Toast: The Restaurant Disruptor Faces Its Next Test

Toast continues to gain restaurant market share, with 171,000 locations and recurring gross profit outpacing location and payment volume growth. AI-driven Toast IQ adoption is substantial, reaching 23% of the base, and early monetization efforts like Toast IQ Grow show promising incremental revenue potential. Expansion into enterprise, international, and retail markets extends TOST’s growth runway, though hardware cost pressures and competitive threats warrant monitoring. At ~24x 2026 earnings, TOST’s Buy rating is supported by rapid growth, deepening software adoption, and emerging operating leverage, though valuation assumes significant margin expansion.

Toast (TOST) has already proved it can win restaurants. Its platform is now used by some 171,000 locations, while gross payment volume, annualized recurring run rate, and recurring gross profit are all growing above 20%.