Toast (TOST) Q2 2026 earnings summary

Executive summary

• Q2 2026 delivered strong results with recurring gross profit streams up over 28% year-over-year and GAAP operating income margin at 26%.

• Net income for the quarter was $154 million, nearly doubling year-over-year, and adjusted EBITDA reached $221 million, up 38%.

• Record 9,500 net new locations added, growing total locations 22% year-over-year to approximately 180,000.

• AI-driven products, especially Toast IQ Grow, are scaling rapidly and driving new ARR and higher ARPU.

• Expansion into new markets (enterprise, international, retail) is accelerating, with ARR in each outpacing the core at similar maturity.

Financial highlights

• Total revenue for Q2 2026 was $1,908 million, up from $1,550 million in Q2 2025; recurring gross profit up 28% year-over-year.

• Adjusted EBITDA reached $221 million, up 38%, with margins expanding to 37%.

• GAAP operating income was $152 million (26% margin); GAAP EPS was $0.26, nearly doubling year-over-year.

• Free cash flow was $130 million, down year-over-year due to strategic hardware inventory build.

• Gross payment volume for Q2 2026 was $60.7 billion, up 22% year-over-year.

Outlook and guidance

• Q3 2026: Subscription and fintech gross profit expected to grow 22%-24% year-over-year; adjusted EBITDA guidance of $210-$220 million.

• Full-year 2026: Recurring gross profit growth outlook raised to 23%-25%; adjusted EBITDA guidance increased to $805-$825 million.

• Long-term target: 40%+ adjusted EBITDA margins, with ongoing margin expansion and disciplined investment in new TAMs and AI.