Toast, Inc.
For the period ended Dec 31, 2025. Filed Feb 18, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 18, 2026
TOST$34.67-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-26.
0001650164-25-000072
Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-18.
0001650164-26-000057
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 105 current paragraphs.
81 unchanged; 21 reworded; 3 added; 14 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
The increase in research and development expenses during the fiscal year ended December 31, 2025 was primarily attributable to an increase in employee-related costs.
Current report
The increase in general and administrative expenses during the fiscal year ended December 31, 2025 was primarily driven by an increase in bad debt expense.
Current report
The decrease in restructuring expenses during the fiscal year ended December 31, 2025 was driven by significant restructuring and restructuring-related expenses incurred during fiscal year ended December 31, 2024 as part of the February 2024 Restructuring Plan. See Note 11, “Restructuring Plan” of the Notes to the Consolidated Financial Statements for further information.
Removed paragraphs (14)
Previous report
*: Certain percentages may not foot due to rounding.
Previous report
The increase in hardware and professional services revenue during the fiscal year ended December 31, 2024 was primarily driven by growth in new Locations.
Previous report
The increase in hardware and professional services costs during the fiscal year ended December 31, 2024 was primarily attributable to an increase in employee-related costs.
Previous report
Research and development expenses remained approximately flat during the fiscal year ended December 31, 2024.
Previous report
The decrease in general and administrative expenses during the fiscal year ended December 31, 2024 was primarily driven by a decrease in employee-related costs of $30 million and a decrease in lease termination expenses of $9 million.
Previous report
Restructuring expenses included restructuring actions to adjust our cost structure and real estate footprint in 2024. See Note 12 to our consolidated financial statements for further information.
Previous report
(1) For the fiscal year ended December 31, 2022, non-GAAP subscription services and financial technology solutions gross profit was not a key non-GAAP financial measure.
Previous report
•As of December 31, 2024, operating lease commitments totaled $39 million, of which $12 million is due in 2025 and $27 million is due thereafter. For further information refer to Note 6, "Lessee Arrangements” included in this Annual Report on Form 10-K in “Notes to Consolidated Financial Statements.”
Previous report
Business Combinations
Previous report
The acquisition purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates. When determining the fair value of assets acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to intangible assets. Valuation techniques generally consist of the market approach, income approach and/or cost approach. An estimate of fair value can be affected by many assumptions that require significant judgment. For example, the income approach and/or cost approach generally requires us to use assumptions to estimate future cash flows including those related to revenue and expense, long-term growth rates, discount rates, future tax rates and assumptions related to the time, cost and effort to recreate the technology acquired. Such assumptions are inherently uncertain and unpredictable and can differ from actual future events. Our estimate of the fair value of certain assets may differ materially from that determined by others who use different assumptions or utilize different business models and from the future cash flows actually realized. The fair value of assets acquired and liabilities assumed related to our most recent acquisitions is further described in Note 17, "Business Combinations" included in this Annual Report on Form 10-K in “Notes to Consolidated Financial Statements”.
Previous report
Stock-Based Compensation Expense
Previous report
We use the Black-Scholes option-pricing model to determine the estimated fair value of stock option awards. We have limited historical stock option activity and therefore estimate the expected term of stock options granted using the simplified method, which represents the average of the contractual term of the stock option and its weighted-average vesting period. The expected volatility of stock options is based upon the weighted-average historical volatility of our Class A common stock and the average historical volatility of a number of publicly traded companies in a similar industry. We also estimate a forfeiture rate to calculate the stock-based compensation expense for options and restricted stock units, or RSUs, based on an analysis of actual historical experience and expected employee attrition rates.
Previous report
We will continue to use judgment in evaluating the expected volatility, expected term and forfeiture rate utilized in our stock-based compensation expense calculation for stock option awards on a prospective basis. As we continue to accumulate additional data related to our Class A common stock and forfeiture rates, we may adjust our estimates, which could materially impact our future stock-based compensation expense inclusive of RSUs.
Previous report
Total stock-based compensation recognized in fiscal year 2024 related to stock-options was $42 million. For further information related to stock-based compensation expense and key assumptions utilized refer to Note 10, "Stock-Based Compensation Expense" included in this Annual Report on Form 10-K in “Notes to Consolidated Financial Statements.”
Reworded paragraphs (21)
Previous wording
As of December 31, 2024, approximately 134,000 Locations, an increase of 26% year over year, processing approximately $159 billion of gross payment volume in the trailing 12 months, partnered with Toast to optimize operations, increase sales, engage guests, and maintain happy employees.
Current wording
As of December 31, 2025, approximately 164,000 Locations, an increase of 22% year over year, processing approximately $195 billion of gross payment volume in the trailing 12 months, partnered with Toast to optimize operations, increase sales, engage guests, and maintain happy employees.
Previous wording
The increase in subscription services costs during the fiscal year ended December 31, 2024 was primarily attributable to an increase in employee-related costs.
Current wording
The increase in subscription services costs during the fiscal year ended December 31, 2025 was primarily driven by a $22 million increase in amortization of capitalized software and a $15 million increase in employee-related costs.
Previous wording
The increase in sales and marketing expenses during the fiscal year ended December 31, 2024 was primarily attributable to an increase in employee-related costs.
Current wording
The increase in sales and marketing expenses during the fiscal year ended December 31, 2025 was primarily driven by a $64 million increase in employee-related costs and a $24 million increase in marketing expenses.
Previous wording
Interest income, net, increased by $5 million during the fiscal year ended December 31, 2024 compared to the prior fiscal year, primarily driven by increased cash and cash equivalent balances.
Current wording
Interest income, net, increased by $9 million during the fiscal year ended December 31, 2025 compared to the prior fiscal year, primarily driven by increased cash and cash equivalent and marketable securities balances.
Previous wording
The change in fair value of the warrant liability during the fiscal year ended December 31, 2024 was attributable to an increase in our stock price and a reduction of outstanding warrants primarily due to a warrant repurchase of 5 million shares of Class B common stock in July 2024, or the Warrant Repurchase. See Note 3 to our consolidated financial statements for further information.
Current wording
The change in fair value of the warrant liability during the fiscal year ended December 31, 2025 was primarily driven by a decrease in our stock price, as the number of outstanding warrants remained unchanged during the period. The prior year balance included a reduction of outstanding warrants primarily due to a warrant repurchase of 5 million shares of Class B common stock in July 2024, or the Warrant Repurchase. See Note 3, “Financial Instruments” of the Notes to the Consolidated Financial Statements for further information.
Previous wording
The gain recognized in other income, net, for the fiscal year ended December 31, 2024 was primarily attributable to the Warrant Repurchase. See Note 3 to our consolidated financial statements for further information.
Current wording
The gain recognized in other income, net, for the fiscal year ended December 31, 2024 was primarily attributable to the one-time extinguishment gain of the warrant liabilities in connection with the Warrant Repurchase in July 2024.
Previous wording
The following table reflects the reconciliation of net income (loss) to Adjusted EBITDA for each of the periods presented:
Current wording
The following table reflects the reconciliation of net income to Adjusted EBITDA for each of the periods presented:
Previous wording
(1)Restructuring and restructuring-related expenses for the fiscal year ended December 31, 2024 include $32 million of severance benefits, $12 million of stock-based compensation expense, and $2 million of accelerated amortization related to facilities.
Current wording
(1)Restructuring and restructuring-related expenses for the fiscal years ended December 31, 2025 and 2024 include $9 million and $32 million of severance benefits, $3 million and $12 million of stock-based compensation expense and $— million and $2 million of accelerated amortization related to facilities, respectively.
Previous wording
Net Cash Provided by (Used in) operating activities (GAAP) and Free Cash Flow (Non-GAAP)
Current wording
Net Cash Provided by Operating Activities (GAAP) and Free Cash Flow (Non-GAAP)
Previous wording
(2) Excludes $87 million of cash held on behalf of customers and $55 million of restricted cash.
Current wording
(1) Excludes $159 million of cash held on behalf of customers and $71 million of restricted cash.
Previous wording
The net increase in cash, cash equivalents and marketable securities was primarily due to increases from cash provided by operating activities from the fiscal year ended December 31, 2024 compared to the previous year. During the fiscal year ended December 31, 2024, the increase in net cash provided by operating activities as compared to the fiscal year ended December 31, 2023, was driven by net income of $19 million during the fiscal year ended December 31, 2024 as compared to a net loss of $246 million during the same period last year, an increase in non-cash adjustments, primarily attributable to the fair value remeasurement of our warrant liability and increased amortization of deferred contract acquisition costs. This increase was partially offset by cash severance charges paid in connection with the Restructuring Plan and a higher use of cash for working capital primarily driven by higher deferred contract acquisition costs and increases of accounts receivable, net, resulting, in part, from continued growth in Locations, partially offset by higher accrued expenses and other current liabilities due to higher financial technology solutions expenses related to our growth in GPV.
Current wording
The net increase in cash, cash equivalents and marketable securities was primarily due to increases from cash provided by operating activities from the fiscal year ended December 31, 2025 compared to the previous year. During the fiscal year ended December 31, 2025, the increase in net cash provided by operating activities as compared to the fiscal year ended December 31, 2024, was primarily driven by net income of $342 million during the fiscal year ended December 31, 2025 as compared to a net income of $19 million during the same period last year. This increase was partially offset by a higher use of cash for working capital primarily driven by increases in accrued expenses and other current liabilities due to the timing of payments.
Previous wording
The decrease in net cash used in investing activities during the fiscal year ended December 31, 2024, as compared to the fiscal year ended December 31, 2023, was primarily driven by net cash inflows from marketable securities as compared to net cash outflows from marketable securities during last year, partially offset by an increase in capital expenditures. The decrease in net cash provided by financing activities during the fiscal year ended December 31, 2024, as compared to the same period last year, was primarily driven by cash outflows related to the Warrant Repurchase and share repurchases, partially offset by an increase in cash inflows from the proceeds from the issuance of common stock.
Current wording
The increase in net cash used in investing activities during the fiscal year ended December 31, 2025, as compared to the fiscal year ended December 31, 2024, was primarily driven by net cash outflows from marketable securities as compared to net cash inflows from marketable securities during last year. The decrease in net cash provided by financing activities during the fiscal year ended December 31, 2025, as compared to the same period last year, was primarily driven by cash outflows related share repurchases and payments of debt issuance costs, partially offset by cash inflows from the proceeds from the issuance of common stock.
Previous wording
During 2021 we entered into a senior secured credit facility, or the 2021 Facility, which we subsequently amended on March 2, 2023 to replace the London Interbank Offered Rate, or LIBOR, with the Secured Overnight Financing Rate, or SOFR. The 2021 Facility is subject to a minimum liquidity covenant of $250 million, subject to certain additional customary restrictive covenants in connection with the February 2024 share repurchase program. We were in compliance with all financial covenants as of December 31, 2024. As of December 31, 2024, there were no borrowings outstanding on the 2021 Facility and outstanding letters of credit totaled $5 million. As of December 31, 2024, our total available borrowing capacity under the 2021 Facility was $325 million. See Note 7, "Debt" included in this Annual Report on Form 10-K in “Notes to Consolidated Financial Statements” for further information.
Current wording
During 2021 we entered into a senior secured credit facility, or the 2021 Facility, which we subsequently amended on March 2, 2023 to replace the London Interbank Offered Rate, or LIBOR, with the Secured Overnight Financing Rate, or SOFR. On May 6, 2025, we amended and restated our 2021 Facility to increase the available revolving commitments from $330 million to $350 million and to extend the term of the 2021 Facility to May 6, 2030. We were in compliance with all financial covenants as of December 31, 2025. As of December 31, 2025, there were no borrowings outstanding on the 2021 Facility and outstanding letters of credit totaled $3 million. As of December 31, 2025, our total available borrowing capacity under the 2021 Facility was $347 million. See Note 6, "Debt" of the Notes to the Consolidated Financial Statements for further information.
Previous wording
In February 2024, we announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock, in an aggregate amount of up to $250 million. The repurchase program has no expiration date, does not obligate us to acquire any particular amount of our Class A common stock, and it may be suspended at any time at our discretion. The timing and actual number of shares repurchased may depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.
Current wording
In February 2024, we announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock, in an aggregate amount of up to $250 million. In February 2026, our board of directors authorized an increase of $500 million to our share repurchase program. The repurchase program has no expiration date, does not obligate us to acquire any particular amount of our Class A common stock, and it may be suspended at any time at our discretion. The timing and actual number of shares repurchased may depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. See Note 17, “Subsequent Events (unaudited)" of the Notes to the Consolidated Financial Statements for further information.
Previous wording
For further information see "Note 3. Financial Instruments", “Note 9. Common Stock" and "Note 10. Stock-Based Compensation" included in this Annual Report on Form 10-K in “Notes to Consolidated Financial Statements.”
Current wording
For further information see Note 3, “Financial Instruments", Note 8, “Common Stock", and Note 9, “Stock-Based Compensation" of the Notes to the Consolidated Financial Statements for further information.
Previous wording
•As of December 31, 2024, our non-cancellable purchase obligations to hardware suppliers totaled $65 million, all of which is due within the next 12 months.
Current wording
•As of December 31, 2025, our non-cancellable purchase obligations to hardware suppliers totaled $106 million, all of which is due within the next 12 months.
Previous wording
•As of December 31, 2024, our non-cancellable contractual commitments with our cloud service providers and other vendors totaled $185 million of which $69 million is due within the next 12 months and $116 million thereafter.
Current wording
•As of December 31, 2025, our non-cancellable contractual commitments with our cloud service providers and other vendors totaled $157 million of which $90 million is due within the next 12 months and $67 million thereafter.
Previous wording
In addition to the above material cash requirements, we also recognize liabilities associated with financial guarantees related to loan purchase activities. Such activities are further described within Note 2, "Summary of Significant Accounting Policies" included in this Annual Report on Form 10-K in “Notes to Consolidated Financial Statements.” See also Note 16, "Commitments and Contingencies" and Note 6, "Lessee Arrangements" included in this Annual Report on Form 10-K in “Notes to Consolidated Financial Statements.”
Current wording
In addition to the above material cash requirements, we also recognize liabilities associated with financial guarantees related to loan purchase activities. Such activities are further described within Note 2, "Summary of Significant Accounting Policies" and Note 15, "Commitments and Contingencies" of the Notes to the Consolidated Financial Statements for further information.
Previous wording
We believe that the critical accounting estimates summarized below involve a greater degree of judgment and complexity. Accordingly, these are the estimates and policies we believe are the most critical in fully understanding and evaluating our financial condition and results of operations. For further information on our critical accounting estimates and policies summarized below, refer to Note 2, "Summary of Significant Accounting Policies" included in this Annual Report on Form 10-K in “Notes to Consolidated Financial Statements.” If the impact of changes in our critical accounting estimates are material or considered necessary to understand our results of operations for the periods presented, then such information is disclosed within this Annual Report on Form 10-K in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Current wording
We believe that the critical accounting estimates summarized below involve a greater degree of judgment and complexity. Accordingly, these are the estimates and policies we believe are the most critical in fully understanding and evaluating our financial condition and results of operations. For further information on our critical accounting estimates and policies summarized below, refer to Note 2, "Summary of Significant Accounting Policies" included in this Annual Report on Form 10-K in the Notes to Consolidated Financial Statements. If the impact of changes in our critical accounting estimates are material or considered necessary to understand our results of operations for the periods presented, then such information is disclosed within this Annual Report on Form 10-K in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Previous wording
Our contracts often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately as opposed to being combined may require judgment. We allocate total arrangement consideration at the inception of an arrangement to each performance obligation using the relative selling price allocation method based on each distinct performance obligation’s standalone selling price, or SSP. Determining the SSP for each distinct performance obligation requires judgement.
Current wording
Our contracts often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately as opposed to being combined may require judgment.
Previous wording
Refer to the sections titled “Recent Accounting Pronouncements” in Note 2 of the "Notes to Consolidated Financial Statements" included in Item 8, "Financial Statements and Supplementary Data" in this Annual Report on Form 10-K for more information.
Current wording
Refer to the sections titled “Recent Accounting Pronouncements” in Note 2, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data" in this Annual Report on Form 10-K for more information.