Toast stock falls after price cuts for small restaurant software packages

Investing.com -- Toast Inc (NYSE: TOST) stock fell 5% Monday morning after the restaurant technology provider significantly reduced pricing for its software packages aimed at smaller restaurants, raising concerns about competitive pressures in the industry.

The company has cut monthly fees for its "Core" and "Growth" software packages by 26-58% across most hardware types, according to Baird analyst David Koning, who monitors Toast’s pricing on a weekly basis. These changes were not present in last week’s review.

For handheld and countertop hardware kits, Toast reduced its Core Software package by approximately 34% to $144 per month from $219, while the Growth Software package saw a steeper cut of about 58% to $244 per month from $578.

Self-service hardware kits saw similar reductions, with Core Software prices dropping 26% to $184 monthly from $249, and Growth Software fees decreasing 53% to $284 from $608 monthly. However, the Basic Software option for self-service hardware increased slightly by 10% to $109 per month.

The pricing changes appear targeted at smaller restaurants that process below $1 million in annualized volume per location, which is smaller than Toast’s core customer base. Processing fees remain unchanged.

Industry observers note these price reductions align with reports of increasing competition in the restaurant technology sector, including rumors of hardware giveaways by competitors seeking to attract merchants, said Koning.

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