Key Highlights

  • Annualized recurring run-rate reached USD 2.5 billion at September 30, 2026, up 24%, with roughly 8,500 net new locations added during the quarter.
  • Net income came to USD 169 million and adjusted EBITDA to USD 240 million, compared with USD 105 million and USD 176 million a year earlier.
  • The full-year 2026 adjusted EBITDA outlook now spans USD 840 million to USD 850 million, up from USD 805 million to USD 825 million.
  • Elena Gomez, president and CFO, departs at year end, while Michael Senno assumes the CFO role on January 1, 2027.

Third Quarter Growth Lifts Operating Income and Profit

Toast (NYSE:TOST) released third quarter 2026 results on November 3, 2026, covering the quarter ended September 30. Total locations grew 21% to around 189,000, while gross payment Volume rose 20% to USD 61.8 billion. Operating income doubled to USD 165 million from USD 84 million, and Diluted Earnings per Share reached USD 0.29 versus USD 0.16. Free Cash Flow of USD 181 million compared with USD 153 million a year earlier, and Operating Cash Flow was USD 198 million. Adjusted EBITDA of USD 240 million represented about 36% growth over USD 176 million, a figure derived by simple arithmetic from the two reported amounts, and the company noted that growth rates are year over year and totals may not tie due to rounding.

Recurring Gross Profit Anchors the Margin Story

Toast runs a restaurant and retail platform that earns from software subscriptions and from financial technology such as payment processing. Management tracks recurring gross profit, a non-GAAP measure covering subscription services and financial technology solutions. That metric climbed 27% to USD 642 million, while the GAAP equivalent rose 29% to USD 630 million. Measured against that gross profit, the GAAP operating income margin widened to 26%. More than 20 product updates were also released, including Toast IQ Team for labor management and Toast Fuel for independent fuel and convenience operators.

Planned CFO Transition, Guidance Math and Non-GAAP Limits

Gomez oversaw the company through its 2021 IPO and will serve as an adviser until July 2, 2027, while Senno, currently senior vice president of finance, takes the CFO role. For the fourth quarter, Toast expects adjusted EBITDA of USD 200 million to USD 210 million and recurring gross profit of USD 610 million to USD 620 million, which works out to 22% to 24% growth. For the full year, recurring gross profit is expected at USD 2,375 million to USD 2,385 million, or 26% growth, up from an earlier 23% to 25%. The company cannot reconcile forward non-GAAP figures to GAAP without unreasonable effort, so its outlook leaves out items such as stock-based compensation and changes in Warrant fair value.

Where Things Stand

Toast did not cut its outlook because of the CFO exit: the company raised full-year guidance after a quarter in which recurring gross profit grew 27% and Operating Margin expanded, and it described the change as a personal decision with a transition running to July 2, 2027. Toast (NYSE:TOST) guided fourth quarter recurring gross profit growth of 22% to 24%, slower than the 27% in the third quarter. Watch whether location additions hold near 8,500 a quarter, how the new CFO approaches Capital use, and how quickly agent-based products convert into recurring revenue. The release extract gave no reason for the gap between operating income and net income.