Toast stock fell on Wednesday after the provider of restaurant software reported second quarter earnings and revenue that edged by consensus estimates amid high expectations. Live customer locations, a key technical metric for Toast stock, came in at a record 8,500 in the quarter, above estimates of 8,300.
The company reported Q2 financial results after the market close on Tuesday.
Toast earnings for the June quarter rose 550% to 13 cents on a GAAP basis, topping estimates for 11-cent profit. Revenue climbed 25% to $1.55 billion versus estimates of $1.53 billion.
In addition, annual recurring revenue rose 31% to $1.9 billion, topping estimates of $1.87 billion.
Gross payment volume increased 23% year over year to $49.9 billion, the company said, topping estimates of $48.87 billion.
Toast Stock: New Locations Grow 24%
Meanwhile, live customer locations increased 24% from a year earlier to 148,000.
"Notably, management achieved its goal for a record net add quarter (8,500)," said Jefferies analyst Samad Samana in a report. "Guidance was raised by more than the beat, but planned investments are expected to weigh on profitability. Some investors will nitpick core net adds (excluding new growth segments) and the guidance, but we believe Q2 was another strong building block as Toast positions for sustainable long-term growth."
At Evercore ISI, analyst Adam Frisch said in a report: "Q2 showed the model is transitioning sooner than we expected, with a material slowdown in new U.S. core adds suggested by the higher-than expected growth in new vector adds that are (average revenue per user) dilutive. The race is on to see whether Toast can scale new vector adds quickly enough to offset U.S. core deceleration and preserve acceptable growth trajectories for recurring gross profit and EBITDA."
On the stock market today, Toast fell 1.5% to near 47 in early trading. Heading into the Toast earnings report, shares had advanced about 32% in 2025.
Toast's products range from point-of-sale hardware, kitchen displays, payment processing, supplier and invoice management to payroll, delivery management, menu consultation and marketing programs. The company recently released a new handheld point-of-sale device, which features analytical software to make tableside recommendations to customers.
Toast's main competitors include Square-parent Block, Fiserv's Clover, Shift4, Lightspeed, TouchBistro and SpotOn.
Toast Stock Technical Ratings
The company was founded in 2012 and filed its initial public offering in September 2021. The Toast IPO raised $870 million.
Meanwhile, Toast stock holds an IBD Composite Rating of 98, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. Also, the best growth stocks have a Composite Rating of 90 or better.
Further, Toast stock has an Accumulation/Distribution Rating of A-minus, according to IBD MarketSurge analysis. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
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