The news: Toast reported its revenues grew 22% YoY to $1.63 billion, per Q4 2025 earnings.

• Total locations grew 22% YoY, or approximately 164,000 new locations.
• Gross payment volume increased 22% YoY to $51.4 billion.
• And subscription services and financial technology solutions gross profit was up 29% YoY to $487 million.

The restaurant POS provider narrowly missed analysts’ expectations on quarterly earnings, returning $0.23 per share against Zacks Consensus Estimate of $0.24 per share, per Yahoo Finance.

However, Toast raised its outlook for 2026, anticipating non-GAAP subscription services and financial technology solutions profit growth in the range of $505 million to $515 million, or 22% to 24% QoQ growth.

How we got here: The POS provider arena is crowding, forcing platforms to deliver more vertical-specific solutions to gain loyalty from merchants. For Toast, the company has decided to center its verticalization strategy around Toast IQ, its conversational AI assistant tool, to drive value for its restaurant clients, following competitors like Square, which has also leaned into AI updates to connect to SMB concerns while navigating current economic uncertainty.

Inside the earnings call: CEO Aman Narang reiterated Toast’s commitment to AI-forward strategy, stating “Toast IQ is the foundation of [the] strategy” for driving analytics, operational efficiency, and workflow automation, stating consumer uptake has already been robust: Over half of Toast locations have used the tool post-launch and eight million queries have already been sent on the platform. 

In addition to serving their bread and butter restaurant clients, Narang also mentioned ambitions to launch deeper into retail, suggesting that Toast’s ability “to drive differentiation through AI and analytics” can help meet these new merchants within different verticals just as effectively.

Implications for POS providers: Catering to SMBs in this economic climate requires attention to these businesses’ key goal under economic turbulence: survival. AI initiatives should hew to basic tasks that alleviate time and costs for small businesses owners—over half of SMBs want assistance with marketing, inventory management, and business line expansions, per Marqeta report.