Toast (NYSE:TOST) Reports Q4 FY2023 Results, Beats Analysts’ Expectations
Toast, the provider of integrated point-of-sale (POS) hardware, software, and payments solutions for restaurants, has reported its Q4 FY2023 results, surpassing analysts’ expectations. The company’s revenue for the quarter stood at $1.04 billion, a 34.7% increase compared to the same quarter last year.
Despite the positive revenue growth, Toast recorded a GAAP loss of $0.07 per share, down from its loss of $0.04 per share in the previous year’s quarter. However, the performance was still impressive considering the challenging economic environment faced by the industry due to the ongoing pandemic.
The highlights of Toast’s Q4 FY2023 results are as follows:
1. Revenue Beats Analyst Estimates
Toast’s revenue of $1.04 billion in Q4 exceeded analyst estimates of $1.02 billion, representing a 1.9% beat. The company’s consistent revenue growth over the past two years is commendable, growing from $512 million in Q4 FY2021 to $1.04 billion in this quarter alone.
2. Exceeds Analyst EPS Expectations
The company’s earnings per share (EPS) of -$0.07 outperformed analyst estimates of -$0.11, marking a 35.8% beat. This positive EPS result indicates Toast’s ability to effectively manage its expenses and optimize profitability.
3. Strong Free Cash Flow Growth
Toast’s free cash flow for Q4 stood at $81 million, which represents a remarkable increase of 119% from the previous quarter. This growth in free cash flow is a positive sign for the company’s financial stability and potential for future expansion.
4. Gross Margin Improvement
The gross margin (GAAP) for Toast in Q4 FY2023 was 21.8%, up from 20.8% in the same quarter last year. This improvement in gross margin highlights the company’s ability to control costs and increase profitability.
5. Market Capitalization
Toast’s market capitalization currently stands at $10.89 billion, reflecting investors’ confidence in the company’s growth prospects and its ability to navigate through the challenges faced by the restaurant industry.
Toast, founded by three MIT engineers at a local Cambridge bar, has achieved impressive growth since its inception. With its integrated POS solutions, the company has garnered a strong reputation within the restaurant industry.
Despite the ongoing challenges posed by the pandemic, Toast’s Q4 FY2023 results indicate that the company is on the right track. Its revenue growth has been exceptional over the past two years, and it continues to show momentum in generating free cash flow.
The positive results from Q4 have been well-received by investors, as Toast’s stock rose by 11.8% after the earnings report. Currently trading at $21.5 per share, the company’s solid performance and growth prospects make Toast an interesting stock to watch in the coming months.
Analyst comment
Positive news: Toast reported Q4 FY2023 results beating analysts’ expectations with revenue up 34.7%. The company also showed continued momentum in free cash flow and a growth in gross margin. The stock is up 11.8% after reporting.
Short analysis: With strong revenue growth and positive free cash flow, Toast is expected to maintain its momentum in the market and potentially experience further growth.
