Toast stock soars on earnings beat while Olo stock gets hammered

Yahoo Finance Live anchors discuss second-quarter earnings for Toast and Olo.

Video transcript

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- Welcome back. We are coming up against the opening bell on Wall Street in what has been another good week for stocks. Brad, let's hit a few, I would say, companies that could use some help because it has not been a very kind year to them.

Let's start with Toast. Funny name, funny ticker, out with results. Stock is popping 19% here in the premarket, a hot mover on the Yahoo Finance Trending Ticker page, one of my favorite pages on the platform. I encourage everyone to check it out.

Toast's noting that total locations-- they're a restaurant technology company-- total locations up 40% year over year. But it is the outlook. We've been talking all morning long, this market is not rewarding companies, necessarily, for losing money.

In this case, they are with Toast. But still, wow, for the year, really slated to lose about $140 million to $160 million on an adjusted operating profit basis. That is massive.

- Yeah. They acknowledge that restaurants are operating in a challenging environment. And as of this point in time for Toast, ensuring that they continue to have more restaurants that actually opt into what their platform provides, not even just on the ordering front.

But also, I think the seamless kind of checkout front, too, that's something I've taken advantage of increasingly over the past year. I mean, I think that more of the small businesses, especially restaurants in New York City, they've employed technology where they can to make it a more seamless checkout.

Because that helps them with table turnover as well if you're not sitting there just waiting for the staff to come back over and bring the check and then that process of going back and forth three times.

Toast makes that efficient. And I think that efficiency is what many of the restaurants right now that have added on more tables as well, both indoors and outdoors, for those who would like to make sure that they're in an open air environment. That allows them to just turn through more of their customers as well.

And so the efficiency is there. It's really just adding on more restaurants and helping those restaurants navigate through the environment that we still find ourselves in.

- Yeah, good point. I was intrigued, too, just going through the Toast earnings call, that they are now working with restaurants inside hotels. You're seeing, I think, a broadening out--

- As they should be.

- Yeah, they're broadening it out of their business from I think traditional fast food companies. I believe they have a big partnership with Jamba Juice. So good to see them on that front.

But look, on the other side of the spectrum, we have Olo. This is a Toast competitor here. That stock is, I believe, getting slaughtered here in the pre market. And I would take issue with this market move in Olo.

I mean, it's getting absolutely obliterated, a little bit cautious outlook from Olo. Shares getting hammered by more than 30%. But unlike Toast, they're looking for profits this year. They just revised their outlook slightly for the full year.

So this looks to be a bit of overreaction. But still, ugly day for the folks at Olo. Better day for the folks at Toast.

- Yeah, some of the numbers here that Olo had pointed out in their most recent second quarter earnings here. Gross profit, that increased 10% year over year, $31.4 million there. 69% of total revenue is what it represented. And then their platform revenue, that also increased by about 29% year over year, came in at about $44.5 million there.

And so all this to kind of summarize that new experience that everybody's come to expect as a customer. That is either just ordering from one of the local restaurants or going to sit back down and really make sure that we're kind of patronizing these small businesses.

- You know what? I don't like these QR codes. You go to--

- You don't like the QR codes?

- I get it. I want to touch a menu. I'm paying over $100 for a meal. I want to touch a menu. I want to just see it. I don't want to hold up my phone. I don't know. I'm a little different, I guess.

- Pick up your phone. I'll text a menu on your phone.