Toast Shares Rise Ahead of Third-Quarter Earnings
The restaurant software maker reports results after the market close Tuesday as it faces an FTC lawsuit over alleged hidden fees.
Updated on Nov. 2, 2026 in Dining Out
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Toast stock rose 7.83% to $34.16 on Monday as investors positioned ahead of the company's third-quarter earnings report after the market close Tuesday. The rally came weeks after the Federal Trade Commission and several states sued the restaurant technology provider on October 29.
Why it matters
Toast serves a large base of U.S. restaurants, and the lawsuit alleges that hidden fees and unwanted subscriptions have affected how those businesses pay for its software. The earnings report will give investors an updated view of growth despite the regulatory challenge.
Analysts expect third-quarter revenue of $1.97 billion, up 21%, and earnings of 25 cents per share, compared with second-quarter revenue of $1.91 billion. Toast ARR reached $2.4 billion as of June 30, up 25%, but the report does not address how the pending lawsuit may affect those figures.
The players
Toast, Inc.
Toast is a restaurant technology company that provides point-of-sale, payment, and management software to restaurants across the United States.
Federal Trade Commission
The FTC is the U.S. federal agency responsible for consumer protection and antitrust enforcement, including actions against unfair or deceptive business practices.
The details
Regulators allege Toast imposed undisclosed early termination fees of $150 per remaining contract month and charged restaurants for unwanted services. The lawsuit also challenges Toast's advertised 24/7 customer support and alleges certain loan terms discouraged restaurants from switching providers. Toast denied the allegations.
Timeline
June 30: Toast ARR reached $2.4 billion.
September 2: BNP Paribas downgraded Toast to Neutral.
October 15: Bank of America maintained a Buy rating with a $40 forecast.
October 19: Truist lowered its price forecast to $38.
October 29: The FTC and several states sued Toast.
Industry Dynamics
The lawsuit places Toast within a broader regulatory push against hidden fees and hard-to-cancel subscriptions, now extended from consumer markets into software sold to small businesses. Restaurant technology has become a crowded field, and regulatory scrutiny adds a new variable as providers compete for locations.
Restaurant owners using Toast should review their contracts for early termination fees and subscription charges, since regulators allege these terms were not clearly disclosed. Diners are not directly affected, but restaurants facing software costs may pass some pressure on to menu prices over time.
The takeaway
Restaurant operators should read software contracts closely for termination fees, add-on charges, and cancellation terms before signing or renewing. Checking those terms early can prevent unexpected costs as providers compete for market share.
What happens next
Toast reports third-quarter earnings after the market close on Tuesday.
Further reading
For more on how restaurants choose their dining and payment tools, see Dining Out.
Source note: This article includes information reported by Benzinga.
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