Third Quarter Revenue Grew 26% Year-over-Year on Increased Module Adoption, Increased Transaction Volume, and Continued Growth in New Locations
NEW YORK, November 09, 2022–(BUSINESS WIRE)–Olo Inc. (NYSE:OLO), a leading open SaaS platform for restaurants that enables hospitality at every guest touchpoint, today announced financial results for the third quarter ended September 30, 2022.
“We’re proud of our third quarter results. We generated $47.3 million in total revenue, a 26% increase year over year, as our platform supported increased module adoption within our existing customer base, increased transaction volume, and continued growth in new locations,” said Noah Glass, Olo’s Founder and CEO.
“The Olo platform is purpose-built to help our customers do more with less and create a differentiated and memorable guest experience, and as restaurant executive and operator conversations increasingly focus on sales and margin maintenance due to challenges related to increased inflation, supply chain constraints, and labor dynamics, we believe that Olo’s platform is best positioned to meet restaurants’ needs,” concluded Mr. Glass.
Third Quarter Financial and Other Highlights
- Total revenue increased 26% year-over-year to $47.3 million.
- Platform revenue increased 28% year-over-year to $46.4 million.
- Gross profit increased 9% year-over-year to $32.0 million, and was 68% of total revenue.
- Non-GAAP gross profit increased 15% year-over-year to $34.7 million, and was 73% of total revenue.
- Operating loss was $15.9 million.
- Non-GAAP operating income was $3.0 million.
- Net loss was $14.6 million or $0.09 per share, compared to a net loss of $11.3 million or $0.08 per share a year ago.
- Non-GAAP net income was $4.3 million or $0.02 per share, compared to non-GAAP net income of $5.0 million or $0.03 per share a year ago.
- Cash, cash equivalents and short- and long-term investments totaled $469.2 million as of September 30, 2022.
- Average revenue per unit (ARPU) increased 15% year-over-year, and increased 3% sequentially to approximately $558.
- Ending active locations increased 11% year-over-year to approximately 84,000.
- Dollar-based net revenue retention (NRR) was approximately 107%.
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.”
Third Quarter and Recent Business Highlights
- Olo expanded relationships within its existing customer base, increasing product adoption across several product suites. Jack in the Box, a top-25 quick service restaurant, or QSR, with more than 2,200 locations replaced their proprietary digital ordering solution with Olo’s Ordering module.
- Olo welcomed leading enterprise brands and convenience stores, or C-Stores, to the platform. Leading enterprise brands such as Smashburger, Ruby Tuesday, and Zaxby’s selected Olo to replace legacy technology providers, leveraging Olo’s open SaaS platform to implement highly customized and personalized digital programs to their guests, while increasing operational efficiencies. C-Stores such as Maverik – Adventure’s First Stop, an intermountain west operator with nearly 400 locations across 12 states, as well as an east coast operator with more than 200 locations selected Olo to enable their guests to order fresh food for pickup or delivery. C-Stores represent an emerging vertical for Olo given their 55,000 location opportunity.
- Olo strengthened its partner network by adding autonomous and piloted robots through partnerships with certified delivery providers Coco Delivery, Refraction AI, and Serve Robotics to fulfill orders in specific markets, as well as voice artificial intelligence ordering solution providers ConverseNow, SYNQ3, and Valyant AI to enable the digital transformation of the drive thru, increase operational efficiency, and improve guest experience.
- Olo implemented product enhancements to better serve its customers, many of which were showcased in Olo’s 2022 Fall Product Release event, which may be viewed at olo.com/quarterly-release. Notably, Olo announced the commercial availability of Borderless, an offering designed to speed and streamline payment across Olo’s network of over 600 brands, and introduced new capacity management capabilities, allowing operators to effectively manage kitchen order flow.
- Olo earned Vendor of the Year awards from fast-casual brands Cousins Subs and Noodles & Company in recognition of the Olo platform’s ability to improve the guest experience and empower restaurant teams to provide hospitality through optimized operations and personalization.
- Olo debuted its updated corporate website at olo.com, which showcases the platform’s modular end-to-end restaurant technology offering that encompasses all guest touchpoints: on-premise, off-premise, guest engagement, and payments. The updated site also includes Olo’s first Environment, Social, and Governance, or ESG, site, viewable at olo.com/ESG. Additionally, Olo debuted a refreshed page for its partner program, Olo Connect, which includes a tiered partner directory of Olo’s expansive technology partners viewable at partners.olo.com.
As of November 9, 2022, Olo is issuing the following outlook for the fourth quarter of 2022 and fiscal year 2022:
For the fourth quarter of 2022, Olo expects to report:
- Revenue in the range of $48.2 million to $48.7 million; and
- Non-GAAP operating income in the range of $2.6 million to $3.0 million.
For the fiscal year 2022, Olo expects to report:
- Revenue in the range of $183.8 million to $184.3 million; and
- Non-GAAP operating income in the range of $9.3 million to $9.7 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 macroeconomic environment, which has been characterized by rising inflation and interest rates, lower consumer confidence, uncertainty caused by the ongoing COVID-19 pandemic, volatility in part due to the war in Ukraine, and the risk of a global recession, 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, Olo’s business and financial results could be materially adversely affected in the future if off-premise dining declines.