New York, February 13, 2026, 16:30 EST — After-hours trade
Toast gained roughly 5% after the bell Friday, stabilizing following a volatile session as investors reacted to the restaurant software firm’s earnings and beefed-up buyback. Shares finished up 4.6% at $27.33, swinging between $24.41 and $28.48 during the day; Block dropped around 1%, while Lightspeed lost close to 5%.
This update hits now as Toast tries to keep that growth narrative alive—and prove it can generate cash, not just top-line expansion. The company is projecting adjusted EBITDA in 2026 of $775 million to $795 million. That metric, which leaves out interest, taxes, and certain non-cash expenses, is a Wall Street favorite for profitability snapshots. Toast is also aiming for 20% to 22% growth in what it dubs “recurring gross profit streams”—mostly recurring subscription and payments gross profit on a non-GAAP basis. 1
No consensus among analysts here. Needham slashed its target on Toast to $35, down from $60, but stuck with its buy call, citing “multiple compression” in both software and payments. Bernstein’s Harshita Rawat, on the other hand, isn’t budging. She kept her Outperform rating and a $39 price target, still calling Toast “one of the highest quality names” in payments, this after a steep slide since the start of the year. 2
Toast posted a fourth-quarter profit of $101 million, or $0.16 per share, up from $33 million, or $0.05 per share, a year ago. Revenue increased 22.6% to $1.63 billion, according to the company. 3
CFO Elena Gomez, in her prepared remarks for the earnings call, pointed to about 150 basis points of margin pressure—so, around 1.5 percentage points—baked into the 2026 outlook, citing steeper memory chip prices for hardware and increased tariff expenses. That margin hit, she warned, will likely show up mostly in the back half of 2026, once pricier components start running through inventory. She also flagged the first quarter as usually slower for both net adds and payment volume, compared to the rest of the year. 4
Toast’s board signed off on a $500 million boost to its share buyback plan on Feb. 10, according to a regulatory filing. The program doesn’t have an end date. Toast said it might turn to 10b5-1 trading plans—those preset buyback schedules—to get the job done. 5
During the earnings call, management called out 30,000 net new locations for 2025, projecting roughly 164,000 locations by year-end. Annualized recurring run-rate? Over $2 billion. And they see full-year gross payment volume landing close to $195 billion. Executives flagged increasing adoption of Toast IQ—the in-product assistant—as the company targets fresh markets. 6
Toast packages point-of-sale software, payments, and tools for everything from ordering to marketing and team management into a single cloud-based platform tailored for restaurants. Lately, the company’s been pushing further into hybrid setups that mix elements of retail and restaurants—operators in these spaces want inventory tracking and checkout consolidated in one system. 7
Competition is thick. Toast finds itself up against Block’s Square, Fiserv’s Clover, plus a swarm of niche restaurant tech firms—where software bells and whistles aren’t the only battleground. Price tags, device expenses, and customer support are all in play.
Still, the bull case isn’t locked in. If restaurant traffic drops, that’s a direct drag on payment volumes. Management also warned about persistent hardware costs—those could stick around if component shortages and tariffs refuse to lighten up.
Eyes are now on the March 31 quarter—specifically, what Toast has to say about net location growth and margins as 2026 gets underway. Another thing: how fast the larger buyback authorization actually leads to real repurchases remains a key point for traders.
