Good afternoon. My name is Danielle, and I will be your conference operator today. At this time, I would like to welcome everyone to Toast's Third Quarter 2025 Earnings Conference Call. Today's call will be 45 minutes. I'll now turn the call over to Michael Senno, Senior Vice President of Finance. You may begin your conference.

Thank you. Welcome to Toast earnings conference call for the third quarter ended September 30, 2025. On today's call are CEO, Aman Narang; and CFO, Elena Gomez; will open with prepared remarks, which will be followed by our Q&A session. Before we start, I'd like to draw your attention to the safe harbor statement included in today's press release. During this call, we'll make statements related to our business that may be considered forward-looking within the meaning of the Securities Act and the Exchange Act. All statements other than statements of historical facts are forward-looking statements including those regarding management's expectations of future financial and operational performance and operational expenditures, location growth, future profitability and margin outlook, business and investment strategy, expected growth and business outlook, including our financial guidance for the fourth quarter and full year 2025. Forward-looking statements reflect our views only as of today. And except as required by law, we undertake no obligation to update or revise these forward-looking statements. Please refer to the cautionary language in today's press release and our SEC filings for a discussion of the risks and uncertainty that could cause actual results to differ materially from our expectations. During this call, we will discuss certain non-GAAP financial measures, including, but not limited to, non-GAAP subscription services gross profit and non-GAAP Financial Technology Solutions gross profit, which we refer to collectively as our recurring gross profit streams. These are the basis for our top line guidance. These non-GAAP measures are not intended to be a substitute for our GAAP results. Please refer to the earnings release and SEC filings for detailed reconciliations of these non-GAAP measures to the most comparable GAAP measures. Unless otherwise stated, all references on this call to cost of revenue, gross profit and gross margin, sales and marketing expense, research and development expense and general and administrative expense are on a non-GAAP basis. Finally, the press release can be found on the Investor Relations website at investors.toasttab.com. After the call, a replay will be available on our website. And with that, let me turn the call over to Aman.

Thanks, Michael, and thank you, everybody, for joining us this afternoon. We delivered another great quarter with 34% top line growth, 35% margins and continued year-over-year growth in net location adds. Our momentum and execution thus far have us well positioned to deliver a strong 2025. We surpassed $2 billion in ARR for the first time. And while I'm proud of this milestone, I'm even more energized about where we're headed. We are an industry leader here in the U.S. in our core business with a clear path to doubling our market share as we scale locations and deliver customer-focused innovation for restaurants. This success enables us to invest in our fast-growing new market segments. We will continue to expand our TAM into new verticals and new geographies while increasing the capabilities we provide for existing customers. This growth mindset is key to building a durable growth company that can scale to $5 billion and $10 billion in ARR and beyond. I want to thank the entire Toast team for an exceptional year so far and I'm confident in our collective ability to keep raising the bar as we grow from here. This quarter, we secured numerous marquee wins, including large-scale operators such as Nordstrom, TGI Fridays and Everbowl, brands that are turning to Toast to power their next stage of growth. I’m also excited to announce an expanded partnership with Uber, making it easier for restaurants to drive guest demand and better manage off-premise sales. We also plan to support each other in the field with joint go-to-market efforts both here in the U.S. as well as in our international markets. At the start of the year, we laid out 4 key priorities: number one, scale locations and market share in our core U.S. SMB business; two, demonstrate that our new markets can be material drivers of growth; three, increase customer adoption of our broad platform and drive differentiation through data and AI; and lastly, continue to invest with discipline in our most important priorities while expanding margins over time. Starting with number one, scaling locations in our U.S. SMB and mid-market restaurant business. Today, about 95% of our ARR comes from our core U.S. SMB and mid-market restaurant customers led by our best-in-class restaurant platform and strong go-to-market execution. We win the majority of decisions we're in, and our win rates against every major competitor are up year-over-year. Net adds in our core remained in the same range from a year ago, and this momentum puts us on a clear path to doubling our share of locations and GPV over time. Many of the best restaurants in the country run on Toast, from new concepts to award-winning institutions. For example, 14 of Bon Appetit 20 Best New restaurants for 2025 chose Toast, and more than half of all Michelin-starred restaurants in the U.S. are powered by our platform as well. A great example is Canlis, a Seattle landmark redefining hospitality for over 70 years. After struggling with reliability and uptime, they've turned to Toast for our simplicity, reliability and hands-on support. They love that they no longer need to think about the technology to deliver one of the best dining experiences in the country. In their words, Toast works so well, we don't even have to think about it. We're also seeing strong traction in mid-market with a steady stream of wins each quarter. As I shared earlier, Nordstrom is rolling out Toast at nearly 200 dining locations nationwide, unifying multiple concepts on one platform. TGI Fridays is moving its U.S. footprint to Toast, simplifying operations across its restaurant, and Everbowl, a fast-growing 100-plus unit brand chose Toast for our ability to deliver speed and simplicity at scale. These wins highlight the versatility of our platform to serve restaurants of every type and size. Our platform only grows stronger with the addition of new AI-driven capabilities that I'll touch on in a moment. Moving on to our second priority, demonstrating that the new market segments can be material drivers of growth. We continue to build momentum in international markets as we expand our platform and establish Toast brand globally. Large well-respected multi-concept hospitality groups such as Eclective in Ireland, Caravan Group in the U.K., and Happy Belly Group in Canada have chosen Toast because the CS is a best-in-class solution that can help them run a better business. We're rolling out new integrations, including with Uber, improving our online ordering and inventory management solutions and continuing to regionalize key capabilities as we build towards the best global platform for restaurants. International SaaS ARPU is up 20% year-over-year. And we're confident that these investments will continue to drive both ARPU and win rates over time. In Food and Beverage retail, we continue to gain traction each quarter. We recently went live with Tri-County Meat Markets in Texas, DeLallo Italian Market in Pennsylvania, and Nature's Best in Illinois. They all came to Toast for a modern all-in-one platform, which allows them to manage everything from thousands of inventory items to efficient checkout lanes at scale. We're expanding our sales team and deepening our retail offering with features and integrations to support our vertical strategy. It's exciting to see our customers leverage parts of our restaurant platform, including our kitchen display screens, to power fulfillment in grocery stores as well as bottle shops. Lastly, in enterprise, our continued investment in the upmarket and multi-location management capabilities is paying off. We landed our two largest deals ever this year, and our pipeline has never been stronger. Across all these markets, our momentum is accelerating, and we're confident in our path to become a market leader in each of these areas and building them into meaningful growth engines for Toast. Over the long term, we believe these new TAMs have the potential to surpass our core business and enable us to scale from 156,000 locations today to 500,000 locations and beyond. Next, our third priority is expanding our platform adoption and driving differentiation through data and AI. Toast was built by listening to customers, taking real problems from the restaurant floor and turning them into products that make a difference in their day-to-day. This customer-centric approach powers our next wave of innovation where our unique scale and data are driving new AI products like Toast IQ and Toast Advertising. We recently evolved into Toast IQ, a true AI assistant for restaurant operators. At Amici, a casual pizza and wing spot in Georgia, the team uses Toast IQ daily to analyze sales, adjust menus and make faster decisions. As an example, it flagged a drink promotion costing them up to $700 a day and helped them fix it and build a happy hour menu that is even more effective. As they put it, Toast IQ feels like having a personal assistant. That's the goal. Toast IQ gives fast answers, proactive insights, and direct actions to operators. Adoption has been strong, and since rolling it out in early October, more than 25,000 restaurants have used Toast IQ over 235,000 times so far. Our mission is to help our customers drive real results by making Toast IQ the intelligence platform of the future. The product gets better every day as we expand the data sources and deepen integrations across the platform. As an example, we're also partnering with brands like The Coca-Cola Company to help restaurants increase drink sales through data-driven recommendations. Just one example of the exciting new opportunities this product unlocks. Our marketing and advertising tools are another way we're helping restaurants grow. We started with email and SMS, then layered in AI to automate and personalize outreach. With Toast Advertising, operators can now launch campaigns across Google and Meta in just minutes with AI-powered recommendations and clear ROI reporting. It is driving real impact. During the peak season, Pizza by the Sea in Florida estimated $400,000 in sales across its four locations, which was attributed to Toast advertising campaigns, a more than 20 times return on ad spend. Together, Toast IQ and Toast Advertising are just the start of how we're combining AI, data, and deep restaurant expertise to make our platform smarter, more powerful, and indispensable to restaurants everywhere. Lastly, we are continuing to invest with discipline while expanding margins. Our goal is to maximize long-term shareholder value by building a durable growth business that compounds ARR over time. It took us more than 10 years to reach our first $1 billion in ARR, and just two years to double it. We are a leader in our core U.S. SMB business and have conviction that we can replicate that success across our new TAMs by using the same vertical strategy that has worked so well in our core across new verticals, new geographies, and new segments. With strong momentum across all areas, we're on track to increase net adds in 2025 as well as in 2026. Enterprise, international, and food and beverage retail are collectively on pace to reach $100 million in ARR this year, and we see the potential for each of them to grow to $1 billion in ARR over time. As we scale, we're also carefully managing our margins by prioritizing what's most important to build a long-term growth business. Our core business already operates at our target 40% EBITDA margin that we laid out at our Investor Day, giving us the flexibility to invest in new growth engines. Given the size of the opportunity, our growing conviction and leadership across new markets and our line of sight to achieving strong unit economics at scale, we're investing to accelerate growth. We are executing against what we laid out at our Investor Day last year. We have momentum in our core, traction across new markets, expanding platform adoption, and strong execution across the business. I've never been more confident in our ability to create value for our customers and drive long-term shareholder value. To wrap up, I want to thank our entire team, our customers, as well as our investors. The progress we're making this year is a direct result of our team's hard work and dedication, our customers' trust, and of course, the support of all of our investors. Thank you. And with that, I'll turn the call over to Elena.

Thank you, Aman, and to everyone for joining us today. To start, I would also like to thank our team for another strong quarter, which came in better than our expectations. We crossed $2 billion in ARR in the third quarter, just two years after hitting $1 billion. Doubling our ARR underscores the strength and diversity of our business model with both payments and SaaS ARR each exceeding $1 billion for the first time. We're proud of the milestone and sustaining strong ARR growth at scale, though we're far from done. Our management team wakes up every day with the mindset of getting to $10 billion in ARR over the next decade. Starting with our core business, getting to this point took years of investment to establish the breadth of our product and go-to-market footprint. The result of these investments and our relentless focus on execution is a business with 40% margins that continues to scale. While our core business is already operating at our long-term margin profile, the incremental margins are tracking higher, even as we continue to invest with the goal of doubling our core market share and sustaining healthy ARR growth. In our new growth areas, we're employing the same proactive disciplined approach to capital allocation with growing evidence and conviction that each of these three new areas can be material businesses long-term. We're leaning into upfront investments to build the product capabilities and go-to-market footprint to scale into a market leader in each area. We're confident we can scale efficiently and drive meaningful contributions to growth over time. Turning to our quarterly results, ARR grew 30%. Total fintech and subscription gross profit, our recurring gross profit streams increased 34% year-over-year with a total take rate of 98 basis points across SaaS and fintech. That's up 7 basis points from a year ago as we steadily increase adoption, reflecting the growing value our platform provides our customers. Adjusted EBITDA was $176 million for the quarter, with margins expanding 5 percentage points year-over-year to 35%. GAAP operating income was $84 million. We are consistently growing net adds year-over-year every quarter. In Q3, we added approximately 7,500 net locations, ending the quarter with 156,000 total locations, up 23% from a year ago. We remain on track for more net adds in 2025 versus 2024, focusing on executing the same strategy, sustaining consistent market share gains in our core combined with growing traction in new TAMs, which sets us up well to continue to grow net adds in 2026. SaaS ARR grew 28% year-over-year, driven by location growth and a mid-single-digit increase in SaaS ARPU on an ARR basis. Subscription revenue increased 29% and subscription gross profit grew 32%. SaaS gross margin was 79%, up from 77% a year ago due to continued SaaS COGS optimization. Payments ARR increased 31%, and fintech gross profit grew 35% in the third quarter versus a year ago. GPV was $52 billion, growing 24% year-over-year. GPV per location was up slightly versus last year due to stronger same-store sales trends in the summer. Fintech net take rate was 61 basis points, and payments net take rate was 49 basis points. Payments take rate increased 4 basis points from a year ago, benefiting from the same drivers we've seen all year: ongoing cost optimization efforts, small targeted pricing moves, and new products, including surcharging. Non-payments fintech solutions led by Toast Capital contributed $58 million in gross profit and 11 basis points in take rate. We continue to enhance our underwriting process, which unlocked incremental origination volume in the quarter. Overall, the program remains healthy, and defaults remain in line with our expectations. Excluding $31 million of bad debt and credit-related expenses, operating expenses increased 17% in Q3. We are investing in our highest priority areas to drive durable growth while driving efficiencies throughout the P&L. Sales and marketing expenses grew 23%, reflecting our healthy location growth and scaling our international and retail go-to-market presence. This added sales capacity positions us to gain market share faster and scale growth in these new TAMs. R&D expenses grew 12%. Innovations like Toast IQ and Advertising are great examples of further differentiation of our core product. We're also adding capabilities to expand our product market fit across new customer segments and seeding longer-term Horizon 3 opportunities that have the potential to become new growth vectors. Hardware and professional services gross profit was negative 10% of our recurring gross profit streams. We are leaning into our customer acquisition momentum to establish market share in new towns and continue to drive growth in the core. We're also absorbing higher tariff costs while staying within our guardrails to maintain healthy payback periods as we scale. Adjusted EBITDA was $176 million, a 35% margin. Our Q3 results reflect robust top line growth, driven in part by better-than-expected GPV as well as our continued focus on driving efficiencies throughout the P&L. GAAP operating income was $84 million, up from $34 million a year ago. That's both from the strength in adjusted EBITDA and our disciplined approach to managing stock-based compensation. Stock-based comp as a percentage of recurring gross profit was 14% in Q3, down 3 percentage points versus a year ago. Free cash flow grew to $153 million in Q3 and $564 million on a trailing 12-month basis, nearly 100% conversion from adjusted EBITDA. Moving to capital allocation, year-to-date through the third quarter, we repurchased 1.5 million shares or $54 million. We will continue to be opportunistic based on market conditions and act judiciously in support of building long-term shareholder value. Now turning to guidance. For the fourth quarter, we expect total fintech and subscription gross profit to grow in the range of 22% to 25% year-over-year, and adjusted EBITDA to be $140 million to $150 million. On the back of our strong year-to-date results and momentum heading into Q4, we raised our full year outlook. At the midpoint, we now expect 32% growth in fintech and subscription gross profit and $615 million in adjusted EBITDA. I'm extremely proud of the financial profile we've built over the last few years. We've doubled ARR while investing in the next wave of businesses to sustain that growth. Our ability to drive strong growth and expand adjusted EBITDA margins at a healthy rate demonstrates the power and leverage of our business model, which is also enabling us to invest in Horizon 2 and 3 growth areas. We take a deliberate gated approach to investing across our core and Horizon 2 and 3 growth areas. Our new TAM started as a small Horizon 3 bet that we gradually scaled as we gained momentum and saw initial product market fit. We have enough signal across each new TAM that we see a path to market leadership and healthy unit economics at scale. We are investing into that potential to position ourselves for success and to drive long-term growth and shareholder value while gradually expanding margins over time. As Aman said, the strategy we laid out at Investor Day is working. We remain confident in our medium- and long-term targets. Specifically for 2026, at our multibillion-dollar scale, we will sustain growth over 20%, and our ambition is to exceed that. Our current expectation is that margins will be flat to slightly up year-over-year. That's underpinned by the strong core margin of 40% and conviction to invest behind our new TAMs. We are still in our 2026 planning cycle, and we'll provide an update in February when we issue guidance. Our commitment to disciplined capital allocation is unwavering. Our long-term margin target is within our control. We are choosing to reinvest in areas we have conviction can be meaningful long-term cash flow generators and add significant shareholder value. To close out, we had an excellent quarter, and I'm proud of our team for consistently delivering results that outperform our expectations. 2025 is on track to be another year of impressive top line growth and margin expansion. Our momentum in the core is strong, and with new TAM scaling quickly, we're confident Toast is in a position to compound our top line at a healthy rate for the next decade and drive long-term shareholder value. Now I will turn the call back over to the operator to begin Q&A.

Your first question comes from the line of Josh Baer from Morgan Stanley.

Congratulations on a strong quarter. I wanted to ask about GPV per location, which saw a slight increase year-over-year, outperforming expectations. I'm curious about how much of this was influenced by changes in customer mix, particularly with a lower concentration of customers in more challenging market segments, and how much can be attributed to Toast customers outperforming their peers. If that is the case, what kind of data are you examining? Is it mainly a selection bias regarding the customers you acquire, or is your technology actually driving increased sales?

Yes. Thanks for the question, Josh. We saw in Q3 and the summer that GPV per location exceeded expectations. As we look at October, I think it normalized a little bit. But overall, it's in line with what we expected. I think certainly, our platform is a big part of what we build to help restaurants run a more profitable and successful business. A lot of the investments we continue to make in handheld, for example, is an example of that to help restaurants run a better business. Same-store sales have been in a balanced place year-over-year, so nothing has dramatically changed.

Our next question comes from the line of Will Nance from Goldman Sachs.

I think, obviously, really nice results tonight. You talked about a clear path to doubling your market share in core SMB. There's been a really heightened focus on competition recently. Honestly, probably as a reaction to how much you yourselves have raised the bar on how to approach this market, pretty much every competitor has doubled down trying to catch up. Can you just speak to some of those competitive concerns? You mentioned win rates being up against peers. How are you thinking about the sustainability of your recent market share gains and maybe how long it takes to reach that goal of ultimately doubling your share in the core market?

Yes. Thanks for the question, Will. First of all, I just want to congratulate the team. We had a fantastic Q3 and a fantastic year so far. Team is performing well. If you look at our net adds, as I mentioned, they're up in Q3 and they're tracking to be up every quarter this year, which is a direct result of the execution of the team. Our win rates, as I mentioned, are up year-over-year against all major competitors, both in QSR and FSR. Our go-to-market team on the ground continues to execute at a high level. One of the things they emphasize is maximizing location growth, which is across our payments and SaaS revenue. They've got the tools across upfront fees and hardware and services to ensure they can take the location down and win because we've got this upsell engine to complement the new location team. Lastly, the most important underpinning of this growth is our core platform. We were the first ones to build a restaurant-focused platform that was purpose-built for this industry, and we continue to innovate and drive customer-focused innovation. Toast IQ is an excellent example of that, helping restaurants run a better business. Our aspiration is to build the best GPT interface for the restaurant industry. In terms of timing, you asked about timing, Will; our net adds this year in our core business are in about the same range as last year, showing you the market share gains we're achieving every year as we continue to grow and scale.

Our next question comes from Josh Baer from Morgan Stanley.

I think I already asked mine.

Your next question comes from Timothy Chiodo from UBS.

I want to shift gears a little bit to talk more about the opportunity that Toast has with consumers. Back when you had maybe 100,000 restaurants or so, some of the stuff was less applicable because the network wasn't quite as dense, but it's getting there, and you're on your way to being north of 200,000. I was wondering if you could talk about what that means in terms of an opportunity? You've got some pieces, right? Toast Tables, Toast Takeout, the Uber partnership, and much more; there could be gift cards. Just talk about what that dense network gives you as an advantage versus some of your competitors and what kind of products could come out of that.

Yes. That's a great question, Tim. If you look at our scale and the impact that's already having, you already see examples of that even beyond consumer. Just to zoom out for a second, you've got millions of restaurant employees using Toast, and when you walk into Toast restaurants, a consistent theme that I hear is that they love Toast, and they want to work at Toast-run restaurants. Another example is we launched about a year ago a benchmarking product to help restaurants with menus and pricing insights to run better businesses just off the menu data. There are many examples where our scale and our network effects are playing a role. In consumer, I woke up this morning and went to a restaurant locally in Lexington, Massachusetts and got a Revival Cafe. One of my favorite things about the app is you can order ahead and just pick it up and leave, similar to what Starbucks pioneered many years ago. We can do that across 100,000-plus Toast restaurants here in the U.S. People love that experience. In addition, we have a unique opportunity to bring diners into stores. Whether it's our partnership with Resy and Tock as part of the Amex partnership or with Toast Tables, the ability to get a table and sit down. One of the things we're looking at is the ability to walk out and leave at the end of the transaction because you've got a card on file. A significant opportunity exists in providing a better guest experience concerning bringing diners into the restaurant and then leaving the restaurant. Within the app, one feature that people appreciate is our ability to generate intelligent offers during slow periods, and the option to track all their loyalty in one place. I agree with you; there’s a lot of potential here given the density of restaurants we now have. The focus is on how to build the best in-store experience and digitize that experience for restaurants.

Your next question comes from Dan Dolev from Mizuho.

Great results. I wanted to ask about just the consumer in general, like the macro. There's been a lot of anxiety out there, and obviously, your results are looking great. Can you talk to us about what you’re seeing sort of in the quarter, but also more recently as we are in Q4? That would be fantastic.

Yes. Thanks for the question. The summer was strong. Q3 was strong year-over-year. What we saw in October on the consumer has normalized a little bit, but really within a narrow band and in line with what our expectations were. Our customers and our restaurants are performing well. One of the things we always look at is whether it's in boom markets or slower markets. We’ve studied previous recessions in '01 and '08, and what we've seen is that restaurants tend to be resilient. Our data show our customers are holding up really well.

The next question comes from Dominic Ball from Rothschild & Co Redburn.

Aman, just to start with, it's fantastic to hear that you guys are saying that Toast can double its market share in its core talent. It's amazing. With digital chits within Toast IQ, it looks like one of the best products from our perspective that you launched over the last five years. When we survey private full-service restaurant owners, the dream is really to understand their customer when they walk in. Because waiters and waitresses churn so much, it's challenging to do that, but this sort of product seems to be offering that. Can you share any case studies or early data points on how this has gone so far?

Yes. Thanks, Dominic. We're seeing lots of use cases across Toast IQ where customers attribute value to having their data drive value for them. Digital chits are a great example. In the past, if you're using a separate reservation system and a legacy point of sale, you might be printing that out on paper. But the ability to have that digitally on your handheld makes that experience more powerful because you can connect the guest experience to what's in the menu to drive upsell and create a more personalized experience right at the table. More broadly, within Toast IQ, we're seeing really high adoption of our back end because customers love that they can use more of a natural language interface, like a GPT interface they can utilize for support, make changes to their back end, whether it's adding specials or gaining insights about their business’s profitability and sales trends. There are many use cases within the Toast IQ umbrella. Digital chits are a good example, and I am really excited to see the progress and adoption so far and what the product can do for our customers.

Our next question comes from David Hynes from Canaccord Genuity.

Congrats on a great quarter. Aman, I wanted to ask how you saw the business perform during the AWS outage. Anecdotally, I talked to restaurants up here in the Boston area. It sounded like everyone kind of cut over to offline mode. It worked well. They were able to collect payment information. I assume they ran those later. I think they had to shut down online ordering, which I'm sure is factored into Elena's guidance for Q4. What did you hear about competitive disruptions? Is this a differentiating point for Toast? How did the business hold up during that period?

Yes. The business held up fine, precisely because we've spent the past decade building this platform for restaurants. One key requirement is if something goes down, whether it’s the Internet or AWS, our customers need to be able to operate within the restaurant. Customers were able to take orders, send their orders to kitchens, accept payments offline, and as the system came back, they were able to process those in offline mode. We see that the need to leverage these digital channels, whether it's our first-party channels or our partner ecosystem, has grown over the years. Overall, I think customers were able to work through it effectively, and I don't believe there was any meaningful impact in terms of guidance for Q4.

Our next question comes from Rayna Kumar from Oppenheimer.

Great results. It was good to see the total take rate up seven basis points from a year ago. I'm just wondering how sustainable an improving take rate is.

Yes. Thank you. I'm proud of the team here for their execution. The take rate was up; the core net take rate was up four basis points, and the total take rate was up about five basis points. These increases are the benefits of small targeted pricing moves and COGS optimization, which is a priority for that team. It’s also new products like surcharging that currently contribute a bit but can drive more meaningfully as we onboard more customers on that product. Zooming out, we have confidence in our ability to increase the take rate over time using the same levers: driving cost optimization on a per-transaction basis, more digital innovation, and scaling with our volume. We see this as an opportunity.

The next question comes from Jason Kupferberg from Wells Fargo.

I wanted to ask about recurring gross profit. You delivered about 1,000 basis points of upside on that metric in the quarter, a lot even by Toast standards. I think this was against the lapping effect of last year's accounting change. What kind of surprised you to the upside, GPV, Toast Capital, or other factors? Looking at typical Q4 seasonality on the recurring gross profit, it tends to be up modestly quarter-over-quarter versus Q3. If we look at the top end of the Q4 guidance, I think you'd be down a bit. Any call-outs there? You've had a record of outperforming, but I'm curious if there's anything else we might be missing on that front.

Thanks, Jason. You summarized it quite well. Our guidance for Q4 is a growth rate of 25% at the high end, and we always aim to do better. We take a balanced view of GPV due to macro dynamics. However, we saw strong GPV trends in the summer, along with a strong quarter from Toast Capital, which we expect to normalize in Q4. We are confident with the guidance we've provided.

Our next question comes from Stephen Sheldon from William Blair.

Great results. I wanted to follow up on a prior question on Toast IQ. Great to hear that over 25,000 locations have used it, which is a lot more than expected this early. I wanted an update on how we should think about the financial impact, including higher AI costs associated with hosting. With that kind of adoption, I assume that you're not selling it as a separate SKU. Am I right on that assumption? Do you plan to sell it separately in the future? Could that be beneficial for SaaS pricing increases or better product attach rates as we consider next year or two?

Yes. Great question, Stephen. Right now, the focus on Toast IQ is really on adoption and driving customer value. I’m really excited about the early adoption from customers and the value they're receiving. There are product-led growth opportunities to expand our platform. One area we’re investing in is our marketing platform, for instance. We started off with email and SMS, but now we’ve integrated AI-driven automation to personalize marketing campaigns because restaurant owners, particularly SMBs, don’t have much time to create these campaigns. You can imagine Agentic capabilities within Toast IQ to start recommending these campaigns during slower periods or at different times. Whether it’s on marketing or back-office functions, we see numerous opportunities to drive key Agentic use cases within Toast IQ. In terms of monetization, it's early, but one avenue we might explore is usage-based monetization, akin to GPT. The primary focus right now is ensuring adoption to drive growth.

Our next question comes from Samad Samana from Jefferies.

It's great to see the strong results. I'm focused here on pricing. First, was there some intention to test or target your website's pricing, fully realizing your public disclosure made? And then just comments on targeted fintech pricing moves you've made—how much of the back book have you managed to push price through? I appreciate your addressing pricing questions, as I believe it's a crucial focus for everyone.

Yes. Thanks, Samad, for the question. I'll start with the website, which was human error. We found and fixed it immediately. We do tests occasionally, but this was not a test. In that part of the website, it only gets about 1% of our bookings, so it was not material overall. We’ve corrected that and moved on. Regarding pricing, our philosophy remains unchanged. It's one growth lever, and we will continue to make targeted price changes, balancing them with market share potential. Gaining share is a priority, and we believe we can optimize pricing over time. We haven't disclosed how much of the back book we've managed to adjust, but we feel confident that, as long as we are providing value, we'll be able to drive prices over time in small targeted ways.

We will now take our last question from the line of Darrin Peller from Wolfe Research.

Just help us understand what gives you confidence in your ability to see increased net adds in 2026. How much will come from the TAM expansion areas driving growth versus the core business you've been adding well?

Yes. Sure, Darrin. If you look at the trend we've seen in the past year, our core net adds are in the same range as last year. Our record net adds every quarter this year have resulted from these new TAMs contributing more. We expect this trend to continue next year. We anticipate the core will maintain its performance based on the signals we're seeing, while these new TAMs will play a bigger role. The overlap between our core platform and these new TAMs is really exciting, which is why we've been able to grow this business to nearly $100 million in ARR just in a couple of years. This alignment will drive incremental net adds for our business next year.

This concludes today's conference call. Thank you all for joining.