You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements, and the related notes that are included elsewhere in this Quarterly Report on Form 10-Q, and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Special Note Regarding Forward-Looking Statements” and Item 1A. Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and in this Quarterly Report on Form 10-Q, if applicable. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Overview Toast is a global technology platform built for restaurant and retail businesses. From the busiest local restaurants and shops to large hospitality brands, Toast helps owners and operators manage their businesses more efficiently, drive guest demand, and build lasting success. Toast integrates software, agentic AI, payments, financial technology solutions, and hardware with a broad partner ecosystem. Powering billions of purchases throughout local commerce, Toast delivers the precision and innovation required for modern restaurant and retail environments. We define a live location, or Location, as a unique location that has used Toast Point of Sale, or POS, to record transaction volumes above a minimum threshold, and has not been marked as a churned location as of the date of determination. A Location can use Toast payment services, which we refer to as a Toast Processing Location, or for select enterprise customers, not use Toast’s payment services, which we refer to as a Non-Toast Processing Location. Customers of legacy solutions provided by companies that we have acquired that do not use Toast POS, are not included in our Location count. As of June 30, 2026, Toast served approximately 180,000 Locations, up 22% compared to one year ago, and processed $215 billion in gross payment volume over the trailing 12 months. Seasonality and Other Factors We experience seasonality in our financial technology solutions revenue, which is largely driven by the level of Gross Payment Volume, or GPV, processed through our platform. Moreover, our performance may be impacted by global financial, economic, and political events. For example, customers typically have greater sales during the warmer months, though this effect varies regionally, and customer sales can be impacted by seasonal needs of our customers (which may also impact the total number of Toast Processing Locations in such a period that contributes to our GPV). As a result, our financial technology solutions revenue per Toast Processing Location has historically been stronger in the second and third quarters. We believe that financial technology solutions revenue from both existing and potential future products will continue to represent a significant proportion of our overall revenue mix, and seasonality will continue to impact our results of operations. Our performance may also be impacted by geopolitical events, such as tariffs, which may influence consumer spending or restaurant operations. There is uncertainty as to when specific tariffs may go into effect and the impact higher tariffs may have on consumer demand or on our business. For further discussion of such potential impacts, see Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. 16 Table of Contents Key Business Metrics We use the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions: Three Months Ended June 30, Six Months Ended June 30, (dollars in billions) 2026 2025 % Growth 2026 2025 % Growth Gross Payment Volume (GPV) $ 60.7 $ 49.9 22 % $ 112.0 $ 92.1 22 % As of June 30, (dollars in millions) 2026 2025 % Growth Annualized Recurring Run-Rate (ARR) $ 2,409 $ 1,928 25 % Gross Payment Volume (GPV) Gross Payment Volume represents the sum of total dollars processed through the Toast payments platform across Toast Processing Locations in a given period. GPV is a key measure of the scale of our platform, which in turn drives our financial performance. As our customers generate more sales and therefore more GPV, we generally see higher financial technology solutions revenue. Annualized Recurring Run-Rate (ARR) We monitor Annualized Recurring Run-Rate as a key operational measure of the scale of our subscription and payment processing services for both new and existing customers. To calculate this metric, we first calculate recurring run-rate on a monthly basis. Monthly Recurring Run-Rate, or MRR, is measured on the final day of each month as the sum of (i) our monthly billings of subscription services fees, which we refer to as the subscription component of MRR, and (ii) our in-month adjusted payments services fees, exclusive of estimated transaction-based costs, which we refer to as the payments component of MRR. MRR does not include fees derived from Toast Capital or related costs. MRR is also not burdened by the impact of SaaS credits offered. The MRR calculation includes all locations on the Toast platform and locations on legacy solutions, which have a negligible impact on ARR. ARR is determined by taking the sum of (i) twelve times the subscription component of MRR and (ii) four times the trailing-three-month cumulative payments component of MRR. We believe this approach provides an indication of our scale, while also controlling for short-term fluctuations in payments volume. Our ARR may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with our platform, pricing, competitive offerings, economic conditions, or overall changes in our customers’ and their guests’ spending levels. ARR is an operational measure, does not reflect our revenue or gross profit determined in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, and should be viewed independently of, and not combined with or substituted for, our revenue, gross profit, and other financial information determined in accordance with GAAP. Further, ARR is not a forecast of future revenue and investors should not place undue reliance on ARR as an indicator of our future or expected results. 17 Table of Contents Results of Operations Revenue Three Months Ended June 30, Change Six Months Ended June 30, Change (dollars in millions) 2026 2025 Amount % 2026 2025 Amount % Subscription services $ 290 $ 227 $ 63 28 % $ 558 $ 436 $ 122 28 % Financial technology solutions 1,570 1,276 294 23 % 2,893 2,358 535 23 % Hardware and professional services 48 47 1 2 % 87 93 (6) (6) % Total revenue $ 1,908 $ 1,550 $ 358 23 % $ 3,538 $ 2,887 $ 651 23 % Total revenue increased by 23% for the three and six months ended June 30, 2026, compared to the same periods in 2025. This growth was primarily driven by increases in financial technology solutions and subscription services revenue, attributable to a higher number of Locations on the Toast platform and continued product adoption. Costs of Revenue Three Months Ended June 30, Change Six Months Ended June 30, Change (dollars in millions) 2026 2025 Amount % 2026 2025 Amount % Subscription services $ 64 $ 64 $ — — % $ 124 $ 130 $ (6) (5) % Financial technology solutions 1,211 992 219 22 % 2,222 1,823 399 22 % Hardware and professional services 116 101 15 15 % 227 194 33 17 % Amortization of acquired intangible assets 1 1 — — % 2 2 — — % Total costs of revenue $ 1,392 $ 1,158 $ 234 20 % $ 2,575 $ 2,149 $ 426 20 % Total costs of revenue increased by 20% for the three and six months ended June 30, 2026, compared to the same periods in 2025. The increase was primarily driven by higher financial technology solutions costs associated with increased gross payment volume, offset by a one-time benefit of approximately $10 million related to tariff refunds. Operating Expenses Three Months Ended June 30, Change Six Months Ended June 30, Change (dollars in millions) 2026 2025 Amount % 2026 2025 Amount % Sales and marketing $ 166 $ 141 $ 25 18 % $ 322 $ 274 $ 48 18 % Research and development 109 91 18 20 % 206 175 31 18 % General and administrative 89 79 10 13 % 173 158 15 9 % Restructuring expenses — 1 (1) (100) % — 8 (8) (100) % Total operating expenses $ 364 $ 312 $ 52 17 % $ 701 $ 615 $ 86 14 % Total operating expenses increased by 17% and 14%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. This increase was primarily driven by higher employee-related costs. Non-GAAP Financial Measures We use certain non-GAAP financial measures described below to supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP and to understand and 18 Table of Contents evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered substitutes for, or superior to, the financial information prepared and presented in accordance with GAAP. We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP metrics to provide investors insight into the information used by our management to evaluate our business and financial performance. We believe that these measures provide investors increased comparability of our core financial performance over multiple periods with other companies in our industry. Net Income (Loss) (GAAP) and Adjusted EBITDA (Non-GAAP) Adjusted EBITDA is defined as net income (loss), adjusted to exclude stock-based compensation expense and related payroll tax expense, depreciation and amortization expense, interest income, net, income taxes and certain other items that are not considered to reflect our operating activities and performance within the ordinary course of business, such as restructuring expenses, acquisition expenses, fair value adjustments on warrant liabilities, gain on warrant extinguishments, expenses related to early termination of leases (which includes associated asset impairments), and stock-based charitable contribution expense, as applicable. We have provided below a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to Adjusted EBITDA. We believe Adjusted EBITDA is useful for investors in comparing our financial performance to other companies and from period to period. Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as depreciation and amortization, interest expense, and interest income, which can vary substantially from company to company depending on their financing and capital structures and the method by which their assets were acquired. In addition, Adjusted EBITDA eliminates the impact of certain items that may obscure trends in the underlying performance of our business. Adjusted EBITDA also has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. The expenses and other items that are excluded from the calculation of Adjusted EBITDA may differ from the expenses and other items that other companies may exclude from Adjusted EBITDA when they report their financial results. The following table reflects the reconciliation of net income to Adjusted EBITDA for each of the periods presented: Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Net income $ 154 $ 80 $ 280 $ 136 Stock-based compensation expense and related payroll tax 58 64 116 128 Depreciation and amortization 11 16 22 35 Interest income, net (11) (11) (24) (23) Change in fair value of warrant liability 1 8 (7) 5 Restructuring expenses(1) — 1 — 8 Income tax expense 8 3 13 5 Adjusted EBITDA $ 221 $ 161 $ 400 $ 294 (1) Restructuring expenses for the three and six months ended June 30, 2025 include $1 million and $5 million, respectively, of severance benefits and $— million and $3 million, respectively of stock-based compensation expense. 19 Table of Contents Subscription Services and Financial Technology Solutions Gross Profit (GAAP) and Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit is defined as subscription services gross profit and financial technology solutions gross profit, adjusted to exclude stock-based compensation expense and related payroll tax expense, and depreciation and amortization expense. We believe this non-GAAP measure is useful to view the resulting figures excluding the aforementioned non-cash charges because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and such amounts vary substantially from company to company depending on their financing and capital structures and the method by which their assets were acquired. We have provided below a reconciliation of Subscription Services and Financial Technology Solutions Gross Profit, the most directly comparable GAAP financial measure, to Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit. Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Revenue: Subscription services $ 290 $ 227 $ 558 $ 436 Financial technology solutions 1,570 1,276 2,893 2,358 Costs of Revenue: Subscription services 64 64 124 130 Financial technology solutions 1,211 992 2,222 1,823 Subscription services and financial technology solutions gross profit (GAAP) $ 585 $ 447 $ 1,105 $ 841 Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Subscription services and financial technology solutions gross profit (GAAP) $ 585 $ 447 $ 1,105 $ 841 Stock-based compensation expense and related payroll tax 3 4 6 9 Depreciation and amortization 7 13 13 29 Non-GAAP subscription services and financial technology solutions gross profit $ 595 $ 464 $ 1,124 $ 879 Net Cash Provided by Operating Activities (GAAP) and Free Cash Flow (Non-GAAP) Free cash flow is defined as net cash provided by operating activities reduced by purchases of property and equipment and capitalization of internal-use software costs (collectively referred to as capital expenditures). We believe that free cash flow is a meaningful indicator of our sources of liquidity and capital requirements that provides information to management and investors in evaluating the cash flow trends of our business. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Other companies may calculate free cash flow or similarly titled non-GAAP measures differently, which could reduce the usefulness of free cash flow as a tool for comparison. In addition, free cash flow does not reflect mandatory debt service and other non-discretionary expenditures that are required to be made under contractual commitments and does not represent the total increase or decrease in our cash balance for any given period. 20 Table of Contents The following table presents a reconciliation of net cash provided by operating activities to free cash flow for each of the periods presented: Six Months Ended June 30, (in millions) 2026 2025 Net cash provided by operating activities $ 276 $ 302 Capital expenditures (31) (25) Free cash flow $ 245 $ 277 Liquidity and Capital Resources Our principal sources of liquidity are cash and cash equivalents and marketable securities. We also have access to external sources of liquidity through a credit facility as further described below. The following tables present selected financial information related to our liquidity: (in millions) June 30, 2026 (1) December 31, 2025 (2) Cash and cash equivalents $ 1,015 $ 1,353 Marketable securities 698 638 Cash and cash equivalents and marketable securities $ 1,713 $ 1,991 Available credit facility $ 347 $ 347 Total $ 2,060 $ 2,338 (1) Excludes $216 million of cash held on behalf of customers and $73 million of restricted cash. (2) Excludes $159 million of cash held on behalf of customers and $71 million of restricted cash. Six Months Ended June 30, (in millions) 2026 2025 Net cash provided by operating activities $ 276 $ 302 Net cash (used in) investing activities (142) (16) Net cash provided (used in) by financing activities (412) 51 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1) 3 Net increase (decrease) in cash, cash equivalents, cash held on behalf of customers and restricted cash $ (279) $ 340 Cash, cash equivalents and marketable securities The net decrease in cash, cash equivalents and marketable securities in the six months ended June 30, 2026 was primarily driven by cash used in financing activities of $412 million and cash used in investing activities of $142 million, partially offset by cash provided by operating activities of $274 million (which excludes changes in the balance of restricted cash). The decrease in net cash provided by operating activities during the six months ended June 30, 2026, compared to the same period in 2025, was driven by changes in net working capital, primarily attributable to higher inventory purchases. This increase in cash outflows was partially offset by higher net income, which increased from $136 million during the six months ended June 30, 2025, to $280 million for the same period in 2026. The increase in net cash used in investing activities during the six months ended June 30, 2026, compared to the same period in 2025, was primarily driven by higher net purchases of marketable securities and loans held for investment, partially offset by proceeds from repayment of loans held for investment. The increase in net cash used in financing activities during the six months ended June 30, 2026, compared to the same period in 2025, was primarily driven by an increase in cash paid to repurchase our shares. 21 Table of Contents We do not anticipate any material changes, or material changes in trends, related to our net working capital requirements, liquidity or cash flows in the near term, other than for items disclosed within this Quarterly Report on Form 10-Q and our 2025 Annual Report on Form 10-K. Debt 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 June 30, 2026. As of June 30, 2026, there were no borrowings outstanding on the 2021 Facility and outstanding letters of credit totaled $3 million. As of June 30, 2026, our total available borrowing capacity under the 2021 Facility was $347 million. Share Repurchase Program In February 2024, we announced the authorization of a share repurchase program for the repurchase of shares of our Class A common stock, par value $0.000001 per share, in an aggregate amount of up to $250 million. On February 10, 2026, our board of directors approved an increase of $500 million to our previously authorized share repurchase program for the repurchase of shares of our Class A common stock. The repurchase program has no expiration date, does not obligate us to acquire any particular amount of our Class A common stock, and 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. During the three and six months ended June 30, 2026, we repurchased $159 million and $486 million in Class A common stock, respectively. As of June 30, 2026, approximately $100 million remained authorized for repurchase under our share repurchase program. Other Capital Requirements Expected working and other capital requirements are described in our 2025 Annual Report on Form 10-K in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” At June 30, 2026, other than for the changes disclosed in the “Notes to Condensed Consolidated Financial Statements” and “Liquidity and Capital Resources” in this Quarterly Report, there have been no other material changes to our expected working and other capital requirements described in our 2025 Annual Report on Form 10-K, and we believe that our existing cash and cash equivalents, along with our available borrowing capacity under our credit facility, will be sufficient to meet our working capital needs for at least the next 12 months, including planned capital expenditures, strategic transactions, and investment commitments that we may enter into from time to time.