Toast’s latest earnings suggest the restaurant technology company is entering a new phase. For years, the company focused on adding more restaurants to its platform and growing payments volume. This quarter, management made a different case: Toast believes artificial intelligence (AI) can deepen customer relationships, unlock new revenue streams and make its software indispensable to restaurant operators. Backed by record customer additions and stronger profitability, the company argued that AI is becoming the next engine of growth rather than simply another product feature.
That message framed Toast’s second quarter earnings call after the company reported record net location growth and another quarter of double-digit gains across its core business. Toast CEO Aman Narang pointed to the company’s expanding customer base while emphasizing that AI is moving beyond experimentation into tools that restaurants are already paying to use.
“We had a record 9,500 net location adds in the quarter, 1,000 more than our previous high watermark,” Narang said during the call. “Our core business continues to scale. Our new markets are growing rapidly, and we’re reinventing our platform with AI to agents and software, working together to drive real business outcomes for customers.”
Narang added that Toast IQ Grow, the company’s AI-powered marketing product, has become the fastest-growing offering in Toast’s history. He said its early success strengthens management’s confidence that AI can increase the amount customers spend on the platform over time while helping restaurants automate work that many still outsource.
The company illustrated that strategy with an example of a Louisiana restaurant, Spirits Food & Friends, that consolidated multiple business systems onto Toast before adopting Toast IQ Grow. According to management, the restaurant reduced its outside marketing costs by 70% while generating more than $100,000 in marketing-attributed sales in less than two months. Toast said its access to customer transaction data gives it an advantage because it can directly connect marketing campaigns with completed orders and use those insights to personalize future promotions.
Looking ahead, Toast executives said their priorities remain consistent: expand what Toast can do through AI, enter additional markets and use AI internally to improve how the company operates. Narang reiterated his belief that those initiatives position Toast to continue scaling toward what he described as a $10 billion annual recurring revenue opportunity over the long term.
For Q3, Toast forecast non-GAAP subscription services and financial technology gross profit of $615 million to $625 million and adjusted EBITDA of $210 million to $220 million, signaling confidence that its momentum will continue into the second half of the year.
