Toast, Inc.

What they do

Toast provides a comprehensive platform of SaaS products, financial technology solutions (including integrated payment processing), restaurant-grade hardware, and a partner ecosystem. Its Android-based software powers point-of-sale, digital ordering, labor management, inventory, marketing, and loyalty tools, connecting front and back of house operations across service models.

Revenue drivers

• Financial technology solutions — Primary revenue stream, driven by gross payment volume (GPV) processed through Toast Payments. GPV for Q2 2026 was $60.7 billion, up 22% year-over-year.
• Subscription services — Recurring subscription fees for SaaS products. Annualized recurring run-rate (ARR) reached $2.4 billion as of June 30, 2026, up 25% year-over-year.
• Hardware and other — Sale of purpose-built hardware (POS terminals, handhelds, kiosks, kitchen display systems) and other services, complementing the core platform.

Recent performance

In Q2 2026, Toast reported revenue of $1.91 billion, up from $1.63 billion in both Q1 2026 and Q4 2025. Net income was $154 million (diluted EPS $0.26) versus $80 million in Q2 2025. Adjusted EBITDA was $221 million, including a $10 million tariff refund benefit. Operating cash flow was $144 million and free cash flow $130 million. The company added approximately 9,500 net new locations, bringing total locations to ~180,000, up 22% year-over-year.

Strategy

Management emphasizes expanding platform adoption among existing customers and attracting new ones across enterprise and international markets. They highlight AI-driven offerings like Toast IQ Grow as a growth driver, and plan to re-invest the $10 million tariff refund in the business. Continued investment in sales, marketing, and R&D is expected to precede benefits.

Risks

• Growth management — Failure to scale finance, IT, and security infrastructure effectively could hinder growth and financial performance.
• Competition — Highly competitive market with new entrants and existing rivals could pressure pricing and market share.
• Tariff and geopolitical impacts — Tariffs could affect consumer spending or restaurant operations, creating uncertainty in results.
• Dependence on GPV — Revenue is heavily tied to gross payment volume, which is subject to seasonality and macroeconomic conditions.

Outlook

For Q3 2026, Toast expects non-GAAP subscription and fintech solutions gross profit between $615-$625 million and Adjusted EBITDA between $210-$220 million. For full year 2026, it raised guidance: non-GAAP subscription and fintech gross profit of $2,325-$2,355 million (23-25% growth) and Adjusted EBITDA of $805-$825 million. Management cites strong momentum, record net location adds, and fast adoption of AI products.