New York, February 12, 2026, 19:12 ET — Activity in after-hours trading.
- Toast shares slid 6.7% during the session and were recently off around 5.5% in after-hours trading
- Fourth-quarter profit came in at $101 million, and the company bumped up its buyback authorization by another $500 million.
- Management pointed to tariff costs and pricier memory chips for hardware as the key factors shaping its 2026 guidance.
Toast finished Thursday’s session off 6.7% at $26.14, and the stock slipped further after hours, last quoted at $24.70, down about 5.5%, as the latest Q4 results and the 2026 forecast landed. 1
Why does the report matter? Toast is under pressure to show it can boost its restaurant count and widen margins—investors have been quick to punish any whiff of bumpy growth or cost creep lately. Shares tumbled, skimming the session low at $25.91, a price traders tend to watch closely. 1
Management flagged new cost headwinds tied to hardware bundled with its software and payments products. CFO Elena Gomez said the forecast factors in “about 150 basis points” of margin drag, blaming pricier memory chips. She also mentioned tariffs as a cost factor. 2
Toast posted fourth-quarter revenue of $1.63 billion, with net income tallying $101 million, and adjusted EBITDA coming in at $163 million. The company’s annualized recurring run-rate (ARR) climbed 26%, now topping $2.0 billion. ARR tracks recurring subscription-style revenue, while gross payment volume (GPV) covers the total dollar amount processed through Toast’s platform. 3
The company put out first-quarter guidance for non-GAAP subscription services and financial technology solutions gross profit in a $505 million to $515 million range, with adjusted EBITDA pegged between $160 million and $170 million. Looking further out, management expects those full-year 2026 figures to reach $2.27 billion to $2.30 billion for non-GAAP gross profit and $775 million to $795 million for adjusted EBITDA. 3
Toast’s board signed off on an extra $500 million for its share buyback program, leaving the authorization open-ended. The company said it could snap up stock on the open market, and it’s open to using trading plans for repurchases. 4
Toast wrapped up 2025 with around 164,000 locations—a 22% climb from the previous year—and tacked on about 8,000 net new spots in the fourth quarter. Investors track location growth closely, since it drives both payments volume and steady software fees. 3
The company continues to expand outside its main restaurant territory, targeting retail sectors with its point-of-sale and payments tech. It pointed to a deal that will see Toast deployed in over 1,000 Papa Murphy’s locations nationwide, and highlighted fresh retailer-oriented features, with more capabilities added to its Toast IQ assistant. 3
Just two days ago, Toast and Instacart rolled out a partnership to connect in-store inventory directly with Instacart’s platform, pitching “just-in-time” supply for restaurants. Toast President Steve Fredette described the move as a way for customers to “never miss a beat.” 5
Risk-off sentiment dominated U.S. equities, dragging the S&P 500 ETF lower by roughly 1.5% during the session.
But here’s the thing: Toast’s biggest headache remains cost inflation and tariffs, both eating into hardware margins right as the restaurant POS and payments field turns cutthroat. Competitors and payment processors aren’t letting up—they’re pushing hard on price and bundles. On top of that, if consumers pull back, restaurants might rethink opening new spots or investing in tech, which would slow down Toast’s pace for adding new locations.
Investors want clearer signals from management on buyback timing and if hardware costs start to come down later in 2026. Eyes are on whether the company can hit its goals for the quarter closing March 31, 2026. 3
