What To Expect From Toast's (TOST) Q1 Earnings

Anthony Lee /
2024/05/06 3:04 am EDT

Restaurant software platform Toast (NYSE:TOST) will be announcing earnings results tomorrow after market hours. Here's what to look for.

Toast beat analysts' revenue expectations by 1.9% last quarter, reporting revenues of $1.04 billion, up 34.7% year on year. It was a slower quarter for the company, with a miss of analysts' ARR (annual recurring revenue) estimates.

Is Toast a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Toast's revenue to grow 27.2% year on year to $1.04 billion, slowing from the 53.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.02 per share.

Toast Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Toast has only missed Wall Street's revenue estimates once over the last two years, exceeding top-line expectations by 4% on average.

Looking at Toast's peers in the vertical software segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Procore Technologies delivered year-on-year revenue growth of 26.2%, beating analysts' expectations by 2.5%, and PTC reported revenues up 11.2%, topping estimates by 4.6%. Procore Technologies traded up 1.4% following the results while PTC was down 2.4%.

Read our full analysis of Procore Technologies's results here and PTC's results here.

Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts thanks to mixed inflation data, and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share prices down 3.1% on average over the last month. Toast is down 1.2% during the same time and is heading into earnings with an average analyst price target of $24.5 (compared to the current share price of $22.9).

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