Toast Accelerates Restaurant Growth While Block Leans on Cash App to Offset Square Slowdown

Toast (NYSE: TOST | TOST Price Prediction) and Block (NYSE: SQ) both reported Q3 2025 earnings that beat revenue estimates but missed on EPS. Toast powers 156,000 restaurant locations with payment and operations software. Block runs Square for sellers and Cash App for consumers. Both are investing heavily in AI with different business models.

Toast Grows Fast. Block Grows Broad.

Toast posted $1.63 billion in revenue, up 25% year over year and ahead of the $1.59 billion estimate. The company added 7,500 net locations in Q3 and now processes $51.5 billion in gross payment volume annually, up 24%. Annualized recurring revenue hit $2 billion, growing 30%. CEO Aman Narang said the company is expanding its U.S. restaurant leadership while scaling into new markets through AI and partnerships.

Block reported $6.87 billion in revenue, crushing the $6.38 billion estimate by nearly $500 million. Gross profit reached $2.66 billion, up 18%. Cash App generated $1.62 billion in gross profit, growing 24%, while Square contributed $1.02 billion, up 9%. Cash App serves 58 million monthly active users. Square’s gross payment volume growth accelerated to 12%. CEO Jack Dorsey emphasized quality and velocity. The company repurchased 5.3 million shares for $403 million.

Both missed EPS expectations despite strong top lines. Toast earned $0.16 per share against a $0.23 estimate. Block posted adjusted EPS of $0.54 versus $0.67 expected. The gap reflects heavy investment spending.

One Focuses. One Diversifies.

Toast is a vertical play selling exclusively to restaurants with point-of-sale hardware, payment processing, payroll, inventory management, and digital ordering. The company launched Toast IQ, a conversational AI assistant, and Toast Advertising this quarter. It announced a strategic partnership with Uber Technologies.

Block operates two platforms. Square serves small and medium businesses with payment tools, invoicing, and AI-driven growth optimization. Cash App functions as a consumer fintech app with peer-to-peer payments, direct deposit, bitcoin trading, and stock investing. The company generated its first revenue from Proto, its blockchain initiative, and rolled out Square bitcoin payments.

Toast raised Q4 guidance to $480 million to $490 million in non-GAAP gross profit, implying 22% to 25% growth. Block raised full-year gross profit guidance to $10.24 billion and adjusted operating income to $2.06 billion.

What Happens Next Depends on Execution

For Toast, watch whether the company can sustain 30% ARR growth while expanding internationally. The restaurant technology market is competitive, and maintaining 7,500 net location additions per quarter will require continued product innovation. The AI tools and advertising platform are new, and their contribution to gross profit remains unclear.

For Block, watch whether Cash App can keep growing gross profit at 24% while Square stabilizes at single-digit growth. The company flagged increased transaction and loan losses, which could pressure margins if consumer credit deteriorates. Proto’s first revenue is a signal, but it’s too early to know if blockchain becomes material.

Comparing Growth Profiles and Business Models

Toast represents a focused, high-growth vertical software business with 30% ARR growth, 34% gross profit expansion, and $1.36 billion in cash. The company’s single-vertical approach provides concentrated exposure to restaurant technology with clear unit economics and location-based growth metrics.

Block represents a diversified fintech model with buyback activity and a 15% operating margin. Cash App’s 24% gross profit growth contrasts with Square’s slowdown and rising credit losses. The multi-platform structure offers broader market exposure but introduces complexity across consumer and business segments. One Reddit user on r/wallstreetbets posted a $1 million bet on Block, calling it “extremely undervalued” with a P/E of 12 and predicting $180 per share in six to twelve months.

Toast offers a single-vertical growth story with clearer visibility into restaurant market penetration. Block offers a multi-platform approach with different risk-reward characteristics across its two ecosystems.