Toast, Inc. (TOST): Business Model Canvas [Dec-2025 Updated]

You're looking at how a major platform captures the restaurant industry's tech spend, and frankly, the numbers for Toast, Inc. as of Q3 2025 are what you need to see. They aren't just selling a Point-of-Sale system; they've built an integrated ecosystem where they process a massive $51.5 billion in Gross Payment Volume (GPV) and pull in over $2.0 billion in Annual Recurring Revenue (ARR) from their 156,000 locations. This Business Model Canvas breaks down exactly how they turn software subscriptions, hardware sales, and their powerful FinTech offerings into that scale, so you can see the mechanics behind their market position and where the real costs-like payment processing fees-are hitting them.

Toast, Inc. (TOST) - Canvas Business Model: Key Partnerships

You're looking to understand the backbone of Toast, Inc.'s growth engine-the external relationships that make their platform indispensable to restaurants. Honestly, for a company focused on vertical integration, partnerships are key to extending reach and capability, so let's dig into the numbers behind these alliances.

Strategic global partnership with Uber Technologies, Inc. (preferred delivery marketplace)

Toast, Inc. cemented a multi-year strategic global partnership with Uber Technologies, Inc., naming Uber as the preferred delivery marketplace for Toast restaurants worldwide. This is a big deal for merchants, aiming to streamline digital ordering and increase sales. As of the last twelve months ending November 2025, Toast reported revenue of $5.53 billion, showing impressive growth of 26.06%, which these expanded integrations are designed to fuel further. The partnership builds on prior work, including the 2024 expansion of Toast Delivery Services with Uber Direct, which helps restaurants save on fees and expand their delivery radius. You should note that new marketing tools allowing merchants to manage promotions and local advertising on Uber Eats directly from the Toast platform are slated to begin rolling out in 2026. The companies are also expanding existing integrations to Canada, Ireland, and the United Kingdom. To be fair, Toast's strong liquidity, evidenced by a current ratio of 2.59, supports these large-scale expansion initiatives.

Multi-year strategic partnership with American Express (Amex) for Resy/Tock integration

The alliance with American Express centers on enhancing the guest experience, specifically by bringing all inventory from Resy and Tock-Toast's reservation and ticketing platforms-into a single view for the restaurant operator. While this partnership was announced around the Q2 2025 earnings period, management indicated that it is still in the early stages, meaning there's significant runway for mutual benefit development ahead. This integration is designed to make managing reservations and bookings more seamless for the combined user base.

Ecosystem of hundreds of partners building on the platform's API

The platform's open nature, supported by its API, is a critical asset. Toast currently supports approximately 140,000 total locations as of March 31, 2025. This massive installed base attracts third-party developers. The company boasts an ecosystem with over 200+ available integrations, allowing restaurants to plug in specialized tools that complement the core Toast offering. The platform's API is constantly evolving; for example, release notes show planned production deployments for API changes extending through late 2025 and into early 2026, such as updates to the Orders API and Credit Cards API. This constant development keeps the platform sticky.

Here's a quick look at the financial scale that underpins the value of these integrated services:

Metric	Q1 2025 Value	YoY Growth (Q1 2025 vs Q1 2024)
Total Locations	Approximately 140,000	25%
Gross Payment Volume (GPV)	$42.2 billion	22%
Non-GAAP Sub. & FinTech Gross Profit	$415 million	37%
Adjusted EBITDA	$133 million	N/A (vs $57 million in Q1 2024)

The growth in Non-GAAP subscription services and financial technology solutions gross profit to $415 million in Q1 2025, up 37% year-over-year, shows how effectively Toast monetizes the payment processing component of its platform. For the full year 2025, Toast expects this metric to land between $1,775 million and $1,795 million.

POS hardware manufacturers and suppliers

Toast maintains relationships with commercial-grade hardware suppliers, though specific names like Epson or Star Micronics weren't detailed in recent financial reports. The platform is designed to work with Toast's proprietary hardware, including Handheld POS devices, Self-ordering kiosks, and Kitchen Display Systems. The company actively helps manage the initial capital outlay for these items. For instance, Toast offers an Easy Pay commercial lease, allowing customers to pay for hardware and onboarding fees through a portion of their daily transactions, which definitely helps lower the barrier to entry for new customers.

Finance: draft 13-week cash view by Friday.

Toast, Inc. (TOST) - Canvas Business Model: Key Activities

You're looking at the core engine of Toast, Inc. as of late 2025. These are the things they absolutely must execute on every day to keep that platform humming for restaurants.

Financial technology and payment processing for $51.5 billion in Q3 2025 GPV

The financial technology piece is massive; it's the lifeblood flowing through the system. Toast processed $51.5 billion in Gross Payment Volume (GPV) just in the third quarter of 2025. This volume is supported by their payments net take rate, which was reported at 49 basis points in Q3 2025. Also, non-payments fintech solutions, like Toast Capital, contributed $58 million in gross profit during that same quarter. Honestly, managing that scale of transaction flow while maintaining compliance and speed is a huge operational lift.

Customer onboarding and 24/7 support for 156,000 total locations

Scaling the customer base demands a rock-solid support structure. As of the end of Q3 2025, Toast powered approximately 156,000 total restaurant locations globally. That's a lot of endpoints needing uptime. To support this, they added 7,500 net new locations in that quarter alone. If onboarding takes 14+ days, churn risk rises, so the efficiency of getting those new locations live is defintely critical to their growth algorithm.

Continuous R&D and innovation of the cloud-based platform (e.g., Toast IQ AI assistant)

Innovation here is about making the platform stickier and more valuable than a simple point-of-sale system. The company is actively pushing advanced features. They launched Toast IQ, which is their conversational AI assistant, and also rolled out Toast Advertising. These tools are designed to help customers increase revenue and operate more efficiently, which is how they justify their long-term vision of reaching $10 billion in Annual Recurring Revenue (ARR).

Sales and marketing to acquire new restaurant locations

The sales engine is focused on consistent market share gains. The Annual Recurring Revenue (ARR) figure shows the success of this effort, having crossed $2.0 billion as of September 30, 2025. This represents a 30% year-over-year growth in ARR for Q3 2025. The goal is to double their share of locations and GPV over time, which requires sustained net adds, as seen by the 7,500 added in Q3.

Hardware sourcing, logistics, and deployment (POS terminals, handhelds)

While the software is the core value, the physical deployment is the entry point. Getting the necessary hardware-the POS terminals and handheld devices-to 156,000 locations, including major enterprise wins with brands like TGI Fridays and Nordstrom (rolling out at nearly 200 dining locations), requires significant logistics muscle. This activity underpins the entire subscription and payments model.

Here's a quick look at the scale of the operation as of the Q3 2025 reporting period:

Metric	Value (As of Q3 2025)
Total Locations Powered	156,000
Net Locations Added in Q3	7,500
Quarterly Gross Payment Volume (GPV)	$51.5 billion
Annual Recurring Revenue (ARR)	$2.0 billion
ARR Year-over-Year Growth	30%
Adjusted EBITDA	$176 million

The operational health is clear from the cash conversion, too. Free Cash Flow (FCF) was $153 million in Q3 2025, showing nearly 100% conversion from Adjusted EBITDA. That efficiency is what funds the R&D and sales expansion.

Toast, Inc. (TOST) - Canvas Business Model: Key Resources

You're looking at the core assets that power Toast, Inc. (TOST) right now, late in 2025. These aren't just abstract concepts; they are the hard numbers and the platform itself that make the business run.

Proprietary cloud-based, integrated software platform (Toast POS, Toast Payroll)

The platform is the engine, handling everything from the front of the house to back-office functions like payroll. The financial performance of this core software is strong, showing clear customer commitment.

• GAAP subscription services and financial technology solutions gross profit was $490 million in Q3 2025.
• Non-GAAP subscription services and financial technology solutions gross profit hit $506 million in Q3 2025.
• This represents a year-over-year growth rate of 34% for both GAAP and Non-GAAP gross profit in Q3 2025.

Large installed customer base of approximately 156,000 restaurant locations

Scale is a massive resource here. The sheer number of restaurants using the system creates a network effect and a deep pool for upselling other services. It's defintely a moat.

Here's the quick math on their footprint growth as of the end of Q3 2025:

Metric	Value as of Q3 2025
Total Global Locations	Approximately 156,000
Net Locations Added in Q3 2025	Approximately 7,500
Year-over-Year Location Growth	23%

Annual Recurring Revenue (ARR) exceeding $2.0 billion as of Q3 2025

This is the clearest indicator of the platform's recurring financial strength. It took them ten years to hit the first billion, but only two more years to double it, which shows the acceleration in value capture.

• ARR crossed the $2.0 billion milestone as of September 30, 2025.
• This represented a 30% year-over-year growth rate for ARR.
• For the first time, both Payments ARR and SaaS ARR each exceeded $1 billion.

Proprietary hardware devices like the Toast Go® handheld POS

While the software is the core, the integrated hardware locks in the customer and ensures a consistent experience. The hardware revenue growth in the prior year gives you a sense of its importance to the overall ecosystem.

Hardware Context	Data Point
Hardware Revenue Growth (2024 YoY)	Approximately 15%
Starting Hardware Cost (POS System)	Starts at $799

Extensive customer data and AI capabilities (Toast IQ) for insights

The data flowing through the platform fuels the AI tools, which in turn drive more value back to the customer, creating a feedback loop. The early adoption figures for the latest AI tool are telling.

• The conversational AI assistant, Toast IQ, saw early adoption of over 25,000 restaurants.
• These restaurants used Toast IQ more than 235,000 times since its early October 2025 rollout.

Finance: draft 13-week cash view by Friday.

Toast, Inc. (TOST) - Canvas Business Model: Value Propositions

All-in-one platform: POS, payments, and operations management in one system

You see the value in consolidating the technology stack, which is exactly what Toast, Inc. delivers by integrating point-of-sale (POS), payments, and back-office functions.

The sheer scale of adoption shows this proposition is working; as of September 30, 2025, Toast powered approximately 156,000 total locations globally. This represented a 23% year-over-year increase in total locations. The platform processes massive transaction volumes, evidenced by the Gross Payment Volume (GPV) reaching $51.5 billion in the third quarter of 2025 alone.

The platform's revenue streams reflect this integration:

• Annual Recurring Revenue (ARR) surpassed $2.0 billion as of September 30, 2025.
• For the first time, both Payments ARR and SaaS ARR each exceeded $1 billion.
• The company projects full-year 2025 Non-GAAP subscription services and financial technology solutions gross profit in the range of $1,865 million to $1,875 million.

This dual-engine approach provides resilience; the SaaS subscriptions offer stickiness, while the payments volume drives scale.

Operational efficiency: Streamlining workflows to reduce labor costs and errors

The platform's design is intended to make restaurant operations hum more smoothly, which translates directly to the bottom line for your clients.

The financial results from Q3 2025 show this efficiency is translating into profitability:

Metric	Q3 2025 Value	Comparison/Context
Adjusted EBITDA	$176 million	Up from $113 million in Q3 2024.
Adjusted EBITDA Margin	35%	Up 13 percentage points year-over-year.
Free Cash Flow (FCF)	$153 million	Nearly 100% conversion from Adjusted EBITDA in Q3 2025.
Total Take Rate	98 basis points	Up seven basis points year-over-year.

The focus on disciplined cost management is clear; management raised the full-year 2025 Adjusted EBITDA guidance to $610 million to $620 million. That's a clear signal of confidence in the unit economics.

Integrated FinTech: Access to working capital via Toast Capital and payment processing

For a restaurant owner needing cash flow support, the integration of Toast Capital directly into the POS ecosystem is a major value driver, as repayment flexes with sales volume.

Key details on the capital offering include:

• Loans range from $1,000 to $300,000 per location, based on eligibility.
• Target repayment terms are set at 90, 270, or 360 days.
• Repayment is automated as a fixed percentage of daily card transactions processed through Toast.
• The cost is a fixed fee, with no compounding interest or late fees mentioned.

The growth in the financial technology segment is strong; Subscription Services and Financial Technology Solutions gross profit grew 34% year-over-year in Q3 2025 to $490 million (GAAP).

Data-driven insights: AI-powered tools for menu optimization and guest feedback

You're seeing the shift from just processing transactions to actively advising on business performance, driven by AI tools like Toast IQ.

The adoption and impact of these tools are quantifiable:

• Over 25,000 restaurants used Toast IQ since its early October rollout.
• The tool has been used over 235,000 times since its launch.
• One example showed Toast IQ flagging a drink promotion that was costing a restaurant approximately $700 a day in lost profit.

The company also launched Toast Advertising, which, alongside Toast IQ, is cited as helping customers increase revenue and operate more efficiently.

Purpose-built for restaurants: Industry-specific features for various service models

The platform's ability to handle complexity beyond the small-to-medium business (SMB) segment is a key differentiator now, proving its industry-specific design scales up.

This is validated by recent large-scale customer wins:

• Secured a deal with Nordstrom to roll out the platform at nearly 200 of its dining locations.
• Secured the entire U.S. operation of TGI Fridays.
• Enterprise wins in Q1 2025 included Applebee's and Topgolf.

The platform's capability to manage complex operations, like the integration of restaurant and entertainment functions at Topgolf, underscores its industry-specific feature set.

Toast, Inc. (TOST) - Canvas Business Model: Customer Relationships

You're managing customer relationships across a base that has grown to approximately 156,000 total locations globally as of the end of the third quarter of 2025. This scale means the approach to customer interaction must be segmented, moving from high-touch for the largest accounts to automated efficiency for the Small and Midsize Business (SMB) core.

Dedicated direct sales and account management teams for enterprise clients are clearly evidenced by the marquee wins secured throughout 2025. Toast, Inc. signed deals with major operators, including rolling out the platform at nearly 200 dining locations for Nordstrom and moving TGI Fridays' entire US operation onto the platform. This follows the landmark Q1 2025 win of Applebee's Neighborhood Grill + Bar, a chain comprising 2,000 restaurants. These large-scale operators necessitate dedicated, high-touch support from contract signing through implementation and ongoing account management.

High-touch onboarding and implementation for new locations is a necessary function for these complex enterprise rollouts, ensuring deep integration across hundreds of sites. For the broader base, the company added approximately 7,500 net new locations in the third quarter of 2025 alone, demonstrating the continuous need for scalable, yet effective, initial setup procedures across all tiers.

Automated, in-app, and self-service support for SMBs is crucial for managing the sheer volume of the installed base. The platform's increasing sophistication allows for this scale. For instance, the adoption of Toast IQ, the conversational AI assistant, is strong, with over 25,000 restaurants using it more than 235,000 times since its early October launch. This suggests a significant shift toward AI-driven, self-service guidance for day-to-day operational questions, reducing reliance on direct human support for the majority of locations.

Community building and educational resources for restaurateurs are being delivered through platform innovations that provide tangible return on investment. The Toast Advertising tool, for example, helped one early-testing customer, Pizza by the Sea, estimate generating $400,000 in sales from their campaigns, which represented an estimated 20x return on ad spend in initial tests. This data-driven education helps solidify the value proposition beyond the core point-of-sale system.

Personalized hospitality tools via Amex/Resy/Tock integration represent a strategic push into enhancing the guest experience, which directly impacts the restaurant's success and, therefore, the relationship with Toast, Inc. A strategic, multi-year partnership with American Express aims to combine Resy and Tock's guestbook capabilities with Toast's Digital Chits technology. This allows staff to view important customer information directly on handhelds and POS terminals during service. This integration is designed to leverage the network effect, as Resy and Tock together added approximately 27,000 restaurants/venues to the American Express Global Dining network as of 2024.

Here are the key metrics defining the scale of Toast, Inc.'s customer base as of late 2025:

Metric	Value (as of Q3 2025)	Context
Total Global Locations Powered	156,000	Total installed base
Net New Locations Added (Q3 2025)	Approx. 7,500	Quarterly growth in customer count
Annual Recurring Revenue (ARR)	Over $2.0 billion	Total ARR as of September 30, 2025
Enterprise Customer Location Count (Nordstrom)	Nearly 200	Locations in a single major enterprise rollout
Toast IQ User Base	Over 25,000 restaurants	Adoption of the AI assistant feature

The focus on advanced tooling and enterprise integration shows a clear tiered approach to customer relationships:

• Dedicated sales engagement for large chains like TGI Fridays and Nordstrom.
• AI-driven self-service support via Toast IQ for the broader SMB base.
• Integration of reservation/guest data through the American Express/Resy/Tock partnership.
• Tools like Toast Advertising providing measurable ROI, such as a 20x return on ad spend in tests.

Toast, Inc. (TOST) - Canvas Business Model: Channels

You're looking at how Toast, Inc. gets its platform into the hands of restaurateurs and how their end-customers transact. It's a multi-pronged approach, blending high-touch sales with digital ubiquity, which is key to their growth trajectory.

Direct Sales Force: Primary channel for new customer acquisition.

Toast uses a dual sales model to cover the Total Addressable Market (TAM) of an estimated 1.4 million restaurant locations, of which they estimate they have penetrated only about 10% as of late 2025. The strategy involves field sales reps focusing on high-density areas where in-person engagement is critical for closing deals, while inside sales teams cover lower-density regions. This direct effort is clearly driving volume; for example, in Q3 2025, Toast added approximately 7,500 net new locations. The enterprise segment is also a key focus for this force, signing major deals like Nordstrom, which is implementing the platform at nearly 200 dining locations across approximately 100 stores.

Here's a look at the location growth that this channel mix is driving:

Metric	As of March 31, 2025 (Q1 End)	As of June 30, 2025 (Q2 End)	As of September 30, 2025 (Q3 End)
Total Customer Locations	Approximately 140,000	Approximately 148,000	Approximately 156,000
Net New Locations Added in Quarter	Over 6,000	Record 8,500	Approximately 7,500
Enterprise/New Market Locations	Tracking toward surpassing 10,000 in 2025	Passed 10,000 live locations	N/A

The success of the direct sales motion is also reflected in their overall market position, holding approximately 24.30% of the POS market, second only to Square's 28.01% as of early 2025.

Online/In-app Ordering: Digital channels for end-customer transactions.

The platform's integrated digital ordering capabilities are a core part of the value proposition, processing a significant portion of the $51.5 billion in Gross Payment Volume (GPV) recorded in Q3 2025. For end-customers, there's a clear trend favoring direct digital interaction; research indicates a notable preference for ordering through a restaurant's own website rather than a third-party app. This preference holds across demographics, suggesting Toast's direct digital storefront solutions are capturing valuable transaction flow.

Third-Party Delivery Integrations: Direct links to platforms like Uber Eats.

While Toast, Inc. provides direct links and integrations for delivery platforms, the channel strategy appears to favor direct customer ordering. The platform serves as the restaurant operating system, connecting front-of-house and back-of-house operations across service models including delivery. Specific financial breakdowns of revenue contribution from partners like Uber Eats aren't public, but the overall GPV growth to $51.5 billion in Q3 2025 shows high transaction volume across all fulfillment methods.

Toast App Marketplace: Ecosystem for third-party software integrations.

The ecosystem approach is supported by the App Marketplace, which allows restaurants to extend the platform's functionality. This is part of the strategy to increase platform adoption through data and AI. While specific metrics like the number of active third-party apps or developer adoption rates aren't explicitly stated for late 2025, the focus on expanding the intelligence ecosystem with features like the conversational AI assistant within Toast IQ shows a commitment to platform depth.

Local Partner Network: Resellers and integrators for regional reach.

Toast supports its direct sales efforts with a network of local partners. The company explicitly highlights this channel, noting that 'Local partners. Helping clients succeed has never been so rewarding'. This network likely aids in regional market penetration and localized support, which is crucial in the relationship-driven restaurant business, complementing the field sales force's territory planning.

Finance: draft 13-week cash view by Friday.

Toast, Inc. (TOST) - Canvas Business Model: Customer Segments

You're looking at the customer base for Toast, Inc. as of late 2025; it's a massive, multi-faceted group that the company is segmenting for focused growth. The foundation remains the U.S. restaurant sector, but the expansion into larger accounts and adjacent verticals is what's driving the current narrative.

Core U.S. SMB Restaurants: Small and medium-sized full-service and quick-service eateries.

This is the engine room. Toast, Inc. is an industry leader in the U.S. core business, holding an estimated market share of around 15% in the U.S. restaurant sector as of 2024. Management has a clear path to doubling its market share in this segment. The platform targets mid-market restaurants, which are often defined as those generating over $1 million in annual revenue. The overall footprint grew significantly, ending Q3 2025 with approximately 156,000 total locations globally. For context on the pace, Q3 2025 saw approximately 7,500 net new locations added, following a record 8,500 net additions in Q2 2025.

Enterprise/Large-Scale Operators: Multi-location chains like Nordstrom and TGI Fridays.

This segment is a key growth vector, proving the platform's ability to handle complexity beyond the small-to-medium business (SMB) scale. Toast, Inc. landed its two largest deals ever in 2025. You see marquee names like Nordstrom, which is rolling out the platform across nearly 200 of its dining locations. Another major win involves moving TGI Fridays' entire U.S. operation onto the platform. Furthermore, the company secured Firehouse Subs, a QSR enterprise brand with 1,300 locations. These wins validate the investment in above-store capabilities for multi-location management.

Food & Beverage Retail: Businesses like bakeries, cafes, and specialty food stores (e.g., Zabar's).

The expansion into retail is a deliberate move to broaden the Total Addressable Market (TAM). This vertical includes bakeries, cafes, convenience stores, and butcher shops. A specific example of a retail concept welcomed to the platform is Zabar's. The company is seeing traction here, with the combined new segments-including retail-on track to surpass $100 million in Annual Recurring Revenue (ARR) collectively by the end of 2025.

International Markets: Restaurants in Canada, UK, Ireland, and Australia.

Toast, Inc. is applying its U.S. playbook to scale in new markets. By Q2 2025, the company crossed the 10,000 live location milestone across its new TAMs, which includes International, Enterprise, and Retail. Early international efforts, particularly in English-speaking markets, showed strong growth, with Software as a Service (SaaS) Average Revenue Per User (ARPU) in these regions growing by 50% year-over-year in 2024. The platform is bringing features like loyalty programs and email marketing abroad.

Diverse service models: Quick service, fine dining, bars, and ghost kitchens.

The platform's architecture supports a wide array of operational styles, which is key to its broad appeal. The customer base is not monolithic; it spans the spectrum of the hospitality industry.

Here's a quick look at the scale across segments as of mid-2025:

Segment Category	Key Metric/Data Point (Late 2025)	Specific Example/Context
Total Global Locations	Approximately 156,000 (as of Q3 2025)	Up 23% year-over-year from Q3 2024
Core U.S. SMB	Estimated 15% U.S. market share (as of 2024)	Management aims to double this market share
Enterprise/New TAMs	Crossed 10,000 live locations (by Q2 2025)	Projected to surpass $100 million in ARR collectively by year-end 2025
Enterprise Scale	Largest deals ever signed in 2025	Nordstrom rollout at nearly 200 locations

The platform supports everything from quick service and bars to fine dining and, implicitly, ghost kitchens through its digital ordering and online storefront suites. The focus is on providing an integrated ecosystem, which drives high switching costs for these diverse operators.

You should check the Q4 2025 guidance for the expected total location count by year-end, as that will give you the final number for the full year's customer acquisition.

Toast, Inc. (TOST) - Canvas Business Model: Cost Structure

You're looking at the expense side of the ledger for Toast, Inc. as of late 2025, which is heavily weighted toward growth and platform investment. The cost structure reflects a company scaling rapidly while pushing for operational leverage.

Cost of Revenue: Primarily payment processing fees and hardware costs. The total cost of revenue for Q3 2025 was reported as $1.201 billion. This figure directly relates to the Gross Payment Volume (GPV) processed, which hit $51.5 billion in Q3 2025. For context, GAAP subscription services and financial technology solutions gross profit was $490 million in the same quarter.

Significant R&D expenses: Investment in platform development and AI, specifically Toast IQ, is a major cost driver. Research and development expenses for the twelve months ending September 30, 2025, totaled $369 million. This sustained investment is intended to differentiate the platform and drive future Annual Recurring Revenue (ARR).

Sales and Marketing expenses: These costs remain high to fuel customer acquisition and location additions. In Q1 2025, operating costs rose about 12%, which management attributed to increased spending on sales and marketing. The company added approximately 7,500 net new locations in Q3 2025 alone.

Personnel costs: Salaries and stock-based compensation are significant components of the operating expenses. Stock-based compensation defintely impacts the GAAP Earnings Per Share (EPS) calculation, which was reported at $0.16 for Q3 2025, missing expectations.

Hardware manufacturing and inventory costs: These costs are embedded within the Cost of Revenue, as Toast provides hardware solutions alongside its software. The need to provision hardware for new locations, like the 7,500 added in Q3, directly influences this cost line.

Here's a quick look at the key Q3 2025 financial metrics that define the cost and revenue environment:

Metric	Amount (Q3 2025)
Total Revenue	$1.63 billion
Cost of Revenue (Stated)	$1.201 billion
GAAP Gross Profit	$490 million
Adjusted EBITDA	$176 million
Total Locations Powered	156,000
Net New Locations Added	7,500

The cost structure is managed to achieve operating leverage, as evidenced by the rising margins:

• GAAP income from operations was $84 million in Q3 2025.
• Operating Margin reached 5.1% in Q3 2025.
• Free Cash Flow (FCF) was $153 million in Q3 2025.
• The core U.S. SMB business is already operating at the long-term target margin of 40% Adjusted EBITDA.

Finance: draft 13-week cash view by Friday.

Toast, Inc. (TOST) - Canvas Business Model: Revenue Streams

You're looking at the engine room of Toast, Inc. (TOST) revenue generation as of late 2025. The model is heavily weighted toward recurring revenue, but the transaction volume remains the foundational driver.

Financial Technology Solutions: Transaction fees on Gross Payment Volume (GPV)

This is the largest piece of the pie, honestly. Toast generates revenue by taking a percentage, known as a take rate, on every dollar processed through its payments platform. For the third quarter ended September 30, 2025, the Gross Payment Volume (GPV) hit a massive $51.5 billion. This scale is what fuels the financial technology solutions revenue stream.

The total take rate for all financial technology and subscription services combined stood at 98 basis points in Q3 2025. To be clear, that means for every dollar processed, Toast kept just under one cent. The payments component of that take rate, the pure transaction fee, was 49 basis points as of Q3 2025. The combined GAAP gross profit for subscription services and financial technology solutions in Q3 2025 was $490 million, with the non-GAAP figure reaching $506 million. Management guided for the full year 2025 Non-GAAP subscription services and financial technology solutions gross profit to land between $1,865 million and $1,875 million.

Subscription Services: Recurring SaaS fees for software modules

This is the stickier, higher-margin part of the business you want to see growing fast. As of September 30, 2025, Toast, Inc. surpassed $2.0 billion in Annual Recurring Revenue (ARR). That is a 30% year-over-year increase for the total ARR. Crucially, for the first time, both Payments ARR and SaaS ARR individually surpassed the $1.0 billion mark. The SaaS gross margin for the quarter was reported at 79%. The platform supported approximately 156,000 total locations globally by the end of Q3 2025.

Here's a quick look at the scale of the platform as of the latest reported quarter:

Metric	Value (Q3 2025)
Total Annual Recurring Revenue (ARR)	$2.0 billion
Total Locations Served	Approximately 156,000
Gross Payment Volume (GPV)	$51.5 billion
GAAP Subscription & FinTech Gross Profit	$490 million

Hardware Sales

Revenue from hardware sales, like POS terminals and peripherals, is a one-time component of the model. While the company launched its newest handheld, the Toast Go® 3, the financial reporting focuses on the combined subscription and financial technology solutions gross profit, which is the core recurring revenue. The non-recurring revenue streams are generally bundled into the 'License' category when broken down by segment, which accounted for 15.36% of total revenue in Q3 2025.

FinTech Solutions: Interest and fees from Toast Capital

Toast Capital, the restaurant lending arm, contributes directly through interest and fees generated from originations. In the third quarter of 2025, this non-payments fintech segment contributed $58 million in gross profit. This represented a take rate contribution of 11 basis points for that quarter. This is a growing area, especially as the company moves upmarket to serve larger chains. If onboarding takes 14+ days, churn risk rises, but lending provides an alternative revenue stream independent of daily transaction volume fluctuations.

Advertising and Marketing Services

Toast is actively building out services to help restaurants drive more business directly through the platform. The company launched Toast Advertising, which is already helping customers increase revenue. This stream is designed to capture fees for promoting restaurants on the platform, similar to how other digital marketplaces monetize visibility. While specific revenue figures for this nascent stream weren't broken out separately in the Q3 2025 summary, its inclusion signals a strategic push to monetize customer success beyond core processing and software.

You should keep an eye on these key operational metrics as they signal the health of the revenue base:

• SaaS ARR growth rate: 30% year-over-year as of September 30, 2025.
• Total Locations added in Q3 2025: Approximately 7,500 net new locations.
• Full Year 2025 Adjusted EBITDA guidance midpoint: $615 million.

Finance: draft 13-week cash view by Friday.