Toast (TOST) - 2025 Goldman Sachs TMT Conference
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Goldman Sachs TMT Conference – September 9, 2025
Management Present:
Aman Narang – Co-Founder, CEO & Director
Elena Gomez – President, CFO & Interim Chief Accounting & Principal Accounting Officer
Financial Performance
“Recurring gross profit growth of 31% year-over-year in Q2.”
“We’re now adding north of $400 million in ARR annually.”
8,500 net adds in Q2, a record for Toast.
CFO Elena Gomez: “Momentum we saw in the first half is why we have confidence we’re going to add more net adds in ’25 than ’24.”
New verticals nearing $100M ARR.
Guidance & Future Trends
Long-term margin goals of 30–35% remain intact.
Gomez: “Our long-term margins announced at Investor Day are still what we’re marching toward … it may not be linear, but it’s in our control.”
SaaS ARPU growth expected to remain in mid-single digits near term, with long-term upside from upsell and AI-driven modules.
Fintech take rate improved by +3 bps in Q2, with surcharging cited as a growth lever.
Macro & Demand Trends
CFO: “We’re seeing very stable, healthy trends … restaurants are resilient and can handle any macro turn.”
Toast Capital demand dipped early Q2 due to market volatility but “came back pretty much in line with our expectations”.
International & Vertical Expansion
Operating in Canada, U.K., Ireland, and recently launched in Australia with strong productivity:
“Rep productivity 2 years in is actually better in these international markets than it was in the U.S.”
Full-serve restaurants now account for >50% of international net adds.
Enterprise growth accelerating with marquee deals like Dine Brands and Marriott. Pipeline visibility is improving as customers onboard over 18–24 months.
Food & Beverage retail vertical: ARPU > $10K, expanding into convenience stores, gas stations, and grocery. Initial TAM estimate: 220K U.S. locations at $3M GPV each.
AI & Product Innovation
AI central to roadmap:
AI-driven marketing assistant that suggests and runs campaigns.
AI tools for retail: faster SKU onboarding, image and description generation.
Susie (Toast GPT): designed as “the world’s best GPT for restaurants” to simplify data analysis.
Exploring voice ordering, personalized diner experiences via Amex partnership, and demand-supply yield optimization.
Capital Allocation
Clear priorities:
Invest in core business.
Fund longer-term growth opportunities (international, enterprise, retail).
Opportunistic M&A, but “the hurdle is high” and must be strategic & cultural fit.
CFO: “We’ve got such a great execution machine in our core business that we want to make sure we don’t disrupt that.”
10 Notable Quotes
“In Q2 year-over-year recurring gross profit growth of 31% … now adding north of $400 million in ARR.”
“Penetration today is in the high teens … in markets with over 30% share, share gains are growing faster than the average.”
“Rep productivity year-over-year is actually up … we saw record net adds of 8,500.”
“Approaching $100 million in ARR in new verticals.”
“International ARPU continues to grow at a healthy clip.”
“Enterprise is a multiyear journey, but deals like Dine Brands and Marriott show our credibility.”
“Food and beverage retail has been a really positive surprise … ARPUs are healthy and economics are strong.”
“AI-driven marketing assistant can not only suggest campaigns, but actually create the campaigns across channels.”
“We want to build the world’s best GPT for restaurants.”
“Our hurdle for M&A is high … economics, adjacency, time-to-market, and cultural fit all must align.”
Q&A Summary
Q (Goldman Sachs): How has Toast progressed on scaling, innovation, and margin expansion since Investor Day?
A (CEO Narang): Strong execution: 31% recurring gross profit growth, ARR +$400M, margins at targets, new vectors (retail, enterprise, international) ahead of plan.Q (Goldman Sachs): Where do you stand in SMB restaurant TAM penetration?
A (CEO Narang): U.S. SMB/mid-market TAM ~600K restaurants, Toast penetration “high teens” with top 10 markets >30% share and still gaining.Q (Goldman Sachs): What about international?
A (CEO Narang): Strong progress in U.K., Canada, Ireland; launched in Australia; ARPU and rep productivity trending better than U.S. at same stage.Q (Goldman Sachs): What’s the ARPU opportunity in enterprise?
A (CFO Gomez): ARR potential significant; payback and LTV/CAC strong; pipeline visibility improving with marquee logos.Q (Baird): How do you approach TAM expansion?
A (CEO Narang): Careful not to dilute focus. Must have “right to win” and strong unit economics.Q (Goldman Sachs): What are your main investment priorities?
A (CFO Gomez): Balancing core and emerging businesses; long-term margin targets unchanged; disciplined capital allocation.Q (Goldman Sachs): What about pricing?
A (CFO Gomez): No step changes; targeted moves only. SaaS ARPU in mid-singles near term, long-term upside from AI and attach.Q (Goldman Sachs): M&A appetite?
A (CFO Gomez): Opportunistic, but hurdle is high and must align strategically
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