Toast (NYSE:TOST) Issues Earnings Results, Misses Estimates By $0.06 EPS

Toast (NYSE:TOST) issued its earnings results on Tuesday. The company reported $0.26 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.32 by ($0.06), FiscalAI reports. Toast had a net margin of 7.14% and a return on equity of 23.91%. The company had revenue of $1.91 billion during the quarter, compared to analysts’ expectations of $1.87 billion. During the same quarter in the previous year, the company earned $0.13 earnings per share. The firm’s quarterly revenue was up 23.1% compared to the same quarter last year.

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

• Q2 exceeded expectations, with recurring gross profit streams up 28%, GAAP operating margin reaching 26%, adjusted EBITDA increasing 38% to $221 million, and record net additions of 9,500 locations.
• Toast raised its full-year 2026 outlook to 23%–25% growth in recurring gross profit and adjusted EBITDA of $805 million–$825 million, while maintaining a strategy of sustained growth and gradual margin expansion.
• The company reported strong early traction for Toast IQ Grow, its AI marketing agent, which is on track to reach $10 million in ARR faster than any prior product and could expand monetization into payroll, scheduling, bookkeeping, tax, and other services.
• Toast is gaining momentum beyond its core restaurant market across enterprise, international, and retail, with new customers including Best Western and TGI Fridays U.K.; ARR in these new markets is expected to nearly double to $200 million this year.
• Free cash flow declined year over year to $130 million due to higher hardware inventory, while memory-cost pressures are expected to have a greater P&L impact in 2027 despite supply-chain mitigation efforts and a roughly $10 million tariff refund in Q2.

Toast Stock Performance

Shares of TOST traded up $0.11 during mid-day trading on Thursday, hitting $34.91. 1,577,729 shares of the company’s stock were exchanged, compared to its average volume of 11,783,050. The stock’s 50-day moving average is $28.08 and its 200-day moving average is $27.84. Toast has a fifty-two week low of $22.26 and a fifty-two week high of $46.81. The company has a market cap of $18.02 billion, a price-to-earnings ratio of 44.80 and a beta of 1.72.

Trending Headlines about Toast

Here are the key news stories impacting Toast this week:

• Positive Sentiment: Revenue and customer growth exceeded expectations. Toast reported Q2 revenue of $1.91 billion, above the $1.87 billion consensus and 23.1% higher year over year. The company added a record 9,500 net locations, signaling continued adoption of its restaurant technology platform. Toast Announces Second Quarter 2026 Financial Results
• Positive Sentiment: Recurring profit streams and operating leverage improved. Recurring gross profit grew 28%, while GAAP operating-income margins expanded to 26%. Management plans to reinvest part of the upside into artificial intelligence and international and product expansion, while also raising its 2026 outlook. Toast Q2 Earnings Call Centers on AI-Led Reinvestment
• Positive Sentiment: Analysts raised targets following the results. BMO lifted its target to $40 and rated Toast “outperform,” Piper Sandler raised its target to $39 with an “overweight” rating, and Needham increased its target to $45 with a “buy” rating. Keefe, Bruyette & Woods raised its target to $35 but maintained a market-perform rating. Analyst price-target changes
• Neutral Sentiment: Options activity indicates heightened interest. Investors purchased 20,735 call options, about 34% above typical call volume. This may reflect bullish speculation, but it does not necessarily represent durable institutional conviction.
• Negative Sentiment: Valuation remains a concern. One analyst urged investors to trim their positions, arguing that Toast’s valuation could become disconnected from fundamentals after its recent rally. With a P/E ratio above 44, further gains may require continued strong execution. Toast valuation downgrade
• Negative Sentiment: Profitability results were mixed. One earnings account reported adjusted EPS of $0.26, below the $0.32 consensus, despite revenue beating estimates and EPS improving from $0.13 a year earlier. The discrepancy among published EPS figures adds some uncertainty around the quarter’s headline profitability. Toast quarterly earnings report
• Negative Sentiment: The chief revenue officer sold shares. Jonathan Vassil sold 14,280 shares worth about $470,000, although the transaction was executed under a pre-arranged Rule 10b5-1 plan and is therefore a relatively weak bearish signal. SEC insider-trading filing

Insider Activity

In other Toast news, CEO Aman Narang sold 14,365 shares of the business’s stock in a transaction on Thursday, July 2nd. The shares were sold at an average price of $28.85, for a total value of $414,430.25. Following the completion of the transaction, the chief executive officer owned 70,451 shares in the company, valued at $2,032,511.35. The trade was a 16.94% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CRO Jonathan Vassil sold 14,280 shares of Toast stock in a transaction on Monday, August 3rd. The shares were sold at an average price of $32.89, for a total value of $469,669.20. Following the completion of the transaction, the executive owned 69,966 shares of the company’s stock, valued at approximately $2,301,181.74. This trade represents a 16.95% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 173,545 shares of company stock worth $4,748,501 over the last 90 days. Company insiders own 10.03% of the company’s stock.

Hedge Funds Weigh In On Toast

Several hedge funds and other institutional investors have recently made changes to their positions in the stock. Caden Capital Partners LP purchased a new position in Toast in the fourth quarter valued at $105,000. Jupiter Wealth Management LLC acquired a new position in shares of Toast during the 4th quarter worth about $178,000. Advisors Asset Management Inc. increased its holdings in shares of Toast by 28.5% in the 4th quarter. Advisors Asset Management Inc. now owns 5,253 shares of the company’s stock valued at $187,000 after acquiring an additional 1,164 shares during the last quarter. Intesa Sanpaolo Wealth Management purchased a new position in shares of Toast in the 4th quarter valued at about $118,000. Finally, Mindset Wealth Management LLC acquired a new stake in shares of Toast during the 4th quarter worth about $202,000. Hedge funds and other institutional investors own 82.91% of the company’s stock.

Analysts Set New Price Targets

Several research analysts have recently weighed in on the stock. Mizuho lowered their price target on shares of Toast from $45.00 to $38.00 and set an “outperform” rating on the stock in a research report on Tuesday, May 12th. Morgan Stanley set a $45.00 target price on shares of Toast in a research note on Friday, May 8th. Wells Fargo & Company boosted their target price on shares of Toast from $36.00 to $40.00 and gave the company an “overweight” rating in a report on Wednesday. DA Davidson increased their price target on shares of Toast from $28.00 to $30.00 and gave the company a “neutral” rating in a research note on Wednesday, July 29th. Finally, The Goldman Sachs Group upgraded shares of Toast from a “neutral” rating to a “buy” rating and set a $36.00 price target for the company in a report on Thursday, July 9th. Seventeen research analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the company. According to MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average target price of $38.38.

Toast Company Profile

Toast, Inc (NYSE: TOST) is a technology company that builds a cloud-based platform for restaurants and other foodservice businesses. Headquartered in Boston, Massachusetts, Toast offers integrated point-of-sale (POS) systems and a suite of software and hardware designed to streamline front-of-house and back-of-house operations. The company went public in 2021 and has positioned itself as a vertically integrated provider for the restaurant industry.

Toast’s product portfolio includes touchscreen POS terminals and handheld order-and-pay devices, kitchen display systems, and peripherals tailored for high-volume foodservice environments.