Toast (TOST) Q3 2025 earnings summary

Executive summary

• Achieved 34% top-line growth and 35% margins in Q3 2025, with ARR surpassing $2 billion, doubling from $1 billion in two years, and net location adds up 23% year-over-year to 156,000.

• Net income for Q3 2025 was $105 million, up from $56 million in Q3 2024; Adjusted EBITDA reached $176 million, up from $113 million.

• Gross Payment Volume (GPV) grew 24% year-over-year to $51.5 billion for Q3 2025.

• Secured marquee wins with Nordstrom, TGI Fridays, Everbowl, and expanded partnership with Uber; launched AI-driven products like Toast IQ and Toast Advertising.

• Strong momentum in core U.S. SMB and mid-market restaurant business, with international SaaS ARPU up 20% year-over-year.

Financial highlights

• ARR grew 30% year-over-year to $2.02 billion; subscription revenue increased 29% to $244 million, and financial technology solutions revenue rose 26% to $1.35 billion for Q3 2025.

• Adjusted EBITDA was $176 million for Q3, with margins expanding 5 percentage points year-over-year to 35%.

• GAAP operating income was $84 million, up from $34 million a year ago; GAAP net income was $105 million.

• Free cash flow reached $153 million in Q3 and $430 million for the nine months ended September 30, 2025.

• Hardware and professional services revenue declined 10% year-over-year to $44 million for Q3 2025.

Outlook and guidance

• Q4 2025 guidance: Non-GAAP subscription services and financial technology solutions gross profit expected between $480 million and $490 million (22-25% growth year-over-year); Adjusted EBITDA expected between $140 million and $150 million.

• Raised full-year 2025 outlook: Non-GAAP subscription services and financial technology solutions gross profit expected between $1,865 million and $1,875 million (32% growth year-over-year); Adjusted EBITDA expected between $610 million and $620 million.

• For 2026, expect growth over 20% at multi-billion dollar scale, with margins flat to slightly up year-over-year.

• Management expects financial technology solutions revenue to remain a significant portion of the overall revenue mix, with seasonality continuing to impact results.