Toast lifts FY2026 outlook as AI and expansion initiatives gain traction

Transcript intelligence

What changed

Compared with the prior quarter, Toast raised its full-year outlook, reported recurring gross profit growth of 28% and GAAP operating margin of 26%, and recorded 9,500 net location adds. Management also highlighted Toast IQ Grow, new hospitality and international wins, and the start of fuel-payment processing.

Guidance delta

Management raised FY2026 recurring gross profit growth guidance from 21–23% to 23–25% and adjusted EBITDA guidance from $790–810 million to $805–825 million.

Key takeaways

• Toast IQ Grow was described as its fastest-growing product and was on track to reach $10 million ARR; management said it is contributing to higher ARPU.
• Core activity remained strong in the reported quarter, with 28% recurring gross profit growth and a record 9,500 net location adds.
• The company is extending beyond its core restaurant footprint through hospitality, international, grocery and fuel-payment initiatives.
• The raised outlook supports the growth case, but hardware costs and the economics of newer offerings remain important execution tests.

Management priorities

• Expand Toast IQ with additional agentic modules for payroll, tax, scheduling, inventory and bookkeeping.
• Scale fuel payments and pursue further grocery and convenience-store locations.
• Deepen enterprise hotel relationships and continue Tier 1 international expansion.
• Use internal AI tools to improve operational efficiency while managing hardware costs.