BOSTON – Toast Inc. (NYSE: TOST), an end-to-end digital platform for restaurants, reported a strong start to 2024, with first-quarter revenue beating analysts’ expectations and providing an upbeat outlook for the coming quarters.
The company’s shares rose 4.5% following the announcement, indicating positive investor reaction to the financial results and future outlook.
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 particularly strong at $1.08 billion, beating the consensus estimate of $1.04 billion and marking a significant increase from last year’s $819 million.
CEO Aman Narang attributed the strong results to Toast’s focus on scaling restaurants, driving annualized revenue (ARR), which grew 32% year-on-year to $1.3 billion, and expanding its market reach. “With a differentiated business model that scales efficiently, we are poised for sustainable growth and continued earnings growth,” Narang said.
Looking ahead, in the second quarter ending June 30, 2024, Toast expects non-GAAP gross revenue from subscription services and financial technology solutions to be between $320 million and $330 million, reflecting growth of 20% to 24% compared to the second quarter. quarter of 2023. Adjusted EBITDA is expected to be between $55 million and $65 million.
For the full year ended December 31, 2024, Toast raised its forecast for gross profit from non-GAAP subscription services and financial technology solutions to a range of $1.325 million to $1.345 million—up from its previous forecast of growth of 23% to 25%, representing an increase of 25-27% compared to last year. The company also raised its adjusted EBITDA guidance from previous estimates of $200 million to $220 million and now expects $250 million to $270 million.
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Commenting on the results, Mizuho analysts said: “While we expect a (deserved) positive reaction from the stock, it may be lower than the initial hype as much of the outperformance is due to earnings growth relative to revenue growth potential.”
Toast’s positive growth trajectory is further highlighted by recent business advancements, including the launch of the new Restaurant Management Suite, designed to manage large-scale, multi-location operations using artificial intelligence-based classification tools.
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