NEW YORK, March 4, 2026, 06:23 EST
- Toast is projecting a higher number of net new locations in 2026 compared to 2025, the company told investors.
- The CFO pointed to memory chip costs hitting 2026 by “about 150 basis points,” adding tariffs to the list of pressures.
- Shares added roughly 0.9% in premarket action, building on the previous session’s 5.6% jump.
Toast is projecting higher net new restaurant additions in 2026 compared to last year, targeting more enterprise clients and debuting Toast IQ—its new AI tool designed to automate restaurant operations. Shares climbed roughly 0.9% ahead of the bell, following Tuesday’s 5.6% jump.
Toast’s ability to expand hangs on bringing in new locations and channeling a higher volume of payments across its platform, making the comments significant. Restaurant and payments software players have faced pressure from Wall Street to prove they can keep growing while holding the line on margin.
Toast’s business hinges on its point-of-sale hardware and cloud-based software suite; it also handles payment processing. With revenue linked to both subscriptions and how much diners actually spend, a dip in restaurant traffic can hit the numbers fast.
Toast CEO Aman Narang and finance chief Elena Gomez addressed investors at Morgan Stanley’s Technology, Media, and Telecom Conference this Tuesday, the company said on its investor site.
Narang pointed out Toast has “doubled market share” since going public, adding that “now have 20% of all restaurants here in the U.S. in our SMB and mid-market segment.” https://seekingalpha.com/article/4877767-t…
“Consumer trends are stable,” Gomez said, noting that gross payment volume per location has hovered within a “narrow band” for several quarters. She pointed to memory chip costs, estimating those would hit “about 150 basis points in 2026.” Tariffs, she added, are set to have a bigger effect in both 2025 and 2026. As for margins, the company’s long-term target of 40% or more “has not changed.” https://www.investing.com/news/transcripts…
Narang told the conference that Toast has topped $2 billion in annual recurring revenue—a subscription figure that reflects contracted sales. He said newer segments, including enterprise, international and retail, now each generate over $100 million in ARR and have “doubled” compared to last year. On automation, Narang noted, “A third of our support tickets never hits a human already.” https://ca.investing.com/news/transcripts/…
Executives are pushing deeper into Toast IQ, their so-called AI “copilot” built into the platform. Over 50% of Toast’s locations picked it up in just the first four months, the Morgan Stanley moderator pointed out.
Toast faces competition from others targeting restaurants with bundled software-plus-payments deals. Block’s Square and Lightspeed Commerce are also chasing that wallet share. On the big-chain and legacy POS side, Oracle and NCR Voyix continue to hang on.
But Toast’s strategy isn’t simple. Fewer diners means lower payment volumes, and hardware expenses stick around even if software sales stay steady. Miss on new locations, and the numbers reflect it right away.
Executives flagged “take rate” expansion—the cut of payment volume the company holds onto—plus targeted pricing and fresh products as levers right now. That’s the current battleground for margins, and investors aren’t done poking at it.
