Shares of Toast Inc. were getting slammed in premarket trading Thursday, as the maker of payment offerings and software for the restaurant industry topped revenue expectations for its latest quarter but gave a largely in-line outlook that may not have been enough for Wall Street after a big recent run-up in the stock.
The stock was off about 13% in premarket action.
For the fourth quarter, Toast TOST,
Revenue rose to $769 million from $512 million, while analysts tracked by FactSet were expecting $753 million. The company generated $25.5 billion in gross payment volume, or the value of transactions flowing through its platform, coming in above the $25 billion that analysts were projecting,
The company saw its total locations rise almost 40% from a year before, to roughly 79,000.
“Results were very strong as locations, [gross payment volume] and take rates continued to rise nicely while losses continued to narrow,” Mizuho analyst Dan Dolev wrote in a note to clients.
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For the first quarter, Toast expects revenue of $745 million to $775 million, along with a $20 million to $30 million loss on the basis of adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda). The FactSet consensus was for $751 million in revenue and a $22 million adjusted Ebitda loss.
For the full year, Toast models $3.57 billion to $3.66 billion in revenue as well as a $10 million to $30 million adjusted-Ebitda loss. Analysts were anticipating $3.62 billion in revenue and a $19 million loss on the basis of adjusted Ebitda.
Dolev noted that given a nearly 45% run-up in Toast shares to start 2023 “and expectations for 2023 sales and Ebitda likely running ahead of themselves,” Toast’s outlook “may not meet investor enthusiasm.”
