Toast (TOST) - 2025 UBS TMT Conference
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Toast, Inc. – UBS TMT Conference Presentation
Date: December 3, 2025
Participants:
Elena Gomez – President, CFO & Interim Chief Accounting & Principal Accounting Officer
Emily Woodward – Head of Investor Relations (mentioned in introduction)
1. Financial Performance
• “We crossed a $2 billion milestone… We’re on pace to deliver 32% recurring gross profit and doing so at a healthy 33% margin.”
• “Adjusted EBITDA margins are expanding by more than 600 basis points.” (from analyst framing)
• “Take rate has been up year-over-year every single quarter in Q3 and is on pace for that in Q4.”
• Strength driven by pricing, COGS optimization and more digital products:
“We will implement surgical, very targeted price changes… steady targeted price change.”
“We have an opportunity to drive cost per transaction down.”
“Surcharging… an example of our innovation.”
• GPV per location stable: “Trends to be relatively stable… GPV per location tends to stay in a narrow band.”
• Core ARPU growing faster than total ARPU: “Core ARPU is growing faster than our total ARPU.”
2. Guidance & Outlook for 2026
• “Recurring gross profit will minimum grow 20%… we always aim to do better.”
• “Margins will be flat to slightly up.”
• Core business generating strong profitability: “Our core business is generating 40% margins… the lion’s share of our business.”
• Company leaning into investments due to opportunity: “Now is the time to make these upfront investments… each represent significant ARR opportunities.”
• Confidence heading into 2026: “Momentum… is really giving us confidence in 2026.”
3. Capital Allocation & Unit Economics
• Toast emphasizes disciplined payback:
“We manage this business with healthy unit economics and payback periods.”
“We empower [reps] because we have this payback framework… they’re empowered to leverage that.”
• Hardware as a lever: “Hardware has always been a lever that our reps use… we empower the reps… cases where they need to lean in on hardware, they will.”
• High-quality unit economics enable investment: “Incremental margins are higher, which is fueling our ability to invest in these new verticals.”
• Surcharging & pricing as capital-efficient drivers of take rate.
4. Core SMB & Mid-Market Trends
• Net adds remain strong:
Core SMB adds in 2025 similar to 2024, and expected similar in 2026.
“We still have many markets that are not flywheel… plenty of runway.”
• Market share ambition: “We stated a goal… to roughly double your market share in the core.”
• Win rates and productivity strong: “Our win rates are up. Our productivity is really strong.”
• SaaS ARR per location: “We feel really confident to be in that mid-single digits… core ARPU is growing faster.”
5. New TAMs: Enterprise, International & Food/Beverage Retail
• TAM expansion strategy: “Applying the same playbook… to become a leader in the U.S. SMB markets.”
• Segments characterized by legacy systems & fragmentation: “Legacy players… fragmented market… opportunity to modernize the tech stack.”
• Enterprise:
“We won some of our biggest deals in the company’s history.”
Above-store capabilities a key differentiator.
• International:
Started with English-speaking markets.
“Seeing really great traction… adding capabilities.”
• Retail:
Building inventory capabilities.
Customers reliant on legacy providers.
6. AI, Product Innovation & Partnerships
Toast IQ & AI Initiatives
• “Toast IQ… almost as a copilot for the restaurant operator.”
• Real customer impact:
“It tells me when times are slow.”
“It tells me what are the best-selling items… which employee has the highest sales… which employees have voids.”
• Advertising: “Early in our journey… customers… seeing very specific ROI.”
Partnerships
• Amex: “Opportunity… to improve guest experience… bringing all of the inventory with resi and tables into one place.”
• Uber: “A better integration… and over time… relationship continuing to expand.”
7. Competition & Payments
• Win rates improving: “Our win rates are up… our productivity is really strong.”
• Enterprise payments attach: “Most of our enterprise customers do take payments… only a handful have not.”
• Hotel vertical: Example—Marriott and Choice Hotels expanding footprint.
• Visa/MasterCard settlement impact: “Likely not material… any impact would be beyond ’27 and beyond.”
10 Notable Direct Quotes
“2025 was a strong operational execution year for us… maniacal focus on execution across the company.”
“We crossed a $2 billion milestone, a really big achievement for this company.”
“We’re on pace to deliver 32% recurring gross profit and doing so at a healthy 33% margin.”
“We believe [new segments] will be significant cash flow generators over the long term.”
“As we get bigger, naturally, the core net adds will taper… but we’re just not there yet.”
“Our win rates are up. Our productivity is really strong.”
“Take rate has been up year-over-year every single quarter… Q3 and on pace in Q4.”
“Toast IQ has changed how she runs her business.”
“Now is the time to make these upfront investments in these new verticals.”
“Partners for us are really an important strategic asset.”
(All sourced from )
Q&A Summary
Q: 2025 milestones & setup for 2026?
A: 2025 was a strong execution year; recurring gross profit +32% at 33% margin, crossed $2B milestone. Momentum gives confidence entering 2026.
Q: Drivers of success in enterprise, international and retail TAMs?
A: Applying Toast’s U.S. SMB playbook to fragmented, legacy-dominated markets; modern tech stack and above-store capabilities differentiate Toast.
Q: ARPU profile across segments?
A: Core ARPU highest; new segments have lower ARPU initially but expand over time; managed with strict payback discipline.
Q: Sustainability of core SMB net adds?
A: Many non-flywheel markets remain; tapering will eventually happen but “we’re not there yet.”
Q: Competitive landscape?
A: Win rates up; strong rep productivity; best-in-class product and disciplined payback framework driving share gains.
Q: SaaS ARR per location drivers?
A: Mid-single-digit growth sustained; core ARPU growing faster; mix from new verticals moderates total ARPU.
Q: GPV per location trends?
A: Stable macro; GPV/location remains within narrow historical band.
Q: Take rate drivers?
A: Targeted pricing, COGS optimization, increasing digital products including surcharging.
Q: 2026 outlook & investment step-up?
A: Minimum 20% recurring gross profit growth; margins flat to slightly up; investing in new TAMs due to large ARR potential.
Q: Where is OpEx going?
A: Core: GTM capacity + product innovation.
New TAMs: rep capacity (intl/retail) + product build-out; enterprise mainly product.
Q: Hardware investment & tariffs?
A: Hardware a key lever; reps adjust mix across SaaS/payments/hardware under payback guardrails; Toast Go 3 a major differentiator.
Q: Toast IQ?
A: AI-powered operator copilot; early customer feedback very positive.
Q: Partnerships (Amex, Uber)?
A: Improve guest experience & integrations; early but expanding.
Q: Enterprise payments attach?
A: Most enterprise customers take payments; some exceptions due to prior agreements; hotel pipeline strong.
Q: Visa/Mastercard settlement impact?
A: Limited; not material, earliest effects would be beyond 2027.
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