Summary
Toast closed fiscal 2025 with a strong fourth quarter. Revenue for FY2025 Q4 was $1.63 billion, up 22.0% from FY2024 Q4. Gross profit was $423 million, up 27.0%. Operating income reached $85 million, up 165.6%. Net income was $101 million, up 215.6%. Gross margin improved to 25.9%, up 1.0 percentage point. Operating margin was 5.2%, up 2.8 percentage points. For the full fiscal year, revenue was $6.15 billion, up 24.1%. Operating income was $292 million, up 1725.0%. Net income was $342 million, up 1700.0%. Diluted EPS was $0.56, up $0.53. Operating cash flow was $194 million in the quarter, up 32.0%, and $661 million for the full year, up 83.6%. Capital expenditures were $16 million in the quarter, up 23.1%, and $53 million for the full year, down 1.9%. Deferred revenue finished at $69 million, up 9.5%, and remaining performance obligations were $999 million, up 19.4%.
The operational picture also improved. Toast added a record 30,000 net locations in 2025, including approximately 8,000 in the fourth quarter. Total Locations rose 22% year over year to approximately 164,000. Gross Payment Volume was $51.4 billion in the fourth quarter, up 22% year over year, and $195.1 billion for the full year, up 23%. Annualized recurring run-rate exceeded $2.0 billion as of December 31, 2025, up 26%. Payments ARR was $986 million, up 24%, and Subscription ARR was $1,061 million, up 28%. Non-GAAP subscription services and financial technology solutions gross profit grew 28% year over year to $502 million in the quarter and 33% to $1.9 billion for the full year. Adjusted EBITDA was $163 million in the quarter compared with $111 million in the prior-year quarter, and $633 million for the full year compared with $373 million. Free Cash Flow, a non-GAAP measure, was $178 million in the quarter and $608 million for the full year.
Guidance points to continued growth. For the first quarter ending March 31, 2026, Toast expects non-GAAP subscription services and financial technology solutions gross profit of $505 million to $515 million, representing 22-24% growth compared to Q1 2025. It expects Adjusted EBITDA of $160 million to $170 million. For the full year ending December 31, 2026, the company guides to non-GAAP subscription services and financial technology solutions gross profit of $2,270 million to $2,300 million, or 20-22% growth compared to 2025. Full-year Adjusted EBITDA is expected to be $775 million to $795 million. The board also authorized a $500 million increase to the share repurchase program in February 2026. Recent business wins include an agreement with MTY Food Group to roll out Toast across more than 1,000 Papa Murphy's US locations, new retail-specific AI features, and a partnership with Instacart.
Risks remain. The company's outlook is forward-looking and subject to uncertainties described in its Risk Factors. Financial technology solutions revenue is tied to Gross Payment Volume, which can be affected by seasonality, economic conditions, and customer spending levels. Competition, pricing pressures, and customer satisfaction with the platform could influence future results. The MD&A notes that customers typically have greater sales during warmer months, which can affect financial technology solutions revenue per location. Toast also has contractual commitments, including $106 million of non-cancellable purchase obligations to hardware suppliers due within the next 12 months and $157 million of non-cancellable commitments with cloud service providers and other vendors, of which $90 million is due within the next 12 months. These obligations, along with the need to invest in technology and infrastructure, are part of the risk profile.
The quarter also highlighted the company's ability to generate cash. Operating cash flow of $194 million in the quarter and $661 million for the year funded capital expenditures of $16 million and $53 million, respectively. Free Cash Flow, which deducts capital expenditures from operating cash flow, was $178 million in the quarter and $608 million for the year. Management noted that existing cash and available borrowing capacity should meet working capital needs for at least the next 12 months. The $500 million share repurchase increase adds another option for capital allocation. Still, the business faces execution risk as it expands into new markets and retail verticals. The MTY and Instacart deals show progress, but they will need to translate into locations and GPV over time.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.63B | $1.63B | ±0.0% | $1.34B | +22.0% |
| Gross profit | $423.0M | $432.0M | -2.1% | $333.0M | +27.0% |
| Gross margin | 25.9% | 26.4% | -0.6 pp | 24.9% | +1.0 pp |
| Research & development | $97.0M | $102.0M | -4.9% | $93.0M | +4.3% |
| Sales & marketing | $153.0M | $144.0M | +6.3% | $130.0M | +17.7% |
| General & administrative | $84.0M | $102.0M | -17.6% | $78.0M | +7.7% |
| Total operating expenses | $338.0M | $348.0M | -2.9% | $301.0M | +12.3% |
| Operating income (loss) | $85.0M | $84.0M | +1.2% | $32.0M | +165.6% |
| Operating margin | 5.2% | 5.1% | +0.1 pp | 2.4% | +2.8 pp |
| Net income (loss) | $101.0M | $105.0M | -3.8% | $32.0M | +215.6% |
| Net margin | 6.2% | 6.4% | -0.3 pp | 2.4% | +3.8 pp |
| Diluted EPS | $0.17 | $0.16 | +$0.01 | $0.05 | +$0.12 |
Risks
Toast Capital depends on a single bank partner to originate working capital loans, and Toast must purchase charged-off or non-performing loans up to 15% of the original principal amount made in a quarter. MD&A notes the increase in general and administrative expenses was primarily driven by an increase in bad debt expense, tying the risk to current results.
A majority of Toast customers are SMBs, which have higher business failure rates and are more exposed to inflation, interest rates, policy changes, and restaurant closures. MD&A reports approximately 164,000 Locations, up 22% year over year, and GPV of $195.1 billion, up 23%, but any deterioration in SMB health could reduce locations, payment volume, and revenue.
Toast uses AI internally and in customer products and relies on third-party models, creating risks from inaccurate outputs, data-privacy issues, evolving EU AI Act and U.S. state laws, and competitors adopting AI faster. The filing specifically cites the EU AI Act and the December 11, 2025 executive order on a national AI policy framework.
Toast handles payroll processing and customer funds, making it a target for financial fraud, account takeover, insider fraud, and stolen identities. The filing states Toast has suffered and may in the future suffer losses from such fraud, which could require customer reimbursements and expose it to civil or criminal liability.
Financial technology solutions revenue and gross profit vary with GPV, card mix, consumer spending, and economic conditions; card-not-present and debit transactions generally carry higher gross profit than card-present and credit transactions. These fluctuations can affect revenue and gross profit from period to period.
The restaurant management software market is intensely competitive, with well-capitalized competitors offering discounts, lower processing rates, point solutions without required payment processing, and alternative pay models. Competitive pressure may force Toast to lower rates or increase incentives, hurting financial performance.
Toast has experienced system outages in the past and may face future disruptions from capacity constraints, new functionality, third-party vendors, or natural disasters. Some systems are not fully redundant, disaster recovery may be insufficient, and service-level commitments could lead to customer claims and revenue losses.
Toast offers financial products and payroll services through bank partners and is subject to contractual and regulatory requirements for marketing and servicing activities. Failure to comply could lead to liability, regulatory sanctions, or termination by bank partners, and new products may require additional licenses or approvals.
Financial technology solutions revenue is seasonal, with revenue per Toast Processing Location historically stronger in the second and third quarters because customers typically have greater sales during warmer months. This seasonality may cause fluctuations in financial results.
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 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.