Toast, Inc. Earnings Recaps
Q2 2026
Aug 6, 2026
The stock rose 6.1% following earnings, driven primarily by stronger-than-expected growth in recurring gross profit streams and accelerated customer additions, underscoring investor confidence in the company’s AI-driven product expansion and scalable platform momentum.
Key takeaways
- Recurring gross profit streams grew over 28% year-over-year, illustrating continued strength in core profitability metrics.
- GAAP operating income margin expanded to 26%, reflecting improved operating leverage despite ongoing investments.
- Net location adds hit a record 9,500, exceeding prior quarterly highs and signaling sustained customer acquisition momentum.
- New AI-powered product, Toast IQ Grow, is rapidly gaining traction and is on track to be the fastest-growing product to $10 million ARR; early client results include a 70% reduction in agency spend and over $100,000 in marketing-attributed sales in ~2 months.
- Expansion across new verticals such as gas stations and endorsement by major hospitality brands like Best Western supports growth beyond traditional restaurant segments.
Q1 2026
May 8, 2026
Shares fell 11.5% following the quarter, reflecting investor disappointment likely driven by cautious outlook elements and possible margin pressures despite reported revenue growth and AI-related initiatives.
Key takeaways
- Recurring gross profit streams grew 27%, indicating ongoing top-line momentum in core subscription and fintech services.
- GAAP operating income margins expanded to 21%, though the market reaction suggests underlying margin concerns or sustainability doubts.
- Added 7,000 net locations, marking continued customer expansion beyond local restaurants to enterprise chains and international markets.
- Heavy emphasis on AI investments and the launch of Toast IQ Grow marketing agent to enhance customer outcomes, yet skepticism remains on near-term impact and execution risks.
- Market reaction implies investors were underwhelmed by forward guidance or cautious commentary, overshadowing operational progress announced on the call.
Q3 2025
Nov 5, 2025
Toast delivered a robust third quarter with 34% revenue growth and surpassed $2 billion in annual recurring revenue (ARR) for the first time, positioning the company for sustained expansion in the restaurant technology sector.
Key takeaways
- Achieved 34% year-over-year revenue growth and 35% gross margins amid continued strong performance in net location adds.
- Secured major partnerships with brands like Nordstrom and TGI Fridays, emphasizing Toast’s growing influence in various restaurant segments.
- International SaaS ARPU increased by 20% year-over-year, reflecting successful market expansion and competitive platform offerings.
- Expanded partnerships, including a collaboration with Uber, to enhance off-premise sales capabilities for restaurant clients.