GET DAILY SIGNALSToast (TOST) Beats Q3 Earnings but Shares Dip 6% After Hours
Key Takeaways
- Toast reported third-quarter 2026 revenue of $1.98 billion, up 21.3% year over year and slightly above the roughly $1.97 billion Wall Street consensus.
- Diluted earnings per share (EPS) of $0.29 beat the FactSet consensus of $0.25, while net income rose to $169 million from $105 million a year earlier.
- Annualized recurring run-rate (ARR) climbed 24% to $2.5 billion, and total locations grew 21% to approximately 189,000.
- Adjusted EBITDA reached $240 million, above the roughly $219 million analysts had projected.
- Toast raised its full-year 2026 adjusted EBITDA outlook but announced that CFO Elena Gomez will step down at the end of the year.
- Shares fell about 6% in after-hours trading despite the headline beat.
Why Toast’s Results Matter to Investors
Toast has been steadily turning strong top-line growth into reliable profitability over the past few years, and its quarterly updates serve as an important gauge for spending trends in the restaurant and hospitality space. I pay close attention to these reports because they offer clues about demand resilience among operators, payment volume trends, and the company’s progress on margins while it adds new locations. This quarter’s release carried extra weight given the upcoming change in finance leadership, which makes the guidance and commentary particularly relevant for assessing the path into 2027.
Breaking Down the Quarter’s Numbers
For the third quarter ended September 30, 2026, Toast posted total revenue of $1.98 billion, a 21.3% increase from $1.63 billion a year earlier. The result landed close to the analyst consensus of roughly $1.97 billion. Diluted EPS came in at $0.29, topping the FactSet consensus of $0.25 and improving from $0.16 in the prior-year period. Net income advanced to $169 million from $105 million, while operating income rose to $165 million from $84 million. Adjusted EBITDA reached $240 million from $176 million, exceeding the approximately $219 million that analysts had projected.
Operating metrics continued to expand. ARR increased 24% year over year to $2.5 billion as of September 30, 2026. Total locations rose 21% to about 189,000, with roughly 8,500 net new locations added during the quarter. Gross payment volume grew 20% to $61.8 billion, a touch below the FactSet estimate of around $62.6 billion. Free cash flow climbed to $181 million from $153 million a year earlier. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
How the Market Responded
Toast shares declined about 6% in after-hours trading after the release, even though the company beat on EPS and adjusted EBITDA. The reaction appeared to reflect caution around the announced leadership change, with CFO Elena Gomez stepping down at the end of December 2026 and Senior Vice President of Finance Michael Senno assuming the role effective January 1, 2027. The modest shortfall in gross payment volume relative to estimates may have added to the tempered sentiment, highlighting how closely investors track payment activity as a proxy for restaurant-industry health.
Looking Ahead: Guidance and What to Watch
Investors will want to monitor how Toast delivers on its updated guidance. For the fourth quarter ending December 31, 2026, the company expects non-GAAP subscription services and financial technology solutions gross profit of $610 million to $620 million, along with adjusted EBITDA of $200 million to $210 million. For the full year, management lifted its adjusted EBITDA outlook to $840 million to $850 million, up from the prior range of $805 million to $825 million.
The CFO transition will likely stay in focus. Michael Senno, a long-tenured finance executive at the company, takes over on January 1, 2027, and investors will look for signs of continuity or any shifts in growth and margin priorities. Beyond leadership, key areas to track include the pace of net new location additions, growth in gross payment volume, and the rollout of newer offerings such as Toast IQ and Toast Fuel. Margin trends, cost management, and the overall health of restaurant spending will remain important as the company aims to sustain profitable growth.
My Take on Using AI Tools for Analysis
When I review quarterly results like these, I often turn to Tickeron’s AI Screener to quickly compare Toast against peers on fundamentals and technical signals. It helps me spot patterns and refine watchlists without spending hours on manual filtering. In my experience, layering these AI-driven insights with traditional earnings analysis gives a clearer picture of where the stock stands relative to the broader sector.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
TOST in -2.87% downward trend, sliding for three consecutive days on October 27, 2026
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where TOST declined for three days, in 225 of 279 cases, the price declined further within the following month. The odds of a continued downward trend are 81%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 48 of 65 cases where TOST's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 74%.
TOST broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where TOST's RSI Indicator exited the oversold zone, 22 of 24 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 90%.
The Momentum Indicator moved above the 0 level on October 30, 2026. You may want to consider a long position or call options on TOST as a result. In 65 of 79 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 82%.
The Moving Average Convergence Divergence (MACD) for TOST just turned positive on October 06, 2026. Looking at past instances where TOST's MACD turned positive, the stock continued to rise in 44 of 55 cases over the following month. The odds of a continued upward trend are 80%.
TOST moved above its 50-day moving average on November 02, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for TOST crossed bullishly above the 50-day moving average on October 28, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 14 of 16 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 88%.
Following a +6.09% 3-day Advance, the price is estimated to grow further. Considering data from situations where TOST advanced for three days, in 246 of 311 cases, the price rose further within the following month. The odds of a continued upward trend are 79%.
The Aroon Indicator entered an Uptrend today. In 183 of 242 cases where TOST Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 76%.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 38 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 48 (best 1 - 100 worst), indicating steady price growth. TOST’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 71 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (9.446) is normal, around the industry mean (16.593). P/E Ratio (40.265) is within average values for comparable stocks, (57.337). Projected Growth (PEG Ratio) (0.235) is also within normal values, averaging (3.648). Dividend Yield (0.000) settles around the average of (0.283) among similar stocks. P/S Ratio (2.758) is also within normal values, averaging (103.889).
The Tickeron PE Growth Rating for this company is 93 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. TOST’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 91, placing this stock worse than average.
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