Summary
Toast closed fiscal 2024 with strong top-line growth and its first full year of GAAP profitability. Fourth quarter revenue was $1.34 billion, up 29.2% from the prior-year quarter. Gross profit rose 47.3% to $333 million. Gross margin improved to 24.9%, a gain of 3.1 percentage points. Operating income was $32 million, swinging to a profit from an operating loss. Net income was $32 million, swinging to a profit from a net loss. For the full year, revenue reached $4.96 billion, up 28.3%. Full-year gross profit was $1.19 billion, up 42.7%. Full-year gross margin was 24.0%, up 2.4 percentage points. Operating income was $16 million, swinging to a profit. Net income was $19 million, swinging to a profit, and diluted EPS was $0.03, swinging to a profit.
Cash generation also improved. Fourth quarter operating cash flow was $147 million, up 59.8%. Capital expenditures were $13 million, up 18.2%. Full-year operating cash flow was $360 million, up 166.7%, while capital expenditures were $54 million, up 28.6%. Free cash flow, a non-GAAP measure, was $134 million in the fourth quarter and $306 million for the full year. Deferred revenue was $63 million at December 31, 2024, up 53.7%. Remaining performance obligations were $837 million, up 23.5%. Toast ended 2024 with approximately 134,000 Locations, up 26% year over year, after adding a record 28,000 net locations. Annualized recurring run-rate rose 34% to over $1.6 billion. Gross Payment Volume was $42.2 billion in the quarter, up 25%, and $159.1 billion for the full year, up 26%. Adjusted EBITDA, a non-GAAP measure, was $111 million in the quarter and $373 million for the full year.
Management's guidance focuses on non-GAAP measures. For the first quarter ending March 31, 2025, Toast expects non-GAAP subscription services and financial technology solutions gross profit of $385 million to $395 million, or 27% to 30% growth compared with Q1 2024, and Adjusted EBITDA of $100 million to $110 million. For the full year ending December 31, 2025, the company expects non-GAAP subscription services and financial technology solutions gross profit of $1,745 million to $1,765 million, or 23% to 25% growth compared with 2024, and Adjusted EBITDA of $510 million to $530 million. The outlook excludes a reconciliation to GAAP because items such as stock-based compensation and warrant liability changes cannot be forecast without unreasonable effort.
Toast expanded its enterprise and partner reach. It announced an expanded partnership with Uber Technologies, giving restaurants more delivery options. It signed Ascent Hospitality Management to implement Toast Enterprise Solutions at Perkins and Huddle House restaurants across an initial 500 locations, which Toast calls its largest full service restaurant group to date. It also signed Mendocino Farms, a fast-casual group with over 70 locations in California. In 2024, Toast worked with more than one-third of the 2024 James Beard award-winning restaurants and over half of Michelin-rated U.S. restaurants.
The operating backdrop still carries risks. Toast depends on GPV, and financial technology solutions revenue is seasonal, with stronger revenue per Toast Processing Location historically in the second and third quarters. The company cites risks tied to customer satisfaction, pricing, competitive offerings, economic conditions, and changes in customer and guest spending levels. Changes in the fair value of the warrant liability can move results. Forward-looking statements in the release are subject to those risks and uncertainties, and actual results may differ materially.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.34B | $1.30B | +2.5% | $1.04B | +29.2% |
| Gross profit | $333.0M | $322.0M | +3.4% | $226.0M | +47.3% |
| Gross margin | 24.9% | 24.7% | +0.2 pp | 21.8% | +3.1 pp |
| Research & development | $93.0M | $89.0M | +4.5% | $94.0M | -1.1% |
| Sales & marketing | $130.0M | $119.0M | +9.2% | $102.0M | +27.5% |
| General & administrative | $78.0M | $80.0M | -2.5% | $86.0M | -9.3% |
| Total operating expenses | $301.0M | $288.0M | +4.5% | $282.0M | +6.7% |
| Operating income (loss) | $32.0M | $34.0M | -5.9% | -$56.0M | +157.1% |
| Operating margin | 2.4% | 2.6% | -0.2 pp | -5.4% | +7.8 pp |
| Net income (loss) | $32.0M | $56.0M | -42.9% | -$36.0M | +188.9% |
| Net margin | 2.4% | 4.3% | -1.9 pp | -3.5% | +5.9 pp |
| Diluted EPS | $0.05 | $0.07 | -$0.02 | -$0.07 | +$0.12 |
Risks
Toast’s customer base is majority small- and medium-sized businesses, which the filing says can be more difficult and costly to retain and are more susceptible to fluctuating inflation and interest rates; restaurant closures or reduced consumer spending could lower gross payment volume and revenue.
Financial technology solutions revenue is generally a percentage of payment volume plus a per-transaction fee, so it varies with total dollars processed, ticket size, consumer spending, and the mix of card-present, card-not-present, debit, and credit transactions; unfavorable shifts in any of these factors could reduce revenue and gross profit.
Toast Capital relies on a single bank partner to originate working capital loans, and Toast may be obligated to purchase certain non-performing or charged-off loans up to 15% of the original principal amount made in a quarter; if the bank partner terminates or credit losses exceed expectations, the lending program and financial results could be materially harmed.
The restaurant management software market is intensely competitive, and competitors may offer discounted services, lower processing rates and fees, or alternative pay models; such pressure may force Toast to lower rates or increase incentives, which the filing says has negatively affected and may continue to negatively affect financial performance.
Subscriptions generally range from 12 to 36 months and customers are not obligated to renew; declines in renewals or restaurant closures, including those tied to inflation and interest rate changes, could adversely affect revenue even if new customer revenue partly offsets the lost revenue.
Toast processes sensitive payment, payroll, and personal data and has experienced security and privacy incidents in the past; the filing says AI technologies are enabling increasingly automated, targeted, and coordinated attacks, and a breach could lead to lost revenue, litigation, regulatory action, and reputational harm.
Toast uses AI internally and in customer-facing products and relies on third-party AI models; the filing warns competitors may adopt AI more quickly or successfully, and evolving regulation such as the EU Artificial Intelligence Act effective August 1, 2024 could require significant compliance resources and constrain AI use.
Toast depends on its management team and qualified personnel, and the market for qualified personnel is competitive; if the perceived value of equity awards declines, the company may struggle to recruit and retain employees, including its direct sales force.
Toast recorded restructuring expenses in FY2024 to adjust its cost structure and real estate footprint, after no such expenses in the prior year; restructuring actions may increase short-term expenses and impact the ability to grow or quickly develop and introduce products.
Toast faces complex regulatory requirements for financial technology products, international expansion, data privacy, anti-money laundering, and AI; failure to comply or new regulations could require additional partnerships, licenses, approvals, and compliance costs, and could subject it to liability or sanctions.
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
Total Annualized Recurring Run-Rate (ARR)
Summary, forecast, risks and KPIs are extracted from Toast, Inc.'s SEC filings for Q4 FY2024 (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.