Q4 2025 Toast Inc Earnings Call Transcript
Key Points
- Toast Inc (TOST) achieved a 33% growth in recurring gross profits and expanded adjusted EBITDA margins to 34% in 2025.
- The company added over 30,000 net locations on the platform, ending the year with 164,000 locations.
- Toast Inc (TOST) launched over 500 new features, including the Toast IQ conversational AI assistant, which has seen strong customer feedback and adoption.
- The company successfully entered new markets, signing major enterprise customers like Applebee's and Firehouse Subs, and launched in Australia.
- Toast Inc (TOST) is investing in AI to enhance productivity and customer support, which is contributing to margin expansion and operational efficiency.
- The company faces higher memory chip costs due to global demand, impacting hardware costs and margins in the second half of 2026.
- Hardware and professional services gross profit was negative 12% of recurring gross profit streams, partly due to absorbing higher tariff costs.
- There is a drag on SaaS ARR per location from international, food and beverage retail, and enterprise segments, which are still developing.
- Toast Inc (TOST) is heavily investing in R&D, which could delay short-term margin expansion despite long-term growth potential.
- The company is navigating the potential commoditization of software due to AI advancements, which could impact its competitive edge.
Good afternoon. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to Toast's fourth quarter and full year 2025 earnings conference call. Today's call will be 45 minutes.
I'll now turn the call over to Michael Senno, Senior Vice President of Finance. You may begin your conference.
Thank you, operator. Welcome to Toast's earnings conference call for the fourth quarter and full year ended December 31, 2025. On today's call are CEO, Aman Narang; and CFO, Elena Gomez, will open with prepared remarks, which will be followed by our Q&A session.
Before we start, I'd like to draw your attention to the safe harbor statement included in today's press release. During this call, we'll make statements related to our business that may be considered forward-looking within the meaning of the Securities Act and the Exchange Act. All statements other than statements of historical facts are forward-looking statements, including those
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