Toast (TOST) Q4 2025 earnings summary

Executive summary

• Recurring gross profits grew 33% year-over-year, with adjusted EBITDA margins expanding to 34% and over 30,000 net new locations added, ending 2025 with 164,000 locations.

• ARR increased 26% to over $2 billion, and payment volume reached $195.1 billion in 2025.

• Product innovation included over 500 new features, notably Toast IQ, an AI assistant, driving strong customer adoption and productivity gains.

• Expansion into new markets (retail, international, enterprise) doubled ARR in those segments, with major wins like Applebee's, Firehouse Subs, and Papa Murphy's.

• Board authorized a $500 million increase to the share repurchase program.

Financial highlights

• Adjusted EBITDA for 2025 was $633 million, with free cash flow of $608 million.

• GAAP operating income rose to $292 million, and full-year GAAP net income was $342 million, up from $19 million in 2024.

• Q4 recurring gross profit streams increased 28% year-over-year; SaaS ARR and subscription revenue each grew 28%.

• SaaS gross margin expanded 300 basis points to 80% in Q4; SaaS net retention rate was 109%.

• Q4 2025 GPV was $51.4 billion, up 22% year-over-year; full-year GPV reached $195.1 billion.

Outlook and guidance

• 2026 guidance: recurring gross profit streams to grow 20%-22%, adjusted EBITDA of $775M-$795M, with slightly higher margins year-over-year.

• Net location adds expected to increase in 2026, with sustained mid-single-digit SaaS ARPU growth.

• Q1 2026 guidance: fintech and subscription gross profit growth of 22%-24%, adjusted EBITDA of $160M-$170M.

• Guidance includes a 150 basis point negative impact from higher memory chip costs, mainly in the second half of 2026.

• Full-year 2026 non-GAAP subscription services and financial technology solutions gross profit expected between $2,270–$2,300 million.