Toast Reports Significant Financial Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 04 2026
0mins
Should l Buy TOST?
Source: Fool
- Recurring Revenue Growth: Toast's Annualized Recurring Revenue (ARR) reached $1.9 billion in mid-2025, growing approximately 30% year-over-year, with projections to exceed $2 billion by Q3 2025, highlighting its strong appeal and stability in the small business market.
- First Year of Profitability: In FY 2024, Toast achieved GAAP profitability with a net income of $19 million and an Adjusted EBITDA of $373 million, marking a critical transition from cash burn to self-funding growth.
- Market Penetration Potential: Despite servicing around 156,000 restaurant locations, Toast's total addressable market is estimated at 1.4 million locations, indicating significant room for future expansion and growth potential.
- Product Expansion Strategy: By launching new offerings like Toast IQ and Toast Advertising, Toast enhances customer marketing and operational efficiency, thereby increasing customer lifetime value and reducing churn, further solidifying its market position.
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Analyst Views on TOST
Wall Street analysts forecast TOST stock price to rise
21 Analyst Rating
13 Buy
8 Hold
0 Sell
Moderate Buy
Current: 26.070
Low
36.00
Averages
47.00
High
60.00
Current: 26.070
Low
36.00
Averages
47.00
High
60.00
About TOST
Toast, Inc. is a cloud-based, all-in-one digital technology platform purpose-built for the entire restaurant community. It provides a platform of software-as-a-service (SaaS) products and financial technology solutions, including integrated payment processing, restaurant-grade hardware, and a broad ecosystem of third-party partners. It serves as the restaurant operating system, connecting front of house and back of house operations across service models including dine-in, takeout, delivery, catering, and retail. Its products include point-of-sale (POS) & restaurant operations, marketing, online ordering & delivery, team management, vendor management, retail, and financial technology solutions. Its in-store POS and restaurant operations offerings are built to help reduce time to take an order, optimize operations, and handle payments. Its marketing products provide integrated solutions to deliver targeted email and SMS campaigns, build loyalty programs, offer gift cards, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Launch of Intelligent Assistant: Toast IQ, a conversational AI assistant designed for the hospitality sector, transforms billions of data points into actionable insights, empowering restaurateurs to optimize decision-making, thereby improving operational efficiency and customer satisfaction.
- Accelerated Technology Integration: The latest innovations from Toast focus on 'human-boosting' technology, allowing operators to automate complex workflows with simple commands, resulting in rapid adoption of intelligent tools in over half of its locations, significantly enhancing work efficiency.
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- Customer Growth and Challenges: The company added a record 30,000 net locations last year, capturing about 20% of the U.S. small and mid-market restaurant sector, yet future growth hinges on restaurant chains, international markets, and retail, which currently contribute only 5% to annual recurring revenue.
- AI Assistant Launch: The recent introduction of Toast IQ, an AI assistant that quickly performs tasks and analyzes data, aims to aid restaurant owners and staff in decision-making; however, advancements in AI may lead customers to prefer developing their own software, increasing competitive pressure on Toast.
- Risk of Declining Software Margins: While Toast achieved an 80% software gross margin in Q4, the potential for AI to reduce software costs poses a threat to its pricing power, especially as payments account for 82% of total revenue, raising concerns about future profitability.
See More
Market Dynamics and Company Outlook
- Oil Price Fluctuations: Brent crude oil prices surged by 4%, surpassing $117 per barrel, leading U.S. gas prices to exceed $4 per gallon; while the S&P 500 is expected to open higher, the market faces cost pressures from rising oil prices, potentially impacting overall economic recovery.
- Marvell and Nvidia Partnership: Marvell shares surged nearly 10% after announcing a strategic partnership with Nvidia, which will invest $2 billion to enhance the connectivity of Marvell's custom processors with Nvidia's networking technology, thereby strengthening Marvell's competitive position in the AI chip market.
- McCormick Acquires Unilever's Food Business: McCormick announced a $45 billion deal to acquire Unilever's food business, which will significantly expand its market share in spices and condiments, despite reporting only 1.2% organic sales growth in the last quarter, enhancing brand influence.
- Wells Fargo Downgrades Ford: Wells Fargo cut its price target for Ford from $11 to $10 and reiterated a sell rating, with analysts concerned that the fallout from the Iran war will increase raw material and freight costs, potentially impacting the profitability of automakers.
See More
Market Cap Game Show: Emily vs. Bill Showdown
- Market Capital Showdown: In this episode, Motley Fool analysts Emily Flippen and Bill Barker faced off in a market cap range challenge involving 10 companies, engaging listeners and enhancing the show's interactivity.
- Championship Battle: Emily, the reigning Market Cap Game Show world champion, showcased her investment analysis skills against Bill, ultimately winning with a score of 7 to 3, solidifying her champion status.
- Investor Education: The show utilized a fun game format to help listeners understand the significance of market caps, increasing public interest in investing and promoting financial literacy.
- Industry Insights: Analysts discussed the market performance of various companies, including Adyen and PayCom, providing deep insights into current market dynamics to assist investors in making informed decisions.
See More
A.O. Smith and Toast Stocks Recommended
- Investment Opportunity: A.O. Smith and Toast are currently viewed as undervalued stocks, with Motley Fool analysts suggesting that now is an excellent buying opportunity that could yield significant investment returns.
- Market Performance: As of March 13, 2026, A.O. Smith's stock price was at 1.15%, while Toast's stock rose by 1.64%, indicating active market performance and attracting investor interest in both companies.
- Analyst Insights: Jason Hall and Tyler Crowe emphasize that despite market volatility, the fundamentals of A.O. Smith and Toast remain strong, suggesting good growth potential in the future.
- Long-Term Outlook: The analysts believe that with economic recovery and increasing consumer demand, both stocks could appreciate significantly over the next few years, making them attractive for long-term investors.
See More
Global Payments Restructures Strategy and Market Outlook
- Market Share Expansion: Global Payments aims to dominate the merchant acquisition market through the acquisition of Worldpay, which is expected to accelerate cash flow and provide substantial returns to shareholders, thereby enhancing the company's position in the competitive payments industry.
- Financial Restructuring: The company undertook a major restructuring in early 2025, cutting costs and shedding assets, with expectations to boost free cash flow to $5 billion by 2028, further strengthening financial stability and supporting future shareholder return plans.
- Technological Innovation: Global Payments launched a new all-in-one point-of-sale system called Genius, aimed at enhancing brand recognition and customer loyalty, with analysts predicting this will drive greater success in future market promotions.
- Acquisition Integration: With the support of activist investor Elliott Management, Global Payments is integrating the Worldpay acquisition, expected to achieve $600 million in cost savings and enhance operational leverage, further strengthening its competitive edge in the market.
See More
Toast Named One of Fast Company's Most Innovative Companies of 2026
- Recognition as an Innovator: Toast has been named one of Fast Company's Most Innovative Companies of 2026, highlighting its leadership in technological innovation within the restaurant industry, which enhances brand image and attracts potential customers.
- Launch of Intelligent Assistant: Toast IQ, a conversational AI assistant designed for the hospitality sector, transforms billions of data points into actionable insights, empowering restaurateurs to optimize decision-making, thereby improving operational efficiency and customer satisfaction.
- Accelerated Technology Integration: The latest innovations from Toast focus on 'human-boosting' technology, allowing operators to automate complex workflows with simple commands, resulting in rapid adoption of intelligent tools in over half of its locations, significantly enhancing work efficiency.
- Expanded Industry Influence: Fast Company's recognition underscores Toast's role in driving industry change, indicating that the company not only adapts to change but also leads industry development, providing a blueprint for sustained innovation in the future.
See More
Toast Faces AI Impact, Stock Down Over 40%
- Market Uncertainty Intensifies: Toast's stock has plummeted over 40% from its summer high due to the impact of artificial intelligence on software stocks, with nearly $1 trillion wiped off the industry, highlighting investor anxiety about future prospects.
- Customer Growth and Challenges: The company added a record 30,000 net locations last year, capturing about 20% of the U.S. small and mid-market restaurant sector, yet future growth hinges on restaurant chains, international markets, and retail, which currently contribute only 5% to annual recurring revenue.
- AI Assistant Launch: The recent introduction of Toast IQ, an AI assistant that quickly performs tasks and analyzes data, aims to aid restaurant owners and staff in decision-making; however, advancements in AI may lead customers to prefer developing their own software, increasing competitive pressure on Toast.
- Risk of Declining Software Margins: While Toast achieved an 80% software gross margin in Q4, the potential for AI to reduce software costs poses a threat to its pricing power, especially as payments account for 82% of total revenue, raising concerns about future profitability.
See More
