Toast Q3 revenue slightly beats after adding new locations

By Reuters News


Overview

  • US restaurant technology platform's Q3 revenue was a slight beat versus analyst expectations

  • Net income rose yr/yr to $169 mln in Q3

  • CFO Elena Gomez to step down; Michael Senno named successor effective Jan 2027


Outlook

  • Toast sees Q4 non-GAAP subscription and fintech gross profit at $610 mln-$620 mln

  • Company expects Q4 adjusted EBITDA of $200 mln-$210 mln

  • Toast forecasts 2026 non-GAAP subscription and fintech gross profit at $2.375 bln-$2.385 bln


Result Drivers

  • LOCATION GROWTH - Co added about 8,500 net new locations in Q3, contributing to revenue and profit increases

  • HIGHER ARR - Annualized recurring run-rate increased 24% yr/yr to $2.5 bln, reflecting growth in subscription and payment processing services

  • SUBSCRIPTION & PAYMENTS - Gross profit from subscription services and financial technology solutions rose 29% yr/yr


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Slight Beat*

$1.98 bln

$1.97 bln (26 Analysts)

Q3 EPS

$0.29

Q3 Net Income

$169 mln

Q3 Annual Recurring Revenue

$2.50 bln

Q3 Gross Profit

$543 mln

Q3 Operating Expenses

$378 mln

Q3 Operating Income

$165 mln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 21 "strong buy" or "buy", 12 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the software peer group is "buy"

  • Wall Street's median 12-month price target for Toast, Inc. is $39.00, about 16.7% above its November 2 closing price of $33.42

  • The stock recently traded at 28 times the next 12-month earnings vs. a P/E of 31 three months ago


Reuters Recommended Reads

  • Nov 3 - Dynatrace Q2 revenue beats estimates, sets $1 bln additional buyback

  • Nov 2 - Paymentus Q3 revenue beats on higher billers and transaction volumes

  • Nov 2 - Roku Q3 revenue beats estimates on advertising, subscription growth


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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