Olo Inc. (NYSE:OLO), a leading on-demand commerce platform powering the restaurant industry’s digital transformation, today announced financial results for the fourth quarter and full year ended December 31, 2021.
“2021 was a great year for Olo. We grew annual revenues by more than 50%, expanded ARPU by 16% to more than $2,000 per year, surpassed more than $20 billion in Gross Merchandise Value for the year, successfully completed our IPO, and closed our first strategic acquisition. We ended the year with our platform connecting approximately 79,000 active restaurant locations across more than 500 restaurant brands to more than 200 technology partners and more than 85 million consumers who have ordered over the platform this past year.” said Noah Glass, Olo’s Founder and CEO.
“I believe that the work conducted in 2021, and continuing throughout 2022, will further establish Olo as the most critical platform that restaurants will need for the future,” continued Mr. Glass.
Fourth-Quarter Financial and Other Highlights
- Total revenue increased 31% year-over-year to $40.0 million.
- Platform revenue increased 33% year-over-year to $38.9 million.
- Gross profit increased 25% year-over-year to $31.5 million, or 79% of total revenue.
- Non-GAAP gross profit increased 27% year-over-year to $32.6 million, or 82% of total revenue.
- Operating loss was $6.8 million, or 17% of total revenue, compared to operating income of $5.5 million a year ago.
- Non-GAAP operating income was $4.3 million, or 11% of total revenue, compared to $7.6 million a year ago.
- Net loss was $2.1 million or $(0.01) per share, compared to net loss of $3.0 million or $(0.13) per share a year ago.
- Non-GAAP net income was $4.2 million or $0.02 per diluted share, compared to non-GAAP net income of $7.6 million or $0.34 per diluted share a year ago.
- Cash and cash equivalents were $514.4 million, as of December 31, 2021.
- Ending active locations increased 23% year-over-year to approximately 79,000.
- Average revenue per unit (ARPU) increased 7% year-over-year to approximately $504.
- Dollar-based net revenue retention (NRR) remained over 120%.
A reconciliation of GAAP to non-GAAP financial measures is provided at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures and Other Metrics”.
Fourth-Quarter and Recent Business Highlights
- Olo launched commercial availability of Olo Pay, a fully-integrated payment platform enabling restaurants to grow and protect their digital business. Brixx Pizza, Granite City Food & Brewery, WaBa Grill, and others piloted the solution in 2021, and have praised the benefits of Olo Pay in helping enhance the consumer experience and streamline in-house operations.
- Olo announced that the company plans to develop borderless payment capabilities this year, allowing customers to securely speed through checkout at any participating restaurant within the Olo Pay network with a single click. This has the potential to remove friction for more than 85 million consumers that have ordered over the platform this past year, and across the more than 500 brands using Olo today, helping to increase basket conversion rates, retention, visit frequency, spend and improve the overall consumer experience. Noodles & Company, a national fast-casual restaurant, will add Olo Pay to their existing Olo technology stack, further enabling the Noodles & Company’s on-demand commerce solutions.
- Olo expanded relationships with existing brands, including several restaurants adding the Olo Network module to their existing Olo solutions. Notable brands include BJs, Miller’s Ale House, Fuzzy’s Taco Shop, Hacienda Colorado, Jack Stack Barbecue, Tijuana Flats, and Uncle Julio’s, demonstrating the extensibility of the Olo platform and the attractiveness of providing restaurant brands with new ordering channels as a means to strengthen and expand their direct ordering relationships.
- Olo continued to service and expand the presence of virtual brands on the platform, including Applebee’s Cosmic Wings, as well as Virtual Dining Concepts adding Mario’s Tortas and Pauly D’s Italian Sub. Virtual brands continue to represent an emerging digital and delivery-only service model that allows Olo’s customers to leverage their operations to maximize revenue per square foot.
- Olo continued its commitment to the Pledge 1% movement, in which Olo committed 1% of Olo’s time, product, and equity, to Olo for Good initiatives. This quarter, Olo launched its first non-profit partner, Emma’s Torch, a woman-founded fast-casual restaurant that provides refugees, asylees, and survivors of human trafficking with culinary training, English as a Second Language classes, and interview preparation. Olo is waiving fees for Emma’s Torch’s use of Ordering and Dispatch modules.
Omnivore Acquisition
On February 20, 2022, Olo signed a definitive agreement to acquire Omnivore Technologies, Inc., a restaurant technology provider that connects restaurants’ Point of Sale, or POS, systems with technologies that improve efficiency and increase profitability. Through the acquisition, restaurant brands will gain access to additional POS integration capabilities, new on-premise and payment features, and an expanded technology partner network. The acquisition will broaden Olo’s platform capabilities and allow restaurants to connect to apps and technologies that streamline operations, improve efficiency, enhance guest experience, and increase profitability. The transaction is expected to close in the first quarter of 2022 and is subject to the satisfaction of customary closing conditions. Omnivore’s expected contribution to Olo’s 2022 financial results is included in the Financial Outlook section below.
Financial Outlook
As of February 23, 2022, Olo is issuing the following outlook for the first quarter of 2022 and fiscal year 2022:
For the first quarter of 2022, Olo expects to report:
- Revenue in the range of $41.5 million to $42.0 million; and
- Non-GAAP operating income in the range of $0.6 million to $1.0 million.
For the fiscal year 2022, Olo expects to report:
- Revenue in the range of $194.0 million to $196.0 million; and
- Non-GAAP operating income in the range of $7.4 million to $9.0 million.
The outlook provided above constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond Olo’s control. See the cautionary note regarding “Forward-Looking Statements” below. Fluctuations in Olo’s operating results may be particularly pronounced in the current economic environment due to the uncertainty caused by, and the unprecedented nature of, the ongoing COVID-19 pandemic, the severity, duration, and ultimate impact of which is difficult to predict at this time. While Olo has benefited from the acceleration of demand for off-premise dining during the COVID-19 pandemic, Olo’s business and financial results could be materially adversely affected in the future if off-premise dining declines. The situation regarding COVID-19 remains uncertain and could change rapidly, and Olo will continue to evaluate its potential impact on its business.