Abstract
Toast, Inc. will report fourth-quarter results on February 12, 2026 Post Market; this preview consolidates recent financial data, guidance signals, and institutional commentary to frame expectations for revenue, gross margin, net profit margin, and adjusted EPS with year-over-year context.
Market Forecast
Consensus tracking and the company’s latest forecast inputs indicate Toast, Inc.’s fourth-quarter revenue estimate at USD 1.62 billion with year-over-year growth of 23.56%, forecast EBIT of USD 70.06 million with year-over-year growth of 236.39%, and forecast adjusted EPS of USD 0.13 with year-over-year growth of 125.84%. The company’s outlook implies stabilizing gross profitability, though explicit gross margin guidance is not provided; modeled net profit momentum tracks higher given the improved EBIT and EPS cadence on a year-over-year basis. The main business highlights center on Payment and FinTech processing volumes and software subscriptions, with an outlook for continued transaction growth and attach rates to drive recurring revenue. The segment with the strongest promise appears to be Financial Technology Solutions, given its scale and monetization of payment throughput, supported by recent year-over-year revenue expansion.
Last Quarter Review
Toast, Inc. delivered last-quarter revenue of USD 1.63 billion, a gross profit margin of 26.52%, GAAP net profit attributable to the parent company of USD 0.11 billion, a net profit margin of 6.43%, and adjusted EPS of USD 0.16, with year-over-year revenue growth of 25.13% and adjusted EPS growth of 220.00%. A notable highlight was EBIT of USD 84.00 million, exceeding prior estimates, reflecting operating leverage from scale and disciplined expense control. Main business momentum was anchored by Financial Technology Solutions revenue of USD 1.35 billion, Subscription Services at USD 0.24 billion, and Hardware at USD 0.04 billion, with FinTech remaining the dominant revenue engine.
Current Quarter Outlook
Main Business: Payments and Financial Technology Solutions
Financial Technology Solutions remains the core of Toast, Inc.’s model, tied to gross payment volume expansion across restaurant cohorts and improving monetization per location. Transaction processing scale typically lifts blended contribution margins as fixed platform costs are leveraged, and the previous quarter’s gross margin of 26.52% provides a baseline to assess mix and fee dynamics. For the current quarter, forecast EBIT of USD 70.06 million and adjusted EPS of USD 0.13 suggest steady operating efficiency even as revenue growth decelerates modestly from last quarter’s realized pace to an estimated 23.56% year-over-year. Key drivers include new location adds, deeper product penetration with modules such as payroll and capital, and a stable rate environment that moderates card-present interchange volatility. The company’s reliance on payment volumes does mean profitability is sensitive to restaurant traffic, seasonality, and promotional pricing dynamics; however, the breadth of customer tiers helps balance exposure to category-specific softness.
Most Promising Business: Subscription Software
Subscription Services are poised to scale as attach rates rise, offering recurring revenue with favorable unit economics relative to hardware. The last quarter’s USD 0.24 billion in subscription revenue supports a trajectory where new modules and feature sets deepen customer engagement and increase average revenue per unit. In the current quarter, management’s forecast EPS and EBIT profiles suggest incremental margin contributions from software given its gross margin characteristics, helping to support overall net profit margin resilience even as transaction-mix shifts. Growth levers include cross-sell into existing merchant base, upsell to premium packages, and deployment of analytics and automation tools that improve restaurant operations. Risks include competitive pricing pressure and churn if macro conditions tighten for small and medium-sized merchants, but the diversification of modules offers optionality to maintain value perception and retention.
Stock Price Drivers: Profit Mix, Margin Trajectory, and Operating Leverage
This quarter’s stock reaction will be most influenced by the interplay of revenue growth, gross margin stability, and the translation of top-line expansion into EBIT and adjusted EPS. The forecast calls for revenue of USD 1.62 billion and EBIT of USD 70.06 million; investors will scrutinize whether gross margin can hold near the last quarter’s 26.52% given seasonally higher volumes and potential promotional costs. Net profit margin, which measured 6.43% last quarter, will be assessed relative to EPS of USD 0.13, with an emphasis on whether the mix of software versus hardware and payment economics supports sustainable margin lift. Operating leverage depends on disciplined sales and marketing spend and the pace of onboarding, while qualitative signals around churn, new product adoption, and international expansion can shape sentiment. Any variance in fee rates, card network costs, or cost of funds in ancillary products could tilt margins, making disclosures on unit economics critical for valuation narratives.
Analyst Opinions
The prevailing institutional stance over the last six months has skewed constructive, with a majority favoring continued top-line momentum and improving profitability as the platform scales. Analysts highlight that last quarter’s upside on EBIT and adjusted EPS reinforces the thesis that software and payments synergy drives operating leverage as cohorts mature. Well-followed broker commentary points to durability in transaction volumes and the vision for expanding financial services offerings—such as integrated payroll and capital solutions—into the installed base, which could add incremental revenue streams without disproportionately increasing operating costs. The bullish view emphasizes the widened contribution from Subscription Services to smooth cyclicality, the demonstrated ability to beat revenue estimates (USD 1.63 billion actual versus USD 1.58 billion estimate), and the positive trajectory in net margins from a low base, all of which support a constructive setup into the February 12, 2026 report. The majority’s framework expects stable gross margin near the recent 26.52% level, with sensitivity to the balance between payments growth and software mix, and sees the forecast EPS of USD 0.13 as attainable barring unexpected volume softness. On valuation, proponents acknowledge execution dependence but argue scale economics are becoming clearer, warranting focus on cohort profitability, attach rate trends, and the cadence of product releases to refine forward expectations.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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