Toast (TOST) Q4 2025 earnings summary

Executive summary

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

• ARR increased 26% to over $2 billion, and payment volume reached $195 billion in 2025.

• Over 500 new features launched, including 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 from $16 million a year ago; full-year GAAP net income was $342 million.

• 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%.

• Payments ARR grew 24%, fintech gross profit up 25%, and GPV reached $51 billion in Q4, up 22% year-over-year.

Outlook and guidance

• 2026 guidance: recurring gross profit streams to grow 20–22%, adjusted EBITDA of $775–$795 million, 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 $160–$170 million.

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