Toast, Inc.TOST

Toast, Inc. Revenue Disclosure

10-KFiled Feb 18, 20261 min read
Revenue from Contracts with Customers
The following table summarizes the activity in deferred revenue (in millions):

Year Ended December 31,
20252024
Deferred revenue, beginning of period
$
63 
$
41 
Deferred revenue, end of period
$
69 
$
63 
Revenue recognized in the period from amounts included in deferred revenue at the beginning of period
$
59 
$
39 

Deferred revenue includes amounts classified within other long-term liabilities on our Consolidated Balance Sheets.

As of December 31, 2025, $999 million of revenue is expected to be recognized from remaining performance obligations for customer contracts. We expect to recognize revenue of approximately $936 million of these remaining performance obligations over the next 24 months, with the balance recognized thereafter.
The following table summarizes the activity in deferred contract acquisition costs (in millions):

Year Ended December 31,
20252024
Beginning balance
$
172 
$
127 
Capitalization
147 
127 
Amortization
(99)
(82)
Ending balance
$
220 
$
172 
As of December 31, 2025 and 2024, $98 million and $74 million, respectively, of our current deferred contract acquisition costs were recorded within other current assets with the remaining balance recorded within other non-current assets in the accompanying Consolidated Balance Sheets.

Historical Timeline

Fiscal YearFiled
2025Feb 18, 2026Showing above
2024Feb 26, 2025
2023Feb 27, 2024
2022Mar 1, 2023
2021Mar 1, 2022

About Revenue Disclosures

Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.

Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.

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