Toast stock jumps 13% on Q2 revenue beat & strong guidance; earns positive reactions

Toast (NYSE:) shares soared nearly 13% in pre-market Wednesday following the company’s Q2 results.

of $978 million (up 45% year-over-year) came in better than the consensus estimate of $943.08M. EPS was ($0.19), compared to the consensus estimate of ($0.01).

As of June 30, 2023, ARR was $1.1 billion, representing a 45% year-over-year growth. Gross Payment Volume (GPV) grew 38% year-over-year to $32.1B.

“Toast delivered record results in the second quarter. In addition to exceeding $1B in ARR, Toast reached Adjusted EBITDA profitability and positive free cash flow for the first time since IPO as we remain focused on driving lean, durable growth,” said CEO Chris Comparato.

For Q3/23, the company expects revenue in the range of $1.010-1.040B, above the consensus estimate of $1.002B. Adjusted EBITDA is seen at $15-$25M.

For the full year, the company expects revenue in the range of $3.810-3.870B, better than the consensus of $3.775B. Adjusted EBITDA is seen at $15-$35M.

JPMorgan analysts said the results were “strong.”

“We are raising estimates and feel incrementally positive on the stock, but maintain our Neutral rating given our preference to more defensive growers in less certain 2H macro. That said, we see a positive stock reaction to results and maintain our Dec 23 $23 PT.”

BTIG analysts added:

“We continue to believe that TOST’s valuation implies a longer-term SaaS ARPU in the $9k+ context, compared to ~$6k today, and that the company’s path towards increased SaaS monetization will be more challenging than many investors expect.”

Additional reporting by Senad Karaahmetovic