Toast Inc.'s (NYSE:TOST) General Counsel, Brian R. Elworthy, has recently sold company shares valued at over $79,000, according to the latest regulatory filings. The transactions took place on October 2, 2024, with the shares being sold at an average price of $27.765 each.
The sale involved 2,878 shares of Class A Common Stock, and according to the filing, the sale was part of the process to cover tax withholding obligations related to the vesting and settlement of Restricted Stock Units (RSUs). This transaction suggests that the sale was not a discretionary trade, but a required action to fulfill tax-related responsibilities.
In addition to the sale, Elworthy also acquired a significant number of shares through the vesting of RSUs. On October 1, 2024, Elworthy acquired 8,721 shares of Class A Common Stock through the conversion of RSUs, which convert into stock on a one-for-one basis upon vesting. These transactions did not involve any cash exchange, as they pertain to the vesting schedule of the RSUs granted to him. The filings indicate that a portion of these RSUs vested in equal quarterly installments starting from July 1, 2022, and April 1, 2023, with the remaining to vest in the following years.
Following these transactions, Elworthy's direct holdings in Toast Inc. have changed, but the exact post-transaction share count was not disclosed in the summary of the filing. However, it's noted that Elworthy also has indirect ownership through the Brian R. Elworthy Irrevocable Trust of 2019, which holds 78,736 shares of Class A Common Stock.
Investors often monitor insider transactions as they can provide insights into management's perspective on the company's current valuation and future prospects. The disclosed sale and acquisition of shares by Toast Inc.'s General Counsel may be of interest to current and potential shareholders, although it's important to consider that the sale was not discretionary and was related to tax obligations.
Toast Inc., headquartered in Boston, Massachusetts, operates in the computer processing and data preparation sector, providing a cloud-based, end-to-end technology platform for the restaurant industry.
In other recent news, Toast Inc. has reported impressive second-quarter 2024 results, with a significant increase in key financial metrics and a record addition of 8,000 new locations. These developments have led to a 29% year-over-year increase in recurring gross profit streams, reaching $344 million, and an adjusted EBITDA of $92 million. The company also achieved GAAP income profitability ahead of schedule.
These recent developments have prompted Toast Inc. to raise its full-year financial outlook, now expecting a 27% to 29% growth in fintech and subscription gross profit, and adjusted EBITDA projections of $285 million to $305 million. Despite a 3% decline in GPV per location in Q2 and a slight increase in churn rate, the company's core U.S. SMB and mid-market business have contributed significantly to net additions.
Furthermore, Toast Inc. plans to increase investment in key business areas in the second half of the year and expects to maintain breakeven on a GAAP basis. The company continues to focus on leveraging AI for customer value creation, demonstrating its commitment to strategic investment and ongoing business strategy execution.
InvestingPro Insights
To provide additional context to the recent insider transaction at Toast Inc. (NYSE:TOST), let's examine some key financial metrics and insights from InvestingPro.
Toast's market capitalization stands at $15.42 billion, reflecting its significant presence in the restaurant technology sector. The company has shown strong revenue growth, with a 32.19% increase over the last twelve months as of Q2 2024, reaching $4.386 billion. This growth trajectory aligns with the company's expanding footprint in the restaurant industry.
Despite the robust top-line performance, Toast is currently not profitable, with an adjusted operating income of -$117 million over the last twelve months. However, an InvestingPro Tip suggests that net income is expected to grow this year, which could signal improving financial health and potentially explain why insiders like Brian R. Elworthy are holding onto a significant portion of their shares after tax-related sales.
The stock has demonstrated impressive performance, with a 57.92% price total return over the past year. This strong return may reflect investor confidence in Toast's growth prospects and market position. Additionally, the company's liquid assets exceed short-term obligations, indicating a solid financial foundation that could support future growth initiatives.
It's worth noting that Toast's stock price movements are quite volatile, which investors should consider when interpreting insider transactions. The recent sale by the General Counsel, while tax-related, occurs against a backdrop of a stock trading at 93.18% of its 52-week high, suggesting overall positive market sentiment.
For those interested in a deeper dive into Toast's financials and prospects, InvestingPro offers 11 additional tips, providing a more comprehensive analysis of the company's investment potential.
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