Olo's Q1 2025: Unpacking Contradictions in Pay Expansion, Margins, and Revenue Growth
Earnings DecryptMonday, May 19, 2025 3:21 pm ET
2min read
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.
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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.
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