Olo (OLO) 7 Nov 24 2024 Q3 Earnings call transcript

In its recent third quarter earnings call, Olo, a leading digital ordering and delivery platform, showcased a robust performance with significant strides in customer acquisition, product development, and financial results. The company's executives, including Founder and CEO, Noah Glass, CFO, Peter Benevides, and newly appointed CTO, Jason Ordway, shared insights into Olo's strategic initiatives and future outlook.

Strategic Customer Gains and Product Innovations

Olo's third quarter was marked by impressive customer wins and product enhancements. The company added approximately 3,000 net new locations, surpassing its target for the year. Notably, Olo's customer retention rate was above 120%, indicating a strong customer base that continues to benefit from the platform's offerings.

In terms of product innovation, Olo announced the general availability of card-present functionality on Qu POS, marking a significant step towards enhancing the guest experience and streamlining operations for restaurant brands. The company also revealed plans for multiple Olo Pay card-present pilots with enterprise and emerging enterprise brand customers on Qu and NCR Voyix POS, signaling a shift towards more comprehensive payment solutions.

Financial Highlights and Future Outlook

Financially, Olo reported a 24% year-over-year increase in total revenue, with platform revenue reaching $71 million. The company also announced a 10% year-over-year growth in subscription revenue from Olo Pay. These figures underscore Olo's ability to generate revenue through its digital ordering and payment solutions, positioning the company for future growth.

Looking ahead, Olo expects to add approximately 6,000 net new locations in the fourth quarter of 2024, reflecting the company's continued expansion in the restaurant industry. Additionally, the company raised its revenue and non-GAAP operating income guidance for the full year 2024, indicating confidence in its financial performance.

Strategic Hires and Organizational Changes

Olo also announced key leadership changes, including the appointment of Jason Ordway as the new CTO and the departure of Chief Revenue Officer, Diego Panama. These moves signify Olo's commitment to strengthening its leadership team and driving innovation in the technology space.

Challenges and Future Growth Opportunities

Despite the strong performance, Olo acknowledged the challenges ahead, particularly in the areas of gross margin and operating expenses. The company is focusing on optimizing its cost structure and streamlining operations to maintain profitability and prepare for future growth.

Conclusion

Olo's third quarter performance highlights the company's strategic focus on customer acquisition, product innovation, and financial growth. With a robust product suite, a strong customer base, and strategic leadership changes, Olo is well-positioned to capitalize on the growing demand for digital ordering and payment solutions in the restaurant industry. The company's commitment to open platforms and industry collaboration sets it apart in the competitive landscape, positioning Olo for continued growth and innovation in the years ahead.