How Toast's Upgraded Profit Guidance and Q3 Results Will Impact Toast (TOST) Investors

• Toast, Inc. recently reported third-quarter 2025 results, posting US$1.63 billion in revenue and US$105 million in net income, both up significantly from the previous year, and raised its full-year adjusted EBITDA guidance.
• An interesting development is that despite a miss on annual recurring revenue, Toast's strong profit performance and improved outlook were well received by investors.
• We'll explore how Toast's upgraded profit guidance following robust quarterly results shapes its investment narrative and outlook.

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Toast Investment Narrative Recap

To be a Toast shareholder, you need to believe in the company's ability to drive digital transformation in the restaurant industry, capture increasing fintech and software revenues, and expand beyond the US market. The recent strong profit surge and raised adjusted EBITDA guidance reinforce optimism for sustained operational improvements, but short-term results did not meaningfully change the big picture: the most important near-term catalyst remains robust adoption of digital ordering solutions, while flat or declining gross payment volume per location is still the key risk to watch.

The recently announced partnership with Uber draws attention, as it could deepen Toast’s digital ordering ecosystem and support its transaction-based growth ambitions. If these joint efforts successfully boost digital ordering and guest engagement, they may help address concerns over muted payment volumes per location and broaden Toast's reach in a competitive space.

However, investors should also keep in mind that even as profits rise, the risk of flat payment volumes could...

Read the full narrative on Toast (it's free!)

Toast's outlook anticipates $8.9 billion in revenue and $738.5 million in earnings by 2028. This is based on analysts’ expectation of 17.3% annual revenue growth and a $514.5 million increase in earnings from the current level of $224.0 million.

Uncover how Toast's forecasts yield a $48.38 fair value, a 31% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members have published 12 individual fair value estimates for Toast, spanning from US$26.11 to US$58.86 per share. Take these diverse perspectives in context of persistent industry headwinds around payment volume growth, which can affect Toast’s ability to deliver on optimistic earnings forecasts.

Explore 12 other fair value estimates on Toast - why the stock might be worth as much as 59% more than the current price!

Build Your Own Toast Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Toast research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Toast research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Toast's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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