Toast posted a $6.5 billion revenue run-rate growing 22% year-over-year while turning GAAP profitable. Net income more than doubled to $126 million. The restaurant POS and payments company added 7,000 locations in Q1, ending at 171,000 total.
Software margins crossed 80%, model got real leverage
SaaS gross margin hit 81% for the first time, up 300 basis points year-over-year. Free cash flow reached $115 million, up from $69 million. Operating margin expanded to 21% non-GAAP. For years the knock was margins, payments drag the model down, hardware loses money. The numbers say otherwise now.
Toast crossed 1% monetisation of payment volume for the first time. They processed $51.3 billion in gross payment volume. Payments take rate sits at 51 basis points, fintech at 61 basis points. When you own the system of record for a restaurant, you layer on payments, then capital, then more software. Each layer lifts your take rate.
Enterprise bookings in one quarter beat prior year's total count
Toast built the business on independent restaurants. The enterprise play is working. Q1 bookings for new enterprise locations exceeded the entire prior year's customer count. Recent wins include Applebee's, Alinea, Preferred Hotels. They are also pushing into retail, specifically targeting 20,000 independent grocers representing $250 billion in sales.
AI agents shipping, not roadmap
40,000 locations use Toast IQ weekly. That is one in four of their 171,000 total base actively using the AI analytics and agent platform. The first agent, Toast IQ Grow, handles restaurant marketing automation and campaign management.
The structural advantage: all the data already lives inside Toast. Guest orders, visit patterns, labour costs, inventory, performance metrics. They have been collecting it for over a decade. Competitors need to integrate, clean, and convince customers to share data. Toast already has it.
Worth noting: this is a payments-heavy business with an attached SaaS layer, not pure software. Payments take rate is 51 basis points. Software growing 26% while the overall business grows 22% means the mix is shifting, but slowly. Still, $2.2 billion in software revenue at 80%+ margins funds a lot of product development.
For sales teams in vertical SaaS: Toast proves the model works at scale. Own the workflow, add payments, layer fintech, ship AI agents that use the data you already collect. They are not slowing down at $6.5 billion. The playbook is clear.