Toast, Inc. Class A ((TOST)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Toast, Inc. Earnings Call Highlights Strong Growth and Strategic Initiatives
The recent earnings call for Toast, Inc. reflected a robust positive sentiment, underscored by notable growth in new locations, international expansion, and strategic partnerships. The company’s financial performance surpassed expectations, and its product innovations were well-received. Despite these achievements, minor challenges were identified in Gross Payment Volume (GPV) per location, tariff expenses, and nonpayment fintech solutions.
Record Net Location Additions
Toast achieved a significant milestone by adding a record 8,500 net new locations in Q2 2025, bringing the total to approximately 148,000 locations. This represents a 24% increase from the previous year, highlighting the company’s successful expansion efforts.
Strong Financial Performance
The company reported impressive financial results, with recurring gross profit growing 35% year-over-year. Toast’s adjusted EBITDA reached $161 million, and GAAP operating income was reported at $80 million, showcasing the company’s robust financial health.
International Expansion
Toast made strides in its international presence by launching in Australia, its fourth international market. The company also secured its first Australian customer, Graze Craze, marking a significant step in its global expansion strategy.
Enterprise and Retail Growth
The company surpassed 10,000 live locations across its enterprise, food and beverage retail, and international segments. These segments are on track to exceed $100 million in Annual Recurring Revenue (ARR) by the end of the year, indicating strong growth potential in these areas.
American Express Partnership
Toast announced a strategic partnership with American Express to integrate reservation listings into the Local by Toast app. This collaboration aims to enhance personalized experiences at the point of sale, adding value to Toast’s offerings.
Product Innovation
The launch of the Toast Go 3 handheld device, featuring the new AI-powered ToastIQ intelligence engine, was well-received by customers. This innovation underscores Toast’s commitment to enhancing its product lineup and customer experience.
Slight Decline in GPV Per Location
Despite overall growth, Toast experienced a 1% year-over-year decline in Gross Payment Volume (GPV) per location. This indicates some challenges in maintaining transaction volume growth at existing locations.
Tariff and Investment Expenses
Toast anticipates higher tariff expenses in the second half of the year and plans to increase investments in new customer segments. These factors may impact the company’s margins, but are part of its strategic growth initiatives.
Nonpayment Fintech Solutions Decrease
Nonpayment fintech solutions, including Toast Capital, contributed $40 million in gross profit, down from $47 million in the previous quarter. This decrease is attributed to seasonal dynamics and softer demand.
Forward-Looking Guidance
Toast provided optimistic guidance for future growth, expecting total subscription and fintech gross profit to grow between 23% and 26% year-over-year in Q3 2025. Adjusted EBITDA is projected to be between $140 million and $150 million. The company raised its full-year guidance, anticipating fintech and subscription gross profit growth of 29% and adjusted EBITDA of $575 million, resulting in a margin of 32%. Toast’s strategic priorities include scaling locations and market share in the U.S., expanding into new segments, increasing customer adoption of their platform, and maintaining disciplined investment while expanding margins.
In conclusion, Toast, Inc.’s earnings call highlighted a strong positive sentiment, driven by impressive growth in new locations, international expansion, and strategic partnerships. The company’s financial performance exceeded expectations, and its product innovations were well-received. While minor challenges were noted, Toast’s forward-looking guidance and strategic priorities position it well for continued success.