Toast, Inc. (NYSE: TOST) — research brief (BMC #057)

Prepared 2026-10-09 (America/Chicago). Labels: FACT = stated by Toast (Form 10-K, Q2 2026 results release and Form 10-Q, Toast's own pricing blog); SECONDARY = third-party reviews/press; INFERENCE = arithmetic or reasoning by this project from company-stated numbers. Do not invent ARR, valuation, headcount, or volume figures. Fiscal year = calendar year. Non-GAAP and ARR are company-defined measures.

Sources (accessed 2026-10-09)

Annual Report on Form 10-K for FY ended 31 Dec 2025 (filed 18 Feb 2026): https://www.sec.gov/Archives/edgar/data/1650164/000165016426000057/tost-20251231.htm
Q2 2026 results press release, 4 Aug 2026 (8-K Ex. 99.1): https://www.sec.gov/Archives/edgar/data/1650164/000165016426000162/tost-20260630xexhibit991.htm
Quarterly Report on Form 10-Q for Q2 2026 (filed 5 Aug 2026): https://www.sec.gov/Archives/edgar/data/1650164/000165016426000164/tost-20260630.htm
Toast pricing blog (Starter Kit $0/mo, Point of Sale $69/mo, Build Your Own custom): https://pos.toasttab.com/blog/on-the-line/how-much-does-a-restaurant-pos-system-cost
Third-party review of plans/processing rates (SECONDARY): https://costofstarting.com/best/toast-pricing
Toast's own pricing and about pages block automated fetches (Cloudflare); plan details above come from the Toast blog page and search summaries.
8-K filed 1 Oct 2026 (Item 5.02): Chief Revenue Officer Jonathan Vassil to retire effective 31 Dec 2026 — noted, not a model change.
Logo: no Simple Icons glyph exists for Toast; a clean monogram tile in Toast orange (#FF4C00) is used.

Teaching arc

Win the restaurant with a cheap, complete system → make the money when it takes payments. Toast gives a restaurant POS, handhelds, kitchen screens, online ordering and payroll for a per-location subscription (a $0 Starter Kit or $69/month Point of Sale) and sells hardware below cost (FY25 hardware and services revenue $180M vs $400M cost; gross loss ≈$220M, INFERENCE) → each location then pays a percentage plus a fixed fee on every card swipe: payments are $5,037M of $6,153M FY25 revenue (82%, INFERENCE), though most of it passes through as interchange and processor cost, leaving ~0.59% of volume as fintech gross profit (INFERENCE: $1,146M ÷ $195.1B; same ~0.59% in Q2 2026) → more locations (~164,000 at FY25 end, ~180,000 at Q2 2026, record ~9,500 net adds in Q2) and more modules (payroll, marketing, Toast IQ AI, Toast Capital) lift recurring gross profit $1,417M → $1,887M (+33%) in FY25, ARR $2.05B → $2.41B by Q2 2026, GAAP operating income $16M → $292M, FCF $306M → $608M, and a buyback ($486M YTD through 30 Jun 2026).

Key numbers (FACT unless noted)

FY25 revenue $6,153M (+24%): subscription $936M (+33%), financial technology solutions $5,037M (+24%), hardware and professional services $180M (-10%). FY24: $4,960M total.
FY25 cost of revenue $4,560M (subscription $264M, fintech $3,891M, hardware/services $400M, amortization $5M). Gross profit $1,593M. By line (INFERENCE): subscription $672M (~72% margin), fintech $1,146M, hardware ≈ −$220M.
Non-GAAP subscription + fintech gross profit FY25 $1,887M (FY24 $1,417M; FY23 $1,057M).
FY25 operating income $292M (FY24 $16M; FY23 −$287M); net income $342M; operating cash flow $661M; free cash flow $608M (FY24 $306M).
Opex FY25: sales and marketing $571M, G&A $344M (bad debt up), restructuring $12M.
GPV FY25 $195.1B (+23%); Locations ~164,000 (+22%); ARR $2,047M (+26%); ~6,500 employees.
Q2 2026: revenue $1,908M (+23%); subscription $290M, fintech $1,570M, hardware/services $48M; gross profit $516M; operating income $152M (vs $80M); net income $154M; adjusted EBITDA $221M incl. ~$10M tariff refund; FCF $130M (vs $208M); GPV $60.7B (+22%); Locations ~180,000 (+22%); ~9,500 net new; ARR $2,409M (+25%); non-GAAP recurring gross profit $595M (+28%).
Balance sheet 30 Jun 2026: cash $1,015M, marketable securities $698M; loans held for investment (Toast Capital) $46M vs $0 at 31 Dec 2025; restricted cash $73M as loan collateral.
Guidance: Q3 2026 non-GAAP sub+fintech gross profit $615–625M, adjusted EBITDA $210–220M; FY2026 $2,325–2,355M (+23–25%), adjusted EBITDA $805–825M.
Buybacks: $486M for 19M shares YTD through 30 Jun 2026; board added $500M authorization in Feb 2026.

Business model mechanics (FACT, 10-K)

Subscription revenue: rate per location varying by products, hardware configuration, employee count; contracts 12–36 months.
Payments: percentage of amount plus per-transaction fee, recognized gross; Toast is principal, chooses third-party acquirers, and bears interchange, network, processing and settlement fees in cost of revenue.
Toast Capital: working capital loans originated by a third-party bank, repaid via a fixed % of daily sales; Toast earns underwriting/marketing fees and servicing fees; must buy charged-off/non-performing loans up to 15% of a quarter's originations; since 2026 also holds some loans.
Easy Pay leasing, card surcharging, payroll card and Toast PayOut with a bank partner.
Go-to-market: local in-market sales teams (acquisition organized by customer size/type/geography; growth team for install base), high-volume marketing, brand/referrals, 200+ partners.
Segments: majority SMB; pursuing mid-market and enterprise (BWH Hotels endorsement, TGI Fridays UK rollout), food and beverage retail, and international (early).
Company estimate: U.S. restaurant locations on Toast ≈ 20% of the U.S. restaurant market.

Pricing (FACT vs SECONDARY)

FACT (Toast blog): $0/month eligible Starter Kit (one-terminal configuration, no upfront hardware, transaction fees and terms apply); $69/month Point of Sale; Build Your Own custom.
SECONDARY (third-party): Starter Kit pay-as-you-go processing ~3.09–3.69% + 15¢; Point of Sale and Growth 2.49% + 15¢ in person; Growth from ~$165/month. Treat as indicative, not Toast-published.

Caveats

ARR and non-GAAP gross profit are company-defined and exclude Toast Capital; they are not GAAP.
Take-rate style ratios (fintech gross profit ÷ GPV) are this project's arithmetic and mix payments with Toast Capital and other fintech lines.

# Toast, Inc. (NYSE: TOST) — research brief (BMC #057) Prepared 2026-10-09 (America/Chicago). Labels: **FACT** = stated by Toast (Form 10-K, Q2 2026 results release and Form 10-Q, Toast's own pricing blog); **SECONDARY** = third-party reviews/press; **INFERENCE** = arithmetic or reasoning by this project from company-stated numbers. Do not invent ARR, valuation, headcount, or volume figures. Fiscal year = calendar year. Non-GAAP and ARR are company-defined measures. ## Sources (accessed 2026-10-09) - Annual Report on Form 10-K for FY ended 31 Dec 2025 (filed 18 Feb 2026): https://www.sec.gov/Archives/edgar/data/1650164/000165016426000057/tost-20251231.htm - Q2 2026 results press release, 4 Aug 2026 (8-K Ex. 99.1): https://www.sec.gov/Archives/edgar/data/1650164/000165016426000162/tost-20260630xexhibit991.htm - Quarterly Report on Form 10-Q for Q2 2026 (filed 5 Aug 2026): https://www.sec.gov/Archives/edgar/data/1650164/000165016426000164/tost-20260630.htm - Toast pricing blog (Starter Kit $0/mo, Point of Sale $69/mo, Build Your Own custom): https://pos.toasttab.com/blog/on-the-line/how-much-does-a-restaurant-pos-system-cost - Third-party review of plans/processing rates (SECONDARY): https://costofstarting.com/best/toast-pricing - Toast's own pricing and about pages block automated fetches (Cloudflare); plan details above come from the Toast blog page and search summaries. - 8-K filed 1 Oct 2026 (Item 5.02): Chief Revenue Officer Jonathan Vassil to retire effective 31 Dec 2026 — noted, not a model change. - Logo: no Simple Icons glyph exists for Toast; a clean monogram tile in Toast orange (#FF4C00) is used. ## Teaching arc Win the restaurant with a cheap, complete system → make the money when it takes payments. Toast gives a restaurant POS, handhelds, kitchen screens, online ordering and payroll for a per-location subscription (a $0 Starter Kit or $69/month Point of Sale) and sells hardware below cost (FY25 hardware and services revenue $180M vs $400M cost; gross loss ≈$220M, INFERENCE) → each location then pays a percentage plus a fixed fee on every card swipe: payments are $5,037M of $6,153M FY25 revenue (82%, INFERENCE), though most of it passes through as interchange and processor cost, leaving ~0.59% of volume as fintech gross profit (INFERENCE: $1,146M ÷ $195.1B; same ~0.59% in Q2 2026) → more locations (~164,000 at FY25 end, ~180,000 at Q2 2026, record ~9,500 net adds in Q2) and more modules (payroll, marketing, Toast IQ AI, Toast Capital) lift recurring gross profit $1,417M → $1,887M (+33%) in FY25, ARR $2.05B → $2.41B by Q2 2026, GAAP operating income $16M → $292M, FCF $306M → $608M, and a buyback ($486M YTD through 30 Jun 2026). ## Key numbers (FACT unless noted) - FY25 revenue $6,153M (+24%): subscription $936M (+33%), financial technology solutions $5,037M (+24%), hardware and professional services $180M (-10%). FY24: $4,960M total. - FY25 cost of revenue $4,560M (subscription $264M, fintech $3,891M, hardware/services $400M, amortization $5M). Gross profit $1,593M. By line (INFERENCE): subscription $672M (~72% margin), fintech $1,146M, hardware ≈ −$220M. - Non-GAAP subscription + fintech gross profit FY25 $1,887M (FY24 $1,417M; FY23 $1,057M). - FY25 operating income $292M (FY24 $16M; FY23 −$287M); net income $342M; operating cash flow $661M; free cash flow $608M (FY24 $306M). - Opex FY25: sales and marketing $571M, G&A $344M (bad debt up), restructuring $12M. - GPV FY25 $195.1B (+23%); Locations ~164,000 (+22%); ARR $2,047M (+26%); ~6,500 employees. - Q2 2026: revenue $1,908M (+23%); subscription $290M, fintech $1,570M, hardware/services $48M; gross profit $516M; operating income $152M (vs $80M); net income $154M; adjusted EBITDA $221M incl. ~$10M tariff refund; FCF $130M (vs $208M); GPV $60.7B (+22%); Locations ~180,000 (+22%); ~9,500 net new; ARR $2,409M (+25%); non-GAAP recurring gross profit $595M (+28%). - Balance sheet 30 Jun 2026: cash $1,015M, marketable securities $698M; loans held for investment (Toast Capital) $46M vs $0 at 31 Dec 2025; restricted cash $73M as loan collateral. - Guidance: Q3 2026 non-GAAP sub+fintech gross profit $615–625M, adjusted EBITDA $210–220M; FY2026 $2,325–2,355M (+23–25%), adjusted EBITDA $805–825M. - Buybacks: $486M for 19M shares YTD through 30 Jun 2026; board added $500M authorization in Feb 2026. ## Business model mechanics (FACT, 10-K) - Subscription revenue: rate per location varying by products, hardware configuration, employee count; contracts 12–36 months. - Payments: percentage of amount plus per-transaction fee, recognized gross; Toast is principal, chooses third-party acquirers, and bears interchange, network, processing and settlement fees in cost of revenue. - Toast Capital: working capital loans originated by a third-party bank, repaid via a fixed % of daily sales; Toast earns underwriting/marketing fees and servicing fees; must buy charged-off/non-performing loans up to 15% of a quarter's originations; since 2026 also holds some loans. - Easy Pay leasing, card surcharging, payroll card and Toast PayOut with a bank partner. - Go-to-market: local in-market sales teams (acquisition organized by customer size/type/geography; growth team for install base), high-volume marketing, brand/referrals, 200+ partners. - Segments: majority SMB; pursuing mid-market and enterprise (BWH Hotels endorsement, TGI Fridays UK rollout), food and beverage retail, and international (early). - Company estimate: U.S. restaurant locations on Toast ≈ 20% of the U.S. restaurant market. ## Pricing (FACT vs SECONDARY) - FACT (Toast blog): $0/month eligible Starter Kit (one-terminal configuration, no upfront hardware, transaction fees and terms apply); $69/month Point of Sale; Build Your Own custom. - SECONDARY (third-party): Starter Kit pay-as-you-go processing ~3.09–3.69% + 15¢; Point of Sale and Growth 2.49% + 15¢ in person; Growth from ~$165/month. Treat as indicative, not Toast-published. ## Caveats - ARR and non-GAAP gross profit are company-defined and exclude Toast Capital; they are not GAAP. - Take-rate style ratios (fintech gross profit ÷ GPV) are this project's arithmetic and mix payments with Toast Capital and other fintech lines.