Toast (NYSE:TOST) Posts Quarterly Earnings Results, Misses Expectations By $0.08 EPS

Toast (NYSE:TOST) issued its earnings results on Tuesday. The company reported $0.29 earnings per share for the quarter, missing analysts’ consensus estimates of $0.37 by ($0.08), FiscalAI reports. The business had revenue of $1.98 billion for the quarter, compared to analyst estimates of $1.97 billion. Toast had a return on equity of 27.14% and a net margin of 7.69%. The firm’s revenue for the quarter was up 21.3% on a year-over-year basis. During the same period last year, the company posted $0.16 earnings per share.

Here are the key takeaways from Toast’s conference call:

• Strong Q3 execution: recurring gross profit grew 27% year over year, GAAP operating income nearly doubled to $165 million, and Toast added 8,500 net locations, ending the quarter with approximately 189,000 locations.
• Toast raised its full-year outlook to 26% recurring gross profit growth and $840 million-$850 million in adjusted EBITDA; management also expressed confidence in maintaining 20%+ growth into 2027.
• AI products are gaining traction, with Toast IQ Grow on track to exceed $10 million in ARR this year and IQ Team customers reporting a 41% reduction in overtime hours; subscription gross margin expanded 320 basis points year over year.
• Enterprise, international, and retail initiatives are scaling rapidly, collectively reaching approximately $200 million in ARR and expected to double for the second consecutive year, with new customers including Bagel Brands, Outback Steakhouse Australia, and Zingerman’s Deli.
• Management expects only modest adjusted EBITDA margin progression next year as it reinvests in new markets and long-term growth initiatives. Free-cash-flow conversion was pressured by higher hardware inventory, while the FTC lawsuit remains an unresolved legal risk.

Toast Stock Down 1.6%

TOST stock traded down $0.58 during trading on Thursday, reaching $34.79. 8,732,084 shares of the company’s stock were exchanged, compared to its average volume of 10,906,576. Toast has a 1-year low of $22.26 and a 1-year high of $39.67. The company’s fifty day moving average price is $31.91 and its 200-day moving average price is $29.39. The firm has a market cap of $17.88 billion, a PE ratio of 38.17 and a beta of 1.74.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on TOST shares. The Goldman Sachs Group upgraded Toast from a “neutral” rating to a “buy” rating and set a $36.00 target price on the stock in a research note on Thursday, July 9th. BTIG Research reaffirmed a “neutral” rating on shares of Toast in a report on Thursday, August 27th. Barclays increased their price objective on shares of Toast from $35.00 to $39.00 and gave the stock an “overweight” rating in a report on Wednesday, August 5th. Citigroup lifted their price objective on shares of Toast from $36.00 to $39.00 and gave the company a “buy” rating in a research report on Wednesday, August 5th. Finally, Robert W. Baird boosted their target price on shares of Toast from $30.00 to $33.00 and gave the company a “neutral” rating in a research note on Wednesday, July 8th. Seventeen investment analysts have rated the stock with a Buy rating and eleven have issued a Hold rating to the stock. Based on data from MarketBeat.com, Toast has an average rating of “Moderate Buy” and an average price target of $38.65.

Key Toast News

Here are the key news stories impacting Toast this week:

• Positive Sentiment: Ruby Tuesday chose Toast to support its next chapter, adding a notable restaurant customer and offering a potential boost to Toast’s platform adoption. Ruby Tuesday selects Toast
• Positive Sentiment: Toast raised its 2026 adjusted EBITDA outlook to $840 million–$850 million and highlighted recurring gross profit growth, AI initiatives, and plans to improve margins in 2027. Third-quarter revenue was $1.98 billion, up 21.3% year over year and slightly above analysts’ estimates. Toast raises 2026 outlook
• Neutral Sentiment: Toast named Michael Senno CFO as Elena Gomez steps away as president. The appointment provides a successor, but the senior leadership transition may prompt questions about continuity. Toast names Michael Senno CFO
• Negative Sentiment: Reported third-quarter EPS of $0.29 missed the cited consensus estimate of $0.37, despite the revenue beat and stronger outlook. That earnings shortfall may be offsetting some of the positive news. Toast quarterly earnings report
• Negative Sentiment: Chief Revenue Officer Jonathan Vassil sold 14,280 shares, reducing his direct holding by 15.57%. The sale was made under a pre-arranged Rule 10b5-1 plan, so it is not necessarily a view on the company’s near-term prospects. Toast insider share sale

Insider Activity

In related news, CEO Aman Narang sold 119,843 shares of the company’s stock in a transaction dated Monday, August 10th. The shares were sold at an average price of $35.38, for a total value of $4,240,045.34. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CRO Jonathan Vassil sold 85,280 shares of the company’s stock in a transaction dated Friday, August 21st. The stock was sold at an average price of $36.34, for a total transaction of $3,099,075.20. Following the completion of the sale, the executive directly owned 69,966 shares of the company’s stock, valued at $2,542,564.44. The trade was a 54.93% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 375,002 shares of company stock valued at $12,938,296. Company insiders own 10.03% of the company’s stock.

About Toast

Toast, Inc (NYSE:TOST) provides a cloud-based technology platform designed for restaurants. Its integrated system combines point-of-sale software and hardware with payment processing, helping restaurants manage sales, orders, menus, guest interactions and day-to-day operations from a unified platform.

The company offers products and services including online ordering, delivery management, digital ordering and payment tools, restaurant websites, gift cards, loyalty programs, marketing, labor management, payroll, inventory management, reporting and analytics.