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Toast Inc. TOST is slated to report first-quarter 2025 earnings on May 8, after the closing bell.
The Zacks Consensus Estimate for revenues is pegged at $1.34 billion, indicating an increase of 24.7% from a year ago.
The Zacks Consensus Estimate for non-GAAP earnings per share is pegged at 19 cents. The company reported a loss of 5 cents per share in the year-ago quarter.
TOST’s earnings beat the Zacks Consensus Estimate in three of the last trailing four quarters, while lagging once, with the average surprise being 197.4%. The stock has gained 51% in the past year compared with the Zacks Internet-Software industry’s growth of 23.3%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
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Key Factors at Play
Healthy sales momentum across Subscription services, Financial technology solutions and Hardware and professional services segments is likely to have aided TOST’s performance in the first quarter. TOST expects adjusted EBITDA between $100 million and $110 million, with gross profit projected to grow in the band of 27% to 30% for the quarter. Management noted potential for stronger growth in the first half of the year.
Toast’s strategy focuses on boosting restaurant revenues and profits, aiming to drive strong long-term ARPU growth and higher win rates for the company.
Riding on its robust strategies for 2025, the company prioritizes growing market share in the U.S. restaurant industry, showcasing growth in new regions, boosting platform usage with data and AI, and keeping investments disciplined while improving profit margins. For 2025, international and retail markets are projected to exceed 10,000 customer locations, driven by greater R&D investment and enhanced go-to-market efforts.
Previously, Hilton Hotels & Resorts had chosen Toast as an approved POS provider, adding to hotel partnerships with brands like Marriott and Choice Hotels. Its biggest full-service restaurant deal with Ascent Brands, starting with 500 Perkins and Huddle House locations during the quarter, is a tailwind. These wins highlight TOST’s growing presence in the enterprise space and strong pipeline for more large brand partnerships.
Toast, Inc. Price and EPS Surprise
Toast, Inc. price-eps-surprise | Toast, Inc. Quote
Toast strives to tackle its customers' toughest problems with a seamless, user-friendly platform—a balance it continually works to uphold. It has rolled out key updates for front-of-house staff, including improvements to POS, kiosks and kitchen displays. To boost guest engagement, it launched Websites, Branded Apps and AI-powered SMS Marketing. TOST also enhanced reporting, payroll and accounting tools and introduced a Benchmarking tool to help restaurants manage costs and gain insights.
Nonetheless, weather and broader macroeconomic factors may have affected GPV per location in the first quarter. Growing competition in the international domain and risks in executing enterprise rollouts are likely to have weighed on its performance. Increased spending on top growth priorities, such as expanding its retail sales team and launching new brand marketing efforts, is likely to have hurt its margins.