Toast

Give restaurants the whole system for little or nothing up front, then earn on every swipe: Toast (NYSE: TOST) sells an all-in-one restaurant platform — POS, hardware, online ordering, payroll, marketing and more — for a per-location subscription ($0 Starter Kit or $69/month Point of Sale), but 82% of FY2025 revenue ($5.04B of $6.15B) is payments. Hardware is sold below cost (FY25 hardware revenue $180M vs $400M cost, INFERENCE), and the real prize is locations: ~180,000 by mid-2026 (+22%) processing $195.1B in FY25 and $60.7B in Q2 2026 (+22%). Software attach and AI lift recurring gross profit (FY25 $1.89B, +33%) while operating income swung from $16M to $292M and Q2 2026 ARR reached $2.4B (+25%).

Business Model Canvas
Toast
Research date: Oct 9, 2026
Evidence-backed · sources in companion brief

Key Partners

  • Card networks, acquiring processors and banks behind every transaction (FACT).
  • Bank partner originates Toast Capital loans; Toast must buy some charged-off loans, capped at 15% of a quarter's originations (FACT, 10-K).
  • Third-party hardware manufacturers, some single-sourced (FACT, 10-K).
  • 200+ integration partners across payroll, inventory, accounting, loyalty, ordering (FACT).
  • Brand partners — BWH Hotels endorsement; TGI Fridays UK rollout (FACT, Q2 2026).

Key Activities

  • Build and update the POS, kitchen, ordering, payroll and marketing software.
  • Design, ship and support restaurant-grade hardware (FACT).
  • Process payments and settle funds; underwrite and service Toast Capital loans (FACT).
  • Sell and onboard — on-site, remote or self-guided; 24/7 support (FACT).
  • Add AI — Toast IQ, Toast IQ Grow; test products in 'Toast Lab' with a Boston operator (FACT, Q2 2026).

Key Resources

  • ~180,000 locations, record ~9,500 net adds in Q2 2026 (FACT).
  • ~20% of U.S. restaurant locations on platform — company estimate (FACT, 10-K).
  • Proprietary Android-based software, EMV-certified hardware, PCI-compliant payments (FACT).
  • ~6,500 employees at end of 2025 (FACT).
  • $1.7B cash and marketable securities at 30 Jun 2026 (FACT).

Value Propositions

  • POS, handhelds, kiosks, kitchen display, online ordering, payroll, marketing, retail (FACT).
  • $0 Starter Kit or $69/month Point of Sale entry points (FACT, Toast blog).
  • Easy Pay lease and optional card surcharging to offset fees (FACT, 10-K).
  • Commission-free first-party ordering and the Local by Toast app (FACT, 10-K).
  • Toast IQ AI assistant that answers questions and takes actions in the system (FACT).

Customer Relationships

  • 12–36 month subscription terms (FACT, 10-K).
  • On-site, remote or self-guided onboarding (FACT).
  • 24/7/365 chat and phone support (FACT).
  • Growth team focused on expanding into the install base (FACT).
  • Customer base is mostly SMBs, which churn more than enterprise (FACT, risk factor).

Channels

  • In-market field sales teams (acquisition + growth) (FACT, 10-K).
  • High-volume digital marketing and demand generation (FACT).
  • Enterprise endorsements — BWH Hotels; TGI Fridays UK (FACT, Q2 2026).
  • Referrals and brand awareness as scale builds (FACT).
  • Local by Toast consumer ordering app (FACT, 10-K).

Customer Segments

  • Independent restaurants and SMB groups — the majority (FACT).
  • Mid-market and enterprise chains, e.g. BWH Hotels, TGI Fridays (FACT).
  • Food and beverage retail — c-stores, bottle shops, grocery (FACT).
  • International pilots, starting with the UK (FACT, Q2 2026).
  • Restaurant staff via payroll cards and Toast PayOut (FACT).

Cost Structure

  • Cost of revenue $4,560M (74% of revenue) in FY25 (FACT + INFERENCE).
  • Payments cost $3,891M tied to GPV (FACT).
  • Hardware and services cost $400M vs $180M revenue (FACT lines).
  • Sales and marketing $571M; G&A $344M incl. bad debt (FACT).
  • Toast Capital — buys charged-off loans up to 15% of quarterly originations; $46M loans held at 30 Jun 2026 (FACT).

Revenue Streams

  • Subscription services $936M FY25 (+33%); Q2 2026 $290M (FACT).
  • Financial technology solutions $5,037M FY25 (+24%); Q2 2026 $1,570M (FACT).
  • Hardware and professional services $180M FY25; Q2 2026 $48M (FACT).
  • Pricing — $0 Starter Kit, $69/month Point of Sale, custom Build Your Own (FACT, Toast).
  • Published processing rates (e.g. 2.49% + 15¢ on the $69 plan) are from third-party reviews, not Toast's own page (SECONDARY).
Sources: sec.gov/Archives/edgar · sec.gov/Archives/edgar · pos.toasttab.com/blog/on-the-line · sec.gov/Archives/edgar · costofstarting.com/best/toast-pricing
Not affiliated with Toast.
BMC · Osterwalder 9-block · Oct 9, 2026