Toast (TOST) Q1 2026 earnings summary

Executive summary

• Q1 2026 recurring gross profit streams grew 27% year-over-year, with GAAP operating income margin expanding to 21% and net income reaching $126 million.

• 7,000 net locations added, ending the quarter with approximately 171,000 live locations, up 22% year-over-year, processing $204 billion in gross payment volume over the trailing 12 months.

• Strategic focus on expanding from software to agentic platform, entering new markets, leveraging AI for productivity, and launching new AI-driven products such as Toast IQ Grow and Toast Drive-Thru.

• Total revenue for Q1 2026 was $1.63 billion, a 22% increase compared to Q1 2025, driven by growth in subscription services and financial technology solutions.

• Diluted EPS more than doubled to $0.20, up from $0.09 in Q1 2025.

Financial highlights

• ARR up 26% year-over-year to $2.2 billion; recurring gross profit streams up 27%.

• Adjusted EBITDA reached $179 million (34% margin), up 35% year-over-year.

• GAAP operating income margin at 21% ($110 million); gross profit increased to $447 million; SaaS gross margin exceeded 80% for the first time, reaching 81%.

• Payments ARR and Fintech gross profit increased 24%; GPV was $51.3 billion, up 22% year-over-year.

• Free cash flow was $115 million, up from $69 million in Q1 2025, with cash and cash equivalents plus marketable securities totaling $1.77 billion as of March 31, 2026.

Outlook and guidance

• Q2 2026 guidance: subscription and Fintech gross profit to grow 22%-24% year-over-year; Adjusted EBITDA of $185-$195 million.

• Full-year 2026 guidance raised: recurring gross profit growth of 21%-23%, Adjusted EBITDA of $790-$810 million.

• Management expects financial technology solutions revenue to remain a significant portion of the revenue mix, with seasonality impacting results, particularly stronger performance in Q2 and Q3.

• Existing liquidity and available borrowing capacity are expected to meet working capital needs for at least the next 12 months.

• Long-term focus on sustaining high growth and achieving 40%+ EBITDA margin profile.