TOST Set to Release Q1 Earnings: Essential Insights for Investors

Toast Inc. TOST is slated to report first-quarter 2025 earnings on May 8, after the closing bell.

The Zacks Consensus Estimate for revenues is pegged at $1.34 billion, indicating an increase of 24.7% from a year ago.

The Zacks Consensus Estimate for non-GAAP earnings per share is pegged at 19 cents. The company reported a loss of 5 cents per share in the year-ago quarter.

TOST’s earnings beat the Zacks Consensus Estimate in three of the last trailing four quarters, while lagging once, with the average surprise being 197.4%. The stock has gained 51% in the past year compared with the Zacks Internet-Software industry’s growth of 23.3%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Key Factors at Play

Healthy sales momentum across Subscription services, Financial technology solutions and Hardware and professional services segments is likely to have aided TOST’s performance in the first quarter. TOST expects adjusted EBITDA between $100 million and $110 million, with gross profit projected to grow in the band of 27% to 30% for the quarter. Management noted potential for stronger growth in the first half of the year. 

Toast’s strategy focuses on boosting restaurant revenues and profits, aiming to drive strong long-term ARPU growth and higher win rates for the company.

Riding on its robust strategies for 2025, the company prioritizes growing market share in the U.S. restaurant industry, showcasing growth in new regions, boosting platform usage with data and AI, and keeping investments disciplined while improving profit margins. For 2025, international and retail markets are projected to exceed 10,000 customer locations, driven by greater R&D investment and enhanced go-to-market efforts.

Previously, Hilton Hotels & Resorts had chosen Toast as an approved POS provider, adding to hotel partnerships with brands like Marriott and Choice Hotels. Its biggest full-service restaurant deal with Ascent Brands, starting with 500 Perkins and Huddle House locations during the quarter, is a tailwind. These wins highlight TOST’s growing presence in the enterprise space and strong pipeline for more large brand partnerships.

Toast, Inc. Price and EPS Surprise

Toast, Inc. price-eps-surprise | Toast, Inc. Quote

Toast strives to tackle its customers' toughest problems with a seamless, user-friendly platform—a balance it continually works to uphold. It has rolled out key updates for front-of-house staff, including improvements to POS, kiosks and kitchen displays. To boost guest engagement, it launched Websites, Branded Apps and AI-powered SMS Marketing. TOST also enhanced reporting, payroll and accounting tools and introduced a Benchmarking tool to help restaurants manage costs and gain insights.

Nonetheless, weather and broader macroeconomic factors may have affected GPV per location in the first quarter. Growing competition in the international domain and risks in executing enterprise rollouts are likely to have weighed on its performance. Increased spending on top growth priorities, such as expanding its retail sales team and launching new brand marketing efforts, is likely to have hurt its margins.

Key Recent Developments

On May 1, 2025, Toast launched ToastIQ, an AI-powered engine that provides smart prompts, personalized tips and automated workflows to improve daily restaurant operations. Built into the Toast platform, it uses data from more than 130,000 locations and combines AI with Toast’s hospitality expertise to help all staff work faster and more efficiently. 

On April 14, 2025, Toast partnered with Dine Brands Global, Inc., the parent company of iconic American restaurant chains like Applebee’s Neighborhood Grill + Bar, IHOP and Fuzzy’s Taco Shop, for a nationwide technology rollout of Toast at Applebee’s locations across the United States. The initiative aims to modernize one of America’s most recognizable casual dining restaurants.

What Does Our Model Predict for TOST?

Our proven model does not predict an earnings beat for TOST this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

TOST has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are three stocks you may want to consider, as our model shows that these have the right elements to post an earnings beat in this reporting cycle.

Axon Enterprise AXON is set to report first-quarter 2025 earnings on May 7, after market close. It has an Earnings ESP of +9.28% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AXON’s earnings is pegged at $1.27 per share, indicating year-over-year growth of 10.4%. The consensus estimate for its sales is pegged at $589.1 million, indicating year-over-year growth of 27.9%.

GXO Logistics GXO currently has an Earnings ESP of +1.18% and a Zacks Rank of 3. The company is slated to report first-quarter 2025 results on May 7. The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $2.91 billion and 26 cents per share, respectively. 

Shares of GXO have declined 27.1% in the past year.

Sonos SONO currently has an Earnings ESP of +25.71% and a Zacks Rank of 3. The company is slated to report quarterly results on May 7. The Zacks Consensus Estimate for second-quarter fiscal 2025 revenues and loss are pegged at $255.9 million and 18 cents per share, respectively. 

Shares of SONO have declined 47.1% in the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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