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- **Record Growth**: Q3 ARR hits $2B (30% YoY), driven by core SMB expansion and new TAMs (enterprise, intl, retail).
- **AI Adoption Surge**: Toast IQ used by 25,000+ locations in early rollout, showcasing AI's role in restaurant operations.
- **Profitability**: 35% EBITDA margin in Q3, with free cash flow conversion at ~100%. Raised full-year EBITDA guidance to $615M.
- **Strategic Momentum**: On track for $100M ARR in new TAMs this year, with potential to scale each to $1B+.
- **Resilience**: Minimal impact from AWS outage, highlighting platform reliability and offline-first design.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 ARR reached $2 billion, up 30% YoY, with 34% gross profit growth. Core U.S. SMB business operates at 40% EBITDA margin.
- **Market Share Expansion**: On track to double core market share, with net adds of ~7,500 locations in Q3 (23% YoY growth to 156,000 total locations).
- **AI Innovation**: Toast IQ, an AI-driven restaurant assistant, achieved 25,000+ locations using it over 235,000 times in early adoption. Partnerships with Coca-Cola to enhance sales through data insights.
- **New TAMs**: Enterprise, international, and food & beverage retail collectively on pace for $100M ARR in 2025, with potential to scale to $1B each.

**【CFO Financial Commentary】**
- **Financial Highlights**: Q3 GAAP operating income $84M (vs. $34M YoY), free cash flow $153M. Adjusted EBITDA $176M (35% margin). Raised full-year guidance to 32% gross profit growth and $615M EBITDA.
- **Take Rate Performance**: Total take rate +7bps YoY to 98bps, driven by cost optimization and new products like surcharging.
- **Investment Strategy**: 17% YoY growth in sales & marketing to scale new TAMs; R&D focused on AI-driven products (e.g., Toast IQ, Advertising).

**【Q&A Key Highlights】**
- **GPV Trends**: Q3 GPV per location up slightly YoY due to strong summer sales, but normalized in October. Core SMB same-store sales stable.
- **Competitive Edge**: Win rates vs. peers up YoY, driven by platform differentiation (e.g., Toast IQ, integrated payments/SaaS).
- **Consumer Play**: 100,000+ restaurants enable order-ahead, table reservations, and loyalty programs. Toast Tables and Uber partnership enhance off-premise sales.
- **AWS Outage Resilience**: Minimal impact as restaurants operated offline, then synced transactions post-recovery.
- **2026 Outlook**: Target 20%+ ARR growth, with core margins flat to up as new TAMs scale with healthy unit economics.

Toast, Inc. (TOST) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

TOST

TOST fundamentals

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