After-Hours Surge for Toast Inc. Shares
In a promising turn of events, technology provider Toast Inc. exceeded revenue expectations for the latest quarter and achieved positive free cash flow for the first time since its initial public offering. As a result, the company’s shares experienced a significant surge in after-hours trading on Tuesday.
Strong Financial Performance
Toast Inc. reported a net loss of $98 million, or 19 cents per share, for the second quarter, compared to a loss of $54 million, or 11 cents per share, in the same period last year. Despite the increased loss, the company outperformed the FactSet consensus of a 14-cent GAAP loss per share.
Additionally, Toast recorded adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $15 million. This marks a significant improvement from the $33 million loss reported for the same metric in the previous year. Analysts had predicted a $3 million adjusted Ebitda loss for the quarter, making Toast’s actual results even more impressive.
Positive Free Cash Flow
Most notably, Toast achieved positive free cash flow of $39 million in the second quarter. This milestone is particularly significant as it is the first time the company has accomplished this feat since going public two years ago. Toast’s CEO, Chris Comparato, attributed this achievement to their unwavering commitment to driving lean and sustainable growth.
Comparato expressed confidence in Toast’s future prospects, citing recent successes such as securing a new deal with Marriott and expanding their presence in the restaurant market. He emphasized that Toast is just scratching the surface of its potential in the industry’s total addressable market.
Impressive Revenue Growth
Toast Inc.’s revenue experienced substantial growth, reaching $978 million for the quarter, compared to $675 million in the previous year. This surpassed the FactSet consensus of $943 million and further bolstered investor confidence.
Positive Market Reaction
Investors responded positively to Toast’s strong performance, leading to an 11% increase in the company’s stock during Tuesday’s extended trading session.
Promising Outlook
Looking ahead, Toast Inc. expects revenue between $1.01 billion and $1.04 billion for the third quarter. This projection is higher than the FactSet consensus of $1.00 billion, underscoring Toast’s optimism for continued growth.
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