A screen displays the corporate logo for Toast Inc. throughout the company’s IPO on the Recent York Stock Exchange (NYSE) in Recent York City, U.S., September 22, 2021.
Brendan Mcdermid | Reuters
Toast, maker of restaurant management software, said on Thursday it will let go of 550 employees, about 10% of its workforce. The corporate also reported fourth-quarter earnings that surpassed Wall Street’s expectations.
Several technology firms have instituted layoffs in 2024. On Wednesday Cisco said it might eliminate 4,000 jobs as sales declined and clients became much more cautious about spending.
Toast’s shares were initially up as much as 16% after hours but then gave back much of the gains.
Here’s how the corporate did, compared with the consensus amongst analysts polled by LSEG, formerly known as Refinitiv:
- Earnings per share: Lack of 7 cents per share, vs. lack of 11 cents per share expected
- Revenue: $1.04 billion vs. $1.02 billion expected
Toast’s revenue increased almost 35% 12 months over 12 months throughout the quarter, based on a statement. Its net lack of $36 million narrowed from $99 million within the year-ago quarter. The corporate has committed $250 million for share buybacks.
The pandemic lead many restaurants to adopt Toast’s tools for mobile ordering and payments, which helped double the corporate’s revenue. Shares debuted on the Recent York Stock Exchange in 2021, within the midst of that uptick. Demand has cooled since then, down from 37% within the third quarter and about 45% within the second quarter.
Toast faces increasing competition from the likes of Block, Fiserv and Shift4, Bank of America analysts wrote in a December note as they reduced their rating on the stock from buy to neutral.
Despite the competition, transactions using Toast products proceed to grow. Gross payment volume, at $33.70 billion, was up 32%, higher than the $33.53 billion consensus amongst analysts surveyed by StreetAccount.
Toast’s latest layoffs should lead to $45 million to $55 million in charges, mostly in the primary quarter, and $100 million in annualized savings.
Those cuts come weeks after Aman Narang, Toast’s co-founder and COO, replaced Chris Comparato as CEO. Under Comparato’s leadership last summer, Toast began charging a fee of 99 cents for every online order that totaled greater than $10. Consumers and restaurant owners objected, prompting the corporate to eliminate the surcharge.
Narang said on a conference call with analysts that management goals to report operating profit in the primary half of 2025.
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