Olo (US:OLO)2022-08-10 16:00Financial Performance - Gross merchandise value (GMV) processed through the platform reached over $20 billion for the year ended December 31, 2021, reflecting significant annual growth [176]. - The average revenue per unit (ARPU) increased to $544 for the three months ended June 30, 2022, up from $486 in the same period in 2021 [187]. - Total revenue for the three months ended June 30, 2022, was $45,601,000, representing a 27.0% increase from $35,896,000 in the prior year [213]. - Total revenue for the six months ended June 30, 2022, increased by $16.3 million, or 22.7%, to $88.4 million compared to $72.0 million for the same period in 2021 [226]. - Non-GAAP operating income for the six months ended June 30, 2022, was $3.7 million, representing a 4% operating margin, compared to a non-GAAP operating income of $12.5 million and a 17% margin for the same period in 2021 [264]. - Free cash flow for the six months ended June 30, 2022, was $(6.4) million, compared to $14.8 million for the same period in 2021 [266]. Revenue and Cost Analysis - Platform revenue increased by 29.0% to $44,538,000 for the three months ended June 30, 2022, compared to $34,526,000 for the same period in 2021 [213]. - Total platform revenue increased by $10.0 million, or 29.0%, to $44.5 million for the three months ended June 30, 2022, compared to $34.5 million for the same period in 2021 [214]. - Total cost of revenue increased by $6.8 million, or 92.4%, to $14.2 million for the three months ended June 30, 2022, compared to $7.4 million for the same period in 2021 [216]. - Gross profit for the three months ended June 30, 2022, was $31,433,000, compared to $28,533,000 for the same period in 2021 [210]. - Gross margin decreased to 69.5% for the six months ended June 30, 2022, down from 80.3% for the same period in 2021 [233]. Operating Expenses - Operating expenses increased to $43,365,000 for the three months ended June 30, 2022, from $30,942,000 in the same period in 2021 [210]. - Research and development expenses rose to $17,233,000 for the three months ended June 30, 2022, compared to $13,931,000 in the prior year [210]. - Sales and marketing expenses increased significantly to $8,897,000 for the three months ended June 30, 2022, from $3,701,000 in the same period in 2021 [210]. - General and administrative expenses rose by $3.4 million, or 10.8%, to $35.2 million for the six months ended June 30, 2022, accounting for 39.8% of total revenue [235]. - Research and development expenses increased by $5.7 million, or 20.0%, to $34.1 million for the six months ended June 30, 2022, representing 38.5% of total revenue [234]. Customer Metrics - The number of active locations utilizing the platform grew to 82,000 as of June 30, 2022, compared to 74,000 a year earlier [187]. - The dollar-based net revenue retention rate (NRR) was approximately 106% for the period ending June 30, 2022, down from over 120% in previous years [188]. - The company expects to return to an NRR in excess of 120% as customers adopt additional product modules like Olo Pay and FOH solutions [188]. - The platform currently handles more than 2 million orders per day, with over 85 million consumers transacting on it in 2021 [179]. Strategic Initiatives - The company plans to continue investing in research and development to expand existing modules and develop new ones, targeting growth in payments and data analytics [191]. - The company aims to expand its ecosystem of third-party partners to enhance service offerings and integrate with various restaurant technology solutions [192]. - The company executed its first acquisition in 2021, acquiring Wisely Inc., which added guest engagement solutions to its platform [177]. - The company anticipates an increase in operating expenses due to investments in partnerships with small- and medium-sized businesses and international expansion [193]. Cash Flow and Financial Position - As of June 30, 2022, the company had $464.7 million in cash and cash equivalents, short-term and long-term investments [242]. - Cash used in investing activities was $132.9 million during the six months ended June 30, 2022, primarily due to $78.1 million for investments and $49.3 million to acquire Omnivore [255]. - Cash provided by financing activities was $484.7 million during the six months ended June 30, 2021, reflecting net proceeds from the issuance of Class A common stock in the IPO [258]. - The company had no outstanding debt under its credit facility as of June 30, 2022 [278]. Economic Factors - Inflation has significantly increased in the U.S. and overseas, impacting transportation, wages, and other costs [281]. - The primary inflation factors affecting the company are increased labor and overhead costs [281]. - The company does not believe inflation has materially affected its business or financial condition [281]. - If costs face significant inflationary pressures, the company may struggle to offset these through price increases [281]. - Failure to offset higher costs could harm the company's business and financial results [281].