversion of preferred stock 849       849      
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions (in shares)     25,000,000          
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions 944       944      
Charitable contribution stock-based expense (in shares)     546,889          
Charitable contribution stock-based expense 19       19      
Unrealized loss on marketable securities (1)             (1)
Net loss (487)         (487)    
Ending balance (in shares) at Dec. 31, 2021     507,170,365 225,000        
Ending balance at Dec. 31, 2021 $ 1,091   $ 0 $ 0 $ 2,194 $ (1,102)   $ (1)
[1] During the year ended December 31, 2021, stock-based compensation expense recorded within additional paid-in capital does not include $2 of expense recognized as a result of the acquisition of xtraCHEF due to accelerated vesting of acquiree option awards on the acquisition date (see Note 3).
v3.22.0.1
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (Parenthetical) - USD ($)
$ in Thousands
 12 Months Ended
Jun. 08, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Stock-based compensation expense   $ 142,000 $ 86,000 $ 34,000
xtraCHEF, Inc.        
Stock-based compensation expense $ 2,000      
v3.22.0.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Cash flows from operating activities:      
Net loss $ (487,000) $ (248,000) $ (209,000)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:      
Depreciation and amortization 21,000 27,000 7,000
Stock-based compensation expense 140,000 86,000 34,000
Amortization of deferred costs 30,000 15,000 0
Change in fair value of derivative liability 103,000 7,000 0
Change in fair value of warrant liability 97,000 8,000 1,000
Change in deferred income taxes (3,000) 0 (3,000)
Loss on debt extinguishment 50,000 0 0
Credit loss expense 4,000 0 0
Non-cash interest on convertible notes 12,000 8,000 0
Charitable contribution stock-based expense 19,000 0 0
Change in fair value of contingent consideration 3,000 0 0
Other non-cash items 2,000 0 0
Changes in operating assets and liabilities:      
Account receivable, net (23,000) (13,000) (4,000)
Merchant cash advances made 0 0 (22,000)
Merchant cash advances repaid 1,000 9,000 13,000
Prepaid expenses and other current assets (45,000) 18,000 (24,000)
Deferred costs, net (56,000) (25,000) 0
Inventories (23,000) (4,000) (7,000)
Operating lease right-of-use assets 16,000    
Accounts payable 15,000 (6,000) 15,000
Accrued expenses and other current liabilities 145,000 (3,000) 22,000
Deferred revenue (2,000) (8,000) 23,000
Operating lease liabilities (16,000)    
Other assets and liabilities (1,000) 4,000 28,000
Net cash provided by (used in) operating activities 2,000 (125,000) (126,000)
Cash flows from investing activities:      
Cash paid for acquisition, net of customer funds obligations assumed (26,000) 0 (41,000)
Customer funds obligations assumed in acquisition 0 0 8,000
Capitalized software (7,000) (8,000) (6,000)
Purchases of property and equipment (12,000) (28,000) (9,000)
Purchase of marketable securities (469,000) 0 0
Proceeds from the sale of marketable securities 5,000 0 0
Maturities of marketable securities 5,000 0 0
Other 1,000 0 1,000
Net cash used in investing activities (503,000) (36,000) (47,000)
Cash flows from financing activities:      
Proceeds from issuance of Class A common stock upon initial public offering, net of underwriter discounts 950,000 0 0
Payment of deferred offering costs (5,000) 0 0
Proceeds from secured borrowings 0 0 10,000
Repayments of secured borrowings 0 (9,000) (3,000)
Extinguishment of convertible notes (245,000) 0 0
Change in customer funds obligations, net 24,000 4,000 (2,000)
Proceeds from issuance of long-term debt 0 195,000 0
Proceeds from exercise of stock options 21,000 3,000 0
Proceeds from issuance of restricted stock 10,000 0 1,000
Proceeds from issuance of Series E and Series F Preferred 0 402,000 250,000
Redemption of Series B Preferred 0 (1,000) 0
Proceeds from exercise of common stock warrants 3,000 0 0
Other proceeds from financing activities 1,000 0 0
Net cash provided by financing activities 759,000 594,000 256,000
Net increase in cash, cash equivalents, cash held on behalf of customers and restricted cash 258,000 433,000 83,000
Effect of exchange rate changes on cash and cash equivalents and restricted cash (1,000) 2,000 0
Cash, cash equivalents, cash held on behalf of customers and restricted cash at beginning of period 594,000 159,000 76,000
Cash, cash equivalents, cash held on behalf of customers and restricted cash at end period 851,000 594,000 159,000
Reconciliation of cash, cash equivalents, cash held on behalf of customers and restricted cash      
Cash and cash equivalents 809,000 582,000 150,000
Cash held on behalf of customers 34,000 11,000 7,000
Restricted cash 8,000 1,000 2,000
Total cash, cash equivalents, cash held on behalf of customers and restricted cash 851,000 594,000 159,000
Supplemental disclosure of cash flow information      
Cash paid for interest 13,000 5,000 0
Supplemental disclosure of non-cash investing and financing activities:      
Purchase of property and equipment included in accounts payable and accrued expenses 1,000 5,000 11,000
Contingent consideration for acquisition included in purchase price 2,000 0 0
Deferred payment included in purchase price 5,000 0 0
Conversion of convertible preferred stock into Class B common stock upon initial public offering 849,000 0 0
Issuance of common stock warrants upon debt extinguishment 125,000 0 0
Deferred offering costs included in accounts payable and accrued expenses 1,000 0 0
Stock-based compensation expense included in capitalized software 1,000 0 0
Common Class B      
Supplemental disclosure of non-cash investing and financing activities:      
Common stock issued in acquisition 56,000 0 0
xtraCHEF, Inc.      
Supplemental disclosure of non-cash investing and financing activities:      
Common stock issued in acquisition $ 15,000 $ 0 $ 3,000
v3.22.0.1
Description of Business and Basis of Presentation
 12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Basis of Presentation Description of Business and Basis of Presentation
Toast ("we," or the “Company”), is a cloud-based all-in-one digital technology platform purpose-built for the entire restaurant community. Our platform provides a comprehensive suite of software as a service, or SaaS, products, financial technology solutions including integrated payment processing, restaurant-grade hardware, and a broad ecosystem of third-party partners. We serve as the restaurant operating system, connecting front of house and back of house operations across dine-in, takeout, and delivery channels.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, and the rules and regulations of the Securities and Exchange Commission, or SEC. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

As a result of our Initial Public Offering, or IPO, exemptions previously available to us as an Emerging Growth Company as defined in the Jumpstart Our Business Startups Act were no longer available as of December 31, 2021. Accordingly, we adopted Accounting Standards Update, or ASU, 2016-02, Leases, or ASC 842, and ASU 2016-13, 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASC 326 retroactive to January 1, 2021. Our Consolidated Financial Statements for comparative periods have not been recast.

Additionally, we adopted ASU 2014-09, Revenue from Contracts with Customers, or ASC 606, on a modified retrospective basis effective January 1, 2020.

Risks and Uncertainties

We are subject to a number of risks common to emerging, technology-based companies, including a limited operating history; dependence on key individuals; rapid technological changes; competition from substitute products and larger companies; the successful development, marketing, and outsourced manufacturing of our products and services, as well as the impact of the novel coronavirus disease, or COVID-19, on the restaurant industry.

Initial Public Offering

On September 24, 2021, we completed our IPO where we sold 25,000,000 shares of our Class A common stock at the public offering price of $40.00 per share, which included the full exercise of the underwriters’ option to purchase an additional 3,260,869 shares. We received net proceeds of $944 after deducting underwriting discounts and commissions and other offering costs.

Immediately prior to the completion of our IPO, 253,832,025 shares of convertible preferred stock were automatically converted into an equal number of shares of Class B common stock, and 1,002,035 warrants to purchase shares of Series B and Series C convertible preferred stock were automatically exchanged or became exercisable for the same number of shares of Class B common stock.
In connection with and on the date of the IPO, we filed an amended and restated certificate of incorporation (the “Restated Certificate”) with the Secretary of State of the State of Delaware. The Restated Certificate amended and restated our certificate of incorporation in its entirety, and, among other things: (i) authorized 7,000,000,000 shares of Class A common stock; (ii) authorized 700,000,000 shares of Class B common stock; (iii) authorized 100,000,000 shares of undesignated preferred stock that may be issued from time to time by the Board of Directors, or the Board, in one or more series; and (iv) eliminated all references to the previously-existing series of preferred stock. Upon completion of our IPO, each share of issued and outstanding common stock automatically converted into one share of Class B common stock.

Each share of Class A common stock entitles the holder to one vote per share and each share of Class B common stock entitles the holder to ten votes per share on all matters submitted to a vote of stockholders. Holders of Class A common stock and Class B common stock are entitled to receive dividends, when and if declared by the Board. In addition, each share of Class B common stock will convert automatically into a share of Class A common stock on the earlier of (i) seven years from the date of the filing of the Restated Certificate, or (ii) the date the holders of at least two-thirds of our outstanding Class B common stock elect to convert the Class B common stock to Class A common stock.

Stock Split

On September 9, 2021, our Board and stockholders approved a 5-for-1 stock-split of our common stock and convertible preferred stock which became effective shortly thereafter. Accordingly, all shares of common stock and per share amounts, the conversion ratio of the then outstanding convertible preferred stock, the number of shares of common stock into which each outstanding option and warrant to purchase common stock is exercisable, the exercise prices of each option and warrant, as well as the number of shares of common stock that will be issued when each outstanding RSU vests have been proportionately adjusted on a 5-for-1 basis. All share and per share data shown in the accompanying consolidated financial statements and related notes have been retroactively revised to reflect the stock split.

Impact of COVID-19

Since early 2020, changes in consumers' behavior and government-imposed restrictions because of the COVID-19 pandemic have impacted restaurants in various ways, including limiting service to takeout orders for a period of time or reducing capacity to accommodate social distancing recommendations. The extent of the impact of the COVID-19 pandemic over the longer term remain uncertain and will depend largely on future developments that cannot be accurately predicted at this time, including the duration and the spread of the pandemic both globally and within the United States, the introduction and severity of new variants of the virus and their resistance to currently approved vaccines, as well as the potential negative impact these and other factors may have on the restaurant industry and our business.

We considered the potential effects of the COVID-19 pandemic on our consolidated financial statements and the carrying amounts of assets or liabilities as of December 31, 2021 and 2020. During the year ended December 31, 2021, we partially terminated the lease for one of our office facilities. The lease termination penalty of $3 is payable in monthly installments through 2029. We recognized a loss of $1 resulting from the lease termination and $1 of write offs on certain leasehold improvements and other property as a result of exiting the leased space.

During 2020, we terminated leases for two office facilities and recognized a liability of $17 for lease termination costs, resulting in a loss of $3. Lease termination costs of $10 were paid up front, with the remaining balance payable in monthly installments through 2026. A liability related to lease termination fees was $7 as of December 31, 2020. In addition, we recognized $16 of accelerated depreciation on certain leasehold improvements and other property and equipment as a result of exiting the leased space. Depreciation expense was accelerated prospectively for the year ended December 31, 2020 based on the new remaining useful life of the related assets.
Additionally, during 2020 we completed a significant reduction in workforce, pursuant to which we incurred severance costs of $10 and stock-based compensation expense of $3 in connection with the modification of previously issued employee stock option awards. In addition to the restructuring liabilities described above, we also engaged in efforts to reduce operating expenses and took other measures to reduce discretionary spending while conditions remained uncertain for the restaurant industry.

Reclassifications

Certain amounts in prior period financial statements have been reclassified to conform to the current period presentation. None of the reclassifications materially affected previously reported amounts.
v3.22.0.1
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgements and assumptions that can affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments.

Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, allowance for credit losses, liabilities associated with financial guarantees (contingent liabilities for credit losses and non-contingent stand-ready liabilities), negative allowances for expected recoveries on repurchased loans, allowances for uncollectible loans, allowance for excessive and obsolete inventory, reserves for warranties on hardware sold, incremental borrowing rates applied in valuation of lease liabilities, reserves for sales returns, fair values of assets acquired and liabilities assumed through business combinations, useful lives of assets acquired in business combinations, stock-based compensation expense, warrants, convertible debt, debt derivatives and common stock valuation, as well as amortization period for deferred contract acquisition costs.

Fair Value Measurements

Certain assets and liabilities are carried at fair value under U.S. GAAP. These include cash and cash equivalents, marketable securities, warrants to purchase common and preferred stock, contingent consideration liability, non-contingent stand-ready liabilities, and convertible debt-related derivative liabilities. Assets and liabilities measured at fair value on a nonrecurring basis include assets acquired and liabilities assumed in business combinations. Other financial assets and liabilities are carried at cost with fair value disclosed, if required.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
Fair values of our warrants to purchase common and preferred stock, convertible debt-related derivative liabilities, and contingent consideration liability related to our acquisition of xtraCHEF are determined using Level 3 inputs in the fair value hierarchy described above. The fair value of our marketable securities is determined based on quoted market prices of similar assets and classified as Level 2 within the fair value hierarchy. (See Note 4). The carrying values of accounts receivable, merchant cash advances receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term nature.

We record a non-contingent liability which represents a financial guarantee related to our obligation to stand-ready to repurchase delinquent or defaulted loans which we service through the Toast Capital loan program (please refer to Note 9, “Loan Servicing Activities,” for further information). A non-contingent liability is recorded at fair value as loans are originated and amortized on a straight-line basis over the expected obligation term, which ranges from 90 to 270 days, or derecognized into results of operations if we repurchase the loan. The fair value of the non-contingent liability is measured based on a discounted cash flow model under the income approach. The fair value of the non-contingent liability reflects various inputs and assumptions, including the probability and amount of payments to be made under the guarantee based on probabilities of loan defaults and delinquency, as well as associated losses, and a discount rate reflecting our credit risk as the guarantor. The fair value measurement of the non-contingent liability is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy.

Foreign Currency Translation

The functional currency of our foreign subsidiaries is the local currency. The assets and liabilities of foreign subsidiaries are translated into U.S. dollars using exchange rates in effect at the Consolidated Balance Sheet date. Revenue and expenses are translated using the average exchange rates during the period. Equity transactions are translated using historical exchange rates. Exchange-rate differences resulting from translation adjustments are accounted for as a component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in "Other income (expense), net" in the Consolidated Statements of Operations for the period.

Concentration of Credit Risk and Significant Customers

Financial instruments that subject us to significant concentrations of credit risk primarily consist of cash deposits and cash equivalents, marketable securities, and accounts receivable. We maintain substantially all of our cash deposits and cash equivalents with primarily one financial institution, which, at times, may exceed federally insured limits. We have not incurred any losses associated with this concentration of deposits. Marketable securities consist of highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments, debt instruments issued by municipalities in the U.S., corporate debt securities, mortgage-backed securities, and asset-backed securities. Our investment policy provides guidelines and limits regarding investment type, concentration, credit quality, and maturity aimed at maintaining sufficient liquidity to satisfy operating and working capital requirements along with strategic initiatives, preserving capital, and minimizing risk of capital loss while generating returns on our investments.

Accounts receivable are typically unsecured. We regularly monitor the creditworthiness of our customers and believe that we have adequately provided for exposure to potential credit losses. During the years ended December 31, 2021, 2020, and 2019, we had no customers that accounted for more than 10% of our total revenue. No customers accounted for more than 10% of our total receivables as of December 31, 2021 or 2020.

We have third-party automated clearing houses acquiring processors that represented substantially all deposits in transit as of December 31, 2021 and 2020.

Segment Information

Our operations constitute a single operating segment. Operating segments are defined as components of an enterprise for which discrete financial information is available and is evaluated regularly by the chief operating decision maker, or CODM, in deciding how to allocate resources and assess performance. Our CODM is our Chief Executive Officer who reviews financial information presented on a consolidated basis for the purposes of allocating resources and evaluating financial performance.
Revenue Recognition

During the years ended December 31, 2021, 2020, and 2019, we generated four types of revenue, including: (1) subscription services from our SaaS products, (2) financial technology solutions, including loan servicing activities, (3) hardware, and (4) professional services. Our contracts often include promises to transfer multiple products and services to a customer.

Determining whether products and services are considered distinct performance obligations that should be accounted for separately as opposed to being combined may require significant judgment. We allocate total arrangement consideration at the inception of an arrangement to each performance obligation using the relative selling price allocation method based on each distinct performance obligation’s standalone selling price, or SSP. Judgment is required to determine the SSP for each distinct performance obligation. We determine the SSP for hardware and professional services revenue using an adjusted market assessment approach which analyzes discounts provided to similar customers based on customer category and size. SSP for subscription services revenue was established using the adjusted market approach considering relevant information such as current and new customer pricing, renewal pricing, competitor information, market trends and market share for similar services. SSP for financial technology solutions revenue was determined using our own standalone sales data. We allocate all variable fees earned from financial technology services revenue to that distinct performance obligation on the basis that pricing practices for that performance obligation are consistent with the allocation objective under ASC 606.

Customer credits are estimated based on historical experience. The provision for these estimates is recorded as a reduction of revenue and an increase to liabilities at the time that the related revenue is recognized.

We facilitate customers receiving financing from third-party financing firms for hardware, professional services, and the initial SaaS subscription services term. We have partnerships with these third-party financing firms that ultimately decide whether to extend credit to the customers. We pay the equivalent of an early payment discount to the third-party financing partners and recognize the payment as a reduction of revenue, as we believe these costs represent a customer sales incentive. Under our arrangements with the financing firms, we also assume a limited portion of the risk of customer defaults, which prior to the adoption of ASC 326 were accrued upon origination of the financing agreements under ASC 460, Guarantees (ASC 460). Upon adopting ASC 326 effective January 1, 2021, we recognize a contingent guarantee liability for expected credit losses and a non-contingent stand-ready liability related to the financial guarantees in accordance with ASC 460 along with a corresponding non-cash charge recorded as "General and administrative" expense in the Consolidated Statements of Operations. Costs incurred to date under such guarantees have not been material.

Subscription Services

Subscription services revenue is generated from fees charged to customers for access to our software applications. Subscription services revenue is primarily based on a rate per location, and this rate varies depending on the number of software products purchased, hardware configuration, and employee count. The performance obligation is satisfied ratably over the contract period as the service is provided, commencing when the subscription service is made available to the customer. Our contracts with customers are generally for a term ranging from 12 to 36 months. Amounts invoiced in excess of revenue recognized represent deferred revenue.
Financial Technology Solutions

Financial technology solutions revenue includes transaction-based payment processing services for customers which are charged a transaction fee for payment-processing. This transaction fee is generally calculated as a percentage of the total transaction amount processed plus a fixed per-transaction fee, which is earned as transactions are authorized and submitted for processing. We incur costs of interchange and network assessment fees, processing fees, and bank settlement fees to the third-party payment processors and financial institutions involved in settlement, which are recorded as costs of revenues. We satisfy our payment processing performance obligations and recognize the transaction fees as revenue upon authorization by the issuing bank and submission for processing. The transaction fees collected are recognized as revenue on a gross basis as we are the principal in the delivery of the managed payments solutions to the customers.

We have concluded that we are the principal in this performance obligation to provide a managed payment solution because we control the payment processing services before the customer receives them, perform authorization and fraud check procedures prior to submitting transactions for processing in the payment network, have sole discretion over which third-party acquiring payment processors we will use and are ultimately responsible to the customers for amounts owed if those acquiring payment processors do not fulfill their obligations. We generally have full discretion in setting prices charged to the customers. Additionally, we are obligated to comply with certain payment card network operating rules and contractual obligations under the terms of out registration as a payment facilitator and as a master merchant under our third-party acquiring payment processor agreements which make us liable for the costs of processing the transactions for our customers and chargebacks and other financial losses if such amounts cannot be recovered from the restaurant.

Financial technology solutions revenue is recorded net of refunds and reversals initiated by the restaurant and are recognized upon authorization by the issuing bank and submission for processing. We allocate all variable fees earned from transaction-based revenue to this performance obligation on the basis that it is consistent with the ASC 606 allocation objectives.

Financial technology solutions revenue also includes fees earned from marketing and servicing working capital loans to customers through our wholly-owned subsidiary, Toast Capital, that are originated by a third-party banking partner. We believe Toast Capital is uniquely qualified to underwrite and competitively price loans that range from $5 thousand to $250 thousand to eligible Toast customers by using patented systems for loan origination that incorporate historical POS data and payment processing volume. In these arrangements, Toast Capital’s bank partner originates all loans, and Toast Capital then services the loans using Toast’s payments infrastructure to remit a fixed percentage of daily sales to our bank partner until the loan is paid back. Toast Capital earns fees for the underwriting and marketing of loans, which are recognized upon origination of the loan, and loan servicing fees, based on a percentage of each outstanding loan, which are recognized as servicing revenue as the servicing is delivered in accordance with ASC 860, Transfers and Servicing. Servicing revenue is adjusted for the amortization of servicing rights carried at amortized cost. The marketing and facilitation fees earned upon execution of these loan agreements with its customers are recognized as revenue on a gross basis. Similar to the limited guarantee we provide in third-party financing arrangements described above, we also provide limited guarantees to our bank partner for customer defaults. We recognize a contingent guarantee liability for expected credit losses and a non-contingent stand-ready liability related to this financial guarantee in accordance with ASC 460 along with a corresponding non-cash charge recorded as "General and administrative" expense in the Consolidated Statements of Operations.

Hardware

Hardware revenue is generated from the sale of terminals, tablets, handhelds, and related devices and accessories, net of estimated returns. We invoice end-user customers upon shipment of the products. Revenue for hardware sales is recognized at the point in time at which the transfer of control occurs in accordance with agreed upon shipping terms, satisfying the performance obligation. We accept returns for hardware sales and recognize them at the time of the sale as a reduction of transaction price based on historical experience.
Professional Services

Professional services revenue is generated from fees charged to customers for installation services, including business process mapping, configuration, and training. Professional services are sold separately. Amounts invoiced in advance are recorded as deferred revenue. The duration of providing professional services to the customer is relatively short and completed in a matter of days. The performance obligation for professional services is considered to be satisfied upon the completion of the installation.

Cash, Cash Equivalents, Cash Held on Behalf of Customers and Restricted Cash

We define cash and cash equivalents as highly liquid investments with original maturities of 90 days or less at the time of purchase that are readily convertible to known amounts of cash. As of December 31, 2021 and 2020, our cash and cash equivalents consisted primarily of cash held in checking and money market accounts as well as marketable securities with an original maturities of 90 days or less.

Cash held on behalf of customers represents an asset that is restricted for the purpose of satisfying obligations to remit funds to various tax authorities to satisfy customers’ payroll, tax and other obligations. Cash held on behalf of customers is included within "Prepaid expenses and other current assets," and the corresponding customer funds obligation is included within "Accrued expenses and other current liabilities" on our Consolidated Balance Sheets.

Restricted cash represents cash held with commercial lending institutions. The restrictions are related to cash collateralized letters of credit to cover potential customer defaults on third-party financing arrangements, and cash held as collateral pursuant to an agreement with the originating third-party bank for the working capital loans serviced by Toast Capital (See Note 9).

Cash and cash equivalents and restricted cash consisted of the following:

December 31,
20212020
Cash and cash equivalents
$809 $582 
Cash held on behalf of customers
34 11 
Restricted cash
8 1 
Total cash, cash equivalents, cash held on behalf of customers and
restricted cash		$851 $594 

Marketable Securities

Our marketable securities are classified as available-for-sale. We classify our marketable securities as current assets, including those with maturities greater than 12 months, as they are available for use in current operations or to satisfy other liquidity requirements.

Marketable securities are carried at fair value, and we report unrealized gains and losses as a component of accumulated other comprehensive income, net of tax, until the security is sold or matures, except for changes in allowance for expected credit losses, which are recorded in our results of operations. Gains or losses realized from sales of marketable securities are computed based on the specific identification method and recognized as a component of "Other income (expense), net" in the accompanying Consolidated Statements of Operations.
Accounts Receivable, net

Accounts receivable, net consisted of the following:

December 31,
20212020
Accounts receivable
$20 $5 
Unbilled receivables
39 32 
Less: Allowance for credit losses
(4)(4)
Accounts receivable, net$55 $33 

Our allowance for credit losses was comprised of the following:

Amount
Balance as of December 31, 2019
(5)
Additions
(5)
Write offs
6 
Balance as of December 31, 2020
$(4)
Impact of adopting ASU 2016-13(2)
Additions
(1)
Write offs
3 
Balance as of December 31, 2021
$(4)

Accounts receivable, net consists of trade accounts receivable and unbilled receivables (which we collectively refer to as accounts receivable), net of an allowance for credit losses. Unbilled receivables represent revenue recognized on a contract in excess of billings. Our payment terms for trade accounts receivable vary by the type of customer and the products or services offered. The term between invoicing and when payment is due is not significant.

We record an allowance for expected credit losses for Accounts Receivable upon the initial recognition of an Accounts Receivable balance in accordance with ASC 326. The allowance for credit losses represents the best estimate of lifetime expected credit losses, based on customer-specific information, historical loss rates and the impact of current and future conditions, including an assessment of customer creditworthiness, historical payment experience and the age of outstanding receivables, Accounts Receivable balances are written off against the allowance for credit losses when we determine that the balances are not recoverable. Provisions for the allowance for expected credit losses are recorded in "General and administrative" expenses in the Consolidated Statements of Operations. We evaluate the allowance for credit losses for the entire portfolio of Accounts Receivable on an aggregate basis due to similar risk characteristics of its customers based on similar industry and historical loss patterns.

Inventory

Inventory, which consists of tablets, printers, and networking equipment, are stated at the lower of cost or net realizable value and are accounted for using the average cost method. We evaluate ending inventory for estimated excess and obsolete inventory based primarily on historical sales levels by product and projections of future demand, as well as the impact of changing product design and technology. We recognize freight, handling costs, and damaged inventory as current-period costs. We recorded provisions for excess and obsolete inventory for the years ended December 31, 2021 and 2020, of $3 and $5, respectively.
Assets and Liabilities Recorded with Loan Servicing Activities

Capitalized servicing rights are recorded as a component of "Prepaid expenses and other current assets" in the accompanying Consolidated Balance Sheets, and represent rights associated with servicing loans originated by our industrial bank partner to merchant customers. A servicing asset is recognized when benefits of servicing are expected to be greater than adequate compensation for performing servicing by us. No servicing rights are recorded if the amounts earned represent adequate compensation. In determining adequate compensation, we compare its level of compensation to the level of compensation demanded by current market prices.

Servicing rights are initially recorded at fair value. Initial measurement is based on an analysis of discounted cash flows based on assumptions that market participants use to estimate fair value. Subsequently, servicing rights are amortized over the expected period of estimated net servicing income and assessed for impairment.

Amortization of servicing rights is recorded in proportion to and over the period of estimated net servicing income. Resulting amortization expense is recorded as an adjustment to net "Financial technology solutions" revenue on the Consolidated Statements of Operations.

Impairment is recognized through a valuation allowance and a charge to current period earnings if it is considered to be temporary. If circumstances indicate that the likelihood of future recovery of the impaired assets or liability is remote, we directly write-down such assets and relieve the valuation account.

Under the terms of our agreement with our industrial bank partner, we are obligated to repurchase certain loans originated by our industrial banking partner to our customers in cases where the customer's payments on the loan are delayed for a defined period of time, and the loan is considered delinquent. Our obligation is limited to a specified percentage of the total loans originated, measured on a quarterly basis. To the extent we make a repurchase, our obligation with respect to the quarterly cohort of loans from which the defaulted loan originated is reduced. Please refer to "Acquired Loans Receivable, Net" section within this note for information on our accounting for repurchased loans.

This obligation represents a financial guarantee with two aspects: a contingent liability accounted for under ASC 326 related to our contingent obligation to purchase defaulted loans, and a non-contingent liability accounted for under ASC 460 related to our obligation to stand-ready to perform under the obligation. As noted above, we adopted ASC 326 effective January 1, 2021 which applies to the contingent component of the guarantee arrangement. We measure a contingent liability for expected credit losses which is based on historical lifetime loss data, as well as macroeconomic forecasts applied to the loan portfolio. Probability of default curves are generated using historical default data for portfolios of guaranteed loans with similar risk characteristics. Loss severity estimates are generated using historical collections data for the loans repurchased by us. Additionally, we apply macroeconomic factors, such as forecasted trends in unemployment rates, which are sourced externally, using a single scenario that we believe is most appropriate to the economic conditions applicable to a particular period. Projected loss rates, inclusive of historical loss data and macroeconomic factors, are applied to the outstanding principal amounts of the guaranteed loans. We may also include qualitative adjustments that incorporate incremental information not captured in the quantitative estimates of its current expected credit losses. The expected term of the loans guaranteed by us typically range from 90 to 270 days, and the reasonable and supportable forecast period we have included in our projected loss rates is approximately 12 months based on externally sourced data.

Contingent liabilities for expected credit losses are recorded as new guaranteed loans get originated, along with a corresponding non-cash charge recorded within "General and administrative" expense in the Consolidated Statements of Operations. We remeasure these contingent liabilities each reporting period and reverse the liability upon loan purchase or upon the expiration of the obligation. We record a non-contingent liability at fair value as loans are originated, with a corresponding charge recorded within "General and administrative" expense in the accompanying Consolidated Statements of Operations. Subsequently, the liability is amortized on a straight-line basis over the expected obligation term, which ranges from 90 to 270 days, and derecognized upon loan repurchase against "General and administrative" expense in the Consolidated Statements of Operations.
Prior to January 1, 2021, we estimated a single liability related to the financial guarantees which was accounted for as a guarantee under ASC 460 and was recorded as a reduction of net revenue at the time the loans were originated and trued up over the period of repayment.

Please refer to the "Recently Adopted Accounting Pronouncements" section within this note related to the adoption of ASC 326, Note 6, “Merchant Cash Advances Receivable and Acquired Loans Receivable, Net” for additional information on acquired loans receivable, as well as Note 9, “Loan Servicing Activities” for additional information on the liabilities related to the financial guarantees.

Acquired Loans Receivable, Net

As described above, we are obligated to purchase delinquent loans from our industrial bank partner. Such purchases, net of expected recoveries, are recorded as a reduction to our potential liability with respect to the quarterly cohort of loans from which the defaulted loan originated (please see Note 9, "Loan Servicing Activities").

Effective January 1, 2021, we adopted ASC 326, and as a result account for purchased loans in accordance with the guidance for purchased credit deteriorated, or PCD, assets as the loans experienced credit quality deterioration between their origination and purchase.

Because we have an expectation of collecting cash flows at the portfolio level, a negative allowance is established for expected recoveries. We estimate a negative allowance on an undiscounted basis using historical collections data for loans purchased by us and qualitative adjustments that incorporate incremental information not captured in the quantitative estimates of our current expected recoveries. Cash collections related to Acquired Loans Receivable are first applied to the negative allowance balance, and when recoveries received exceed the negative allowance, we recognize amounts within operating expenses in the Consolidated Statements of Operations. The negative allowance is recorded as an asset and presented within "Accounts receivable, net" on our Consolidated Balance Sheets. Changes in the negative allowance are recorded as an operating expense in the Consolidated Statements of Operations.

Prior to January 1, 2021, Acquired Loans Receivable were carried at their amortized cost, fully offset by an allowance for loan losses.

Please refer to "Recently Adopted Accounting Pronouncements" in Note 2 for discussion related to ASC 326 adoption, Note 6, "Merchant Cash Advances Receivable and Acquired Loans Receivable, Net” for additional information on acquired loans receivable, and Note 9, "Loan Servicing Activities" for additional information on the liabilities related to financial guarantees.

Property and Equipment, Intangible Assets and Impairment of Long-lived Assets

Property and equipment are stated at cost, net of accumulated depreciation, and are depreciated using the straight-line method over their estimated lives, as follows:

Property and EquipmentEstimated Useful Life
Computer and other equipment3 years
Office furniture and fixtures3 years
Tooling3 years
Capitalized software2 years

Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining terms of the respective leases. Repair and maintenance costs are expensed as incurred, whereas major improvements are capitalized as additions to property and equipment.

We account for our internal use software and website development costs in accordance with the guidance in ASC 350-40, Internal-Use Software. The costs incurred prior to the application development stage and post implementation are expensed as incurred. Direct and incremental internal and external costs incurred during the application development stage, are capitalized until the application is substantially complete and ready for its intended use, at which point amortization begins. Training and data conversion costs are expensed as incurred.
When assets are retired or disposed of, cost and associated accumulated depreciation are derecognized, and any resulting gain or loss is included in our Consolidated Statements of Operations.

Operating Leases

We adopted ASC 842 effective January 1, 2021. We determine if an arrangement is or contains a lease at contract inception. Lease agreements generally contain lease and non-lease components, which we elect to combine for all asset classes as a single lease component. Payments under lease arrangements are primarily fixed. Variable payments typically represent non-lease components, which consist primarily of payments for maintenance, utilities, and management fees. Variable payments included in lease arrangements are expensed as incurred and excluded from the right of use assets and lease liabilities.

Right-of-use assets and lease liabilities for operating leases are initially measured on the lease commencement date based on a present value of lease payments over the lease term. Right of use assets are recorded net of any lease incentives received from a lessor. Lease liabilities are calculated as the present value of fixed payments over the lease term, including periodic fixed rent increases and excluding any lease incentives paid or payable to us by a lessor. Lease payments are discounted to present value using our estimated incremental borrowing rate, because a readily determinable implicit rate is not available. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The weighted average discount rate for operating leases was 2.62% as of December 31, 2021.

Lease term includes the non-cancelable term, renewal options that extend the lease and are reasonably certain to be exercised, and options to terminate the lease before the end of its non-cancelable term that are not reasonably certain to be exercised.

We do not record right-of-use assets and lease liabilities for leases with an initial term of 12 months or less and recognize lease expense on a straight-line basis over the lease term.

Our consolidated financial statements and related disclosures for the reporting periods prior to January 1, 2021 have not been adjusted and continue to be reported under Topic 840.

Business Combinations

We account for acquisitions using the acquisition method of accounting. Assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration transferred in a business combination, including any contingent consideration, is allocated to the assets acquired and liabilities assumed based on their respective fair values. The excess of the consideration transferred over the fair values of the assets acquired and the liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date or upon a final determination of asset and liability fair values, whichever occurs first, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Any subsequent adjustments are recorded on the Consolidated Statements of Operations.

Intangible Assets

Intangible assets consist of finite-lived acquired technology, customer relationships, and acquired trade names. Finite-lived intangible assets are valued based on estimated future cash flows and amortized on a straight-line basis over their estimated useful lives. We evaluate the remaining estimated useful life of its intangible assets being amortized on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining amortization period.

Acquired technology is amortized over its useful life on a straight-line basis within costs of revenue. Customer relationships are amortized over their useful life on a straight-line basis within Amortization of acquired technology and customer assets.
The estimated useful lives for acquired technology, customer relationship intangible assets and acquired trade names are as follows:
Estimated Useful Life
Acquired technology
3 - 10 years
Customer acquired intangible assets6 years
Trade names1.5 years

We evaluate the recoverability of property and equipment and finite lived intangible assets for impairment whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable. For purposes of this assessment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability is measured by comparing the carrying amount of an asset group to the estimated future undiscounted future net cash flows expected to be generated from their use and eventual disposal. If the carrying amount is not recoverable, the carrying amount is reduced to fair value and impairment loss is recognized. We did not identify any events or circumstances that indicated the carrying amounts of our long-lived assets may not be recoverable and did not recognize any impairment during the year ended December 31, 2021.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net tangible and identifiable intangible assets of the businesses acquired by us. Goodwill is tested for impairment annually during the fourth quarter or more often if impairment indicators are present, based on events and circumstances indicating that it is more likely than not that the fair value of the reporting unit is below its carrying value. As of December 31, 2021, no goodwill impairment has been identified.

Deferred Offering Costs

We capitalized certain legal, accounting and other third-party fees that were directly associated with in-process equity financings as deferred offering costs until such financings were consummated. Upon completion of the IPO, $6 of such deferred costs were recorded as a reduction of the proceeds generated from the offering which were recognized in additional paid-in capital.

Deferred Revenue

Deferred revenue represents our obligation to transfer products or services to customers for which consideration has been received and consists of amounts deferred from subscription services contracts, professional service engagements, and customer deposits received in advance. Amounts deferred under subscription service contracts are recognized ratably over the respective term of the customer contract. Deferred revenue for professional services includes consideration amounts that have been received from customers in advance, but the services are yet to be completed or accepted by customers. Sales taxes collected from customers and remitted to government authorities are excluded from revenue and deferred revenue.

Costs of Revenue

Costs of revenue primarily consists of costs associated with payment processing, personnel, and related infrastructure for operation of our cloud-based platform, data center operations, customer support, loan servicing and allocated overhead. Hardware costs consist of all product and shipping costs associated with tablets, printers, and other peripherals. Employee-related costs consist of salaries, benefits, bonuses, and stock-based compensation expense. Overhead consists of certain facilities costs, depreciation expense, and amortization costs associated with internally developed software.

Payment processing costs include interchange fees, network assessment fees and fees paid to the acquiring payment processors.
Stock-Based Compensation Expense

We grant equity awards, including stock options which vest upon the satisfaction of a service condition and restricted stock units, or RSUs, which vest upon the satisfaction of a performance condition and/or a service condition. We account for stock-based compensation expense related to equity awards in accordance with ASC 718, Compensation—Stock Compensation. Stock-based awards are measured at fair value on the grant date and compensation cost recognized over the service period, net of estimated forfeitures. Compensation cost is recognized on a straight-line basis for stock-options and RSUs, and on an accelerated attribution basis for awards with a performance condition for each separately vesting portion of the award over the applicable vesting period.

We use the Black-Scholes option-pricing model to determine the estimated fair value of stock option awards. We estimate the following assumptions used in the option pricing model:

•Expected Volatility—We do not have sufficient history of market prices for our Class A common stock due to its recently completed IPO. As such, we estimate volatility for stock option grants by evaluating the average historical volatility of a peer group of similar public companies over a period commensurate with the options' expected term.

•Expected Term—The expected term of our stock options represents the period that the stock-based awards are expected to be outstanding. We do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. As such, we estimate the expected term of the options based on the simplified method determined based on the midpoint of the stock options vesting term and contractual expiration period.

•Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury yield curve published as of the grant date, with maturities approximating the expected term of the options granted.

•Dividend Yield—We have not declared or paid dividends to date and do not anticipate declaring dividends. As such, the expected dividend is zero.

The fair value of restricted stock unit awards, or RSUs, is determined based on the closing market price of our common stock on the date of the grant.

Prior to our IPO, the fair value of our common stock was determined by our Board, with the assistance of management, as there was no public market for the underlying common stock. Our Board determined the fair value of our common stock by considering a number of objective and subjective factors, such as contemporaneous third-party valuations of our common stock, the valuation of comparable companies, sales of our common and redeemable convertible preferred stock to outside investors in arms-length transactions, our operating and financial performance, the lack of marketability, and the general and industry specific economic outlook, amongst other factors. After the completion of the IPO, the fair value of our Class A common stock is determined based on the New York Stock Exchange, or NYSE, closing price on the date of grant.

Prior to September 2021, RSUs granted by us vest upon the satisfaction of both a service-based vesting condition, which is typically four years, and a liquidity event-related performance vesting condition. All performance conditions were achieved upon the completion of our IPO, and we recorded a cumulative stock compensation expense for RSUs in September 2021. Stock compensation expense for the remaining service period after the satisfaction of the performance condition will be recorded over the remaining requisite service period using the accelerated attribution method.

We estimate a forfeiture rate to calculate the stock-based compensation expense for all awards based on an analysis of actual historical experience and expected employee attrition rates.
The Amended and Restated 2014 Stock Incentive Plan, as amended (the "2014 Plan") of our company allows for early exercise of all granted options, before vesting requirements have been satisfied. Shares acquired through the early exercise of options which have not vested at the time of an employee’s termination may be repurchased by us at the lower of the original exercise price or the then current fair value. We have not recognized any tax benefits related to the effects of employee stock-based compensation expense.

Advertising Costs

We expense advertising costs as incurred. Advertising expense for the years ended December 31, 2021, 2020, and 2019, was $17, $6, and $8, respectively, and is included in "Sales and marketing" expense in the accompanying Consolidated Statements of Operations.

Income Taxes

We account for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. In addition, this method requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

We account for uncertain tax positions recognized in the consolidated financial statements by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Interest and penalties, if applicable, related to uncertain tax positions would be recognized as a component of income tax expense.

Net Loss Per Share

During the year ended December 31, 2021, we amended and restated our certificate of incorporation and created two classes of common stock: Class A common stock and Class B common stock (see Note 1). Class A common stock and Class B common stock share proportionately, on a per share basis, in our net income (losses) and participate equally in the dividends on common stock, if declared. We allocate net losses attributable to common stock between the common stock classes on a one-to-one basis when computing net income (loss) per share. As a result, basic and diluted net income (loss) per share of Class A common stock and share of Class B common stock are equivalent.

We compute net loss per common share based on the two-class method required for multiple classes of common stock and participating securities. The two-class method requires income (loss) available to common stockholders for the period to be allocated between multiple classes of common stock and participating securities based upon their respective rights to receive dividends as if all income (loss) for the period had been distributed.

We consider our currently outstanding restricted shares issued upon early exercise of stock options and our convertible preferred stock which was outstanding prior to the completion of the IPO to be participating securities. Restricted shares issued upon early exercise of stock options are considered participating securities because holders of such shares have non-forfeitable dividend rights in the event of a dividend declaration for common shares. The holders of our convertible preferred stock were entitled to non-cumulative dividends in preference to common stockholders, at specified rates, if declared. The holders of our convertible preferred stock were not, and restricted shares are not contractually obligated to participate in our losses. As such, our net losses for the years ended December 31, 2021, 2020, and 2019 were not allocated to these participating securities.
Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of our Class A and Class B common stock outstanding, adjusted for outstanding shares that are subject to repurchase. Weighted average shares of Class A and Class B common stock outstanding exclude shares which were acquired from the early exercise of options and the exercise of options under outstanding promissory notes, both of which are not considered substantive exercises for accounting purposes (see Note 21). During the year ended December 31, 2021, the weighted average shares of common stock outstanding include shares issued as a result of the exercise of vested options upon the repayment of outstanding promissory notes.

Diluted net loss per common share gives effect to all potentially dilutive securities. Our potentially dilutive securities, which include convertible preferred stock, options to purchase common stock, unvested restricted stock units, exercised options for which we received non-recourse notes from the individuals, as well as warrants to purchase common stock and convertible preferred stock, and contingently convertible debt, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive as a result of a net loss incurred during each period. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share was the same during each reporting period.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, or ASU 2020-06. The new guidance simplifies the accounting for certain financial instruments by removing certain separation models required under current U.S. GAAP, including the beneficial conversion feature and cash conversion feature. ASU 2020-06 also improves and amends the related earnings per share guidance for both subtopics. ASU 2020-06 is effective for public business entities for fiscal years beginning after December 15, 2021 and interim periods within that fiscal year. We are evaluating the impact of the adoption of ASU 2020-06 on our consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, or ASU 2021-08. The standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, as if it had originated the contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The amendments in ASU 2021-08 should be applied prospectively to business combinations occurring on or after the effective date of the standard. Early adoption is permitted. We are currently evaluating the impact of this pronouncement on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

We adopted the following accounting standards during the year ended December 31, 2021:

Leases

In February 2016, the FASB issued ASC 842, as amended, which superseded the guidance in former ASC 840, Leases. Based on ASC 842, a lessee is required to recognize in the statement of financial position a lease obligation related to making lease payments and a right-of-use asset representing its right to control the use of the underlying asset during the lease term, including optional payments that are reasonably certain to occur.

We adopted ASC 842 on January 1, 2021 on a modified retrospective basis and elected the transition option to forgo application of comparative period presentation in the financial statements during the year of adoption. Therefore, our Consolidated Financial Statements for the year ended December 31, 2021 are presented in accordance with ASC 842, while comparative periods have not been recast.
We did not elect the hindsight practical expedient related to determining the lease term. We elected the package of practical expedients upon transition, and therefore did not reassess the lease classification of existing or expired contracts, the accounting for initial direct costs and whether any of such contracts represent or contain leases. We also made an accounting policy election to combine lease and non-lease components into a single lease component for each class of underlying assets for the arrangements in which we are a lessee.

The adoption of Topic 842 resulted in a recognition of operating lease right-of-use assets of $95, operating lease obligations of $115, and an immaterial cumulative-effect adjustment to accumulated deficit as of January 1, 2021. The adoption of Topic 842 and did not have a material impact on our results of operations and cash flows during the year ended December 31, 2021, as described in Note 12, "Lessee Arrangements." The adoption of Topic 842 for the arrangements in which we are a lessor did not have a material impact on our financial position as of December 31, 2021 and results of operations and cash flows during the period then ended.

Credit Losses

In June 2016, the FASB issued ASC 326. The guidance and related amendments modify the accounting for credit losses for most financial assets and require the use of an expected credit loss model replacing the currently used incurred loss method.

We adopted the standard as of January 1, 2021 and recognized a cumulative-effect adjustment to the opening retained earnings as of that date. Therefore, our Consolidated Financial Statements for the year ended December 31, 2021 are presented in accordance with ASC 326, while comparative periods have not been recast.

The primary financial instruments in the scope of ASC 326 include cash equivalents, accounts receivable, off-balance sheet credit exposures under financial guarantee arrangements, and acquired loans receivable.

The following table summarizes the effect of the adoption on all affected items in the Consolidated Balance Sheets and the cumulative effect on opening accumulated deficit:
ComponentFinancial Statement Line Item
Balance as of
December 31, 2020
Balance as of
January 1,
2021		Effect of Adoption
Asset Accounts Receivable, Net $1 $3 $2 
LiabilityAccrued Expenses and Other Current Liabilities1 3 2 
LiabilityDeferred Revenue, Current 1 — (1)
EquityAccumulated Deficit(616)(615)1 

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in the updated guidance simplify the accounting for income taxes by removing certain exceptions and improving consistent application of other areas of the topic by clarifying the guidance. Toast adopted the standard effective January 1, 2021 using the retrospective method of transition. The standard did not have a material impact on our financial position as of December 31, 2021 and our results of operations for the year then ended.
Revenue from Contracts with Customers

In May 2014, the FASB issued Topic 606, which superseded most existing revenue recognition guidance under U.S. GAAP. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. We adopted this standard on January 1, 2020 using the modified retrospective method of transition. Modified retrospective adoption requires entities to apply the standard retrospectively to the most current period presented in the financial statements, requiring the cumulative effect of the retrospective application as an adjustment to the opening balance of retained earnings at the date of initial application. Accordingly, results for reporting periods beginning after January 1, 2020 are presented based on ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic revenue recognition methodology under ASC 605, Revenue Recognition.

We applied Topic 606 to all contracts that were not complete as of January 1, 2020. We elected to adopt the practical expedient outlined in ASC 606 and analyzed the aggregate effect of all contract modifications that occurred prior to January 1, 2020.

We recorded a cumulative-effect adjustment of $18 in accumulated deficit as of January 1, 2020 due to the cumulative impact of adopting Topic 606, related to capitalizing commissions and changes in allocation of arrangement consideration to hardware revenue and subscription revenue.

Based on provisions of ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In order to achieve this core principle, the following five steps are applied:

1.Identify the contract(s) with a customer.
2.Identify the performance obligations in the contract.
3.Determine the transaction price.
4.Allocate the transaction price to the performance obligations in the contract.
5.Recognize revenue as the entity satisfies a performance obligation.

We elected to use the portfolio approach practical expedient for contracts with similar characteristics provided the accounting result will not be materially different from the result of applying the guidance at the individual contract level. We selected various types of contract types and vendors to ensure all possible contract considerations were being captured. We applied this approach to all five steps of our analysis and use our judgment in the application of this approach to contracts and groups of similar contracts for revenue recognition.

We elected to use the significant financing component practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

Prior to the adoption of ASC 606, we did not allocate discounts on hardware revenue and professional services to subscription elements and variable transaction-based fees which were considered contingent revenue. Under ASC 606, arrangement consideration is allocated to each distinct performance obligation using a relative selling price allocation method based on each distinct performance obligation’s SSP, which impacted the allocation of arrangement consideration between hardware revenue and subscription services. We continue to allocate all variable fees earned from transaction-based revenue to this performance obligation on the basis that it is consistent with the allocation objectives in ASC 606.

Additionally, prior to the adoption of ASC 606, we expensed commission costs and related employer payroll taxes as incurred as costs of obtaining a contract. Based on ASC 340-40, Other Assets and Deferred Costs, we are required to capitalize and amortize incremental costs of obtaining a contract, such as sales commissions and related payroll taxes, over the period we expect to derive benefits from the contract, which we have calculated to be three years. The period of benefit for commissions paid for the acquisition of initial subscription services is determined by taking into consideration the initial estimated customer life and the technological life of our subscription services platform and related significant features. We adjust the carrying value of the deferred
commissions assets periodically to account for customer churn, which occurs when customers have ceased operations or otherwise discontinued using our subscription services and financial technology solutions. Amortization expense is included in "Sales and marketing" expense on the Consolidated Statements of Operations.

The following table summarizes the cumulative effect of changes from the adoption of ASC 606 on our Consolidated Balance Sheets as of January 1, 2020 as a result of us adopting ASC 606 using the modified retrospective transition method:
Balance as of
December 31, 2019
Adjustments
Due to
Adoption		Balance as of
January 1,
2020
Consolidated Balance Sheets
Assets:
Accounts receivable$15 $6 $21 
Deferred costs, net— 10 10 
Deferred costs, non-current— 9 9 
Liabilities:
Current portion of deferred revenue39 (2)37 
Deferred revenue, net of current portion21 9 30 
Stockholders’ deficit:
Accumulated deficit$(386)$18 $(368)

The following tables summarize the effect of the adoption of ASC 606 on our select line items included in the Consolidated Financial Statements as of and for the year ended December 31, 2020, as if the previous accounting was in effect:
Year Ended December 31, 2020
As reported (ASC 606)Impact of AdoptionWithout Adoption (ASC 605)
Consolidated Balance Sheets
Assets:
Accounts receivable$33 $22 $11 
Deferred costs, net17 17 — 
Deferred costs, non-current12 12 — 
Liabilities:
Current portion of deferred revenue43 17 26 
Deferred revenue, net of current portion16 — 16 
Stockholders’ deficit:
Accumulated deficit(616)34 (650)
Year Ended December 31, 2020
As reported (ASC 606)Impact of AdoptionWithout Adoption (ASC 605)
Consolidated Statement of Operations and Comprehensive Loss
Revenue:
Hardware revenue$64 $4 $60 
Subscription revenue101 2 99 
Professional services revenue14 1 13 
Operating Expense:
Sales and marketing138 (11)149 
Net loss(248)16 (264)

Improvements to Nonemployee Share-Based Payment Accounting

In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, or ASU 2018-07. ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. On January 1, 2020, we adopted ASU 2018-07, which did not materially impact the Consolidated Financial Statements and the related disclosures.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement

In August 2018, the FASB issued ASU No. 2018-15, Customer’s accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, or ASU 2018-15, which is intended to align the requirements for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing guidance for internal-use software. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. On January 1, 2020, we adopted ASU 2018-15, which did not materially impact the Consolidated Financial Statements and the related disclosures.
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Business Combinations
 12 Months Ended
Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract]  
Business Combinations Business Combinations
xtraCHEF

On June 8, 2021, we acquired 100% of the outstanding capital stock of xtraCHEF, Inc., or xtraCHEF, a provider of restaurant-specific invoice management software that automates the accounts payable and inventory workflow and improves efficiencies related to expense tracking and recording. The acquisition is expected to expand our product portfolio and enable our customers to improve operational efficiencies and financial decision making.
The aggregate purchase price, net of cash acquired of $1, was subject to normal and customary purchase price adjustments and was as follows on the acquisition date:
Amount
Cash consideration, net of cash acquired$24 
Fair value of common stock issued15 
Fair value of settled stock option awards1 
Fair value of contingent consideration2 
Liabilities settled on behalf of xtraCHEF1 
Deferred payments for indemnity claims and working capital funds, net of adjustments (1)
5 
Total purchase price$48 
(1)The amount includes the indemnity funds related to the seller's satisfaction of potential indemnity claims that may be released to the sellers no later than 15 months following the acquisition date, as well as a cash payment related to working capital, subject to further working capital adjustments, that will be released to the sellers or remitted back to us no later than 12 months following the acquisition date.

In consideration for the acquisition of xtraCHEF, we issued 569,400 shares of common stock to the seller shareholders with a fair value of $26.10 per share on the acquisition date supported by a contemporaneous valuation. Additionally, we settled an immaterial amount of option awards that were subject to accelerated vesting on the acquisition date. Total consideration transferred for the settled option awards consisted of cash consideration of $3 and deferred consideration of $1, which included the indemnity fund, the working capital fund and the fair value of contingent consideration. The consideration transferred for the settled option awards of $3 approximated the estimated fair value of the settled option awards on the acquisition date, of which $1 was attributable to pre-acquisition services and included in the purchase price. The remaining amount of $2 was recorded as a stock-based compensation expense on the acquisition date within "General and administrative" expenses in our Consolidated Statements of Operations.

The fair value of contingent consideration of $2 on the acquisition date was estimated based on a Monte Carlo simulation and recorded as a liability in the Consolidated Balance Sheets. Contingent consideration liability was $5 at December 31, 2021. Contingent consideration is based on a cumulative achievement of certain recurring revenue targets, as defined in the acquisition agreement, and represents a potential obligation by us to pay cash and issue shares of our common stock to the former xtraCHEF shareholders up to a certain amount based on the achievement of the required revenue targets during the years ended December 31, 2021 and 2022. The contingent consideration obligation is limited to a maximum payment amount of $7. The liability of $6 related to the indemnity fund will be released to the sellers, to the extent there were no claims for indemnification by us against the fund, no later than 15 months following the acquisition date. As of December 31, 2021, contingent consideration liability consists of a current portion of $4 and a long-term portion of $1 which were included within “Accrued expenses and other current liabilities“ and “Other long-term liabilities” in the Consolidated Balance Sheets.

We accounted for the acquisition as a business combination in accordance with provisions of ASC 805, Business Combinations, or ASC 805. The operating results of xtraCHEF have been reflected in our results of operations from the date of the acquisition. We used a market participant approach to record the assets acquired and liabilities assumed in the xtraCHEF acquisition. Due to the timing of the acquisition, the accounting for this acquisition was not complete as of December 31, 2021. The fair values of the assets acquired and the liabilities assumed have been determined provisionally and are subject to adjustment as we obtain additional information. In particular, additional time is needed to review and finalize the results of the valuation of assets acquired and liabilities assumed. Any adjustments to the purchase price allocation will be made as soon as practicable, but no later than one year from the acquisition date.

Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired. Goodwill was primarily the result of expected synergies from combining the operations of xtraCHEF with our operations and was not deductible for tax purposes.
The following table summarizes the allocation of the preliminary purchase price and the amounts of assets acquired and liabilities assumed for the acquisition based upon their estimated fair values at the date of acquisition. Such balances are reflected in the Consolidated Balance Sheets as of December 31, 2021:

Amount
Intangible assets$14 
Goodwill38 
Deferred tax liability(3)
Other(1)
Net assets acquired$48 

The developed technology and the customer relationships intangible assets of $13 and $1, respectively, have a weighted average amortization period of 10 years and 6 years, respectively, on the acquisition date. We used the income approach in accordance with the relief-from-royalty method to estimate the fair value of the developed technology which is equal to the present value of the after-tax royalty savings attributable to owning the intangible asset. Fair value of the customer relationships was estimated based on the income approach in accordance with the excess-earnings method which is equal to the present value of the after-tax cash flows attributable to the intangible asset only.

During the year ended December 31, 2021, we incurred acquisition-related expenses of $1 in connection with the acquisition of xtraCHEF which were recorded in "General and administrative" expenses in our Consolidated Statements of Operations.

We did not present proforma financial information for our consolidated results of operations for the year ended December 31, 2021 and 2020 as if the acquisition of xtraCHEF occurred on January 1, 2020 because such results were not material. Revenue and result of operations from xtraCHEF were not material to our consolidated revenue and consolidated net loss during the year ended December 31, 2021.

StratEx

On July 17, 2019, we acquired 100% of the outstanding shares of StratEx HoldCo, LLC, or StratEx, a technology company that offers payroll services. The acquisition of StratEx enabled us to integrate payroll services to our existing point of sale product offering creating a cohesive solution for restaurant labor and payroll management.

The purchase consideration directly paid to shareholders consisted of $36 in cash and 543,300 shares of our common stock with a fair value of $3. Third-party acquisition-related costs were $1. The results of StratEx’s operations have been included in the consolidated financial statements since the closing date.

The following table summarizes the consideration paid for StratEx and the fair value of the assets acquired, and liabilities assumed at the closing date:
Consideration:Amount
Cash paid to shareholders
$36 
Common stock issued
3 
Total consideration to shareholders
39 
Indebtedness paid at closing
5 
Total purchase price
$44 
Acquired Assets and Liabilities
Net working capital
$(1)
Intangible technology assets
9 
Intangible customer relationships
3 
Goodwill
36 
Deferred tax liability
(3)
Total purchase price
$44 

Goodwill from the StratEx acquisition was primarily attributable to the value of the expected synergies created by incorporating StratEx solutions into our point-of-sale platform and the value of the assembled workforce. Goodwill was not deductible for tax purposes.

The acquisition of StratEx did not have a material impact on our reported revenue or net loss amounts. Accordingly, pro forma financial information has not been presented.

In connection with the acquisition of StratEx, certain individual stockholders continuing employment at the Company were eligible to receive earn-out bonuses of up to $7 in aggregate based on the achievement of defined financial metrics for specified periods of time in the three-year period following the acquisition. The rights to such payments were tied to continuing employment at the Company and, as such, were considered compensatory and expected payments were accrued over the requisite service period. As of December 31, 2021, 2020, and 2019, we have concluded that we do not expect to pay the earn-out bonuses and hence no accrual was recorded.
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Fair Value of Financial Instruments
 12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
The following table presents information about our financial assets and liabilities that were measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values:
Fair Value Measurements at December 31, 2021
Using:
Level 1Level 2Level 3Total
Assets:
Money market funds$50 $— $— $50 
Commercial paper— 134 — 134 
Certificates of deposit— 14 — 14 
Corporate bonds— 193 — 193 
Treasury securities— 67 — 67 
Asset-backed securities— 49 — 49 
$50 $457 $— $507 
Liabilities:
Warrants to purchase common stock$— $— $181 $181 
Contingent consideration— — 5 5 
$— $— $186 $186 
Fair Value Measurements at December 31, 2020
Using:
Level 1Level 2Level 3Total
Assets:
Money market funds$142 $— $— $142 
$142 $— $— $142 
Liabilities:
Preferred stock warrant liability$— $— $11 $11 
Derivative liability— — 37 37 
$— $— $48 $48 

During the years ended December 31, 2021 and 2020, there were no transfers between Level 1, Level 2 and Level 3.

Valuation of warrants to purchase preferred stock

The fair value of the warrants was determined using the Black-Scholes option-pricing model, which considered as inputs the underlying price, strike price, time to expiration, volatility, risk-free interest rates, and dividend yield. The following table indicates the weighted-average assumptions made in estimating the fair value for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31,
2021(1)
20202019
Risk-free interest rate
0.8%0.3%1.8%
Expected term (in years)
5
5-7
6-8
Expected volatility
54%60%56%
Expected dividend yield
0%0%0%
Exercise price
$0.74$0.74$0.74
(1) During the year ended December 31, 2021, fair value of the preferred stock warrants liability was measured based on the weighted average assumptions from January 1, 2021 through September 24, 2021, the date they were converted into common stock warrants.

Immediately prior to the completion of the IPO on September 24, 2021, all outstanding warrants to purchase preferred stock were automatically converted into warrants to purchase Class B common stock for no consideration or became exercisable for the same number of shares of Class B common stock (see Note 16, “Convertible Preferred Stock”). As a result, the associated preferred stock warrant liability was reclassified into common stock warrant liability following the IPO.

Valuation of Warrants to Purchase Common Stock

The fair value of the warrants was determined using the Black-Scholes option-pricing model, which considered as inputs the underlying price, strike price, time to expiration, volatility, risk-free interest rates, and dividend yield.

The following table indicates the weighted-average assumptions made in estimating the fair value for the year ended December 31, 2021:
Year Ended December 31, 2021
Risk-free interest rate1.3 %
Contractual term (in years)5
Expected volatility50.8 %
Expected dividend yield— %
Exercise price$17.15 
Valuations of Convertible Notes Related Bifurcated Derivative Liability and Contingently Issuable Warrants

In June 2020, we issued $200 aggregate principal amount of senior unsecured convertible promissory notes (the “Convertible Notes”). The Convertible Notes provided a conversion option whereby upon the closing of an underwritten public offering or direct listing of our common stock on a national securities exchange, in each case that meets certain criteria, the Convertible Notes would convert into common stock at a conversion price that represented a discount to the price paid by investors (see Note 14, "Debt"). The conversion option was determined to be an embedded derivative, required to be bifurcated and accounted for separately from the Convertible Notes.

Upon a voluntary redemption of the Convertible Notes, we were obligated to issue warrants to the note holders to purchase common stock equal to two-thirds the principal balance divided by the strike price which is determined assuming a total equity value of $9,500 divided by the fully diluted share count at the time of conversion. These contingently issuable warrants to purchase common stock met the definition of a derivative and were accounted for separately and recorded based on the fair value of those warrants as adjusted for the probability that there would be a voluntary redemption of the Convertible Notes.

The fair value of the bifurcated derivative liability and contingently issuable warrants was determined based on inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy. Our valuations of the bifurcated derivative liability and contingently issuable warrants were measured using an income approach based on a discounted cash flow model, as well as a probability-weighted expected return method, or PWERM. We used various key assumptions, such as estimation of the timing and probability of expected future events, and selection of discount rates applied to future cash flows using a yield curve representative of our credit risk.

The estimated fair value of the Convertible Notes at December 31, 2020 was $249, a Level 3 measurement, based on assumptions about a plain vanilla debt instrument based on entity specific credit risk assumptions and the contractual term of the debt and the values previously noted for the bifurcated derivative liability and contingently issuable warrants, and adjusted for the expected probability of the settlement options allowable under the Convertible Notes.

On June 21, 2021, we prepaid all of the then-outstanding Convertible Notes as an optional prepayment (see Note 14, "Debt"). In connection with the optional prepayment, we derecognized the bifurcated derivative liability and contingently issuable warrants which were remeasured at fair value on the settlement date.

Contingent Consideration Liability

Fair value of contingent consideration liability incurred in connection with the acquisition of xtraCHEF was estimated at $2 on the acquisition date based on a Monte Carlo simulation (see Note 3, "Business Combinations"). The Monte Carlo simulation performs numerous simulations utilizing certain assumptions, such as projected revenue amounts over the related period, risk-free rate, and risk-adjusted discount rate. The fair value measurement of contingent consideration is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. Changes in the assumptions used could materially change the estimated fair value of the contingent consideration which is subject to remeasurement during each reporting period until the contingency is resolved and the liability is settled. We recognize the change in fair value of the contingent consideration liability within "General and administrative" expense in our Consolidated Statements of Operations.

The following table provides a roll-forward of the aggregate fair value of our warrants to purchase preferred stock, common stock, derivative liability, and contingent consideration liability for which fair value is determined on recurring basis using Level 3 inputs:
Preferred
Stock Warrant Liability		Common Stock Warrant LiabilityDerivative LiabilityContingent Consideration Liability
Balance as of December 31, 2019
$3 $— $— $— 
Fair value at issuance— — 30 — 
Change in fair value8 — 7 — 
Balance as of December 31, 2020
11 — 37 — 
Fair value at issuance— 125 — — 
Fair value on the acquisition date— — — 2 
Change in fair value and other adjustments38 59 103 3 
Settlement(43)(9)(140)— 
Conversion of preferred stock warrants into common stock warrants upon the IPO(6)6 — — 
Balance as of December 31, 2021
$— $181 $— $5 
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Marketable Securities
 12 Months Ended
Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities Marketable Securities
During the year ended December 31, 2021, we invested in debt securities, with an initial investment in October 2021, which were classified as available-for-sale.

The amortized cost, gross unrealized holding losses and fair value of marketable securities, including accrued interest receivable, consisted of the following:
December 31, 2021
Amortized CostGross Unrealized LossesFair Value
Commercial paper$134 $— $134 
Certificates of deposit14 — 14 
Corporate bonds194 (1)193 
Treasury securities67 — 67 
Asset-backed securities49 — 49 
Total$458 $(1)$457 

There were no marketable securities held by us at December 31, 2020.

The fair values of the marketable securities by contractual maturities at December 31, 2021 were as follows:
December 31, 2021
Due within 1 year$284 
Due after 1 year through 5 years173 
Due after 5 years through 10 years— 
Total marketable securities$457 
We review marketable securities for impairment during each reporting period to determine if any of the securities have experienced an other-than-temporary decline in fair value. If the fair value of the debt securities is below their amortized cost basis, we evaluated whether there is an intent to sell, or if it was more likely than not that we will be required to sell the debt securities in an unrealized loss position before recovering the amortized cost basis. If either of these conditions were present, we wrote down the security to its fair value and recognized the loss in the Consolidated Statements of Operations. If neither of these conditions were present, we determined if a credit loss existed by considering the financial condition and near-term prospects of the issuer, as well as current market conditions and forecasts. Credit losses were recognized up to the amount equal to the difference between the fair value and the amortized cost basis and recorded as an allowance for credit losses on the Consolidated Balance Sheets with a corresponding adjustment to earnings. Unrealized losses that were not related to credit losses were recognized in accumulated other comprehensive loss. Unrealized losses were not significant for the securities held in our portfolio as of December 31, 2021. There were no impairment losses or expected credit losses related to our marketable securities during the year ended December 31, 2021.
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Merchant Cash Advances Receivable and Acquired Loans Receivable, Net
 12 Months Ended
Dec. 31, 2021
Credit Loss [Abstract]  
Merchant Cash Advances Receivable and Acquired Loans Receivable, Net Merchant Cash Advances Receivable and Acquired Loans Receivable, Net
During the year ended December 31, 2019, we originated merchant cash advances to customers which were generally repaid through withholding a percentage of the amounts remitted to the merchant from future card processing transactions processed through our platform. Toast Capital merchant cash advances provided customers with access to financing from $5 thousand to $250 thousand. We reserved an estimate for expected losses for individual merchant cash advances based on recent point of sale and cash receipt activity or where known collection risks were identified such as a restaurant closure.

During the year ended December 31, 2019, we sold the rights to a portfolio with a principal balance of $12 in merchant cash advances originated by us to the same Utah-chartered industrial bank with which we partner for other loan activities (See Note 2, “Summary of Significant Accounting Policies” and Note 9, “Loan Servicing Activities”). We continued to service these advances after the sale in accordance with the contractual agreement with the partner bank. Other merchant cash advances receivable included loans originated by us that were not sold to the bank partner.

We serviced loans and assume liability for their default on a limited basis based on a specified percentage of the total loans originated, which were measured on a quarterly basis. If the merchant’s payments were delayed for a defined period of time, the loan was considered delinquent and we were required to purchase the loan from its bank. Effective January 1, 2021, we established a policy to write off the amortized cost of individual assets when it is deemed probable that we would not collect the outstanding balance on an individual asset. Due to the deteriorated credit quality of the individual accounts, we may write off the unpaid principal balance of all accounts in a portfolio at the time of acquisition. However, when we have an expectation of collecting cash flows at the portfolio level, a negative allowance is established for expected recoveries.

As of December 31, 2021 and December 31, 2020, we had $2 and $3 of acquired loans outstanding, respectively. As of December 31, 2021, we have written off all outstanding acquired loans receivable and
merchant cash advances and have established a negative allowance for expected recoveries which is included within "Prepaid expenses and other current assets" in the Consolidated Balance Sheets.

Changes in the negative allowance for acquired loans and merchant cash advances receivable for the year ended December 31, 2021 were as follows:
Amount
Beginning balance, as of December 31, 2020
$— 
Impact of adopting ASC 326
3 
Expected recoveries
1 
Reduction due to cash collections
(3)
Ending balance, as of December 31, 2021
$1 

Prior to January 1, 2021, we carried acquired loans receivable at their amortized cost, fully offset by an allowance for loan losses. Additionally, we carried a single estimated liability under ASC 460 related to our obligation to purchase loans from our bank partner, and such purchases are recorded as a reduction to our potential liability with respect to the quarterly cohort of loans from which the defaulted loan originated (see Note 9, “Loan Servicing Activities”).
Prior to the adoption of ASC 326, merchant cash advances receivable were included within "Prepaid expenses and other current assets" in the Consolidated Balance Sheets and consisted of the following:

December 31, 2020
MCA ReceivableLoans ReceivableFactor ReceivableTotal
Balance$1 $3 $1 $5 
Less: Allowance(1)(3)— (4)
$— $— $1 $1 

Prior to the adoption of ASC 326, our allowance for uncollectible loans and merchant cash advances receivable consisted of the following:
Allowance
MCA ReceivableLoans Receivable
Balance as of December 31, 2019
$— $— 
Additions(1)(5)
Repayments— 2 
Write offs— — 
Balance as of December 31, 2020$(1)$(3)
v3.22.0.1
Inventory
 12 Months Ended
Dec. 31, 2021
Inventory Disclosure [Abstract]  
Inventory Inventory
Inventory consisted of the following:

December 31,
20212020
Finished goods
$41 $17 
Components of finished goods
1 6 
Capitalized overhead
2 1 
Reserve for excess and obsolete inventory
(2)(5)
$42 $19 

Components of finished goods consisted of advances made to contract manufacturers for finished goods components to which we had title.
v3.22.0.1
Prepaid Expenses and Other Current Assets
 12 Months Ended
Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Prepaid Expenses and Other Current Assets Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:

December 31,
20212020
Cash held on behalf of customers
$34 $11 
Prepaid SaaS expenses
11 6 
Prepaid expenses
13 2 
Prepaid insurance6 — 
Deposits for inventory purchases21 — 
Other current assets7 3 
$92 $22 
v3.22.0.1
Loan Servicing Activities
 12 Months Ended
Dec. 31, 2021
Guarantees and Product Warranties [Abstract]  
Loan Servicing Activities Loan Servicing Activities
During 2021 and 2020, we performed loan servicing activities through the Toast Capital loan program, where we partnered with an industrial bank to provide working capital loans to qualified Toast customers based on the customer’s current payment processing and POS data. Under the program, our bank partner originates the loans and we market and service the loans and facilitate the loan application and origination process. These loans provided eligible customers with access to financing up to $250 thousand and loan repayment occurs automatically through a fixed percentage of every payment transaction on Toast’s platform. Lending was temporarily paused in 2020 due to the COVID-19 pandemic, but resumed in the fourth quarter of 2020. We earn a share of interest and fees paid on loans, which is recognized as servicing revenue as the services are delivered and included within financial technology services revenue in the Consolidated Statements of Operations. Servicing revenue is adjusted for the amortization of servicing rights carried at amortized cost.

We service loans and assume liability for their default on a limited basis based on a specified percentage of the total loans originated, which are measured on a quarterly basis. If the merchant’s payments are delayed for a defined period of time, the loan is considered delinquent and we are required to purchase the loan from our bank partner. The loan purchase, net of expected recoveries, reduces our potential liability with respect to the quarterly cohort of loans from which the defaulted loan originated. This obligation represents a financial guarantee which has a contingent aspect related to our contingent obligation to purchase defaulted loans and a non-contingent aspect related to our obligation to stand-ready to perform under the guarantee. Upon adoption of ASC 326, we recognize a contingent liability for expected credit losses and a non-contingent stand-ready liability related to the financial guarantees in accordance with ASC 460 which are included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets.

Changes in the contingent liability for expected credit losses for the year ended December 31, 2021 were as follows:
Amount
Beginning balance, as of January 1, 2021
$— 
Impact upon ASC 326 adoption
1 
Credit loss expense
2 
Reductions due to loan purchases
(1)
Ending balance, as of December 31, 2021
$2 

The increase in the contingent liability for expected credit losses for the year ended December 31, 2021 was primarily driven by growth in bank partner loan originations.

The balance of the non-contingent stand-ready liability was $1 as of December 31, 2021.

Prior to January 1, 2021, we estimated a single liability related to the financial guarantees which was accounted for as a guarantee under ASC 460. As of December 31, 2020, our estimate of additional loans expected to be repurchased under the guarantee was $1, as measured under ASC 460.
v3.22.0.1
Property and Equipment, net
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
Property and Equipment, net Property and Equipment, net
Property and equipment consisted of the following:
December 31,
20212020
Leasehold improvements
$29 $30 
Capitalized software25 18 
Computer equipment
8 3 
Furniture and fixtures
8 7 
Tooling and equipment
2 1 
72 59 
Less: Accumulated depreciation
(31)(15)
$41 $44 
Depreciation expense for the years ended December 31, 2021, 2020, and 2019, was $9, $19, and $3, respectively.

During the years ended December 31, 2021 and 2020, we capitalized $8 and $9, respectively, in capitalized software and website development costs. As of December 31, 2021 and 2020, capitalized software and website development costs of $10 are included in "Property and equipment, net" on the Consolidated Balance Sheets. Depreciation expense attributable to capitalized software and website development costs was $8, $5, and $3, respectively, for the years ended December 31, 2021, 2020 and 2019.
v3.22.0.1
Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the periods presented were as follows:

Amount
Balance as of December 31, 2019
$36 
Acquisitions
— 
Balance as of December 31, 2020
36 
Acquisitions
38 
Balance as of December 31, 2021
$74 

We determined impairment indicators were present as of March 31, 2020 due to the COVID-19 pandemic and evaluated goodwill for impairment. We compared the book value of our reporting unit to the fair value of the equity implied by common stock valuations performed in April 2020, concluding that there was no goodwill impairment.

There were no goodwill impairment losses recognized during the years ended December 31, 2021, 2020 and 2019. We performed our annual quantitative goodwill impairment test as of December 31, 2021 and determined that no adjustment to goodwill was necessary because the reporting unit's fair value significantly exceeded its book value.

Intangible assets, net consisted of the following:
As of December 31, 2021
Technology AssetCustomer AssetsTotal
Gross carrying amount$22 $4 $26 
Accumulated amortization(8)(2)(10)
Intangible assets, net$14 $2 $16 

As of December 31, 2020
Technology AssetCustomer AssetsTotal
Gross carrying amount$9 $3 $12 
Accumulated amortization(4)(1)(5)
Intangible assets, net$5 $2 $7 

The total estimated future amortization of intangible assets as of December 31, 2021 was as follows:
Year ended December 31,Amount
2022$4 
20232 
20242 
20251 
20261 
Thereafter6 
$16 
v3.22.0.1
Lessee Arrangements
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Lessee Arrangements Lessee Arrangements
We lease office and warehouse space in various cities throughout the United States, Ireland, and India, pursuant to operating leases. The weighted average remaining lease term for our operating leases is 6.9 years. We determine the lease term based on whether renewal and termination options to extend or reduce the lease term are reasonably certain to be exercised.

The components of lease expense were as follows during the year ended December 31, 2021:

Amount
Operating lease expense
$25 
Variable lease expense
1 
Total
$26 

The following table summarizes maturities of our operating lease liabilities as of December 31, 2021:

Amount
2022$22 
202313 
202413 
202512 
202612 
Thereafter36 
Total future minimum lease payments108 
Less: Imputed interest9 
Present value of future minimum lease payments$99 

The weighted average discount rate used in the calculation of our lease liability was 2.62% as of December 31, 2021.

The following table summarizes supplemental cash flow information related to operating leases during the year ended December 31, 2021:

Cash paid for amounts included in the measurement of lease liabilities:Amount
Operating cash flows for operating leases
$25 
Operating lease right of use assets obtained in exchange for new or modified lease obligations:
Upon the adoption of Topic 842
95 
During the remainder of the period
4 
Total
$99 
As of December 31, 2021 we had committed to payments of $3 related to operating leases that had yet to commence and therefore are not included in the Consolidated Balance Sheets. These leases will commence in calendar year 2022.

During the year ended December 31, 2020 and 2019, we recognized total rent expense of $28 and $15, respectively, related to operating leases. As of December 31, 2021, we had issued standby letters of credit in the amount of $13 held as collateral for various real estate leases.
v3.22.0.1
Accrued Expenses and Other Current Liabilities
 12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]  
Accrued Expenses and Other Current Liabilities Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:

December 31,
20212020
Accrued transaction-based costs
$120 $14 
Accrued payroll and bonus
24 12 
Customer funds obligation
34 11 
Accrued expenses
21 8 
Accrued commissions
19 7 
Sales returns and allowances
9 4 
Other liabilities
19 7 
$246 $63 
v3.22.0.1
Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt Debt
Revolving Line of Credit

In March 2019, we entered into a senior secured credit facility, which comprised a revolving line of credit equal to $100. Interest on outstanding loans under the 2019 Facility accrued interest at a per annum rate of, at our election, LIBOR plus 3.00% or the base rate plus 2.00%. Interest was payable in arrears quarterly, in the case of base rate loans, and at the end of the applicable interest period (but not less frequently than three months), in the case of LIBOR loans. This credit facility was subject to certain financial maintenance covenants, including maximum total net debt to recurring revenue ratio, maximum senior net debt to recurring revenue ratio, minimum liquidity and minimum last quarter annualized recurring revenue. As of December 31, 2020, no amount was drawn and outstanding under this credit facility; however, $14 of letters of credit were outstanding, which reduced the amount available under this credit facility to $86.

On June 8, 2021, we terminated the 2019 Facility and entered into a new revolving line of credit facility, or 2021 Facility, equal to $330. Interest on outstanding loans under the 2021 Facility is determined based on loan type and accrues at an annual rate, as defined in the agreement, of: (a) LIBO Rate multiplied by the Statutory Reserve Rate, plus 1.50% per annum; or 0.5% per annum plus the highest of: (i) the Prime Rate, (ii) the Federal Reserve Bank of New York Rate plus 0.5%, or (iii) the Adjusted LIBO Rate plus 1.00%. Subsequent to December 31, 2021, interest on outstanding loans will be accrued based on Secured Overnight Financing Rate, or SOFR. The 2021 Facility is subject to a minimum liquidity covenant of $250. As of December 31, 2021, no amount was drawn and outstanding under the 2021 Facility which had $330 available for borrowings. As of December 31, 2021, there were $13 of letters of credit outstanding. As a result of entering into a 2021 Facility, we became obligated to prepay or redeem the Convertible Notes which occurred on June 21, 2021.

We incurred $3 of debt issuance costs in connection with obtaining the 2021 Facility which are presented within "Other non-current assets" in the Consolidated Balance Sheets and amortized over the term of the 2021 Facility.
Convertible Notes

Convertible Notes consisted of the following:

December 31, 2020
Convertible notes$200 
Accrued interest5 
Less: Unamortized discount(33)
Long-term debt, net of discount$172 

In June 2020, we issued the Convertible Notes pursuant to the Senior Unsecured Convertible Promissory Note Purchase Agreement (the “NPA”), dated as of June 19, 2020. The aggregate principal amount of Convertible Notes issued at the time of closing of the convertible notes transaction was $200. The Convertible Notes bore interest at a rate of 8.5% per annum, 50% of which was payable in cash and the other 50% payable in kind. Interest was payable semi-annually in arrears, beginning on December 31, 2020. Unless earlier converted, redeemed, or repaid, the Convertible Notes would mature on June 19, 2027. Interest expense related to the Convertible Notes was $12 during each of the years ended December 31, 2021 and 2020.

Upon the issuance of the Convertible Notes, we identified and assessed the embedded features of the Convertible Notes. We concluded that the conversion features upon both IPO and non-IPO events pursuant to which our securities would become publicly traded, as well as the redemption features upon a change in control, certain events of default and sales of certain assets were not clearly and closely related to the Convertible Notes and met the definition of a derivative. Therefore, we bifurcated the features and accounted for them separately from the Convertible Notes. We estimated the fair value of these bifurcated derivative features as a combined single derivative liability. Additionally, we concluded the contingently issuable warrants to purchase common stock met the definition of a derivative, and accounted for them separately based on their fair value, adjusted for the probability that there would be a voluntary redemption of the Convertible Notes. The estimated fair values of the derivative liability and warrants on the issuance date were deducted from the carrying value of the Convertible Notes and recorded in long-term liabilities. The bifurcated derivative liability and contingently issuable warrants were subsequently adjusted to their fair value during each reporting period with the change in fair value recorded in other income (expense) on the Consolidated Statements of Operations.

We allocated the transaction costs related to the Convertible Notes and bifurcated derivatives using the same proportion as the allocation of proceeds from the Convertible Notes. Transaction costs attributable to Convertible Notes were recorded as a direct deduction from the debt liability in the Consolidated Balance Sheets, along with the original issue discount, and amortized to interest expense over the term of the Convertible Notes. The transaction costs attributable to the bifurcated derivatives were expensed as incurred. The carrying value of the Convertible Notes was accreted to the principal amount along with the 15% exit fee payable at maturity as interest expense using the effective interest method over the term of the Convertible Notes. The effective interest rate on the Convertible Notes was 13.33%.
Upon a voluntary redemption of the Convertible Notes, we were obligated to pay an applicable premium, as further described in the NPA and in the Convertible Notes, and issue warrants to the note holders to purchase a number of shares of common stock equal to the quotient of: (i) two-thirds of the outstanding principal amount, plus any accrued and unpaid interest, on such redemption date, divided by (ii) the Capped Price, provided that if the Convertible Notes were voluntarily redeemed prior to December 19, 2021, the number of shares underlying such warrants would be calculated as of December 19, 2021. On June 21, 2021, we prepaid all of the outstanding Convertible Notes with a carrying amount of $183, including principal and accrued cash and paid in kind interest, net of an unamortized discount, for an aggregate amount equal to $249. In connection with the prepayment, we issued to the registered holders of the Convertible Notes the warrants to purchase 8,113,585 shares of our common stock with an exercise price of $17.51 per share. The fair value of the warrants of $125 was included in the Convertible Notes’ aggregate settlement consideration of $374. Additionally, we derecognized the liability for the bifurcated derivative and contingently issuable warrants of $141 which were remeasured at fair value on the settlement date. During the year ended December 31, 2021, we recognized a loss of $50 on the settlement of the Convertible Notes and a loss of $103 on the change in fair value of the bifurcated derivative liability and contingently issuable warrants which were recorded in other income (expense) in the Consolidated Statements of Operations.
v3.22.0.1
Warrants to Purchase Preferred and Common Stock
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Warrants to Purchase Preferred and Common Stock Warrants to Purchase Preferred and Common Stock
Warrants to Purchase Preferred Stock

In conjunction with certain debt financing transactions, we issued warrants to purchase shares of preferred stock. These warrants were exercisable upon issuance and were not subject to any vesting or restrictions on timing of exercise.

At December 31, 2020, there were 1,002,035 warrants to purchase Series B and Series C convertible preferred stock outstanding with exercise prices of $0.40 and $1.40 per share, respectively, and contractual term ranging between 8 and 10.5 years. We classified the warrants as liabilities on our Consolidated Balance Sheets as they were free-standing financial instruments that could require us to transfer assets upon exercise. The fair value of warrant liabilities was $11 at December 31, 2020. The initial value of the warrants was recorded as a discount to the related convertible debt and amortized as interest expense. All debt financing arrangements entered into prior to March 2019 have been settled; however, the associated warrants remained outstanding prior to the completion of the IPO on September 24, 2021.

Upon the completion of the IPO, 1,002,035 warrants to purchase shares of Series B and Series C convertible preferred stock were automatically exchanged or became exercisable for the same number of shares of Class B common stock. As a result, the associated preferred stock warrant liability was reclassified into common stock warrant liability following the IPO.

The warrants were measured at fair value at issuance and subsequently remeasured at fair value at each reporting date. Changes in the fair value of the warrant liability were recognized as a component of Other income (expense) in our Consolidated Statements of Operations. We recorded a loss of $38, $8, and $1, respectively, related to the change in the fair value of the preferred stock warrant liability during the years ended December 31, 2021, 2020, and 2019.

Warrants to Purchase Common Stock

In conjunction with the optional prepayment of the Convertible Notes on June 21, 2021, we issued warrants to purchase 8,113,585 shares of our common stock with an exercise price of $17.51 per share (see Note 14, "Debt"). These warrants became exercisable 50 trading days following the completion of the IPO, following which they are not subject to any vesting or restrictions on timing of exercise.
We classify the warrants as liabilities and recognize them at fair value in our Consolidated Balance Sheets because they meet the definition of a derivative. Subsequent changes in the warrants’ respective fair values are recognized in our results of operations in its Consolidated Statements of Operations at each reporting period. We evaluated the warrants and concluded that they do not meet the criteria to be classified within stockholders’ equity (deficit). The agreement governing the warrants includes a provision the application of which could result in a different exercise price and a settlement value depending on the assumption of the warrants by their holders. The warrants are not considered to be indexed to our own stock because the actions of the warrant holders do not represent an input into the pricing of a fixed-for-fixed option on our shares of common stock which precludes us from classifying the warrants in stockholders’ equity (deficit).

The warrants were initially measured at fair value upon their issuance and are subsequently measured at fair value during each reporting date. Changes in the fair value of the warrants liability are recognized as a component of Other income (expense) in our Consolidated Statements of Operations. Changes in the fair value of the warrants liability will continue to be recognized in our results of operations until the warrants are exercised or expire.

Following the completion of the IPO, 1,002,035 common stock warrants were exercised for the same number of shares of Class B Common stock for immaterial cash consideration. We derecognized the associated common stock warrant liability with a corresponding adjustment to the "Additional paid-in capital" in the Consolidated Balance Sheets. The warrant liability was remeasured at fair value on the exercise dates resulting in a remeasurement loss of $19 recorded within Other income (expense) for the warrants exercised during the year ended December 31, 2021. The remaining warrants were remeasured at December 31, 2021 resulting in a total remeasurement loss of $62 recorded within other income (expense) for the year ended December 31, 2021.

In February 2022, we issued 371,573 shares of Class B common stock as a result of warrants exercise and recognized a remeasurement gain of $6 for the fair value of warrant liability.
Common Stock
We filed a Restated Certificate with the Secretary of State of the State of Delaware on September 24, 2021. The Restated Certificate amended and restated our then existing amended and restated certificate of incorporation in its entirety and authorized 7,000,000,000 shares of Class A common stock and 700,000,000 shares of Class B common stock each with a $0.000001 par value.

Each share of Class A Common stock entitles the holder to one vote for each share and each share of Class B Common stock entitles the holder to ten votes per share on all matters submitted to a vote of stockholders. Each share of Class B common stock is convertible into a share of Class A common stock voluntarily at the option of the holder. Each share of Class B common stock will automatically convert into a share of Class A common stock on the earlier of the date that is seven years from the date of closing of the IPO or the date the holders of at least two-third of our Class B common stock elect to convert the Class B common stock to Class A common stock.

Upon completion of the IPO, each share of common stock issued and outstanding was reclassified as, and became, one share of Class B common stock. As of each Consolidated Balance Sheet date, we had reserved shares of Class A common stock, Class B common stock and common stock for issuance in connection with the following:
December 31,
20212020
Conversion of shares of preferred stock (as if converted to common stock)— 253,832,025
Options to purchase Class A common stock, Class B common stock, and common stock58,917,018 58,035,220
Restricted stock units15,384,809 — 
Warrants to purchase preferred stock (as if converted to warrants to purchase common stock)
— 1,002,035
Warrants to purchase Class B common stock7,961,455— 
Shares available for future grant under the Stock Plans
53,916,10533,435,380
Shares reserved for charitable donations4,922,001— 
Shares available for issuance under 2021 Employee Stock Purchase Plan11,638,189— 
152,739,577346,304,660
Shares Reserved for Charitable Donations

In recognition of our values and commitment to local communities, we joined the Pledge 1% movement to fund our social impact initiatives through Toast.org, the philanthropic branch. Toast.org is dedicated to solving critical food issues that impact communities across the United States. During the year ended December 31, 2021, the Board approved reserving 5,468,890 shares of Class A common stock that we may, but are not obligated to, issue over a period of ten years in ten equal installments as a non-binding bona fide gift to a charitable organization to fund its social impact initiatives through Toast.org. During the year ended December 31, 2021 we transferred 546,889 shares of our Class A common stock to an independent donor advised fund as the first installment of its Pledge 1% commitment. We recognized a charitable contribution stock-based expense of $19 for the fair value of the donated shares, which was recorded within "General and administrative" expenses in the Consolidated Statements of Operations during the year ended December 31, 2021.

2021 Employee Stock Purchase Plan

In 2021, our Board adopted and the stockholders approved, the 2021 Employee Stock Purchase Plan ("ESPP") which became effective on September 23, 2021. The ESPP initially reserves and authorizes the issuance of up to a total of 11,638,189 shares of our Class A common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1, 2022 and each January 1 thereafter through January 1, 2031, by the lesser of: (i) 11,638,189 shares of our Class A common stock, (ii) 1% of the issued and outstanding number of shares of Class A common stock and Class B common stock on the date immediately preceding December 31, or (iii) such lesser number of shares of Class A common stock as determined by the plan administrator of the ESPP. As of December 31, 2021, there were no shares of common stock purchased under the ESPP.

Restricted Stock and Promissory Notes

As of December 31, 2021 and December 31, 2020, 4,133,955 shares of Class B common stock and 1,096,800 shares of common stock, respectively, were issued upon early exercise of stock options. Pursuant to the associated agreements, upon termination of employment, unvested shares held by such individuals are subject to repurchase by us. As of December 31, 2021 and December 31, 2020, cash paid for unvested shares of $6 and $1, respectively, is included in "Other long-term liabilities" in the Consolidated Balance Sheets.

At each Consolidated Balance Sheet date, shares subject to restriction consisted of the following:

Shares
Nonvested as of January 1, 2020
1,877,710 
Exercise of stock options
321,400 
Repurchases
(185,190)
Vested
(917,120)
Nonvested as of December 31, 2020
1,096,800 
Exercise of stock options
412,810 
Exercise of stock options in connection with promissory notes repayment14,267,650 
Repurchases
(35,665)
Vested
(11,607,640)
Nonvested as of December 31, 2021
4,133,955 
In February 2019, the Board authorized certain senior executives to exercise an aggregate of 15,057,340 of stock options by issuing to us an aggregate of $23 in promissory notes (the “Promissory Notes”) that bore interest at 2.63% per annum and were repayable through proceeds of any sales of the stock (once it is vested) or upon a maturity date of five years from issuance, sixty days following termination of employment or immediately prior to us filing a registration statement under the Securities Act of 1933, as amended. The Promissory Notes were considered non-recourse for accounting purposes. Accordingly, the exercises were not considered substantive and not recorded in the Consolidated Balance Sheets or Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) or Cash Flows. Interest earned on the Promissory Notes was not recognized as income but was incorporated into the exercise price used to determine the fair value of the underlying stock options. The fair value of the underlying stock options was recognized in our Statement of Operations over the requisite service period through a charge to compensation expense and a corresponding credit to Additional Paid in Capital. The then outstanding principal and accrued interest of $23 under the Promissory Notes were repaid in full in May 2021. The total repayment excluded underlying stock options as part of the Promissory Notes which were not vested, forfeited, and cancelled upon employee termination.

We issued 8,045,300 shares for the exercise of vested options upon the Promissory Notes repayment and recognized $14 of the associated cash proceeds in Additional Paid in Capital during the year ended December 31, 2021. Additionally, we recognized a liability of $9 related to unvested shares in "Other long-term liabilities" in the Consolidated Balance Sheets.
v3.22.0.1
Convertible Preferred Stock
 12 Months Ended
Dec. 31, 2021
Temporary Equity Disclosure [Abstract]  
Convertible Preferred Stock Convertible Preferred Stock
We previously issued Series A convertible preferred stock (the “Series A Preferred Stock”), Series B convertible preferred stock (the “Series B Preferred Stock”), Series C convertible preferred stock (the “Series C Preferred Stock”), Series D convertible preferred stock (the “Series D Preferred Stock”), Series E convertible preferred stock (the “Series E Preferred Stock”), and Series F convertible preferred stock (the “Series F Preferred Stock”) (collectively, the “Preferred Stock”).

Immediately prior to the completion of the IPO on September 24, 2021, all of the then outstanding 253,832,025 shares of our convertible preferred stock were automatically converted into an aggregate 253,832,025 shares of Class B common stock. The holders of our convertible preferred stock had certain voting, conversion, dividend, and redemption rights, as well as liquidation preferences and conversion privileges, in respect of the convertible preferred stock. All of such rights, preferences, and privileges associated with the convertible preferred stock were terminated at the time of our IPO in conjunction with the conversion of all outstanding shares of convertible preferred stock into shares of Class B common stock.

In March 2019, we entered into a Series E Preferred Stock Purchase Agreement (the “Series E Stock Purchase Agreement”) whereby we issued 45,788,025 shares of Series E Preferred Stock at a purchase price of $5.46 per share for aggregate gross proceeds of $250.

In February 2020, we entered into a Series F Preferred Stock Purchase Agreement (the “Series F Stock Purchase Agreement”). From February 2020 to April 2020, pursuant to the Series F Stock Purchase Agreement, we issued an aggregate of 44,301,220 shares of Series F Preferred Stock at a purchase price of $9.09 per share for aggregate gross proceeds of $403.

In October 2020, we entered into a stock repurchase agreement with an investor, pursuant to which it repurchased 77,270 Series B Preferred Stock shares for $1.
The following table summarizes convertible preferred stock at December 31, 2020 and immediately prior to the conversion into Class B common stock upon completion of the IPO:

Preferred Stock AuthorizedPreferred Stock Issued and OutstandingCarrying
Value		Liquidation PreferenceCommon Stock Issuable Upon Conversion
Series A Preferred Stock18,072,29018,072,290$2 $2 18,072,290 
Series B Preferred Stock76,536,69575,803,51529 30 75,803,515 
Series C Preferred Stock38,773,86536,643,44551 51 36,643,445 
Series D Preferred Stock33,223,53033,223,530115 115 33,223,530 
Series E Preferred Stock45,788,02545,788,025250 250 45,788,025 
Series F Preferred Stock44,851,27544,301,220402 402 44,301,220 
257,245,680253,832,025$849 $850 253,832,025 
v3.22.0.1
Common Stock
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Common Stock Warrants to Purchase Preferred and Common Stock
Warrants to Purchase Preferred Stock

In conjunction with certain debt financing transactions, we issued warrants to purchase shares of preferred stock. These warrants were exercisable upon issuance and were not subject to any vesting or restrictions on timing of exercise.

At December 31, 2020, there were 1,002,035 warrants to purchase Series B and Series C convertible preferred stock outstanding with exercise prices of $0.40 and $1.40 per share, respectively, and contractual term ranging between 8 and 10.5 years. We classified the warrants as liabilities on our Consolidated Balance Sheets as they were free-standing financial instruments that could require us to transfer assets upon exercise. The fair value of warrant liabilities was $11 at December 31, 2020. The initial value of the warrants was recorded as a discount to the related convertible debt and amortized as interest expense. All debt financing arrangements entered into prior to March 2019 have been settled; however, the associated warrants remained outstanding prior to the completion of the IPO on September 24, 2021.

Upon the completion of the IPO, 1,002,035 warrants to purchase shares of Series B and Series C convertible preferred stock were automatically exchanged or became exercisable for the same number of shares of Class B common stock. As a result, the associated preferred stock warrant liability was reclassified into common stock warrant liability following the IPO.

The warrants were measured at fair value at issuance and subsequently remeasured at fair value at each reporting date. Changes in the fair value of the warrant liability were recognized as a component of Other income (expense) in our Consolidated Statements of Operations. We recorded a loss of $38, $8, and $1, respectively, related to the change in the fair value of the preferred stock warrant liability during the years ended December 31, 2021, 2020, and 2019.

Warrants to Purchase Common Stock

In conjunction with the optional prepayment of the Convertible Notes on June 21, 2021, we issued warrants to purchase 8,113,585 shares of our common stock with an exercise price of $17.51 per share (see Note 14, "Debt"). These warrants became exercisable 50 trading days following the completion of the IPO, following which they are not subject to any vesting or restrictions on timing of exercise.
We classify the warrants as liabilities and recognize them at fair value in our Consolidated Balance Sheets because they meet the definition of a derivative. Subsequent changes in the warrants’ respective fair values are recognized in our results of operations in its Consolidated Statements of Operations at each reporting period. We evaluated the warrants and concluded that they do not meet the criteria to be classified within stockholders’ equity (deficit). The agreement governing the warrants includes a provision the application of which could result in a different exercise price and a settlement value depending on the assumption of the warrants by their holders. The warrants are not considered to be indexed to our own stock because the actions of the warrant holders do not represent an input into the pricing of a fixed-for-fixed option on our shares of common stock which precludes us from classifying the warrants in stockholders’ equity (deficit).

The warrants were initially measured at fair value upon their issuance and are subsequently measured at fair value during each reporting date. Changes in the fair value of the warrants liability are recognized as a component of Other income (expense) in our Consolidated Statements of Operations. Changes in the fair value of the warrants liability will continue to be recognized in our results of operations until the warrants are exercised or expire.

Following the completion of the IPO, 1,002,035 common stock warrants were exercised for the same number of shares of Class B Common stock for immaterial cash consideration. We derecognized the associated common stock warrant liability with a corresponding adjustment to the "Additional paid-in capital" in the Consolidated Balance Sheets. The warrant liability was remeasured at fair value on the exercise dates resulting in a remeasurement loss of $19 recorded within Other income (expense) for the warrants exercised during the year ended December 31, 2021. The remaining warrants were remeasured at December 31, 2021 resulting in a total remeasurement loss of $62 recorded within other income (expense) for the year ended December 31, 2021.

In February 2022, we issued 371,573 shares of Class B common stock as a result of warrants exercise and recognized a remeasurement gain of $6 for the fair value of warrant liability.
Common Stock
We filed a Restated Certificate with the Secretary of State of the State of Delaware on September 24, 2021. The Restated Certificate amended and restated our then existing amended and restated certificate of incorporation in its entirety and authorized 7,000,000,000 shares of Class A common stock and 700,000,000 shares of Class B common stock each with a $0.000001 par value.

Each share of Class A Common stock entitles the holder to one vote for each share and each share of Class B Common stock entitles the holder to ten votes per share on all matters submitted to a vote of stockholders. Each share of Class B common stock is convertible into a share of Class A common stock voluntarily at the option of the holder. Each share of Class B common stock will automatically convert into a share of Class A common stock on the earlier of the date that is seven years from the date of closing of the IPO or the date the holders of at least two-third of our Class B common stock elect to convert the Class B common stock to Class A common stock.

Upon completion of the IPO, each share of common stock issued and outstanding was reclassified as, and became, one share of Class B common stock. As of each Consolidated Balance Sheet date, we had reserved shares of Class A common stock, Class B common stock and common stock for issuance in connection with the following:
December 31,
20212020
Conversion of shares of preferred stock (as if converted to common stock)— 253,832,025
Options to purchase Class A common stock, Class B common stock, and common stock58,917,018 58,035,220
Restricted stock units15,384,809 — 
Warrants to purchase preferred stock (as if converted to warrants to purchase common stock)
— 1,002,035
Warrants to purchase Class B common stock7,961,455— 
Shares available for future grant under the Stock Plans
53,916,10533,435,380
Shares reserved for charitable donations4,922,001— 
Shares available for issuance under 2021 Employee Stock Purchase Plan11,638,189— 
152,739,577346,304,660
Shares Reserved for Charitable Donations

In recognition of our values and commitment to local communities, we joined the Pledge 1% movement to fund our social impact initiatives through Toast.org, the philanthropic branch. Toast.org is dedicated to solving critical food issues that impact communities across the United States. During the year ended December 31, 2021, the Board approved reserving 5,468,890 shares of Class A common stock that we may, but are not obligated to, issue over a period of ten years in ten equal installments as a non-binding bona fide gift to a charitable organization to fund its social impact initiatives through Toast.org. During the year ended December 31, 2021 we transferred 546,889 shares of our Class A common stock to an independent donor advised fund as the first installment of its Pledge 1% commitment. We recognized a charitable contribution stock-based expense of $19 for the fair value of the donated shares, which was recorded within "General and administrative" expenses in the Consolidated Statements of Operations during the year ended December 31, 2021.

2021 Employee Stock Purchase Plan

In 2021, our Board adopted and the stockholders approved, the 2021 Employee Stock Purchase Plan ("ESPP") which became effective on September 23, 2021. The ESPP initially reserves and authorizes the issuance of up to a total of 11,638,189 shares of our Class A common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1, 2022 and each January 1 thereafter through January 1, 2031, by the lesser of: (i) 11,638,189 shares of our Class A common stock, (ii) 1% of the issued and outstanding number of shares of Class A common stock and Class B common stock on the date immediately preceding December 31, or (iii) such lesser number of shares of Class A common stock as determined by the plan administrator of the ESPP. As of December 31, 2021, there were no shares of common stock purchased under the ESPP.

Restricted Stock and Promissory Notes

As of December 31, 2021 and December 31, 2020, 4,133,955 shares of Class B common stock and 1,096,800 shares of common stock, respectively, were issued upon early exercise of stock options. Pursuant to the associated agreements, upon termination of employment, unvested shares held by such individuals are subject to repurchase by us. As of December 31, 2021 and December 31, 2020, cash paid for unvested shares of $6 and $1, respectively, is included in "Other long-term liabilities" in the Consolidated Balance Sheets.

At each Consolidated Balance Sheet date, shares subject to restriction consisted of the following:

Shares
Nonvested as of January 1, 2020
1,877,710 
Exercise of stock options
321,400 
Repurchases
(185,190)
Vested
(917,120)
Nonvested as of December 31, 2020
1,096,800 
Exercise of stock options
412,810 
Exercise of stock options in connection with promissory notes repayment14,267,650 
Repurchases
(35,665)
Vested
(11,607,640)
Nonvested as of December 31, 2021
4,133,955 
In February 2019, the Board authorized certain senior executives to exercise an aggregate of 15,057,340 of stock options by issuing to us an aggregate of $23 in promissory notes (the “Promissory Notes”) that bore interest at 2.63% per annum and were repayable through proceeds of any sales of the stock (once it is vested) or upon a maturity date of five years from issuance, sixty days following termination of employment or immediately prior to us filing a registration statement under the Securities Act of 1933, as amended. The Promissory Notes were considered non-recourse for accounting purposes. Accordingly, the exercises were not considered substantive and not recorded in the Consolidated Balance Sheets or Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) or Cash Flows. Interest earned on the Promissory Notes was not recognized as income but was incorporated into the exercise price used to determine the fair value of the underlying stock options. The fair value of the underlying stock options was recognized in our Statement of Operations over the requisite service period through a charge to compensation expense and a corresponding credit to Additional Paid in Capital. The then outstanding principal and accrued interest of $23 under the Promissory Notes were repaid in full in May 2021. The total repayment excluded underlying stock options as part of the Promissory Notes which were not vested, forfeited, and cancelled upon employee termination.

We issued 8,045,300 shares for the exercise of vested options upon the Promissory Notes repayment and recognized $14 of the associated cash proceeds in Additional Paid in Capital during the year ended December 31, 2021. Additionally, we recognized a liability of $9 related to unvested shares in "Other long-term liabilities" in the Consolidated Balance Sheets.
v3.22.0.1
Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Revenue from Contracts with Customers
The following table summarizes the activity in deferred revenue:

Year Ended December 31,
20212020
Deferred revenue, beginning of year$59 $60 
Cumulative adjustment for adoption of ASC 606— 7 
Deferred revenue, beginning of year, as adjusted$59 $67 
Deferred revenue, end of period$56 $59 
Revenue recognized in the period from amounts included in deferred revenue at the beginning of period$43 $29 

As of December 31, 2021, $405 of revenue is expected to be recognized from remaining performance obligations for customer contracts. We expect to recognize revenue on approximately $389 of these remaining performance obligations over the next 24 months, with the balance recognized thereafter.

The following table summarizes the activity in deferred contract acquisition costs:

Year Ended December 31,
20212020
Beginning balance$29 $— 
Adjustment due to adoption of ASC 606— 19 
Capitalization of sales commissions costs56 25 
Amortization of sales commissions costs(30)(15)
Ending balance$55 $29 
Year Ended December 31,
20212020
Deferred costs, current
$30 $17 
Deferred costs, non-current
25 12 
Total
$55 $29 
v3.22.0.1
Stock-Based Compensation Expense
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Expense Stock-Based Compensation Expense
2021 Stock Option and Incentive Plan

The 2021 Stock Option and Incentive Plan was adopted by our Board of Directors on August 13, 2021, approved by the stockholders on September 9, 2021 and became effective on September 20, 2021. The 2021 Plan replaced the 2014 Plan, which continues to govern outstanding equity awards granted thereunder as the Board determined not to make additional awards under the 2014 Plan following the pricing of our IPO. The 2021 Plan allows us to make equity-based and cash-based incentive awards to our officers, employees, directors, and consultants. We initially reserved 58,190,945 shares of Class A common stock for the issuance of awards under the 2021 Plan. The number of shares reserved and available for issuance under the 2021 Plan will automatically increase on January 1, 2022 and each January 1 thereafter, by 5% of the outstanding number of shares of the Class A common stock and Class B common stock on the immediately preceding December 31, or such lesser number of shares as determined by the Compensation Committee of the Board. As of December 31, 2021, 4,978,619 shares of Class A common stock, stock options, or restricted stock units have been granted and were currently outstanding under the 2021 Plan, and 53,916,105 shares of Class A common stock remain available for issuance to officers, directors, employees, and consultants pursuant to the 2021 Plan.

2014 Stock Incentive Plan

The 2014 Stock Incentive Plan (the “2014 Plan”) was initially adopted in 2014 and amended and restated in 2020. A total of 167,777,810 shares of our Class B common stock were reserved for issuance under the 2014 Plan. Upon completion of our IPO, the 2014 Plan was replaced by the 2021 Plan as the Board has determined not to make additional awards under the 2014 Plan. Shares of Class B common stock underlying any awards under the 2014 Plan that are forfeited, canceled, reacquired by us prior to vesting, satisfied without the issuance of stock or otherwise terminated (other than by exercise) and shares of Class B common stock that are withheld upon exercise of an option or settlement of an award to cover the exercise price or tax withholding will be added to the shares of Class A common stock available for issuance under the 2021 Plan.

As of December 31, 2021 and 2020, 69,324,332 shares of Class A and Class B common stock, stock options or restricted stock units, and 58,035,220 shares of common stock, stock options or restricted stock units have been granted and were outstanding under the 2014 Plan, respectively. As of December 31, 2020, 33,435,380 shares of common stock were available for issuance to officers, directors, employees, and consultants pursuant to the 2014 Stock Plan.

Stock-based compensation expense recognized for December 31, 2021, 2020, and 2019, were as follows:

Year Ended December 31,
202120202019
Costs of revenue
$12 $7 $1 
Sales and marketing
24 16 1 
Research and development
48 30 3 
General and administrative
58 33 29 
$142 $86 $34 

Stock-based compensation expense of $1 was capitalized as software development costs for the year ended December 31, 2021. There were no such costs during the years ended December 31, 2020 and 2019.
Stock Options

For the majority of stock option awards with service conditions, 20% of each option award vests on the first anniversary of the date of grant, and the remaining 80% vests in equal quarterly installments over the next 16 quarters. Awards with performance or market conditions vest upon occurrence of certain events or meeting certain financial targets set forth in the individual grant agreements. The awards have a contractual life of ten years. The determination of the fair value of stock-based payment awards utilizing the Black-Scholes model is affected by the stock price and a number of assumptions, including expected volatility, expected term, risk-free interest rate, and expected dividends.

The following table indicates the weighted-average assumptions made in estimating the fair value as of December 31, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
Risk-free interest rate
1.00 %0.49 %2.12 %
Expected term (in years)
6.326.646.26
Expected volatility
65 %63 %60 %
Expected dividend yield
0 %0 %0 %
Weighted-average fair value of common stock
$17.00 $3.23 $1.85 
Weighted-average fair value per share of options issued
$10.12 $1.95 $1.12 

The following is a summary of stock option activity under our stock option plans:

Number of SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual TermAggregate Intrinsic Value(1)
(in years)
Outstanding as of December 31, 2020
58,035,220$2.08 8.27$447 
Granted(2)
9,869,50017.00 
Exercised(2)
(6,307,785)1.31 
Forfeited(2,679,917)4.88 
Outstanding as of December 31, 2021
58,917,018$4.53 7.65$1,778 
Options vested and expected to vest as of
December 31, 2020
58,035,220$2.08 8.27$447 
Options exercisable as of December 31, 2020
57,620,665$2.08 8.26$446 
Options vested and expected to vest as of
December 31, 2021
58,917,018$4.53 7.65$1,778 
Options exercisable as of December 31, 2021
58,852,018$4.50 7.65$1,778 
(1) The aggregate intrinsic value was determined as the difference between the estimated fair value of our common stock as of each reporting date prior to the completion of the IPO and the closing price of the Class A common stock on the last trading day of the month of December 2021, or the date of exercise, as appropriate, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their in-the-money options at period end.

The weighted average grant date fair value per share of options granted was $10.12, $1.95, and $1.12 respectively for the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021 and December 31, 2020, the total number of vested, unexercised options was 25,983,807 and 18,151,770, respectively, with an intrinsic value of $855 and $159, respectively. As of December 31, 2021 and December 31, 2020, the total number of non-vested options was 37,106,955 and 50,758,305, respectively.

The aggregate intrinsic values of options exercised was $162, $38, and $4, respectively, for the years ended December 31, 2021, 2020, and 2019, respectively. Total exercise value of options vested during the years ended December 31, 2021, 2020, and 2019 was $36, $23 and $10, respectively.
As of December 31, 2021, total unrecognized stock-based compensation expense related to the options was $98 and is expected to be recognized over the remaining weighted-average service period of 3.84 years.

Restricted Stock Units

We granted restricted stock units, or RSUs, to employees and directors, some of which contain service-based vesting conditions, and some of which contain both service and performance-based vesting conditions, including liquidity event-related, or IPO-related, vesting conditions under the 2014 Plan. Compensation expense related to RSUs is equal to the fair value of the underlying shares on the date of grant. Compensation expense associated with awards that have performance-based vesting conditions is recognized when the performance conditions become probable of being achieved. RSUs that contain both service and performance-based vesting conditions (as defined in the award) become eligible to vest when both the service and performance criteria have been met. Upon consummation of the IPO, we began recognizing stock-based compensation expense for RSUs with the IPO-related vesting condition based on the applicable service period. During the year ended December 31, 2021, we recognized $63 of stock-based compensation expense related to such awards.

We reflect RSUs as issued and outstanding shares of common stock when such units vest. The following table summarizes RSU activity as of December 31, 2021:
RSUWeighted Average Grant Date Fair Value
Outstanding balance as of December 31, 2020
158,370 $2.21 
Granted15,681,204 29.80 
Vested(53,570)2.40 
Forfeited(401,195)26.06 
Outstanding balance as of December 31, 2021
15,384,809 $29.71 

The weighted average grant-date fair value of RSUs granted during the year ended December 31, 2021 was $29.80. As of December 31, 2021, we issued 53,570 shares of common stock to settle RSUs upon vesting. The fair value of RSUs vested as of December 31, 2021 was $1. No RSUs vested as of December 31, 2020.

As of December 31, 2021, total unrecognized stock-based compensation expense related to the RSUs was $306 and is expected to be recognized over the remaining weighted-average service period of 3.75 years.

Performance Incentive Plan

During the years ended December 31, 2020 and 2019, we granted stock-based awards to certain members of management that vest based on both service and market conditions related to our achievement of certain market capitalization targets. Market capitalization targets related to the awards with market-based vesting conditions were achieved upon the consummation of the IPO, resulting in us expensing the remaining grant date fair value of the awards. We recognized $0, $3, and $0 of stock compensation expense related to the performance awards during the years ended December 31, 2021, 2020, and 2019.

During 2021, 2020, and 2019 secondary investors purchased 975,057, 9,498,100, and 7,586,180 shares of common stock from certain employees, respectively. Stock-based compensation expense related to these transactions, representing amounts paid in excess of then current fair value, totaled $46, $53, and $27 in 2021, 2020, and 2019, respectively, and is recorded in operating expenses in the accompanying Consolidated Statements of Operations.
During the year ended December 31, 2020, we facilitated a tender offer of common stock whereby certain third parties purchased an aggregate of 3,281,510 shares of common stock from certain eligible employees and non-employees for an aggregate purchase price of $49. We recognized stock-based compensation expense of $17 in connection with the tender offer, which represented the difference between the purchase price and the fair value of common stock on the date of sale.

During the year ended December 31, 2020 we amended the terms of previously issued employee stock option awards. Specifically, the vesting of certain awards were accelerated, and the post-termination exercise periods of the awards were extended. We accounted for the amendment as a modification of previously issued awards and incurred $3 of incremental stock-based compensation expense in connection with the modifications.
v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income (loss) before provision for income taxes are as follows (in millions):

Year Ended December 31,
202120202019
United States$(493)$(249)$(212)
Foreign3 1 — 
Total loss before income taxes$(490)$(248)$(212)

The components of income tax (benefit) expense for the years ended December 31, 2021, 2020, and 2019, were as follows:
Year Ended December 31,
202120202019
Current state
$— $— $— 
Current foreign
— — — 
Current tax expense
— — — 
Deferred federal
(2)— (2)
Deferred state
(1)— (1)
Deferred tax benefit
(3)— (3)
Total income tax (benefit) expense
$(3)$— $(3)

The tax effects of temporary differences that gave rise to a significant portion of the deferred tax assets and liabilities at December 31, 2021 and 2020, were as follows:
December 31,
20212020
Deferred tax assets:
Net operating loss carryforwards$150 $122 
Stock-based compensation expense19 3 
Credit carryforward24 17 
Accrued expenses and reserves13 8 
Charitable contributions5 — 
Deferred revenue7 8 
Deferred rent— 5 
Depreciation2 — 
Interest carryforwards— 1 
Convertible debt derivative— 6 
Inventory reserve1 2 
Lease liability25 — 
Total deferred tax assets246 172 
Valuation allowance(206)(154)
Net deferred tax assets40 18 
Deferred tax liabilities:
Amortization(4)(2)
Convertible debt— (6)
Other(2)(2)
Capitalized contract acquisition costs(14)(8)
Right-of-use asset(20)— 
Total deferred tax liabilities(40)(18)
Net deferred tax asset (liability)$— $— 

A reconciliation of our effective tax rate to the United States federal income tax rate were as follows:

December 31,
202120202019
Tax provision at statutory rate
21.0%21.0%21.0%
State tax—net of federal
1.2%5.4%6.6%
Permanent items - Other
(0.6)%(0.8)%(0.4)%
Warrants(4.2)%—%—%
Convertible debt extinguishment(1.5)%—%—%
Research and development credits
1.0%1.6%1.8%
Stock-based compensation expense
(0.8)%(4.0)%(3.3)%
Derivative liability
(5.6)%(1.3)%—%
Other, net
—%0.3%0.2%
Change in valuation allowance
(10.0)%(22.3)%(24.4)%
Effective Tax Rate
0.5%(0.1)%1.5%

Interpretive guidance on the accounting for Global Intangible Low-Taxed Income, or GILTI, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense. We have made the accounting policy election to recognize GILTI as a period expense.
During the year ended December 31, 2021, we recorded an income tax benefit of $3, which is primarily attributable to a non-recurring benefit of $3 for the release of a portion of our valuation allowance. The valuation allowance release was due to taxable temporary differences available as a source of income to realize the benefit of certain pre-existing Toast deferred tax assets as a result of the xtraCHEF acquisition.

Management has evaluated the positive and negative evidence bearing upon the realizability of its net deferred tax assets, which are composed principally of net operating loss and tax credit carryforwards. Management has determined that it is more likely than not that we will not recognize the benefits of our deferred tax assets and, as a result, a full valuation allowance has been recorded against our net deferred tax assets as of December 31, 2021 and 2020. The valuation allowance increased by $52 and $50 during the years ended December 31, 2021 and 2020, respectively, primarily due to the operating losses incurred during each year.

As of December 31, 2021, we had U.S. federal net operating loss carryforwards of $572 which may be able to offset future income tax liabilities. Of the federal net operating loss carryforward $487 has an indefinite carryforward period, and $85 will expire at various dates through 2037. As of December 31, 2021, we had U.S. state net operating loss carryforwards of $557, of which $479 begin to expire in 2034 and the remaining $78 do not expire. As of December 31, 2021, we had U.S. federal tax credit carryforwards of $16 which expire between 2034 and 2041. As of December 31, 2021 we had U.S. state tax credit carryforwards of $10 which expire between 2031 and 2036.

Ownership changes, as defined in the Internal Revenue Code Section 382, could limit the amount of U.S. net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income. Generally, an ownership change occurs when the ownership percentage of 5% or greater stockholders increases by more than 50% over a three-year period. The company's ability to utilize its federal and state tax attributes may be limited by ownership changes that have occurred in the past or may occur in the future.

As of December 31, 2021, 2020, and 2019, we had immaterial tax reserves for uncertain tax positions, none of which would impact the effective tax rate if recognized. We will recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2021, 2020, and 2019, we had no accrued interest or penalties related to uncertain tax positions and no such amounts have been recognized.

We file income tax returns in the United States (federal, and various state jurisdictions), as well as Ireland and India. The federal, state and foreign income tax returns are generally subject to tax examinations for the tax years ended December 31, 2018 through December 31, 2021. To the extent we have tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state or foreign tax authorities until utilized in a future period.

The unremitted earnings of our foreign subsidiaries are immaterial at December 31, 2021.
v3.22.0.1
Loss Per Share
 12 Months Ended
Dec. 31, 2021
Earnings Per Share [Abstract]  
Loss Per Share Loss Per Share
The following table sets forth the computation of net loss per share attributable to common stockholders:

Year Ended December 31,
202120202019
Numerator:
Net loss$(487)$(248)$(209)
Redemption of Series B Preferred Stock— (1)— 
Net loss attributable to common stockholders$(487)$(249)$(209)
Denominator:
Weighted average shares of common stock outstanding-basic and diluted289,584,001199,982,965194,820,145
Net loss per share attributable to common stockholders-basic and diluted$(1.68)$(1.25)$(1.08)
We excluded the following potential shares of common stock from the computation of diluted net loss per share because including them would have an antidilutive effect for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
Options to purchase Class B common stock
58,917,018 58,035,220 51,262,585 
Unvested restricted stock
4,133,955 1,096,800 1,877,710 
Unvested restricted stock units15,384,809 — — 
Shares issued for exercise of non-recourse notes
— 14,267,650 15,057,340 
Convertible preferred stock (as converted to common stock)
— 253,832,025 209,608,075 
Warrants to purchase Class B common stock and common stock and preferred stock (as if converted to warrants to purchase common stock)
7,961,455 1,002,035 1,002,035 
Total86,397,237 328,233,730 278,807,745 

Potential shares issuable based on the contingent conversion features under the Convertible Notes prior to their repayment were also excluded from the computation of diluted net loss per share because the number of shares issuable was contingent on the enterprise value of the business and number of shares outstanding at the time of conversion and such shares would be antidilutive as of December 31, 2021 and 2020 (see Note 14, "Debt").
v3.22.0.1
Segment Information
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
We have operations in the United States, Ireland, and India. We did not earn material revenue in any country other than the United States during the year ended December 31, 2021 and earned all of our revenue in the United States during the years ended December 31, 2020 and 2019.

The following table sets forth the breakdown of long-lived assets based on geography:
December 31,
20212020
United States
$119 $44 
Ireland
1 — 
Total long-lived assets$120 $44 
Tangible long-lived assets consist of property and equipment and operating lease right-of-use assets. Long-lived assets attributed to the United States and Ireland are based upon the country in which the asset is located.
v3.22.0.1
Commitment and Contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Purchase Commitments

We had non-cancelable purchase obligations to hardware suppliers and cloud service providers of $315 and $63 as of December 31, 2021 and 2020, respectively. These purchase commitments were not recorded as liabilities on the Consolidated Balance Sheets as of December 31, 2021 and 2020 as we have not yet received the related products and services. As of December 31, 2021, the future minimum payments under our non-cancelable purchase commitments were as follows:

Year ending December 31,Amount
2022
$304 
2023
8 
  2024
3 
Total future minimum payments$315 
Legal Proceedings

From time to time, we may be involved in legal actions arising in the ordinary course of business. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved unfavorably. We establish accruals for losses that management deems to be probable and subject to reasonable estimate. As of December 31, 2021 and December 31, 2020, we do not expect any claims with a reasonably possible adverse outcome to have a material impact to us, and accordingly, have not accrued for any material claims.
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Retirement Plan
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Retirement Plan Retirement Plan
Substantially all employees are eligible to participate in the 401(k) defined contribution plan which is sponsored by us. Participants may contribute a portion of their compensation to the plan, up to the maximum amount permitted under Section 401(k) of the Internal Revenue Code. At our discretion, we can match a portion of the participants’ contributions. We made matching contributions of 50% of employee 401(k) contributions up to a maximum of 3% of total earnings, subject to vesting of 50% after 1 year of service and 100% after two years of service. This matching program was temporarily suspended from April 1, 2020 through December 31, 2020 and was reinstated on January 1, 2021.

During the year ended December 31, 2021, 2020, and 2019, we recognized $6, $2 and $4, respectively, of expense for the defined contribution plans. We engage with a third party to undergo an annual audit of the retirement plan per the Employee Retirement Income Security Act of 1974.
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FINANCIAL STATEMENT SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
 12 Months Ended
Dec. 31, 2021
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
FINANCIAL STATEMENT SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FINANCIAL STATEMENT SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(In millions)

For the Year Ended December 31, 2021

Balance at beginning of periodAdditions charged to costs and expensesDeductions
Other, net (2)
Balance at end of period
Valuation and qualifying accounts deducted from assets
Allowance for accounts receivable
$4 $1 $(3)$2 $4 
Negative allowance for acquired loans and merchant cash advances receivable (1)
— 1 (3)3 1 
Inventory obsolescence reserve5 3 (6)— 2 
Valuation allowance for deferred tax assets$154 $55 $(3)$— $206 
(1) The negative allowance for acquired loans and merchant cash advances receivable was added in 2021 as part of our adoption of ASC 326.
(2) These items represent the impact of adopting ASC 326, effective January 1, 2021.

For the Year Ended December 31, 2020

Balance at beginning of periodAdditions charged to costs and expensesDeductionsOther, netBalance at end of period
Valuation and qualifying accounts deducted from assets
Allowance for accounts receivable
$5 $5 $(6)$— $4 
Allowances for uncollectible loans and MCAs receivable— 6 (2)— 4 
Inventory obsolescence reserve2 5 (2)— 5 
Valuation allowance for deferred tax assets$104 $50 $— $— $154 

For the Year Ended December 31, 2019

Balance at beginning of periodAdditions charged to costs and expensesDeductionsOther, netBalance at end of period
Valuation and qualifying accounts deducted from assets
Allowance for accounts receivable
$2 $12 $(9)$— $5 
Allowances for uncollectible loans and MCAs receivable— 1 (1)— — 
Inventory obsolescence reserve2 2 (2)— 2 
Valuation allowance for deferred tax assets$52 $55 $(3)$— $104 
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Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, and the rules and regulations of the Securities and Exchange Commission, or SEC. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgements and assumptions that can affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments.

Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, allowance for credit losses, liabilities associated with financial guarantees (contingent liabilities for credit losses and non-contingent stand-ready liabilities), negative allowances for expected recoveries on repurchased loans, allowances for uncollectible loans, allowance for excessive and obsolete inventory, reserves for warranties on hardware sold, incremental borrowing rates applied in valuation of lease liabilities, reserves for sales returns, fair values of assets acquired and liabilities assumed through business combinations, useful lives of assets acquired in business combinations, stock-based compensation expense, warrants, convertible debt, debt derivatives and common stock valuation, as well as amortization period for deferred contract acquisition costs.
Fair Value Measurements
Certain assets and liabilities are carried at fair value under U.S. GAAP. These include cash and cash equivalents, marketable securities, warrants to purchase common and preferred stock, contingent consideration liability, non-contingent stand-ready liabilities, and convertible debt-related derivative liabilities. Assets and liabilities measured at fair value on a nonrecurring basis include assets acquired and liabilities assumed in business combinations. Other financial assets and liabilities are carried at cost with fair value disclosed, if required.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
Fair values of our warrants to purchase common and preferred stock, convertible debt-related derivative liabilities, and contingent consideration liability related to our acquisition of xtraCHEF are determined using Level 3 inputs in the fair value hierarchy described above. The fair value of our marketable securities is determined based on quoted market prices of similar assets and classified as Level 2 within the fair value hierarchy. (See Note 4). The carrying values of accounts receivable, merchant cash advances receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term nature.We record a non-contingent liability which represents a financial guarantee related to our obligation to stand-ready to repurchase delinquent or defaulted loans which we service through the Toast Capital loan program (please refer to Note 9, “Loan Servicing Activities,” for further information). A non-contingent liability is recorded at fair value as loans are originated and amortized on a straight-line basis over the expected obligation term, which ranges from 90 to 270 days, or derecognized into results of operations if we repurchase the loan. The fair value of the non-contingent liability is measured based on a discounted cash flow model under the income approach. The fair value of the non-contingent liability reflects various inputs and assumptions, including the probability and amount of payments to be made under the guarantee based on probabilities of loan defaults and delinquency, as well as associated losses, and a discount rate reflecting our credit risk as the guarantor. The fair value measurement of the non-contingent liability is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy.
Foreign Currency Translation The functional currency of our foreign subsidiaries is the local currency. The assets and liabilities of foreign subsidiaries are translated into U.S. dollars using exchange rates in effect at the Consolidated Balance Sheet date. Revenue and expenses are translated using the average exchange rates during the period. Equity transactions are translated using historical exchange rates. Exchange-rate differences resulting from translation adjustments are accounted for as a component of accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in "Other income (expense), net" in the Consolidated Statements of Operations for the period.
Concentration of Credit Risk and Significant Customers Financial instruments that subject us to significant concentrations of credit risk primarily consist of cash deposits and cash equivalents, marketable securities, and accounts receivable. We maintain substantially all of our cash deposits and cash equivalents with primarily one financial institution, which, at times, may exceed federally insured limits. We have not incurred any losses associated with this concentration of deposits. Marketable securities consist of highly liquid debt instruments of the U.S. government and its agencies, debt instruments issued by foreign governments, debt instruments issued by municipalities in the U.S., corporate debt securities, mortgage-backed securities, and asset-backed securities. Our investment policy provides guidelines and limits regarding investment type, concentration, credit quality, and maturity aimed at maintaining sufficient liquidity to satisfy operating and working capital requirements along with strategic initiatives, preserving capital, and minimizing risk of capital loss while generating returns on our investments. Accounts receivable are typically unsecured. We regularly monitor the creditworthiness of our customers and believe that we have adequately provided for exposure to potential credit losses.
Segment Information Our operations constitute a single operating segment. Operating segments are defined as components of an enterprise for which discrete financial information is available and is evaluated regularly by the chief operating decision maker, or CODM, in deciding how to allocate resources and assess performance. Our CODM is our Chief Executive Officer who reviews financial information presented on a consolidated basis for the purposes of allocating resources and evaluating financial performance.
Revenue Recognition and Deferred Revenue
During the years ended December 31, 2021, 2020, and 2019, we generated four types of revenue, including: (1) subscription services from our SaaS products, (2) financial technology solutions, including loan servicing activities, (3) hardware, and (4) professional services. Our contracts often include promises to transfer multiple products and services to a customer.

Determining whether products and services are considered distinct performance obligations that should be accounted for separately as opposed to being combined may require significant judgment. We allocate total arrangement consideration at the inception of an arrangement to each performance obligation using the relative selling price allocation method based on each distinct performance obligation’s standalone selling price, or SSP. Judgment is required to determine the SSP for each distinct performance obligation. We determine the SSP for hardware and professional services revenue using an adjusted market assessment approach which analyzes discounts provided to similar customers based on customer category and size. SSP for subscription services revenue was established using the adjusted market approach considering relevant information such as current and new customer pricing, renewal pricing, competitor information, market trends and market share for similar services. SSP for financial technology solutions revenue was determined using our own standalone sales data. We allocate all variable fees earned from financial technology services revenue to that distinct performance obligation on the basis that pricing practices for that performance obligation are consistent with the allocation objective under ASC 606.

Customer credits are estimated based on historical experience. The provision for these estimates is recorded as a reduction of revenue and an increase to liabilities at the time that the related revenue is recognized.

We facilitate customers receiving financing from third-party financing firms for hardware, professional services, and the initial SaaS subscription services term. We have partnerships with these third-party financing firms that ultimately decide whether to extend credit to the customers. We pay the equivalent of an early payment discount to the third-party financing partners and recognize the payment as a reduction of revenue, as we believe these costs represent a customer sales incentive. Under our arrangements with the financing firms, we also assume a limited portion of the risk of customer defaults, which prior to the adoption of ASC 326 were accrued upon origination of the financing agreements under ASC 460, Guarantees (ASC 460). Upon adopting ASC 326 effective January 1, 2021, we recognize a contingent guarantee liability for expected credit losses and a non-contingent stand-ready liability related to the financial guarantees in accordance with ASC 460 along with a corresponding non-cash charge recorded as "General and administrative" expense in the Consolidated Statements of Operations. Costs incurred to date under such guarantees have not been material.

Subscription Services

Subscription services revenue is generated from fees charged to customers for access to our software applications. Subscription services revenue is primarily based on a rate per location, and this rate varies depending on the number of software products purchased, hardware configuration, and employee count. The performance obligation is satisfied ratably over the contract period as the service is provided, commencing when the subscription service is made available to the customer. Our contracts with customers are generally for a term ranging from 12 to 36 months. Amounts invoiced in excess of revenue recognized represent deferred revenue.
Financial Technology Solutions

Financial technology solutions revenue includes transaction-based payment processing services for customers which are charged a transaction fee for payment-processing. This transaction fee is generally calculated as a percentage of the total transaction amount processed plus a fixed per-transaction fee, which is earned as transactions are authorized and submitted for processing. We incur costs of interchange and network assessment fees, processing fees, and bank settlement fees to the third-party payment processors and financial institutions involved in settlement, which are recorded as costs of revenues. We satisfy our payment processing performance obligations and recognize the transaction fees as revenue upon authorization by the issuing bank and submission for processing. The transaction fees collected are recognized as revenue on a gross basis as we are the principal in the delivery of the managed payments solutions to the customers.

We have concluded that we are the principal in this performance obligation to provide a managed payment solution because we control the payment processing services before the customer receives them, perform authorization and fraud check procedures prior to submitting transactions for processing in the payment network, have sole discretion over which third-party acquiring payment processors we will use and are ultimately responsible to the customers for amounts owed if those acquiring payment processors do not fulfill their obligations. We generally have full discretion in setting prices charged to the customers. Additionally, we are obligated to comply with certain payment card network operating rules and contractual obligations under the terms of out registration as a payment facilitator and as a master merchant under our third-party acquiring payment processor agreements which make us liable for the costs of processing the transactions for our customers and chargebacks and other financial losses if such amounts cannot be recovered from the restaurant.

Financial technology solutions revenue is recorded net of refunds and reversals initiated by the restaurant and are recognized upon authorization by the issuing bank and submission for processing. We allocate all variable fees earned from transaction-based revenue to this performance obligation on the basis that it is consistent with the ASC 606 allocation objectives.

Financial technology solutions revenue also includes fees earned from marketing and servicing working capital loans to customers through our wholly-owned subsidiary, Toast Capital, that are originated by a third-party banking partner. We believe Toast Capital is uniquely qualified to underwrite and competitively price loans that range from $5 thousand to $250 thousand to eligible Toast customers by using patented systems for loan origination that incorporate historical POS data and payment processing volume. In these arrangements, Toast Capital’s bank partner originates all loans, and Toast Capital then services the loans using Toast’s payments infrastructure to remit a fixed percentage of daily sales to our bank partner until the loan is paid back. Toast Capital earns fees for the underwriting and marketing of loans, which are recognized upon origination of the loan, and loan servicing fees, based on a percentage of each outstanding loan, which are recognized as servicing revenue as the servicing is delivered in accordance with ASC 860, Transfers and Servicing. Servicing revenue is adjusted for the amortization of servicing rights carried at amortized cost. The marketing and facilitation fees earned upon execution of these loan agreements with its customers are recognized as revenue on a gross basis. Similar to the limited guarantee we provide in third-party financing arrangements described above, we also provide limited guarantees to our bank partner for customer defaults. We recognize a contingent guarantee liability for expected credit losses and a non-contingent stand-ready liability related to this financial guarantee in accordance with ASC 460 along with a corresponding non-cash charge recorded as "General and administrative" expense in the Consolidated Statements of Operations.

Hardware

Hardware revenue is generated from the sale of terminals, tablets, handhelds, and related devices and accessories, net of estimated returns. We invoice end-user customers upon shipment of the products. Revenue for hardware sales is recognized at the point in time at which the transfer of control occurs in accordance with agreed upon shipping terms, satisfying the performance obligation. We accept returns for hardware sales and recognize them at the time of the sale as a reduction of transaction price based on historical experience.
Professional Services

Professional services revenue is generated from fees charged to customers for installation services, including business process mapping, configuration, and training. Professional services are sold separately. Amounts invoiced in advance are recorded as deferred revenue. The duration of providing professional services to the customer is relatively short and completed in a matter of days. The performance obligation for professional services is considered to be satisfied upon the completion of the installation.
Deferred revenue represents our obligation to transfer products or services to customers for which consideration has been received and consists of amounts deferred from subscription services contracts, professional service engagements, and customer deposits received in advance. Amounts deferred under subscription service contracts are recognized ratably over the respective term of the customer contract. Deferred revenue for professional services includes consideration amounts that have been received from customers in advance, but the services are yet to be completed or accepted by customers. Sales taxes collected from customers and remitted to government authorities are excluded from revenue and deferred revenue.
Cash and Cash Equivalents, Cash Held on Behalf of Customers and Restricted Cash
We define cash and cash equivalents as highly liquid investments with original maturities of 90 days or less at the time of purchase that are readily convertible to known amounts of cash. As of December 31, 2021 and 2020, our cash and cash equivalents consisted primarily of cash held in checking and money market accounts as well as marketable securities with an original maturities of 90 days or less.

Cash held on behalf of customers represents an asset that is restricted for the purpose of satisfying obligations to remit funds to various tax authorities to satisfy customers’ payroll, tax and other obligations. Cash held on behalf of customers is included within "Prepaid expenses and other current assets," and the corresponding customer funds obligation is included within "Accrued expenses and other current liabilities" on our Consolidated Balance Sheets.

Restricted cash represents cash held with commercial lending institutions. The restrictions are related to cash collateralized letters of credit to cover potential customer defaults on third-party financing arrangements, and cash held as collateral pursuant to an agreement with the originating third-party bank for the working capital loans serviced by Toast Capital (See Note 9).
Marketable Securities
Our marketable securities are classified as available-for-sale. We classify our marketable securities as current assets, including those with maturities greater than 12 months, as they are available for use in current operations or to satisfy other liquidity requirements.

Marketable securities are carried at fair value, and we report unrealized gains and losses as a component of accumulated other comprehensive income, net of tax, until the security is sold or matures, except for changes in allowance for expected credit losses, which are recorded in our results of operations. Gains or losses realized from sales of marketable securities are computed based on the specific identification method and recognized as a component of "Other income (expense), net" in the accompanying Consolidated Statements of Operations.
Accounts Receivable Accounts receivable, net consists of trade accounts receivable and unbilled receivables (which we collectively refer to as accounts receivable), net of an allowance for credit losses. Unbilled receivables represent revenue recognized on a contract in excess of billings. Our payment terms for trade accounts receivable vary by the type of customer and the products or services offered. The term between invoicing and when payment is due is not significant. We record an allowance for expected credit losses for Accounts Receivable upon the initial recognition of an Accounts Receivable balance in accordance with ASC 326. The allowance for credit losses represents the best estimate of lifetime expected credit losses, based on customer-specific information, historical loss rates and the impact of current and future conditions, including an assessment of customer creditworthiness, historical payment experience and the age of outstanding receivables, Accounts Receivable balances are written off against the allowance for credit losses when we determine that the balances are not recoverable. Provisions for the allowance for expected credit losses are recorded in "General and administrative" expenses in the Consolidated Statements of Operations. We evaluate the allowance for credit losses for the entire portfolio of Accounts Receivable on an aggregate basis due to similar risk characteristics of its customers based on similar industry and historical loss patterns.
Inventory Inventory, which consists of tablets, printers, and networking equipment, are stated at the lower of cost or net realizable value and are accounted for using the average cost method. We evaluate ending inventory for estimated excess and obsolete inventory based primarily on historical sales levels by product and projections of future demand, as well as the impact of changing product design and technology. We recognize freight, handling costs, and damaged inventory as current-period costs.
Assets and Liabilities Recorded with Loan Servicing Activities
Capitalized servicing rights are recorded as a component of "Prepaid expenses and other current assets" in the accompanying Consolidated Balance Sheets, and represent rights associated with servicing loans originated by our industrial bank partner to merchant customers. A servicing asset is recognized when benefits of servicing are expected to be greater than adequate compensation for performing servicing by us. No servicing rights are recorded if the amounts earned represent adequate compensation. In determining adequate compensation, we compare its level of compensation to the level of compensation demanded by current market prices.

Servicing rights are initially recorded at fair value. Initial measurement is based on an analysis of discounted cash flows based on assumptions that market participants use to estimate fair value. Subsequently, servicing rights are amortized over the expected period of estimated net servicing income and assessed for impairment.

Amortization of servicing rights is recorded in proportion to and over the period of estimated net servicing income. Resulting amortization expense is recorded as an adjustment to net "Financial technology solutions" revenue on the Consolidated Statements of Operations.

Impairment is recognized through a valuation allowance and a charge to current period earnings if it is considered to be temporary. If circumstances indicate that the likelihood of future recovery of the impaired assets or liability is remote, we directly write-down such assets and relieve the valuation account.

Under the terms of our agreement with our industrial bank partner, we are obligated to repurchase certain loans originated by our industrial banking partner to our customers in cases where the customer's payments on the loan are delayed for a defined period of time, and the loan is considered delinquent. Our obligation is limited to a specified percentage of the total loans originated, measured on a quarterly basis. To the extent we make a repurchase, our obligation with respect to the quarterly cohort of loans from which the defaulted loan originated is reduced. Please refer to "Acquired Loans Receivable, Net" section within this note for information on our accounting for repurchased loans.

This obligation represents a financial guarantee with two aspects: a contingent liability accounted for under ASC 326 related to our contingent obligation to purchase defaulted loans, and a non-contingent liability accounted for under ASC 460 related to our obligation to stand-ready to perform under the obligation. As noted above, we adopted ASC 326 effective January 1, 2021 which applies to the contingent component of the guarantee arrangement. We measure a contingent liability for expected credit losses which is based on historical lifetime loss data, as well as macroeconomic forecasts applied to the loan portfolio. Probability of default curves are generated using historical default data for portfolios of guaranteed loans with similar risk characteristics. Loss severity estimates are generated using historical collections data for the loans repurchased by us. Additionally, we apply macroeconomic factors, such as forecasted trends in unemployment rates, which are sourced externally, using a single scenario that we believe is most appropriate to the economic conditions applicable to a particular period. Projected loss rates, inclusive of historical loss data and macroeconomic factors, are applied to the outstanding principal amounts of the guaranteed loans. We may also include qualitative adjustments that incorporate incremental information not captured in the quantitative estimates of its current expected credit losses. The expected term of the loans guaranteed by us typically range from 90 to 270 days, and the reasonable and supportable forecast period we have included in our projected loss rates is approximately 12 months based on externally sourced data.

Contingent liabilities for expected credit losses are recorded as new guaranteed loans get originated, along with a corresponding non-cash charge recorded within "General and administrative" expense in the Consolidated Statements of Operations. We remeasure these contingent liabilities each reporting period and reverse the liability upon loan purchase or upon the expiration of the obligation. We record a non-contingent liability at fair value as loans are originated, with a corresponding charge recorded within "General and administrative" expense in the accompanying Consolidated Statements of Operations. Subsequently, the liability is amortized on a straight-line basis over the expected obligation term, which ranges from 90 to 270 days, and derecognized upon loan repurchase against "General and administrative" expense in the Consolidated Statements of Operations.
Prior to January 1, 2021, we estimated a single liability related to the financial guarantees which was accounted for as a guarantee under ASC 460 and was recorded as a reduction of net revenue at the time the loans were originated and trued up over the period of repayment.
Acquired Loans Receivable, Net
As described above, we are obligated to purchase delinquent loans from our industrial bank partner. Such purchases, net of expected recoveries, are recorded as a reduction to our potential liability with respect to the quarterly cohort of loans from which the defaulted loan originated (please see Note 9, "Loan Servicing Activities").

Effective January 1, 2021, we adopted ASC 326, and as a result account for purchased loans in accordance with the guidance for purchased credit deteriorated, or PCD, assets as the loans experienced credit quality deterioration between their origination and purchase.

Because we have an expectation of collecting cash flows at the portfolio level, a negative allowance is established for expected recoveries. We estimate a negative allowance on an undiscounted basis using historical collections data for loans purchased by us and qualitative adjustments that incorporate incremental information not captured in the quantitative estimates of our current expected recoveries. Cash collections related to Acquired Loans Receivable are first applied to the negative allowance balance, and when recoveries received exceed the negative allowance, we recognize amounts within operating expenses in the Consolidated Statements of Operations. The negative allowance is recorded as an asset and presented within "Accounts receivable, net" on our Consolidated Balance Sheets. Changes in the negative allowance are recorded as an operating expense in the Consolidated Statements of Operations.
Prior to January 1, 2021, Acquired Loans Receivable were carried at their amortized cost, fully offset by an allowance for loan losses.
Amortization Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining terms of the respective leases. Repair and maintenance costs are expensed as incurred, whereas major improvements are capitalized as additions to property and equipment.
Internal Use Software We account for our internal use software and website development costs in accordance with the guidance in ASC 350-40, Internal-Use Software. The costs incurred prior to the application development stage and post implementation are expensed as incurred. Direct and incremental internal and external costs incurred during the application development stage, are capitalized until the application is substantially complete and ready for its intended use, at which point amortization begins. Training and data conversion costs are expensed as incurred.
Retirement or Disposal of Assets When assets are retired or disposed of, cost and associated accumulated depreciation are derecognized, and any resulting gain or loss is included in our Consolidated Statements of Operations.
Operating Leases
We adopted ASC 842 effective January 1, 2021. We determine if an arrangement is or contains a lease at contract inception. Lease agreements generally contain lease and non-lease components, which we elect to combine for all asset classes as a single lease component. Payments under lease arrangements are primarily fixed. Variable payments typically represent non-lease components, which consist primarily of payments for maintenance, utilities, and management fees. Variable payments included in lease arrangements are expensed as incurred and excluded from the right of use assets and lease liabilities.

Right-of-use assets and lease liabilities for operating leases are initially measured on the lease commencement date based on a present value of lease payments over the lease term. Right of use assets are recorded net of any lease incentives received from a lessor. Lease liabilities are calculated as the present value of fixed payments over the lease term, including periodic fixed rent increases and excluding any lease incentives paid or payable to us by a lessor. Lease payments are discounted to present value using our estimated incremental borrowing rate, because a readily determinable implicit rate is not available. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The weighted average discount rate for operating leases was 2.62% as of December 31, 2021.

Lease term includes the non-cancelable term, renewal options that extend the lease and are reasonably certain to be exercised, and options to terminate the lease before the end of its non-cancelable term that are not reasonably certain to be exercised.

We do not record right-of-use assets and lease liabilities for leases with an initial term of 12 months or less and recognize lease expense on a straight-line basis over the lease term.

Our consolidated financial statements and related disclosures for the reporting periods prior to January 1, 2021 have not been adjusted and continue to be reported under Topic 840.
Business Combinations We account for acquisitions using the acquisition method of accounting. Assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration transferred in a business combination, including any contingent consideration, is allocated to the assets acquired and liabilities assumed based on their respective fair values. The excess of the consideration transferred over the fair values of the assets acquired and the liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date or upon a final determination of asset and liability fair values, whichever occurs first, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Any subsequent adjustments are recorded on the Consolidated Statements of Operations.
Intangible Assets
Intangible assets consist of finite-lived acquired technology, customer relationships, and acquired trade names. Finite-lived intangible assets are valued based on estimated future cash flows and amortized on a straight-line basis over their estimated useful lives. We evaluate the remaining estimated useful life of its intangible assets being amortized on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining amortization period.

Acquired technology is amortized over its useful life on a straight-line basis within costs of revenue. Customer relationships are amortized over their useful life on a straight-line basis within Amortization of acquired technology and customer assets.
Impairment of Property and Equipment and Finite-Lived Intangible Assets We evaluate the recoverability of property and equipment and finite lived intangible assets for impairment whenever events or circumstances indicate that the carrying amounts of such assets may not be recoverable. For purposes of this assessment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability is measured by comparing the carrying amount of an asset group to the estimated future undiscounted future net cash flows expected to be generated from their use and eventual disposal. If the carrying amount is not recoverable, the carrying amount is reduced to fair value and impairment loss is recognized. We did not identify any events or circumstances that indicated the carrying amounts of our long-lived assets may not be recoverable and did not recognize any impairment during the year ended December 31, 2021.
Goodwill Goodwill represents the excess of purchase price over the fair value of net tangible and identifiable intangible assets of the businesses acquired by us. Goodwill is tested for impairment annually during the fourth quarter or more often if impairment indicators are present, based on events and circumstances indicating that it is more likely than not that the fair value of the reporting unit is below its carrying value.
Deferred Offering Costs We capitalized certain legal, accounting and other third-party fees that were directly associated with in-process equity financings as deferred offering costs until such financings were consummated.
Cost of Revenue
Costs of revenue primarily consists of costs associated with payment processing, personnel, and related infrastructure for operation of our cloud-based platform, data center operations, customer support, loan servicing and allocated overhead. Hardware costs consist of all product and shipping costs associated with tablets, printers, and other peripherals. Employee-related costs consist of salaries, benefits, bonuses, and stock-based compensation expense. Overhead consists of certain facilities costs, depreciation expense, and amortization costs associated with internally developed software.

Payment processing costs include interchange fees, network assessment fees and fees paid to the acquiring payment processors.
Stock-Based Compensation Expense
We grant equity awards, including stock options which vest upon the satisfaction of a service condition and restricted stock units, or RSUs, which vest upon the satisfaction of a performance condition and/or a service condition. We account for stock-based compensation expense related to equity awards in accordance with ASC 718, Compensation—Stock Compensation. Stock-based awards are measured at fair value on the grant date and compensation cost recognized over the service period, net of estimated forfeitures. Compensation cost is recognized on a straight-line basis for stock-options and RSUs, and on an accelerated attribution basis for awards with a performance condition for each separately vesting portion of the award over the applicable vesting period.

We use the Black-Scholes option-pricing model to determine the estimated fair value of stock option awards. We estimate the following assumptions used in the option pricing model:

•Expected Volatility—We do not have sufficient history of market prices for our Class A common stock due to its recently completed IPO. As such, we estimate volatility for stock option grants by evaluating the average historical volatility of a peer group of similar public companies over a period commensurate with the options' expected term.

•Expected Term—The expected term of our stock options represents the period that the stock-based awards are expected to be outstanding. We do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. As such, we estimate the expected term of the options based on the simplified method determined based on the midpoint of the stock options vesting term and contractual expiration period.

•Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury yield curve published as of the grant date, with maturities approximating the expected term of the options granted.

•Dividend Yield—We have not declared or paid dividends to date and do not anticipate declaring dividends. As such, the expected dividend is zero.

The fair value of restricted stock unit awards, or RSUs, is determined based on the closing market price of our common stock on the date of the grant.

Prior to our IPO, the fair value of our common stock was determined by our Board, with the assistance of management, as there was no public market for the underlying common stock. Our Board determined the fair value of our common stock by considering a number of objective and subjective factors, such as contemporaneous third-party valuations of our common stock, the valuation of comparable companies, sales of our common and redeemable convertible preferred stock to outside investors in arms-length transactions, our operating and financial performance, the lack of marketability, and the general and industry specific economic outlook, amongst other factors. After the completion of the IPO, the fair value of our Class A common stock is determined based on the New York Stock Exchange, or NYSE, closing price on the date of grant.

Prior to September 2021, RSUs granted by us vest upon the satisfaction of both a service-based vesting condition, which is typically four years, and a liquidity event-related performance vesting condition. All performance conditions were achieved upon the completion of our IPO, and we recorded a cumulative stock compensation expense for RSUs in September 2021. Stock compensation expense for the remaining service period after the satisfaction of the performance condition will be recorded over the remaining requisite service period using the accelerated attribution method.

We estimate a forfeiture rate to calculate the stock-based compensation expense for all awards based on an analysis of actual historical experience and expected employee attrition rates.
The Amended and Restated 2014 Stock Incentive Plan, as amended (the "2014 Plan") of our company allows for early exercise of all granted options, before vesting requirements have been satisfied. Shares acquired through the early exercise of options which have not vested at the time of an employee’s termination may be repurchased by us at the lower of the original exercise price or the then current fair value. We have not recognized any tax benefits related to the effects of employee stock-based compensation expense.
Advertising Costs We expense advertising costs as incurred.
Income Taxes We account for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. In addition, this method requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.We account for uncertain tax positions recognized in the consolidated financial statements by prescribing a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Interest and penalties, if applicable, related to uncertain tax positions would be recognized as a component of income tax expense.
Net Loss Per Share
During the year ended December 31, 2021, we amended and restated our certificate of incorporation and created two classes of common stock: Class A common stock and Class B common stock (see Note 1). Class A common stock and Class B common stock share proportionately, on a per share basis, in our net income (losses) and participate equally in the dividends on common stock, if declared. We allocate net losses attributable to common stock between the common stock classes on a one-to-one basis when computing net income (loss) per share. As a result, basic and diluted net income (loss) per share of Class A common stock and share of Class B common stock are equivalent.

We compute net loss per common share based on the two-class method required for multiple classes of common stock and participating securities. The two-class method requires income (loss) available to common stockholders for the period to be allocated between multiple classes of common stock and participating securities based upon their respective rights to receive dividends as if all income (loss) for the period had been distributed.

We consider our currently outstanding restricted shares issued upon early exercise of stock options and our convertible preferred stock which was outstanding prior to the completion of the IPO to be participating securities. Restricted shares issued upon early exercise of stock options are considered participating securities because holders of such shares have non-forfeitable dividend rights in the event of a dividend declaration for common shares. The holders of our convertible preferred stock were entitled to non-cumulative dividends in preference to common stockholders, at specified rates, if declared. The holders of our convertible preferred stock were not, and restricted shares are not contractually obligated to participate in our losses. As such, our net losses for the years ended December 31, 2021, 2020, and 2019 were not allocated to these participating securities.
Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of our Class A and Class B common stock outstanding, adjusted for outstanding shares that are subject to repurchase. Weighted average shares of Class A and Class B common stock outstanding exclude shares which were acquired from the early exercise of options and the exercise of options under outstanding promissory notes, both of which are not considered substantive exercises for accounting purposes (see Note 21). During the year ended December 31, 2021, the weighted average shares of common stock outstanding include shares issued as a result of the exercise of vested options upon the repayment of outstanding promissory notes.Diluted net loss per common share gives effect to all potentially dilutive securities. Our potentially dilutive securities, which include convertible preferred stock, options to purchase common stock, unvested restricted stock units, exercised options for which we received non-recourse notes from the individuals, as well as warrants to purchase common stock and convertible preferred stock, and contingently convertible debt, have been excluded from the computation of diluted net loss per share as the effect would be antidilutive as a result of a net loss incurred during each period. Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share was the same during each reporting period.
Recently Issued Accounting Pronouncements Not Yet Adopted and Emerging Growth Company Status
Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, or ASU 2020-06. The new guidance simplifies the accounting for certain financial instruments by removing certain separation models required under current U.S. GAAP, including the beneficial conversion feature and cash conversion feature. ASU 2020-06 also improves and amends the related earnings per share guidance for both subtopics. ASU 2020-06 is effective for public business entities for fiscal years beginning after December 15, 2021 and interim periods within that fiscal year. We are evaluating the impact of the adoption of ASU 2020-06 on our consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, or ASU 2021-08. The standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, as if it had originated the contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The amendments in ASU 2021-08 should be applied prospectively to business combinations occurring on or after the effective date of the standard. Early adoption is permitted. We are currently evaluating the impact of this pronouncement on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

We adopted the following accounting standards during the year ended December 31, 2021:

Leases

In February 2016, the FASB issued ASC 842, as amended, which superseded the guidance in former ASC 840, Leases. Based on ASC 842, a lessee is required to recognize in the statement of financial position a lease obligation related to making lease payments and a right-of-use asset representing its right to control the use of the underlying asset during the lease term, including optional payments that are reasonably certain to occur.

We adopted ASC 842 on January 1, 2021 on a modified retrospective basis and elected the transition option to forgo application of comparative period presentation in the financial statements during the year of adoption. Therefore, our Consolidated Financial Statements for the year ended December 31, 2021 are presented in accordance with ASC 842, while comparative periods have not been recast.
We did not elect the hindsight practical expedient related to determining the lease term. We elected the package of practical expedients upon transition, and therefore did not reassess the lease classification of existing or expired contracts, the accounting for initial direct costs and whether any of such contracts represent or contain leases. We also made an accounting policy election to combine lease and non-lease components into a single lease component for each class of underlying assets for the arrangements in which we are a lessee.

The adoption of Topic 842 resulted in a recognition of operating lease right-of-use assets of $95, operating lease obligations of $115, and an immaterial cumulative-effect adjustment to accumulated deficit as of January 1, 2021. The adoption of Topic 842 and did not have a material impact on our results of operations and cash flows during the year ended December 31, 2021, as described in Note 12, "Lessee Arrangements." The adoption of Topic 842 for the arrangements in which we are a lessor did not have a material impact on our financial position as of December 31, 2021 and results of operations and cash flows during the period then ended.

Credit Losses

In June 2016, the FASB issued ASC 326. The guidance and related amendments modify the accounting for credit losses for most financial assets and require the use of an expected credit loss model replacing the currently used incurred loss method.

We adopted the standard as of January 1, 2021 and recognized a cumulative-effect adjustment to the opening retained earnings as of that date. Therefore, our Consolidated Financial Statements for the year ended December 31, 2021 are presented in accordance with ASC 326, while comparative periods have not been recast.
The primary financial instruments in the scope of ASC 326 include cash equivalents, accounts receivable, off-balance sheet credit exposures under financial guarantee arrangements, and acquired loans receivable.
Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in the updated guidance simplify the accounting for income taxes by removing certain exceptions and improving consistent application of other areas of the topic by clarifying the guidance. Toast adopted the standard effective January 1, 2021 using the retrospective method of transition. The standard did not have a material impact on our financial position as of December 31, 2021 and our results of operations for the year then ended.
Revenue from Contracts with Customers

In May 2014, the FASB issued Topic 606, which superseded most existing revenue recognition guidance under U.S. GAAP. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. We adopted this standard on January 1, 2020 using the modified retrospective method of transition. Modified retrospective adoption requires entities to apply the standard retrospectively to the most current period presented in the financial statements, requiring the cumulative effect of the retrospective application as an adjustment to the opening balance of retained earnings at the date of initial application. Accordingly, results for reporting periods beginning after January 1, 2020 are presented based on ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic revenue recognition methodology under ASC 605, Revenue Recognition.

We applied Topic 606 to all contracts that were not complete as of January 1, 2020. We elected to adopt the practical expedient outlined in ASC 606 and analyzed the aggregate effect of all contract modifications that occurred prior to January 1, 2020.

We recorded a cumulative-effect adjustment of $18 in accumulated deficit as of January 1, 2020 due to the cumulative impact of adopting Topic 606, related to capitalizing commissions and changes in allocation of arrangement consideration to hardware revenue and subscription revenue.

Based on provisions of ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In order to achieve this core principle, the following five steps are applied:

1.Identify the contract(s) with a customer.
2.Identify the performance obligations in the contract.
3.Determine the transaction price.
4.Allocate the transaction price to the performance obligations in the contract.
5.Recognize revenue as the entity satisfies a performance obligation.

We elected to use the portfolio approach practical expedient for contracts with similar characteristics provided the accounting result will not be materially different from the result of applying the guidance at the individual contract level. We selected various types of contract types and vendors to ensure all possible contract considerations were being captured. We applied this approach to all five steps of our analysis and use our judgment in the application of this approach to contracts and groups of similar contracts for revenue recognition.

We elected to use the significant financing component practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

Prior to the adoption of ASC 606, we did not allocate discounts on hardware revenue and professional services to subscription elements and variable transaction-based fees which were considered contingent revenue. Under ASC 606, arrangement consideration is allocated to each distinct performance obligation using a relative selling price allocation method based on each distinct performance obligation’s SSP, which impacted the allocation of arrangement consideration between hardware revenue and subscription services. We continue to allocate all variable fees earned from transaction-based revenue to this performance obligation on the basis that it is consistent with the allocation objectives in ASC 606.

Additionally, prior to the adoption of ASC 606, we expensed commission costs and related employer payroll taxes as incurred as costs of obtaining a contract. Based on ASC 340-40, Other Assets and Deferred Costs, we are required to capitalize and amortize incremental costs of obtaining a contract, such as sales commissions and related payroll taxes, over the period we expect to derive benefits from the contract, which we have calculated to be three years. The period of benefit for commissions paid for the acquisition of initial subscription services is determined by taking into consideration the initial estimated customer life and the technological life of our subscription services platform and related significant features. We adjust the carrying value of the deferred
commissions assets periodically to account for customer churn, which occurs when customers have ceased operations or otherwise discontinued using our subscription services and financial technology solutions. Amortization expense is included in "Sales and marketing" expense on the Consolidated Statements of Operations.
Improvements to Nonemployee Share-Based Payment Accounting

In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, or ASU 2018-07. ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. On January 1, 2020, we adopted ASU 2018-07, which did not materially impact the Consolidated Financial Statements and the related disclosures.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement

In August 2018, the FASB issued ASU No. 2018-15, Customer’s accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, or ASU 2018-15, which is intended to align the requirements for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing guidance for internal-use software. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. On January 1, 2020, we adopted ASU 2018-15, which did not materially impact the Consolidated Financial Statements and the related disclosures.
Marketable Securities Impairment We review marketable securities for impairment during each reporting period to determine if any of the securities have experienced an other-than-temporary decline in fair value. If the fair value of the debt securities is below their amortized cost basis, we evaluated whether there is an intent to sell, or if it was more likely than not that we will be required to sell the debt securities in an unrealized loss position before recovering the amortized cost basis. If either of these conditions were present, we wrote down the security to its fair value and recognized the loss in the Consolidated Statements of Operations. If neither of these conditions were present, we determined if a credit loss existed by considering the financial condition and near-term prospects of the issuer, as well as current market conditions and forecasts. Credit losses were recognized up to the amount equal to the difference between the fair value and the amortized cost basis and recorded as an allowance for credit losses on the Consolidated Balance Sheets with a corresponding adjustment to earnings. Unrealized losses that were not related to credit losses were recognized in accumulated other comprehensive loss.
v3.22.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Schedule of Cash and Cash Equivalents
Cash and cash equivalents and restricted cash consisted of the following:

December 31,
20212020
Cash and cash equivalents
$809 $582 
Cash held on behalf of customers
34 11 
Restricted cash
8 1 
Total cash, cash equivalents, cash held on behalf of customers and
restricted cash		$851 $594 
Schedule of Accounts, Notes, Loans and Financing Receivable
Accounts receivable, net consisted of the following:

December 31,
20212020
Accounts receivable
$20 $5 
Unbilled receivables
39 32 
Less: Allowance for credit losses
(4)(4)
Accounts receivable, net$55 $33 
Changes in the negative allowance for acquired loans and merchant cash advances receivable for the year ended December 31, 2021 were as follows:
Amount
Beginning balance, as of December 31, 2020
$— 
Impact of adopting ASC 326
3 
Expected recoveries
1 
Reduction due to cash collections
(3)
Ending balance, as of December 31, 2021
$1 
Prior to the adoption of ASC 326, merchant cash advances receivable were included within "Prepaid expenses and other current assets" in the Consolidated Balance Sheets and consisted of the following:

December 31, 2020
MCA ReceivableLoans ReceivableFactor ReceivableTotal
Balance$1 $3 $1 $5 
Less: Allowance(1)(3)— (4)
$— $— $1 $1 
Accounts Receivable, Allowance for Credit Loss
Our allowance for credit losses was comprised of the following:

Amount
Balance as of December 31, 2019
(5)
Additions
(5)
Write offs
6 
Balance as of December 31, 2020
$(4)
Impact of adopting ASU 2016-13(2)
Additions
(1)
Write offs
3 
Balance as of December 31, 2021
$(4)
Property, Plant and Equipment
Property and equipment are stated at cost, net of accumulated depreciation, and are depreciated using the straight-line method over their estimated lives, as follows:

Property and EquipmentEstimated Useful Life
Computer and other equipment3 years
Office furniture and fixtures3 years
Tooling3 years
Capitalized software2 years
Property and equipment consisted of the following:
December 31,
20212020
Leasehold improvements
$29 $30 
Capitalized software25 18 
Computer equipment
8 3 
Furniture and fixtures
8 7 
Tooling and equipment
2 1 
72 59 
Less: Accumulated depreciation
(31)(15)
$41 $44 
Schedule of Acquired Finite-Lived Intangible Assets by Major Class
The estimated useful lives for acquired technology, customer relationship intangible assets and acquired trade names are as follows:
Estimated Useful Life
Acquired technology
3 - 10 years
Customer acquired intangible assets6 years
Trade names1.5 years
Accounting Standards Update and Change in Accounting Principle
The following table summarizes the effect of the adoption on all affected items in the Consolidated Balance Sheets and the cumulative effect on opening accumulated deficit:
ComponentFinancial Statement Line Item
Balance as of
December 31, 2020
Balance as of
January 1,
2021		Effect of Adoption
Asset Accounts Receivable, Net $1 $3 $2 
LiabilityAccrued Expenses and Other Current Liabilities1 3 2 
LiabilityDeferred Revenue, Current 1 — (1)
EquityAccumulated Deficit(616)(615)1 
The following table summarizes the cumulative effect of changes from the adoption of ASC 606 on our Consolidated Balance Sheets as of January 1, 2020 as a result of us adopting ASC 606 using the modified retrospective transition method:
Balance as of
December 31, 2019
Adjustments
Due to
Adoption		Balance as of
January 1,
2020
Consolidated Balance Sheets
Assets:
Accounts receivable$15 $6 $21 
Deferred costs, net— 10 10 
Deferred costs, non-current— 9 9 
Liabilities:
Current portion of deferred revenue39 (2)37 
Deferred revenue, net of current portion21 9 30 
Stockholders’ deficit:
Accumulated deficit$(386)$18 $(368)

The following tables summarize the effect of the adoption of ASC 606 on our select line items included in the Consolidated Financial Statements as of and for the year ended December 31, 2020, as if the previous accounting was in effect:
Year Ended December 31, 2020
As reported (ASC 606)Impact of AdoptionWithout Adoption (ASC 605)
Consolidated Balance Sheets
Assets:
Accounts receivable$33 $22 $11 
Deferred costs, net17 17 — 
Deferred costs, non-current12 12 — 
Liabilities:
Current portion of deferred revenue43 17 26 
Deferred revenue, net of current portion16 — 16 
Stockholders’ deficit:
Accumulated deficit(616)34 (650)
Year Ended December 31, 2020
As reported (ASC 606)Impact of AdoptionWithout Adoption (ASC 605)
Consolidated Statement of Operations and Comprehensive Loss
Revenue:
Hardware revenue$64 $4 $60 
Subscription revenue101 2 99 
Professional services revenue14 1 13 
Operating Expense:
Sales and marketing138 (11)149 
Net loss(248)16 (264)
v3.22.0.1
Business Combinations (Tables)
 12 Months Ended
Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract]  
Schedule of Business Acquisitions, by Acquisition
The aggregate purchase price, net of cash acquired of $1, was subject to normal and customary purchase price adjustments and was as follows on the acquisition date:
Amount
Cash consideration, net of cash acquired$24 
Fair value of common stock issued15 
Fair value of settled stock option awards1 
Fair value of contingent consideration2 
Liabilities settled on behalf of xtraCHEF1 
Deferred payments for indemnity claims and working capital funds, net of adjustments (1)
5 
Total purchase price$48 
(1)The amount includes the indemnity funds related to the seller's satisfaction of potential indemnity claims that may be released to the sellers no later than 15 months following the acquisition date, as well as a cash payment related to working capital, subject to further working capital adjustments, that will be released to the sellers or remitted back to us no later than 12 months following the acquisition date.
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following table summarizes the allocation of the preliminary purchase price and the amounts of assets acquired and liabilities assumed for the acquisition based upon their estimated fair values at the date of acquisition. Such balances are reflected in the Consolidated Balance Sheets as of December 31, 2021:

Amount
Intangible assets$14 
Goodwill38 
Deferred tax liability(3)
Other(1)
Net assets acquired$48 
The following table summarizes the consideration paid for StratEx and the fair value of the assets acquired, and liabilities assumed at the closing date:
Consideration:Amount
Cash paid to shareholders
$36 
Common stock issued
3 
Total consideration to shareholders
39 
Indebtedness paid at closing
5 
Total purchase price
$44 
Acquired Assets and Liabilities
Net working capital
$(1)
Intangible technology assets
9 
Intangible customer relationships
3 
Goodwill
36 
Deferred tax liability
(3)
Total purchase price
$44 
v3.22.0.1
Fair Value of Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table presents information about our financial assets and liabilities that were measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values:
Fair Value Measurements at December 31, 2021
Using:
Level 1Level 2Level 3Total
Assets:
Money market funds$50 $— $— $50 
Commercial paper— 134 — 134 
Certificates of deposit— 14 — 14 
Corporate bonds— 193 — 193 
Treasury securities— 67 — 67 
Asset-backed securities— 49 — 49 
$50 $457 $— $507 
Liabilities:
Warrants to purchase common stock$— $— $181 $181 
Contingent consideration— — 5 5 
$— $— $186 $186 
Fair Value Measurements at December 31, 2020
Using:
Level 1Level 2Level 3Total
Assets:
Money market funds$142 $— $— $142 
$142 $— $— $142 
Liabilities:
Preferred stock warrant liability$— $— $11 $11 
Derivative liability— — 37 37 
$— $— $48 $48 
Fair Value Measurement Inputs and Valuation Techniques The following table indicates the weighted-average assumptions made in estimating the fair value for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31,
2021(1)
20202019
Risk-free interest rate
0.8%0.3%1.8%
Expected term (in years)
5
5-7
6-8
Expected volatility
54%60%56%
Expected dividend yield
0%0%0%
Exercise price
$0.74$0.74$0.74
(1) During the year ended December 31, 2021, fair value of the preferred stock warrants liability was measured based on the weighted average assumptions from January 1, 2021 through September 24, 2021, the date they were converted into common stock warrants.
The following table indicates the weighted-average assumptions made in estimating the fair value for the year ended December 31, 2021:
Year Ended December 31, 2021
Risk-free interest rate1.3 %
Contractual term (in years)5
Expected volatility50.8 %
Expected dividend yield— %
Exercise price$17.15 
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis The following table provides a roll-forward of the aggregate fair value of our warrants to purchase preferred stock, common stock, derivative liability, and contingent consideration liability for which fair value is determined on recurring basis using Level 3 inputs:
Preferred
Stock Warrant Liability		Common Stock Warrant LiabilityDerivative LiabilityContingent Consideration Liability
Balance as of December 31, 2019
$3 $— $— $— 
Fair value at issuance— — 30 — 
Change in fair value8 — 7 — 
Balance as of December 31, 2020
11 — 37 — 
Fair value at issuance— 125 — — 
Fair value on the acquisition date— — — 2 
Change in fair value and other adjustments38 59 103 3 
Settlement(43)(9)(140)— 
Conversion of preferred stock warrants into common stock warrants upon the IPO(6)6 — — 
Balance as of December 31, 2021
$— $181 $— $5 
v3.22.0.1
Marketable Securities (Tables)
 12 Months Ended
Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]  
Debt Securities, Available-for-sale
The amortized cost, gross unrealized holding losses and fair value of marketable securities, including accrued interest receivable, consisted of the following:
December 31, 2021
Amortized CostGross Unrealized LossesFair Value
Commercial paper$134 $— $134 
Certificates of deposit14 — 14 
Corporate bonds194 (1)193 
Treasury securities67 — 67 
Asset-backed securities49 — 49 
Total$458 $(1)$457 
The fair values of the marketable securities by contractual maturities at December 31, 2021 were as follows:
December 31, 2021
Due within 1 year$284 
Due after 1 year through 5 years173 
Due after 5 years through 10 years— 
Total marketable securities$457 
v3.22.0.1
Merchant Cash Advances Receivable and Acquired Loans Receivable, Net (Tables)
 12 Months Ended
Dec. 31, 2021
Credit Loss [Abstract]  
Schedule of Accounts, Notes, Loans and Financing Receivable
Accounts receivable, net consisted of the following:

December 31,
20212020
Accounts receivable
$20 $5 
Unbilled receivables
39 32 
Less: Allowance for credit losses
(4)(4)
Accounts receivable, net$55 $33 
Changes in the negative allowance for acquired loans and merchant cash advances receivable for the year ended December 31, 2021 were as follows:
Amount
Beginning balance, as of December 31, 2020
$— 
Impact of adopting ASC 326
3 
Expected recoveries
1 
Reduction due to cash collections
(3)
Ending balance, as of December 31, 2021
$1 
Prior to the adoption of ASC 326, merchant cash advances receivable were included within "Prepaid expenses and other current assets" in the Consolidated Balance Sheets and consisted of the following:

December 31, 2020
MCA ReceivableLoans ReceivableFactor ReceivableTotal
Balance$1 $3 $1 $5 
Less: Allowance(1)(3)— (4)
$— $— $1 $1 
Financing Receivable, Allowance for Credit Loss
Prior to the adoption of ASC 326, our allowance for uncollectible loans and merchant cash advances receivable consisted of the following:
Allowance
MCA ReceivableLoans Receivable
Balance as of December 31, 2019
$— $— 
Additions(1)(5)
Repayments— 2 
Write offs— — 
Balance as of December 31, 2020$(1)$(3)
v3.22.0.1
Inventory (Tables)
 12 Months Ended
Dec. 31, 2021
Inventory Disclosure [Abstract]  
Schedule of Inventory, Current
Inventory consisted of the following:

December 31,
20212020
Finished goods
$41 $17 
Components of finished goods
1 6 
Capitalized overhead
2 1 
Reserve for excess and obsolete inventory
(2)(5)
$42 $19 
v3.22.0.1
Prepaid Expenses and Other Current Assets (Tables)
 12 Months Ended
Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure
Prepaid expenses and other current assets consisted of the following:

December 31,
20212020
Cash held on behalf of customers
$34 $11 
Prepaid SaaS expenses
11 6 
Prepaid expenses
13 2 
Prepaid insurance6 — 
Deposits for inventory purchases21 — 
Other current assets7 3 
$92 $22 
v3.22.0.1
Loan Servicing Activities (Tables)
 12 Months Ended
Dec. 31, 2021
Guarantees and Product Warranties [Abstract]  
Off-Balance Sheet, Credit Loss, Liability
Changes in the contingent liability for expected credit losses for the year ended December 31, 2021 were as follows:
Amount
Beginning balance, as of January 1, 2021
$— 
Impact upon ASC 326 adoption
1 
Credit loss expense
2 
Reductions due to loan purchases
(1)
Ending balance, as of December 31, 2021
$2 
v3.22.0.1
Property and Equipment, net (Tables)
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
Property and equipment are stated at cost, net of accumulated depreciation, and are depreciated using the straight-line method over their estimated lives, as follows:

Property and EquipmentEstimated Useful Life
Computer and other equipment3 years
Office furniture and fixtures3 years
Tooling3 years
Capitalized software2 years
Property and equipment consisted of the following:
December 31,
20212020
Leasehold improvements
$29 $30 
Capitalized software25 18 
Computer equipment
8 3 
Furniture and fixtures
8 7 
Tooling and equipment
2 1 
72 59 
Less: Accumulated depreciation
(31)(15)
$41 $44 
v3.22.0.1
Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
The changes in the carrying amount of goodwill for the periods presented were as follows:

Amount
Balance as of December 31, 2019
$36 
Acquisitions
— 
Balance as of December 31, 2020
36 
Acquisitions
38 
Balance as of December 31, 2021
$74 
Schedule of Finite-Lived Intangible Assets
Intangible assets, net consisted of the following:
As of December 31, 2021
Technology AssetCustomer AssetsTotal
Gross carrying amount$22 $4 $26 
Accumulated amortization(8)(2)(10)
Intangible assets, net$14 $2 $16 

As of December 31, 2020
Technology AssetCustomer AssetsTotal
Gross carrying amount$9 $3 $12 
Accumulated amortization(4)(1)(5)
Intangible assets, net$5 $2 $7 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense The total estimated future amortization of intangible assets as of December 31, 2021 was as follows:
Year ended December 31,Amount
2022$4 
20232 
20242 
20251 
20261 
Thereafter6 
$16 
v3.22.0.1
Lessee Arrangements (Tables)
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Lease, Cost
The components of lease expense were as follows during the year ended December 31, 2021:

Amount
Operating lease expense
$25 
Variable lease expense
1 
Total
$26 
The following table summarizes supplemental cash flow information related to operating leases during the year ended December 31, 2021:

Cash paid for amounts included in the measurement of lease liabilities:Amount
Operating cash flows for operating leases
$25 
Operating lease right of use assets obtained in exchange for new or modified lease obligations:
Upon the adoption of Topic 842
95 
During the remainder of the period
4 
Total
$99 
Lessee, Operating Lease, Liability, Maturity
The following table summarizes maturities of our operating lease liabilities as of December 31, 2021:

Amount
2022$22 
202313 
202413 
202512 
202612 
Thereafter36 
Total future minimum lease payments108 
Less: Imputed interest9 
Present value of future minimum lease payments$99 
v3.22.0.1
Accrued Expenses and Other Current Liabilities (Tables)
 12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]  
Schedule of Accounts Payable and Accrued Liabilities
Accrued expenses and other current liabilities consisted of the following:

December 31,
20212020
Accrued transaction-based costs
$120 $14 
Accrued payroll and bonus
24 12 
Customer funds obligation
34 11 
Accrued expenses
21 8 
Accrued commissions
19 7 
Sales returns and allowances
9 4 
Other liabilities
19 7 
$246 $63 
v3.22.0.1
Debt (Tables)
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Convertible Debt
Convertible Notes consisted of the following:

December 31, 2020
Convertible notes$200 
Accrued interest5 
Less: Unamortized discount(33)
Long-term debt, net of discount$172 
v3.22.0.1
Convertible Preferred Stock (Tables)
 12 Months Ended
Dec. 31, 2021
Temporary Equity Disclosure [Abstract]  
Temporary Equity
The following table summarizes convertible preferred stock at December 31, 2020 and immediately prior to the conversion into Class B common stock upon completion of the IPO:

Preferred Stock AuthorizedPreferred Stock Issued and OutstandingCarrying
Value		Liquidation PreferenceCommon Stock Issuable Upon Conversion
Series A Preferred Stock18,072,29018,072,290$2 $2 18,072,290 
Series B Preferred Stock76,536,69575,803,51529 30 75,803,515 
Series C Preferred Stock38,773,86536,643,44551 51 36,643,445 
Series D Preferred Stock33,223,53033,223,530115 115 33,223,530 
Series E Preferred Stock45,788,02545,788,025250 250 45,788,025 
Series F Preferred Stock44,851,27544,301,220402 402 44,301,220 
257,245,680253,832,025$849 $850 253,832,025 
v3.22.0.1
Common Stock (Tables)
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Schedule of Stock by Class As of each Consolidated Balance Sheet date, we had reserved shares of Class A common stock, Class B common stock and common stock for issuance in connection with the following:
December 31,
20212020
Conversion of shares of preferred stock (as if converted to common stock)— 253,832,025
Options to purchase Class A common stock, Class B common stock, and common stock58,917,018 58,035,220
Restricted stock units15,384,809 — 
Warrants to purchase preferred stock (as if converted to warrants to purchase common stock)
— 1,002,035
Warrants to purchase Class B common stock7,961,455— 
Shares available for future grant under the Stock Plans
53,916,10533,435,380
Shares reserved for charitable donations4,922,001— 
Shares available for issuance under 2021 Employee Stock Purchase Plan11,638,189— 
152,739,577346,304,660
Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option
At each Consolidated Balance Sheet date, shares subject to restriction consisted of the following:

Shares
Nonvested as of January 1, 2020
1,877,710 
Exercise of stock options
321,400 
Repurchases
(185,190)
Vested
(917,120)
Nonvested as of December 31, 2020
1,096,800 
Exercise of stock options
412,810 
Exercise of stock options in connection with promissory notes repayment14,267,650 
Repurchases
(35,665)
Vested
(11,607,640)
Nonvested as of December 31, 2021
4,133,955 
We reflect RSUs as issued and outstanding shares of common stock when such units vest. The following table summarizes RSU activity as of December 31, 2021:
RSUWeighted Average Grant Date Fair Value
Outstanding balance as of December 31, 2020
158,370 $2.21 
Granted15,681,204 29.80 
Vested(53,570)2.40 
Forfeited(401,195)26.06 
Outstanding balance as of December 31, 2021
15,384,809 $29.71 
v3.22.0.1
Revenue from Contracts with Customers (Tables)
 12 Months Ended
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]  
Contract with Customer, Contract Asset, Contract Liability, and Receivable
The following table summarizes the activity in deferred revenue:

Year Ended December 31,
20212020
Deferred revenue, beginning of year$59 $60 
Cumulative adjustment for adoption of ASC 606— 7 
Deferred revenue, beginning of year, as adjusted$59 $67 
Deferred revenue, end of period$56 $59 
Revenue recognized in the period from amounts included in deferred revenue at the beginning of period$43 $29 
Capitalized Contract Cost
The following table summarizes the activity in deferred contract acquisition costs:

Year Ended December 31,
20212020
Beginning balance$29 $— 
Adjustment due to adoption of ASC 606— 19 
Capitalization of sales commissions costs56 25 
Amortization of sales commissions costs(30)(15)
Ending balance$55 $29 
Year Ended December 31,
20212020
Deferred costs, current
$30 $17 
Deferred costs, non-current
25 12 
Total
$55 $29 
v3.22.0.1
Stock-Based Compensation Expense (Tables)
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense recognized for December 31, 2021, 2020, and 2019, were as follows:

Year Ended December 31,
202120202019
Costs of revenue
$12 $7 $1 
Sales and marketing
24 16 1 
Research and development
48 30 3 
General and administrative
58 33 29 
$142 $86 $34 
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions
The following table indicates the weighted-average assumptions made in estimating the fair value as of December 31, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
Risk-free interest rate
1.00 %0.49 %2.12 %
Expected term (in years)
6.326.646.26
Expected volatility
65 %63 %60 %
Expected dividend yield
0 %0 %0 %
Weighted-average fair value of common stock
$17.00 $3.23 $1.85 
Weighted-average fair value per share of options issued
$10.12 $1.95 $1.12 
Share-based Payment Arrangement, Option, Activity
The following is a summary of stock option activity under our stock option plans:

Number of SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual TermAggregate Intrinsic Value(1)
(in years)
Outstanding as of December 31, 2020
58,035,220$2.08 8.27$447 
Granted(2)
9,869,50017.00 
Exercised(2)
(6,307,785)1.31 
Forfeited(2,679,917)4.88 
Outstanding as of December 31, 2021
58,917,018$4.53 7.65$1,778 
Options vested and expected to vest as of
December 31, 2020
58,035,220$2.08 8.27$447 
Options exercisable as of December 31, 2020
57,620,665$2.08 8.26$446 
Options vested and expected to vest as of
December 31, 2021
58,917,018$4.53 7.65$1,778 
Options exercisable as of December 31, 2021
58,852,018$4.50 7.65$1,778 
(1) The aggregate intrinsic value was determined as the difference between the estimated fair value of our common stock as of each reporting date prior to the completion of the IPO and the closing price of the Class A common stock on the last trading day of the month of December 2021, or the date of exercise, as appropriate, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their in-the-money options at period end.
Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option
At each Consolidated Balance Sheet date, shares subject to restriction consisted of the following:

Shares
Nonvested as of January 1, 2020
1,877,710 
Exercise of stock options
321,400 
Repurchases
(185,190)
Vested
(917,120)
Nonvested as of December 31, 2020
1,096,800 
Exercise of stock options
412,810 
Exercise of stock options in connection with promissory notes repayment14,267,650 
Repurchases
(35,665)
Vested
(11,607,640)
Nonvested as of December 31, 2021
4,133,955 
We reflect RSUs as issued and outstanding shares of common stock when such units vest. The following table summarizes RSU activity as of December 31, 2021:
RSUWeighted Average Grant Date Fair Value
Outstanding balance as of December 31, 2020
158,370 $2.21 
Granted15,681,204 29.80 
Vested(53,570)2.40 
Forfeited(401,195)26.06 
Outstanding balance as of December 31, 2021
15,384,809 $29.71 
v3.22.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
The components of income (loss) before provision for income taxes are as follows (in millions):

Year Ended December 31,
202120202019
United States$(493)$(249)$(212)
Foreign3 1 — 
Total loss before income taxes$(490)$(248)$(212)

The components of income tax (benefit) expense for the years ended December 31, 2021, 2020, and 2019, were as follows:
Year Ended December 31,
202120202019
Current state
$— $— $— 
Current foreign
— — — 
Current tax expense
— — — 
Deferred federal
(2)— (2)
Deferred state
(1)— (1)
Deferred tax benefit
(3)— (3)
Total income tax (benefit) expense
$(3)$— $(3)
Schedule of Deferred Tax Assets and Liabilities The tax effects of temporary differences that gave rise to a significant portion of the deferred tax assets and liabilities at December 31, 2021 and 2020, were as follows:
December 31,
20212020
Deferred tax assets:
Net operating loss carryforwards$150 $122 
Stock-based compensation expense19 3 
Credit carryforward24 17 
Accrued expenses and reserves13 8 
Charitable contributions5 — 
Deferred revenue7 8 
Deferred rent— 5 
Depreciation2 — 
Interest carryforwards— 1 
Convertible debt derivative— 6 
Inventory reserve1 2 
Lease liability25 — 
Total deferred tax assets246 172 
Valuation allowance(206)(154)
Net deferred tax assets40 18 
Deferred tax liabilities:
Amortization(4)(2)
Convertible debt— (6)
Other(2)(2)
Capitalized contract acquisition costs(14)(8)
Right-of-use asset(20)— 
Total deferred tax liabilities(40)(18)
Net deferred tax asset (liability)$— $— 
Schedule of Effective Income Tax Rate Reconciliation
A reconciliation of our effective tax rate to the United States federal income tax rate were as follows:

December 31,
202120202019
Tax provision at statutory rate
21.0%21.0%21.0%
State tax—net of federal
1.2%5.4%6.6%
Permanent items - Other
(0.6)%(0.8)%(0.4)%
Warrants(4.2)%—%—%
Convertible debt extinguishment(1.5)%—%—%
Research and development credits
1.0%1.6%1.8%
Stock-based compensation expense
(0.8)%(4.0)%(3.3)%
Derivative liability
(5.6)%(1.3)%—%
Other, net
—%0.3%0.2%
Change in valuation allowance
(10.0)%(22.3)%(24.4)%
Effective Tax Rate
0.5%(0.1)%1.5%
v3.22.0.1
Loss Per Share (Tables)
 12 Months Ended
Dec. 31, 2021
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
Year Ended December 31,
202120202019
Numerator:
Net loss$(487)$(248)$(209)
Redemption of Series B Preferred Stock— (1)— 
Net loss attributable to common stockholders$(487)$(249)$(209)
Denominator:
Weighted average shares of common stock outstanding-basic and diluted289,584,001199,982,965194,820,145
Net loss per share attributable to common stockholders-basic and diluted$(1.68)$(1.25)$(1.08)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
We excluded the following potential shares of common stock from the computation of diluted net loss per share because including them would have an antidilutive effect for the years ended December 31, 2021, 2020, and 2019:
Year Ended December 31,
202120202019
Options to purchase Class B common stock
58,917,018 58,035,220 51,262,585 
Unvested restricted stock
4,133,955 1,096,800 1,877,710 
Unvested restricted stock units15,384,809 — — 
Shares issued for exercise of non-recourse notes
— 14,267,650 15,057,340 
Convertible preferred stock (as converted to common stock)
— 253,832,025 209,608,075 
Warrants to purchase Class B common stock and common stock and preferred stock (as if converted to warrants to purchase common stock)
7,961,455 1,002,035 1,002,035 
Total86,397,237 328,233,730 278,807,745 
v3.22.0.1
Segment Information (Tables)
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Long-lived Assets by Geographic Areas
The following table sets forth the breakdown of long-lived assets based on geography:
December 31,
20212020
United States
$119 $44 
Ireland
1 — 
Total long-lived assets$120 $44 
Tangible long-lived assets consist of property and equipment and operating lease right-of-use assets. Long-lived assets attributed to the United States and Ireland are based upon the country in which the asset is located.
v3.22.0.1
Commitment and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Unrecorded Unconditional Purchase Obligations Disclosure As of December 31, 2021, the future minimum payments under our non-cancelable purchase commitments were as follows:
Year ending December 31,Amount
2022
$304 
2023
8 
  2024
3 
Total future minimum payments$315 
v3.22.0.1
Description of Business and Basis of Presentation (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Sep. 24, 2021
USD ($)
vote
$ / shares
shares
Sep. 09, 2021
Dec. 31, 2021
USD ($)
shares
Dec. 31, 2020
USD ($)
shares
Dec. 31, 2019
USD ($)
shares
Sep. 23, 2021
shares
Dec. 31, 2018
shares
Class of Stock [Line Items]              
Convertible preferred stock, outstanding (in shares) | shares     0 253,832,025 209,608,075   163,820,050
Common stock, authorized (in shares) | shares     0 570,000,000      
Preferred stock, authorized (in shares) | shares 100,000,000   100,000,000 100,000,000      
Stock split, conversion ratio   5          
Stock-based compensation expense | $     $ 142,000 $ 86,000 $ 34,000    
COVID-19              
Class of Stock [Line Items]              
Lease termination penalty | $     3,000 17,000      
Loss on lease termination | $     1,000 3,000      
Write-offs of certain leasehold improvements | $     $ 1,000        
Upfront payment for lease termination | $       10,000      
Liability for lease termination fees | $       7,000      
Accelerated depreciation | $       16,000      
Severance costs | $       10,000      
Stock-based compensation expense | $       $ 3,000      
Common Class B              
Class of Stock [Line Items]              
Convertible preferred stock, outstanding (in shares) | shares           253,832,025  
Outstanding warrants (in shares) | shares           1,002,035  
Common stock, authorized (in shares) | shares 700,000,000   700,000,000 0      
Common stock, convertible (in shares) | shares 1            
Number of voting rights | vote 10            
Common Class A              
Class of Stock [Line Items]              
Common stock, authorized (in shares) | shares 7,000,000,000   7,000,000,000 0      
Number of voting rights | vote 1            
IPO              
Class of Stock [Line Items]              
Sale of stock, number of shares issued (in shares) | shares 25,000,000,000,000            
Sale of stock, share price (in dollars per share) | $ / shares $ 40.00            
Sale of stock, consideration received | $ $ 944,000            
Over-Allotment Option              
Class of Stock [Line Items]              
Sale of stock, number of shares issued (in shares) | shares 3,260,869,000,000            
v3.22.0.1
Summary of Significant Accounting Policies - Narrative (Details)
 12 Months Ended
Dec. 31, 2021
USD ($)
revenue_type
class
Dec. 31, 2020
USD ($)
revenue_type
Dec. 31, 2019
USD ($)
revenue_type
Sep. 24, 2021
USD ($)
Dec. 31, 2018
USD ($)
Subsidiary, Sale of Stock [Line Items]          
Number of revenue types | revenue_type 4 4 4    
Provision for excess and obsolete inventory $ 3,000,000 $ 5,000,000      
Weighted average discount rate (as a percent) 2.62%        
Goodwill impairment loss $ 0 0 $ 0    
Advertising expense $ 17,000,000 6,000,000 8,000,000    
Number of classes of stock | class 2        
Operating lease right-of-use assets $ 79,000,000        
Operating lease obligations 99,000,000        
Accumulated deficit 1,091,000,000 $ (471,000,000) (330,000,000)   $ (158,000,000)
Restricted Stock Units (RSUs)          
Subsidiary, Sale of Stock [Line Items]          
Award vesting period   4 years      
Accumulated Deficit          
Subsidiary, Sale of Stock [Line Items]          
Accumulated deficit (1,102,000,000) $ (616,000,000) (386,000,000)   $ (177,000,000)
Accounting Standards Update 2016-02          
Subsidiary, Sale of Stock [Line Items]          
Operating lease right-of-use assets   95,000,000      
Operating lease obligations   115,000,000      
Cumulative adjustment for adoption new accounting standard          
Subsidiary, Sale of Stock [Line Items]          
Accumulated deficit   1,000,000 18,000,000    
Cumulative adjustment for adoption new accounting standard | Accumulated Deficit          
Subsidiary, Sale of Stock [Line Items]          
Accumulated deficit   $ 1,000,000 18,000,000    
Cumulative adjustment for adoption new accounting standard | Accounting Standards Update 2014-09 | Accumulated Deficit          
Subsidiary, Sale of Stock [Line Items]          
Accumulated deficit     $ 18,000,000    
Minimum          
Subsidiary, Sale of Stock [Line Items]          
Face amount per loan 5,000        
Maximum          
Subsidiary, Sale of Stock [Line Items]          
Face amount per loan $ 250,000        
Initial Public Offering          
Subsidiary, Sale of Stock [Line Items]          
Deferred offering costs       $ 6,000,000  
v3.22.0.1
Summary of Significant Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Accounting Policies [Abstract]        
Cash and cash equivalents $ 809,000 $ 582,000 $ 150,000  
Cash held on behalf of customers 34,000 11,000 7,000  
Restricted cash 8,000 1,000 2,000  
Total cash, cash equivalents, cash held on behalf of customers and restricted cash $ 851,000 $ 594,000 $ 159,000 $ 76,000
v3.22.0.1
Summary of Significant Accounting Policies - Schedule of Accounts Receivable and Allowance For Credit Losses (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Accounts receivable $ 20,000 $ 5,000
Unbilled receivables 39,000 32,000
Less: Allowance for credit losses (4,000) (4,000)
Accounts receivable, net 55,000 33,000
Accounts Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning balance (4,000) (5,000)
Additions (1,000) (5,000)
Write-offs 3,000 6,000
Ending balance (4,000) (4,000)
Cumulative adjustment for adoption new accounting standard    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Less: Allowance for credit losses   (2,000)
Accounts Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning balance $ (2,000)  
Ending balance   $ (2,000)
v3.22.0.1
Summary of Significant Accounting Policies - Schedule of Useful Lives (Details)
 12 Months Ended
Dec. 31, 2021
Computer and other equipment  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Furniture and fixtures  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Tooling  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Capitalized software  
Property, Plant and Equipment [Line Items]  
Useful life 2 years
v3.22.0.1
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Intangible Assets (Details)
 12 Months Ended
Dec. 31, 2021
Acquired technology | Minimum  
Finite-Lived Intangible Assets [Line Items]  
Intangible asset, useful life 3 years
Acquired technology | Maximum  
Finite-Lived Intangible Assets [Line Items]  
Intangible asset, useful life 10 years
Customer acquired intangible assets  
Finite-Lived Intangible Assets [Line Items]  
Intangible asset, useful life 6 years
Trade Names  
Finite-Lived Intangible Assets [Line Items]  
Intangible asset, useful life 1 year 6 months
v3.22.0.1
Summary of Significant Accounting Polices - Schedule of Effect of New Accounting Standard ASC 326 (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Jan. 01, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accounts Receivable, Net     $ 33    
Accrued Expenses and Other Current Liabilities $ 246   63    
Deferred revenue 44   43    
Accumulated deficit 1,091   (471) $ (330) $ (158)
Accumulated Deficit          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accumulated deficit $ (1,102)   (616) (386) $ (177)
Accounting Standards Update 2016-13          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accounts Receivable, Net     1    
Accrued Expenses and Other Current Liabilities     1    
Deferred revenue     1    
Accounting Standards Update 2016-13 | Accumulated Deficit          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accumulated deficit     (616)    
Cumulative Effect, Period of Adoption, Adjusted Balance          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accounts Receivable, Net       21  
Deferred revenue       37  
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accounts Receivable, Net   $ 3      
Accrued Expenses and Other Current Liabilities   3      
Deferred revenue   0      
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2016-13 | Accumulated Deficit          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accumulated deficit   (615)      
Cumulative adjustment for adoption new accounting standard          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accumulated deficit     1 18  
Cumulative adjustment for adoption new accounting standard | Accumulated Deficit          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accumulated deficit     $ 1 $ 18  
Cumulative adjustment for adoption new accounting standard | Accounting Standards Update 2016-13          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accounts Receivable, Net   2      
Accrued Expenses and Other Current Liabilities   2      
Deferred revenue   (1)      
Cumulative adjustment for adoption new accounting standard | Accounting Standards Update 2016-13 | Accumulated Deficit          
New Accounting Pronouncements or Change in Accounting Principle [Line Items]          
Accumulated deficit   $ 1      
v3.22.0.1
Summary of Significant Accounting Polices - Schedule of Effect of New Accounting Standard ASC 606 (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Consolidated Balance Sheets      
Accounts Receivable, Net   $ 33  
Deferred revenue $ 44 43  
Deferred revenue, non-current 12 16  
Accumulated deficit (1,102) (616)  
Deferred costs, net 30 17  
Deferred costs, non-current 25 12  
Consolidated Statement of Operations and Comprehensive Loss      
Revenues 1,705 823 $ 665
Sales and marketing 190 138 128
Net loss (487) (248) (209)
Without Adoption (ASC 605)      
Consolidated Balance Sheets      
Accounts Receivable, Net   11 15
Current portion of deferred revenue     39
Deferred revenue   26  
Deferred revenue, net of current portion     21
Deferred revenue, non-current   16  
Accumulated deficit   (650) (386)
Deferred costs, net   0  
Deferred costs, non-current   0  
Consolidated Statement of Operations and Comprehensive Loss      
Sales and marketing   149  
Net loss   (264)  
Impact of Adoption | Accounting Standards Update 2014-09      
Consolidated Balance Sheets      
Accounts Receivable, Net   22  
Deferred revenue   17  
Deferred revenue, non-current   0  
Accumulated deficit   34  
Deferred costs, net   17  
Deferred costs, non-current   12  
Consolidated Statement of Operations and Comprehensive Loss      
Sales and marketing   (11)  
Net loss   16  
Hardware      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues 112 64 55
Hardware | Without Adoption (ASC 605)      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues   60  
Hardware | Impact of Adoption | Accounting Standards Update 2014-09      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues   4  
Subscription services      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues 169 101 62
Subscription services | Without Adoption (ASC 605)      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues   99  
Subscription services | Impact of Adoption | Accounting Standards Update 2014-09      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues   2  
Professional services      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues $ 18 14 16
Professional services | Without Adoption (ASC 605)      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues   13  
Professional services | Impact of Adoption | Accounting Standards Update 2014-09      
Consolidated Statement of Operations and Comprehensive Loss      
Revenues   $ 1  
Cumulative adjustment for adoption new accounting standard | Impact of Adoption | Accounting Standards Update 2014-09      
Consolidated Balance Sheets      
Accounts Receivable, Net     6
Deferred costs, net     10
Deferred costs, non-current     9
Deferred revenue     (2)
Deferred revenue, non-current     9
Accumulated deficit     18
Cumulative Effect, Period of Adoption, Adjusted Balance      
Consolidated Balance Sheets      
Accounts Receivable, Net     21
Deferred costs, net     10
Deferred costs, non-current     9
Deferred revenue     37
Deferred revenue, non-current     30
Accumulated deficit     $ (368)
v3.22.0.1
Business Combinations - Narrative (Details) - USD ($)
 12 Months Ended
Jun. 08, 2021
Jul. 19, 2019
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Jul. 17, 2019
Business Acquisition [Line Items]            
Stock-based compensation expense     $ 142,000,000 $ 86,000,000 $ 34,000,000  
xtraCHEF, Inc.            
Business Acquisition [Line Items]            
Voting interest acquired (as a percent) 100.00%          
Cash acquired from acquisition $ 1,000,000          
Number of common units issued for acquisition (in shares) 569,400          
Fair value of common shares issued (in dollars per share) $ 26.10          
Equity interests settled in cash $ 3,000,000          
Equity interests settled, deferred consideration 1,000,000          
Equity interests settled 3,000,000          
Equity interests settled, consideration transferred for services 1,000,000          
Stock-based compensation expense 2,000,000          
Contingent consideration liability 2,000,000   5,000,000      
Contingent consideration obligation, maximum payment amount 7,000,000          
Liability related to indemnity fund $ 6,000,000          
Deferred payments for indemnity funds, period following acquisition date 15 months          
Contingent liability, current     4,000,000      
Contingent liability, noncurrent     1,000,000      
Goodwill, tax deductible amount $ 0          
Acquisition related costs     $ 1,000,000      
xtraCHEF, Inc. | Developed Technology            
Business Acquisition [Line Items]            
Finite lived intangibles acquired $ 13,000,000          
Finite lived intangibles acquired, weighted average useful life 10 years          
xtraCHEF, Inc. | Customer Relationships            
Business Acquisition [Line Items]            
Finite lived intangibles acquired $ 1,000,000          
Finite lived intangibles acquired, weighted average useful life 6 years          
Stratex            
Business Acquisition [Line Items]            
Voting interest acquired (as a percent)           100.00%
Number of common units issued for acquisition (in shares)   543,300        
Goodwill, tax deductible amount           $ 0
Acquisition related costs   $ 1,000,000        
Cash purchase consideration   36,000,000        
Shares issued, fair value           $ 3,000,000
Earn out bonuses   $ 7,000,000        
Earn out bonuses, period   3 years        
v3.22.0.1
Business Combinations - Schedule of Preliminary Aggregate Purchase Price (Details) - USD ($)
$ in Millions
 12 Months Ended
Jun. 08, 2021
Jul. 19, 2019
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Jul. 17, 2019
Business Acquisition [Line Items]            
Cash paid for acquisition, net of customer funds obligations assumed     $ 26 $ 0 $ 41  
Contingent consideration for acquisition included in purchase price     2 $ 0 $ 0  
xtraCHEF, Inc.            
Business Acquisition [Line Items]            
Cash paid for acquisition, net of customer funds obligations assumed $ 24          
Fair value of common stock issued 15          
Fair value of settled stock option awards 1          
Contingent consideration for acquisition included in purchase price 2          
Liabilities settled on behalf of xtraCHEF 1          
Deferred payments for indemnity claims and working capital funds, net of adjustments 5          
Total purchase price $ 48          
Total purchase price     $ 48      
Deferred payments for indemnity funds, period following acquisition date 15 months          
Deferred cash payments, period following acquisition date 12 months          
Stratex            
Business Acquisition [Line Items]            
Cash paid for acquisition, net of customer funds obligations assumed   $ 36        
Fair value of common stock issued   3        
Liabilities settled on behalf of xtraCHEF   5        
Total purchase price   $ 39        
Total purchase price           $ 44
v3.22.0.1
Business Combinations - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Jul. 17, 2019
Business Acquisition [Line Items]        
Goodwill $ 74 $ 36 $ 36  
xtraCHEF, Inc.        
Business Acquisition [Line Items]        
Intangible assets 14      
Goodwill 38      
Deferred tax liability (3)      
Other (1)      
Net assets acquired $ 48      
Stratex        
Business Acquisition [Line Items]        
Goodwill       $ 36
Net working capital       (1)
Deferred tax liability       (3)
Net assets acquired       44
Stratex | Technology Asset        
Business Acquisition [Line Items]        
Intangible assets       9
Stratex | Customer Relationships        
Business Acquisition [Line Items]        
Intangible assets       $ 3
v3.22.0.1
Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Jun. 21, 2021
Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants $ 181,000 $ 125,000 $ 11,000
Fair Value, Recurring      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Total assets 507,000   142,000
Warrants 181,000   11,000
Contingent consideration 5,000    
Derivative Liability     37,000
Total liabilities 186,000   48,000
Fair Value, Recurring | Money market funds      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 50,000   142,000
Fair Value, Recurring | Commercial paper      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 134,000    
Fair Value, Recurring | Certificates of deposit      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 14,000    
Fair Value, Recurring | Corporate bonds      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 193,000    
Fair Value, Recurring | Treasury securities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 67,000    
Fair Value, Recurring | Asset-backed securities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 49,000    
Fair Value, Recurring | Level 1      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Total assets 50,000   142,000
Warrants 0   0
Contingent consideration 0    
Derivative Liability     0
Total liabilities 0   0
Fair Value, Recurring | Level 1 | Money market funds      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 50,000   142,000
Fair Value, Recurring | Level 1 | Commercial paper      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 1 | Certificates of deposit      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 1 | Corporate bonds      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 1 | Treasury securities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 1 | Asset-backed securities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 2      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Total assets 457,000   0
Warrants 0   0
Contingent consideration 0    
Derivative Liability     0
Total liabilities 0   0
Fair Value, Recurring | Level 2 | Money market funds      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0   0
Fair Value, Recurring | Level 2 | Commercial paper      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 134,000    
Fair Value, Recurring | Level 2 | Certificates of deposit      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 14,000    
Fair Value, Recurring | Level 2 | Corporate bonds      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 193,000    
Fair Value, Recurring | Level 2 | Treasury securities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 67,000    
Fair Value, Recurring | Level 2 | Asset-backed securities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 49,000    
Fair Value, Recurring | Level 3      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Total assets 0   0
Warrants 181,000   11,000
Contingent consideration 5,000    
Derivative Liability     37,000
Total liabilities 186,000   48,000
Fair Value, Recurring | Level 3 | Money market funds      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0   $ 0
Fair Value, Recurring | Level 3 | Commercial paper      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 3 | Certificates of deposit      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 3 | Corporate bonds      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 3 | Treasury securities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets 0    
Fair Value, Recurring | Level 3 | Asset-backed securities      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Assets $ 0    
v3.22.0.1
Fair Value of Financial Instruments - Weighted Average Assumptions (Details) - Level 3
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Risk-free interest rate | Preferred Stock Warrants      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 0.008 0.003 0.018
Risk-free interest rate | Common Stock Warrant Liability      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 0.013    
Contractual term (in years) | Preferred Stock Warrants      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 5    
Contractual term (in years) | Preferred Stock Warrants | Minimum      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs   5 6
Contractual term (in years) | Preferred Stock Warrants | Maximum      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs   7 8
Contractual term (in years) | Common Stock Warrant Liability      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 5    
Expected volatility | Preferred Stock Warrants      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 0.54 0.60 0.56
Expected volatility | Common Stock Warrant Liability      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 0.508    
Expected dividend yield | Preferred Stock Warrants      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 0 0 0
Expected dividend yield | Common Stock Warrant Liability      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 0    
Exercise price | Preferred Stock Warrants      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 0.74 0.74 0.74
Exercise price | Common Stock Warrant Liability      
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]      
Warrants, measurement inputs 17.15    
v3.22.0.1
Fair Value of Financial Instruments - Narrative (Details) - USD ($)
 1 Months Ended
Jun. 30, 2020
Dec. 31, 2021
Jun. 08, 2021
Dec. 31, 2020
Jun. 19, 2020
Level 3          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Fair value of Convertible Notes       $ 249,000,000  
Convertible Notes          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Debt issued $ 200,000,000       $ 200,000,000
Equity value of Convertible Notes $ 9,500,000,000        
Rate of issuance as a percent of common stock 66.67%        
xtraCHEF, Inc.          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Contingent consideration liability   $ 5,000,000 $ 2,000,000    
v3.22.0.1
Fair Value of Financial Instruments - Rollforward of Level 3 Inputs (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Warrants | Preferred Stock Warrants    
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Beginning balance $ 11,000 $ 3,000
Fair value at issuance 0 0
Change in fair value and other adjustments 38,000 8,000
Settlement (43,000)  
Conversion of preferred stock warrants into common stock warrants upon the IPO (6,000)  
Ending balance 0 11,000
Warrants | Common Stock Warrant Liability    
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Beginning balance 0 0
Fair value at issuance 125,000 0
Change in fair value and other adjustments 59,000 0
Settlement (9,000)  
Conversion of preferred stock warrants into common stock warrants upon the IPO 6,000  
Ending balance 181,000 0
Derivative Liability    
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Beginning balance 37,000 0
Fair value at issuance 0 30,000
Change in fair value and other adjustments 103,000 7,000
Settlement (140,000)  
Ending balance 0 37,000
Contingent Consideration Liability    
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Beginning balance 0 0
Fair value at issuance 0 0
Change in fair value and other adjustments 3,000 0
Fair value on the acquisition date 2,000  
Settlement 0  
Ending balance $ 5,000 $ 0
v3.22.0.1
Marketable Securities - Schedule of Available-for-Sale Securities (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 458,000  
Gross Unrealized Losses (1,000)  
Fair Value 457,000 $ 0
Commercial paper    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 134,000  
Gross Unrealized Losses 0  
Fair Value 134,000  
Certificates of deposit    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 14,000  
Gross Unrealized Losses 0  
Fair Value 14,000  
Corporate bonds    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 194,000  
Gross Unrealized Losses (1,000)  
Fair Value 193,000  
Treasury securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 67,000  
Gross Unrealized Losses 0  
Fair Value 67,000  
Asset-backed securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 49,000  
Gross Unrealized Losses 0  
Fair Value $ 49,000  
v3.22.0.1
Marketable Securities - Scheduled Maturities of Available-for-Sale Securities (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]    
Due within 1 year $ 284,000,000  
Due after 1 year through 5 years 173,000,000  
Due after 5 years through 10 years 0  
Total marketable securities 457,000,000 $ 0
Impairment losses on marketable securities $ 0  
v3.22.0.1
Merchant Cash Advances Receivable and Acquired Loans Receivable, Net - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2021
Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Principal balance of rights sold $ 12,000    
Acquired loans outstanding   $ 2,000 $ 3,000
Minimum      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Face amount per loan   5  
Maximum      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Face amount per loan   $ 250  
Toast Capital | Minimum      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Face amount per loan 5    
Toast Capital | Maximum      
Accounts, Notes, Loans and Financing Receivable [Line Items]      
Face amount per loan $ 250    
v3.22.0.1
Merchant Cash Advances Receivable and Acquired Loans Receivable, Net - Schedule of Negative Allowance (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2021
USD ($)
Financing Receivable, Allowance for Credit Loss [Line Items]  
Beginning balance $ (4)
Ending balance  
Acquired Loans and Merchant Cash Advances Receivable  
Financing Receivable, Allowance for Credit Loss [Line Items]  
Beginning balance 0
Credit loss expense 1
Reduction due to cash collections (3)
Ending balance (1)
Cumulative adjustment for adoption new accounting standard | Acquired Loans and Merchant Cash Advances Receivable  
Financing Receivable, Allowance for Credit Loss [Line Items]  
Beginning balance $ 3
Ending balance  
v3.22.0.1
Merchant Cash Advances Receivable and Acquired Loans Receivable, Net - Schedule of Financing Receivables (Details) - USD ($)
$ in Millions
Dec. 31, 2020
Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Balance $ 5  
Less: Allowance (4)  
Financing receivable, net 1  
MCA Receivable    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Balance 1  
Less: Allowance (1) $ 0
Financing receivable, net 0  
Loans Receivable    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Balance 3  
Less: Allowance (3) $ 0
Financing receivable, net 0  
Factor Receivable    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Balance 1  
Less: Allowance 0  
Financing receivable, net $ 1  
v3.22.0.1
Merchant Cash Advances Receivable and Acquired Loans Receivable, Net - Schedule of Allowance For Credit Losses (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2020
USD ($)
Financing Receivable, Allowance for Credit Loss [Roll Forward]  
Beginning balance  
Ending balance $ 4
MCA Receivable  
Financing Receivable, Allowance for Credit Loss [Roll Forward]  
Beginning balance 0
Repayments 0
Write offs 1
Ending balance 1
Loans Receivable  
Financing Receivable, Allowance for Credit Loss [Roll Forward]  
Beginning balance 0
Repayments 2
Write offs 5
Ending balance $ 3
v3.22.0.1
Inventory (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Inventory Disclosure [Abstract]    
Finished goods $ 41,000 $ 17,000
Components of finished goods 1,000 6,000
Capitalized overhead 2,000 1,000
Reserve for excess and obsolete inventory (2,000) (5,000)
Inventories $ 42,000 $ 19,000
v3.22.0.1
Prepaid Expenses and Other Current Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]      
Cash held on behalf of customers $ 34,000 $ 11,000 $ 7,000
Prepaid SaaS expenses 11,000 6,000  
Prepaid expenses 13,000 2,000  
Prepaid Insurance 6,000 0  
Deposits for inventory purchases 21,000 0  
Other current assets 7,000 3,000  
Prepaid expenses and other current assets $ 92,000 $ 22,000  
v3.22.0.1
Loan Servicing Activities - Narrative (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Non-contingent stand-ready liability    
Guarantor Obligations [Line Items]    
Guarantee liability $ 1,000 $ 1,000
Bank Partner    
Guarantor Obligations [Line Items]    
Face amount per loan $ 250  
v3.22.0.1
Loan Servicing Activities - Rollforward of Credit Losses (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2021
USD ($)
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]  
Beginning balance $ 0
Credit loss expense 2
Reductions due to loan purchases (1)
Ending balance 2
Cumulative adjustment for adoption new accounting standard  
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]  
Beginning balance $ 1
v3.22.0.1
Property and Equipment, net - Schedule of Property and Equipment, Net (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 72 $ 59
Less: Accumulated depreciation (31) (15)
Property and equipment, net 41 44
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 29 30
Capitalized software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 25 18
Computer equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 8 3
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 8 7
Tooling and equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 2 $ 1
v3.22.0.1
Property and Equipment, net - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Property, Plant and Equipment [Abstract]      
Depreciation expense $ 9 $ 19 $ 3
Capitalized software 8 9  
Capitalized software and development costs 10 10  
Capitalized software, depreciation $ 8 $ 5 $ 3
v3.22.0.1
Goodwill and Intangible Assets - Rollforward of Goodwill (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Goodwill [Roll Forward]    
Beginning balance $ 36 $ 36
Acquisitions 38 0
Ending balance $ 74 $ 36
v3.22.0.1
Goodwill and Intangible Assets - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]      
Goodwill impairment loss $ 0 $ 0 $ 0
v3.22.0.1
Goodwill and Intangible Assets - Schedule of Intangible Assets, Net (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount $ 26 $ 12
Accumulated amortization (10) (5)
Intangible assets, net 16 7
Technology Asset    
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount 22 9
Accumulated amortization (8) (4)
Intangible assets, net 14 5
Customer Assets    
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount 4 3
Accumulated amortization (2) (1)
Intangible assets, net $ 2 $ 2
v3.22.0.1
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]    
2022 $ 4  
2023 2  
2024 2  
2025 1  
2026 1  
Thereafter 6  
Intangible assets, net $ 16 $ 7
v3.22.0.1
Lessee Arrangements - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2021
Leases [Abstract]      
Weighted average remaining lease term     6 years 10 months 24 days
Weighted average discount rate (as a percent)     2.62%
Lease not yet commenced, amount     $ 3
Rent expense $ 28    
Letters of credit     $ 13
Rent expense   $ 15  
v3.22.0.1
Lessee Arrangements - Schedule of Components of Lease Expense (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2021
USD ($)
Leases [Abstract]  
Operating lease expense $ 25
Variable lease expense 1
Total $ 26
v3.22.0.1
Lessee Arrangements - Schedule of Maturities of Operating Lease Liabilities (Details)
$ in Millions
Dec. 31, 2021
USD ($)
Leases [Abstract]  
2022 $ 22
2023 13
2024 13
2025 12
2026 12
Thereafter 36
Total future minimum lease payments 108
Less: Imputed interest 9
Present value of future minimum lease payments $ 99
v3.22.0.1
Lessee Arrangements - Schedule of Supplemental Cash Flow Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Jan. 01, 2021
Dec. 31, 2021
Dec. 31, 2021
Lessee, Lease, Description [Line Items]      
Operating cash flows for operating leases   $ 25  
Operating lease right of use assets obtained in exchange for new or modified lease obligations:   $ 99 $ 4
Accounting Standards Update 2016-02      
Lessee, Lease, Description [Line Items]      
Operating lease right of use assets obtained in exchange for new or modified lease obligations: $ 95    
v3.22.0.1
Accrued Expenses and Other Current Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Payables and Accruals [Abstract]    
Accrued transaction-based costs $ 120 $ 14
Accrued payroll and bonus 24 12
Customer funds obligation 34 11
Accrued expenses 21 8
Accrued commissions 19 7
Sales returns and allowances 9 4
Other liabilities 19 7
Total accrued expenses and other current liabilities $ 246 $ 63
v3.22.0.1
Debt - Narrative (Details) - USD ($)
 1 Months Ended 12 Months Ended
Jun. 21, 2021
Jun. 08, 2021
Jun. 30, 2020
Mar. 31, 2019
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Jun. 19, 2020
Debt Instrument [Line Items]                
Letters of credit         $ 13,000,000      
Warrants issued (in shares) 8,113,585              
Warrants issued, exercise price (in dollars per share) $ 17.51              
Warrants $ 125,000,000       181,000,000 $ 11,000,000    
Change in fair value of warrant liability 141,000,000       97,000,000 8,000,000 $ 1,000,000  
Loss on debt extinguishment         50,000,000 0 0  
Change in fair value of derivative liability         103,000,000 7,000,000 $ 0  
Line of Credit | Revolving Credit Facility | 2019 Credit Facility                
Debt Instrument [Line Items]                
Maximum borrowing capacity       $ 100,000,000        
Proceeds from issuance of long-term debt           0    
Long term debt, amount available           0    
Remaining borrowing capacity           86,000,000    
Line of Credit | Revolving Credit Facility | 2019 Credit Facility | London Interbank Offered Rate (LIBOR)                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       3.00%        
Line of Credit | Revolving Credit Facility | 2019 Credit Facility | Base Rate                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)       2.00%        
Line of Credit | Revolving Credit Facility | 2021 Credit Facility                
Debt Instrument [Line Items]                
Maximum borrowing capacity   $ 330,000,000            
Long term debt, amount available         0      
Remaining borrowing capacity         330,000,000      
Minimum liquidity amount   250,000,000            
Debt issuance costs   $ 3,000,000            
Line of Credit | Revolving Credit Facility | 2021 Credit Facility | London Interbank Offered Rate (LIBOR)                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)   1.50%            
Line of Credit | Revolving Credit Facility | 2021 Credit Facility | Prime Rate                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)   0.50%            
Line of Credit | Revolving Credit Facility | 2021 Credit Facility | Federal Reserve Bank of New York Rate                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)   0.50%            
Line of Credit | Revolving Credit Facility | 2021 Credit Facility | Adjusted LIBOR Rate                
Debt Instrument [Line Items]                
Basis spread on variable rate (as a percent)   1.00%            
Line of Credit | Letter of Credit | 2019 Credit Facility                
Debt Instrument [Line Items]                
Long term debt, amount available           14,000,000    
Convertible Notes                
Debt Instrument [Line Items]                
Long term debt, amount available           172,000,000    
Debt issued     $ 200,000,000         $ 200,000,000
Interest rate (as a percent)               8.50%
Interest rate payable in cash (as a percent)               50.00%
Interest rate payable in kind (as a percent)               50.00%
Interest expense         $ 12,000,000 $ 12,000,000    
Exit fee (as a percent)         15.00%      
Effective interest rate (as a percent)         13.33%      
Rate of issuance as a percent of common stock     66.67%          
Repayments of convertible notes 183,000,000              
Aggregate amount of convertible notes prepaid 249,000,000              
Aggregate settlement consideration $ 374,000,000              
Loss on debt extinguishment         $ 50,000,000      
v3.22.0.1
Debt - Schedule of Convertible Notes (Details) - Convertible Notes
$ in Thousands
Dec. 31, 2020
USD ($)
Debt Instrument [Line Items]  
Convertible notes $ 200,000
Accrued paid in kind interest 5,000
Less: Unamortized discount (33,000)
Long-term debt, net of discount $ 172,000
v3.22.0.1
Warrants to Purchase Preferred and Common Stock - Narrative (Details) - USD ($)
$ / shares in Units, $ in Thousands
 1 Months Ended 3 Months Ended 12 Months Ended
Jun. 21, 2021
Feb. 28, 2022
Dec. 31, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Sep. 23, 2021
Class of Warrant or Right [Line Items]              
Warrants issued, exercise price (in dollars per share) $ 17.51            
Warrants $ 125,000   $ 181,000 $ 181,000 $ 11,000    
Warrants issued (in shares) 8,113,585            
Change in fair value of warrant liability $ 141,000     97,000 $ 8,000 $ 1,000  
Subsequent Event              
Class of Warrant or Right [Line Items]              
Change in fair value of warrant liability   $ 6,000          
Minimum              
Class of Warrant or Right [Line Items]              
Contractual term         8 years    
Maximum              
Class of Warrant or Right [Line Items]              
Contractual term         10 years 6 months    
Other income (expense)              
Class of Warrant or Right [Line Items]              
Change in fair value of warrant liability       (38,000) $ (8,000) $ (1,000)  
Preferred Stock Warrants, Prior To March 2019              
Class of Warrant or Right [Line Items]              
Warrants         $ 11,000    
Common Stock Warrant Liability              
Class of Warrant or Right [Line Items]              
Warrants issued, exercise price (in dollars per share) $ 17.51            
Warrants Exercised, Prior to September 30              
Class of Warrant or Right [Line Items]              
Change in fair value of warrant liability       $ 19,000      
Warrants Exercised, October 2021              
Class of Warrant or Right [Line Items]              
Change in fair value of warrant liability     $ 62,000        
Common Class B              
Class of Warrant or Right [Line Items]              
Outstanding warrants (in shares)             1,002,035
Common Class B | Subsequent Event              
Class of Warrant or Right [Line Items]              
Issuance of common stock upon net exercise of common stock warrants (in shares)   371,573          
Series B Preferred Stock | Preferred Stock Warrants, Issued 2015              
Class of Warrant or Right [Line Items]              
Warrants issued, exercise price (in dollars per share)     $ 0.40 $ 0.40      
Series C Preferred Stock | Preferred Stock Warrants, Issued 2018              
Class of Warrant or Right [Line Items]              
Warrants issued, exercise price (in dollars per share)     $ 1.40 $ 1.40      
v3.22.0.1
Convertible Preferred Stock - Narrative (Details) - USD ($)
$ / shares in Units, $ in Millions
 1 Months Ended 3 Months Ended 12 Months Ended
Oct. 31, 2020
Mar. 31, 2019
Apr. 30, 2020
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2021
Dec. 31, 2018
Temporary Equity [Line Items]              
Preferred stock, outstanding (in shares)       253,832,025 209,608,075 0 163,820,050
Issuance of preferred stock (in shares)       44,301,220 45,788,025    
Issuance of preferred stock       $ 403 $ 250    
Series E Preferred Stock              
Temporary Equity [Line Items]              
Preferred stock, outstanding (in shares)       45,788,025      
Issuance of preferred stock (in shares)   45,788,025          
Purchase price per share (in dollars per share)   $ 5.46          
Issuance of preferred stock   $ 250          
Series F Preferred Stock              
Temporary Equity [Line Items]              
Preferred stock, outstanding (in shares)       44,301,220      
Issuance of preferred stock (in shares)     44,301,220        
Purchase price per share (in dollars per share)     $ 9.09        
Issuance of preferred stock     $ 403        
Series B Preferred Stock              
Temporary Equity [Line Items]              
Preferred stock, outstanding (in shares)       75,803,515      
Stock repurchased (in shares) 77,270            
Preferred stock repurchased $ 1            
v3.22.0.1
Convertible Preferred Stock - Summary of Convertible Preferred Stock (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Temporary Equity [Line Items]        
Preferred stock, authorized (in shares) 0 257,245,680    
Preferred stock, issued (in shares) 0 253,832,025    
Convertible preferred stock, outstanding (in shares) 0 253,832,025 209,608,075 163,820,050
Carrying Value   $ 849    
Liquidation Preference $ 0 $ 850    
Common Stock Issuable Upon Conversion (in shares)   253,832,025    
Series A Preferred Stock        
Temporary Equity [Line Items]        
Preferred stock, authorized (in shares)   18,072,290    
Preferred stock, issued (in shares)   18,072,290    
Convertible preferred stock, outstanding (in shares)   18,072,290    
Carrying Value   $ 2    
Liquidation Preference   $ 2    
Common Stock Issuable Upon Conversion (in shares)   18,072,290    
Series B Preferred Stock        
Temporary Equity [Line Items]        
Preferred stock, authorized (in shares)   76,536,695    
Preferred stock, issued (in shares)   75,803,515    
Convertible preferred stock, outstanding (in shares)   75,803,515    
Carrying Value   $ 29    
Liquidation Preference   $ 30    
Common Stock Issuable Upon Conversion (in shares)   75,803,515    
Series C Preferred Stock        
Temporary Equity [Line Items]        
Preferred stock, authorized (in shares)   38,773,865    
Preferred stock, issued (in shares)   36,643,445    
Convertible preferred stock, outstanding (in shares)   36,643,445    
Carrying Value   $ 51    
Liquidation Preference   $ 51    
Common Stock Issuable Upon Conversion (in shares)   36,643,445    
Series D Preferred Stock        
Temporary Equity [Line Items]        
Preferred stock, authorized (in shares)   33,223,530    
Preferred stock, issued (in shares)   33,223,530    
Convertible preferred stock, outstanding (in shares)   33,223,530    
Carrying Value   $ 115    
Liquidation Preference   $ 115    
Common Stock Issuable Upon Conversion (in shares)   33,223,530    
Series E Preferred Stock        
Temporary Equity [Line Items]        
Preferred stock, authorized (in shares)   45,788,025    
Preferred stock, issued (in shares)   45,788,025    
Convertible preferred stock, outstanding (in shares)   45,788,025    
Carrying Value   $ 250    
Liquidation Preference   $ 250    
Common Stock Issuable Upon Conversion (in shares)   45,788,025    
Series F Preferred Stock        
Temporary Equity [Line Items]        
Preferred stock, authorized (in shares)   44,851,275    
Preferred stock, issued (in shares)   44,301,220    
Convertible preferred stock, outstanding (in shares)   44,301,220    
Carrying Value   $ 402    
Liquidation Preference   $ 402    
Common Stock Issuable Upon Conversion (in shares)   44,301,220    
v3.22.0.1
Common Stock - Narrative (Details)
$ / shares in Units, $ in Thousands
 1 Months Ended 3 Months Ended 12 Months Ended
May 31, 2021
USD ($)
shares
Feb. 28, 2019
USD ($)
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
installment
$ / shares
shares
Dec. 31, 2020
USD ($)
$ / shares
shares
Dec. 31, 2019
USD ($)
shares
Sep. 24, 2021
vote
$ / shares
shares
Sep. 20, 2021
shares
Class of Stock [Line Items]                
Common stock, authorized (in shares)     0 0 570,000,000      
Common stock, par value (in dollars per share) | $ / shares     $ 0.000001 $ 0.000001 $ 0.000001   $ 0.000001  
Common stock, issued (in shares)     0 0 219,755,430      
Common stock, outstanding (in shares)     0 0 219,755,430      
Common stock reserved for issuance (in shares)     152,739,577 152,739,577 346,304,660      
Stock-based compensation expense | $       $ 142,000 $ 86,000 $ 34,000    
Stock issued (in shares)         1,096,800      
Exercise of common stock options (in shares)   15,057,340   6,307,785        
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions | $       $ 944,000        
Director                
Class of Stock [Line Items]                
Promissory notes | $   $ 23,000            
Interest rate per annum (as a percent)   2.63%            
Repayment of promissory notes | $ $ 23,000              
Maturity of note receivable from issuance   5 years            
Maturity of note receivable following termination   60 days            
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions (in shares) 8,045,300              
Unrecognized stock-based compensation expense related to options | $     $ 9,000 9,000        
Director | Accumulated Deficit                
Class of Stock [Line Items]                
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions | $       $ 14,000        
Unvested restricted stock                
Class of Stock [Line Items]                
Stock issued (in shares)     4,133,955 4,133,955 1,096,800 1,877,710    
Unrecognized stock-based compensation expense | $     $ 6,000 $ 6,000 $ 1,000      
Pledge 1%                
Class of Stock [Line Items]                
Annual pledged percentage of maximum (as a percent)       1.00%        
Stock-based compensation expense | $       $ 19,000        
The 2021 Employee Stock Purchase Plan                
Class of Stock [Line Items]                
Increase in number of shares reserved and available for issuance (as a percent)               1.00%
Common Class A                
Class of Stock [Line Items]                
Common stock, authorized (in shares)     7,000,000,000 7,000,000,000 0   7,000,000,000  
Common stock, par value (in dollars per share) | $ / shares     $ 0.000001 $ 0.000001 $ 0.000001      
Number of voting rights | vote             1  
Common stock conversion period     7 years          
Common stock, issued (in shares)     167,732,925 167,732,925 0      
Common stock, outstanding (in shares)     167,732,925 167,732,925 0      
Common Class A | Pledge 1%                
Class of Stock [Line Items]                
Shares reserved for issuance, issuance period       10 years        
Number of annual installments | installment       10        
Shares transferred to independent donor       546,889        
Common Class A | The 2021 Employee Stock Purchase Plan                
Class of Stock [Line Items]                
Common stock reserved for issuance (in shares)               11,638,189
Common Class A | Maximum | Pledge 1%                
Class of Stock [Line Items]                
Common stock reserved for issuance (in shares)     5,468,890 5,468,890        
Common Class B                
Class of Stock [Line Items]                
Common stock, authorized (in shares)     700,000,000 700,000,000 0   700,000,000  
Common stock, par value (in dollars per share) | $ / shares     $ 0.000001 $ 0.000001 $ 0.000001      
Number of voting rights | vote             10  
Ownership percentage of stock     66.67%          
Common stock, issued (in shares)     339,437,440 339,437,440 0      
Common stock, outstanding (in shares)     339,437,440 339,437,440 0      
Stock issued (in shares)     4,133,955 4,133,955        
v3.22.0.1
Common Stock - Schedule of Class A and Class B Common Shares Reserved For Issuance (Details) - shares
Dec. 31, 2021
Dec. 31, 2020
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 152,739,577 346,304,660
Preferred Stock    
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 0 253,832,025
Options to purchase Class A common stock, Class B common stock and common stock    
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 58,917,018 58,035,220
Unvested restricted stock units    
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 15,384,809 0
Warrants to purchase Class B common stock and common stock and preferred stock (as if converted to warrants to purchase common stock)    
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 0 1,002,035
Warrants to purchase Class B common stock and common stock and preferred stock (as if converted to warrants to purchase common stock) | Common Class B    
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 7,961,455 0
Shares available for future grant under the Stock Plans    
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 53,916,105 33,435,380
Shares reserved for charitable donations    
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 4,922,001 0
Shares available for issuance under 2021 Employee Stock Purchase Plan    
Class of Stock [Line Items]    
Common stock reserved for issuance (in shares) 11,638,189 0
v3.22.0.1
Common Stock - Schedule of Restricted Stock Units (Details) - shares
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]    
Beginning balance (in shares) 1,096,800  
Exercise of stock options in connection with promissory notes repayment (in shares) 14,267,650  
Ending balance (in shares)   1,096,800
Unvested restricted stock    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]    
Beginning balance (in shares) 1,096,800 1,877,710
Exercise of stock options (in shares) 412,810 321,400
Repurchases (in shares) (35,665) (185,190)
Vested (in shares) (11,607,640) (917,120)
Ending balance (in shares) 4,133,955 1,096,800
v3.22.0.1
Revenue from Contracts with Customers - Summary of Activity of Deferred Revenue (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Disaggregation of Revenue [Line Items]      
Deferred revenue $ 56 $ 59 $ 67
Revenue recognized in the period from amounts included in deferred revenue at the beginning of period $ 43 29  
Without Adoption (ASC 605)      
Disaggregation of Revenue [Line Items]      
Deferred revenue   $ 59 60
Impact of Adoption      
Disaggregation of Revenue [Line Items]      
Deferred revenue     $ 7
v3.22.0.1
Revenue from Contracts with Customers - Narrative (Details)
$ in Millions
Dec. 31, 2021
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, amount $ 405
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, amount $ 389
Remaining performance obligation, period 24 months
v3.22.0.1
Revenue from Contracts with Customers - Summary of Capitalized Costs (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Increase (Decrease) in Capitalized Contract Costs [Roll Forward]    
Beginning balance $ 29  
Capitalization of sales commissions costs 56 $ 25
Amortization of sales commissions costs (30) (15)
Ending balance 55 29
Capitalized Contract Cost, Net, Classified [Abstract]    
Deferred costs, net 30 17
Deferred costs, non-current 25 12
Total capitalized sales commissions costs $ 55 29
Impact of Adoption    
Increase (Decrease) in Capitalized Contract Costs [Roll Forward]    
Beginning balance   $ 19
Capitalized Contract Cost, Net, Classified [Abstract]    
Total capitalized sales commissions costs    
v3.22.0.1
Stock-Based Compensation Expense - Narrative (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Sep. 20, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares) 152,739,577 346,304,660    
Stock-based compensation expense included in capitalized software $ 1,000 $ 0 $ 0  
Unexercised options vested (in shares) 18,151,770 25,983,807    
Unexercised options vested, intrinsic value $ 159,000 $ 855,000    
Non-vested options (in shares) 50,758,305 37,106,955    
Aggregate intrinsic value of options exercised $ 162,000 $ 38,000 4,000  
Fair value of options vested 36,000 23,000 10,000  
Stock-based compensation expense $ 142,000 86,000 $ 34,000  
Incremental cost in connection with modifications   $ 3,000    
The 2021 Stock Option and Incentive Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Increase in number of shares reserved and available for issuance (as a percent)       5.00%
Shares granted under plan (in shares) 4,978,619      
The 2021 Stock Option and Incentive Plan | Common Class A        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares)       58,190,945
Number of shares available for grant (in shares) 53,916,105      
The 2014 Stock Incentive Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Number of shares available for grant (in shares)   33,435,380    
The 2014 Stock Incentive Plan | Common Class B        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares)       167,777,810
Shares granted under plan (in shares) 69,324,332      
Option        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares) 58,917,018 58,035,220    
Contractual life 10 years      
Weighted average fair value per share of options granted (in dollars per share) $ 10.12 $ 1.95 $ 1.12  
Unrecognized stock-based compensation expense $ 98,000      
Expected period for recognition 3 years 10 months 2 days      
Option | The 2014 Stock Incentive Plan        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Shares granted under plan (in shares) 58,035,220      
Option | Vesting on first anniversary of date of grant        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Award vesting (as a percent) 20.00%      
Option | Vesting in equal quarterly installments        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Award vesting (as a percent) 80.00%      
Award vesting period 5 years 3 months 29 days      
Unvested restricted stock units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares) 15,384,809 0    
Award vesting period   4 years    
Unrecognized stock-based compensation expense $ 306,000      
Expected period for recognition 3 years 9 months      
Stock-based compensation expense $ 63,000      
Granted (in dollars per share) $ 29.80      
Restricted stock issued (in shares) 53,570      
Fair value of RUSs vested $ 1,000      
Performance Shares        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense $ 0 $ 3,000 $ 0  
Performance Shares | Secondary Investors        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Equity interests settled (in shares) 975,057 9,498,100 7,586,180  
Stock-based compensation expense related to transactions $ 46,000 $ 53,000 $ 27,000  
Performance Shares | Third Parties        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Equity interests settled (in shares)   3,281,510    
Stock-based compensation expense related to transactions   $ 17,000    
Aggregate purchase price   $ 49,000    
v3.22.0.1
Stock-Based Compensation Expense - Schedule of Stock-based Compensation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense $ 142,000 $ 86,000 $ 34,000
Costs of revenue      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 12,000 7,000 1,000
Sales and marketing      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 24,000 16,000 1,000
Research and development      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 48,000 30,000 3,000
General and administrative      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense $ 58,000 $ 33,000 $ 29,000
v3.22.0.1
Stock-Based Compensation Expense - Schedule of Weighted Average Assumptions (Details) - Option - $ / shares
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate (as a percent) 1.00% 0.49% 2.12%
Expected term (in years) 6 years 3 months 25 days 6 years 7 months 20 days 6 years 3 months 3 days
Expected volatility (as a percent) 65.00% 63.00% 60.00%
Expected dividend yield (as a percent) 0.00% 0.00% 0.00%
Weighted-average fair value of common stock (in dollars per share) $ 17.00 $ 3.23 $ 1.85
Weighted average fair value per share of options granted (in dollars per share) $ 10.12 $ 1.95 $ 1.12
v3.22.0.1
Stock-Based Compensation Expense - Summary of Stock Option Activity (Details) - USD ($)
 1 Months Ended 12 Months Ended
Feb. 28, 2019
Dec. 31, 2021
Dec. 31, 2020
Number of Shares      
Beginning balance (in shares)   58,035,220  
Granted (in shares)   9,869,500  
Exercised (in shares) (15,057,340) (6,307,785)  
Forfeited (in shares)   (2,679,917)  
Ending balance (in shares)     58,035,220
Options vested and expected to vest (in shares)   58,917,018 58,035,220
Options exercisable (in shares)   58,852,018 57,620,665
Weighted Average Exercise Price      
Beginning balance (in dollars per share)   $ 2.08  
Granted (in dollars per share)   17.00  
Exercised (in dollars per share)   1.31  
Forfeited (in dollars per share)   4.88  
Ending balance (in dollars per share)   4.53 $ 2.08
Options vested and expected to vest, Weighted average exercise price (in dollars per share)   4.53 2.08
Options exercisable, Weighted average exercise price per share (in dollars per share)   $ 4.50 $ 2.08
Weighted Average Remaining Contractual Term      
Options outstanding   7 years 7 months 24 days 8 years 3 months 7 days
Options vested and expected to vest   7 years 7 months 24 days 8 years 3 months 7 days
Options exercisable   7 years 7 months 24 days 8 years 3 months 3 days
Aggregate Intrinsic Value      
Options outstanding   $ 1,778,000,000 $ 447,000,000
Options vested and expected to vest   1,778,000,000 447,000,000
Options exercisable   $ 1,778,000,000 $ 446,000,000
v3.22.0.1
Stock-Based Compensation Expense - Summary of RSU Activity (Details) - Unvested restricted stock units
 12 Months Ended
Dec. 31, 2021
$ / shares
shares
RSU  
Beginning balance (in shares) | shares 158,370
Granted (in shares) | shares 15,681,204
Vested (in shares) | shares (53,570)
Forfeited (in shares) | shares (401,195)
Ending balance (in shares) | shares  
Weighted Average Grant Date Fair Value  
Beginning balance (in dollars per share) | $ / shares $ 2.21
Granted (in dollars per share) | $ / shares 29.80
Vested (in dollars per share) | $ / shares 2.40
Forfeited (in dollars per share) | $ / shares 26.06
Ending balance (in dollars per share) | $ / shares $ 29.71
v3.22.0.1
Income Taxes - Components of Loss Before Income Taxes (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income Tax Disclosure [Abstract]      
United States $ (493) $ (249) $ (212)
Foreign 3 1 0
Loss before income taxes benefit $ (490) $ (248) $ (212)
v3.22.0.1
Income Taxes - Schedule of Components of Income Tax Benefit (Expense) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income Tax Disclosure [Abstract]      
Current state $ 0 $ 0 $ 0
Current foreign 0 0 0
Current tax expense 0 0 0
Deferred federal (2) 0 (2)
Deferred state (1) 0 (1)
Deferred tax benefit (3) 0 (3)
Total income tax (benefit) expense $ (3) $ 0 $ (3)
v3.22.0.1
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Deferred tax assets:    
Net operating loss carryforwards $ 150 $ 122
Stock-based compensation expense 19 3
Credit carryforward 24 17
Accrued expenses and reserves 13 8
Charitable contributions 5 0
Deferred revenue 7 8
Deferred rent 0 5
Depreciation 2 0
Interest carryforwards 0 1
Convertible debt derivative 0 6
Inventory reserve 1 2
Lease liability 25 0
Total deferred tax assets 246 172
Valuation allowance (206) (154)
Net deferred tax assets 40 18
Deferred tax liabilities:    
Amortization (4) (2)
Convertible debt 0 (6)
Other (2) (2)
Capitalized contract acquisition costs (14) (8)
Right-of-use asset (20) 0
Total deferred tax liabilities (40) (18)
Net deferred tax asset (liability) $ 0 $ 0
v3.22.0.1
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income Tax Disclosure [Abstract]      
Tax provision at statutory rate 21.00% 21.00% 21.00%
State tax—net of federal 1.20% 5.40% 6.60%
Permanent items - Other (0.60%) (0.80%) (0.40%)
Warrants (4.20%) 0.00% 0.00%
Convertible debt extinguishment (1.50%) 0.00% 0.00%
Research and development credits 1.00% 1.60% 1.80%
Stock-based compensation expense (0.80%) (4.00%) (3.30%)
Derivative liability (5.60%) (1.30%) 0.00%
Other, net 0.00% 0.30% 0.20%
Change in valuation allowance (10.00%) (22.30%) (24.40%)
Effective Tax Rate 0.50% (0.10%) 1.50%
v3.22.0.1
Income Taxes - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Tax Credit Carryforward [Line Items]      
Benefit from income taxes $ 3,000,000 $ 0 $ 3,000,000
Release of portion of valuation allowance 3,000,000    
Increase in valuation allowance 52,000,000 50,000,000  
Unrecognized tax benefits that would impact effective tax rate 0 0 0
Accrued interest and penalties 0 $ 0 $ 0
Indefinite Carryforward Period      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 78,000,000    
Tax Period 2034      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 479,000,000    
Federal Tax Authority      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 572,000,000    
Tax credit carryforwards 16,000,000    
Federal Tax Authority | Indefinite Carryforward Period      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 487,000,000    
Federal Tax Authority | Tax Year 2037      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 85,000,000    
State and Local Jurisdiction      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 557,000,000    
Tax credit carryforwards $ 10,000,000    
v3.22.0.1
Loss Per Share - Schedule of Net Loss Per Share (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Numerator:      
Net loss $ (487) $ (248) $ (209)
Redemption of Series B Preferred Stock 0 (1) 0
Net loss attributable to common stockholders $ (487) $ (249) $ (209)
Denominator:      
Weighted average shares of common stock outstanding - basic (in shares) 289,584,001 199,982,965 194,820,145
Weighted average shares of common stock outstanding - diluted (in shares) 289,584,001 199,982,965 194,820,145
Net loss per share attributable to common stockholders - basic (in dollars per share) $ (1.68) $ (1.25) $ (1.08)
Net loss per share attributable to common stockholders - diluted (in dollars per share) $ (1.68) $ (1.25) $ (1.08)
v3.22.0.1
Loss Per Share - Schedule of Antidilutive Shares (Details) - shares
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive shares excluded from computation of earnings per share (in shares) 86,397,237 328,233,730 278,807,745
Options to purchase Class A common stock, Class B common stock and common stock      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive shares excluded from computation of earnings per share (in shares) 58,917,018 58,035,220 51,262,585
Unvested restricted stock      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive shares excluded from computation of earnings per share (in shares) 4,133,955 1,096,800 1,877,710
Unvested restricted stock units      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive shares excluded from computation of earnings per share (in shares) 15,384,809 0 0
Shares issued for exercise of non-recourse notes      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive shares excluded from computation of earnings per share (in shares) 0 14,267,650 15,057,340
Convertible preferred stock (as converted to common stock)      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive shares excluded from computation of earnings per share (in shares) 0 253,832,025 209,608,075
Warrants to purchase Class B common stock and common stock and preferred stock (as if converted to warrants to purchase common stock)      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive shares excluded from computation of earnings per share (in shares) 7,961,455 1,002,035 1,002,035
v3.22.0.1
Segment Information (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Segment Reporting Information [Line Items]    
Total long-lived assets $ 120 $ 44
United States    
Segment Reporting Information [Line Items]    
Total long-lived assets 119 44
Ireland    
Segment Reporting Information [Line Items]    
Total long-lived assets $ 1 $ 0
v3.22.0.1
Commitment and Contingencies - Narrative (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]    
Non-cancelable purchase obligations $ 315 $ 63
v3.22.0.1
Commitment and Contingencies - Schedule of Future Minimum Lease Payments (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]    
2022 $ 304  
2023 8  
2024 3  
Total future minimum payments $ 315 $ 63
v3.22.0.1
Retirement Plan (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Defined Contribution Plan Disclosure [Line Items]      
Matching contribution of employee 401(k) contributions (as a percent) 50.00%    
Maximum contribution of total earnings (as a percent) 3.00%    
Defined contribution plan cost $ 6 $ 2 $ 4
Vesting after One Year of Service      
Defined Contribution Plan Disclosure [Line Items]      
Vesting percentage 50.00%    
Vesting period 1 year    
Vesting After Two Years of Service      
Defined Contribution Plan Disclosure [Line Items]      
Vesting percentage 100.00%    
Vesting period 2 years    
v3.22.0.1
FINANCIAL STATEMENT SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Allowance for accounts receivable      
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Balance at beginning of period $ 4 $ 5 $ 2
Additions charged to costs and expenses 1 5 12
Deductions (3) (6) (9)
Other, net 2 0 0
Balance at end of period 4 4 5
Allowances for uncollectible loans and MCAs receivable      
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Balance at beginning of period 4 0 0
Additions charged to costs and expenses 1 6 1
Deductions (3) (2) (1)
Other, net 3 0 0
Balance at end of period 1 4 0
Inventory obsolescence reserve      
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Balance at beginning of period 5 2 2
Additions charged to costs and expenses 3 5 2
Deductions (6) (2) (2)
Other, net 0 0 0
Balance at end of period 2 5 2
Valuation allowance for deferred tax assets      
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Balance at beginning of period 154 104 52
Additions charged to costs and expenses 55 50 55
Deductions (3) 0 (3)
Other, net 0 0 0
Balance at end of period $ 206 $ 154 $ 104