Toast Q1 payments volume growth stalls

Toast

07/05/2026 21:32

Overview

Restaurant tech platform's Q1 hardware revenue declined yr/yr

Payment volumes flat yr/yr at 22%

Q1 net income more than doubled yr/yr to $126 mln

Company repurchased 14 mln shares for $378 mln year-to-date through May 6, 2026

Outlook

Toast sees Q2 non-GAAP subscription services and financial technology solutions gross profit at $565 mln-$575 mln

Company expects Q2 adjusted EBITDA of $185 mln-$195 mln

Toast raises 2026 full-year non-GAAP subscription services and financial technology solutions gross profit outlook to $2.29 bln-$2.32 bln

Company lifts 2026 full-year adjusted EBITDA forecast to $790 mln-$810 mln

Result Drivers

CUSTOMER GROWTH - Co added about 7,000 net new locations in Q1, supporting recurring revenue and payment volume growth

PRODUCT EXPANSION - Launch of Toast IQ Grow AI marketing solution and Toast Drive-Thru aimed to boost customer demand and operational efficiency

STRATEGIC PARTNERSHIPS - New agreements with hospitality brands and hotel groups expanded Toast's presence in the restaurant and hotel sectors

Company press release: ID:nBw21WJtya

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Meet
$1.63 bln
$1.63 bln (23 Analysts)
Q1 Net Income
$126 mln
Q1 Annual Recurring Revenue
$2.20 bln
Q1 Gross Profit
$447 mln
Q1 Operating Expenses
$337 mln
Q1 Operating Income
$110 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 19 "strong buy" or "buy", 11 "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 $35.00, about 23.6% above its May 6 closing price of $28.31

The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 40 three months ago

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.)