Toast — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 was $1,981 million, up from $1,633 million in Q3 2025.
• Subscription services revenue was $317 million compared to $244 million in the prior year period.
• Financial technology solutions revenue was $1,619 million compared to $1,345 million in the prior year period.
• Gross Payment Volume (GPV) increased 20% to $61.8 billion in Q3 2026, up from $51.5 billion in Q3 2025.
• Annualized Recurring Run-Rate (ARR) grew 24% to $2.5 billion as of September 30, 2026.
• Total Locations increased 21% to approximately 189,000.
• Subscription services and financial technology solutions gross profit grew 29% to $630 million; Non-GAAP subscription services and financial technology solutions gross profit grew 27% to $642 million.
• Operating income was $165 million in Q3 2026 compared to $84 million in Q3 2025.
• Net income was $169 million in Q3 2026 compared to $105 million in Q3 2025.
• Adjusted EBITDA was $240 million in Q3 2026 compared to $176 million in Q3 2025.
• Diluted earnings per share was $0.29 in Q3 2026 compared to $0.16 in Q3 2025.
• Net cash provided by operating activities was $198 million in Q3 2026 compared to $165 million in Q3 2025.
• Free Cash Flow was $181 million in Q3 2026 compared to $153 million in Q3 2025.
• Deferred revenue was $76 million as of September 30, 2026, compared to $68 million as of December 31, 2025.
• Cash and cash equivalents were $1,203 million as of September 30, 2026, compared to $1,353 million as of December 31, 2025.

Guidance and Future Outlook:

• For Q4 2026, Toast expects Non-GAAP subscription services and financial technology solutions gross profit to be between $610 million and $620 million (22-24% growth compared to Q4 2025).
• For Q4 2026, Toast expects Adjusted EBITDA to be between $200 million and $210 million.
• For the full year 2026, Toast expects Non-GAAP subscription services and financial technology solutions gross profit to be between $2,375 million and $2,385 million (26% growth compared to 2025, up from the previous 23-25% guidance).
• For the full year 2026, Toast expects Adjusted EBITDA to be between $840 million and $850 million (up from the previous $805 million to $825 million guidance).

Business Segments and Product Lines:

• Toast added approximately 8,500 net new Locations in the third quarter.
• As part of the Fall Release, Toast expanded Toast IQ Grow with new SEO, Reviews, and Offers agents.
• Toast launched Toast IQ Team, a new labor management solution featuring sales forecasting, a Scheduling Agent, staff contests, payroll, and tip management.
• Toast launched Toast Fuel, a solution for independent fuel and convenience operators to manage payments, retail, and food service on a single platform.
• Toast secured new restaurant customers including Ruby Tuesday, Luke's Lobster, Hopdoddy, and ForFive Coffee, representing more than 250 locations.
• Toast expanded operations to Quebec, now operating across all 10 Canadian provinces with support for French, English, Spanish, and Mandarin.

Market and Competitive Landscape:

• Toast Fuel targets the independent fuel and convenience market, where an estimated 80% of fuel bought by consumers in the U.S. is sold.
• The company describes its platform as moving beyond tools to "agents" that take on work for operators.

Management Commentary and Tone:

• CEO Aman Narang stated the company had "another strong quarter" with recurring gross profit streams growing 27% and GAAP Operating Income margin expanding to 26%.
• Narang expressed confidence in the path to "durable growth for years to come."
• President and CFO Elena Gomez announced she will step away at the end of the calendar year after five and a half years, having led the company through its 2021 IPO and significant growth.
• Michael Senno, Senior Vice President of Finance, will succeed Gomez as CFO effective January 1, 2027.
• Board Chair Mark Hawkins praised Gomez's leadership and expressed confidence in Senno's ability to guide the company.

Other Key Points:

• Toast will host a live conference call at 5:00 p.m. Eastern Time on November 3, 2026.
• The company utilizes its Investor Relations website and Toast Newsroom for material non-public information disclosure.
• Restructuring expenses for the three months ended September 30, 2026, were $6 million, including $6 million in severance benefits.
• The company reported a change in fair value of warrant liability of $(1) million in Q3 2026 compared to $7 million in Q3 2025.
• Capital expenditures were $17 million in Q3 2026 compared to $12 million in Q3 2025.
• Cash paid to repurchase Class A common stock was $0 in Q3 2026 compared to $23 million in Q3 2025.