Operator

Good afternoon. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to Toast Second Quarter 2026 Earnings Conference Call. Today’s call will be 45 minutes.

I will now turn the call over to Michael Senno, Senior Vice President of Finance. You may begin your conference.

Michael Senno
Senior Vice President of Finance

Thank you. Welcome to Toast Second Quarter 2026 Earnings Call. First, CEO, Aman Narang; and CFO, Elena Gomez, will open with prepared remarks followed by Q&A.

Before we start, I’d like to remind everyone that today’s call may include forward-looking statements, which are subject to risks and uncertainties and reflect our views and assumptions only as of today. These forward-looking statements include expectations around financial and operational metrics, products, business and investment strategy and guidance. Actual results may vary significantly, and we expressly disclaim any obligation to update the forward-looking statements made today. For a detailed discussion of risks, please refer to the cautionary language in today’s press release and our SEC filings.

During this call, we will discuss certain non-GAAP financial measures, including, but not limited to, non-GAAP subscription services gross profit and non-GAAP financial technology

It reported revenue of $7.8 billion, compared with $4.1 billion a year earlier.

Second-quarter ​revenue beat expectations of $6.93 billion, according to LSEG data. The company posted a net loss of $541 million attributable to shareholders for the three months ended June 30.

The company said it invested $18.37 billion in AI infrastructure, Starship and Starlink expansion.

The company’s stock has declined 8% since its record-breaking initial public offering in ‌June that valued ⁠the company at ⁠about $1.75 trillion. The stock could face additional pressure from the expiry of SpaceX’s post-IPO lock-up period starting on Thursday, which may unleash a wave of insider ​and early-investor shares on the market.

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Starlink and SpaceX’s broader connectivity operations remain the company’s primary financial engine, underpinning CEO Elon Musk’s push to build an ​AI-first business that extends beyond renting compute capacity to developing frontier models, consumer and enterprise software, and, eventually, data centers in space.
The company’s satellite-internet unit has continued to expand its global subscriber base, aided by launches of additional satellites and a growing range of consumer, enterprise, ​aviation, maritime and government services.But that expansion has come with tradeoffs: average revenue per ⁠user (ARPU) has ‌dropped as SpaceX has entered more international markets and rolled out lower-priced plans.

Investors are watching whether ​SpaceX can maintain ​growth while improving the economics of its network, particularly as it spends heavily to expand coverage, increase ⁠capacity and develop direct-to-device mobile services.

SpaceX’s AI business, which includes xAI, Grok, and social-media platform ​X, and a rapidly expanding data center operation, has been its biggest area of ​investment. The business is generating revenue from compute contracts with Anthropic, Alphabet’s Google and Reflection AI, though a portion of its recurring revenue has yet to be recognized.

Operating losses at the AI business have mounted, and SpaceX has cautioned that the AI unit will require sustained investment before it can generate profits consistently.

Starship, SpaceX’s next-generation reusable rocket system, is yet to enter commercial service but is expected to enable deployment of higher-bandwidth Starlink satellites and orbital AI-computing infrastructure.

The company’s ability to turn Starship into a reliably reusable vehicle is ‌central to its longer-term strategy. Investors have closely watched for updates on testing progress, launch cadence, reusability milestones and the vehicle’s satellite-deployment capabilities.

Separately, SpaceX said that it had partnered with Nvidia to use its chips in ​the Starmind AI1 ​orbital compute satellites.

The space segment, which includes ⁠commercial launches, government missions and development of Starship remains a significant source of costs and uncertainty.

While launch activity for Falcon – SpaceX’s partially reusable workhorse rocket – has remained robust, revenue can vary with the mix of internal Starlink deployments, commercial customer missions and government contracts.

In ​recent years, SpaceX has increasingly prioritized launches for its own satellite network over third-party payloads, while continuing to absorb significant costs tied to Starship’s development.

Investors will also be keen to hear Musk’s comments on a potential merger between SpaceX and Tesla after a Wall Street Journal report last week that executives at his electric-vehicle company had been told to prepare for a separation of its China business ahead of a potential deal.

Musk dismissed the report as “fake news,” but he had previously declined to rule out the possibility, citing growing overlap between the companies.

Caterpillar shares jumped more than 6% Tuesday morning, trading at $882.97 as of 10:05 a.m. Eastern time, after the construction and mining equipment maker reported record second-quarter results and raised its full-year sales outlook, driven largely by surging demand tied to the ongoing buildout of AI data centers.

The gains, which reached as high as 11% in premarket trading before settling into Tuesday’s session, added roughly 450 points to the Dow Jones Industrial Average and reinforced the equipment giant’s growing role as a beneficiary of the broader artificial-intelligence infrastructure boom sweeping through corporate America.

A historic quarter

Caterpillar reported second-quarter sales and revenue of $20.5 billion, up 24% from $16.6 billion a year earlier, marking the first time in the company’s history that quarterly sales have topped $20 billion. Adjusted earnings per share came in at $8.17, up sharply from $4.72 in the same period last year and well above the $6.20 per share analysts had expected, according to data compiled by LSEG. On a GAAP basis, diluted earnings per share rose to $7.77 from $4.62, while net profit climbed to $3.593 billion from $2.179 billion. Operating profit increased 50% to $4.295 billion.

Chairman and CEO Joe Creed highlighted the milestone in a statement accompanying the results, noting it marked “the first time in company history that we have generated over $20 billion” in sales and revenue for a single quarter. Creed pointed to broadening momentum across all three of the company’s primary business segments, underscored by a record order backlog of $72.1 billion heading into the second half of the year.

Data centers driving the surge

The results were powered heavily by two segments tied closely to the broader AI infrastructure buildout. Caterpillar’s Construction Industries segment posted sales growth of 35% to $8.3 billion, with North American construction demand surging 50% as data center construction projects continued to ramp up across the country. The company’s Power & Energy segment grew revenue by 17% to $8.2 billion, with power generation sales, predominantly tied to backup power equipment for data centers, climbing 29%. Combined, the two segments accounted for 81% of Caterpillar’s total revenue during the quarter.

Resource Industries revenue rose 20% to $4.6 billion, driven by higher equipment sales to end users and increased international locomotive deliveries, while Financial Products revenue grew 10% to $1.145 billion, with segment profit up 32% to $328 million.

A sharp turnaround from earlier tariff pressure

Tuesday’s results marked a notable reversal from the pressures Caterpillar flagged just one quarter earlier. In the first quarter, the company reported unfavorable manufacturing costs of $710 million tied to higher tariff expenses, which weighed on margins across all three of its business segments. Caterpillar has since lowered its full-year tariff cost forecast to approximately $2.2 billion, down from an earlier estimate of $2.2 billion to $2.6 billion, and recorded $392 million in expected tariff recoveries under the International Emergency Economic Powers Act during the second quarter alone.

On the back of the strong results, Caterpillar raised its full-year revenue growth forecast to the mid-to-high-teens percentage range, up from its previous projection of low-double-digit growth, a signal to investors that the company expects the current pace of demand to continue through the rest of the year.

Easing concerns about AI-related spending

The results carried significance beyond Caterpillar’s own balance sheet. The company’s results are often viewed as a bellwether for the broader industrial economy, and Tuesday’s beat and raised outlook helped ease recent concerns among investors and analysts, including prominent short-seller Michael Burry, about the sustainability of AI-related capital spending following a stretch of declines in power-equipment stocks tied to that theme. Caterpillar’s ability to convert its record backlog into delivered revenue on schedule this quarter offered reassurance that demand tied to the data center buildout remains durable rather than speculative.

Strong cash generation and capital returns

Caterpillar also reported robust cash flow figures alongside its earnings. Enterprise operating cash flow totaled $4.4 billion for the quarter, while Machinery, Power & Energy operating cash flow reached $5.7 billion and free cash flow came in at $5.1 billion. The company ended the quarter with $6.7 billion in enterprise cash and returned $2.2 billion to shareholders during the period, including $1.5 billion through share repurchases and $700 million in dividends.

A soft spot in the Middle East

Despite the overall strength, Creed acknowledged during the company’s earnings call that Caterpillar saw softer sales to end users in the Middle East within its Construction Industries segment, one of the few regional pockets of weakness noted in an otherwise strong quarter.

Investing in AI and electrification

Beyond its equipment sales, Caterpillar has also been expanding its own footprint in AI-adjacent technology and electrification. The company recently acquired Skycatch, a spatial data and AI analytics firm focused on mine sites, and has been trialing battery-electric haul trucks in partnership with mining giants BHP and Rio Tinto in Australia’s Pilbara region. Those investments align with a broader strategic push the company has signaled toward autonomous and AI-assisted equipment, an initiative it showcased earlier this year at CES with an in-cab AI assistant integrated into one of its mini-excavator models.

Heading into Tuesday’s report, Caterpillar shares had already climbed roughly 36% in 2026, reflecting growing investor enthusiasm for companies positioned to benefit from the broader AI infrastructure buildout. With the company’s record backlog, raised guidance and reduced tariff cost outlook now confirmed, analysts will be watching closely in the coming quarters for further evidence that the current surge in data center-related demand for construction and power generation equipment can be sustained through the remainder of 2026 and beyond.

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WASHINGTON — Alexandra Eala rallied from a set down to defeat top seed Jessica Pegula 4-6, 6-4, 6-0 in the final of the Mubadala DC Open on Monday, capturing her first career WTA Tour singles title and becoming the first player from the Philippines to win a title at the tour level.

The 21-year-old’s breakthrough capped a stunning week in Washington, where she knocked out three seeded players, including a Grand Slam champion and a reigning Olympic gold medalist, en route to the biggest win of her young career. Eala entered the tournament ranked No. 28 in the world and is now projected to climb into the top 20 for the first time ahead of the U.S. Open.

A dramatic, rain-interrupted final

The championship match spanned two days after heavy rain and lightning forced officials to suspend play Sunday night, with Pegula leading by a set and ahead in the second. Play resumed Monday at midday, and Eala wasted little time seizing control, closing out the match in one hour and 45 minutes once action got back underway.

From behind in the second set, Eala mounted a remarkable turnaround, winning the final nine games of the match outright. She capped the comeback with a dominant 6-0 third set in which she surrendered just eight points to Pegula, the world No. 3 and 2019 Washington champion who had entered the final chasing her 12th career title.

Eala was especially sharp behind her first serve throughout the match, winning 84.4% of those points (38 of 45) compared with Pegula’s 56.5%. She converted four of her nine break-point opportunities and won 79 of the 140 total points played in the match, despite not recording a single ace and committing three double faults.

Redemption after past heartbreak

Monday’s victory marked a measure of redemption for Eala, whose only previous appearance in a tour-level singles final ended in painful fashion. At last year’s Lexus Eastbourne Open, she held four championship points against Maya Joint before ultimately falling in a third-set tiebreak. This time, facing another high-pressure moment against one of the sport’s top-ranked players, Eala repeatedly met the challenge.

Speaking after lifting the trophy, Eala reflected on the emotional weight of finally breaking through. “I feel so much love. My first chance at a title,” she said, addressing the crowd on court following the win.

A run through the sport’s elite

Eala’s path to the title ran through a gauntlet of accomplished opponents. She opened her tournament by defeating 2024 Olympic champion Zheng Qinwen, then knocked out No. 7 seed and defending champion Leylah Fernandez in the second round. In the quarterfinals, she ousted No. 2 seed Elina Svitolina, before overcoming No. 3 seed and four-time Grand Slam champion Naomi Osaka in the semifinals to reach her first WTA 500-level final.

With her victories over Svitolina and Pegula, Eala’s win total against top-10 opponents this season climbed to seven, tying her with Elena Rybakina and Svitolina herself for the most top-10 victories on tour in 2026.

Pegula praises her opponent

Pegula, who had won the two players’ only previous meeting in the 2025 Miami Open semifinals, offered generous praise for Eala during the post-match trophy presentation, acknowledging both her opponent’s rapid rise and the passionate following she has built. “To see how far you’ve come over the last couple of years,” Pegula told Eala on court, reflecting on the Filipina’s emergence as one of the tour’s most closely watched young stars.

The result also evened the head-to-head series between the two players at one win apiece, following Pegula’s three-set victory over Eala in Miami last year.

A landmark moment for Philippine tennis

Eala’s triumph carries significance well beyond the tournament itself, marking the first time a player from the Philippines has won a WTA Tour-level singles title. Her rise has already drawn a passionate following, with a large and vocal contingent of Filipino fans packing center court throughout the tournament, a dynamic Pegula herself referenced when comparing the atmosphere in Washington to the raucous, heavily pro-Eala crowds she encountered during their earlier meeting in Miami.

Fritz claims the men’s title

In the tournament’s men’s final, played the same day, American Taylor Fritz claimed his 11th career ATP title, defeating 19-year-old Spanish rising star Rafael Jodar 7-6(2), 6-4. The win marked a significant step in Fritz’s return to peak form following a knee injury that had sidelined him earlier this season, with the American winning 81% of his first-serve points in a steady, serve-driven performance.

Prize money and rankings implications

The Mubadala DC Open featured a total prize purse of $1,637,982, with the singles champion earning $252,000. Beyond the financial reward, Monday’s result carries substantial ranking implications for both finalists. Pegula, despite the loss, is set to improve to No. 4 in the season-long WTA Race while remaining No. 3 in the overall PIF WTA Rankings. Eala, meanwhile, is projected to move into the world’s top 20 for the first time in her career, a milestone that would have seemed unlikely even to her at the start of the tournament.

With her first WTA title now secured and a significant ranking jump on the horizon, Eala heads into the U.S. Open Series as one of the tour’s most talked-about breakout stars of 2026. Her run through three seeded players, including a Grand Slam champion and a reigning Olympic gold medalist, has established her as a legitimate threat heading into the year’s final Grand Slam tournament, with fans and analysts alike now watching closely to see whether Washington marks the beginning of a sustained run near the top of the sport rather than a single standout week.