Toast (NYSE:TOST) Posts Solid Growth
$TOST
Toast (NYSE:TOST) reported $1.34 billion in revenue for Q1 2025, marking a 24.4% year-on-year increase. Although the revenue fell slightly short of Wall Street’s estimate of $1.35 billion, the company’s growth remains impressive. The non-GAAP earnings of $0.09 per share also missed analysts’ expectations by 51.6%, but adjusted earnings exceeded expectations.
Despite the revenue miss, Toast reported adjusted EBITDA of $133 million, a significant 25.2% beat over estimates. The company’s annual recurring revenue (ARR) reached $1.71 billion, reflecting a robust 31.3% YoY growth. Operating margins showed improvement, turning positive at 3.2%, a significant recovery from last year’s -5.2%.
Toast continues to benefit from strong customer demand, as evidenced by its 38.6% annualized revenue growth over the past three years. The company’s integrated point-of-sale platform, along with its ToastIQ AI solution, drives efficiency for restaurants. Innovations like ToastIQ are crucial in maintaining momentum amid an increasingly competitive landscape.
Strategic partnerships remain a key driver of growth. The company has expanded its footprint through a notable partnership with Dine Brands Global, bringing its solutions to Applebee’s locations nationwide. This expansion into the enterprise space is part of Toast’s broader strategy to capture more market share.
Looking ahead, Toast has raised its full-year EBITDA guidance to $550 million, signaling confidence in its ability to maintain its performance. While the Q1 miss raises some questions, the company’s solid ARR growth and strategic innovations position it well for the future. Toast’s continued investment in technology and partnerships is likely to support its long-term growth trajectory.
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