Summary
Toast opened the year with a much cleaner profit profile. Revenue was $1.34 billion in the first quarter, up 24.4% from the prior-year quarter. Gross profit rose 39.0% to $346 million. Operating income was $43 million, up from a loss in the prior-year quarter. Net income was $56 million, up from a loss in the prior-year quarter, and diluted EPS was $0.09, up from a loss per share in the prior-year quarter. Gross margin reached 25.9%, up 2.7 percentage points, while operating margin was 3.2%, up 8.4 percentage points. Those margins matter because Toast still carries a large payments business and hardware mix, so cost control and operating leverage have an outsized effect on earnings.
Operational momentum stayed strong. Locations grew 25% year over year to approximately 140,000. Gross Payment Volume rose 22% to $42.2 billion. Annualized recurring run-rate was $1.7 billion as of March 31, 2025, up 31% year over year. Toast signed an agreement with Dine Brands for Applebee's locations in the U.S., its largest deal to date, and a separate agreement with Topgolf. Management also introduced ToastIQ, an intelligence engine with services such as Menu Upsells, Shift at a Glance, Digital Chits, AI-Marketing Assistant, and Advertising. Non-GAAP gross profit was $374 million, up from $268 million in the prior-year quarter, and non-GAAP costs of revenue were $963 million, up from $807 million. Adjusted EBITDA was $133 million, up from $57 million. Non-GAAP subscription services and financial technology solutions gross profit grew 37% to $415 million. Toast considers the non-GAAP subscription services and financial technology solutions gross profit figure its recurring gross profit streams.
Cash generation flipped positive. Operating cash flow was $79 million, up from a use of cash in the prior-year quarter. Free cash flow was $69 million, compared with negative $33 million in the prior-year quarter. Capital expenditures were $10 million, down 23.1%. Deferred revenue was $60 million, up 15.4%, and remaining performance obligations were $875 million, up 27.2%. On May 6, 2025, Toast closed a $350 million revolving credit facility, amending and restating a $330 million facility.
Guidance points to continued growth. For the second quarter, Toast expects non-GAAP subscription services and financial technology solutions gross profit of $435 million to $445 million, or 26% to 29% growth compared with Q2 2024, and Adjusted EBITDA of $130 million to $140 million. For the full year, the company expects non-GAAP subscription services and financial technology solutions gross profit of $1,775 million to $1,795 million, or 25% to 27% growth compared with 2024, and Adjusted EBITDA of $540 million to $560 million, up from $510 million to $530 million. The main risks sit around consumer spending and restaurant operations. The MD&A flags uncertainty from tariffs, including when specific tariffs may go into effect and how higher tariffs could affect consumer demand or restaurant operations. Seasonality also matters. Financial technology solutions revenue per Toast Processing Location has historically been stronger in the second and third quarters, and customer sales can be affected by seasonal needs. Toast also cites global financial, economic, and political events as potential swing factors.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.34B | $1.34B | -0.1% | $1.07B | +24.4% |
| Gross profit | $346.0M | $333.0M | +3.9% | $249.0M | +39.0% |
| Gross margin | 25.9% | 24.9% | +1.0 pp | 23.2% | +2.7 pp |
| Research & development | $84.0M | $93.0M | -9.7% | $83.0M | +1.2% |
| Sales & marketing | $133.0M | $130.0M | +2.3% | $107.0M | +24.3% |
| General & administrative | $79.0M | $78.0M | +1.3% | $74.0M | +6.8% |
| Total operating expenses | $303.0M | $301.0M | +0.7% | $305.0M | -0.7% |
| Operating income (loss) | $43.0M | $32.0M | +34.4% | -$56.0M | +176.8% |
| Operating margin | 3.2% | 2.4% | +0.8 pp | -5.2% | +8.4 pp |
| Net income (loss) | $56.0M | $32.0M | +75.0% | -$83.0M | +167.5% |
| Net margin | 4.2% | 2.4% | +1.8 pp | -7.7% | +11.9 pp |
| Diluted EPS | $0.09 | $0.05 | +$0.04 | -$0.15 | +$0.24 |
Risks
The MD&A states performance may be impacted by global financial, economic, and political events, and specifically flags tariffs as a risk that may influence consumer spending or restaurant operations. It also notes uncertainty as to when specific tariffs may go into effect and the impact higher tariffs may have on consumer demand or on Toast's business.
Financial technology solutions revenue is largely driven by Gross Payment Volume, and Toast says revenue per Toast Processing Location has historically been stronger in the second and third quarters because customers typically have greater sales during warmer months. This seasonality can cause results of operations to fluctuate even as FY2025 Q1 total revenue rose 24.4% year over year to $1.34 billion.
ARR may decline or fluctuate due to customer satisfaction, pricing, competitive offerings, economic conditions, or overall changes in customer and guest spending levels. ARR is an operational measure that does not reflect GAAP revenue or gross profit and is not a forecast of future revenue.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Gross Payment Volume (GPV)
Total Locations
Payments Annualized Recurring Run-Rate
Subscription Annualized Recurring Run-Rate
Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit
Annualized Recurring Run-Rate (ARR)
Summary, forecast, risks and KPIs are extracted from Toast, Inc.'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.