Toast Announces First Quarter 2026 Financial Results
TOST
Annualized recurring run-rate (ARR) grew 26% to $2.2 billion as of March 31, 2026 Added approximately 7,000 net new Locations in first quarter Net income was $126 million and Adjusted EBITDA was $179 million in first quarter Repurchased 14 million shares for $378 million year-to-date through May 6, 2026
Published on 05/07/2026 at 04:08 pm EDT
Toast (NYSE: TOST), the global technology platform built for restaurants and retail businesses, today reported financial results for the first quarter ended March 31, 2026.
“2026 is off to a strong start. In Q1 we grew recurring gross profit 27%, expanded GAAP Operating Income margin to 21%, and added approximately 7,000 net locations," said Toast CEO Aman Narang. "AI is helping us both build faster and drive more impact for our customers. For example, the launch of Toast IQ Grow includes our first AI agent and aims to help restaurants optimize their digital presence and drive more demand. We see strong momentum across both our core as well as our new markets, and with the incredible opportunities AI creates I've never been more confident in our ability to scale this business.”
Financial Highlights for the First Quarter of 2026
Percentages may not tie due to rounding. For more information on the non-GAAP financial measures and key metrics discussed in this press release, please see the sections titled “Key Business Metrics” and “Non-GAAP Financial Measures,” as well as the reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures at the end of this press release.
Outlook1
For the second quarter ending June 30, 2026, Toast expects to report:
For the full year ending December 31, 2026, Toast expects to report:
The outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. See cautionary note regarding “Forward-looking Statements” in this press release.
Recent Business Highlights
Conference Call Information
Toast will host a live conference call at 5:00 p.m. Eastern Time on Thursday, May 7, 2026. The live webcast of the conference call can be accessed through Toast’s investor relations website at http://investors.toasttab.com. A replay of the webcast will be available for a period of 90 days after the call.
Toast has used, and intends to continue to use, its Investor Relations website (http://investors.toasttab.com), as well as the Toast Newsroom (https://pos.toasttab.com/news), as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Information on or that can be accessed through Toast’s Investor Relations website, or that is contained in any website to which a hyperlink is provided herein is not part of this press release, and the inclusion of Toast’s Investor Relations website address, and any hyperlinks are only inactive textual references.
____________________ 1 A reconciliation of these forward looking Non-GAAP measures to the corresponding GAAP measure is not available without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliations that have not yet occurred, are out of our control, or cannot be reasonably predicted, including but not limited to the change in fair value of our warrant liability and stock-based compensation. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results. 2 Currently available in beta
About Toast
Toast is a global technology platform built for restaurant and retail businesses. From the busiest local restaurants and shops to large hospitality brands, Toast helps owners and operators manage their businesses more efficiently, drive guest demand, and build lasting success.
Toast integrates software, agentic AI, payments, financial technology solutions, and hardware with a broad partner ecosystem. Powering billions of purchases throughout local commerce, Toast delivers the precision and innovation required for modern restaurant and retail environments. For more information, visit www.toasttab.com.
Forward-looking Statements
This press release contains “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when Toast or its management is discussing its beliefs, estimates or expectations. Such statements generally include the words “believes,” “plans,” “intends,” “targets,” “may,” “could,” “should,” “will,” “expects,” “estimates,” “suggests,” “anticipates,” “outlook,” “continues,” or similar expressions. These statements are not historical facts or guarantees of future performance, but represent the beliefs of Toast and its management at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside Toast’s control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. Forward-looking statements include, without limitation, statements about Toast’s expected financial positions or growth, including guidance on financial results for the second fiscal quarter and full year of 2026; Toast’s operating strategy and view, including the expected product demand, ability and strategy to deliver innovative solutions, and growth of its business; statements about new products and offerings and the benefits thereof; Toast’s investments in technology and infrastructure; arrangements between Toast and its customers, including the planned and future implementation of the Toast platform at such customers’ locations; Toast’s ability to attract and retain customers and the commitments from its customers; competitive positions, financing and capital allocation strategy; and business strategy.
The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in Toast’s filings with the Securities and Exchange Commission (“SEC”), including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations'' in Toast’s Annual Report on Form 10-K for the year ended December 31, 2025, Toast’s Quarterly Report on Form 10-Q for the three months ended March 31, 2026 that will be filed following this earnings release, and Toast’s subsequent SEC filings. Toast can give no assurance that the plans, intentions, expectations or strategies as reflected in or suggested by those forward-looking statements will be attained or achieved. The forward-looking statements in this release are based on information available to Toast as of the date hereof, and Toast disclaims any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing Toast’s views as of any date subsequent to the date of this press release.
TOAST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in millions, except per share amounts)
Three Months Ended March 31,
2026
2025
Revenue:
Subscription services
$
268
$
209
Financial technology solutions
1,323
1,082
Hardware and professional services
39
46
Total revenue
1,630
1,337
Costs of revenue:
Subscription services
60
66
Financial technology solutions
1,011
831
Hardware and professional services
111
93
Amortization of acquired intangible assets
1
1
Total costs of revenue
1,183
991
Gross profit
447
346
Operating expenses:
Sales and marketing
156
133
Research and development
97
84
General and administrative
84
79
Restructuring expenses
—
7
Total operating expenses
337
303
Operating income
110
43
Other income:
Interest income, net
13
12
Change in fair value of warrant liability
8
3
Income before taxes
131
58
Income tax expense
(5
)
(2
)
Net income
$
126
$
56
Earnings per share:
Basic
$
0.21
$
0.10
Diluted
$
0.20
$
0.09
Weighted-average shares used in computing earnings per share:
Basic
587
575
Diluted
602
603
TOAST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions)
March 31,
2026
December 31,
2025
Assets:
Current assets:
Cash and cash equivalents
$
1,098
$
1,353
Marketable securities
672
638
Accounts receivable, net
138
127
Inventories, net
136
114
Other current assets
548
437
Total current assets
2,592
2,669
Property and equipment, net
114
105
Operating lease right-of-use assets
24
27
Intangible assets, net
13
14
Goodwill
113
113
Restricted cash
74
71
Other non-current assets
164
146
Total non-current assets
502
476
Total assets
$
3,094
$
3,145
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable
$
70
$
47
Deferred revenue
73
68
Accrued expenses and other current liabilities
921
854
Total current liabilities
1,064
969
Warrants to purchase common stock
11
19
Operating lease liabilities, non-current
17
20
Other long-term liabilities
12
13
Total liabilities
1,104
1,021
Commitments and Contingencies
Stockholders’ Equity:
Preferred stock
—
—
Common stock
—
—
Accumulated other comprehensive income (loss)
(1
)
2
Additional paid-in capital
3,127
3,384
Accumulated deficit
(1,136
)
(1,262
)
Total stockholders’ equity
1,990
2,124
Total liabilities and stockholders’ equity
$
3,094
$
3,145
TOAST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) (in millions)
Three Months Ended March 31,
2026
2025
Cash flows from operating activities:
Net income
$
126
$
56
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
10
19
Stock-based compensation expense
54
60
Amortization of deferred contract acquisition costs
22
23
Change in fair value of warrant liability
(8
)
(3
)
Credit loss expense
27
22
Other non-cash items
(1
)
—
Changes in operating assets and liabilities:
Accounts receivable, net
(18
)
(9
)
Other current assets
(2
)
(12
)
Deferred contract acquisition costs
(45
)
(33
)
Inventories, net
(22
)
7
Accounts payable
18
10
Accrued expenses and other current liabilities
(32
)
(56
)
Deferred revenue
4
(1
)
Operating lease right-of-use assets and operating lease liabilities, net
1
—
Other assets and liabilities
(2
)
(4
)
Net cash provided by operating activities
132
79
Cash flows from investing activities:
Capital expenditures
(17
)
(10
)
Purchases of marketable securities
(161
)
(110
)
Proceeds from the sale of marketable securities
38
40
Purchases of loans classified as held for investment, net
(23
)
—
Maturities of marketable securities
88
102
Net cash provided by (used in) investing activities
(75
)
22
Cash flows from financing activities:
Change in customer funds obligations, net
82
64
Proceeds from issuance of common stock
14
26
Cash paid to repurchase Class A common stock
(323
)
(17
)
Net cash provided by (used in) financing activities
(227
)
73
Net increase (decrease) in cash, cash equivalents, cash held on behalf of customers and restricted cash
(170
)
174
Cash, cash equivalents, cash held on behalf of customers and restricted cash at beginning of period
1,583
1,085
Cash, cash equivalents, cash held on behalf of customers and restricted cash at end of period
$
1,413
$
1,259
Reconciliation of cash, cash equivalents, cash held on behalf of customers and restricted cash
Cash and cash equivalents
1,098
1,005
Cash held on behalf of customers
241
187
Restricted cash
74
67
Total cash, cash equivalents, cash held on behalf of customers and restricted cash
$
1,413
$
1,259
Non-GAAP Financial Measures
In this press release, Toast refers to non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with United States generally accepted accounting principles (“GAAP”). Toast uses certain non-GAAP financial measures, as described below, to understand and evaluate its core operating performance. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of Toast’s financial performance and should not be considered substitutes for, or superior to, the financial information prepared and presented in accordance with GAAP. Toast believes that these non-GAAP financial measures provide useful information about its financial performance, enhance the overall understanding of its past performance and future prospects, and allow for greater transparency with respect to important metrics used by Toast’s management for financial and operational decision-making.
In the tables below, Toast has provided reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. These non-GAAP financial measures should not be considered substitutes for financial measures calculated in accordance with GAAP, and the financial results that Toast calculates and presents in the table in accordance with GAAP, as well as the corresponding reconciliations from those results, should be carefully evaluated.
The following are the non-GAAP financial measures referenced in this press release and presented in the tables below:
Adjusted EBITDA, Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit, Non-GAAP Costs of Revenue, Non-GAAP Gross Profit, Non-GAAP Subscription Services Gross Profit, Non-GAAP Financial Technology Solutions Gross Profit, Non-GAAP Hardware and Professional Services Gross Profit, Non-GAAP Non-Payments Financial Technology Solutions Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses, and Free Cash Flow do not purport to represent profitability and liquidity measures as defined in accordance with GAAP. These measures are provided to investors and others to improve the quarter-to-quarter and year-to-year comparability of Toast's financial results and to ensure that investors understand the information Toast uses to evaluate the performance of its businesses.
Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations since they do not include the impact of certain expenses and cash flows that are reflected in our Consolidated Statements of Operations and Consolidated Statements of Cash Flows. Thus, our Adjusted EBITDA, Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit, Non-GAAP Costs of Revenue, Non-GAAP Gross Profit, Non-GAAP Subscription Services Gross Profit, Non-GAAP Financial Technology Solutions Gross Profit, Non-GAAP Hardware and Professional Services Gross Profit, Non-GAAP Non-Payments Financial Technology Solutions Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses, and Free Cash Flow should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
Key Business Metrics
In addition, Toast also uses the following key business metrics to help it evaluate its business, identify trends affecting its business, formulate business plans, and make strategic decisions:
Locations
We define a live location, or Location, as a unique location that has used Toast Point of Sale to record transaction volumes above a minimum threshold, and has not been marked as a churned location as of the date of determination. A Location can use Toast payment services, which we refer to as a Toast Processing Location, or for select enterprise customers, not use Toast’s payment services, which we refer to as a Non-Toast Processing Location. Customers of legacy solutions provided by companies that we have acquired, that do not use Toast Point of Sale, are not included in our Location count.
Summary of Key Business Metrics and Non-GAAP Results
(unaudited)
Three Months Ended March 31,
(dollars in billions)
2026
2025
% Growth
Gross Payment Volume (GPV)
$
51.3
$
42.2
22
%
As of March 31,
(dollars in millions)
2026
2025
% Growth
Payments Annualized Recurring Run-Rate
$
1,026
$
830
24
%
Subscription Annualized Recurring Run-Rate
1,125
883
27
%
Total Annualized Recurring Run-Rate (ARR)
$
2,151
$
1,713
26
%
Adjusted EBITDA
Three Months Ended March 31,
(in millions)
2026
2025
Net income
$
126
$
56
Stock-based compensation expense and related payroll tax
58
64
Depreciation and amortization
11
19
Interest income, net
(13
)
(12
)
Change in fair value of warrant liability
(8
)
(3
)
Restructuring expenses(1)
—
7
Income tax expense
5
2
Adjusted EBITDA
$
179
$
133
(1) Restructuring expenses for the three months ended March 31, 2025 include $4 million of severance benefits and $3 million of stock-based compensation expense.
Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit
Three Months Ended March 31,
(dollars in millions)
2026
2025
Gross profit (GAAP):
Subscription services
$
208
$
143
Financial technology solutions
312
251
Adjustments:
Stock-based compensation expense and related payroll tax
3
5
Depreciation and amortization
6
16
Non-GAAP Subscription Services and Financial Technology Solutions Gross Profit
$
529
$
415
Non-GAAP Costs of Revenue
Three Months Ended March 31,
(dollars in millions)
2026
2025
Costs of revenue
$
1,183
$
991
Stock-based compensation expense and related payroll tax
(7
)
(11
)
Depreciation and amortization
(8
)
(17
)
Non-GAAP costs of revenue
$
1,168
$
963
Non-GAAP Gross Profit
Three Months Ended March 31,
(dollars in millions)
2026
2025
Gross profit
$
447
$
346
Stock-based compensation expense and related payroll tax
7
11
Depreciation and amortization
8
17
Non-GAAP gross profit
$
462
$
374
Non-GAAP Subscription Services Gross Profit
Three Months Ended March 31,
(dollars in millions)
2026
2025
Subscription services gross profit
$
208
$
143
Stock-based compensation expense and related payroll tax
3
5
Depreciation and amortization
6
16
Non-GAAP subscription services gross profit
$
217
$
164
Non-GAAP Financial Technology Solutions Gross Profit
Three Months Ended March 31,
(dollars in millions)
2026
2025
Financial technology solutions gross profit
$
312
$
251
Stock-based compensation expense and related payroll tax
—
—
Depreciation and amortization
—
—
Non-GAAP financial technology solutions gross profit
$
312
$
251
Non-GAAP Hardware and Professional Services Gross Profit
Three Months Ended March 31,
(dollars in millions)
2026
2025
Hardware and professional services gross profit
$
(72
)
$
(47
)
Stock-based compensation expense and related payroll tax
4
6
Depreciation and amortization
—
—
Non-GAAP hardware and professional services gross profit
$
(68
)
$
(41
)
Non-GAAP Non-Payments Financial Technology Solutions Gross Profit
Three Months Ended March 31,
(dollars in millions)
2026
2025
Financial technology solutions gross profit
$
312
$
251
Payments financial technology solutions gross profit
(261
)
(204
)
Non-GAAP non-payments financial technology solutions gross profit
$
51
$
47
Non-GAAP Sales and Marketing Expenses
Three Months Ended March 31,
(dollars in millions)
2026
2025
Sales and marketing expenses
$
156
$
133
Stock-based compensation expense and related payroll tax
(14
)
(16
)
Depreciation and amortization
(1
)
—
Non-GAAP sales and marketing expenses
$
141
$
117
Non-GAAP Research and Development Expenses
Three Months Ended March 31,
(dollars in millions)
2026
2025
Research and development expenses
$
97
$
84
Stock-based compensation expense and related payroll tax
(23
)
(22
)
Depreciation and amortization
(1
)
(1
)
Non-GAAP research and development expenses
$
73
$
61
Non-GAAP General and Administrative Expenses
Three Months Ended March 31,
(dollars in millions)
2026
2025
General and administrative expenses
$
84
$
79
Stock-based compensation expense and related payroll tax
(14
)
(15
)
Depreciation and amortization
(1
)
(1
)
Termination of leases
—
—
Stock-based charitable contribution expense
—
—
Non-GAAP general and administrative expenses
$
69
$
63
Free Cash Flow
Three Months Ended March 31,
(dollars in millions)
2026
2025
Net cash provided by operating activities
$
132
$
79
Capital expenditures
(17
)
(10
)
Free cash flow
$
115
$
69
Sums may not equal totals due to rounding.
TOST-FIN
Source: Toast, Inc.
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