Toast, Inc.

Q2 2026 was a strong quarter: ARR grew 25%, recurring gross profit streams increased 28% year over year, Adjusted EBITDA was $221 million, GAAP operating income was $152 million, and GAAP EPS was $0.26. GAAP operating income margin was 26%, Adjusted EBITDA margin was 37%, and Toast said it was operating above Rule of 50 with recurring gross profit growth plus operating margin reaching 57% in the quarter. GPV was $61 billion, up 22%, total take rate was 98 basis points, and total locations grew 22% year over year to approximately 180,000. For guidance, Q3 2026 total subscription and fintech gross profit is expected to grow 22% to 24% year over year and Adjusted EBITDA is expected to be $210 million to $220 million. Full-year 2026 outlook was raised to recurring gross profit growth of 23% to 25% and Adjusted EBITDA of $805 million to $825 million.

Aman Narang framed the quarter as evidence that Toast is scaling its core while expanding into AI and new markets. He emphasized Toast IQ Grow as the first step in an Agentic platform that can take on work like marketing, and said the company sees an opportunity to extend that model into scheduling, payroll, tax, bookkeeping, and other services. His tone was confident and expansionary, repeatedly pointing to Toast’s $10 billion ARR ambition and the company’s vertical integration as the basis for long-term growth.

Elena Gomez said Q2 came in ahead of expectations across the board and highlighted strong execution in both growth and profitability. She cited recurring gross profit streams up 28%, ARR up 25%, Adjusted EBITDA of $221 million, GAAP operating income of $152 million, and GAAP EPS of $0.26, while noting free cash flow of $130 million was down year over year because Toast chose to acquire and hold more hardware inventory. She also pointed to SaaS gross margin expansion of about 240 basis points year over year, SBC at 10% of recurring gross profit, and over 19 million shares repurchased year-to-date for $486 million, with about $100 million left on authorization.

Analysts focused on three themes: how far Toast can extend AI agents beyond marketing, how much margin expansion is available while still investing, and how to think about hardware cost pressure and 2027. Management said Toast IQ Grow is the template for future AI workflows, with likely areas including voice AI, scheduling, payroll, tax, inventory, and bookkeeping, and that the product is already running positive margins and improving as it scales. On margins, management said the confidence comes from both core leverage and strong signals in new TAMs, while on hardware they said mitigation steps have reduced the impact versus original expectations and that long-term hardware margins should improve once memory markets normalize.