Toast (TOST) Goldman Sachs Communacopia + Technology Conference 2026 summary

Business performance and growth

• Achieved over 6x growth in both top and bottom lines since IPO, with market leadership in the U.S. SMB restaurant sector and expansion into international, enterprise, and retail verticals.

• Core business market share increased from 4-5% to over 20% of locations, with even higher share in GPV, driven by deep vertical focus and tailored solutions for sub-verticals.

• ARPU has grown from $8-9K at IPO to over $13K, reflecting successful platform evolution and product expansion.

• New verticals (retail, international, enterprise) are expected to double ARR to $200 million this year, with higher ARPU and faster growth than the core business at a similar stage.

• Expansion strategy is guided by a top-down annual review and customer-driven signals, focusing on high-GPV, complex businesses and leveraging a unified platform.

Product innovation and AI strategy

• Transitioned from a point-of-sale application to a comprehensive platform, now leveraging AI to automate and optimize restaurant operations.

• Toast IQ Grow, an AI-driven product suite, is on track to be the fastest to $10 million ARR, delivering significant sales growth (up to 40%) for early adopters.

• AI products enable personalized marketing, demand forecasting, and operational efficiencies, targeting manual tasks traditionally outsourced by SMBs.

• The services TAM in restaurants is larger than software, presenting a major opportunity for ARPU growth as AI products expand.

• Ongoing development aims to extend AI capabilities to areas like voice AI, bookkeeping, labor scheduling, and supply cost management.

Financial strategy and margin outlook

• Primary growth levers are location growth and product attach, with pricing actions remaining targeted and secondary.

• Monetization rate (RGP over GPV) increased by 5 basis points year-over-year, supported by product adoption and COGS optimization.

• Hardware supply chain improvements and memory cost management have led to lower-than-expected expenses and structurally better margins projected for 2026 and 2027.

• Investments are focused on durable growth and expanding into new TAMs, with confidence in achieving healthy paybacks (sub-20 months) and leveraging core platform efficiencies.

• Long-term margin potential is seen at 40%+ as AI adoption and operational leverage increase across the business.