Executive Summary

Q1 2025 delivered strong execution: Revenue $1.337B, GAAP net income $56M, Adjusted EBITDA $133M, and over 6,000 net new locations added; ARR reached $1.713B (+31% YoY) and GPV was $42.2B (+22% YoY) .
Results vs consensus: Primary EPS $0.197 beat $0.180; revenue $1.337B was slightly below $1.343B; Adjusted EBITDA $133M topped EBITDA consensus ~$106M. Bold beats: EPS beat; EBITDA beat; revenue slight miss (values from S&P Global)*.
Guidance raised: FY25 non-GAAP subscription & fintech gross profit to $1.775–$1.795B (from $1.745–$1.765B) and Adjusted EBITDA to $540–$560M (from $510–$530M); Q2 guide: non-GAAP gross profit $435–$445M and Adjusted EBITDA $130–$140M .
Strategic catalysts: ToastIQ AI features launched; Applebee’s (largest deal to-date) and Topgolf enterprise wins underscore upmarket traction and platform differentiation .

What Went Well and What Went Wrong

What Went Well

Continued platform scale and bookings momentum across SMB, international, retail, and enterprise; management expects record net adds in Q2 .
Enterprise traction: Applebee’s nationwide deployment, strong pipeline; majority of enterprise deals attach payments; attractive paybacks given large ARR per deal .
AI differentiation: ToastIQ launched with upsell, digital chits, and AI marketing; early case studies show higher average order values and strong ad ROAS; “we expect Sous Chef will be an operator’s companion” .

What Went Wrong

Hardware/tariff headwinds: management flagged “slightly higher tariff expenses related to our hardware” baked into 2025 outlook; costs remain manageable due to supply-chain diversification .
GPV per location softness persisted; management expects GPV per location to remain down YoY in Q2 despite normal seasonal GPV pattern .
Revenue narrowly missed consensus; conversion benefits seen in 2024 are normalizing, implying tougher back-half comps vs prior ARR-to-revenue conversion tailwinds (values from S&P Global; conversion commentary) .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$1,305*	$1,338	$1,337
Primary EPS ($USD, non-GAAP)	$0.175*	$0.180*	$0.197*
GAAP Diluted EPS ($USD)	N/A	$0.05	$0.09
Adjusted EBITDA ($USD Millions)	$113	$111	$133

Values marked * retrieved from S&P Global.

Consensus vs Actual (S&P Global):

Revenue: Q3 $1,291M est vs $1,305M actual; Q4 $1,315M est vs $1,338M actual; Q1 $1,343M est vs $1,337M actual (values from S&P Global)*.
Primary EPS: Q3 $0.132 est vs $0.175 actual; Q4 $0.162 est vs $0.180 actual; Q1 $0.180 est vs $0.197 actual (values from S&P Global)*.
EBITDA: Q3 $78.5M est vs $113M actual; Q4 $99.5M est vs $111M actual; Q1 $106.2M est vs $133M actual (Adjusted EBITDA actuals from company; consensus from S&P Global)* .

Segment Revenue Breakdown

Segment ($USD Millions)	Q4 2024	Q1 2025
Subscription Services	$200	$209
Financial Technology Solutions	$1,090	$1,082
Hardware & Professional Services	$48	$46
Total Revenue	$1,338	$1,337

Key KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
GPV ($USD Billions)	$41.7	$42.2	$42.2
ARR ($USD Billions)	N/A	$1.626	$1.713
Total Locations	~127,000	~134,000	~140,000

Cash Flow Snapshot

Net cash from operating activities: $79M; Free Cash Flow: $69M (Q1 2025) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non-GAAP Subscription & Fintech Gross Profit ($USD Millions)	FY 2025	$1,745–$1,765	$1,775–$1,795	Raised
Adjusted EBITDA ($USD Millions)	FY 2025	$510–$530	$540–$560	Raised
Non-GAAP Subscription & Fintech Gross Profit ($USD Millions)	Q2 2025	N/A	$435–$445	New
Adjusted EBITDA ($USD Millions)	Q2 2025	N/A	$130–$140	New

Management noted tariff headwinds in hardware are “manageable” and reflected in the guide .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
AI/Technology initiatives (ToastIQ, Sous Chef)	Announced benchmarking and generative AI campaigns; ARPU uplift expected over time	ToastIQ launched; early upsell and ad ROAS case studies; “operator’s companion” vision for Sous Chef in pilots	Improving execution and commercialization
Pricing & Take Rate	Targeted fintech price changes (Sept) with small net take rate uplift; pricing as complementary lever	Payments net take rate 48 bps, +3 bps YoY from cost optimization and targeted pricing; overall net take rate 59 bps	Gradual expansion
Enterprise pipeline/wins	Pipeline strengthening (Potbelly, Hilton, Perkins/Huddle House)	Largest deal to-date with Applebee’s; Topgolf signed; enterprise paybacks attractive; payments typically attached	Accelerating
International	Attach rates improving; SaaS ARPU up 50% YoY for Q4 go-lives	Traction continues; guest product attach doubling; ARPU expected to scale with launches	Solidifying
Macro/GPV per location	GPV/location down ~3% YoY; stable consumer trends	Trends remain stable; management anticipates GPV/location to remain down YoY in Q2	Stable-to-soft
Tariffs/Supply Chain	Not prominent in Q3; focus on platform investments	Tariff costs manageable; supply chain diversified away from China; reflected in guide	Manageable risk

Management Commentary

“We added over 6,000 net new locations, grew our recurring gross profit streams 37%, and delivered $133 million in Adjusted EBITDA.” — Aman Narang, CEO .
“Based on the momentum... we’re set up to increase location net adds year-over-year in 2025 versus 2024 and are tracking for a record quarter of net adds in Q2.” — Elena Gomez, CFO .
“Applebee’s… is our largest win in terms of committed locations… leveraging handhelds, KDS, and our enterprise management suite.” — Aman Narang .
“Payments net take rate was 48 bps, up 3 bps from a year ago from ongoing cost optimization efforts and targeted pricing moves we made last year.” — Elena Gomez .
“We expect Sous Chef will be an operator’s companion… and ToastIQ brings intelligence into the flow of hospitality.” — Aman Narang .

Q&A Highlights

Enterprise economics: Attractive paybacks and healthy ARPU; lower churn supports favorable LTV/CAC; payments usually attached .
Macro/pricing: Consumer trends stable; pricing remains a “small” lever and balanced to customer context; guidance prepared for a range of outcomes .
Tariffs/hardware: Incremental tariff costs manageable due to supply chain diversification; reflected in 2025 guide .
International traction: Early-stage but similar playbook to U.S. with healthy GPV/location; referral effects still maturing .
Toast Capital: Originations healthy; defaults in line; contributes ~10 bps to net take rate; program risk managed .

Estimates Context

Q1 2025: Primary EPS $0.197 vs $0.180 consensus (beat); revenue $1.337B vs $1.343B consensus (slight miss); EBITDA/Adjusted EBITDA $133M vs ~$106M consensus (beat). Q4 and Q3 also show EPS and EBITDA beats; revenue beats in Q3 and Q4 (values from S&P Global)*.
Implication: Street likely to raise FY25 gross profit and Adjusted EBITDA estimates given higher full-year guidance (company-raised ranges) .

Key Takeaways for Investors

Durable growth engine: Record net adds tracking for Q2; ARR +31% YoY; locations ~140k; core SMB momentum remains the primary growth driver .
Enterprise validation: Applebee’s and Topgolf wins broaden TAM and underscore platform capability; attractive deal economics and high payments attach support margin durability .
AI as attach catalyst: ToastIQ and future Sous Chef capabilities should drive ARPU via upsell, marketing performance, and operational efficiency; watch for monetization paths as scale grows .
Profitability trajectory: FY25 guide raised—non-GAAP gross profit + Adjusted EBITDA; tariff costs manageable; balanced pricing/cost optimization support take rate expansion .
Near-term watch items: GPV per location softness; Q2 non-GAAP gross profit and Adjusted EBITDA delivery vs guide ranges .
Medium-term thesis: Vertical platform depth, data scale, and AI differentiation should sustain share gains, ARPU growth, and operating leverage; enterprise/international/retail add multi-year optionality .
Trading setup: Raised guide + enterprise logos + AI narrative are positive catalysts; revenue slight miss offsets but EPS/EBITDA beats and net adds momentum may drive constructive sentiment (consensus comparisons from S&P Global)*.

Notes: Values marked * retrieved from S&P Global.

Toast, Inc. (TOST)·Q1 2025 Earnings Summary