Key Highlights

  • Annualized recurring run-rate grew 24% to USD 2.5 billion as of September 30, 2026, with about 8,500 net new locations added in the quarter.
  • Net income was USD 169 million and adjusted EBITDA was USD 240 million, against USD 105 million and USD 176 million a year earlier.
  • Full-year 2026 adjusted EBITDA guidance moved up to USD 840 million to USD 850 million from USD 805 million to USD 825 million.
  • President and Chief Financial Officer Elena Gomez will step away at year end, and Michael Senno becomes CFO on January 1, 2027.

Third Quarter Growth and the Higher Profit Base

Toast (NYSE:TOST) reported third quarter 2026 results on November 3, 2026, for the quarter ended September 30. Total locations rose 21% to about 189,000, and gross payment Volume grew 20% to USD 61.8 billion. Operating Income doubled to USD 165 million from USD 84 million, and Diluted Earnings per Share were USD 0.29 against USD 0.16. Free Cash Flow was USD 181 million, compared with USD 153 million a year earlier, and Operating Cash Flow was USD 198 million. Adjusted EBITDA of USD 240 million was up about 36% from USD 176 million, simple arithmetic on the two reported figures, and the company noted that growth rates are year over year and that figures may not tie due to rounding.

How Recurring Gross Profit Drives the Margin Story

Toast sells a restaurant and retail platform, earning money from software subscriptions and from financial technology such as payment processing. Management focuses on recurring gross profit, which the company defines as non-GAAP subscription services and financial technology solutions gross profit. That measure grew 27% to USD 642 million, while the GAAP equivalent grew 29% to USD 630 million. GAAP operating income margin, measured against that gross profit, expanded to 26%. The company also released more than 20 product updates, including Toast IQ Team for labor management and Toast Fuel for independent fuel and convenience operators.

CFO Handover, Guidance Math and Risks

Gomez led the company through its 2021 IPO and will serve as an adviser through July 2, 2027, while Senno, currently senior vice president of finance, takes over. For the fourth quarter, Toast guided adjusted EBITDA of USD 200 million to USD 210 million and recurring gross profit of USD 610 million to USD 620 million, which implies 22% to 24% growth. For the full year, recurring gross profit is guided to USD 2,375 million to USD 2,385 million, or 26% growth, up from 23% to 25%. The company said it cannot reconcile forward non-GAAP measures to GAAP without unreasonable effort, so the outlook excludes items such as stock-based compensation and Warrant Fair Value changes.

Where Things Stand

The raise follows a quarter in which recurring gross profit grew 27% and Operating Margin expanded, and the CFO change is planned rather than a sign of weak results: the company described it as a personal decision with a transition running to July 2, 2027. Toast (NYSE:TOST) guided fourth quarter growth in recurring gross profit of 22% to 24%, slower than the 27% in the third quarter. Items to watch include whether location additions stay near 8,500 a quarter, how the new CFO frames Capital use, and how fast the agent-based products convert into recurring revenue. The company did not give a reason for the gap between operating income and Net Income in the supplied release extract.