Toast Q2 Earnings Call Highlights

Toast added a record 9,500 net locations, lifting its total to roughly 180,000, while recurring gross profit grew 28%, adjusted EBITDA rose 38% to $221 million and GAAP operating margin reached 26%.

Toast IQ Grow is its fastest-growing product launch, with plans to extend agentic AI into scheduling, payroll, inventory and accounting. Enterprise, international and retail markets are expected to nearly double ARR to $200 million this year.

Toast now expects 2026 recurring gross profit growth of 23%–25% and adjusted EBITDA of $805 million–$825 million, while continuing share repurchases and reinvesting in AI, new markets and longer-term growth initiatives.

Toast NYSE: TOST reported second-quarter results that exceeded its expectations, led by record location additions, growth in recurring gross profit streams and expanding operating margins. Management also raised its full-year outlook while outlining plans to reinvest in artificial intelligence products, international, enterprise and retail expansion.

CEO Aman Narang said recurring gross profit streams rose more than 28% in the quarter, while GAAP operating income margin reached 26%. The company added a record 9,500 net locations during the period, bringing its total location count to about 180,000, up 22% from a year earlier.

CFO Elena Gomez said annual recurring revenue grew 25% year over year, while recurring gross profit streams rose 28%. Adjusted EBITDA increased 38% to $221 million, with the adjusted EBITDA margin expanding 240 basis points to 37%.

GAAP operating income was $152 million, representing a 26% margin, while GAAP earnings per share reached $0.26. Gomez said recurring gross profit growth plus operating margin totaled 57% in the quarter on a GAAP basis.

Gross payment volume was $61 billion, up 22% year over year. GPV per location was flat, though management said core GPV exceeded expectations amid strong same-store sales trends and a modest benefit from the World Cup late in June.

SaaS ARR increased 27%, supported by location growth and mid-single-digit ARPU growth. Subscription gross profit rose 32%, while SaaS gross margin increased about 240 basis points. Payments ARR grew 23%, and fintech gross profit increased 26%. Total take rate was 98 basis points, up five basis points year over year.

Non-payments fintech products, led by Toast Capital, generated $57 million in gross profit and contributed nine basis points to take rate. Toast said customer demand for capital remained strong and credit defaults remained within its expectations. The company attributed its underwriting performance to its data capabilities and disciplined underwriting process.

Management highlighted Toast IQ Grow, an AI-powered marketing offering, as the company’s fastest-growing product launch to date. Narang said the product is on track to become Toast’s fastest product to reach $10 million in ARR. Toast IQ Grow combines website, search engine optimization, digital ordering and social-media marketing tools. It uses restaurant and guest data to develop marketing campaigns and connect those campaigns to resulting sales, according to Narang.