Toast (TOST) Q3 Earnings Report Preview: What To Look For

Restaurant software platform Toast (NYSE:TOST) will be announcing earnings results tomorrow after the bell. Here’s what to expect.

Toast beat analysts’ revenue expectations by 1.7% last quarter, reporting revenues of $1.24 billion, up 27% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ EBITDA estimates and optimistic EBITDA guidance for the next quarter.

Is Toast a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Toast’s revenue to grow 25.2% year on year to $1.29 billion, slowing from the 37.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.13 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Toast has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 3% on average.

Looking at Toast’s peers in the vertical software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Agilysys delivered year-on-year revenue growth of 16.5%, beating analysts’ expectations by 1.1%, and Cadence reported revenues up 18.8%, topping estimates by 2.9%. Agilysys traded down 7.9% following the results while Cadence was up 12.5%.

Read our full analysis of Agilysys’s results here and Cadence’s results here.

There has been positive sentiment among investors in the vertical software segment, with share prices up 7% on average over the last month. Toast is up 8.4% during the same time and is heading into earnings with an average analyst price target of $29.83 (compared to the current share price of $31.23).

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