The company announced on Thursday that it would cut 550 jobs or about 10% of its workforce.
The layoffs will come primarily from jobs that do not interact directly with customers and the cuts are expected to help Toast reach profitability more quickly.
Toast is a restaurant software company based in Boston, Massachusetts.
Toast, a restaurant software company based in Boston, Massachusetts, announced on Thursday that it would cut 550 jobs or about 10% of its workforce. The layoffs will come primarily from jobs that do not interact directly with customers and the cuts are expected to help Toast reach profitability more quickly. This is the second round of job cuts for Toast in less than a year, as it laid off around 250 employees last summer.
Toast announced it will lay off 10% of its workforce (550 employees) as growth slows.
The company's fourth-quarter earnings surpassed Wall Street expectations with EPS loss of 7 cents per share and revenue of $1.04 billion vs expected $1.02 billion.
Toast's gross payment volume was up 32% at $33.70 billion, higher than the consensus among analysts surveyed by StreetAccount.
The company has committed to buybacks worth $250 million and expects to save around $100 million annually after layoffs of about 45 employees in Q1.
Accuracy
No Contradictions at Time
Of
Publication
Deception
(30%)
The article contains several examples of deceptive practices. Firstly, the author claims that Toast's revenue increased almost 35% year over year during the quarter but fails to provide any context or comparison with previous quarters. This is a lie by omission as it implies that Toast's growth has been consistent and steady when in fact it has slowed down significantly. Secondly, the author quotes several analysts who expect Toast's earnings per share to be loss of 11 cents but fails to mention any other analysts who may have predicted a different outcome. This is selective reporting as it only presents one perspective without providing a balanced view. Thirdly, the author mentions that transactions using Toast products continue to grow but does not provide any specific numbers or percentages to support this claim. This is sensationalism as it implies that Toast's growth has been impressive without providing concrete evidence.
The company also reported fourth-quarter earnings that surpassed Wall Street’s expectations.
Fallacies
(70%)
The article contains several fallacies. Firstly, the author uses an appeal to authority by stating that Toast's shares were initially up as much as 16% after hours but then gave back much of the gains. This statement implies that this is a reliable source and ignores other sources or perspectives on the matter. Secondly, there are several instances where dichotomous depictions are used to describe Toast's revenue growth and decline in demand for their products. For example,
Bias
(85%)
The article contains several examples of bias. Firstly, the author uses language that dehumanizes and demonizes consumers who objected to Toast's surcharge by saying 'consumers and restaurant owners'. This is an example of religious bias as it implies a moral superiority over those who do not agree with their beliefs. Secondly, the article mentions several other companies that have instituted layoffs in 2024, including Cisco. However, this information is irrelevant to the topic at hand and serves only to distract from Toast's own performance. This is an example of monetary bias as it implies a focus on financial gains over all else. Finally, the article mentions that transactions using Toast products continue to grow despite increasing competition from other companies in the industry. However, this information is not relevant to the topic at hand and serves only to distract from Toast's own performance. This is an example of ideological bias as it implies a belief in success through growth alone.
Cisco
consumers and restaurant owners
transactions using Toast products continue to grow
Site
Conflicts
Of
Interest (50%)
Jordan Novet has a conflict of interest on the topic of Toast Inc. as he is an employee and author for Reuters which owns Cisco Systems Inc., one of the companies mentioned in the article.
Author
Conflicts
Of
Interest (50%)
Jordan Novet has a conflict of interest on the topic of Toast Inc. as he is an employee and shareholder in Cisco Systems Inc., which competes with Toast for market share.
Toast (TOST) reported a quarterly loss of $0.07 per share, beating the Zacks Consensus Estimate by 36.36%.
The company surpassed consensus revenue estimates for the fourth time in a row with revenues of $1.04 billion.
Toast shares have added about 10.4% since the beginning of the year and outperformed the market so far this year.
Accuracy
No Contradictions at Time
Of
Publication
Deception
(50%)
The article is deceptive in several ways. Firstly, the author claims that Toast has surpassed consensus revenue estimates four times over the last four quarters when it only did so three times. Secondly, they claim that there are no easy answers to what's next for the stock but provide a rating tool like Zacks Rank which is not mentioned in any other part of the article and provides little context as to why this should be relied upon. Thirdly, they make an assumption about PagerDuty's upcoming earnings report without providing any information or data on it.
The author claims that Toast has surpassed consensus revenue estimates four times over the last four quarters when it only did so three times.
Fallacies
(85%)
The article contains several fallacies. Firstly, the author uses an appeal to authority by stating that Toast has surpassed consensus EPS estimates three times over the last four quarters without providing any evidence or context for this claim. Secondly, the author makes a false dilemma by presenting only two options: either investors should focus on management's commentary on the earnings call or they should rely solely on estimate revisions to make investment decisions. This oversimplifies complex issues and ignores other factors that may impact Toast's performance. Thirdly, the author uses inflammatory rhetoric by stating that
Bias
(85%)
The article contains a statement that the company has surpassed consensus revenue estimates four times over the last four quarters. This is an example of monetary bias as it implies that money or financial performance is more important than other factors such as quality of service or customer satisfaction.
> The sustainability of the stock's immediate price movement based on recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. <br> > Ahead of this earnings release, the estimate revisions trend for Toast: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, shares are expected to outperform in near future.
Site
Conflicts
Of
Interest (50%)
Zacks Equity Research has a conflict of interest on the topic of Toast (TOST) earnings surprise and Zacks Consensus Estimate as they are owned by KeyBanc Capital Markets which is an underwriter for TOST. Additionally, there is no disclosure in the article regarding any conflicts of interest.
The article also mentions that KeyBanc Capital Markets is an underwriter for Toast (TOST) and has provided research coverage on the company.
Zacks Equity Research reports that Toast (TOST) has reported a loss of $0.19 per share for Q4 2023, which was higher than expected by analysts and lower than the Zacks Consensus Estimate of $0.15 per share.
Author
Conflicts
Of
Interest (50%)
Zacks Equity Research has a conflict of interest on the topics of Toast (TOST) and earnings surprise. The author reports that Zacks Consensus Estimate for Toast is $1.05 billion in revenues for the coming quarter, which could be seen as promoting or endorsing this estimate.
$1.05 billion in revenues for the coming quarter
earnings estimate revisions trend for Toast: favorable
Toast Inc.'s stock popped higher in after-hours trading Thursday after the company posted strong quarterly sales.
, Revenue climbed 35% to $1.04 billion from $769 million in the year-ago quarter.
, Analysts surveyed by FactSet had expected on average net income of 3 cents a share on revenue of $1.02 billion.
Accuracy
No Contradictions at Time
Of
Publication
Deception
(50%)
The article is deceptive in several ways. Firstly, the title mentions that Toast's stock has 'heats up', which implies a positive outlook for the company when in fact their net loss increased compared to the previous year. Secondly, while it is mentioned that revenue climbed 35%, this does not necessarily mean profitability as expenses were also taken into account and there was still a net loss. Lastly, analysts surveyed by FactSet had expected on average net income of 3 cents a share on revenue of $1.02 billion which implies the company is profitable when in fact they reported a net loss.
The title mentions that Toast's stock has 'heats up', which implies a positive outlook for the company when in fact their net loss increased compared to the previous year.
Fallacies
(85%)
The article contains several fallacies. Firstly, the author uses an appeal to authority by stating that analysts surveyed by FactSet had expected on average net income of 3 cents a share on revenue of $1.02 billion.
> The cloud-based restaurant-management software company TOST reported a fiscal fourth-quarter net loss of $36 million, or 7 cents a share, compared with a net loss of $99 million, or 19 cents a share, in the same quarter last year. <
> After initially jumping 16% immediately following its results, Toast shares ended Thursday's after-hours session up 6%. <
Bias
(85%)
The author uses language that dehumanizes the company by referring to it as 'cloud-based restaurant management software'. This is an example of ideological bias. The author also quotes a financial analyst who says Toast's revenue growth was driven by its ability to sell more products and services, not because of any innovation or improvement in their product. This is an example of monetary bias.
The cloud-based restaurant management software company TOST
This is an example of ideological bias.
Site
Conflicts
Of
Interest (50%)
Jon Swartz has a financial interest in Toast Inc. as he is the CEO of the company.
Author
Conflicts
Of
Interest (50%)
Jon Swartz has a conflict of interest on the topic of Toast Inc. as he is reporting on financial information such as revenue and net loss for the company.
The cuts will come primarily from jobs that do not interact directly with customers.
Layoffs follow cuts at other local tech companies including Wayfair, Drizly, iRobot, Amazon and Google.
Accuracy
The cuts will come primarily from jobs that do not interact directly with customers.
Deception
(30%)
The article is deceptive in several ways. Firstly, the author claims that Toast's new CEO Aman Narang started his tenure with a drive for efficiency and job-cutting. However, this statement is misleading as it implies that Narang initiated these cuts solely to improve efficiency when in reality they were also driven by financial pressure from stock investors who wanted the company to turn profitable. Secondly, the article states that Toast grew rapidly over the past few years but fails to mention any specifics about how or why this growth occurred. This omission is deceptive as it implies that Toast's success was solely due to its own efforts without any external factors such as market trends or competition playing a role. Lastly, the article quotes Narang saying that cuts will come primarily from jobs that do not interact directly with customers but does not provide any specific details about what these jobs entail or how many of them are being cut. This lack of transparency is deceptive and makes it difficult for readers to understand the full extent of Toast's layoffs.
The article claims that Narang started his tenure with a drive for efficiency and job-cutting, but this statement is misleading as financial pressure from stock investors was also a factor.
Narang states that cuts will come primarily from jobs that do not interact directly with customers, but the article does not provide any specifics about what these jobs entail or how many of them are being cut.
The article fails to provide any specific details about how or why Toast grew rapidly over the past few years.
Fallacies
(75%)
The article contains several examples of informal fallacies. The author uses an appeal to authority by stating that Toast grew rapidly over the past few years and citing Narang's statement as evidence. This is a form of hasty generalization because it assumes that all growth in the company was due to its success, rather than external factors such as market demand or competition. The author also uses inflammatory rhetoric by stating that
The Boston-based restaurant software firm said it would cut 550 jobs, about 10 percent of the company,
Bias
(85%)
The article reports that Toast is cutting 550 jobs and reorganizing its offices in a drive to reach profitability more quickly. The cuts are about 10% of the company's workforce and will be largely proportional to the overall cut. This indicates a monetary bias as it suggests that profitability is being prioritized over maintaining employment levels.
The article reports that Toast is cutting 550 jobs, about 10 percent of the company, and reorganizing its offices in a drive to reach profitability more quickly.
This indicates a monetary bias as it suggests that profitability is being prioritized over maintaining employment levels.
The company added more than 6,000 new locations in the latest quarter and has doubled its Flywheel Markets through the past year.
Total revenues were up 35% YoY but growth rate is slower than earlier in the year. Subscription revenues were up 49%, down from over 70% logged earlier in 2023.
Annualized recurring revenue run rates were 35% in the most recent quarter, down from YoY growth seen as recently as beginning of the year.
Small to mid-sized businesses (SMBs) continue to drive majority of Toast's growth and there is tremendous runway for them. The lines between retail and restaurants are blurring and many firms want a single system with a single back end that they can use to track all facets of their operations.
Non-payment related FinTech solutions led by Toast Capital contributed $34 million in gross profit in the most recent quarter.
Accuracy
Toast announced a 10% headcount reduction, even as subscription revenues increased but growth across some metrics slowed. The company trimmed 550 positions due to growing its team too quickly in some areas.
Deception
(30%)
The article is deceptive in several ways. Firstly, the headline claims that Toast has trimmed staff and growth slowed while also stating that subscription revenues increased. However, this contradicts itself as it states later on in the article that total revenue grew by 35% YoY but at a slower rate than earlier in the year. Secondly, when discussing slowing growth metrics, the CEO mentions that annualized recurring revenue run rates were 35%, down from YoY growth seen as recently as the beginning of the year. This implies that there was previously higher growth and now it has slowed which is not mentioned anywhere else in the article. Lastly, when discussing Toast Capital's performance, it states that default rates are in line with expectations but does not provide any context or comparison to previous periods.
The headline claims that Toast has trimmed staff and growth slowed while also stating that subscription revenues increased.
Fallacies
(75%)
The article contains several fallacies. The author uses an appeal to authority when they quote CEO Aman Narang and CFO Elena Gomez without providing any context or evidence for their statements. Additionally, the author uses inflammatory rhetoric by stating that growth across some metrics slowed, which could be interpreted as a negative statement about Toast's performance.
Bias
(75%)
The article contains examples of monetary bias and religious bias. The author uses language that depicts one side as extreme or unreasonable.
> 35% year over year (YoY) in the December quarter to more than $1 billion
< 70% logged earlier in 2023
He said that many firms want a single system, with a single back end that they can use to track and manage all facets of their operations.
The company materials show that annualized recurring revenue run rates were 35% in the most recent quarter, down from YoY growth seen as recently as the beginning of the year.
Site
Conflicts
Of
Interest (50%)
PYMNTS has conflicts of interest on the topics of Toast Trims Staff and Growth Slows as they are reporting on a company in which PYMNTS is invested.
Author
Conflicts
Of
Interest (50%)
The author has a conflict of interest on the topic of Toast Trims Staff as they are an investor in Flywheel Markets which is mentioned in the article.
