Toast Earnings: Record ARR Growth and Major Wins Mark Q1 2025
- Hardik Shah
- May 8
- 2 min read
TLDR
Record ARR & Location Growth: ARR jumped 31% YoY to $1.7B with 6,000+ net new locations added in Q1.
Enterprise Expansion: Signed Applebee’s and Topgolf—Toast’s largest deals to date—showcasing enterprise momentum.
Strong Financials: GAAP net income reached $56M; Adjusted EBITDA more than doubled YoY to $133M.
Business Overview
Toast Inc. (NYSE: TOST) is a cloud-based, all-in-one digital technology platform tailored for the restaurant industry. With a customer base of approximately 140,000 live locations globally, Toast delivers an integrated suite of software-as-a-service (SaaS) tools and financial tech solutions including point-of-sale (POS), payments, operations, digital ordering, marketing, and team management.
Toast Earnings - Q1'25 Highlights
Annualized Recurring Revenue (ARR): $1.7B, up 31% YoY.
Gross Payment Volume (GPV): $42.2B, up 22% YoY.
Revenue: $1.34B, up from $1.08B in Q1 2024.
Subscription Services: $209M (up 38% YoY).
Financial Technology Solutions: $1.08B (up 24% YoY).
GAAP Net Income: $56M vs. a loss of $(83)M in Q1 2024.
Adjusted EBITDA: $133M, up from $57M YoY.
Free Cash Flow: $69M, a dramatic improvement from $(33)M in Q1 2024.
“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
Forward Guidance
Toast raised its full-year 2025 outlook:
Q2 2025 Projections:
Gross Profit (Non-GAAP): $435M–$445M
Adjusted EBITDA: $130M–$140M
Full Year 2025 Guidance:
Gross Profit (Non-GAAP): $1.775B–$1.795B (25–27% growth, revised upward)
Adjusted EBITDA: $540M–$560M (up from prior $510M–$530M range)
Operational Performance
Enterprise Growth: Applebee’s (Toast’s largest win to date) and Topgolf have adopted Toast's platform to streamline operations. These customers validate Toast’s ability to scale in large, complex environments.
Productivity Gains: Sales AE productivity was up YoY, contributing to Toast’s confidence in achieving record Q2 net adds.
Hardware Tariffs: Management expects a modest cost increase due to hardware-related tariffs, already reflected in guidance.
“This is a segment of the market that many investors thought we couldn’t win… Applebee’s is just one among many.” — Aman Narang
Market Insights
Stable Macro Trends: Consumer behavior and new business formations remained stable through early May.
AI Differentiation: ToastIQ and Sous Chef—AI-driven tools—show early success in enhancing guest experience and increasing order sizes. Monetization is in early stages but strategic impact is evident.
“AI presents a unique opportunity to make our platform both easier to use and more powerful… we're early in this journey.” — Aman Narang
Strategic Initiatives
Toast’s growth roadmap centers around four key pillars:
Core U.S. Market Penetration: SMBs remain the engine of location growth.
New Markets: Expansion in enterprise, retail, and international is on track to surpass 10,000 locations in 2025.
AI-Powered Innovation: ToastIQ and Sous Chef are being deployed to increase efficiency and personalization.
Disciplined Investment: Operating margin improvement aligns with scaling goals.
Capital Allocation
Credit Facility: Renewed $350M revolving credit facility.
Share Repurchase: Bought back $17M in shares during Q1 2025.
Cash Position: Ended Q1 with $1.26B in cash and equivalents.
The Bottom Line
Toast is executing with precision—delivering breakout profitability while expanding its platform into large enterprise accounts. With AI-enabled tools gaining traction, record net location additions, and a raised full-year outlook, Toast is shaping up as a category leader in restaurant tech.
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