Toast's Q2 2025: Navigating Contradictions in Investment Strategy, SaaS Growth, and International Expansion

Investment strategy and discipline amidst economic uncertainty, impact of tariffs on cost management, focus on product differentiation and market expansion, SaaS ARR growth expectations, and international expansion strategy are the key contradictions discussed in Toast's latest 2025Q2 earnings call



Revenue and Customer Growth:
- Toast, Inc. reported recurring gross profit grew by 35% in Q2, and they added 8,500 net new locations, achieving a total of 148,000 locations.
- The growth was driven by strong execution across the company and the significant long-term opportunity in the restaurant and food service industry.

Expansion into New Market Segments:
- Toast crossed 10,000 live locations across enterprise, international, and food and beverage retail, with these segments on track to surpass $100 million in ARR by year-end.
- This expansion was driven by Toast's focus on serving new customer segments like enterprise and retail, alongside continued international growth.

Product Innovation and Adoption:
- The introduction of new products like Toast Go 3 and AI-powered intelligence engine, ToastIQ, demonstrated Toast's focus on innovation and customer value.
- The adoption of these products by customers, such as Haywire Restaurants, highlights their positive impact on operational efficiency and sales growth.

Strong Financial Performance:
- Toast reported adjusted EBITDA of $161 million in Q2, with an expansion of 8 percentage points year-on-year to 35%.
- The strong financial performance was attributed to healthy top-line growth, disciplined capital allocation, and increased operational efficiencies.