Toast, Inc. (TOST)

CIK: 0001650164. SIC: 7374 Services-Computer Processing & Data Preparation. Latest 10-K as of: 2026-02-18.

SIC breadcrumb: Services > Business Services > SIC 7374 Services-Computer Processing & Data Preparation

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1650164. Latest filing source: 0001650164-26-000057.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001650164.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001650164.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001650164-26-000114.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements, and the related notes that are included elsewhere in this Quarterly Report on Form 10-Q, and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Special Note Regarding Forward-Looking Statements” and Item 1A. Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and in this Quarterly Report on Form 10-Q, if applicable. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

Toast is a global technology platform built for restaurant and retail businesses. From the busiest local restaurants and shops to large hospitality brands, Toast helps owners and operators manage their businesses more efficiently, drive guest demand, and build lasting success. Toast integrates software, agentic AI, payments, financial technology solutions, and hardware with a broad partner ecosystem. Powering billions of purchases throughout local commerce, Toast delivers the precision and innovation required for modern restaurant and retail environments.

We define a live location, or Location, as a unique location that has used Toast Point of Sale, or POS, to record transaction volumes above a minimum threshold, and has not been marked as a churned location as of the date of determination. A Location can use Toast payment services, which we refer to as a Toast Processing Location, or for select enterprise customers, not use Toast’s payment services, which we refer to as a Non-Toast Processing Location. Customers of legacy solutions provided by companies that we have acquired that do not use Toast POS, are not included in our Location count.

As of March 31, 2026, Toast served approximately 171,000 Locations, up 22% compared to one year ago, and processed $204 billion in gross payment volume over the trailing 12 months.

Seasonality and Other Factors

We experience seasonality in our financial technology solutions revenue, which is largely driven by the level of Gross Payment Volume, or GPV, processed through our platform. Moreover, our performance may be impacted by global financial, economic, and political events. For example, customers typically have greater sales during the warmer months, though this effect varies regionally, and customer sales can be impacted by seasonal needs of our customers (which may also impact the total number of Toast Processing Locations in such a period that contributes to our GPV). As a result, our financial technology solutions revenue per Toast Processing Location has historically been stronger in the second and third quarters. We believe that financial technology solutions revenue from both existing and potential future products will continue to represent a significant proportion of our overall revenue mix, and seasonality will continue to impact our results of operations. Our performance may also be impacted by geopolitical events, such as tariffs, which may influence consumer spending or restaurant operations. There is uncertainty as to when specific tariffs may go into effect and the impact higher tariffs may have on consumer demand or on our business. For further discussion of such potential impacts, see Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

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Key Business Metrics

We use the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions:

Three Months Ended March 31,

(dollars in billions)

2026

2025

% Growth

Gross Payment Volume (GPV)

$

51.3 

$

42.2 

22 

%

As of March 31,

(dollars in millions)

2026

2025

% Growth

Annualized Recurring Run-Rate (ARR)

$

2,151 

$

1,713 

26 

%

Gross Payment Volume (GPV)

Gross Payment Volume represents the sum of total dollars processed through the Toast payments platform across Toast Processing Locations in a given period. GPV is a key measure of the scale of our platform, which in turn drives our financial performance. As our customers generate more sales and therefore more GPV, we generally see higher financial technology solutions revenue.

Annualized Recurring Run-Rate (ARR)

We monitor Annualized Recurring Run-Rate as a key operational measure of the scale of our subscription and payment processing services for both new and existing customers. To calculate this metric, we first calculate recurring run-rate on a monthly basis. Monthly Recurring Run-Rate, or MRR, is measured on the final day of each month as the sum of (i) our monthly billings of subscription services fees, which we refer to as the subscription component of MRR, and (ii) our in-month adjusted payments services fees, exclusive of estimated transaction-based costs, which we refer to as the payments component of MRR. MRR does not include fees derived from Toast Capital or related costs. MRR is also not burdened by the impact of SaaS credits offered. The MRR calculation includes all locations on the Toast platform and locations on legacy solutions, which have a negligible impact on ARR.

ARR is determined by taking the sum of (i) twelve times the subscription component of MRR and (ii) four times the trailing-three-month cumulative payments component of MRR. We believe this approach provides an indication of our scale, while also controlling for short-term fluctuations in payments volume. Our ARR may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with our platform, pricing, competitive offerings, economic conditions, or overall changes in our customers’ and their guests’ spending levels. ARR is an operational measure, does not reflect our revenue or gross profit determined in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, and should be viewed independently of, and not combined with or substituted for, our revenue, gross profit, and other financial information determined in accordance with GAAP. Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of our future or expected results.

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Results of Operations

Revenue

Three Months Ended March 31,

Change

(dollars in millions)

2026

2025

Amount

%

Subscription services

$

268 

$

209 

$

59 

28 

%

Financial technology solutions

1,323 

1,082 

241 

22 

%

Hardware and professional services

39 

46 

(7)

(15)

%

Total revenue

$

1,630 

$

1,337 

$

293 

22 

%

Total revenue increased by 22%, for the three months ended March 31, 2026, compared to the same period in 2025. This growth was primarily driven by increases in subscription services and financial technology solutions revenue, attributable to a higher number of Locations on the Toast platform and continued product adoption.

Costs of Revenue

Three Months Ended March 31,

Change

(dollars in millions)

2026

2025

Amount

%

Subscription services

$

60 

$

66 

$

(6)

(9)

%

Financial technology solutions

1,011 

831 

180 

22 

%

Hardware and professional services

111 

93 

18 

19 

%

Amortization of acquired intangible assets

1 

1 

— 

— 

%

Total costs of revenue

$

1,183 

$

991 

$

192 

19 

%

Total costs of revenue increased by 19% for the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily driven by higher financial technology solutions costs associated with increased gross payment volume.

Operating Expenses

Three Months Ended March 31,

Change

(dollars in millions)

2026

2025

Amount

%

Sales and marketing

$

156 

$

133 

$

23 

17 

%

Research and development

97 

84 

13 

15 

%

General and administrative

84 

79 

5 

6 

%

Restructuring expenses

— 

7 

(7)

(100)

%

Total operating expenses

$

337 

$

303 

$

34 

11 

%

Total operating expenses increased by 11%, for the three months ended March 31, 2026, compared to the same period in 2025. This increase was primarily driven by higher employee-related costs, partially offset by a decrease in restructuring expenses.

Non-GAAP Financial Measures

We use certain non-GAAP financial measures described below to supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP and to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered substitutes for, or superior to, the financial information prepared and presented in accordance with GAAP.

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We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP metrics to provide investors insight into the information used by our management to evaluate our business and financial performance. We believe that these measures provide investors increased comparability of our core financial performance over multiple periods with other companies in our industry.

Net Income (Loss) (GAAP) and Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA is defined as net income (loss), adjusted to exclude stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, interest income, net, income taxes and certain other items that are not considered to reflect our operating activities and performance within the ordinary course of business, such as restructuring expenses, acquisition expenses, fair value adjustments on warrant liabilities, gain on warrant extinguishments, expenses related to early termination of leases (which includes associated asset impairments), and stock-based charitable contribution expense, as applicable. We have provided below a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA.

We believe Adjusted EBITDA is useful for investors in comparing our financial performance to other companies and from period to period. Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation and amortization, interest expense, and interest income, which can vary substantially from company to company depending on their financing and capital structures and the method by which their assets were acquired. In addition, Adjusted EBITDA eliminates the impact of certain items that may obscure trends in the underlying performance of our business. Adjusted EBITDA also has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. The expenses and other items that are excluded from the calculation of Adjusted EBITDA may differ from the expenses and other it

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-02-18. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis includes forward-looking statements that involve risks, uncertainties and assumptions. You should read the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” sections of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

The Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, describes principal factors affecting the results of our operations, financial condition and liquidity, as well as our critical accounting policies and estimates that require significant judgment and thus have the most significant potential impact on our Consolidated Financial Statements included elsewhere in this Form 10-K. Our MD&A is organized as follows:

•Overview. This section provides a general description of our business, recent developments, and key business metrics.

•Results of Operations. This section provides an overview and analysis of our financial results for the fiscal year ended December 31, 2025 compared to the fiscal year ended December 31, 2024. Discussions related to the fiscal year ended December 31, 2023 and year-over-year comparisons between the fiscal years ended December 31, 2024 and 2023 are included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 26, 2025, and incorporated herein by reference.

•Liquidity and Capital Resources. This section provides an analysis of our liquidity and changes in cash flows, as well as a discussion of available borrowings and contractual commitments.

•Critical Accounting Policies and Estimates. This section discusses accounting policies and estimates that require us to exercise subjective or complex judgments in their application. We believe these accounting policies and estimates are important to understanding the assumptions and judgments incorporated in our reported financial results.

OVERVIEW

Toast is a cloud-based, all-in-one digital technology platform purpose-built for the entire restaurant community. We provide a comprehensive platform of software-as-a-service, or SaaS, products and financial technology solutions, including integrated payment processing, restaurant-grade hardware, and a broad ecosystem of third-party partners. We serve as the restaurant operating system, connecting front of house and back of house operations across service models including dine-in, takeout, delivery, catering, and retail.

We define a live location, or Location, as a unique location that has used Toast Point of Sale, or POS, to record transaction volumes above a minimum threshold, and has not been marked as a churned location as of the date of determination. A Location can use Toast payment services, which we refer to as a Toast Processing Location, or for select enterprise customers, not use Toast’s payment services, which we refer to as a Non-Toast Processing Location. Customers of legacy solutions provided by companies that we have acquired that do not use Toast POS, are not included in our Location count.

As of December 31, 2025, approximately 164,000 Locations, an increase of 22% year over year, processing approximately $195 billion of gross payment volume in the trailing 12 months, partnered with Toast to optimize operations, increase sales, engage guests, and maintain happy employees.

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Seasonality

We experience seasonality in our financial technology solutions revenue, which is largely driven by the level of Gross Payment Volume, or GPV, processed through our platform. For example, customers typically have greater sales during the warmer months, though this effect varies regionally, and can be impacted by seasonal needs of our customers (which may also impact the total number of Toast Processing Locations in such a period that contributes to our GPV). As a result, our financial technology solutions revenue per Toast Processing Location has historically been stronger in the second and third quarters. We believe that financial technology solutions revenue from both existing and potential future products will continue to represent a significant proportion of our overall revenue mix, and seasonality will continue to impact our results of operations.

Key Business Metrics

Year Ended December 31,

(dollars in billions)

2025

2024

% Growth

Gross Payment Volume (GPV)

$

195.1 

$

159.1 

23 

%

As of December 31,

(dollars in millions)

2025

2024

% Growth

Total Annualized Recurring Run-Rate (ARR)

$

2,047 

$

1,626 

26 

%

Gross Payment Volume (GPV)

Gross Payment Volume represents the sum of total dollars processed through the Toast payments platform across Toast Processing Locations in a given period. GPV is a key measure of the scale of our platform, which in turn drives our financial performance. As our customers generate more sales and therefore more GPV, we generally see higher financial technology solutions revenue.

Annualized Recurring Run-Rate (ARR)

We monitor Annualized Recurring Run-Rate as a key operational measure of the scale of our subscription and payment processing services for both new and existing customers. To calculate this metric, we first calculate recurring run-rate on a monthly basis. Monthly Recurring Run-Rate, or MRR, is measured on the final day of each month as the sum of (i) our monthly billings of subscription services fees, which we refer to as the subscription component of MRR, and (ii) our in-month adjusted payments services fees, exclusive of estimated transaction-based costs, which we refer to as the payments component of MRR. MRR does not include fees derived from Toast Capital or related costs. MRR is also not burdened by the impact of SaaS credits offered. The MRR calculation includes all locations on the Toast platform and locations on legacy solutions, which have a negligible impact on ARR.

ARR is determined by taking the sum of (i) twelve times the subscription component of MRR and (ii) four times the trailing-three-month cumulative payments component of MRR. We believe this approach provides an indication of our scale, while also controlling for short-term fluctuations in payments volume. Our ARR may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with our platform, pricing, competitive offerings, economic conditions, or overall changes in our customers’ and their guests’ spending levels. ARR is an operational measure, does not reflect our revenue or gross profit determined in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, and should be viewed independently of, and not combined with or substituted for, our revenue, gross profit, and other financial information determined in accordance with GAAP. Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of our future or expected results.

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Components of Results of Operations

Revenue

We principally generate revenue from: (1) subscription services, (2) financial technology solutions, and (3) hardware and professional services.

Subscription services. Consists primarily of fees charged to customers for access to our software applications, generally over a term ranging from 12 to 36 months. Our subscription services revenue is primarily based on a rate per location, and this rate varies depending on the number of software products purchased, hardware configuration, and employee count at each location.

Financial technology solutions. Consists primarily of transaction-based fees paid by customers to facilitate their payment transactions, which are generally calculated as a percentage of the total transaction amount processed plus a per-transaction fee. The transaction fees collected are recognized as revenue on a gross basis. Financial technology solutions revenue also includes fees earned from marketing and servicing working capital loans to our customers through Toast Capital that are originated by a third-party bank.

Hardware and professional services. Consists of hardware revenue from the sale of terminals, tablets, handhelds, and related devices and accessories, net of estimated returns. Hardware and professional services revenue also includes fees charged to customers for professional services which includes installation services, including business process mapping, configuration, and training.

Costs of Revenue

Costs of revenue consists of expenses that are directly related or closely correlated to revenue generation, including, but not limited to, employee-related costs for customer support and certain operational roles as well as allocated overhead. Employee-related costs consist of salaries, benefits, bonuses, and stock-based compensation expense. Allocated overhead includes certain facilities costs, depreciation expense, and amortization costs associated with internally developed software and acquired intangible assets.

Operating Expenses

Our operating expenses consist of the following:

Sales and marketing. Sales and marketing expenses consist primarily of employee-related costs incurred to acquire new customers and increase product adoption across our existing customer base. Marketing expenses also include fees incurred to generate demand through various advertising channels.

Research and development. Research and development expenses consist primarily of uncapitalized employee-related costs associated with improvements to our platform and the development of new product offerings, as well as allocated overhead and expenses associated with the use of third-party software directly related to development of our products and services.

General and administrative. General and administrative expenses consist primarily of expenses related to management and administrative functions, including finance, legal, human resources, and information technology. General and administrative expenses also include costs related to fees paid for certain professional services, including legal, information technology, and tax and accounting services, as well as bad debt and credit-related expenses.

Restructuring expenses. Restructuring expenses consist of personnel-related costs, including employee transition and severance payments, employee benefits, and related facilitation costs.

Other Income (Expenses)

Our other income (expenses) consist of the following:

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Interest income, net. Consists primarily of interest earned on our cash and cash equivalents and marketable securities.

Change in fair value of warrant liability. Represents the change in the fair value of our warrant liability related to warrants issued to purchase shares of our common stock. The warrant liability is remeasured at fair value at each reporting date which could have a significant effect on other income (expense) and our results of operations during each period.

Other income, net. Primarily represents gains from warrant repurchases, foreign currency transaction gains and losses, and gains and losses from our marketable securities.

Income Tax Benefit (Expense)

Income tax benefit (expense). Consists of U.S. federal and state income tax as well as international taxes in various foreign jurisdictions. Our effective tax rate fluctuates from period to period due to changes in the mix of income and losses in jurisdictions with a wide range of tax rates, the effect of acquisitions, changes resulting from the amount of recorded valuation allowance, and permanent differences between GAAP and local tax laws.

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RESULTS OF OPERATIONS

The following section discusses the fiscal years ended December 31, 2025 and 2024 and provides a year-over-year comparison between fiscal years ended December 31, 2025 and 2024. Discussions related to the fiscal year ended December 31, 2023 and year-over-year comparisons between the fiscal years ended December 31, 2024 and 2023 are included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 26, 2025, and incorporated herein by reference.

Revenue

Year Ended December 31,

 Change

(dollars in millions)

2025

2024

Amount

%

Subscription services

$

936 

$

706 

$

230 

33 

%

Financial technology solutions

5,037 

4,053 

984 

24 

%

Hardware and professional services

180 

201 

(21)

(10)

%

Total revenue

$

6,153 

$

4,960 

$

1,193 

24 

%

The increase in subscription services revenue during the fiscal year ended December 31, 2025 was attributed to growth in Locations on the Toast platform and the continued increase in product adoption.

The increase in financial technology solutions revenue during the fiscal year ended December 31, 2025 was primarily attributable to the increase in Locations on the Toast platform.

Costs of Revenue

Year Ended December 31,

 Change

(dollars in millions)

2025

2024

Amount

%

Subscription services

$

264 

$

219 

$

45 

21 

%

Financial technology solutions

3,891 

3,175 

716 

23 

%

Hardware and professional services

400 

371 

29 

8 

%

Amortization of acquired intangible assets

5 

5 

— 

— 

%

Total costs of revenue

$

4,560 

$

3,770 

$

790 

21 

%

The increase in subscription services costs during the fiscal year ended December 31, 2025 was primarily driven by a $22 million increase in amortization of capitalized software and a $15 million increase in employee-related costs.

The increase in financial technology solutions costs during the fiscal year ended December 31, 2025 was due to an increase in GPV.

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Operating Expenses

Sales and Marketing

Year Ended December 31,

 Change

(dollars in millions)

2025

2024

Amount

%

Sales and marketing

$

571 

$

470 

$

101 

21 

%

The increase in sales and marketing expenses during the fiscal year ended December 31, 2025 was primarily driven by a $64 million increase in employee-related costs and a $24 million increase in marketing expenses.

Research and Development

Year Ended December 31,

 Change

(dollars in millions)

2025

2024

Amount

%

Research and development

$

374 

$

351 

$

23 

7 

%

The increase in research and development expenses during the fiscal year ended December 31, 2025 was primarily attributable to an increase in employee-related costs.

General and Administrative

Year Ended December 31,

Change

(dollars in millions)

2025

2024

Amount

%

General and administrative

$

344 

$

307 

$

37 

12 

%

The increase in general and administrative expenses during the fiscal year ended December 31, 2025 was primarily driven by an increase in bad debt expense.

Restructuring Expenses

Year Ended December 31,

Change

(dollars in millions)

2025

2024

Amount

%

Restructuring expenses

$

12 

$

46 

$

(34)

(74)

%

The decrease in restructuring expenses during the fiscal year ended December 31, 2025 was driven by significant restructuring and restructuring-related expenses incurred during fiscal year ended December 31, 2024 as part of the February 2024 Restructuring Plan. See Note 11, “Restructuring Plan” of the Notes to the Consolidated Financial Statements for further information.

Interest Income, net

Year Ended December 31,

 Change

(dollars in millions)

2025

2024

Amount

%

Interest income, net

$

51 

$

42 

$

9 

14 

%

Interest income, net, increased by $9 million during the fiscal year ended December 31, 2025 compared to the prior fiscal year, primarily driven by increased cash and cash equivalent and marketable securities balances.

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Change in Fair Value of Warrant Liability

Year Ended December 31,

Change

(dollars in millions)

2025

2024

Amount

%

Change in fair value of warrant liability

$

3 

$

(49)

$

52 

(106)

%

The change in fair value of the warrant liability during the fiscal year ended December 31, 2025 was primarily driven by a decrease in our stock price, as the number of outstanding warrants remained unchanged during the period. The prior year balance included a reduction of outstanding warrants primarily due to a warrant repurchase of 5 million shares of Class B common stock in July 2024, or the Warrant Repurchase. See Note 3, “Financial Instruments” of the Notes to the Consolidated Financial Statements for further information.

Other income, net

Year Ended December 31,

Change

(dollars in millions)

2025

2024

Amount

%

Other income, net

$

— 

$

13 

$

(13)

(100)

%

The gain recognized in other income, net, for the fiscal year ended December 31, 2024 was primarily attributable to the one-time extinguishment gain of the warrant liabilities in connection with the Warrant Repurchase in July 2024.

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Non-GAAP Financial Measures

We use certain non-GAAP financial measures described below to supplement our consolidated financial statements prepared and presented in accordance with GAAP and to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered substitutes for, or superior to, the financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP metrics to provide investors insight to the information used by our management to evaluate our business and financial performance. We believe that these measures provide investors increased comparability of our core financial performance over multiple periods with other companies in our industry.

Net Income (Loss) (GAAP) and Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA is defined as net income (loss), adjusted to exclude stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, interest income, net, income taxes and certain other items that are not considered to reflect our operating activities and performance within the ordinary course of business, such as restructuring and restructuring-related expenses, acquisition expenses, fair value adjustments on warrant liabilities, expenses related to early termination of leases (which includes associated asset impairments) and stock-based charitable contribution expense, as applicable. We have provided below a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA.

We believe Adjusted EBITDA is useful for investors in comparing our financial performance to other companies and from period to period. Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation and amortization, interest expense, and interest income, which can vary substantially from company to company depending on their financing and capital structures and the method by which their assets were acquired. In addition, Adjusted EBITDA eliminates the impact of certain items that may obscure trends in the underlying performance of our business. Adjusted EBITDA also has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. For example, although depreciation expense is a non-cash charge, the assets being depreciated may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new asset acquisitions. In addition, Adjusted EBITDA excludes stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy. Adjusted EBITDA also does not reflect changes in, or cash requirements for, our working capital needs; interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces the cash available to us; or tax payments that may represent a reduction in cash available to us. The expenses and other items which are excluded from the calculation of Adjusted EBITDA may differ from the expenses and other items that other companies may exclude from Adjusted EBITDA when they report their financial results.

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The following table reflects the reconciliation of net income to Adjusted EBITDA for each of the periods presented:

Year Ended December 31,

(in millions)

2025

2024

Net income

$

342 

$

19 

Stock-based compensation expense and related payroll tax

255 

256 

Depreciation and amortization

67 

46 

Interest income, net

(51)

(42)

Gain on warrant extinguishment

— 

(14)

Change in fair value of warrant liability

(3)

49 

Termination of leases

1 

5 

Stock-based charitable contribution expense

6 

5 

Restructuring and restructuring related expenses(1)

12 

46 

Income tax expense

4 

3 

Adjusted EBITDA

$

633 

$

373 

(1) Restructuring and restructuring-related expenses for the fiscal years ended December 31, 2025 and 2024 include $9 million and $32 million of severance benefits, $3 million and $12 million of stock-based compensation expense and $— million and $2 million of accelerated amortization related to facilities, respectively.

Subscription Services and Financial Technology Solutions Gross Profit (GAAP) and Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit (Non-GAAP)

Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit is defined as subscription services gross profit and financial technology solutions gross profit, adjusted to exclude stock-based compensation expense and related payroll tax expense, and depreciation and amortization expense. We believe this non-GAAP measure is useful to view the resulting figures excluding the aforementioned non-cash charges because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and such amounts vary substantially from company to company depending on their financing and capital structures and the method by which their assets were acquired. We have provided below a reconciliation of Subscription Services and Financial Technology Solutions Gross Profit, the most directly comparable GAAP financial measure, to Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit.

Year Ended December 31,

(in millions)

2025

2024

2023

Revenue:

Subscription services

$

936 

$

706 

$

500 

Financial technology solutions

5,037 

4,053 

3,189 

Costs of Revenue:

Subscription services

264 

219 

166 

Financial technology solutions

3,891 

3,175 

2,503 

Subscription services and financial technology solutions gross profit (GAAP)

$

1,818 

$

1,365 

$

1,020 

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Year Ended December 31,

(in millions)

2025

2024

2023

Subscription services and financial technology solutions gross profit (GAAP)

$

1,818 

$

1,365 

$

1,020 

Stock-based compensation expense and related payroll tax

16 

20 

20 

Depreciation and amortization

53 

32 

17 

Non-GAAP subscription services and financial technology solutions gross profit (Non-GAAP)

$

1,887 

$

1,417 

$

1,057 

Net Cash Provided by Operating Activities (GAAP) and Free Cash Flow (Non-GAAP)

Free cash flow is defined as net cash provided by (used in) operating activities reduced by purchases of property and equipment and capitalization of internal-use software costs (referred to as capital expenditures). We believe that free cash flow is a meaningful indicator of our sources of liquidity and capital requirements that provides information to management and investors in evaluating the cash flow trends of our business. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

Free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Other companies may calculate free cash flow or similarly titled non-GAAP measures differently, which could reduce the usefulness of free cash flow as a tool for comparison. In addition, free cash flow does not reflect mandatory debt service and other non-discretionary expenditures that are required to be made under contractual commitments and does not represent the total increase or decrease in our cash balance for any given period.

The following table presents a reconciliation of net cash provided by operating activities to the free cash flow for each of the periods presented:

Year Ended December 31,

(in millions)

2025

2024

Net cash provided by operating activities

$

661 

$

360 

Capital expenditures

(53)

(54)

Free cash flow

$

608 

$

306 

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity are cash and cash equivalents and marketable securities. We also have access to external sources of liquidity through a credit facility as further described below. The following tables present selected financial information related to our liquidity:

Year Ended December 31,

(in millions)

2025 (1)

2024 (2)

Cash and cash equivalents

$

1,353 

$

903 

Marketable securities

638 

514 

Cash and cash equivalents and marketable securities

$

1,991 

$

1,417 

Available credit facility

$

347 

$

325 

Total

$

2,338 

$

1,742 

(1) Excludes $159 million of cash held on behalf of customers and $71 million of restricted cash.

(2) Excludes $123 million of cash held on behalf of customers and $59 million of restricted cash.

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Year Ended December 31,

(in millions)

2025

2024

Net cash provided by operating activities

$

661 

$

360 

Net cash (used in) investing activities

(172)

(39)

Net cash provided by financing activities

7 

18 

Effect of exchange rate changes on cash and cash equivalents and restricted cash

2 

(1)

Net increase in cash, cash equivalents, cash held on behalf of customers and restricted cash

$

498 

$

338 

Cash, Cash Equivalents and Marketable Securities

The net increase in cash, cash equivalents and marketable securities was primarily due to increases from cash provided by operating activities from the fiscal year ended December 31, 2025 compared to the previous year. During the fiscal year ended December 31, 2025, the increase in net cash provided by operating activities as compared to the fiscal year ended December 31, 2024, was primarily driven by net income of $342 million during the fiscal year ended December 31, 2025 as compared to a net income of $19 million during the same period last year. This increase was partially offset by a higher use of cash for working capital primarily driven by increases in accrued expenses and other current liabilities due to the timing of payments.

The increase in net cash used in investing activities during the fiscal year ended December 31, 2025, as compared to the fiscal year ended December 31, 2024, was primarily driven by net cash outflows from marketable securities as compared to net cash inflows from marketable securities during last year. The decrease in net cash provided by financing activities during the fiscal year ended December 31, 2025, as compared to the same period last year, was primarily driven by cash outflows related share repurchases and payments of debt issuance costs, partially offset by cash inflows from the proceeds from the issuance of common stock.

Debt

During 2021 we entered into a senior secured credit facility, or the 2021 Facility, which we subsequently amended on March 2, 2023 to replace the London Interbank Offered Rate, or LIBOR, with the Secured Overnight Financing Rate, or SOFR. On May 6, 2025, we amended and restated our 2021 Facility to increase the available revolving commitments from $330 million to $350 million and to extend the term of the 2021 Facility to May 6, 2030. We were in compliance with all financial covenants as of December 31, 2025. As of December 31, 2025, there were no borrowings outstanding on the 2021 Facility and outstanding letters of credit totaled $3 million. As of December 31, 2025, our total available borrowing capacity under the 2021 Facility was $347 million. See Note 6, "Debt" of the Notes to the Consolidated Financial Statements for further information.

Share Repurchase Program

In February 2024, we announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock, in an aggregate amount of up to $250 million. In February 2026, our board of directors authorized an increase of $500 million to our share repurchase program. The repurchase program has no expiration date, does not obligate us to acquire any particular amount of our Class A common stock, and it may be suspended at any time at our discretion. The timing and actual number of shares repurchased may depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. See Note 17, “Subsequent Events (unaudited)" of the Notes to the Consolidated Financial Statements for further information.

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Dilution

We calculate our fully diluted share count on an unweighted basis taking our total outstanding share count in addition to unexercised stock options, unvested restricted stock, shares reserved for charitable donations and other securities that can be converted to common stock, such as our warrants to purchase common stock. As of December 31, 2025 our fully diluted share count was as follows:

Year Ended December 31, 2025 (1)

(shares in millions)

Class A and B common stock issued and outstanding

589 

Options to purchase Class A common stock and Class B common stock

21 

Unvested restricted stock units

15 

Warrants to purchase Class B common stock

1 

Shares reserved for charitable donations

3 

Total fully diluted share count

629 

(1) Share amounts presented above do not give effect to potential repurchases of common stock under the treasury stock method.

For further information see Note 3, “Financial Instruments", Note 8, “Common Stock", and Note 9, “Stock-Based Compensation" of the Notes to the Consolidated Financial Statements for further information.

Other Capital Requirements

Recent and expected material cash and other capital requirements, in addition to the above also include the following:

•As of December 31, 2025, our non-cancellable purchase obligations to hardware suppliers totaled $106 million, all of which is due within the next 12 months.

•As of December 31, 2025, our non-cancellable contractual commitments with our cloud service providers and other vendors totaled $157 million of which $90 million is due within the next 12 months and $67 million thereafter.

In addition to the above material cash requirements, we also recognize liabilities associated with financial guarantees related to loan purchase activities. Such activities are further described within Note 2, "Summary of Significant Accounting Policies" and Note 15, "Commitments and Contingencies" of the Notes to the Consolidated Financial Statements for further information.

We expect continued utilization of our available cash resources to support our ongoing business operations. To the extent applicable, material changes in the mix and relative cost of such resources, or changes considered necessary to understand our liquidity and financial condition, may also be reflected in our discussion on the results of operations, disclosed within “Results of Operations” under Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations” within this Annual Report on Form 10-K.

We believe that our existing cash and cash equivalents, along with our available borrowing capacity under our credit facility, will be sufficient to meet our working capital needs for at least the next 12 months, including planned capital expenditures, strategic transactions, and investment commitments that we may enter into from time to time. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under Part I, Item 1A, "Risk Factors” in this Annual Report on Form 10-K.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. By their nature, estimates are inherently subject to a degree of uncertainty. Although we believe that our estimates and the assumptions supporting our assessments are reasonable, actual results could differ materially from our estimates and assumptions. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

We believe that the critical accounting estimates summarized below involve a greater degree of judgment and complexity. Accordingly, these are the estimates and policies we believe are the most critical in fully understanding and evaluating our financial condition and results of operations. For further information on our critical accounting estimates and policies summarized below, refer to Note 2, "Summary of Significant Accounting Policies" included in this Annual Report on Form 10-K in the Notes to Consolidated Financial Statements. If the impact of changes in our critical accounting estimates are material or considered necessary to understand our results of operations for the periods presented, then such information is disclosed within this Annual Report on Form 10-K in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Revenue Recognition

We recognize transaction fees for payment processing on a gross basis. Determining whether to recognize revenue on a gross or net basis requires judgment in evaluating whether we are the principal or agent in contracts with customers. We have concluded that we are the principal in providing a managed payment solution. Substantially all of our financial technology solutions revenue relates to our managed payment solution.

Our contracts often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately as opposed to being combined may require judgment.

Recent Accounting Pronouncements

Refer to the sections titled “Recent Accounting Pronouncements” in Note 2, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data" in this Annual Report on Form 10-K for more information.