Olo's Q1 2025: Unpacking Contradictions in Pay Expansion, Margins, and Revenue Growth

Olo Pay expansion and gross margin impact, Catering Plus revenue and gross margin implications, Olo Pay growth and gross revenue retention, Olo Pay's margin impact, card-present revenue timeline are the key contradictions discussed in Olo's latest 2025Q1 earnings call.



Revenue and Location Growth:
- Olo Inc. reported total revenue of $80.7 million for Q1 2025, up 21% year-over-year.
- This growth was driven by adding approximately 2,000 new locations quarter-to-quarter and exceeding revenue guidance due to strong customer deployment activity.

Operating Income and Gross Profit Improvement:
- Olo's operating income for Q1 was $11.5 million, up from $5.6 million a year ago.
- This improvement was due to gross profit growth, which increased to 18% year-over-year, and continued expense discipline in managing operating expenses.

Customer Acquisition and Expansion:
- Olo expanded its customer base by adding approximately 2,000 net new locations, including a notable Catering Plus pilot with Chipotle and an Olo Pay card-present deal with an enterprise customer.
- This expansion was driven by the company's focus on scaling specific product modules and increasing the number of Olo flywheel brands.

Product Innovation and Module Adoption:
- The adoption of new modules such as Catering Plus and the expansion of existing modules like Olo Pay card-not-present contributed to a 12% year-over-year increase in ARPU.
- This trend was supported by advancements in product capabilities, such as Catering Plus features and Borderless, which enhance order placement and guest experience.