Toast, Q3 2026 Earnings Call Transcript

Toast reported 24% ARR growth and 27% growth in recurring gross profit in Q3, adding 8,500 locations and expanding its GAAP operating margin to 26%. The company raised its full-year outlook to 26% recurring gross profit growth and $840–850 million in adjusted EBITDA. Management expects Q4 subscription and fintech gross profit growth of 22–24%. It cited market-share gains, higher customer spending on its platform and growing adoption of AI tools as drivers of momentum.

Toast is expanding AI agents for restaurant marketing and staffing, while growing enterprise, international and retail markets, which management expects to reach $200 million in ARR. It sees further long-term growth and cash-flow potential in these markets, with margins expected to converge with the core as they scale. For 2027, management expressed confidence in its 20%+ growth framework but expects only modest margin progression as it invests in new opportunities. Hardware cost pressures remain, though mitigation efforts have improved the expected impact; the company also said it is prepared to defend itself against an FTC lawsuit.