BOSTON – Toast Inc. (NYSE: TOST), a comprehensive digital platform for restaurants, reported a robust start to 2024 with first-quarter revenues surpassing analyst expectations and issuing an optimistic outlook for the coming quarters.
The company’s shares surged 4.5% following the announcement, indicating a positive investor response to the financial results and future prospects.
For the first quarter ended March 31, 2024, Toast reported a net loss of $83 million or -$0.15 per share, slightly below the analyst consensus of -$0.14 per share. However, revenue for the quarter was notably strong at $1.08 billion, exceeding the consensus estimate of $1.04 billion and marking a significant increase from last year’s $819 million.
CEO Aman Narang attributed the strong performance to Toast’s focus on scaling restaurant locations, driving annualized recurring run-rate (ARR), which grew by 32% YoY to reach $1.3 billion, and expanding its addressable market. “With a differentiated business model that scales efficiently, we are positioned for durable growth and ongoing margin expansion,” Narang said.
Looking ahead to the second quarter ending June 30, 2024, Toast anticipates non-GAAP subscription services and financial technology solutions gross profit in the range of $320 million to $330 million, reflecting a growth of 20-24% compared to Q2 2023. Adjusted EBITDA is expected to be between $55 million and $65 million.
For the full year ending December 31, 2024, Toast raised its guidance for non-GAAP subscription services and financial technology solutions gross profit to a range of $1,325 million to $1,345 million — up from an earlier forecast of 23-25% growth — representing an increase of 25-27% compared to last year. The company also improved its adjusted EBITDA outlook from previous estimates of $200 million to $220 million to now expect between $250 million and $270 million.
Commenting on the results, Mizuho analysts said, “While we expect a (deserved) positive stock reaction, it may possibly be lower than the initial excitement as much of the excess performance is attributed to profits vs. revenue upside.”
Toast’s positive trajectory is further underscored by its recent business highlights including the launch of new Restaurant Management Suite designed for large-scale operations management across multiple locations using AI-based classification tools.
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