Toast Lifts 2026 Profit Guidance After ARR Growth Cools

The Tip Desk · November 3, 2026 · 3 min read

ARR reached $2.5 billion as of September 30, 2026, up 24%, and the company raised full-year Adjusted EBITDA to $840 million–$850 million.

Toast (TOST), the global technology platform for restaurants and retail, reported annualized recurring run-rate of $2.5 billion as of September 30, 2026, up 24% from a year earlier, a slower pace than the 25% increase to $2.4 billion recorded as of June 30.

The company added approximately 8,500 net new locations in the third quarter, after a record approximately 9,500 in the second quarter. Total locations rose 21% year over year to about 189,000. Gross payment volume increased 20% to $61.8 billion.

Revenue was $1.98 billion, compared with $1.63 billion a year earlier. Subscription services revenue was $317 million and financial technology solutions revenue was $1.62 billion. Hardware and professional services revenue was $45 million.

GAAP subscription services and financial technology solutions gross profit grew 29% to $630 million. Non-GAAP subscription services and financial technology solutions gross profit, which Toast treats as its recurring gross profit streams, grew 27% to $642 million.

Operating income was $165 million, compared with $84 million in the year-ago quarter. Net income was $169 million, or $0.29 a share, versus $105 million, or $0.16 a share, a year earlier. Adjusted EBITDA was $240 million, compared with $176 million a year earlier. GAAP operating income margin was 26%, the same as in the second quarter.

Net cash provided by operating activities was $198 million and free cash flow was $181 million, compared with $165 million and $153 million a year earlier. Cash and cash equivalents were $1.20 billion at September 30.

Restructuring expenses of $6 million, including severance, were recorded in the quarter.

For the fourth quarter ending December 31, 2026, Toast expects non-GAAP subscription services and financial technology solutions gross profit of $610 million to $620 million, or 22% to 24% growth versus the fourth quarter of 2025, and Adjusted EBITDA of $200 million to $210 million.

For the full year ending December 31, 2026, the company raised its outlook for non-GAAP subscription services and financial technology solutions gross profit to $2,375 million to $2,385 million, or 26% growth versus 2025, from a prior range of $2,290 million to $2,320 million. Full-year Adjusted EBITDA is now expected at $840 million to $850 million, up from a prior range of $805 million to $825 million.

President and Chief Financial Officer Elena Gomez said she will step away from her role at the end of the calendar year. Senior Vice President of Finance Michael Senno will succeed her as chief financial officer effective January 1, 2027. Gomez will serve in an advisory role through July 2, 2027.

In its Fall release, Toast said it expanded Toast IQ Grow and launched Toast IQ Team, a labor-management solution. It also introduced Toast Fuel for independent fuel and convenience operators and expanded into Quebec, bringing its platform to all 10 Canadian provinces.

Chief Executive Officer Aman Narang said recurring gross profit streams grew 27% and that the company added approximately 8,500 net locations.