A maker of cloud-based software and payment hardware built for restaurants and food-and-beverage shops, Toast bundles point-of-sale terminals like the Toast Go, online ordering, delivery, loyalty programs, and even small loans through Toast Capital, all in one subscription platform. Founded in 2011 by former tech-industry engineers who wanted to modernize restaurant operations, the company took its name from the breakfast staple—a warm, friendly nod to the businesses it serves. Its Toast IQ assistant can answer operators' questions in plain language, pulling insights from a restaurant's own sales data.
Toast's Q2 2026 net income nearly doubles to $154M as operating margin reaches 8.0% on 23% revenue growth.
Toast's hit 8.0%, its highest level as a public company. rose 23% to $1.91 billion and nearly doubled to $154 million, driven by a 22% increase in restaurant locations and a 28% increase in higher-margin subscription services. The company is scaling profitably, but spent $486 million on share repurchases in the first half, reducing its cash position by 25% from year-end.
Key takeaways
rose 93% to $154 million, as a 23% increase in to $1.91 billion outpaced the rise in operating expenses.
widened 2.8 points to 8.0%, reflecting the from growth exceeding expense growth.
reached 27.0%, up 1.8 points from a year ago, as subscription services grew 28% to $290 million and continued to outgrow the cost of revenue.
Section summaries
Management's Discussion and Analysis
Toast Q2 2026 revenue rose 23% to $1.9B driven by 22% Location growth and higher GPV; net income nearly doubled to $154M.
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Total grew 23% to $1.9B in Q2 2026, primarily from a 22% increase in Locations to ~180,000 and continued product adoption.
Financial technology solutions rose 23% to $1.57B, driven by a 22% increase in to $60.7B.
Financial technology solutions , the largest , rose 23% to $1.57 billion on a 22% increase in Gross Payment Volume to $60.7 billion.
was $130 million for the quarter, down 38% from $208 million a year ago, as higher purchases and share repurchases reduced cash balances.
The company spent $486 million on share repurchases in the first half of 2026, including $159 million in Q2, leaving $100 million remaining under its expanded $500 million authorization.
What changed
reached 27.0%, building on the 25.9% level flagged as a sustainability question in FY 2025, as the mix-shift benefit from subscription services growth continued to drive expansion.
of $130 million in Q2 was down from $208 million a year ago, a reversal from the trajectory of nearly doubling free cash flow in FY 2025, as higher purchases and share repurchases consumed cash.
The pace of share repurchases accelerated sharply: $486 million was spent in H1 2026, exceeding the $107 million spent in all of FY 2025, and reducing cash and equivalents to $1.02 billion from $1.35 billion at year-end.
The in IT general controls over user access, first identified in 2022 and now in its fifth year, remains unremediated with no disclosed update on progress.
What to watch
Whether can sustain above 27% as the company continues to lap the mix-shift benefits from subscription services growth that have driven expansion for multiple quarters.
The pace of the remaining $100 million in share repurchases and whether the company extends the program further, given the $486 million spent in H1 2026 reduced cash to $1.02 billion.
Progress on remediating the in IT general controls, now in its fifth year, which remains an open risk to financial reporting accuracy.
The trajectory of through the remainder of the year, given the 38% decline in Q2 to $130 million driven by higher purchases.
Subscription services increased 28% to $290M, contributing to a 25% rise in to $2.4B.
nearly doubled to $154M from $80M, while grew 37% to $221M, reflecting .
was $245M for H1 2026, down from $277M, as higher purchases and $486M in share repurchases reduced cash balances.
The company increased its authorization by $500M in February 2026 and had $100M remaining under the program as of quarter-end.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to financial market risks, including changes in interest rates and foreign currency exchange rates, as well as credit risk on accounts receivable and our loan servicing activities. Our exposure to market and credit risk has not changed materially since the present…
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We are exposed to financial market risks, including changes in interest rates and foreign currency exchange rates, as well as credit risk on accounts receivable and our loan servicing activities. Our exposure to market and credit risk has not changed materially since the presentation set forth in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 18, 2026.
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Table of Contents
The material set forth in the section titled “Legal Proceedings” in Note 11 to the financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.
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The material set forth in the section titled “Legal Proceedings” in Note 11 to the financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.
There have been no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Our business, operations, and financial results are subject to various risks and uncertainties that coul…
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There have been no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. Our business, operations, and financial results are subject to various risks and uncertainties that could materially adversely affect our business, results of operations, financial condition, and the trading price of our Class A common stock. You should carefully read and consider the risks and uncertainties included in the Annual Report, together with all of the other information in the Annual Report and this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and related notes, and other documents that we file with the SEC. The risks and uncertainties described in these reports may not be the only ones we face. The factors discussed in these reports, among others, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral statements.