Toast 2025 Q2 Earnings Strong Performance as Net Income Surges 471%

Toast (TOST) reported its Q2 2025 earnings on August 6, 2025, delivering results that significantly exceeded expectations. The company reported a 471% year-over-year increase in net income and raised its guidance for the full fiscal year, signaling growing profitability and operational momentum.

Revenue

Toast’s total revenue surged 24.8% year-over-year to $1.55 billion in the second quarter of 2025. The performance was driven primarily by its financial technology solutions, which contributed $1.28 billion. Subscription services added $227 million, while hardware and professional services accounted for $47 million. Notably, the company recorded no amortization of acquired intangible assets, allowing for a clearer picture of its core operations.

Earnings/Net Income

Toast’s earnings per share (EPS) experienced a dramatic increase of 366.7% to $0.14 in Q2 2025 from $0.03 in the same period in 2024. This was matched by a net income of $80 million, a 471.4% rise from $14 million in Q2 2024. The company reached a record high in net income for the quarter, marking a significant milestone in its five-year history.

Price Action

In the wake of the earnings report, Toast’s stock demonstrated mixed performance. On the latest trading day, the stock rose 4.23%, though it fell 5.49% over the most recent full week. Month-to-date, the stock has gained 2.48%, reflecting a somewhat volatile market reaction.

Post Earnings Price Action Review

Following the earnings release, a strategy of buying TOST when the report beat expectations and holding for 30 days yielded an 11.79% return, which underperformed the benchmark return of 38.70%. This approach had a maximum drawdown of 0.00%, a Sharpe ratio of 0.04, and a compound annual growth rate (CAGR) of 3.00%. Despite a volatility of 67.20%, the strategy produced a negative excess return of -26.91%, suggesting a high-risk, low-reward investment profile.

CEO Commentary

Aman Narang, CEO and Co-Founder of Toast, highlighted the company’s robust second-quarter performance, including the addition of 8,500 net new locations and 35% year-over-year growth in recurring gross profit. He also noted $161 million in Adjusted EBITDA, underscoring the strength of Toast’s business model. Narang emphasized expansion across core U.S. restaurant operations and new segments, with enterprise, international, and food and beverage retail now surpassing 10,000 live locations. He also pointed to the launch of Toast Go® 3 and a strategic partnership with American Express as indicators of the company’s forward momentum and leadership in the restaurant technology sector.

Guidance

For Q3 2025, Toast expects non-GAAP subscription services and financial technology solutions gross profit of $465–$475 million (23–26% growth YoY) and Adjusted EBITDA of $140–$150 million. For FY2025, the company forecasts non-GAAP gross profit of $1,815–$1,835 million (28–29% growth YoY) and Adjusted EBITDA of $565–$585 million.

Additional News

Access to the Q2 2025 Earnings Call Transcript was denied, preventing further insights from executive commentary. No major M&A activity or C-level changes were reported in the three weeks following the earnings release. Additionally, there were no dividend or buyback announcements during this period.