Toast Inc. (TOST), a cloud-based restaurant software company, has seen its shares surge by 13% following the announcement of a significant restructuring plan that includes job cuts.
The company's fourth-quarter earnings revealed an adjusted EPS of ($0.07), falling short of the analyst consensus of $0.02. The revenue reached $1 billion, just below the expected $1.02 billion.
The restructuring plan, approved on February 13, 2024, aims to enhance operating expense efficiency and includes a reduction in force affecting approximately 550 employees, the company said.
Toast anticipates incurring charges between $45 to $55 million, primarily related to severance and related costs, with most charges expected in the first quarter of fiscal year 2024.
For the fourth quarter of 2023, Toast reported a 35% increase in revenue YoY to $1.0 billion, with a gross profit of $226 million, up 43% YoY. The non-GAAP subscription services and financial technology solutions gross profit rose 36% YoY to $281 million.
Looking ahead to the first quarter of 2024, Toast expects to report a non-GAAP subscription services and financial technology solutions gross profit in the range of $275 million to $285 million, marking a growth of 20-24% compared to Q1 2023. The adjusted EBITDA is forecasted to be between $15 million and $25 million.
For the full year ending December 31, 2024, the company anticipates a non-GAAP gross profit in the range of $1,300 million to $1,320 million, representing a 23-25% increase from 2023, and an adjusted EBITDA between $200 million and $220 million.
The CEO of Toast stated, "Our decisive actions to streamline operations and focus on core growth areas are reflected in our strong financial performance and the positive response from the market. We are committed to executing our restructuring plan efficiently to position Toast for long-term success."