Toast, Inc. Growth Strategy & Innovation: Fireside Chat at GS Communacopia + Tech Conf. 2025

Key Takeaways

TL;DR: TOST mgmt. underscored strong core execution w/ record net adds & ARR growth, accelerating in enterprise, intl., and retail. ARPU up, platform attach rates robust, and aggressive prod./AI innovation—esp. "Sous Chef" GPT—supporting durable, LT margin expansion. Disciplined cap. allocation & TAM expansion affirmed; further net add growth in 2025 signaled. Significant LT upside in both fintech & SaaS monetization. Macro & supply chain risks well managed; overall tone & pipeline visibility strongly bullish for continued outperformance.

1. Profitability & Growth Trajectory

• Q2 GP +31% YoY; mid-term margin targets (30-35%) in sight.
• ARR add >$400mn/yr (TTM); core biz funds expansion into new verticals.
  • CEO Aman Narang: "We are setting foundations for longer term durable growth."
• Record Q2 net adds: 8.5k locations. Rep productivity YoY up; "more net adds in 2025 than 2024" expected—extends IPO record.
  • CFO Elena Castaneda Gomez: "Momentum...gives us confidence we’ll add more net adds in 2025 than 2024."
• Unit econ. remain strong in both established & new verticals.

2. Core US SMB/Mid-market Restaurant Biz

• Growing share in dense, under-penetrated mkts via added rep capacity & increased mktg.
  • In mature flywheel mkts (e.g., Austin), 70%+ of new restaurants adopt TOST.
  • Reps, mktg deliver "better conversion & productivity."
• No TAM exhaustion concerns: US addressable base at ~600k restaurants.
• Adjacency prods (e.g., payroll, scheduling, AI-driven bookkeeping) drive ARPU & retention.
  • Do-it-with-me/for-me svc models in dev. for non-tech-savvy SMBs.

3. Enterprise Segment (e.g., Dine Brands, Marriott)

• Enterprise is a "multi-yr journey"—innovative capabilities winning blue-chip logos.
  • "As we've invested in enterprise capability, it's given us conviction we can win in the market—deals like Dine Brands and Marriott evidence that."
• Visibility & Pipeline: Large deals have 18-24mo onboarding, providing LT recurring ARR visibility.
  • Deals drive "significant" ARR; LTV/CAC attractive.
• Pipeline growing as customer refs/brand awareness increases; "being pulled into deals" previously not feasible.