Toast shares fall as Q2 earnings fall short of expectations

BOSTON – Toast Inc. (NYSE:TOST) reported mixed second-quarter results on Tuesday, with earnings falling short of expectations despite better-than-expected revenue growth. The restaurant technology company’s shares dropped 2.6% in after-hours trading following the release.

Toast posted adjusted earnings per share of $0.02 for Q2, missing analyst estimates of $0.11. However, revenue came in at $1.24 billion, surpassing the consensus forecast of $1.22 billion. The company’s top-line growth was driven by a 26% YoY increase in gross payment volume to $40.5 billion.

“Our team executed incredibly well in the second quarter and delivered strong results, including adding a record number of net locations and achieving GAAP profitability ahead of expectations,” said Toast CEO and Co-Founder Aman Narang.

The company reported GAAP net income of $14 million for the quarter, compared to a net loss of $98 million in the same period last year. Adjusted EBITDA improved significantly to $92 million from $15 million in Q2 2023.

Toast added approximately 8,000 net new locations in Q2, bringing its total to around 120,000 locations, up 29% YoY. The company’s annualized recurring run-rate (ARR) grew 29% YoY to $1.5 billion as of June 30.

For Q3, Toast expects non-GAAP subscription services and financial technology solutions gross profit between $345 million and $355 million. The company raised its full-year 2024 outlook, now projecting non-GAAP subscription services and financial technology solutions gross profit of $1.34 billion to $1.36 billion.

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