Toast Shares Are Getting Burnt Wednesday: What's Going On?

Toast Inc TOST shares are trading lower Wednesday after the company reported third-quarter financial results and issued soft guidance. 

What Happened: Toast said third-quarter revenue grew 37% year-over-year to $1.032 billion, which beat the consensus estimate of $1.03 billion, according to Benzinga Pro. The company reported a quarterly loss of 9 cents per share, which beat estimates for a loss of 10 cents per share. 

Annualized recurring run-rate (ARR) was up 40% year-over-year. Gross payment volume jumped 34% to $33.7 billion. Total locations increased 34% year-over-year to 99,000.  

Net cash provided by operating activities came in at $47 million and the company generated free cash flow of $37 million in the quarter. 

"Our focus on balancing durable top line growth with efficiency led to our seventh consecutive quarter of Adjusted EBITDA margin expansion," said Chris Comparato, CEO of Toast.

Toast expects fourth-quarter revenue to be in the range of $1 billion to $1.03 billion versus estimates of $1.03 billion. The company expects full-year 2023 revenue to be between $3.83 billion and $3.86 billion versus estimates of $3.86 billion. 

Adjusted EBITDA is expected to be between $5 million and $15 million in the fourth quarter and between $38 million and $48 million for the full year. 

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TOST Price Action: Toast shares were down 17.3% at $14.26 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Toast.