Toast Inc - Ordinary Shares - Class A

Strong Q2 performance + momentum signals (good) - Recurring gross profit streams: +28% YoY (management’s key metric). - GAAP operating income margin: 26%; also cited “Rule of 50” framework and recurring gross profit growth + operating margin peaking at 57% in 2Q. - Net location adds: 9,500 in Q2 (record, +1,000 vs prior high watermark). - Total locations: ~180,000, +22% YoY. - ARR: +25% YoY; SaaS ARR +27% YoY with mid-single-digit ARPU growth and location-driven scale.

Guidance raised for 2026; Q3 outlook steady (good) - Q3 (subscription + fintech gross profit): +22% to +24% YoY; Adj. EBITDA: $210M–$220M. - Full-year 2026 outlook raised: - Recurring gross profit: +23% to +25% YoY - Adjusted EBITDA: $805M–$825M - Management said the EBITDA increase is less than the 2Q beat, implying conservatism on sustainability of one-time items (see risks).

AI “Agentic” product narrative is a key opportunity, with early traction (opportunity/surprising) - Toast IQ Grow (marketing agent) highlighted as the fastest-growing product ever and on track to reach $10M ARR. - Customers are showing same-store sales growth and examples cited: - Spirits Food & Friends: -70% monthly agency spend and >$100k marketing-attributed sales in <2 months. - AI approach described as AI-generated first draft + human review/approval, with gross margins already improving early; management expressed no long-term margin concerns for this product. - Strategic intent: expand beyond marketing into payroll/scheduling, tax/bookkeeping, inventory/accounting, and demand forecasting—aiming to take on outsourced work to lift ARPU.