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Full-year adjusted EBITDA guidance raised to $790 to $810 million after a 35% Q1 EBITDA jump.
Location count hit 171,000, up 22% year over year, with enterprise accelerating fast.
AI tools are lifting restaurant revenue now, with usage-based pricing still ahead.
Toast (TOST - Free Report) is a cloud-based restaurant technology platform that posted a strong Q1 and raised its full-year outlook despite a noisy GAAP print. TOST earns a Zacks Rank #1 (Strong Buy) and is today's Bull of the Day.
About the Company
Founded in 2011 and headquartered in Boston, Toast is a cloud-based restaurant technology platform built around a point-of-sale system that serves as the operational hub for roughly 171,000 restaurant locations worldwide.
The platform covers the full restaurant stack: transaction processing, order management, kitchen communication, employee payroll, scheduling, reporting, and analytics. Toast has expanded well beyond the core POS into online ordering, delivery integrations, marketing solutions, and financial technology services, creating a recurring revenue model that grows with every location it adds.
The company is valued at approximately $13 billion. The stock has a Zacks Style Score of “A” in Growth and Momentum.
Raised Guidance
Toast reported EPS recently beating expectations by roughly 4%. The real positive came with a raised full-year adjusted EBITDA guidance to $790 to $810 million from the prior range of $775 to $795 million. Toast also lifted its recurring gross profit growth target to 21% to 23% from 20% to 22%.
The Q2 guide calls for subscription and fintech gross profit growth of 22% to 24% year over year with adjusted EBITDA of $185 to $195 million.
Estimate Revision Head Higher
Analysts are lifting estimates supporting the bull case, but this is mostly over the long-term. Current year EPS sat at $1.30 thirty days ago and is now $1.34. Next year has moved from $1.66 to $1.74 over the same window, a move of 5%. Three analysts revised current and next year estimates higher in the last 30 days with zero cuts.
Toast IQ reached 40,000 weekly active locations. The Toast IQ Grow pilot is generating an average 8% sales lift for participating restaurants versus comparable Toast locations. About 40% of customer support interactions are now resolved by AI, and engineering coding velocity is up more than 60% year over year.
Management said it is actively exploring usage-based AI pricing models as agents take on more restaurant back-office and marketing work. That is a monetization layer that does not yet exist in current estimates.
Enterprise and International Getting Started
In Q1 2026 alone, Toast booked more enterprise locations than it had total customers in 2023. The pipeline across hotels, full-service dining, and the newly launched drive-thru offering was described as healthy.
Internationally, management is concentrating on tier-1, higher-GPV cities including London, Toronto, Sydney, and Melbourne, with additional dense market launches possible in the back half of 2026.
Toast Local, the company's restaurant-friendly demand channel, saw weekly app downloads more than double last quarter with reservation inventory now covering more than 20,000 restaurants.
The One Overhang
Tariffs are a real near-term issue. Toast is already absorbing higher hardware costs, has built inventory to secure supply into 2027, and acknowledged the P&L impact will be larger in 2027 than in 2026. Management was direct about it, which is worth something. But they were equally direct that it does not threaten growth targets or the long-term 40% plus adjusted EBITDA margin profile.
The Technical Take
The chart has not been pretty, with the stock down roughly 50% from the highs it made back in August. But since reporting earnings the stock has attempted to rally and filled the earnings gap from May.
It has since pulled back and given investors an entry point at the 21-day MA.
Let’s look at those levels and moving averages
Post earnings low: $22.26
Gap fill (recent high): $28.16
21-day: $24.70
50-day: $26.30
200-day: $32.70
Fibonacci buy zone (50%-61.8% retracements): $24.60-25.25
Current trading levels allow for a short-term trade against the recent lows. For longer term investors, there is an opportunity that any further bounce can break the downtrend, challenge the 200-day and eventually reach those levels from last year.
In Summary
A 35% jump in adjusted EBITDA, 22% location growth, a raised full-year outlook, and an AI monetization layer that is not yet priced in.
That is the TOST bull case.
Price target cuts from Wall Street after a GAAP miss created a solid long term entry point.
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Bull of the Day: Toast (TOST)
Key Takeaways
Toast (TOST - Free Report) is a cloud-based restaurant technology platform that posted a strong Q1 and raised its full-year outlook despite a noisy GAAP print. TOST earns a Zacks Rank #1 (Strong Buy) and is today's Bull of the Day.
About the Company
Founded in 2011 and headquartered in Boston, Toast is a cloud-based restaurant technology platform built around a point-of-sale system that serves as the operational hub for roughly 171,000 restaurant locations worldwide.
The platform covers the full restaurant stack: transaction processing, order management, kitchen communication, employee payroll, scheduling, reporting, and analytics. Toast has expanded well beyond the core POS into online ordering, delivery integrations, marketing solutions, and financial technology services, creating a recurring revenue model that grows with every location it adds.
The company is valued at approximately $13 billion. The stock has a Zacks Style Score of “A” in Growth and Momentum.
Raised Guidance
Toast reported EPS recently beating expectations by roughly 4%. The real positive came with a raised full-year adjusted EBITDA guidance to $790 to $810 million from the prior range of $775 to $795 million. Toast also lifted its recurring gross profit growth target to 21% to 23% from 20% to 22%.
The Q2 guide calls for subscription and fintech gross profit growth of 22% to 24% year over year with adjusted EBITDA of $185 to $195 million.
Estimate Revision Head Higher
Analysts are lifting estimates supporting the bull case, but this is mostly over the long-term. Current year EPS sat at $1.30 thirty days ago and is now $1.34. Next year has moved from $1.66 to $1.74 over the same window, a move of 5%. Three analysts revised current and next year estimates higher in the last 30 days with zero cuts.
Toast, Inc. Price and Consensus
Toast, Inc. price-consensus-chart | Toast, Inc. Quote
AI Is Becoming a Real Catalyst
Toast IQ reached 40,000 weekly active locations. The Toast IQ Grow pilot is generating an average 8% sales lift for participating restaurants versus comparable Toast locations. About 40% of customer support interactions are now resolved by AI, and engineering coding velocity is up more than 60% year over year.
Management said it is actively exploring usage-based AI pricing models as agents take on more restaurant back-office and marketing work. That is a monetization layer that does not yet exist in current estimates.
Enterprise and International Getting Started
In Q1 2026 alone, Toast booked more enterprise locations than it had total customers in 2023. The pipeline across hotels, full-service dining, and the newly launched drive-thru offering was described as healthy.
Internationally, management is concentrating on tier-1, higher-GPV cities including London, Toronto, Sydney, and Melbourne, with additional dense market launches possible in the back half of 2026.
Toast Local, the company's restaurant-friendly demand channel, saw weekly app downloads more than double last quarter with reservation inventory now covering more than 20,000 restaurants.
The One Overhang
Tariffs are a real near-term issue. Toast is already absorbing higher hardware costs, has built inventory to secure supply into 2027, and acknowledged the P&L impact will be larger in 2027 than in 2026. Management was direct about it, which is worth something. But they were equally direct that it does not threaten growth targets or the long-term 40% plus adjusted EBITDA margin profile.
The Technical Take
The chart has not been pretty, with the stock down roughly 50% from the highs it made back in August. But since reporting earnings the stock has attempted to rally and filled the earnings gap from May.
It has since pulled back and given investors an entry point at the 21-day MA.
Let’s look at those levels and moving averages
Post earnings low: $22.26
Gap fill (recent high): $28.16
21-day: $24.70
50-day: $26.30
200-day: $32.70
Fibonacci buy zone (50%-61.8% retracements): $24.60-25.25
Current trading levels allow for a short-term trade against the recent lows. For longer term investors, there is an opportunity that any further bounce can break the downtrend, challenge the 200-day and eventually reach those levels from last year.
In Summary
A 35% jump in adjusted EBITDA, 22% location growth, a raised full-year outlook, and an AI monetization layer that is not yet priced in.
That is the TOST bull case.
Price target cuts from Wall Street after a GAAP miss created a solid long term entry point.