Olo (US:OLO)2025-05-08 20:20PART I - FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's analysis of Olo Inc.'s financial condition and results of operations Item 1. Financial Statements (Unaudited) Olo Inc.'s unaudited condensed consolidated financial statements for Q1 2025 report $80.7 million revenue and $1.8 million net income Condensed Consolidated Balance Sheets Olo Inc. reported $764.6 million in total assets, $69.3 million in liabilities, and $695.3 million in equity as of March 31, 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $287,488 | $286,757 | | Total current assets | $459,216 | $448,321 | | Goodwill | $207,781 | $207,781 | | Total assets | $764,579 | $754,776 | | Liabilities & Equity | | | | Total current liabilities | $57,921 | $59,594 | | Total liabilities | $69,307 | $71,553 | | Total stockholders' equity | $695,272 | $683,223 | Condensed Consolidated Statements of Operations Olo Inc. reported $80.7 million total revenue for Q1 2025, a 21.3% increase YoY, with $1.8 million net income and $0.01 diluted EPS Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $80,680 | $66,511 | | Gross Profit | $44,314 | $37,208 | | Loss from operations | ($2,416) | ($7,160) | | Net income (loss) | $1,806 | ($2,356) | | Diluted EPS | $0.01 | ($0.01) | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities for Q1 2025 was $0.5 million, with cash and cash equivalents ending at $287.5 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $548 | $6,027 | | Net cash used in investing activities | ($146) | ($11,016) | | Net cash provided by (used in) financing activities | $329 | ($14,144) | | Net increase (decrease) in cash | $731 | ($19,133) | | Cash and cash equivalents, end of period | $287,488 | $259,085 | Notes to the Condensed Consolidated Financial Statements Notes detail accounting policies, revenue recognition, and fair value measurements, including $48.9 million in point-in-time revenue and $9.4 million in stock-based compensation - For Q1 2025, revenue recognized at a point in time was $48.9 million, while revenue transferred over time was $31.8 million48 - As of March 31, 2025, remaining performance obligations were approximately $46.0 million, with 55% expected to be recognized as revenue over the next twelve months52 - Total stock-based compensation expense for Q1 2025 was $9.4 million, down from $10.8 million in Q1 202482 - The company settled a Securities Class Action lawsuit, recording an expense of $9.0 million in 2023. The court granted final approval in June 2024 and a class distribution order in March 202590 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Olo's Q1 2025 financial performance, highlighting 21.3% revenue growth to $80.7 million, 88,000 active locations, and $911 ARPU Overview and Key Performance Indicators Olo serves 750 restaurant brands across 88,000 active locations, with Q1 2025 showing $911 ARPU and 111% dollar-based net revenue retention - Olo serves over 750 restaurant brands, representing approximately 88,000 active locations as of March 31, 2025112 Key Performance Indicators (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Average Revenue Per Unit | $911 | $816 | | Ending Active Locations | 88,000 | 81,000 | - Dollar-based net revenue retention was 111% for the quarter ended March 31, 2025, demonstrating the ability to retain and expand revenue from existing customers118124 Results of Operations Total revenue for Q1 2025 grew 21.3% to $80.7 million, gross profit increased 19.1% to $44.3 million, and operating loss was $2.4 million Revenue Comparison (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Platform | $79,231 | $65,765 | $13,466 | 20.5% | | Professional services and other | $1,449 | $746 | $703 | 94.2% | | Total Revenue | $80,680 | $66,511 | $14,169 | 21.3% | - The increase in platform revenue was primarily driven by higher Olo Pay volume and increased Order revenue from customers151 - Gross margin decreased from 55.9% to 54.9% YoY, driven by the growing percentage of revenue from Olo Pay, which has lower margins than other modules156 - General and administrative expenses increased by 23.8% to $15.8 million, primarily due to the impact of litigation-related insurance recoveries recorded in the prior-year period158 Liquidity and Capital Resources Olo's liquidity totaled $401.8 million as of March 31, 2025, with a $100 million share repurchase program authorized but unused - Principal sources of liquidity as of March 31, 2025, totaled $401.8 million in cash, cash equivalents, and marketable securities163 - A $100 million Class A common stock repurchase program was authorized on April 30, 2024, but no shares have been repurchased under this program as of March 31, 202516570 - The company had $68.6 million available under its revolving credit facility and no outstanding borrowings as of March 31, 2025167 Certain Non-GAAP Financial Measures Non-GAAP operating income for Q1 2025 was $11.5 million, a significant increase, while non-GAAP free cash flow was a usage of $1.9 million Reconciliation of GAAP Operating Loss to Non-GAAP Operating Income (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating loss, GAAP | ($2,416) | ($7,160) | | Stock-based compensation & related tax | $9,832 | $11,128 | | Certain litigation-related expenses, net | $0 | ($1,372) | | Software & intangible amortization | $4,111 | $3,021 | | Operating income, non-GAAP | $11,527 | $5,617 | Reconciliation of Net Cash from Operations to Non-GAAP Free Cash Flow (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $548 | $6,027 | | Purchase of property and equipment | ($93) | ($68) | | Capitalized internal-use software | ($2,356) | ($3,149) | | Non-GAAP free cash flow | ($1,901) | $2,810 | Item 3. Quantitative and Qualitative Disclosures About Market Risk Olo's primary market risk is interest rate exposure on its short-term investment portfolio, with no significant foreign currency risk, though inflation could impact consumer spending - The company's primary market risk is interest rate risk related to its investments and credit facility. The majority of the investment portfolio is short-term, mitigating this risk188190 - The company does not have material foreign currency exchange risk as its operations are denominated in U.S. dollars191 - While inflation has not had a direct material effect, management acknowledges that persistent inflation could negatively impact consumer spending in the restaurant industry and increase costs192 Item 4. Controls and Procedures Management concluded Olo's disclosure controls were effective as of March 31, 2025, with no material changes to internal control over financial reporting - As of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective193 - No material changes were made to the company's internal control over financial reporting during the first quarter of 2025194 PART II - OTHER INFORMATION This section provides additional information on legal proceedings, risk factors, equity sales, and other corporate developments Item 1. Legal Proceedings Legal proceedings include a settled Securities Class Action lawsuit and pending derivative complaints against certain directors and officers - A Securities Class Action lawsuit was settled, with the court granting final approval on June 11, 2024, and issuing a class distribution order on March 18, 202590 - Three derivative complaints have been consolidated into a single action against certain directors and officers. A motion to dismiss was filed, with a court hearing set for September 16, 2025919297 Item 1A. Risk Factors Olo faces risks from unfavorable economic conditions, including inflation and reduced consumer spending, and credit risk from delivery service provider partnerships - The company's results are sensitive to economic uncertainty, including inflation, high interest rates, and lower consumer confidence, which can negatively impact restaurant spending and technology investment199 - The company is heavily reliant on the restaurant, food, and delivery industries. A downturn in these sectors, such as reduced guest traffic due to rising costs, could significantly harm Olo's results200 - Through its Dispatch module, Olo may be required to pay delivery service providers (DSPs) before collecting payment from its restaurant customers, creating a credit risk if customers become insolvent202 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Olo reports no unregistered equity sales and no repurchases under its $100 million stock buyback program - On April 30, 2024, the Board authorized a $100 million share repurchase program (the 2024 Buyback Program), which has no expiration date. No repurchases have been made under this program206 Item 3. Defaults Upon Senior Securities This item is not applicable to the company Item 4. Mine Safety Disclosures This item is not applicable to the company Item 5. Other Information Key events include a new Chief Sales Officer appointment and credit facility amendment, with no Rule 10b5-1 plan changes - Parrish Chapman was appointed as Chief Sales Officer, commencing his role on May 5, 2025209 - On May 7, 2025, the company amended its credit facility to extend the maturity date and update certain terms210 - No directors or officers adopted, terminated, or materially modified a Rule 10b5-1 trading plan during the quarter211 Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including governance documents, agreements, and certifications