Toast, Inc. Q1 FY2026 Earnings Call

Good afternoon. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to Toast First Quarter 2026 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 First Quarter 2026 Earnings Call. Toast's CEO, Aman Narang; and CFO, Elena Gomez, will open with prepared remarks, followed by Q&A. Before we start, I'd like to remind everyone that today's call may include forward-looking statements, which are subject to risks and uncertainties and reflect our views and assumptions only as of today. These forward-looking statements include expectations around financial and operational metrics, business and investment strategies and guidance. Actual results may vary significantly, and we expressly disclaim any obligation to update the forward-looking statements made today. For a detailed discussion of risks, please refer to the cautionary language in today's press release and our SEC filings. 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 our 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. With that, let me turn the call over to Aman.

Thanks, Michael, and thank you, everybody, for joining us today. 2026 is off to a strong start. In Q1, we grew recurring gross profit streams 27% and expanded GAAP operating income margins to 21%. We added 7,000 net locations and are broadening who we serve from local restaurants across the U.S. to enterprise chains, international markets and retail, by bringing our same playbook of depth and operational expertise that built our core business to each new market. I'm really proud of the Toast team. We are both delivering world-class results and reinventing ourselves at the same time, from how we build for, sell to and support our customers with AI as well as a series of AI investments across our platform to help our customers with the intelligence and the efficiency necessary to run a more successful and profitable business. Toast IQ is the foundation for our evolution from a software platform to an agent platform that can drive outcomes for our customers. And with the recent launch of Toast IQ Grow, which includes our first AI agent, we are already seeing this vision start to come to life. I'm excited to share more in a couple of minutes as we break down our priorities, but what's incredibly exciting is we are just scratching the surface of what's possible here. Our progress in each of these areas is shaping our revised set of priorities in 2026. Number one, expand what Toast has for customers, grow from a software to an agentic platform that can do work and deliver outcomes for our customers. Number two, expand the markets we serve. And number three, reinvent the organization with AI and dramatically accelerate productivity. We are incredibly well positioned as a vertically integrated platform across software, hardware and fintech. We are a foundational technology partner for our customers, and they are looking to us to help them take advantage of the opportunities AI creates. We will lean into this opportunity while continuing to execute our strategy of expanding to new markets to scale this business to $5 billion and $10 billion and beyond. All right. So let's dig into our priorities. Number one, growth from a software to an agentic platform that can do work and deliver outcomes for our customers. For 14 years, we've evolved from a point-of-sale solution into a comprehensive system of record, helping customers manage operations, employees, guests and suppliers. As we've delivered more value and built out our platform, we've seen broader parts attach at higher ARPUs. But what I consistently hear from customers is that while they love our ambition and our innovation, they're stretched thin and don't have enough time to leverage everything we built. As a result, small business owners outsource functions critical to running a profitable business, things like marketing, bookkeeping, payroll and tax, and more. We've always provided the software. And now with AI, we will provide the service that can actually do the work for them. They can leverage our growing agent layer to outsource capabilities that are not their core competency and give them time back to do what they do best: great food, great service and great hospitality. Our advantage here is structural. The data that powers these functions — what guests order, how often and when they visit, how much our customers spend on labor and inventory, how the business is performing — already lived in Toast. That data has been built up over 14 years, and every new location and transaction makes it more valuable. And every agent we deploy deepens the value we can deliver for our customers. This advantage is already showing up in the product. Toast IQ has 40,000 weekly active locations and growing. Operators tell us Toast IQ is already helping them find revenue opportunities, save time and identify trends they haven't picked up on. For instance, Toast IQ helped a customer in California identify that they weren't covering their food and labor costs when opening an hour early for sporting events last fall. The customer adjusted their hours based on this insight, and saved thousands of dollars. The first Toast IQ agent we've launched is a marketing agent within Toast IQ Grow, which brings together everything a restaurant needs to build a brand online, develop direct customer relationships and drive demand. Toast IQ Grow includes websites, online ordering, advertising and marketing capabilities, plus this new marketing agent and a marketing success manager to develop the marketing strategy for a restaurant right alongside them. The marketing agent builds and optimizes the campaign from our customers' past performance data, their sales forecast, and soon upcoming events and weather — a full month of campaign across SMS, email and social media in minutes. Campaigns designed by the marketing agents are already outperforming what restaurants can do on their own, with pilot customers using Toast IQ Grow seeing an average 8% increase in sales compared to similar Toast restaurants. Sahara Bistro Shawarma, a fast-casual Middle Eastern concept, came to Toast with a fragmented marketing stack. By adopting Toast IQ Grow's marketing agent they can now plan and schedule campaigns across email, SMS, Facebook and Instagram weeks in advance. Nearly one-third of sales in March were directly attributable to Toast marketing tools and sales were up more than 30% compared to the prior four weeks. In addition to helping restaurants drive demand through Toast IQ Grow, we are investing in our consumer network, Toast Local. Toast Local connects restaurants and guests directly with zero commissions and no middleman. Restaurants use Toast Local to attract new guests and reengage their regulars through loyalty programs and targeted offers. For guests, they love the convenience of an app that saves them money at tens of thousands of restaurants through no-fee ordering, personalized loyalty rewards and exclusive offers, whether they're ordering pickup, delivery or dining in. That last part is important. Unlike aggregator marketplaces built around delivery, Toast Local extends into the on-premise experience where the majority of restaurant revenue is generated. We recently expanded and experienced significant growth. Toast Local now enables guests to discover and book a table at over 20,000 restaurants through Resy and Toast Tables, making it one of the largest reservation marketplaces. The early traction is strong. We have more than doubled weekly app downloads in the last quarter and Toast Local is now one of the top apps in the App Store's Food & Drink category. We plan to roll out a series of agentic products to tackle other work as well. Over time, we expect agents across restaurant operations, scheduling and payroll, inventory and food costs and bookkeeping and accounting to complement Toast IQ Grow. By working in concert, we will be able to look at a restaurant's projected demand, food cost and availability, labor schedules and projected guest volume to drive suggestions to improve profitability. That's an incredibly exciting future because many of our customers don't have the time or the capabilities to do this effectively today. Moving on to priority two, which is to expand who we serve. The vertical playbook that built our restaurant business — product depth, operational expertise and local go-to-market — is working in enterprise, international and retail. In our core, we're well positioned to grow market share in '26 and beyond, and we're differentiating our product and brand. In product, customers are citing Toast IQ as their reason they're choosing Toast. Our brand campaign 'Built for Busy' extends the differentiation into the market. Built for Busy reflects the fundamental truth about our customers: busy is the ultimate sign of success whether they're running a family restaurant, an enterprise chain or a multi-location retailer. And it captures our product philosophy to shift solutions and products to help customers get and stay busy. From handhelds increasing throughput to KDS keeping the kitchen in sync and starting with the marketing agent, Toast IQ agents taking work off their plate. These differentiators are why we continue to win the majority of the time. We are increasing share across all market types from the largest cities to smaller metro areas and among high-GPV restaurants. In our most penetrated markets, we are still growing, giving us confidence in continued healthy share gains for many years to come. We're proud to announce that The Alinea Group, the world-renowned Chicago-based restaurant group that includes iconic Alinea, Next, The Aviary, and The Office went live on Toast. They chose Toast as a key technology partner that shares the same DNA for relentless innovation, commitment to precision and a passion for delivering a stellar guest experience. Across all of our teams, we're building more conviction in the long-term potential with every quarter. In each of our new TAMs, ARR is growing faster and has higher SaaS ARPU than our core did at a similar time period, demonstrating our proven vertical playbook is working. In enterprise, we launched Toast for Drive-Thru, opening up 140,000 locations and we're going deeper in hotels, bringing Preferred Hotels onto the platform. We also continue to invest in specific product features to deeply serve important sub-verticals like pizza, demonstrated by winning Hungry Howie's, a 500-unit national pizza chain, as well as Papa Murphy's. We continue to see strong growth. And with the pipeline in front of us, I'm confident enterprise will be a meaningful growth driver for years to come. Internationally, we're scaling location count and growing ARPU. We recently launched our Toast Go 3 handheld to further differentiate our platform. We see the best opportunity in Tier 1 cities in the countries we're in, where higher GPV restaurants align with our value proposition and drive stronger ARPU and unit economics. As we expand to new markets beyond Canada, the U.K., Ireland and Australia, we plan to launch more Tier 1 cities with high density of busy restaurants. And in retail, we're scaling quickly and focused on deepening product-market fit with high-value operators. Grocery, for example, is a near-term focus and represents a meaningful opportunity. There are over 20,000 independent grocers in the U.S., generating over $250 billion in sales. We're seeing strong traction with these larger, more complex operators and now serve over 100 grocery locations with more than $5 million in sales, demonstrating our platform is capable of handling the volume and complexity the most demanding retail environments require. The capabilities we built for restaurants — supplier connectivity, invoice workflows, SKU-level complexity — translate directly, letting us move fast to meet the needs of these customers. Our scale across restaurants and growing presence in retail give us a unique vantage point. And over time, we see it as the foundation to becoming the platform powering local commerce. We are on a path to significantly scale the locations we serve across our existing TAM and further expand the opportunity to core adjacencies like membership and golf, more international markets and new retail verticals. We will remain disciplined about where we expand, but our vertical playbook has proven, and with the TAM runway in front of us, I'm confident we can replicate the success we've had in our core business. Now moving on to priority three, which is to drive productivity through AI. AI is reshaping how we work. Engineering coding velocity is up over 60% year-over-year and accelerating in recent months. This helped us launch our marketing agent three months earlier than planned. In support, we've expanded AI coverage from chat to phone and now have about 40% of our support interactions resolved by AI. We're seeing efficiencies as we do this, which is enabling us to invest more in account management and upsell for our highest-value customers. As we drive productivity and efficiency, it frees up capital to invest in our top growth initiatives and support our path to 40-plus percent long-term margin. We see a clear path to materially scaling this business by going deeper in our core markets, expanding what we do for existing customers, scaling the new markets we're already seeing great success in and, over time, opening up new ones. We are operating from a position of financial strength and leaning in to drive sustained long-term growth. We will remain disciplined about where we lean in, guided by customer feedback, and where we have conviction in building differentiated profitable businesses and delivering significant shareholder value. I'm excited about 2026. We are really well positioned for another record year. I want to thank each and every Toaster for their dedication and commitment to Toast. I want to thank our customers and investors for your continued support as well. Thank you. And with that, I'll turn the call over to Elena.

Thank you, Aman, and everyone, for joining us today. I would also like to thank our team for an excellent start to the year. Q1 results exceeded our expectations, reflecting the consistent high level of execution across the company. In the first quarter, ARR was up 26%. Our recurring gross profit streams increased 27% and total monetization across SaaS and fintech exceeded 1% of GPV for the first time. Adjusted EBITDA was $179 million. On a GAAP basis, operating income margin crossed 20% for the first time to 21%, or $110 million, and EPS more than doubled to $0.20. Building on last year's momentum, we added 7,000 net locations in Q1 and ended the quarter with 171,000 live locations, up 22% from a year ago. Our best-in-class vertical SaaS platform and local go-to-market execution continues to drive consistent share gains in our core complemented by increasing contributions across each of our new TAMs. SaaS ARR grew 27% versus a year ago, driven by the combination of our strong location growth and consistent mid-single-digit SaaS ARPU growth on an ARR basis. Subscription gross profit continues to outpace top line growth at 32%. SaaS gross margin exceeded 80% for the first time, expanding nearly 300 basis points from a year ago, to 81%. In addition to ongoing efficiencies as we scale, we're seeing early gains from leveraging AI to transform our customer support experience. Payments ARR and fintech gross profit increased 24% in the first quarter. GPV was $51 billion, up 22% year-over-year with GPV per location down 1% versus last year. Fintech net take rate was 61 basis points and payments take rate was 51 basis points. Payments take rate increased two basis points year-over-year, as we continue to execute on cost optimization efforts, new products and targeted pricing adjustments. Non-payment fintech solutions led by Toast Capital contributed $51 million in gross profit and 10 basis points in take rate. Overall, the program continues to grow at a steady clip, and defaults remain consistent and well within our risk guardrails. Our total monetization take rate measured by recurring gross profit as a percentage of GPV crossed 1% for the first time to 103 basis points. The five basis point increase versus a year ago demonstrates our growing share of wallet and the value we provide our customers. We expect our total take rate to continue to grow as we evolve our platform with AI and deliver more outcomes for our customers. Moving down the P&L, hardware and professional services gross profit was negative 13% of our recurring gross profit streams. We are leaning into our customer acquisition momentum across all of our TAMs and absorbing higher tariff costs. Our strong overall unit economics and scale enable us to absorb these costs while maintaining healthy payback periods. Excluding $28 million of bad debt and credit-related expenses, operating expenses increased 17% in the first quarter. We're investing in our highest priority areas across product and go-to-market and investing in AI tooling to evolve the ways we work and increase productivity. Over time, AI efficiency gains will give us the flexibility to invest more in key growth initiatives and support our long-term margin profile. Sales and marketing expenses increased 20%, reflecting our strong location growth. We're investing to support our ongoing market share gains in our core and moving out sub-segments like non-native English-speaking customers. We're also expanding our go-to-market presence in our new TAMs, which is accelerating our progress. R&D expenses grew 20% year-over-year. We're investing in our product strategy to expand our TAM and drive location growth and differentiate our product with agentic workflows and providing our internal teams with AI capabilities to increase productivity. In enterprise, we just launched our Drive-Thru offering. We're expanding Toast Go 3 internationally and deepening our grocery product for retail customers. And we're further differentiating our core products, most recently with the release of Toast IQ Grow and relaunch of Toast Local. Adjusted EBITDA grew 35% to $179 million, a 34% margin. Our Q1 results reflect healthy top line growth as well as our continued focus on driving efficiencies throughout the P&L. Free cash flow was $115 million. As a reminder, free cash flow is typically lower in Q1 and due to the timing of cash bonus payments and payment seasonality. For the full year, we expect our conversion of adjusted EBITDA into free cash flow to be slightly lower than in 2025. We are strategically purchasing memory chips and plan to hold more inventory in the near term. We expect the majority of this cash impact in Q2 and for the free cash impact to normalize over time as inventory moves to customers. GAAP operating income was up over 150% from last year to $110 million. In addition to our strong adjusted EBITDA growth, we're benefiting from ongoing leverage and reduced stock-based compensation. SBC as a percent of recurring gross profit was 11%. That's nearly half what it was just two years ago through our disciplined approach to managing stock compensation. Year-to-date, we've repurchased 14 million shares for nearly $400 million. We've been opportunistic given the market pullback and our confidence in the business, and we expect this to be an accretive use of capital. We have approximately $200 million remaining on our share repurchase authorization, and we'll maintain an opportunistic approach to repurchases based on market conditions to support long-term shareholder value. The combination of our strong financial results and decline in our diluted share count resulted in GAAP EPS more than doubling to $0.20. Turning to guidance, for the second quarter, we expect total subscription and fintech gross profit to grow 22% to 24% year-over-year and adjusted EBITDA to be $185 million to $195 million. We increased our full year 2026 guidance, reflecting our strong start to the year. We now expect recurring gross profit to grow 21% to 23% and adjusted EBITDA to be $790 million to $810 million. We are positioning Toast to sustain high growth for the next five to ten years. We're seeing positive results from the investments we've made to begin delivering agentic solutions for our customers, extend our lead in the core and accelerate progress in new TAMs across enterprise, international and retail. Our new TAMs are scaling rapidly, and we're confident each is on the path to be materially larger with healthy unit economics. Our bias remains to reinvest top line outperformance across our growth initiatives and into internal AI tools to transform how we operate. Our bar for investing remains high. It is grounded in customer feedback, improving unit economics and where we have conviction we can generate meaningful long-term cash flow. To wrap up, we are executing our goals and are on track to deliver strong top and bottom line results in 2026 while positioning the company for sustained high growth over the next decade as we lead the AI transformation for restaurants and across local commerce. We are more excited than ever about the massive opportunity that lies ahead of us. Now I will turn the call back over to the operator to begin Q&A.

Operator provided instructions for the Q&A session.

Thanks, Krista. We'll kick off for Q&A. First question we will take from Stephen Sheldon at William Blair.

Maybe first here, I wanted to ask — as we think about the hardware, how much of a differentiator do you think your hardware solutions like Toast Go 3 could be? And does owning those touch points with employees and servers, having them in their hands, give you a big leg up in terms of helping restaurants take AI-supported insights from Toast IQ and making them actionable in employee–guest interactions? So I guess, how much does that hardware serve as a differentiator? Or are there other things you think about for the platform that could serve as a big advantage on the AI front?

Stephen, I think that's a great question. There's obviously lots of ways in which AI is helping us build across the platform. But specifically on hardware, we've learned over the years that being vertically integrated across software and hardware as a platform gives us an advantage where we can build capabilities for our customers faster. So to your point about how we are leveraging AI at the table or when a server is interacting with guests, there are a few examples we've shared over the past few quarters. One example is menu upsells where the servers have visibility into which items are most likely to increase check size. More recently, we announced digital chits, which means if you book a table using Toast Tables in tune with Resy, you'll be able to get that data right on the handheld when a server is interacting with guests. Over time, the vision is not only to get the data that's stored in the CRM, but to actually look at the guest's order history to learn what's most relevant for that guest, like allergies, for example. We're also testing things like walk-out-and-pay. If you've got a card on file when you book a table, you don't even have to go through the checkout experience, and the server validating that the bill was paid is really important on the handheld. We also see examples where voice AI and video AI can be applied: phone automation for drive-thru, kiosks and handhelds. Imagine walking into a restaurant and the handheld listening to the order so it gets to the kitchen even faster. We also see AI listening to interactions to help coach staff better. We certainly see the fact that we've got the hardware and software together being a big advantage in terms of building products faster.

We're going to move to our next question, Samad Samana from Jefferies.

I wanted to ask on Toast IQ. As you think more about monetization and agents and your pricing model, would you ever revisit how you're thinking about pricing — making it more usage-based, for example? We've seen a lot of rapid change in other parts of software. Do you see that as a potential upside driver over time if restaurants drive a lot of utilization and value out of it?

Hey, Samad. Good question. We're actively exploring not just the capabilities from an AI standpoint in Toast IQ, but also the pricing model. So it's topical for us. First and foremost, what's exciting to see with Toast IQ is we now have 40,000 weekly active customers using the platform. Getting usage up was the first step and critical. What we've heard from customers is it's actually useful. One common use case is generating custom views on data versus just getting pre-canned reports. Another somewhat surprising area was analyzing fraud and theft and getting visibility into what's going on there. And, of course, supporting backend changes and broader support with the chatbot. There's been lots of ways Toast IQ is adding value. I shared the example about a customer that adjusted their hours by chatting with Toast IQ and recognizing there were hours when they weren't generating enough profit. There are also some products like growth and software and hardware as part of the platform. But the biggest opportunity I see right now is that many customers told us they are trying to keep doors open and deliver great food and hospitality, and that takes a lot. For these busy operators, they tend to outsource things like marketing, back office, payroll and tax, or accounting and bookkeeping. For many of these functions, the data necessary to do marketing actually comes from Toast. That's a key reason why Toast IQ Grow has seen such a strong early signal: we're optimizing the digital presence and generating marketing campaigns using data already in Toast. We've seen an 8% lift in GPV, which is a very good early signal. Toast IQ Grow is an agent, but it's also backed by a human that supports these marketing campaigns. As we can take on some of this work, that's really the monetization opportunity long term. But yes, we're looking at usage-based models as one pricing option.

Thanks, Samad. We'll take our next question from Josh Baer at Morgan Stanley.

Great. Nice quarter. You highlighted 40% of the support interactions resolved by AI and engineering velocity up more than 60%. I see a lot of efficiency. You're reinvesting into growth areas while still trending toward long-term margin targets. Can you talk a bit about how you make the decision between growth versus margin? Should we expect higher growth for longer, or if growth dips would you flip to prioritize margin? How should we interpret your growth versus margin philosophy?

Thanks, Josh. I'll take that. First, we believe AI will change how we work and we're already seeing efficiencies across the company, but we're still rolling things out, so we want to be balanced about how we think about those benefits. A couple principles guide us. One, we're positioning the growth of the company over the next five to ten years and investing behind initiatives where we see durable growth. Two, we hold a high bar and employ strong discipline around capital allocation; that won't change. The decisions to invest are grounded in customer signal and rep productivity — we talk to customers all the time and look at signals across the business to ensure we're excellent stewards of capital. Opportunistically, we'll continue to repurchase shares, for example. But the key takeaway is we have high conviction about our long-term 40%-plus adjusted EBITDA margin profile. That hasn't changed, and you've seen progress in GAAP profitability as well.

We'll turn to our next question from David Hynes at Canaccord.

Elena, I was hoping you could touch on enterprise across two axes. First, the pipeline you see in that cohort and how that compares to a year ago — does it feel like any inflection is happening? Second, the backlog of deals you've won that have yet to go live and what visibility that gives you into location growth over the next several quarters?

Yes. I'll start and Aman can jump in. First, enterprise is a multiyear journey. As you've seen through wins announced over the last several years, we're being pulled into enterprise deals and that's healthy. The pipeline continues to be really healthy. With Drive-Thru, that opens up the opportunity further, and the team is executing well across the enterprise TAM.

Yes, David, I think Elena hit it. One stat I'll share: in Q1 2026 alone, we booked more locations than we had total customers in 2023. That momentum hasn't slowed across hotels, full-serve restaurants and Drive-Thru, which we just launched but have good signal on. We're confident in our ability to hit the plans we set out at the start of the year.

We'll take our next question from Dominic Ball at Rothschild.

Aman, interesting comments on Toast Local following commentary from DoorDash and seeing DoorDash POS active in San Francisco, Phoenix, New York. It seems like a formal launch may be imminent. They have a bundled offering and strong distribution. As this delivery platform transitions from partner to peer, how do you get Toast Local to be a real peer to DoorDash? Are there competitive responses available to Toast?

Dominic, first, whether it's DoorDash or Uber or hundreds of other partners, they're critical because our platforms need to work well together to deliver a great experience. That hasn't changed. We were the first ones in the space to build a deep vertical platform for restaurants — that's what allowed us to grow and achieve significant share. The way we'll continue to win is by focusing exclusively on our customers' needs. A lot of the focus on Toast IQ and the agent layer is about creating value based on customer feedback. With Local, customers consistently say they want a low-commission, no-commission channel to generate demand. Combining Resy inventory with Toast Tables gives us one of the best restaurant inventories to book tables on, and we can do unique things: when you book a table with a card on file, you can make checkout better; you can personalize the table experience based on the guest's order history in Toast; and we can use data about guest behavior and restaurant busyness to create personalized offers that drive incremental demand. Our focus with Local is to help restaurants get more people in the door at a great value. One metric that excites us: app downloads are up 2x in the last quarter, and you can see rankings in the app stores rise in Food & Drink. So very good early momentum, focused on bringing restaurants in-store demand at a strong value proposition.

We'll take our next question from Tim Chiodo at UBS.

Thank you. A topic many investors would like more comfort on is hardware, particularly into 2027. You previously said for 2026 it's about a 150 basis point impact to EBITDA margins. Given today's inventory actions and the plan to hold more inventory, what's your thinking around 2027, the supply you'll have entering 2027 and how conversations with suppliers are going?

Tim, that's a very relevant question. It's a fluid environment. A few points: first, it's important to us not to have any customer disruption, and that's our operating principle. To that end, we've increased inventory levels to secure supply into 2027 and we'll remain opportunistic to add supply if it makes sense. At the highest level, I have no concern about our ability to meet our growth. Second, the impact to the 2027 P&L will be larger than the impact to 2026, but we will manage margins in '26 and '27 as we've managed them today, and we'll have healthy margins in both years. We're actively planning for that. Finally, while there will be near-term cost pressure, we don't anticipate any structural impact to our long-term P&L. We're committed to the long-term margin profile we've discussed. All in all, the team is managing this well, and we're confident in our ability to manage margins and get supply to our customers' hands.

We'll take our next question from Andrew Bauch at BMO.

I wanted to touch on international progress. Over the last several months we've seen a lot of new headlines and releases. Anything you've seen so far that's working or materially different than the U.S. market, given you're a couple years into this push?

Andrew, I'm really proud of the team's progress. The international business grew at a healthy clip last year in both locations and ARPU. We launched Toast Go 3 handheld internationally, which is an important part of our platform. One learning internationally is that Tier 1 cities show the most success — in Canada, Vancouver and Toronto; in the U.K., London; in Australia, Sydney and Melbourne. These cities have the highest GPV busy restaurants where the Toast value proposition is most pronounced, like handhelds and operational capabilities. So we've leaned further into a Tier 1 city strategy. We'll continue to grow outside these cities in the countries we're in, but as we open new countries it may look more like selectively launching Tier 1 cities rather than going fully deep in every country. That's something we're considering as we head into the back half of the year.

Yes, it would be great to see London as a flywheel market.

Couldn't agree more. Absolutely. That's what we're working on.

Thanks, Andrew. Okay. We're going to take our last question from Rayna Kumar at Oppenheimer.

I'm wondering what you're seeing for same-store sales into April, and if you saw any changes in the quarter as well?

Overall, our consumer trends have been stable. GPV per location in Q1 was down 1%, but very much within a reasonable zone, and Q2 is similar. Overall, customers are resilient; they've proven that over many cycles. That's what we're seeing and our own data looks stable as well.

That concludes our conference call today. I want to thank everyone for joining and have a good rest of the night.