Toast, Inc. Fair Value Disclosure
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | 951 | $ | — | $ | — | $ | 951 | |||||||||||||||
Commercial paper | — | 96 | — | 96 | |||||||||||||||||||
Certificates of deposit | — | 23 | — | 23 | |||||||||||||||||||
Corporate bonds | — | 261 | — | 261 | |||||||||||||||||||
U.S. government agency securities | — | 7 | — | 7 | |||||||||||||||||||
Treasury bonds | — | 134 | — | 134 | |||||||||||||||||||
Asset-backed securities | — | 142 | — | 142 | |||||||||||||||||||
$ | 951 | $ | 663 | $ | — | $ | 1,614 | ||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Warrants to purchase common stock | $ | — | $ | — | $ | 19 | $ | 19 | |||||||||||||||
$ | — | $ | — | $ | 19 | $ | 19 | ||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds | $ | 671 | $ | — | $ | — | $ | 671 | |||||||||||||||
Commercial paper | — | 24 | — | 24 | |||||||||||||||||||
Certificates of deposit | — | 3 | — | 3 | |||||||||||||||||||
Corporate bonds | — | 100 | — | 100 | |||||||||||||||||||
U.S. government agency securities | — | 7 | — | 7 | |||||||||||||||||||
Treasury bonds | — | 233 | — | 233 | |||||||||||||||||||
Asset-backed securities | — | 147 | — | 147 | |||||||||||||||||||
$ | 671 | $ | 514 | $ | — | $ | 1,185 | ||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Warrants to purchase common stock | $ | — | $ | — | $ | 22 | $ | 22 | |||||||||||||||
$ | — | $ | — | $ | 22 | $ | 22 | ||||||||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||
Commercial paper | $ | 20 | $ | — | $ | 13 | $ | — | |||||||||||||||
Corporate bonds | 47 | — | 33 | — | |||||||||||||||||||
U.S. government agency securities | — | — | 7 | — | |||||||||||||||||||
Treasury bonds | — | — | 102 | — | |||||||||||||||||||
Asset-backed securities | — | — | 13 | — | |||||||||||||||||||
Total | $ | 67 | $ | — | $ | 168 | $ | — | |||||||||||||||
| December 31, 2025 | |||||
Due within 1 year | $ | 333 | |||
Due after 1 year through 5 years | 291 | ||||
Due after 5 years and thereafter | 14 | ||||
Total marketable securities | $ | 638 | |||
| December 31, 2025 | December 31, 2024 | ||||||||||
Risk-free interest rate | 3.5 | % | 4.3 | % | |||||||
Contractual term (in years) | 1 | 2 | |||||||||
Expected volatility | 45.7 | % | 57.5 | % | |||||||
Expected dividend yield | — | % | — | % | |||||||
Exercise price per share | $ | 17.5 | $ | 17.5 | |||||||
| Common Stock Warrant Liability | |||||
Balance as of December 31, 2023 | $ | 64 | |||
Change in fair value | 49 | ||||
Warrant extinguishment | (74) | ||||
Settlement | (17) | ||||
Balance as of December 31, 2024 | 22 | ||||
Change in fair value | (3) | ||||
Balance as of December 31, 2025 | $ | 19 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.