Financial Data and Key Metrics Changes - In Q2 2025, the company reported a 31% growth in Annual Recurring Revenue (ARR) and a 35% increase in total FinTech and subscription gross profit year over year [25][27] - Adjusted EBITDA reached $161 million with margins expanding by 8 percentage points year over year to 35% [25][26] - GAAP operating income was $80 million, significantly up from $14 million a year ago [33] Business Line Data and Key Metrics Changes - The company added a record 8,500 net new locations, ending Q2 with 148,000 locations, a 24% increase from the previous year [27] - SaaS ARR grew by 30% year over year, driven by location growth and a 5% increase in SaaS ARPU [29] - Payments ARR increased by 32%, while FinTech gross profit grew by 30% in Q2 [30] Market Data and Key Metrics Changes - The company crossed 10,000 live locations across enterprise, food and beverage retail, and international markets [27][15] - Total Gross Payment Volume (GPV) was $50 billion, growing 23% year over year, with GPV per location down 1% [30] - The net take rate for FinTech was 57 basis points, and for Payments, it was 49 basis points, both showing a slight increase from the previous year [30] Company Strategy and Development Direction - The company aims to scale locations and market share in its core US restaurant business while expanding into new customer segments [11][12] - Key priorities include increasing customer adoption of the platform, driving differentiation through data and AI, and investing in high-priority areas while gradually expanding margins [11][12][23] - The partnership with American Express aims to enhance customer experiences and broaden the platform's capabilities [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth opportunities, citing strong execution and market share gains [9][23] - The company plans to continue investing in its core business and new segments, with expectations for sustained long-term growth [28][36] - Management acknowledged the impact of tariffs and seasonal dynamics on margins in the second half of the year [55][36] Other Important Information - The company launched in Australia, marking its fourth international market, and plans to leverage learnings from previous launches [10][18] - The introduction of Toast Go 3 and Toast IQ reflects the company's commitment to innovation and enhancing customer service [20][32] Q&A Session Summary Question: Can you provide context on retail ARPUs and product enhancements? - Management highlighted that retail ARPU is over $10,000, indicating strong growth potential and ongoing investments in sales capacity [41][42] Question: What are the trends in GPV per location? - Management noted that GPV trends have been largely flat, with a slight decrease in GPV per location, but expressed confidence in unit economics across segments [47][48] Question: Can you elaborate on the expected EBITDA for Q3? - Management indicated that increased investments and tariff expenses would impact margins, but emphasized the importance of these investments for long-term growth [54][55] Question: How does the Amex partnership enhance the business? - The partnership aims to create personalized dining experiences by integrating reservation listings and leveraging customer data [118] Question: What feedback has been received on the AI-powered assistant, SUSHAF? - Positive customer feedback has been received, with the product providing valuable insights and recommendations for restaurant operators [124]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported a 31% growth in Annual Recurring Revenue (ARR) and a 35% increase in total FinTech and subscription gross profit year over year [23][24] - Adjusted EBITDA reached $161 million with margins expanding by 8 percentage points year over year to 35% [23][24] - GAAP operating income was $80 million, significantly up from $14 million a year ago [31][32] Business Line Data and Key Metrics Changes - The company added a record 8,500 net new locations, ending Q2 with 148,000 locations, a 24% increase from the previous year [24][27] - The enterprise, food and beverage retail, and international segments collectively surpassed 10,000 live locations in Q2 [24][27] - SaaS ARR grew by 30% year over year, driven by location growth and a 5% increase in SaaS ARPU [27][30] Market Data and Key Metrics Changes - Total Gross Payment Volume (GPV) was $50 billion, growing 23% year over year, with GPV per location down 1% [28][30] - The take rate across SaaS and FinTech gross profit was 93 basis points, an increase of 8 basis points from a year ago [23][28] Company Strategy and Development Direction - The company aims to scale locations and market share in its core US restaurant business while expanding into new customer segments [9][10] - Key priorities include increasing customer adoption of the platform, driving differentiation through data and AI, and maintaining disciplined investment while expanding margins [9][10][21] - The partnership with American Express aims to enhance customer experiences and broaden the platform's reach [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth opportunities, citing strong execution and market share gains [6][21] - The company anticipates continued growth in new market segments, expecting them to become significant contributors to overall business [24][25] - Management acknowledged the impact of tariffs and planned investments to drive sustained growth in the second half of the year [50][51] Other Important Information - The company launched in Australia, marking its fourth international market, and plans to leverage learnings from previous markets for a successful rollout [8][15] - The introduction of Toast Go 3 handhelds is expected to enhance customer service and operational efficiency [19][20] Q&A Session Summary Question: Can you provide context on retail ARPUs and product enhancements? - Management noted that retail ARPU is above $10,000, indicating strong growth potential and ongoing investments in sales capacity [36][38] Question: What are the latest trends in GPV per location? - Management clarified that GPV trends have been largely flat, with retail GPVs higher than restaurants, but overall GPV per location was down 1% [41][43] Question: Can you elaborate on the expected sequential decline in Q3 EBITDA? - Management explained that increased investments in customer segments and tariff impacts are contributing to the expected decline [48][50] Question: How does the Amex partnership enhance the business? - The partnership combines reservation listings and aims to create personalized dining experiences for customers [107][110] Question: What feedback is being received on the AI-powered assistant, SUSHAF? - Positive feedback has been received, with customers appreciating the human interface for insights and recommendations [113][115]

[Toast Second Quarter 2025 Financial Results](index=1&type=section&id=Toast%20Second%20Quarter%202025%20Financial%20Results) [Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) Toast achieved record net new locations, 35% YoY recurring gross profit growth, and $161 million Adjusted EBITDA, alongside international expansion and new product launches - CEO Aman Narang highlighted a strong quarter with a record **8,500 net new locations**, **35% YoY growth in recurring gross profit**, and Adjusted EBITDA of **$161 million**[3](index=3&type=chunk) Q2 2025 Key Performance Indicators (YoY Growth) | Metric | Q2 2025 Value | YoY Growth | | :--- | :--- | :--- | | Annualized Recurring Run-Rate (ARR) | $1.9 billion | 31% | | Total Locations | ~148,000 | 24% | | Gross Payment Volume (GPV) | $49.9 billion | 23% | | GAAP Recurring Gross Profit¹ | $447 million | 35% | | Non-GAAP Recurring Gross Profit¹ | $464 million | 35% | | GAAP Net Income | $80 million | 471% | | Adjusted EBITDA | $161 million | 75% | | Free Cash Flow | $208 million | 93% | - The company expanded its international presence by launching its first customer in Australia and introduced the new Toast Go® 3 handheld POS device[3](index=3&type=chunk)[15](index=15&type=chunk) - A strategic partnership was announced with American Express to enhance guest experiences and expand reach for restaurants on the Toast, Resy, and Tock networks[15](index=15&type=chunk) [Business Outlook](index=1&type=section&id=Business%20Outlook) Toast raised its full-year 2025 guidance, projecting Non-GAAP recurring gross profit of $1,815-$1,835 million and Adjusted EBITDA of $565-$585 million Q3 2025 Outlook | Metric | Q3 2025 Range | YoY Growth | | :--- | :--- | :--- | | Non-GAAP subscription services and financial technology solutions gross profit | $465 million - $475 million | 23% - 26% | | Adjusted EBITDA | $140 million - $150 million | N/A | Full Year 2025 Outlook (Updated) | Metric | Full Year 2025 Range | YoY Growth | Previous Guidance | | :--- | :--- | :--- | :--- | | Non-GAAP subscription services and financial technology solutions gross profit | $1,815 million - $1,835 million | 28% - 29% | 25% - 27% growth | | Adjusted EBITDA | $565 million - $585 million | N/A | $540 million - $560 million | [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The statements show Q2 2025 revenue growth to $1.55 billion, net income of $80 million, total assets of $2.77 billion, and $223 million in operating cash flow [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenue grew 25% to $1.55 billion, with gross profit up 37% to $392 million, and net income reaching $80 million Q2 2025 Statement of Operations Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $1,550 | $1,242 | +25% | | Gross Profit | $392 | $286 | +37% | | Income from Operations | $80 | $5 | +1500% | | Net Income | $80 | $14 | +471% | | Diluted EPS | $0.13 | $0.02 | +550% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $2.77 billion, driven by $1.19 billion in cash, with total liabilities at $949 million and equity at $1.82 billion Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,194 | $903 | | Total current assets | $2,317 | $1,975 | | Total assets | $2,767 | $2,408 | | **Liabilities & Equity** | | | | Total current liabilities | $894 | $811 | | Total liabilities | $949 | $863 | | Total stockholders' equity | $1,818 | $1,545 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q2 2025 net cash from operating activities rose to $223 million, resulting in Free Cash Flow of $208 million after capital expenditures Cash Flow Highlights (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $223 | $124 | | Capital expenditures | $(15) | $(16) | | **Free Cash Flow** | **$208** | **$108** | [Key Business Metrics and Non-GAAP Reconciliations](index=7&type=section&id=Key%20Business%20Metrics%20and%20Non-GAAP%20Reconciliations) This section defines key business metrics like GPV and ARR, and reconciles GAAP to non-GAAP measures such as Adjusted EBITDA and Non-GAAP Gross Profit [Key Business Metrics](index=9&type=section&id=Key%20Business%20Metrics) Q2 2025 saw strong growth in key metrics, with GPV up 23% to $49.9 billion and total ARR increasing 31% to $1.93 billion - Key metrics are used to evaluate the business, including **GPV** for total dollars processed, **ARR** for subscription and payment services scale, and **Locations** for unique sites[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) Key Metrics Performance | Metric | Q2 2025 Value | Q2 2024 Value | YoY Growth | | :--- | :--- | :--- | :--- | | Gross Payment Volume (GPV) | $49.9 billion | $40.5 billion | 23% | | Total ARR | $1,928 million | $1,473 million | 31% | [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Non-GAAP results show Q2 2025 Adjusted EBITDA at $161 million, Non-GAAP Recurring Gross Profit at $464 million, and Free Cash Flow at $208 million Adjusted EBITDA Reconciliation (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $80 | $14 | | Stock-based compensation & related tax | $64 | $70 | | Depreciation and amortization | $16 | $11 | | Other adjustments | $(0) | $7 | | **Adjusted EBITDA** | **$161** | **$92** | Non-GAAP Recurring Gross Profit¹ Reconciliation (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Subscription services gross profit (GAAP) | $163 | $113 | | Financial technology solutions gross profit (GAAP) | $284 | $217 | | Adjustments (Stock-based comp, D&A) | $17 | $14 | | **Non-GAAP Recurring Gross Profit** | **$464** | **$344** | Free Cash Flow Reconciliation (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $223 | $124 | | Capital expenditures | $(15) | $(16) | | **Free Cash Flow** | **$208** | **$108** |

Partnership Overview - American Express is partnering with restaurant management software company Toast to enhance personalized dining experiences using Toast's technology along with the guestbook capabilities of Resy and Tock, both owned by American Express [2][3] - The collaboration aims to provide restaurants, wineries, cafes, and bars with greater visibility by integrating their listings from Resy and Tock into the Local by Toast app and those using Toast Tables [3] Strategic Goals - The partnership is designed to help restaurants deliver smarter service and foster meaningful connections with guests, ultimately driving loyalty and growth [3] - American Express's acquisition of Tock and Roaam, which provide reservation and mobile payment technologies, supports this initiative by enhancing the technological capabilities available to restaurant partners [4] Market Insights - Research indicates that while 83% of consumers are open to personalized offers, only 44% find them very relevant, highlighting a gap in the effectiveness of personalization strategies [5] - The evolution of AI systems is expected to improve personalization efforts by moving beyond basic segmentation to real-time learning and contextual awareness, addressing previous shortcomings in delivering tailored experiences [6][7]

Core Insights - Toast, Inc. (TOST) is scheduled to report its second-quarter 2025 results on August 5, with earnings expected at 24 cents per share and revenues projected at $1.53 billion, reflecting a year-over-year increase of 23.4% [1][8] Earnings Performance - TOST has a strong earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 197.15% [2][3] Financial Metrics - The company anticipates gross profit growth in its subscription and fintech segments between 26% and 29% year over year, with adjusted EBITDA expected to be between $130 million and $140 million [5][8] Market Expansion - TOST has expanded its presence in the U.S. SMB restaurant market, adding over 6,000 net locations in Q1 2025, totaling approximately 140,000 customer locations globally, which is a 25% year-over-year growth [6] Technological Advancements - The company is leveraging AI-powered tools, such as ToastIQ, to enhance its platform and improve restaurant operations, with reported positive impacts on clients' performance [7][9] Stock Performance - TOST shares have increased by 12.9% over the past six months, outperforming the Internet Software market and the Zacks Computer & Technology sector [12] Valuation Concerns - TOST is trading at a premium with a price/book multiple of 13.89X compared to the industry average of 6.74X, indicating a stretched valuation [16][18]

Core Insights - Companies delivering explosive revenue growth are positioned for significant upside potential, particularly in the tech sector [1] Palantir - Palantir Technologies reported a 39% increase in revenue to $883.9 million in Q1, marking its seventh consecutive quarter of accelerating revenue growth [2] - The U.S. commercial business revenue surged 71% year over year to $255 million, while revenue from the U.S. government increased by 45% [2] - The adoption of its AI Platform (AIP) is driving growth, with many customers still in early usage stages, indicating substantial growth opportunities [3][4] SoundHound AI - SoundHound AI experienced a remarkable 151% year-over-year revenue growth to $29.1 million, achieving six consecutive quarters of over 50% growth [5] - The company is making significant inroads in the automotive industry and the restaurant sector, leveraging its technology for customizable voice solutions [6] - The acquisition of Amelia enhances SoundHound's capabilities in agentic AI, with the potential for continued hypergrowth if its technology becomes the preferred interface across industries [7] AppLovin - AppLovin's revenue increased by 40% to $1.48 billion in Q1, with ad revenue soaring 73% due to its AI-powered Axon 2 engine [8] - The Axon 2 adtech engine optimizes ad targeting and placement, helping the company capture significant market share in mobile gaming, with expected growth of 20% to 30% [9] - AppLovin is expanding its ad engine into web-based and e-commerce advertising, presenting further growth opportunities [10] GitLab - GitLab achieved a 27% year-over-year revenue growth to $214.5 million in Q1, marking its eighth consecutive quarter of 25% to 40% growth [11] - The company is transforming into a full software-development life cycle platform, utilizing AI to automate processes and enhance value [12][13] - GitLab may shift from a seat-based model to a consumption-based model, which could drive significant revenue growth [13] Toast - Toast's revenue from subscription and fintech solutions grew by 35% year over year in Q1, with total restaurant locations using its platform increasing by 25% to 140,000 [15] - The company is evolving into a digital operating system for restaurants, offering tools for menu optimization, staffing, and marketing [16] - With expanding AI capabilities and a growing footprint, Toast is well-positioned for future growth in the restaurant tech sector [17]

Core Viewpoint - The market anticipates Toast (TOST) to report a significant year-over-year increase in earnings driven by higher revenues, with actual results being crucial for near-term stock price movements [1][2]. Earnings Expectations - Toast is expected to report quarterly earnings of $0.24 per share, reflecting a year-over-year increase of +1100% [3]. - Revenue projections stand at $1.53 billion, which is a 23.4% increase compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [4]. - A positive Earnings ESP of +1.70% suggests that analysts have recently become more optimistic about Toast's earnings prospects [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank [10]. - Toast currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat despite the positive Earnings ESP [12]. Historical Performance - In the last reported quarter, Toast was expected to post earnings of $0.19 per share but exceeded expectations with earnings of $0.20, resulting in a surprise of +5.26% [13]. - Over the past four quarters, Toast has beaten consensus EPS estimates three times [14]. Conclusion - While Toast does not appear to be a compelling candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [17].

Core Viewpoint - Toast (NYSE: TOST) is currently near its 52-week high, which raises concerns about its valuation, but this perspective may overlook the operational momentum that supports its future earnings potential [1] Group 1: Company Performance - The analysis indicates that operational momentum is a key driver for Toast's future earnings, suggesting that the current valuation may not fully reflect its growth potential [1] - A simulation of 10,000 scenarios was conducted to better capture Toast's future earning potential, indicating a thorough analytical approach to understanding the company's prospects [1] Group 2: Analyst Background - The analyst has a diverse background, having worked in the Industrials and chemicals sector and as a Manager of Finance & Technology at a Canadian charity, which enriches the analysis of Toast [1] - The experience in both execution and analysis is highlighted as a factor that enhances the quality of the investment insights provided [1]

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to improve significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] - Michael has over 10 years of experience analyzing companies in tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] Group 2 - The Investing Group Deep Value Returns, led by Michael, offers insights through its concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [3] - The group provides "hand-holding" support for both new and experienced investors, fostering an active and kind community accessible via chat [3]

Core Insights - Investors should focus on companies with strong growth potential, competitive advantages, and adaptability to technology trends Group 1: Nvidia - Nvidia is the leader in AI infrastructure, holding a 92% market share in Q1 [2] - The company's competitive edge lies in its CUDA software platform, which has been widely adopted in research and development [3] - Nvidia is expanding into new markets, including autonomous driving, while recently receiving approval to sell H20 chips in China [4] Group 2: Taiwan Semiconductor Manufacturing - Taiwan Semiconductor Manufacturing is the leading chip foundry, producing chips for major companies like Nvidia and Apple [6] - The company has seen a rise in revenue from high-performance computing, which now constitutes 60% of its revenue, up from 52% a year ago [7] - TSMC's advanced manufacturing capabilities position it as a key player in the growing AI and autonomous driving markets [8] Group 3: Meta Platforms - Meta Platforms is leveraging AI to enhance its digital advertising capabilities, increasing user engagement on Facebook and Instagram [9] - The company is beginning to monetize WhatsApp and Threads, which have significant user bases, providing a long growth runway [10] - CEO Mark Zuckerberg is investing heavily in AI talent to achieve ambitious goals, positioning Meta as a potential leader in AI [11] Group 4: GitLab - GitLab is evolving into a comprehensive software development lifecycle platform, integrating AI to enhance development processes [12] - The introduction of over 30 new features in GitLab 18 aims to improve efficiency across the software development lifecycle [13] - GitLab's focus on AI-driven solutions positions it well for future growth in an increasingly AI-centric software landscape [13] Group 5: Toast - Toast is becoming essential in the restaurant industry by providing software that enhances operational efficiency and sales [14] - The integration of AI tools like ToastIQ is helping restaurants make data-driven decisions in real time [15] - As restaurants face economic pressures, Toast's technology solutions offer significant growth opportunities in a large and fragmented market [16]