TOAST, INC., 10-K filed on 2/27/2024
Annual Report
v3.24.0.1
Cover Page - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2023
Feb. 21, 2024
Jun. 30, 2023
Document Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2023    
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, 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 Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction false    
Entity Shell Company false    
Entity Public Float     $ 10
Documents Incorporated by Reference
Portions of the registrant's Definitive Proxy Statement relating to the 2024 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, 2023.
    
Entity Central Index Key 0001650164    
Amendment Flag false    
Document Fiscal Year Focus 2023    
Document Fiscal Period Focus FY    
Common Class A      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   437,000,000  
Common Class B      
Document Information [Line Items]      
Entity Common Stock, Shares Outstanding   111,000,000  
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Audit Information
 12 Months Ended
Dec. 31, 2023
Audit Information [Abstract]  
Auditor Name Ernst & Young LLP
Auditor Location Boston, Massachusetts
Auditor Firm ID 42
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CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Current Assets:    
Cash and cash equivalents $ 605 $ 547
Marketable securities 519 474
Accounts receivable, net 69 77
Inventories, net 118 110
Other current assets 259 199
Total current assets 1,570 1,407
Property and equipment, net 75 61
Operating lease right-of-use assets 36 77
Intangible assets, net 26 29
Goodwill 113 107
Restricted cash 55 28
Other non-current assets 83 52
Total non-current assets 388 354
Total assets 1,958 1,761
Current liabilities:    
Accounts payable 32 30
Deferred revenue 39 39
Accrued expenses and other current liabilities 592 427
Total current liabilities 663 496
Warrants to purchase common stock 64 68
Operating lease liabilities, non-current 33 80
Other long-term liabilities 4 19
Total liabilities 764 663
Commitments and Contingencies
Stockholders’ Equity:    
Preferred stock - par value $0.000001; 100 shares authorized, no shares issued or outstanding 0 0
Common stock, $0.000001 par value: Class A - 7,000 shares authorized; 429 and 353 shares issued and outstanding as of December 31, 2023 and 2022, respectively; Class B - 700 shares authorized; 114 and 170 shares issued and outstanding as of December 31, 2023 and 2022, respectively 0 0
Treasury stock, at cost - no and 0 shares outstanding as of December 31, 2023 and 2022, respectively 0 0
Accumulated other comprehensive loss 0 (2)
Additional paid-in capital 2,817 2,477
Accumulated deficit (1,623) (1,377)
Total stockholders’ equity 1,194 1,098
Total liabilities and stockholders’ equity $ 1,958 $ 1,761
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2023
Dec. 31, 2022
Stockholders’ Equity:    
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
Treasury stock (in shares) 0 0
Common Class A    
Stockholders’ Equity:    
Common stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Common stock, authorized (in shares) 7,000,000,000 7,000,000,000
Common stock, issued (in shares) 429,000,000 353,000,000
Common stock, outstanding (in shares) 429,000,000 353,000,000
Common Class B    
Stockholders’ Equity:    
Common stock, par value (in dollars per share) $ 0.000001 $ 0.000001
Common stock, authorized (in shares) 700,000,000 700,000,000
Common stock, issued (in shares) 114,000,000 170,000,000
Common stock, outstanding (in shares) 114,000,000 170,000,000
v3.24.0.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Revenue:      
Total revenue $ 3,865 $ 2,731 $ 1,705
Costs of revenue:      
Amortization of acquired intangible assets 5 5 4
Total costs of revenue 3,031 2,220 1,391
Gross profit 834 511 314
Operating expenses:      
Sales and marketing 401 319 190
Research and development 358 282 163
General and administrative 362 294 189
Total operating expenses 1,121 895 542
Loss from operations (287) (384) (228)
Other income (expenses):      
Interest income (expense), net 37 11 (12)
Change in fair value of warrant liability 3 95 (97)
Change in fair value of derivative liability 0 0 (103)
Loss on debt extinguishment 0 0 (50)
Other income (expense), net 3 1 0
Loss before income taxes (244) (277) (490)
Income tax (expense) benefit (2) 2 3
Net loss $ (246) $ (275) $ (487)
Net loss per share attributable to common stockholders:      
Basic (in dollars per share) $ (0.46) $ (0.54) $ (1.68)
Diluted (in dollars per share) $ (0.47) $ (0.72) $ (1.68)
Weighted average shares used in computing net loss per share:      
Basic (in shares) 532 512 290
Diluted (in shares) 533 512 290
Subscription services      
Revenue:      
Total revenue $ 500 $ 324 $ 169
Costs of revenue:      
Cost of revenue 166 112 63
Financial technology solutions      
Revenue:      
Total revenue 3,189 2,268 1,406
Costs of revenue:      
Cost of revenue 2,503 1,792 1,120
Hardware and professional services      
Revenue:      
Total revenue 176 139 130
Costs of revenue:      
Cost of revenue $ 357 $ 311 $ 204
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Statement of Comprehensive Income [Abstract]      
Net loss $ (246) $ (275) $ (487)
Other comprehensive gain (loss):      
Unrealized gains (losses) on marketable securities, net of tax effect of $0 2 (1) (1)
Total other comprehensive gain (loss) 2 (1) (1)
Comprehensive loss $ (244) $ (276) $ (488)
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Statement of Comprehensive Income [Abstract]      
Unrealized gains (losses) on marketable securities, tax $ 0 $ 0 $ 0
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($)
$ in Millions
Total
Cumulative adjustment for adoption new accounting standard
Additional Paid-in Capital
Accumulated Deficit
Accumulated Deficit
Cumulative adjustment for adoption new accounting standard
Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2020 $ (471) $ 1 $ 145 $ (616) $ 1 $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Issuance of common stock under equity plans 25   25      
Issuance of common stock in connection with business combination 15   15      
Stock-based compensation 141   141      
Issuance of common stock upon net exercise of common stock warrants 56   56      
Conversion of preferred stock 849   849      
Issuance of common stock in connection with initial public offering, net of offering costs 944   944      
Issuance of common stock in connection with charitable contribution 19   19      
Other comprehensive gain (loss), net of tax (1)         (1)
Net loss (487)     (487)    
Ending balance at Dec. 31, 2021 1,091   2,194 (1,102)   (1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Issuance of common stock under equity plans 19   19      
Issuance of common stock in connection with business combination 1   1      
Stock-based compensation 235   235      
Issuance of common stock upon net exercise of common stock warrants 18   18      
Issuance of common stock in connection with charitable contribution 10   10      
Other comprehensive gain (loss), net of tax (1)         (1)
Net loss (275)     (275)    
Ending balance at Dec. 31, 2022 1,098   2,477 (1,377)   (2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Issuance of common stock under equity plans 38   38      
Issuance of common stock in connection with business combination 1   1      
Stock-based compensation 290   290      
Issuance of common stock upon net exercise of common stock warrants 1   1      
Issuance of common stock in connection with charitable contribution 10   10      
Other comprehensive gain (loss), net of tax 2         2
Net loss (246)     (246)    
Ending balance at Dec. 31, 2023 $ 1,194   $ 2,817 $ (1,623)   $ 0
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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Cash flows from operating activities:      
Net loss $ (246,000,000) $ (275,000,000) $ (487,000,000)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:      
Depreciation and amortization 32,000,000 24,000,000 21,000,000
Stock-based compensation expense 277,000,000 228,000,000 140,000,000
Amortization of deferred contract acquisition costs 62,000,000 44,000,000 30,000,000
Change in fair value of derivative liability 0 0 103,000,000
Change in fair value of warrant liability (3,000,000) (95,000,000) 97,000,000
Loss on debt extinguishment 0 0 50,000,000
Credit loss expense 64,000,000 34,000,000 4,000,000
Non-cash interest on convertible notes 0 0 12,000,000
Stock-based charitable contribution expense 10,000,000 10,000,000 19,000,000
Asset impairments 15,000,000 0 0
Other non-cash items (17,000,000) 3,000,000 2,000,000
Changes in operating assets and liabilities:      
Account receivable, net (3,000,000) (35,000,000) (23,000,000)
Other current assets (12,000,000) (36,000,000) (44,000,000)
Deferred contract acquisition costs (107,000,000) (71,000,000) (56,000,000)
Inventories, net (7,000,000) (68,000,000) (23,000,000)
Accounts payable 1,000,000 (11,000,000) 15,000,000
Accrued expenses and other current liabilities 81,000,000 116,000,000 145,000,000
Deferred revenue (5,000,000) (11,000,000) (2,000,000)
Operating lease right-of-use assets and operating lease liabilities, net 1,000,000 0 0
Other assets and liabilities (8,000,000) (13,000,000) (1,000,000)
Net cash provided by (used in) operating activities 135,000,000 (156,000,000) 2,000,000
Cash flows from investing activities:      
Cash paid for acquisition, net of cash acquired (9,000,000) (46,000,000) (26,000,000)
Capital expenditures (42,000,000) (33,000,000) (19,000,000)
Purchases of marketable securities (623,000,000) (434,000,000) (469,000,000)
Proceeds from the sale of marketable securities 35,000,000 46,000,000 5,000,000
Maturities of marketable securities 556,000,000 369,000,000 5,000,000
Other investing activities (3,000,000) 0 1,000,000
Net cash used in investing activities (86,000,000) (98,000,000) (503,000,000)
Cash flows from financing activities:      
Proceeds from issuance of common stock 36,000,000 15,000,000 34,000,000
Change in customer funds obligations, net 27,000,000 26,000,000 24,000,000
Proceeds from initial public offering, net 0 0 950,000,000
Extinguishment of convertible notes 0 0 (245,000,000)
Other financing activities 0 (3,000,000) (4,000,000)
Net cash provided by financing activities 63,000,000 38,000,000 759,000,000
Net increase (decrease) in cash, cash equivalents, cash held on behalf of customers and restricted cash 112,000,000 (216,000,000) 258,000,000
Effect of exchange rate changes on cash and cash equivalents and restricted cash 0 0 (1,000,000)
Cash, cash equivalents, cash held on behalf of customers and restricted cash at beginning of period 635,000,000 851,000,000 594,000,000
Cash, cash equivalents, cash held on behalf of customers and restricted cash at end period 747,000,000 635,000,000 851,000,000
Reconciliation of cash, cash equivalents, cash held on behalf of customers and restricted cash      
Cash and cash equivalents 605,000,000 547,000,000 809,000,000
Cash held on behalf of customers 87,000,000 60,000,000 34,000,000
Restricted cash 55,000,000 28,000,000 8,000,000
Total cash, cash equivalents, cash held on behalf of customers and restricted cash 747,000,000 635,000,000 851,000,000
Supplemental disclosure of non-cash investing and financing activities:      
Issuance of Class B common stock upon exercise of common stock warrants 1,000,000 18,000,000 56,000,000
Common stock issued for acquisition 1,000,000 0 15,000,000
Conversion of convertible preferred stock into Class B common stock upon initial public offering 0 0 849,000,000
Issuance of common stock warrants upon debt extinguishment $ 0 $ 0 $ 125,000,000
v3.24.0.1
Description of Business and Basis of Presentation
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Basis of Presentation Description of Business and Basis of Presentation
Toast Inc. ("Toast", "we," or the “Company”), is a cloud-based, all-in-one digital technology platform purpose-built for the entire restaurant community. We provide a comprehensive platform of software-as-a-service, or SaaS, products and 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 service models including dine-in, takeout, delivery, catering, and retail.

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.

Initial Public Offering

On September 24, 2021, we completed our IPO where we sold 25 million 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 million shares. We received net proceeds of $944 million after deducting underwriting discounts and commissions and other offering costs.

Immediately prior to the completion of our IPO, 254 million shares of convertible preferred stock were automatically converted into an equal number of shares of Class B common stock, and 1 million 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. 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 which were terminated upon IPO. 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 our Board of Directors, or our Board.

Risks and Uncertainties

We are subject to a number of risks and uncertainties, including global events and macroeconomic conditions such as inflation and its potential impact on consumer spending, rising interest rates, global supply chain issues, and any public health concerns, which may also impact consumer behavior, the restaurant industry, and our business.

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.
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Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2023
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.

Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, fair values and useful lives of assets acquired and liabilities assumed through business combinations, stock-based compensation expense, warrants, allowance for credit losses, liabilities associated with financial guarantees related to loan purchase activities, incremental borrowing rates applied in valuation of lease liabilities, common stock valuation, as well as the 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, and warrants to purchase common stock. We also measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities primarily include assets acquired and liabilities assumed in business combinations and liabilities related to our obligation to perform under certain financial guarantees (See Note 2, "Summary of Significant Accounting Policies", "Assets and Liabilities Recorded with Loan Servicing Activities"). Impairments, if any, of property and equipment and/or intangible assets, are written down to fair value measured at such time on a nonrecurring basis. 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.

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 3, “Fair Value Measurements”). The carrying values of accounts receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term nature.

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 a large portion 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. 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, 2023, 2022, and 2021, we had no customers that individually accounted for more than 10% of our total revenue and no customers that individually accounted for more than 10% of our total receivables as of December 31, 2023 or 2022.

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

We principally generate revenues from: (1) subscription services from our SaaS products, (2) financial technology solutions, including loan servicing activities, and (3) hardware and professional services.

Determining whether products and services are considered distinct performance obligations that should be accounted for separately as opposed to being combined requires 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 SSP for hardware and professional services revenue using an adjusted market assessment approach which analyzes discounts provided to similar customers based on customer category, sales channel, and size. SSP for subscription services revenue is also 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 is determined using our own standalone sales data. We allocate variable fees earned from financial technology services revenue to those distinct performance obligations where pricing practices are consistent with the allocation objective.

We measure revenues based on the amount of consideration we expect to receive in exchange for our products and/or services. Customer credits represent variable consideration which is estimated based on historical experience and accounted for as a reduction to the transaction price. We record reductions to revenues for our estimates of customer credits and an increase to liabilities in the period that the related revenue is earned. Sales taxes collected from customers and remitted to government authorities are excluded from revenue and deferred revenue.

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.

Financial Technology Solutions

Financial technology solutions revenue includes transaction-based payment processing services for customers who 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 generally 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 our 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 is recognized upon authorization by the issuing bank and submission for processing.

Financial technology solutions revenue also includes fees earned from marketing and servicing loans to customers through our wholly-owned subsidiary, Toast Capital, that are originated by a third-party banking partner. 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 repaid. 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, included within other current assets. The marketing and facilitation fees earned upon execution of these loan agreements with its customers are recognized as revenue on a gross basis.

Hardware and Professional Services

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 when the transfer of control occurs, which is upon product shipment. We accept returns for hardware sales and estimate returns as a reduction to the transaction price, at the time of the sale based on historical returns data and experience.

Professional services revenue is generated from fees charged to customers for installation services, including business process mapping, configuration, and training. 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 cash deposits, money market funds, and 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.

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 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 held as collateral pursuant to an agreement with the originating third-party bank for the working capital loans serviced by Toast Capital (See Note 5, "Loan Servicing Activities and Acquired Loans Receivable, Net").
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 loss, 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.

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. Credit losses are 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 in the Consolidated Balance Sheets with a corresponding adjustment to earnings. Unrealized losses that are not related to credit losses are recognized in accumulated other comprehensive loss.

Accounts Receivable, net

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.

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, Financial Instruments - Credit Losses, or 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 our 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. Substantially all inventory consists of finished goods. 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 outbound freight, handling costs, and damaged inventory as current-period costs.

Assets and Liabilities Recorded with Loan Servicing Activities

We perform loan servicing activities through the Toast Capital loan program, where we partner with an industrial bank to provide working capital loans to qualified Toast customers based on the customer’s current payment processing and point of sale 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 provide eligible customers with access to financing up to $300 thousand, and loan repayment occurs automatically through a fixed percentage of every payment transaction processed on Toast’s platform.
Under the terms of our agreement with our industrial bank partner, we are obligated to purchase certain loans originated by our industrial banking partner in cases where the customer's payments on the loan are missing or delayed for a defined period of time, and the loan is considered defaulted or delinquent (ineligible). Our obligation is limited to a specified percentage of the total loans originated, measured on a quarterly basis. The loan purchase, net of expected recoveries, reduces our potential liability with respect to the quarterly cohort of loans from which the ineligible loan originated. Refer to Note 2, "Acquired Loans Receivable, Net" for information on our accounting for purchased 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 ineligible loans, and a non-contingent liability accounted for under ASC 460, Guarantees, or ASC 460, related to our obligation to stand-ready to perform under the obligation, both of which are included in accrued expenses and other current liabilities in the Consolidated Balance Sheets. 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 purchased 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 360 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 loans are originated, along with a corresponding non-cash charge recorded within general and administrative expense in the Consolidated Statements of Operations. We remeasure 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 average expected obligation term, which ranges from 90 to 360 days, and derecognized upon loan purchase. Fair value of a non-contingent liability is measured based on a discounted cash flow model under the income approach which 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.

Please refer to Note 5, “Loan Servicing Activities and Acquired Loans Receivable, Net” for additional information on the liabilities related to the financial guarantees.

Acquired Loans Receivable, Net

We are obligated to purchase delinquent loans from our industrial bank partner. Such purchases, net of expected recoveries, are recorded as a reduction of contingent liabilities with respect to the quarterly cohort of loans from which the defaulted loan originated. We 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, and write off their unpaid principal balance at the time of purchase as collectability is not probable. However, when we have an expectation of collecting cash flows, a negative allowance is established for purchased loans based on our historical experience of expected recoveries across our portfolio.
Deferred Contract Acquisition Costs

Based on ASC 340-40, Other Assets and Deferred Costs, we 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 determined to be four 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 expenses in the Consolidated Statements of Operations.

Property 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
Tooling and equipment
3 - 7 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.

Operating Leases

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, net of any lease incentives received by the 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.

Lease term includes the non-cancelable term, unless it is reasonably certain that a renewal or termination option will 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.
Business Combinations and Goodwill

We account for business combinations using the acquisition method of accounting in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values on 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.

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. There were no goodwill impairment losses recognized during the years ended December 31, 2023, 2022, and 2021. Based on our quantitative goodwill impairment test, the reporting unit's fair value significantly exceeded its carrying value at December 31, 2023.

Intangible Assets and Impairment of Long-lived Assets

Intangible assets primarily consist of finite-lived acquired technology and customer relationships. 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 our intangible assets on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining amortization period.

Acquired technology and customer relationships amortization is recorded within costs of revenue and sales and marketing expenses, respectively, within the Consolidated Statements of Operations

The estimated useful lives for acquired technology and customer relationship intangible assets are as follows:
Estimated Useful Life
Acquired technology
3 - 10 years
Customer acquired intangible assets
5 - 6 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. See Note 10, "Other Balance Sheet Information" for additional information related to property and equipment impairments.

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.
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 and acquired intangible assets.

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 service conditions and restricted stock units, or RSUs, which vest upon the satisfaction of service and/or performance conditions. 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 is recognized over the requisite service period, net of estimated forfeitures. 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.

Compensation cost is recognized on a straight-line basis for stock-options, RSUs, and our 2021 Employee Stock Purchase Plan, or ESPP, 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 and ESPP 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 our IPO completed in 2021. 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.

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 NYSE closing price on the date of grant.
The Amended and Restated 2014 Stock Incentive Plan, as amended, or the 2014 Plan, 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 purchased 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, 2023, 2022, and 2021, was $29 million, $25 million, and $17 million, 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, "Description of Business and Basis of Presentation"). Class A common stock and Class B common stock share proportionately, on a per share basis, in our net (losses) income 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 (loss) income per share. As a result, basic and diluted net (loss) income per share of Class A common stock and Class B common stock are equivalent.

We compute net (loss) income per common share based on the two-class method required for multiple classes of common stock and participating securities. The two-class method requires (loss) income 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 (loss) income for the period had been distributed.

We consider our currently outstanding restricted shares issued to be participating securities. Restricted shares are considered participating securities because holders of such shares have non-forfeitable rights in the event of a dividend declaration for common shares. Restricted shares are not contractually obligated to participate in our losses. As such, our net losses for the years ended December 31, 2023, 2022, and 2021 were not allocated to these participating securities.

Basic net (loss) income 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 purchase and Class A restricted common stock. Diluted net (loss) income per common share gives effect to all potentially dilutive securities which are excluded from the computation if the effect is antidilutive.
Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board, or FASB, issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU 2023-07. The amendments in the ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The annual disclosure amendments in this update are effective for us beginning in our fiscal year ending December 31, 2024. The interim disclosure amendments are effective for us beginning in fiscal year ending December 31, 2025. We are currently in the process of evaluating the impacts of the new standard on our consolidated financial statements, which we expect to result in enhanced financial statement disclosures only, however, we do not otherwise expect the adoption of the new guidance to have a material impact on our businesses, results or operations.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU 2023-09. The new guidance requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendments in the ASU are intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update are effective for us beginning in fiscal year ending December 31, 2025. We are currently evaluating the impact of the new standard on our consolidated financial statements which is expected to result in enhanced disclosures, however, we do not otherwise expect the adoption of the new guidance to have a material impact on our businesses, results or operations.
v3.24.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
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 (in millions):

Fair Value Measurements at December 31, 2023
Using:
Level 1Level 2Level 3Total
Assets:
Money market funds$267 $— $— $267 
Commercial paper— 53 — 53 
Certificates of deposit— 29 — 29 
Corporate bonds— 80 — 80 
U.S. government agency securities— 37 — 37 
Treasury securities— 213 — 213 
Asset-backed securities— 107 — 107 
$267 $519 $— $786 
Liabilities:
Warrants to purchase common stock$— $— $64 $64 
$— $— $64 $64 
Fair Value Measurements at December 31, 2022
Using:
Level 1Level 2Level 3Total
Assets:
Money market funds$483 $— $— $483 
Commercial paper— 140 — 140 
Certificates of Deposit— 104 — 104 
Corporate Bonds— 109 — 109 
U.S. government agency securities— 33 — 33 
Treasury securities
— 60 — 60 
Asset-backed securities
— 28 — 28 
$483 $474 $— $957 
Liabilities:
Warrants to purchase common stock$— $— $68 $68 
$— $— $68 $68 

During the years ended December 31, 2023 and 2022, there were no transfers between Level 1, Level 2 and Level 3.

Valuation of Warrants to Purchase Common Stock

The fair value of the warrants was determined using the Black-Scholes option-pricing model. The following table indicates the weighted-average assumptions made in estimating the fair value as of:
December 31, 2023December 31, 2022
Risk-free interest rate4.0 %4.1 %
Contractual term (in years)34
Expected volatility63.8 %60.3 %
Expected dividend yield— %— %
Exercise price per share
$17.16 $17.16 

The following table provides a roll-forward of the aggregate fair value of our warrant liability for which fair value is determined on recurring basis using Level 3 inputs (in millions):

Common Stock Warrant Liability
Balance as of December 31, 2021
$181 
Change in fair value
(95)
Settlement(18)
Balance as of December 31, 2022
68 
Change in fair value(3)
Settlement(1)
Balance as of December 31, 2023
$64 

As of December 31, 2023 and 2022, the maximum number of shares that could be required to be issued in respect of outstanding warrants was 7 million.
v3.24.0.1
Marketable Securities
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities Marketable Securities
The amortized cost, gross unrealized holding losses and fair value of marketable securities classified as available for sale, excluding accrued interest receivable, consisted of the following (in millions):

December 31, 2023
Amortized Cost
Net Unrealized Gains / (Losses)
Fair Value
Commercial paper$53 $— $53 
Certificates of deposit29 — 29 
Corporate bonds80 — 80 
U.S. government agency securities37 — 37 
Treasury securities213 — 213 
Asset-backed securities107 — 107 
Total$519 $— $519 

December 31, 2022
Amortized Cost
Net Unrealized Gains / (Losses)
Fair Value
Commercial paper$140 $— $140 
Certificates of deposit104 — 104 
Corporate bonds110 (1)109 
U.S. government agency securities33 — 33 
Treasury securities61 (1)60 
Asset-backed securities28 — 28 
Total$476 $(2)$474 


The fair values of the marketable securities by contractual maturities at December 31, 2023 were as follows (in millions):
December 31, 2023
Due within 1 year$309 
Due after 1 year through 5 years204 
Due after 5 years and thereafter
6 
Total marketable securities$519 
v3.24.0.1
Loan Servicing Activities and Acquired Loans Receivable, Net
 12 Months Ended
Dec. 31, 2023
Guarantees and Product Warranties [Abstract]  
Loan Servicing Activities and Acquired Loans Receivable, Net Loan Servicing Activities and Acquired Loans Receivable, Net
Changes in the contingent liability for expected credit losses for the years ended December 31, 2023 and 2022 were as follows (in millions):

Year Ended December 31,
20232022
Beginning balance
$14 $2 
Credit loss expense
54 20 
Reductions due to loan purchases
(39)(8)
Ending balance
$29 $14 
The balance of the non-contingent stand-ready liability was $11 million and $6 million, as of December 31, 2023 and 2022, respectively.
v3.24.0.1
Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2023
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 (in millions):

Amount
Balance as of December 31, 2021
$74 
Acquisitions
33 
Balance as of December 31, 2022
107 
Acquisitions
6 
Balance as of December 31, 2023
$113 

Intangible assets, net consisted of the following (in millions):

As of December 31, 2023
Technology AssetsCustomer AssetsTotal
Gross carrying amount$40 $7 $47 
Accumulated amortization(18)(3)(21)
Intangible assets, net$22 $4 $26 

As of December 31, 2022
Technology AssetsCustomer AssetsTotal
Gross carrying amount$38 $6 $44 
Accumulated amortization(13)(2)(15)
Intangible assets, net$25 $4 $29 

The total estimated future amortization of intangible assets as of December 31, 2023 was as follows (in millions):

Year ended December 31,Amount
2024$6 
20256 
20266 
20274 
20281 
Thereafter3 
$26 
v3.24.0.1
Lessee Arrangements
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Lessee Arrangements Lessee Arrangements
The components of lease expense were as follows during the years ended December 31, 2023, 2022, and 2021 (in millions):

Year Ended December 31,
202320222021
Operating lease expense
$12 $21 $25 
Variable lease expense
3 4 1 
Total
$15 $25 $26 

Operating lease expense reflects the non-cash amortization of right-of-use-assets recorded within operating lease right-of-use assets and operating lease liabilities, net on the consolidated statements of operations.

The weighted-average remaining lease term and discount rate for our operating leases were as follows:

Year Ended December 31,
20232022
Weighted-average remaining lease term (years)
4.46.4
Weighted-average discount rate
6.34%5.19%

At December 31, 2023, future lease payments under our operating leases were as follows (in millions):

Amount
2024$13 
202511 
202611 
20278 
20284 
Thereafter4 
Total future minimum lease payments51 
Less: Imputed interest7 
Present value of future minimum lease payments$44 

The following table summarizes supplemental cash flow information related to operating leases during the years ended December 31, 2023, 2022, and 2021 (in millions):
Year Ended December 31,
202320222021

Cash paid for amounts included in the measurement of lease liabilities
$14 $24 $25 
Supplemental non-cash amounts of increases in lease liabilities from obtaining right-of-use assets/ (decreases) of lease liabilities from lease terminations and modifications:
Upon the adoption of ASC 842
— — 95 
During the remainder of the period
(40)14 4 
Total
$(40)$14 $99 

During the year ended December 31, 2023, we terminated the lease for a portion of our corporate headquarters in Boston, MA. As a result, we agreed to pay a net fee of $11 million. We recorded a net charge of $12 million within general and administrative expenses on our Consolidated Statement of Operations, inclusive of a loss on impairment of certain property and equipment associated with the terminated portion of the lease.
v3.24.0.1
Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt Debt
Revolving Line of Credit
During 2021, we entered into a senior secured credit facility, or the 2021 Facility, which we subsequently amended on March 2, 2023 to replace the London Interbank Offered Rate, or LIBOR, with the Secured Overnight Financing Rate, or SOFR. Under the terms of the amendment, interest on loans will be determined based on loan type and accrue at an annual rate, as defined in the agreement, of 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 SOFR based upon loan duration plus 1.00%. The 2021 Facility is subject to a minimum liquidity covenant of $250 million. As of December 31, 2023 and 2022, total available funds under the 2021 Facility were $330 million and no amounts were drawn or outstanding.
v3.24.0.1
Business Combinations
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Business Combinations Business Combinations
Delphi Display Systems, Inc.

On February 14, 2023, we acquired 100% of the outstanding capital stock of Delphi Display Systems, Inc., or Delphi, a provider of digital display solutions and drive-thru technology, for a total purchase price of $10 million, to extend our growing suite of products benefiting quick-service restaurants and enterprise brands.

The final purchase price was allocated to goodwill, intangible assets and other net assets of $6 million, $3 million and $1 million, respectively. Intangible assets consisted of $2 million of developed technology and $1 million of customer relationships, each with estimated useful lives of 5 years. Goodwill is not deductible for tax purposes, and primarily attributable to synergies expected to arise after the acquisition.

The operating results of Delphi have been reflected in our results of operations from the date of the acquisition, but were not material to our consolidated financial statements.

Sling Inc.

On July 6, 2022, we acquired 100% of the outstanding capital stock of Sling Inc., or Sling, an employee scheduling, communication and management solution, to expand our product portfolio in the team scheduling and communication space. The total purchase price of $49 million consisted of cash payments of $38 million on the acquisition date and $9 million placed in escrow related to general representations, indemnities and warranties, as well as a deferred consideration of $2 million. The escrow will be released between 18 months and 60 months following the acquisition date.

In conjunction with the acquisition, we issued shares of Class A restricted common stock to certain members of Sling management with a total fair market value of $19 million. The shares vest over a service period of one to three years and are subject to forfeiture upon termination during the service period.
We used a market participant approach to record the assets acquired and liabilities assumed in the acquisition of Sling. The final allocation of the purchase price to the assets acquired and liabilities assumed based on the acquisition date fair values was as follows (in millions):
Amount
Cash$1 
Intangible assets:
Developed technology, useful life of 5 years
17 
Customer relationships, useful life of 5 years
2 
Goodwill33 
Net working capital1 
Deferred tax liability(5)
Net assets acquired$49 
The fair values of the developed technology and customer relationships intangible assets were based on Level 3 inputs using the cost and income approaches, respectively. The primary unobservable inputs were development effort and after tax cash flows, respectively.
Goodwill, which is not deductible for tax purposes, represents the excess of the consideration transferred over the fair value of the net assets acquired, and is primarily attributable to expected synergies between our operations and those Sling, as well as the assembled workforce.
The operating results of Sling have been reflected in our results of operations from the date of the acquisition, but were not material to our consolidated financial statements.
v3.24.0.1
Other Balance Sheet Information
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Other Balance Sheet Information Other Balance Sheet Information
Accounts Receivable, net (in millions)
December 31,
20232022
Accounts receivable
$57 $45 
Unbilled receivables
23 44 
Less: Allowance for credit losses
(11)(12)
Accounts receivable, net$69 $77 

Our allowance for credit losses was comprised of the following (in millions):

Year Ended December 31,
20232022
Beginning balance$(12)$(4)
Additions(10)(13)
Write offs11 5 
Ending balance$(11)$(12)

Other Current Assets (in millions)
December 31,
20232022
Cash held on behalf of customers
$87 $60 
Deferred contract acquisition costs
60 44 
Other receivables58 32 
Prepaid expenses
24 27 
Deposits for inventory purchases6 20 
Other
24 16 
$259 $199 
Property and Equipment (in millions)
December 31,
20232022
Capitalized software$97 $49 
Computer equipment
18 14 
Leasehold improvements
13 36 
Tooling and equipment
4 2 
Furniture and fixtures
3 8 
Construction in process
1 — 
136 109 
Less: Accumulated depreciation
(61)(48)
$75 $61 

Depreciation expense, which excludes amortization expense related to capitalized software, for the years ended December 31, 2023, 2022, and 2021, was $10 million, $10 million, and $9 million, respectively. Impairment expense for the year ended December 31, 2023 was $15 million, primarily related to the termination of the Boston lease (Note 7). There were no impairment expenses for the years ended December 31, 2022 and 2021.

During the years ended December 31, 2023 and 2022, we capitalized $48 million and $24 million, respectively, in software and website development costs. As of December 31, 2023 and 2022, property and equipment, net in the Consolidated Balance Sheets included unamortized software and website development costs of $57 million and $25 million, respectively. Amortization expense attributable to capitalized software and website development costs was $16 million, $9 million, and $8 million, respectively, for the years ended December 31, 2023, 2022 and 2021.

Accrued Expenses and Other Current liabilities (in millions)

December 31,
20232022
Accrued transaction-based costs
$253 $181 
Customer funds obligation
87 60 
Accrued payroll and bonus
78 59 
Accrued expenses
68 45 
Contingent liability for expected credit losses
29 14 
Accrued commissions
25 15 
Operating lease liability11 14 
Other
41 39 
$592 $427 
v3.24.0.1
Common Stock
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Common Stock Common Stock
Shares of Stock

The following table shows the changes in Class A and Class B shares of common stock (in millions):

Year Ended December 31,
202320222021
Class A and B Common Stock (in shares)
Balance, beginning of period
523 507 220 
Issuance of common stock under equity plans
19 14 6 
Conversion of preferred stock
— — 254 
Issuance of common stock in connection with initial public offering
— — 25 
Issuance of common stock, other
1 2 2 
Balance, end of period
543 523 507 

Changes in Class B Common stock were as follows (in millions):
Year Ended December 31,
202320222021
Class B Common Stock (in shares)
Balance, beginning of period
170 339 — 
Conversion of preferred stock upon Initial Public Offering
— — 254 
Conversion of common stock upon Initial Public Offering
— — 225 
Conversions to Class A common stock
(56)(169)(140)
Balance, end of period
114 170 339 

During the year ended December 31, 2023, all Treasury Stock shares outstanding were fully retired. During the year ended December 31, 2021, immediately prior to the completion of our IPO, all shares of convertible preferred stock were automatically converted into an equal number of shares of Class B common stock.

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, our social impact arm. During the year ended December 31, 2021, our Board approved reserving 5 million 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 bona fide gift to a charitable organization to fund its social impact initiatives through Toast.org. As of December 31, 2023, 4 million shares were reserved for future issuances for charitable donations. During the years ended December 31, 2023, 2022, and 2021, we recognized a charitable contribution stock-based expense of $10 million, $10 million and $19 million, respectively, for the fair value of the donated shares, which was recorded within general and administrative expenses in the Consolidated Statements of Operations.
Restricted Stock

Issued and restricted shares of Class A and Class B common stock relate to those issued upon early exercise of stock options under our 2014 Plan and certain shares issued as part of the consideration for acquisitions. The following table shows the changes in our restricted shares of Class A and Class B common stock (in millions):

Shares
Unvested as of December 31, 2022
3 
Issuance of restricted stock
— 
Repurchases
— 
Vested
(2)
Unvested as of December 31, 2023
1 
v3.24.0.1
Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 2023
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 (in millions):

Year Ended December 31,
20232022
Deferred revenue, beginning of year$46 $56 
Deferred revenue, end of period$41 $46 
Revenue recognized in the period from amounts included in deferred revenue at the beginning of period$42 $51 

Deferred revenue includes amounts classified within other long-term liabilities on our Consolidated Balance Sheets.

As of December 31, 2023, $678 million of revenue is expected to be recognized from remaining performance obligations for customer contracts. We expect to recognize revenue on approximately $618 million 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 (in millions):

Year Ended December 31,
20232022
Beginning balance$82 $55 
Capitalization of sales commissions costs107 71 
Amortization of sales commissions costs(62)(44)
Ending balance$127 $82 

Deferred contract acquisition costs are classified within other current assets (Note 10) and other non-current assets, respectively.
v3.24.0.1
Stock-Based Compensation Expense
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Expense Stock-Based Compensation Expense
Stock-based compensation expense recognized for the years ended December 31, 2023, 2022, and 2021, was as follows (in millions):

Year Ended December 31,
202320222021
Costs of revenue
$43 $33 $12 
Sales and marketing
58 50 24 
Research and development
94 72 48 
General and administrative
82 73 58 
$277 $228 $142 

Stock-based compensation of $13 million, $7 million and $1 million, was capitalized as software development costs for the years ended December 31, 2023, 2022, and 2021, respectively.

Stock Option and Incentive Plans

The 2021 Stock Option and Incentive Plan, or the 2021 Plan, was adopted and approved in 2021. The 2021 Plan replaced the 2014 Plan, which was initially adopted in 2014 and continues to govern outstanding equity awards granted thereunder. The 2021 Plan allows us to make equity-based and cash-based incentive awards to our officers, employees, directors, and consultants. The number of shares reserved and available for issuance under the 2021 Plan automatically increases each January 1, by 5% of the total 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 our Board. As of December 31, 2023, 67 million shares were authorized for future issuance under the 2021 Plan.

2021 Employee Stock Purchase Plan

In 2021, our Board adopted, and our stockholders approved, the 2021 Employee Stock Purchase Plan, or ESPP. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1 of each year through January 1, 2031, by the lesser of: (i) 12 million shares of our Class A common stock, (ii) 1% of the issued and outstanding total 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, 2023, 21 million shares of our Class A common stock were authorized for issuance to participating employees who are allowed to purchase shares of Class A common stock at a price equal to 85% of its fair market value at the beginning or the end of the offering period, whichever is lower.
Stock Options

Our stock option awards generally have a requisite service period of four to five years and a contractual life of ten years.

The following table indicates the weighted-average assumptions made in estimating the fair value based on the Black-Scholes model as of December 31, 2023, 2022, and 2021:

Year Ended December 31,
202320222021
Risk-free interest rate
3.90%2.42%1.00%
Expected term (in years)
6.086.076.32
Expected volatility
56%52%65%
Expected dividend yield
0%0%0%
Weighted-average fair value per share of common stock
$18.01$17.24$17.00
Weighted-average fair value per share of options issued
$10.24$8.94$10.12

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

Number of Shares
 (in millions)		Weighted- Average Exercise Price (per share) Weighted- Average Remaining Contractual Term (in Years)Aggregate Intrinsic Value (in millions)(1)
Outstanding as of December 31, 2022
54$5.98 
Granted318.01 
Exercised(8)3.07 
Forfeited(1)14.20 
Outstanding as of December 31, 2023
48$7.07 
Options vested and expected to vest as of
December 31, 2023
46$6.86 6.2$532 
Options exercisable as of December 31, 2023
41$5.34 5.9$532 
(1) The aggregate intrinsic value was determined as the difference between the closing price of the Class A common stock on the last trading day of the month of December 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 aggregate intrinsic values of options exercised was $137 million, $134 million, and $162 million for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, total unrecognized stock-based compensation expense related to the options was $83 million and is expected to be recognized over the remaining weighted-average service period of 2.5 years.
Restricted Stock Units

The majority of our RSU awards have a requisite service period of four years. 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, 2023:

RSU
(in millions)
Weighted- Average Grant Date Fair Value (per share)
Outstanding balance as of December 31, 2022
31 $22.11 
Granted15 18.58 
Vested(10)21.61 
Forfeited(3)21.72 
Outstanding balance as of December 31, 2023
33 $20.70 
Expected to vest as of December 31, 2023
29 20.74 

The weighted average grant-date fair value per share of RSUs granted during the years ended December 31, 2022 and 2021 was $18.40 and $29.80, respectively. The fair value of RSUs vested during the years ended December 31, 2023, 2022, and 2021 was $208 million, $108 million, and $1 million, respectively.

As of December 31, 2023, total unrecognized stock-based compensation expense related to the RSUs was $490 million and is expected to be recognized over the remaining weighted-average service period of 2.8 years.

Secondary Sales and Tender Offer

During the year ended December 31, 2021, secondary investors purchased shares of common stock from certain employees. Stock-based compensation expense related to these transactions totaled $46 million, representing amounts paid in excess of then current fair value.
v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
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,
202320222021
United States$(258)$(286)$(493)
Foreign14 9 3 
Total loss before income taxes$(244)$(277)$(490)

The components of income tax (expense) benefit for the years ended December 31, 2023, 2022, and 2021, were as follows (in millions):
Year Ended December 31,
202320222021
Current state
$(1)$(1)$— 
Current foreign
(2)(2)— 
Current tax (expense) benefit
(3)(3)— 
Deferred federal
1 4 2 
Deferred state
— 1 1 
Deferred tax (expense) benefit
1 5 3 
Total income tax (expense) benefit
$(2)$2 $3 
The tax effects of temporary differences that gave rise to a significant portion of the deferred tax assets and liabilities at December 31, 2023 and 2022, were as follows (in millions):
December 31,
20232022
Deferred tax assets:
Net operating loss carryforwards$196 $160 
Stock-based compensation expense40 34 
Credit carryforward62 42 
Accrued expenses and reserves49 28 
Charitable contributions10 8 
Deferred revenue2 2 
Depreciation— 1 
Capitalized R&D
77 57 
Inventory reserve— 2 
Lease liability11 23 
Total deferred tax assets447 357 
Valuation allowance(397)(310)
Net deferred tax assets50 47 
Deferred tax liabilities:
       Depreciation
(2)— 
Amortization
(7)(8)
       Capitalized contract acquisition costs(32)(21)
       Right-of-use asset(9)(18)
Total deferred tax liabilities(50)(47)
Net deferred tax asset (liability)$— $— 

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

December 31,
202320222021
Tax provision at statutory rate
21.0%21.0%21.0%
State tax—net of federal
5.4%7.8%1.2%
Permanent items - Other
(1.8)%(1.5)%(0.6)%
Warrants0.3%7.3%(4.2)%
Convertible debt extinguishment—%—%(1.5)%
Research and development credits
6.5%4.6%1.0%
Stock-based compensation expense
3.1%(1.0)%(0.8)%
Derivative liability
—%—%(5.6)%
Change in valuation allowance
(35.3)%(37.5)%(10.0)%
Effective Tax Rate
(0.8)%0.6%0.5%

During the year ended December 31, 2023, we recorded an income tax expense of $2 million, which is primarily attributable to U.S. state tax expense and the tax expense recorded on the earnings of our profitable foreign subsidiaries, partially offset by a non-recurring benefit of $1 million 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 Delphi acquisition.

Management has evaluated the positive and negative evidence bearing upon the realizability of its net deferred tax assets and 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 retained against our net deferred tax assets as of December 31, 2023. The valuation allowance increased by $87 million, $104 million and $52 million during the years ended December 31, 2023, 2022 and 2021, respectively, primarily due to the operating losses incurred and tax credits generated during each year.
As of December 31, 2023, we had U.S. federal net operating loss carryforwards of $720 million which may be able to offset future income tax liabilities. Of the federal net operating loss carryforward $635 million has an indefinite carryforward period, and $85 million will expire at various dates through 2037. As of December 31, 2023, we had U.S. state net operating loss carryforwards of $773 million, of which $641 million begin to expire in 2032 and the remaining $132 million do not expire. As of December 31, 2023, we had U.S. federal tax credit carryforwards of $45 million which expire between 2034 and 2043. As of December 31, 2023 we had U.S. state tax credit carryforwards of $21 million which expire between 2031 and 2038.

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 has completed a historical ownership change analysis and while it has experienced ownership changes in the past none of its existing federal and state tax attributes are subject to historical limitations that are expected to materially limit their utilization. The company's ability to utilize its federal and state attributes could be limited by ownership changes that may occur in the future.

As of December 31, 2023, 2022, and 2021, 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, 2023, 2022, and 2021, we have accrued and recognized immaterial interest or penalties related to uncertain tax positions.

We file income tax returns in the United States (federal, and various state jurisdictions), as well as various foreign jurisdictions. The federal, state and foreign income tax returns are generally subject to tax examinations for the tax years ended December 31, 2020 through December 31, 2023. 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.

As of December 31, 2023, we have not provided deferred U.S. income taxes or foreign withholding taxes on temporary differences resulting from unremitted earnings for certain non-U.S. subsidiaries, which are permanently reinvested outside of the U.S. Due to a recent launch of foreign operations that remain insignificant to our overall activities, the amount of unrecognized basis difference is not material as of December 31, 2023.
v3.24.0.1
Loss Per Share
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Loss Per Share Loss Per Share
Basic net loss per share is determined by dividing net loss by the weighted-average shares outstanding for the period. We analyze the potential dilutive effect of stock options, unvested restricted stock, RSUs, shares under our ESPP, and warrants to purchase common stock (as applicable), during periods we generate net income, or when income is recognized related to changes in fair value of our warrant liability.

For the years ended December 31, 2023 and 2022, we recorded a gain on fair value remeasurement of our warrant liability which was added back to net loss to adjust for the incremental dilutive shares using the treasury stock method. We adjusted the weighted average shares outstanding for the incremental dilutive shares using the treasury stock method. During the year ended December 31, 2021, we recorded a loss on fair value remeasurement of our warrant liability, which was excluded from the calculation of diluted earnings per share due to its antidilutive effect.
The following table sets forth the computation of net loss per share attributable to common stockholders (in millions, except per share amounts):

Year Ended December 31,
202320222021
Numerator:
Net loss attributable to common stockholders- basic$(246)$(275)$(487)
Gain on change in fair value of warrant liability395 — 
Net loss attributable to common stockholders- diluted$(249)$(370)$(487)
Denominator:
Weighted-average shares of common stock outstanding -basic
532512290
Effect of dilutive securities:
Warrants to purchase Class B common stock1— — 
Weighted-average shares of common stock outstanding - diluted
533 512 290 
Net loss per share attributable to common stockholders - basic $(0.46)$(0.54)$(1.68)
Net loss per share attributable to common stockholders - diluted$(0.47)$(0.72)$(1.68)

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, 2023, 2022, and 2021 (in millions):
Year Ended December 31,
202320222021
Options to purchase Class A common stock, Class B common stock, and common stock
48 54 59 
Unvested restricted stock
1 3 4 
Unvested restricted stock units33 31 15 
Warrants to purchase Class B common stock and common stock and preferred stock (as if converted to warrants to purchase common stock)
— — 8 
Total82 88 86 

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.
v3.24.0.1
Segment Information
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment Information Segment Information
We have significant operations in the United States, Ireland, and India. We did not earn material revenue in any country other than the United States during the years ended December 31, 2023, 2022, and 2021.

The following table sets forth the breakdown of long-lived assets based on geography (in millions):
December 31,
20232022
United States$99 $122 
Ireland7 10 
India4 5 
Other1 1 
Total long-lived assets$111 $138 
Tangible long-lived assets consist of property and equipment and operating lease right-of-use assets. Long-lived assets attributed to specific countries are based upon the country in which the asset is located.
v3.24.0.1
Commitment and Contingencies
 12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
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 estimates. As of December 31, 2023 and December 31, 2022, 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.
v3.24.0.1
Subsequent Events (unaudited)
 12 Months Ended
Dec. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events (unaudited) Subsequent Events (unaudited)
In February 2024, we announced a restructuring plan, or the Restructuring Plan, designed to promote overall operating expense efficiency, including a reduction in force and certain other actions to reorganize our facilities and operations. As part of this Restructuring Plan, we expect to incur restructuring and restructuring-related charges of approximately $45 to $55 million, primarily related to severance and severance related costs and certain other costs related to facilities. We expect to complete the Restructuring Plan by the end of fiscal year 2024 and expect to incur substantially all of these charges in the first quarter of fiscal year 2024.
In February 2024, we also announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock, in an aggregate amount of up to $250 million. The repurchase program has no expiration date, does not obligate us to acquire any particular amount of our Class A common stock, and it may be suspended at any time at our discretion. The timing and actual number of shares repurchased may depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.
v3.24.0.1
Pay vs Performance Disclosure - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Pay vs Performance Disclosure      
Net loss $ (246) $ (275) $ (487)
v3.24.0.1
Insider Trading Arrangements
 3 Months Ended 12 Months Ended
Dec. 31, 2023
shares
Dec. 31, 2023
shares
Trading Arrangements, by Individual    
Non-Rule 10b5-1 Arrangement Adopted false  
Rule 10b5-1 Arrangement Terminated false  
Non-Rule 10b5-1 Arrangement Terminated false  
Elena Gomez [Member]    
Trading Arrangements, by Individual    
Material Terms of Trading Arrangement   On December 14, 2023, Elena Gomez, our Chief Financial Officer, entered into a trading plan pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act. Ms. Gomez's Rule 10b5-1 trading plan provides for the sale from time to time of a maximum of 91,664 shares of our Class A common stock pursuant to the terms of the plan. Ms. Gomez's Rule 10b5-1 trading plan expires on March 31, 2025, or earlier if all transactions under the trading arrangement are completed. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c).
Name Elena Gomez  
Title Chief Financial Officer  
Rule 10b5-1 Arrangement Adopted true  
Adoption Date December 14, 2023  
Arrangement Duration 473 days  
Aggregate Available 91,664 91,664
Jonathan Vassil [Member]    
Trading Arrangements, by Individual    
Material Terms of Trading Arrangement  
On December 14, 2023, Jonathan Vassil, our Chief Revenue Officer, entered into a trading plan pursuant to Rule 10b5-1 of the Exchange Act. Mr. Vassil's Rule 10b5-1 trading plan provides for the sale from time to time of a maximum of 300,000 shares of our Class A common stock pursuant to the terms of the plan. Mr. Vassil's Rule 10b5-1 trading plan expires on August 30, 2024, or earlier if all transactions under the trading arrangement are completed. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c).
Name Jonathan Vassil  
Title Chief Revenue Officer  
Rule 10b5-1 Arrangement Adopted true  
Adoption Date December 14, 2023  
Arrangement Duration 260 days  
Aggregate Available 300,000 300,000
Aman Narang [Member]    
Trading Arrangements, by Individual    
Material Terms of Trading Arrangement  
On December 1, 2023, Aman Narang, our co-founder and board member, serving then as our Chief Operating Officer and currently as our Chief Executive Officer, terminated a pre-arranged stock trading plan pursuant to Rule 10b5-1 under the Exchange Act, which was adopted on February 24, 2023 with an original expiration date of October 16, 2024. The trading arrangement was intended to satisfy the affirmative defense in Rule 10b5-1(c). Mr. Narang’s pre-arranged stock trading plan provided for the sale of up to 5,446,666 shares of our Class A common stock pursuant to the terms of the plan, an aggregate of 248,509 shares were sold during the time period from February 24, 2023 through December 1, 2023.
Name Aman Narang  
Title Chief Executive Officer  
Rule 10b5-1 Arrangement Terminated true  
Termination Date December 1, 2023  
Aggregate Available 5,446,666 5,446,666
v3.24.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2023
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.
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.
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.

Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, fair values and useful lives of assets acquired and liabilities assumed through business combinations, stock-based compensation expense, warrants, allowance for credit losses, liabilities associated with financial guarantees related to loan purchase activities, incremental borrowing rates applied in valuation of lease liabilities, common stock valuation, as well as the 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, and warrants to purchase common stock. We also measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities primarily include assets acquired and liabilities assumed in business combinations and liabilities related to our obligation to perform under certain financial guarantees (See Note 2, "Summary of Significant Accounting Policies", "Assets and Liabilities Recorded with Loan Servicing Activities"). Impairments, if any, of property and equipment and/or intangible assets, are written down to fair value measured at such time on a nonrecurring basis. 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.

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 3, “Fair Value Measurements”). The carrying values of accounts receivable, accounts payable, and accrued expenses approximate their fair values due to their short-term nature.
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 a large portion 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. 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/ Deferred Revenue
We principally generate revenues from: (1) subscription services from our SaaS products, (2) financial technology solutions, including loan servicing activities, and (3) hardware and professional services.

Determining whether products and services are considered distinct performance obligations that should be accounted for separately as opposed to being combined requires 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 SSP for hardware and professional services revenue using an adjusted market assessment approach which analyzes discounts provided to similar customers based on customer category, sales channel, and size. SSP for subscription services revenue is also 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 is determined using our own standalone sales data. We allocate variable fees earned from financial technology services revenue to those distinct performance obligations where pricing practices are consistent with the allocation objective.

We measure revenues based on the amount of consideration we expect to receive in exchange for our products and/or services. Customer credits represent variable consideration which is estimated based on historical experience and accounted for as a reduction to the transaction price. We record reductions to revenues for our estimates of customer credits and an increase to liabilities in the period that the related revenue is earned. Sales taxes collected from customers and remitted to government authorities are excluded from revenue and deferred revenue.

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.

Financial Technology Solutions

Financial technology solutions revenue includes transaction-based payment processing services for customers who 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 generally 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 our 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 is recognized upon authorization by the issuing bank and submission for processing.

Financial technology solutions revenue also includes fees earned from marketing and servicing loans to customers through our wholly-owned subsidiary, Toast Capital, that are originated by a third-party banking partner. 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 repaid. 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, included within other current assets. The marketing and facilitation fees earned upon execution of these loan agreements with its customers are recognized as revenue on a gross basis.

Hardware and Professional Services

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 when the transfer of control occurs, which is upon product shipment. We accept returns for hardware sales and estimate returns as a reduction to the transaction price, at the time of the sale based on historical returns data and experience.

Professional services revenue is generated from fees charged to customers for installation services, including business process mapping, configuration, and training. 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.
Cash, Cash Equivalents, Cash Held on Behalf of Customers and Restricted Cash
We define cash and cash equivalents as cash deposits, money market funds, and 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.

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 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 held as collateral pursuant to an agreement with the originating third-party bank for the working capital loans serviced by Toast Capital (See Note 5, "Loan Servicing Activities and Acquired Loans Receivable, Net").
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 loss, 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.
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. Credit losses are 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 in the Consolidated Balance Sheets with a corresponding adjustment to earnings. Unrealized losses that are not related to credit losses are recognized in accumulated other comprehensive loss.
Accounts Receivable, Net
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.
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, Financial Instruments - Credit Losses, or 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 our 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. Substantially all inventory consists of finished goods. 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 outbound freight, handling costs, and damaged inventory as current-period costs.
Assets and Liabilities Recorded with Loan Servicing Activities
We perform loan servicing activities through the Toast Capital loan program, where we partner with an industrial bank to provide working capital loans to qualified Toast customers based on the customer’s current payment processing and point of sale 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 provide eligible customers with access to financing up to $300 thousand, and loan repayment occurs automatically through a fixed percentage of every payment transaction processed on Toast’s platform.
Under the terms of our agreement with our industrial bank partner, we are obligated to purchase certain loans originated by our industrial banking partner in cases where the customer's payments on the loan are missing or delayed for a defined period of time, and the loan is considered defaulted or delinquent (ineligible). Our obligation is limited to a specified percentage of the total loans originated, measured on a quarterly basis. The loan purchase, net of expected recoveries, reduces our potential liability with respect to the quarterly cohort of loans from which the ineligible loan originated. Refer to Note 2, "Acquired Loans Receivable, Net" for information on our accounting for purchased 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 ineligible loans, and a non-contingent liability accounted for under ASC 460, Guarantees, or ASC 460, related to our obligation to stand-ready to perform under the obligation, both of which are included in accrued expenses and other current liabilities in the Consolidated Balance Sheets. 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 purchased 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 360 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 loans are originated, along with a corresponding non-cash charge recorded within general and administrative expense in the Consolidated Statements of Operations. We remeasure 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 average expected obligation term, which ranges from 90 to 360 days, and derecognized upon loan purchase. Fair value of a non-contingent liability is measured based on a discounted cash flow model under the income approach which 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.
Acquired Loans Receivable, Net We are obligated to purchase delinquent loans from our industrial bank partner. Such purchases, net of expected recoveries, are recorded as a reduction of contingent liabilities with respect to the quarterly cohort of loans from which the defaulted loan originated. We 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, and write off their unpaid principal balance at the time of purchase as collectability is not probable. However, when we have an expectation of collecting cash flows, a negative allowance is established for purchased loans based on our historical experience of expected recoveries across our portfolio.
Deferred Contract Acquisition Costs
Based on ASC 340-40, Other Assets and Deferred Costs, we 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 determined to be four 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 expenses in the Consolidated Statements of Operations.
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.
Operating Leases
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, net of any lease incentives received by the 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.

Lease term includes the non-cancelable term, unless it is reasonably certain that a renewal or termination option will 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.
Business Combinations
We account for business combinations using the acquisition method of accounting in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values on 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.
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. There were no goodwill impairment losses recognized during the years ended December 31, 2023, 2022, and 2021. Based on our quantitative goodwill impairment test, the reporting unit's fair value significantly exceeded its carrying value at December 31, 2023.
Intangible Assets
Intangible assets primarily consist of finite-lived acquired technology and customer relationships. 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 our intangible assets on an ongoing basis to determine whether events and circumstances warrant a revision to the remaining amortization period.

Acquired technology and customer relationships amortization is recorded within costs of revenue and sales and marketing expenses, respectively, within the Consolidated Statements of Operations
Impairment of Long-lived 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.
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 and acquired intangible assets.

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 service conditions and restricted stock units, or RSUs, which vest upon the satisfaction of service and/or performance conditions. 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 is recognized over the requisite service period, net of estimated forfeitures. 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.

Compensation cost is recognized on a straight-line basis for stock-options, RSUs, and our 2021 Employee Stock Purchase Plan, or ESPP, 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 and ESPP 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 our IPO completed in 2021. 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.

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 NYSE closing price on the date of grant.
The Amended and Restated 2014 Stock Incentive Plan, as amended, or the 2014 Plan, 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 purchased 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, "Description of Business and Basis of Presentation"). Class A common stock and Class B common stock share proportionately, on a per share basis, in our net (losses) income 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 (loss) income per share. As a result, basic and diluted net (loss) income per share of Class A common stock and Class B common stock are equivalent.

We compute net (loss) income per common share based on the two-class method required for multiple classes of common stock and participating securities. The two-class method requires (loss) income 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 (loss) income for the period had been distributed.

We consider our currently outstanding restricted shares issued to be participating securities. Restricted shares are considered participating securities because holders of such shares have non-forfeitable rights in the event of a dividend declaration for common shares. Restricted shares are not contractually obligated to participate in our losses. As such, our net losses for the years ended December 31, 2023, 2022, and 2021 were not allocated to these participating securities.
Basic net (loss) income 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 purchase and Class A restricted common stock. Diluted net (loss) income per common share gives effect to all potentially dilutive securities which are excluded from the computation if the effect is antidilutive.
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board, or FASB, issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU 2023-07. The amendments in the ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The annual disclosure amendments in this update are effective for us beginning in our fiscal year ending December 31, 2024. The interim disclosure amendments are effective for us beginning in fiscal year ending December 31, 2025. We are currently in the process of evaluating the impacts of the new standard on our consolidated financial statements, which we expect to result in enhanced financial statement disclosures only, however, we do not otherwise expect the adoption of the new guidance to have a material impact on our businesses, results or operations.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU 2023-09. The new guidance requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendments in the ASU are intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this update are effective for us beginning in fiscal year ending December 31, 2025. We are currently evaluating the impact of the new standard on our consolidated financial statements which is expected to result in enhanced disclosures, however, we do not otherwise expect the adoption of the new guidance to have a material impact on our businesses, results or operations.
v3.24.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Schedule of 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
Tooling and equipment
3 - 7 years
Capitalized software2 years
Property and Equipment (in millions)
December 31,
20232022
Capitalized software$97 $49 
Computer equipment
18 14 
Leasehold improvements
13 36 
Tooling and equipment
4 2 
Furniture and fixtures
3 8 
Construction in process
1 — 
136 109 
Less: Accumulated depreciation
(61)(48)
$75 $61 
Schedule of Acquired Finite-Lived Intangible Assets by Major Class
The estimated useful lives for acquired technology and customer relationship intangible assets are as follows:
Estimated Useful Life
Acquired technology
3 - 10 years
Customer acquired intangible assets
5 - 6 years
v3.24.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2023
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 (in millions):

Fair Value Measurements at December 31, 2023
Using:
Level 1Level 2Level 3Total
Assets:
Money market funds$267 $— $— $267 
Commercial paper— 53 — 53 
Certificates of deposit— 29 — 29 
Corporate bonds— 80 — 80 
U.S. government agency securities— 37 — 37 
Treasury securities— 213 — 213 
Asset-backed securities— 107 — 107 
$267 $519 $— $786 
Liabilities:
Warrants to purchase common stock$— $— $64 $64 
$— $— $64 $64 
Fair Value Measurements at December 31, 2022
Using:
Level 1Level 2Level 3Total
Assets:
Money market funds$483 $— $— $483 
Commercial paper— 140 — 140 
Certificates of Deposit— 104 — 104 
Corporate Bonds— 109 — 109 
U.S. government agency securities— 33 — 33 
Treasury securities
— 60 — 60 
Asset-backed securities
— 28 — 28 
$483 $474 $— $957 
Liabilities:
Warrants to purchase common stock$— $— $68 $68 
$— $— $68 $68 
Schedule of Fair Value Measurement Inputs and Valuation Techniques The following table indicates the weighted-average assumptions made in estimating the fair value as of:
December 31, 2023December 31, 2022
Risk-free interest rate4.0 %4.1 %
Contractual term (in years)34
Expected volatility63.8 %60.3 %
Expected dividend yield— %— %
Exercise price per share
$17.16 $17.16 
Schedule of Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis
The following table provides a roll-forward of the aggregate fair value of our warrant liability for which fair value is determined on recurring basis using Level 3 inputs (in millions):

Common Stock Warrant Liability
Balance as of December 31, 2021
$181 
Change in fair value
(95)
Settlement(18)
Balance as of December 31, 2022
68 
Change in fair value(3)
Settlement(1)
Balance as of December 31, 2023
$64 
v3.24.0.1
Marketable Securities (Tables)
 12 Months Ended
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
Schedule of Debt Securities, Available-for-sale
The amortized cost, gross unrealized holding losses and fair value of marketable securities classified as available for sale, excluding accrued interest receivable, consisted of the following (in millions):

December 31, 2023
Amortized Cost
Net Unrealized Gains / (Losses)
Fair Value
Commercial paper$53 $— $53 
Certificates of deposit29 — 29 
Corporate bonds80 — 80 
U.S. government agency securities37 — 37 
Treasury securities213 — 213 
Asset-backed securities107 — 107 
Total$519 $— $519 

December 31, 2022
Amortized Cost
Net Unrealized Gains / (Losses)
Fair Value
Commercial paper$140 $— $140 
Certificates of deposit104 — 104 
Corporate bonds110 (1)109 
U.S. government agency securities33 — 33 
Treasury securities61 (1)60 
Asset-backed securities28 — 28 
Total$476 $(2)$474 


The fair values of the marketable securities by contractual maturities at December 31, 2023 were as follows (in millions):
December 31, 2023
Due within 1 year$309 
Due after 1 year through 5 years204 
Due after 5 years and thereafter
6 
Total marketable securities$519 
v3.24.0.1
Loan Servicing Activities and Acquired Loans Receivable, Net (Tables)
 12 Months Ended
Dec. 31, 2023
Guarantees and Product Warranties [Abstract]  
Schedule of Off-Balance Sheet, Credit Loss, Liability
Changes in the contingent liability for expected credit losses for the years ended December 31, 2023 and 2022 were as follows (in millions):

Year Ended December 31,
20232022
Beginning balance
$14 $2 
Credit loss expense
54 20 
Reductions due to loan purchases
(39)(8)
Ending balance
$29 $14 
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Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
The changes in the carrying amount of goodwill for the periods presented were as follows (in millions):

Amount
Balance as of December 31, 2021
$74 
Acquisitions
33 
Balance as of December 31, 2022
107 
Acquisitions
6 
Balance as of December 31, 2023
$113 
Schedule of Finite-Lived Intangible Assets
Intangible assets, net consisted of the following (in millions):

As of December 31, 2023
Technology AssetsCustomer AssetsTotal
Gross carrying amount$40 $7 $47 
Accumulated amortization(18)(3)(21)
Intangible assets, net$22 $4 $26 

As of December 31, 2022
Technology AssetsCustomer AssetsTotal
Gross carrying amount$38 $6 $44 
Accumulated amortization(13)(2)(15)
Intangible assets, net$25 $4 $29 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
The total estimated future amortization of intangible assets as of December 31, 2023 was as follows (in millions):

Year ended December 31,Amount
2024$6 
20256 
20266 
20274 
20281 
Thereafter3 
$26 
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Lessee Arrangements (Tables)
 12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Schedule of Lease, Cost
The components of lease expense were as follows during the years ended December 31, 2023, 2022, and 2021 (in millions):

Year Ended December 31,
202320222021
Operating lease expense
$12 $21 $25 
Variable lease expense
3 4 1 
Total
$15 $25 $26 
The following table summarizes supplemental cash flow information related to operating leases during the years ended December 31, 2023, 2022, and 2021 (in millions):
Year Ended December 31,
202320222021

Cash paid for amounts included in the measurement of lease liabilities
$14 $24 $25 
Supplemental non-cash amounts of increases in lease liabilities from obtaining right-of-use assets/ (decreases) of lease liabilities from lease terminations and modifications:
Upon the adoption of ASC 842
— — 95 
During the remainder of the period
(40)14 4 
Total
$(40)$14 $99 
Schedule of Weighted Average Lease Term And Discount Rate
The weighted-average remaining lease term and discount rate for our operating leases were as follows:

Year Ended December 31,
20232022
Weighted-average remaining lease term (years)
4.46.4
Weighted-average discount rate
6.34%5.19%
Schedule of Lessee, Operating Lease, Liability, Maturity
At December 31, 2023, future lease payments under our operating leases were as follows (in millions):

Amount
2024$13 
202511 
202611 
20278 
20284 
Thereafter4 
Total future minimum lease payments51 
Less: Imputed interest7 
Present value of future minimum lease payments$44 
v3.24.0.1
Business Combinations (Tables)
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed The final allocation of the purchase price to the assets acquired and liabilities assumed based on the acquisition date fair values was as follows (in millions):
Amount
Cash$1 
Intangible assets:
Developed technology, useful life of 5 years
17 
Customer relationships, useful life of 5 years
2 
Goodwill33 
Net working capital1 
Deferred tax liability(5)
Net assets acquired$49 
v3.24.0.1
Other Balance Sheet Information (Tables)
 12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Accounts Receivable, net
Accounts Receivable, net (in millions)
December 31,
20232022
Accounts receivable
$57 $45 
Unbilled receivables
23 44 
Less: Allowance for credit losses
(11)(12)
Accounts receivable, net$69 $77 
Schedule of Accounts Receivable, net, Allowance for Credit Loss
Our allowance for credit losses was comprised of the following (in millions):

Year Ended December 31,
20232022
Beginning balance$(12)$(4)
Additions(10)(13)
Write offs11 5 
Ending balance$(11)$(12)
Schedule of Other Current Assets
Other Current Assets (in millions)
December 31,
20232022
Cash held on behalf of customers
$87 $60 
Deferred contract acquisition costs
60 44 
Other receivables58 32 
Prepaid expenses
24 27 
Deposits for inventory purchases6 20 
Other
24 16 
$259 $199 
Schedule of 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
Tooling and equipment
3 - 7 years
Capitalized software2 years
Property and Equipment (in millions)
December 31,
20232022
Capitalized software$97 $49 
Computer equipment
18 14 
Leasehold improvements
13 36 
Tooling and equipment
4 2 
Furniture and fixtures
3 8 
Construction in process
1 — 
136 109 
Less: Accumulated depreciation
(61)(48)
$75 $61 
Schedule of Accrued Expenses and Other Current liabilities
Accrued Expenses and Other Current liabilities (in millions)

December 31,
20232022
Accrued transaction-based costs
$253 $181 
Customer funds obligation
87 60 
Accrued payroll and bonus
78 59 
Accrued expenses
68 45 
Contingent liability for expected credit losses
29 14 
Accrued commissions
25 15 
Operating lease liability11 14 
Other
41 39 
$592 $427 
v3.24.0.1
Common Stock (Tables)
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Schedule of Changes in Shares of Common Stock
The following table shows the changes in Class A and Class B shares of common stock (in millions):

Year Ended December 31,
202320222021
Class A and B Common Stock (in shares)
Balance, beginning of period
523 507 220 
Issuance of common stock under equity plans
19 14 6 
Conversion of preferred stock
— — 254 
Issuance of common stock in connection with initial public offering
— — 25 
Issuance of common stock, other
1 2 2 
Balance, end of period
543 523 507 

Changes in Class B Common stock were as follows (in millions):
Year Ended December 31,
202320222021
Class B Common Stock (in shares)
Balance, beginning of period
170 339 — 
Conversion of preferred stock upon Initial Public Offering
— — 254 
Conversion of common stock upon Initial Public Offering
— — 225 
Conversions to Class A common stock
(56)(169)(140)
Balance, end of period
114 170 339 
Schedule of Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option The following table shows the changes in our restricted shares of Class A and Class B common stock (in millions):
Shares
Unvested as of December 31, 2022
3 
Issuance of restricted stock
— 
Repurchases
— 
Vested
(2)
Unvested as of December 31, 2023
1 
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, 2023:
RSU
(in millions)
Weighted- Average Grant Date Fair Value (per share)
Outstanding balance as of December 31, 2022
31 $22.11 
Granted15 18.58 
Vested(10)21.61 
Forfeited(3)21.72 
Outstanding balance as of December 31, 2023
33 $20.70 
Expected to vest as of December 31, 2023
29 20.74 
v3.24.0.1
Revenue from Contracts with Customers (Tables)
 12 Months Ended
Dec. 31, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of Contract Liability
The following table summarizes the activity in deferred revenue (in millions):

Year Ended December 31,
20232022
Deferred revenue, beginning of year$46 $56 
Deferred revenue, end of period$41 $46 
Revenue recognized in the period from amounts included in deferred revenue at the beginning of period$42 $51 
Schedule of Deferred Contract Acquisition Costs
The following table summarizes the activity in deferred contract acquisition costs (in millions):

Year Ended December 31,
20232022
Beginning balance$82 $55 
Capitalization of sales commissions costs107 71 
Amortization of sales commissions costs(62)(44)
Ending balance$127 $82 
v3.24.0.1
Stock-Based Compensation Expense (Tables)
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of Share-based Payment Arrangement, Expensed and Capitalized, Amount
Stock-based compensation expense recognized for the years ended December 31, 2023, 2022, and 2021, was as follows (in millions):

Year Ended December 31,
202320222021
Costs of revenue
$43 $33 $12 
Sales and marketing
58 50 24 
Research and development
94 72 48 
General and administrative
82 73 58 
$277 $228 $142 
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions
The following table indicates the weighted-average assumptions made in estimating the fair value based on the Black-Scholes model as of December 31, 2023, 2022, and 2021:

Year Ended December 31,
202320222021
Risk-free interest rate
3.90%2.42%1.00%
Expected term (in years)
6.086.076.32
Expected volatility
56%52%65%
Expected dividend yield
0%0%0%
Weighted-average fair value per share of common stock
$18.01$17.24$17.00
Weighted-average fair value per share of options issued
$10.24$8.94$10.12
Schedule of Share-based Payment Arrangement, Option, Activity
The following is a summary of stock option activity under our stock option plans:

Number of Shares
 (in millions)		Weighted- Average Exercise Price (per share) Weighted- Average Remaining Contractual Term (in Years)Aggregate Intrinsic Value (in millions)(1)
Outstanding as of December 31, 2022
54$5.98 
Granted318.01 
Exercised(8)3.07 
Forfeited(1)14.20 
Outstanding as of December 31, 2023
48$7.07 
Options vested and expected to vest as of
December 31, 2023
46$6.86 6.2$532 
Options exercisable as of December 31, 2023
41$5.34 5.9$532 
(1) The aggregate intrinsic value was determined as the difference between the closing price of the Class A common stock on the last trading day of the month of December 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.
Schedule of Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option The following table shows the changes in our restricted shares of Class A and Class B common stock (in millions):
Shares
Unvested as of December 31, 2022
3 
Issuance of restricted stock
— 
Repurchases
— 
Vested
(2)
Unvested as of December 31, 2023
1 
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, 2023:
RSU
(in millions)
Weighted- Average Grant Date Fair Value (per share)
Outstanding balance as of December 31, 2022
31 $22.11 
Granted15 18.58 
Vested(10)21.61 
Forfeited(3)21.72 
Outstanding balance as of December 31, 2023
33 $20.70 
Expected to vest as of December 31, 2023
29 20.74 
v3.24.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Schedule of Components of Income (Loss) Tax (Expense) Benefit
The components of income (loss) before provision for income taxes are as follows (in millions):

Year Ended December 31,
202320222021
United States$(258)$(286)$(493)
Foreign14 9 3 
Total loss before income taxes$(244)$(277)$(490)

The components of income tax (expense) benefit for the years ended December 31, 2023, 2022, and 2021, were as follows (in millions):
Year Ended December 31,
202320222021
Current state
$(1)$(1)$— 
Current foreign
(2)(2)— 
Current tax (expense) benefit
(3)(3)— 
Deferred federal
1 4 2 
Deferred state
— 1 1 
Deferred tax (expense) benefit
1 5 3 
Total income tax (expense) benefit
$(2)$2 $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, 2023 and 2022, were as follows (in millions):
December 31,
20232022
Deferred tax assets:
Net operating loss carryforwards$196 $160 
Stock-based compensation expense40 34 
Credit carryforward62 42 
Accrued expenses and reserves49 28 
Charitable contributions10 8 
Deferred revenue2 2 
Depreciation— 1 
Capitalized R&D
77 57 
Inventory reserve— 2 
Lease liability11 23 
Total deferred tax assets447 357 
Valuation allowance(397)(310)
Net deferred tax assets50 47 
Deferred tax liabilities:
       Depreciation
(2)— 
Amortization
(7)(8)
       Capitalized contract acquisition costs(32)(21)
       Right-of-use asset(9)(18)
Total deferred tax liabilities(50)(47)
Net deferred tax asset (liability)$— $— 
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,
202320222021
Tax provision at statutory rate
21.0%21.0%21.0%
State tax—net of federal
5.4%7.8%1.2%
Permanent items - Other
(1.8)%(1.5)%(0.6)%
Warrants0.3%7.3%(4.2)%
Convertible debt extinguishment—%—%(1.5)%
Research and development credits
6.5%4.6%1.0%
Stock-based compensation expense
3.1%(1.0)%(0.8)%
Derivative liability
—%—%(5.6)%
Change in valuation allowance
(35.3)%(37.5)%(10.0)%
Effective Tax Rate
(0.8)%0.6%0.5%
v3.24.0.1
Loss Per Share (Tables)
 12 Months Ended
Dec. 31, 2023
Earnings Per Share [Abstract]  
Schedule of Loss Per Share, Basic and Diluted
The following table sets forth the computation of net loss per share attributable to common stockholders (in millions, except per share amounts):

Year Ended December 31,
202320222021
Numerator:
Net loss attributable to common stockholders- basic$(246)$(275)$(487)
Gain on change in fair value of warrant liability395 — 
Net loss attributable to common stockholders- diluted$(249)$(370)$(487)
Denominator:
Weighted-average shares of common stock outstanding -basic
532512290
Effect of dilutive securities:
Warrants to purchase Class B common stock1— — 
Weighted-average shares of common stock outstanding - diluted
533 512 290 
Net loss per share attributable to common stockholders - basic $(0.46)$(0.54)$(1.68)
Net loss per share attributable to common stockholders - diluted$(0.47)$(0.72)$(1.68)
Schedule of Antidilutive Securities Excluded from Computation of Loss 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, 2023, 2022, and 2021 (in millions):
Year Ended December 31,
202320222021
Options to purchase Class A common stock, Class B common stock, and common stock
48 54 59 
Unvested restricted stock
1 3 4 
Unvested restricted stock units33 31 15 
Warrants to purchase Class B common stock and common stock and preferred stock (as if converted to warrants to purchase common stock)
— — 8 
Total82 88 86 
v3.24.0.1
Segment Information (Tables)
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Schedule of Long-lived Assets by Geographic Areas
The following table sets forth the breakdown of long-lived assets based on geography (in millions):
December 31,
20232022
United States$99 $122 
Ireland7 10 
India4 5 
Other1 1 
Total long-lived assets$111 $138 
v3.24.0.1
Description of Business and Basis of Presentation (Details)
$ / shares in Units, shares in Millions, $ in Millions
Sep. 24, 2021
USD ($)
vote
$ / shares
shares
Sep. 23, 2021
shares
Common Class B    
Class of Stock [Line Items]    
Convertible preferred stock, outstanding (in shares)   254
Outstanding warrants (in shares)   1
Number of voting rights | vote 10  
Common Class A    
Class of Stock [Line Items]    
Number of voting rights | vote 1  
IPO    
Class of Stock [Line Items]    
Sale of stock, number of shares issued (in shares) 25  
Sale of stock, share price (in dollars per share) | $ / shares $ 40.00  
Over-Allotment Option    
Class of Stock [Line Items]    
Sale of stock, number of shares issued (in shares) 3  
Sale of stock, consideration received | $ $ 944  
v3.24.0.1
Summary of Significant Accounting Policies - Narrative (Details)
 12 Months Ended
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
class
shares
Subsidiary, Sale of Stock [Line Items]      
Face amount per loan $ 300,000    
Deferred costs amortization period 4 years    
Goodwill impairment loss $ 0 $ 0 $ 0
Advertising expense $ 29,000,000 $ 25,000,000 $ 17,000,000
Number of classes of stock | class     2
Allocation of between common stock (in shares) | shares     1
Subscription services | Minimum      
Subsidiary, Sale of Stock [Line Items]      
Revenue, term 12 months    
Subscription services | Maximum      
Subsidiary, Sale of Stock [Line Items]      
Revenue, term 36 months    
v3.24.0.1
Summary of Significant Accounting Policies - Schedule of Useful Lives (Details)
Dec. 31, 2023
Computer and other equipment  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Office furniture and fixtures  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Tooling and equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Tooling and equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Useful life 7 years
Capitalized software  
Property, Plant and Equipment [Line Items]  
Useful life 2 years
v3.24.0.1
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Intangible Assets (Details)
Dec. 31, 2023
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 | Minimum  
Finite-Lived Intangible Assets [Line Items]  
Intangible asset, useful life 5 years
Customer acquired intangible assets | Maximum  
Finite-Lived Intangible Assets [Line Items]  
Intangible asset, useful life 6 years
v3.24.0.1
Fair Value Measurements - Schedule of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Warrants to purchase common stock $ 64 $ 68
Fair Value, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 786 957
Warrants to purchase common stock 64 68
Total liabilities 64 68
Fair Value, Recurring | Money market funds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 267 483
Fair Value, Recurring | Commercial paper    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 53 140
Fair Value, Recurring | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 29 104
Fair Value, Recurring | Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 80 109
Fair Value, Recurring | U.S. government agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 37 33
Fair Value, Recurring | Treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 213 60
Fair Value, Recurring | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 107 28
Fair Value, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 267 483
Warrants to purchase common stock 0 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 267 483
Fair Value, Recurring | Level 1 | Commercial paper    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 1 | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 1 | Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 1 | U.S. government agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 1 | Treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 1 | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 519 474
Warrants to purchase common stock 0 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 53 140
Fair Value, Recurring | Level 2 | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 29 104
Fair Value, Recurring | Level 2 | Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 80 109
Fair Value, Recurring | Level 2 | U.S. government agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 37 33
Fair Value, Recurring | Level 2 | Treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 213 60
Fair Value, Recurring | Level 2 | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 107 28
Fair Value, Recurring | Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 0 0
Warrants to purchase common stock 64 68
Total liabilities 64 68
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 0
Fair Value, Recurring | Level 3 | Certificates of deposit    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 3 | Corporate bonds    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 3 | U.S. government agency securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 3 | Treasury securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets 0 0
Fair Value, Recurring | Level 3 | Asset-backed securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets $ 0 $ 0
v3.24.0.1
Fair Value Measurements - Schedule of Weighted Average Assumptions (Details) - Level 3 - Common Stock Warrant Liability
Dec. 31, 2023
Dec. 31, 2022
Risk-free interest rate    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Warrants, measurement inputs 0.040 0.041
Contractual term (in years)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Warrants, measurement inputs 3 4
Expected volatility    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Warrants, measurement inputs 0.638 0.603
Expected dividend yield    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Warrants, measurement inputs 0 0
Exercise price per share    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Warrants, measurement inputs 17.16 17.16
v3.24.0.1
Fair Value Measurements - Schedule of Rollforward of Level 3 Inputs (Details) - Warrants - Common Stock Warrant Liability - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]    
Beginning balance $ 68 $ 181
Change in fair value (3) (95)
Settlement (1) (18)
Ending balance $ 64 $ 68
v3.24.0.1
Fair Value Measurements - Narrative (Details) - shares
shares in Millions
Dec. 31, 2023
Dec. 31, 2022
Common Stock Warrant Liability    
Class of Warrant or Right [Line Items]    
Maximum number of shares that could be issued (in shares) 7 7
v3.24.0.1
Marketable Securities - Schedule of Available-for-Sale Securities (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 519 $ 476
Net Unrealized Gains / (Losses) 0 (2)
Fair Value 519 474
Commercial paper    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 53 140
Net Unrealized Gains / (Losses) 0 0
Fair Value 53 140
Certificates of deposit    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 29 104
Net Unrealized Gains / (Losses) 0 0
Fair Value 29 104
Corporate bonds    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 80 110
Net Unrealized Gains / (Losses) 0 (1)
Fair Value 80 109
U.S. government agency securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 37 33
Net Unrealized Gains / (Losses) 0 0
Fair Value 37 33
Treasury securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 213 61
Net Unrealized Gains / (Losses) 0 (1)
Fair Value 213 60
Asset-backed securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 107 28
Net Unrealized Gains / (Losses) 0 0
Fair Value $ 107 $ 28
v3.24.0.1
Marketable Securities - Schedule of Scheduled Maturities of Available-for-Sale Securities (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]    
Due within 1 year $ 309  
Due after 1 year through 5 years 204  
Due after 5 years and thereafter 6  
Total marketable securities $ 519 $ 474
v3.24.0.1
Loan Servicing Activities and Acquired Loans Receivable, Net - Schedule of Rollforward of Credit Losses (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Off-Balance Sheet, Credit Loss, Liability [Roll Forward]    
Beginning balance $ 14 $ 2
Credit loss expense 54 20
Reductions due to loan purchases (39) (8)
Ending balance $ 29 $ 14
v3.24.0.1
Loan Servicing Activities and Acquired Loans Receivable, Net - Narrative (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Non-contingent stand-ready liability    
Guarantor Obligations [Line Items]    
Guarantee liability $ 11 $ 6
v3.24.0.1
Goodwill and Intangible Assets - Schedule of Rollforward of Goodwill (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Goodwill [Roll Forward]    
Beginning balance $ 107 $ 74
Acquisitions 6 33
Ending balance $ 113 $ 107
v3.24.0.1
Goodwill and Intangible Assets - Schedule of Intangible Assets, Net (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount $ 47 $ 44
Accumulated amortization (21) (15)
Intangible assets, net 26 29
Technology Assets    
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount 40 38
Accumulated amortization (18) (13)
Intangible assets, net 22 25
Customer Assets    
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount 7 6
Accumulated amortization (3) (2)
Intangible assets, net $ 4 $ 4
v3.24.0.1
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]    
2024 $ 6  
2025 6  
2026 6  
2027 4  
2028 1  
Thereafter 3  
Intangible assets, net $ 26 $ 29
v3.24.0.1
Lessee Arrangements - Schedule of Components of Lease Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]      
Operating lease expense $ 12 $ 21 $ 25
Variable lease expense 3 4 1
Total $ 15 $ 25 $ 26
v3.24.0.1
Lessee Arrangements - Schedule of Weighted Average Remaining Lease Term and Discount Rate (Details)
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]    
Weighted-average remaining lease term (years) 4 years 4 months 24 days 6 years 4 months 24 days
Weighted-average discount rate (as a percent) 6.34% 5.19%
v3.24.0.1
Lessee Arrangements - Schedule of Maturities of Operating Lease Liabilities (Details)
$ in Millions
Dec. 31, 2023
USD ($)
Leases [Abstract]  
2024 $ 13
2025 11
2026 11
2027 8
2028 4
Thereafter 4
Total future minimum lease payments 51
Less: Imputed interest 7
Present value of future minimum lease payments $ 44
v3.24.0.1
Lessee Arrangements - Schedule of Supplemental Cash Flow Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Jan. 01, 2021
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2021
Lessee, Lease, Description [Line Items]          
Cash paid for amounts included in the measurement of lease liabilities   $ 14 $ 24   $ 25
Supplemental non-cash amounts of increases in lease liabilities from obtaining right-of-use assets/ (decreases) of lease liabilities from lease terminations and modifications:   $ (40) $ 14 $ 4 $ 99
Accounting Standards Update 2016-02          
Lessee, Lease, Description [Line Items]          
Supplemental non-cash amounts of increases in lease liabilities from obtaining right-of-use assets/ (decreases) of lease liabilities from lease terminations and modifications: $ 95        
v3.24.0.1
Lessee Arrangements - Narrative (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2023
USD ($)
Lessee, Lease, Description [Line Items]  
Operating lease, termination fee $ 11
General and administrative  
Lessee, Lease, Description [Line Items]  
Operating lease, termination fee $ 12
v3.24.0.1
Debt (Details) - Revolving Credit Facility - 2021 Credit Facility - Line of Credit - USD ($)
Mar. 02, 2023
Dec. 31, 2023
Dec. 31, 2022
Debt Instrument [Line Items]      
Minimum liquidity amount $ 250,000,000    
Long term debt, amount available   $ 330,000,000 $ 0
London Interbank Offered Rate (LIBOR)      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 1.50%    
Prime Rate      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 0.50%    
Federal Reserve Bank of New York Rate      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 0.50%    
Adjusted SOFR Rate      
Debt Instrument [Line Items]      
Basis spread on variable rate (as a percent) 1.00%    
v3.24.0.1
Business Combinations - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Feb. 14, 2023
Jul. 06, 2022
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Business Acquisition [Line Items]          
Goodwill     $ 113 $ 107 $ 74
Cash paid for acquisition, net of cash acquired     $ 9 $ 46 $ 26
Delphi Display Systems, Inc          
Business Acquisition [Line Items]          
Voting interest acquired (as a percent) 100.00%        
Equity interests settled, deferred consideration $ 10        
Goodwill 6        
Intangible assets 3        
Other assets 1        
Delphi Display Systems, Inc | Developed Technology          
Business Acquisition [Line Items]          
Intangible assets $ 2        
Finite lived intangibles acquired, weighted average useful life (in years) 5 years        
Delphi Display Systems, Inc | Customer Relationships          
Business Acquisition [Line Items]          
Intangible assets $ 1        
Finite lived intangibles acquired, weighted average useful life (in years) 5 years        
Sling, Inc          
Business Acquisition [Line Items]          
Voting interest acquired (as a percent)   100.00%      
Equity interests settled, deferred consideration   $ 2      
Goodwill   33      
Total purchase price   49      
Cash paid for acquisition, net of cash acquired   38      
Escrow related to general representations and warranties   $ 9      
Deferred cash payments, period following acquisition date   18 months      
Business combination, pre-acquisition tax-related contingencies, period following acquisition date   60 months      
Sling, Inc | Minimum          
Business Acquisition [Line Items]          
Award vesting period   1 year      
Sling, Inc | Maximum          
Business Acquisition [Line Items]          
Award vesting period   3 years      
Sling, Inc | Common Class A          
Business Acquisition [Line Items]          
Escrow related to general representations and warranties   $ 19      
Sling, Inc | Developed Technology          
Business Acquisition [Line Items]          
Intangible assets   $ 17      
Finite lived intangibles acquired, weighted average useful life (in years)   5 years      
Sling, Inc | Customer Relationships          
Business Acquisition [Line Items]          
Intangible assets   $ 2      
Finite lived intangibles acquired, weighted average useful life (in years)   5 years      
v3.24.0.1
Business Combinations - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Millions
Jul. 06, 2022
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Business Acquisition [Line Items]        
Goodwill   $ 113 $ 107 $ 74
Sling, Inc        
Business Acquisition [Line Items]        
Cash $ 1      
Goodwill 33      
Net working capital 1      
Deferred tax liability (5)      
Net assets acquired 49      
Sling, Inc | Developed Technology        
Business Acquisition [Line Items]        
Intangible assets, other than goodwill $ 17      
Finite lived intangibles acquired, weighted average useful life (in years) 5 years      
Sling, Inc | Customer Relationships        
Business Acquisition [Line Items]        
Intangible assets, other than goodwill $ 2      
Finite lived intangibles acquired, weighted average useful life (in years) 5 years      
v3.24.0.1
Other Balance Sheet Information - Schedule of Accounts Receivable (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Accounts receivable $ 57 $ 45  
Unbilled receivables 23 44  
Less: Allowance for credit losses (11) (12) $ (4)
Accounts receivable, net $ 69 $ 77  
v3.24.0.1
Other Balance Sheet Information - Schedule of Allowance For Credit Losses (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]    
Beginning balance $ (12) $ (4)
Additions (10) (13)
Write-offs 11 5
Ending balance $ (11) $ (12)
v3.24.0.1
Other Balance Sheet Information - Schedule of Other Current Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Cash held on behalf of customers $ 87 $ 60 $ 34
Deferred contract acquisition costs 60 44  
Other receivables 58 32  
Prepaid expenses 24 27  
Deposits for inventory purchases 6 20  
Other 24 16  
Other current assets $ 259 $ 199  
v3.24.0.1
Other Balance Sheet Information - Schedule of Property and Equipment (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 136 $ 109
Less: Accumulated depreciation (61) (48)
Property, Plant and Equipment, Net, Total 75 61
Capitalized software    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 97 49
Computer equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 18 14
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 13 36
Tooling and equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 4 2
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 3 8
Construction in process    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 1 $ 0
v3.24.0.1
Other Balance Sheet Information - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Depreciation expense $ 10,000,000 $ 10,000,000 $ 9,000,000
Asset impairments 15,000,000 0 0
Capitalized software 48,000,000 24,000,000  
Capitalized software and development costs 57,000,000 25,000,000  
Capitalized software, depreciation expense $ 16,000,000 $ 9,000,000 $ 8,000,000
v3.24.0.1
Other Balance Sheet Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Accrued transaction-based costs $ 253 $ 181
Customer funds obligation 87 60
Accrued payroll and bonus 78 59
Accrued expenses 68 45
Contingent liability for expected credit losses 29 14
Accrued commissions 25 15
Operating lease liability $ 11 $ 14
Operating lease liability [Extensible Enumeration] Total accrued expenses and other current liabilities Total accrued expenses and other current liabilities
Other liabilities $ 41 $ 39
Total accrued expenses and other current liabilities $ 592 $ 427
v3.24.0.1
Common Stock - Schedule of Changes in Shares of Common Stock (Details) - shares
shares in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Common Class B      
Common Stock [Roll Forward]      
Balance, beginning of period (in shares) 170    
Balance, ending of period (in shares) 114 170  
Common Class A      
Common Stock [Roll Forward]      
Balance, beginning of period (in shares) 353    
Balance, ending of period (in shares) 429 353  
Common Stock      
Common Stock [Roll Forward]      
Balance, beginning of period (in shares) 523 507 220
Issuance of common stock under equity plans (in shares) 19 14 6
Issuance of common stock in connection with initial public offering (in shares) 0 0 25
Issuance of common stock, other (in shares) 1 2 2
Balance, ending of period (in shares) 543 523 507
Common Stock | Common Class B      
Common Stock [Roll Forward]      
Balance, beginning of period (in shares) 170 339 0
Issuance of common stock in connection with initial public offering (in shares) 0 0 225
Balance, ending of period (in shares) 114 170 339
Common Stock | Common Class A      
Common Stock [Roll Forward]      
Conversion of stock (in shares) (56) (169) (140)
Preferred Stock      
Common Stock [Roll Forward]      
Conversion of stock (in shares) 0 0 254
Preferred Stock | Common Class B      
Common Stock [Roll Forward]      
Issuance of common stock in connection with initial public offering (in shares) 0 0 254
v3.24.0.1
Common Stock - Narrative (Details)
shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2023
USD ($)
shares
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
installment
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation expense | $ $ 277 $ 228 $ 142
Pledge 1%      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Annual pledged percentage of maximum (as a percent) 1.00%    
Common stock reserved for issuance (in shares) | shares 4    
Stock-based compensation expense | $ $ 10 $ 10 $ 19
Pledge 1% | Common Class A      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Shares reserved for issuance, issuance period     10 years
Number of annual installments | installment     10
Pledge 1% | Maximum | Common Class A      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Common stock reserved for issuance (in shares) | shares     5
v3.24.0.1
Common Stock - Schedule of Restricted Stock Units (Details) - Restricted stock
shares in Millions
 12 Months Ended
Dec. 31, 2023
shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]  
Beginning balance (in shares) 3
Issuance of restricted stock (in shares) 0
Repurchases (in shares) 0
Vested (in shares) (2)
Ending balance (in shares) 1
v3.24.0.1
Revenue from Contracts with Customers - Schedule of Activity of Deferred Revenue (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Revenue from Contract with Customer [Abstract]      
Deferred revenue $ 41 $ 46 $ 56
Revenue recognized in the period from amounts included in deferred revenue at the beginning of period $ 42 $ 51  
v3.24.0.1
Revenue from Contracts with Customers - Narrative (Details)
$ in Millions
Dec. 31, 2023
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, amount $ 678
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Remaining performance obligation, amount $ 618
Remaining performance obligation, period 24 months
v3.24.0.1
Revenue from Contracts with Customers - Schedule of Deferred Contact Acquisitions Costs (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Increase (Decrease) in Capitalized Contract Costs [Roll Forward]      
Beginning balance $ 82 $ 55  
Capitalization of sales commissions costs 107 71  
Amortization of sales commissions costs (62) (44) $ (30)
Ending balance $ 127 $ 82 $ 55
v3.24.0.1
Stock-Based Compensation Expense - Schedule of Stock-based Compensation (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense $ 277 $ 228 $ 142
Costs of revenue      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 43 33 12
Sales and marketing      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 58 50 24
Research and development      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense 94 72 48
General and administrative      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Stock-based compensation expense $ 82 $ 73 $ 58
v3.24.0.1
Stock-Based Compensation Expense - Narrative (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2023
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation included in capitalized software $ 13   $ 7 $ 1
Aggregate intrinsic value of options exercised   $ 137 $ 134 $ 162
Common Class A        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Purchase shares of Class A common stock   85.00%    
Shares available for future grant under the Stock Plans        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares) 67 67    
Deferred Compensation, Share-Based Payments        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares) 21 21    
Options to purchase Class A common stock, Class B common stock, and common stock        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Contractual life   10 years    
Unrecognized stock-based compensation expense $ 83 $ 83    
Expected period for recognition   2 years 6 months    
Weighted average fair value per share of options granted (in dollars per share)   $ 10.24 $ 8.94 $ 10.12
Options to purchase Class A common stock, Class B common stock, and common stock | Minimum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Requisite service period (in years)   4 years    
Options to purchase Class A common stock, Class B common stock, and common stock | Maximum        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Requisite service period (in years)   5 years    
Unvested restricted stock units        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Requisite service period (in years)   4 years    
Expected period for recognition   2 years 9 months 18 days    
Weighted average fair value per share of options granted (in dollars per share)     $ 18.40 $ 29.80
Fair value of RUSs vested   $ 208 $ 108 $ 1
Unrecognized stock-based compensation expense related to options $ 490 $ 490    
Performance Shares | Secondary Investors        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Incremental stock-based compensation expense       $ 46
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%
The 2021 Employee Stock Purchase Plan | Common Class A        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common stock reserved for issuance (in shares)       12
Stock reserved for future issuance, percentage of issued and outstanding stock (as a percent)       1.00%
v3.24.0.1
Stock-Based Compensation Expense - Schedule of Weighted Average Assumptions (Details) - Option - $ / shares
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Risk-free interest rate (as a percent) 3.90% 2.42% 1.00%
Expected term (in years) 6 years 29 days 6 years 25 days 6 years 3 months 25 days
Expected volatility (as a percent) 56.00% 52.00% 65.00%
Expected dividend yield (as a percent) 0.00% 0.00% 0.00%
Weighted-average fair value per share of common stock (in dollars per share) $ 18.01 $ 17.24 $ 17.00
Weighted average fair value per share of options granted (in dollars per share) $ 10.24 $ 8.94 $ 10.12
v3.24.0.1
Stock-Based Compensation Expense - Schedule of Stock Option Activity (Details)
$ / shares in Units, shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2023
USD ($)
$ / shares
shares
Number of Shares  
Beginning balance (in shares) | shares 54
Granted (in shares) | shares 3
Exercised (in shares) | shares (8)
Forfeited (in shares) | shares (1)
Ending balance (in shares) | shares 48
Options vested and expected to vest (in shares) | shares 46
Options exercisable (in shares) | shares 41
Weighted-Average Exercise Price  
Beginning balance (in dollars per share) | $ / shares $ 5.98
Granted (in dollars per share) | $ / shares 18.01
Exercised (in dollars per share) | $ / shares 3.07
Forfeited (in dollars per share) | $ / shares 14.20
Ending balance (in dollars per share) | $ / shares 7.07
Options vested and expected to vest, Weighted-average exercise price (in dollars per share) | $ / shares 6.86
Options exercisable, Weighted-average exercise price per share (in dollars per share) | $ / shares $ 5.34
Weighted-Average Remaining Contractual Term  
Options vested and expected to vest 6 years 2 months 12 days
Options exercisable 5 years 10 months 24 days
Aggregate Intrinsic Value  
Options vested and expected to vest | $ $ 532
Options exercisable | $ $ 532
v3.24.0.1
Stock-Based Compensation Expense - Schedule of RSU Activity (Details) - Restricted Stock Units
shares in Millions
 12 Months Ended
Dec. 31, 2023
$ / shares
shares
RSU  
Beginning balance (in shares) | shares 31
Granted (in shares) | shares 15
Vested (in shares) | shares (10)
Forfeited (in shares) | shares (3)
Ending balance (in shares) | shares 33
Expected to vest (in shares) | shares 29
Weighted-Average Grant Date Fair Value  
Beginning balance (in dollars per share) | $ / shares $ 22.11
Granted (in dollars per share) | $ / shares 18.58
Vested (in dollars per share) | $ / shares 21.61
Forfeited (in dollars per share) | $ / shares 21.72
Ending balance (in dollars per share) | $ / shares 20.70
Expected to vest ( in dollars per share) | $ / shares $ 20.74
v3.24.0.1
Income Taxes - Schedule of Components of Income (Loss) Before Provision for Income Taxes (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
United States $ (258) $ (286) $ (493)
Foreign 14 9 3
Loss before income taxes $ (244) $ (277) $ (490)
v3.24.0.1
Income Taxes - Schedule of Components of Income Tax (Expense) Benefit (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
Current state $ (1) $ (1) $ 0
Current foreign (2) (2) 0
Current tax (expense) benefit (3) (3) 0
Deferred federal 1 4 2
Deferred state 0 1 1
Deferred tax (expense) benefit 1 5 3
Total income tax (expense) benefit $ (2) $ 2 $ 3
v3.24.0.1
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Deferred tax assets:    
Net operating loss carryforwards $ 196 $ 160
Stock-based compensation expense 40 34
Credit carryforward 62 42
Accrued expenses and reserves 49 28
Charitable contributions 10 8
Deferred revenue 2 2
Depreciation 0 1
Capitalized R&D 77 57
Inventory reserve 0 2
Lease liability 11 23
Total deferred tax assets 447 357
Valuation allowance (397) (310)
Net deferred tax assets 50 47
Deferred tax liabilities:    
Depreciation (2) 0
Amortization (7) (8)
Capitalized contract acquisition costs (32) (21)
Right-of-use asset (9) (18)
Total deferred tax liabilities (50) (47)
Net deferred tax asset (liability) $ 0 $ 0
v3.24.0.1
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]      
Tax provision at statutory rate 21.00% 21.00% 21.00%
State tax—net of federal 5.40% 7.80% 1.20%
Permanent items - Other (1.80%) (1.50%) (0.60%)
Warrants 0.30% 7.30% (4.20%)
Convertible debt extinguishment 0.00% 0.00% (1.50%)
Research and development credits 6.50% 4.60% 1.00%
Stock-based compensation expense 3.10% (1.00%) (0.80%)
Derivative liability 0.00% 0.00% (5.60%)
Change in valuation allowance (35.30%) (37.50%) (10.00%)
Effective Tax Rate (0.80%) 0.60% 0.50%
v3.24.0.1
Income Taxes - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Tax Credit Carryforward [Line Items]      
Income tax expense $ 2,000,000 $ (2,000,000) $ (3,000,000)
Release of portion of valuation allowance (1,000,000)    
Increase in valuation allowance 87,000,000 104,000,000 52,000,000
Unrecognized tax benefits that would impact effective tax rate 0 $ 0 $ 0
Indefinite Carryforward Period      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 132,000,000    
Tax Year 2034      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 641,000,000    
Federal Tax Authority      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 720,000,000    
Tax credit carryforwards 45,000,000    
Federal Tax Authority | Indefinite Carryforward Period      
Tax Credit Carryforward [Line Items]      
Operating loss carryforwards 635,000,000    
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 773,000,000    
Tax credit carryforwards $ 21,000,000    
v3.24.0.1
Loss Per Share - Schedule of Net Loss Per Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Numerator:      
Net loss attributable to common stockholders- basic $ (246) $ (275) $ (487)
Gain on change in fair value of warrant liability 3 95 0
Net loss attributable to common stockholders- diluted $ (249) $ (370) $ (487)
Denominator:      
Weighted-average shares of common stock outstanding - basic (in shares) 532 512 290
Effect of dilutive securities:      
Warrants to purchase Class B common stock (in shares) 1 0 0
Weighted-average shares of common stock outstanding - diluted (in shares) 533 512 290
Net loss per share attributable to common stockholders - basic (in dollars per share) $ (0.46) $ (0.54) $ (1.68)
Net loss per share attributable to common stockholders - diluted (in dollars per share) $ (0.47) $ (0.72) $ (1.68)
v3.24.0.1
Loss Per Share - Schedule of Antidilutive Shares (Details) - shares
shares in Millions
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Antidilutive shares excluded from computation of earnings per share (in shares) 82 88 86
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) 48 54 59
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) 1 3 4
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) 33 31 15
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) 0 0 8
v3.24.0.1
Segment Information (Details) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets $ 111 $ 138
United States    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets 99 122
Ireland    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets 7 10
India    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets 4 5
Other    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Total long-lived assets $ 1 $ 1
v3.24.0.1
Subsequent Events (unaudited) (Details) - Subsequent Event
$ in Millions
Feb. 27, 2024
USD ($)
shares
Common Class A  
Subsequent Event [Line Items]  
Stock repurchase program, number of shares authorized to be repurchased (in shares) | shares 250,000,000
the Restructuring Plan | Minimum  
Subsequent Event [Line Items]  
Restructuring and related cost, expected cost $ 45
the Restructuring Plan | Maximum  
Subsequent Event [Line Items]  
Restructuring and related cost, expected cost $ 55