Toast (TOST) Q1 2026 earnings summary

Executive summary

• Recurring gross profit streams grew 27% year-over-year in Q1 2026, with GAAP operating income margin expanding to 21% and net income reaching $126 million.

• 7,000 net locations were added, bringing the total to approximately 171,000 live locations, up 22% year-over-year, processing $204 billion in gross payment volume over the trailing 12 months.

• Strategic focus on evolving from software to an agentic platform, expanding into enterprise, international, and retail markets, and leveraging AI for productivity and product innovation.

• Launch of Toast IQ Grow and Toast Local, with strong early adoption, measurable sales impact, and expansion to over 20,000 restaurants.

• Share repurchases totaled 14 million shares for nearly $400 million year-to-date, with $200 million remaining authorized.

Financial highlights

• ARR increased 26% year-over-year to $2.2 billion; recurring gross profit streams up 27%; SaaS ARR grew 27% with mid-single digit ARPU growth.

• Adjusted EBITDA reached $179 million (34% margin), up 35% year-over-year; GAAP operating income was $110 million, with EPS more than doubling to $0.20.

• SaaS gross margin exceeded 80% for the first time, reaching 81%.

• Payments ARR and fintech gross profit increased 24%; GPV was $51.3 billion, up 22% year-over-year.

• Free cash flow was $115 million, up from $69 million in Q1 2025, with cash and equivalents totaling $1.77 billion at quarter-end.

Outlook and guidance

• Q2 2026 guidance: Subscription and fintech gross profit expected to grow 22%-24% year-over-year; Adjusted EBITDA of $185-$195 million.

• Full-year 2026 guidance raised: recurring gross profit growth of 21%-23%, Adjusted EBITDA of $790-$810 million.

• Management expects financial technology solutions revenue to remain a significant portion of the mix, with seasonality impacting results.

• Existing liquidity and borrowing capacity expected to meet working capital needs for at least the next 12 months.

• Continued reinvestment of topline outperformance into growth initiatives and AI tools.