Olo (US:OLO)2023-02-23 01:25Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $49.8 million, a 25% increase year-over-year [58] - Platform revenue in Q4 2022 was $48.9 million, a 26% increase year-over-year [58] - Gross profit in Q4 2022 was $37.3 million, compared to $32.6 million a year ago [60] - ARPU for Q4 2022 was approximately $571, representing a 13% increase year-over-year [59] - Net income in Q4 2022 was $5.6 million or $0.03 per share [69] Business Line Data and Key Metrics Changes - Olo Pay contributed just over $3 million in revenue for Q4 2022 and surpassed $6 million in total revenue for the year [58] - Active locations on the platform reached approximately 87,000, a 10% increase year-over-year [59] - Net revenue retention was approximately 108%, up 100 basis points sequentially [59] Market Data and Key Metrics Changes - Olo processed more than $250 million in gross payment volume in Olo Pay's first year of general availability [28] - The company supports approximately 87,000 restaurants and more than 600 brands, connecting them to over 300 technology partners [27] Company Strategy and Development Direction - Olo aims to be the engine of hospitality, helping restaurants drive sales and improve operational efficiency [30] - The company is focused on expanding its product offerings, including Olo Pay and Borderless capabilities, to enhance guest experiences [40][52] - Olo is targeting the grocery and convenience store sectors as new verticals for growth, with an addressable market of approximately 30,000 grocery locations [45][96] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious approach for 2023 due to ongoing macroeconomic uncertainty, despite some positive signs in the industry [64] - The company expects revenue growth to re-accelerate in the second half of 2023, driven primarily by ARPU expansion [65] - Management emphasized the importance of guest-centricity in the restaurant industry and the need for restaurants to build better relationships with their guests [48][50] Other Important Information - Olo's cash, cash equivalents, and investments totaled $451.2 million as of December 31, 2022 [62] - The company repurchased 2.7 million shares for approximately $20.1 million in Q4 2022 [62] Q&A Session Summary Question: How is the company balancing stock-based compensation with GAAP profitability? - Management anticipates stock-based compensation as a percentage of revenue to decrease in 2023 compared to 2022, while ensuring competitive compensation for employees [9][10] Question: What is the guidance for fiscal '23 revenue growth? - The guidance reflects a cautious approach due to elongated sales and deployment cycles, with high-single digit core subscription revenue growth expected [14] Question: Is Olo Pay expected to be gross profit profitable at the projected run rate? - Management confirmed that Olo Pay can generate incremental gross profit dollars at the projected run rate [15] Question: What are the dynamics of the grocery store opportunity? - The grocery segment presents a significant opportunity with approximately 30,000 addressable locations and $37 billion in annual foodservice sales [97] Question: How is the adoption of Olo Pay progressing? - Olo Pay has seen broad adoption across various customer segments, with both new and existing customers integrating the solution [100] Question: What is the status of the Borderless rollout? - The Borderless feature has significantly increased the number of authenticated transactions, enhancing guest profiles and improving guest lifetime value [114]