Toast (TOST) Q1 2025 earnings summary

Executive summary

• Q1 2025 results exceeded expectations, with revenue up 24% to $1.34 billion, over 6,000 net new locations added, and total locations reaching approximately 140,000, up 25% year-over-year.

• Major enterprise wins included Applebee's, Topgolf, and Dine Brands, highlighting the platform's scalability and versatility.

• Net income was $56 million, reversing a net loss of $83 million in Q1 2024; Adjusted EBITDA rose to $133 million (32% margin), up from $57 million.

• Gross Payment Volume reached $42.2 billion, up 22% year-over-year.

• Launched AI-powered solutions (Sous Chef, ToastIQ) to enhance customer operations and guest experience.

Financial highlights

• ARR grew 31% year-over-year to $1.71 billion; SaaS ARR up 32%, driven by location growth and 5% increase in SaaS ARPU.

• Subscription services revenue increased 38% to $209 million; financial technology solutions revenue rose 24% to $1.08 billion.

• Total fintech and subscription gross profit increased 37% year-over-year to $415 million (non-GAAP); GAAP gross profit was $346 million.

• Free cash flow was $69 million, seasonally lower due to timing of bonus payments and GPV seasonality.

• Payments ARR grew 31%; fintech gross profit up 32%; net take rate was 59 bps; payments net take rate 48 bps, up 3 bps year-over-year.

Outlook and guidance

• Full-year 2025 guidance raised: 26% growth in fintech and subscription gross profit, $550 million Adjusted EBITDA (31% margin); Q2 guidance: gross profit growth of 26–29% and Adjusted EBITDA of $130–$140 million.

• Guidance reflects stable consumer trends, slightly higher hardware tariff expenses, and seasonality expected to drive stronger results in Q2 and Q3.

• Guidance incorporates flexibility to manage through a range of macroeconomic outcomes.