Toast(US:TOST)2025-08-05 22:00Financial 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]