Second Quarter Revenue up 21% Year-over-Year
Driven by Continued ARPU Expansion
Olo Inc. (NYSE:OLO) (“Olo” or the “Company”), a leading open
SaaS platform for restaurants, today announced financial results
for the second quarter ended June 30, 2023.
“Our second quarter results demonstrate the consistent, positive
momentum we’ve built over the past few quarters. We generated $55.3
million in total revenue, a 21% increase year-over-year, as our
platform supported increased module adoption within our existing
customer base. With that, this quarter we increased Average Revenue
Per Unit, or ARPU, to $716, up 32% year-over-year, and 13%
sequentially. Net revenue retention increased to approximately
115%, and we ended the quarter with approximately 77,000 active
locations on the platform,” said Noah Glass, Olo’s Founder and
CEO.
“Looking ahead to the rest of the year, we’re energized by our
performance in the first half and remain focused on helping our
customers utilize the digital transformation of the restaurant
industry to their benefit as we bring to life our vision of the
restaurant of the future,” concluded Mr. Glass.
Second Quarter Financial and Other Highlights
- Total revenue increased 21% year-over-year to $55.3
million.
- Gross profit increased 11%(1) year-over-year to $34.5 million,
and was 62% of total revenue.
- Non-GAAP gross profit increased 13%(1) year-over-year to $38.2
million, and was 69% of total revenue.
- Operating loss was $21.2 million, or 38% of total revenue,
compared to operating loss of $11.9 million a year ago.
- Non-GAAP operating income was $4.5 million, or 8% of total
revenue, compared to $2.0 million a year ago.
- Net loss was $17.1 million or $0.11 per share, compared to a
net loss of $11.7 million or $0.07 per share a year ago.
- Non-GAAP net income was $6.4 million or $0.04 per share,
compared to non-GAAP net loss of $1.4 million or $0.01 per share a
year ago.
- Cash, cash equivalents, and short- and long-term investments
totaled $431.2 million as of June 30, 2023.
- Total shares repurchased were approximately 1.4 million for
approximately $10.0 million.
- Average revenue per unit (ARPU) increased 32% year-over-year,
and increased 13% sequentially to approximately $716.
- Dollar-based net revenue retention (NRR) was approximately
115%.
- Ending active locations decreased 6% year-over-year to
approximately 77,000.
Second Quarter and Recent Business Highlights
- Olo achieved solid wins within the enterprise segment,
expanding relationships within its existing customer base,
including Cold Stone Creamery, an ice cream parlor chain, launching
Olo Pay, and California Pizza Kitchen, a casual-dining chain,
launching three new products in the Engage suite. Olo also welcomed
Salad and Go, an enterprise fast casual, drive-thru chain.
- Olo had strong multi-module adoption in the emerging enterprise
segment, with several brands deploying with four or more product
modules; including Anthony’s Coal Fired Pizza & Wings, Maple
Street Biscuit Company, and Metro Diner. All listed launched with
Olo’s core Order solutions—Ordering, Dispatch, and Rails—along with
Olo Pay.
- Olo implemented product enhancements to better serve its
customers, many of which were showcased in Olo’s 2023 Summer
Product Release event, which may be viewed at
olo.com/quarterly-release. Notably, Olo announced card-present Olo
Pay launching on kiosks, Borderless and loyalty account linking,
generative AI assistance in our Marketing product’s email solution,
and a further enhanced version of our AI-driven kitchen capacity
management capability, OrderReady AI.
- Olo expanded its executive leadership team, with the addition
of Joanna Lambert and Sherri Manning as Chief Operating Officer and
Chief People Officer, respectively. They both bring decades of
experience to their roles from impressive companies like American
Express, Paypal, IBM, and Dell.
Financial Outlook
As of August 1, 2023, Olo is issuing the following outlook for
the third quarter and fiscal year of 2023:
For the third quarter of 2023, Olo expects to report:
- Revenue in the range of $56.0 million to $56.5 million;
and
- Non-GAAP operating income in the range of $5.1 million to $5.5
million.
For the fiscal year 2023, Olo expects to report:
- Revenue in the range of $220.0 million to $221.0 million;
and
- Non-GAAP operating income in the range of $17.0 million to
$17.8 million.
The outlook provided above constitutes forward-looking
information within the meaning of applicable securities laws and is
based on a number of assumptions and subject to a number of risks.
Actual results could vary materially as a result of numerous
factors, including inaccuracies in our assumptions and certain risk
factors, many of which are beyond Olo’s control. We assume no
obligation to update these forward-looking statements. See the
cautionary note regarding “Forward-Looking Statements” below.
(1) Prior period amounts including GAAP and non-GAAP gross
profit and gross margin have been reclassified to conform with the
current year presentation. An explanation of our non-GAAP financial
measures are also included below under the heading “Non-GAAP
Financial Measures and Other Metrics.” An explanation of the
reclassification is included as a footnote to the reconciliation of
GAAP to non-GAAP financial measures which is provided at the end of
this press release.
Webcast and Conference Call Information
Olo will host a conference call today, August 1, 2023, at 5:00
p.m. Eastern Time to discuss the Company’s financial results and
financial outlook. A live webcast of this conference call will be
available on the “Investor Relations” website at investors.olo.com,
and a replay will be archived on the website as well.
Available Information
Olo announces material information to the public about the
Company, its products and services, and other matters through a
variety of means, including filings with the SEC, press releases,
public conference calls, webcasts, the “Investor Relations” website
at investors.olo.com, and the Company’s Twitter account @Olo in
order to achieve broad, non-exclusionary distribution of
information to the public and for complying with its disclosure
obligations under Regulation FD.
About Olo
Olo Inc. (NYSE: OLO) is a leading open SaaS platform for
restaurants that enables hospitality at every guest touchpoint.
Millions of orders per day run on Olo’s on-demand commerce engine,
providing restaurants a single source to understand and serve every
guest from every channel, whether direct or third-party. With
integrations to over 300 technology partners, Olo customers can
build personalized guest experiences in and outside of their four
walls, utilizing one of the largest and most flexible restaurant
tech ecosystems on the market. Over 600 restaurant brands trust Olo
to grow their sales, do more with less, and make every guest feel
like a regular. Learn more at olo.com.
Non-GAAP Financial Measures and Other Metrics
Non-GAAP Financial Measures
In this press release, we refer to non-GAAP financial measures
that are derived on the basis of methodologies other than in
accordance with generally accepted accounting principles in the
United States, or GAAP. We use non-GAAP financial measures, as
described below, in conjunction with financial measures prepared in
accordance with GAAP for planning purposes, including in the
preparation of our annual operating budget, as a measure of our
core operating results and the effectiveness of our business
strategy, and in evaluating our financial performance. These
measures provide consistency and comparability with past financial
performance as measured by such non-GAAP figures, facilitate
period-to-period comparisons of core operating results, and assist
shareholders in better evaluating us by presenting
period-over-period operating results without the effect of certain
charges or benefits that may not be consistent or comparable across
periods or compared to other registrants’ similarly named non-GAAP
financial measures and key performance indicators.
A reconciliation of these non-GAAP measures has been provided in
the financial statement tables included in this press release and
investors are encouraged to review the reconciliation. Our use of
non-GAAP financial measures has limitations as an analytical tool,
and these measures should not be considered in isolation or as a
substitute for analysis of our GAAP financial results. Because our
non-GAAP financial measures are not calculated in accordance with
GAAP, they may not necessarily be comparable to similarly titled
measures employed by other companies.
The following are the non-GAAP financial measures referenced in
this press release and presented in the tables below: non-GAAP
gross profit (total and each line item, and total and each non-GAAP
gross profit item on a margin basis as a percentage of revenue),
non-GAAP operating expenses (each line item and each non-GAAP
operating expense item on a margin basis as a percentage of
revenue), non-GAAP operating income (and on a margin basis as a
percentage of revenue), non-GAAP net income (and on a per share
basis), and free cash flow.
We adjust our GAAP financial measures for the following items to
calculate non-GAAP operating income and non-GAAP operating margin:
stock-based compensation expense (non-cash expense calculated by
companies using a variety of valuation methodologies and subjective
assumptions) and related payroll tax expense, certain
litigation-related expenses (which consist of legal and other
professional fees associated with litigation-related matters which
are not indicative of Olo’s core operations and are not part of our
normal course of business), loss on disposal of assets, non-cash
capitalized internal-use software impairment, capitalized
internal-use software and intangible amortization (non-cash
expense), restructuring charges, certain severance costs, and
transaction costs (typically incurred within one year of the
related acquisition, as well as the related tax impacts of the
acquisition). Beginning in the second quarter of 2023, we have
included the tax impact of the non-GAAP adjustments in determining
non-GAAP net income. We determined this amount by utilizing a
federal rate plus a net state rate that excluded the impact of net
operating losses, or NOLs, and valuation allowances to calculate a
non-GAAP blended statutory rate, which we then applied to all
non-GAAP adjustments. The prior period non-GAAP net income
presentation has also been revised to confirm with our new
calculation and presentation.
Reconciliation of non-GAAP operating income guidance to the most
directly comparable GAAP measures is not available without
unreasonable efforts on a forward-looking basis due to the high
variability, complexity, and low visibility with respect to the
charges excluded from these non-GAAP measures; in particular, the
measures and effects of stock-based compensation expense and
related payroll tax expense specific to equity compensation awards
that are directly impacted by unpredictable fluctuations in our
stock price. We expect the variability of the above charges to have
a significant, and potentially unpredictable, impact on our future
GAAP financial results.
Management believes that it is useful to exclude certain
non-cash charges and non-core operational charges from our non-GAAP
financial measures because: (1) the amount of such expenses in any
specific period may not directly correlate to the underlying
performance of our business operations and we believe does not
relate to ongoing operational performance; and (2) such expenses
can vary significantly between periods.
Effective January 1, 2023, we began allocating certain
employee-related costs to platform cost of revenues, sales and
marketing, and research and development expenses. Previously, such
costs had been presented within general and administrative expenses
on our condensed consolidated statement of operations. These costs
are allocated based on each department’s proportionate share of
total employee headcount. We determined that these changes would
better reflect industry practice and provide more meaningful
information as well as increased transparency of our operations.
Prior period amounts have been reclassified to conform with the
current year presentation. Such reclassifications had no effect on
previously reported operating loss, net loss, or accumulated
deficit.
Free cash flow represents net cash provided by or used in
operating activities, reduced by purchases of property and
equipment and capitalization of internal-use software. Free cash
flow is a measure used by management to understand and evaluate our
liquidity and to generate future operating plans. Free cash flow
excludes items that we do not consider to be indicative of our
liquidity and facilitates comparisons of our liquidity on a
period-to-period basis. We believe providing free cash flow
provides useful information to investors and others in
understanding and evaluating the strength of our liquidity and
future ability to generate cash that can be used for strategic
opportunities or investing in our business from the perspective of
our management and Board of Directors.
Key Performance Indicators
In addition, we also use the following key performance
indicators to help us evaluate our business, identify trends
affecting the business, formulate business plans, and make
strategic decisions.
Average revenue per unit (ARPU): We calculate ARPU by dividing
the total platform revenue in a given period by the average active
locations in that same period. We believe ARPU is an important
metric that measures monetization of our platform and demonstrates
our ability to grow within our customer base through the
development of products that our customers value.
Dollar-based net revenue retention (NRR): We calculate NRR as of
a period-end by starting with the revenue, defined as platform
revenue, from the cohort of all active customers as of 12 months
prior to such period-end, or the prior period revenue. An active
customer is a specific restaurant brand that utilizes one or more
of our modules in a given quarterly period. We then calculate the
platform revenue from these same customers as of the current
period-end, or the current period revenue. Current period revenue
includes any expansion and is net of contraction or attrition over
the last 12 months, but excludes platform revenue from new
customers in the current period. We then divide the total current
period revenue by the total prior period revenue to arrive at the
point-in-time dollar-based NRR. We believe that NRR is an important
metric to our investors, demonstrating our ability to retain our
customers and expand their use of our modules over time, proving
the stability of our revenue base and the long-term value of our
customer relationships.
Active Locations: We define an active location as a unique
restaurant location that is utilizing one or more modules in a
given quarterly period. Active locations in any one quarter may not
reflect (i) the future impact of new customer wins as it can take
some time for their locations to go live with our platform, or (ii)
the customers who have indicated their intent to reduce or
terminate their use of our platform in future periods. Of further
note, not all of our customer locations may choose to utilize our
products; therefore, given the definition, such locations will not
be considered active. We believe that active location count is an
important metric that demonstrates the growth and scale of our
overall business and reflects our ability to attract, engage, and
monetize our customers, as well as provides a base to expand usage
of our modules.
Forward-Looking Statements
Statements we make in this press release include statements that
are considered forward-looking within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act,
which may be identified by the use of words such as “anticipates,”
“believes,” “continue,” “estimates,” “expects,” “intends,” “may,”
“plans,” “projects,” “outlook,” “seeks,” “should,” “will,” and
similar terms or the negative of such terms. All statements other
than statements of historical fact are forward-looking statements
for purposes of this release.
We intend these forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in
Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act and are making this statement for purposes of
complying with those safe harbor provisions. These statements
include, but are not limited to, our financial guidance for the
third-quarter of 2023 and the full-year 2023, our future
performance and growth and market opportunities, including new
products and continued module adoption among new and existing
customers, revenue expectations for our Order, Pay, and Engage
suites, our business strategy, and our expectations regarding
advancements in our industry (including our vision related to the
restaurant of the future). Accordingly, actual results could differ
materially or such uncertainties could cause adverse effects on our
results.
Forward-looking statements are based upon various estimates and
assumptions, as well as information known to us as of the date of
this press release, and are subject to risks and uncertainties,
including but not limited to: macroeconomic conditions, including
inflation, changes in discretionary spending, fluctuating interest
rates, and overall market uncertainty; our ability to acquire new
customers, have existing customers adopt additional modules, and
successfully retain existing customers; our ability to compete
effectively with existing competitors, new market entrants, and
customers generally developing their own solutions to replace our
products; our ability to develop and release new and successful
products and services, and develop and release successful
enhancements, features, and modifications to our existing products
and services; the costs and success of our sales and marketing
efforts, and our ability to promote our brand; our long and
unpredictable sales cycles; our ability to identify, recruit, and
retain skilled personnel; our ability to effectively manage our
growth, including any international expansion; our ability to
realize the anticipated benefits of past or future investments,
strategic transactions, or acquisitions, and risk that the
integration of these acquisitions may disrupt our business and
management; our ability to protect our intellectual property rights
and any costs associated therewith; the growth rates of the markets
in which we compete and our ability to expand our market
opportunity; our actual or perceived failure to comply with our
obligations related to data privacy, cybersecurity, and processing
payment transactions; the impact of new and existing laws and
regulations on our business; changes to our strategic relationships
with third parties; our reliance on a limited number of delivery
service providers and aggregators; our ability to generate revenue
from our product offerings and the effects of fluctuations in our
level of client spend retention; the durability of the growth we
have experienced in the past due to the COVID-19 pandemic and the
associated government-imposed restrictions on guest preferences for
digital ordering and customer adoption of multiple modules; and
other general market, political, economic, and business conditions.
Actual results could differ materially from those predicted or
implied, and reported results should not be considered an
indication of future performance. Additionally, these
forward-looking statements, particularly our guidance, involve
risks, uncertainties, and assumptions, including those related to
our customers’ spending decisions and guest ordering behavior.
Significant variations from the assumptions underlying our
forward-looking statements could cause our actual results to vary,
and the impact could be significant.
Additional risks and uncertainties that could affect our
financial results and forward-looking statements are included under
the caption “Risk Factors” in our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2023 that will be filed following this
earnings release, our Annual Report on Form 10-K for the year ended
December 31, 2022, and our other SEC filings, which are available
on our “Investor Relations” website at investors.olo.com and on the
SEC website at www.sec.gov. Undue reliance should not be placed on
the forward-looking statements in this press release. All
forward-looking statements contained herein are based on
information available to us as of the date hereof, and we do not
assume any obligation to update these statements as a result of new
information or future events.
OLO INC. Condensed Consolidated
Balance Sheets (Unaudited) (in thousands, except share and
per share amounts)
As of June 30,
2023
As of December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
318,019
$
350,073
Short-term investments
83,738
98,699
Accounts receivable, net of expected
credit losses of $1,239 and $612, respectively
56,150
48,128
Contract assets
455
336
Deferred contract costs
3,552
2,851
Prepaid expenses and other current
assets
11,183
11,687
Total current assets
473,097
511,774
Property and equipment, net of accumulated
depreciation and amortization of $6,648 and $4,328,
respectively
18,590
11,700
Intangible assets, net of accumulated
amortization of $6,284 and $4,304, respectively
19,718
21,698
Goodwill
207,781
207,781
Contract assets, noncurrent
330
241
Deferred contract costs, noncurrent
5,425
4,171
Operating lease right-of-use assets
13,819
15,581
Long-term investments
29,414
2,430
Other assets, noncurrent
94
186
Total assets
$
768,268
$
775,562
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
7,733
$
2,259
Accrued expenses and other current
liabilities
64,861
52,411
Unearned revenue
3,414
2,527
Operating lease liabilities, current
2,749
3,220
Total current liabilities
78,757
60,417
Unearned revenue, noncurrent
167
661
Operating lease liabilities,
noncurrent
15,427
16,827
Other liabilities, noncurrent
59
41
Total liabilities
94,410
77,946
Stockholders’ equity:
Class A common stock, $0.001 par value;
1,700,000,000 shares authorized at June 30, 2023 and December 31,
2022; 108,136,055 and 105,053,030 shares issued and outstanding at
June 30, 2023 and December 31, 2022, respectively. Class B common
stock, $0.001 par value; 185,000,000 shares authorized at June 30,
2023 and December 31, 2022; 54,894,345 and 57,391,687 shares issued
and outstanding at June 30, 2023 and December 31, 2022,
respectively
163
162
Preferred stock, $0.001 par value;
20,000,000 shares authorized at June 30, 2023 and December 31,
2022
—
—
Additional paid-in capital
862,480
855,249
Accumulated deficit
(188,324)
(157,542)
Accumulated other comprehensive loss
(461)
(253)
Total stockholders’ equity
673,858
697,616
Total liabilities and stockholders’
equity
$
768,268
$
775,562
OLO INC. Condensed Consolidated
Statements of Operations (Unaudited) (in thousands, except
share and per share amounts)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Revenue:
Platform
$
54,603
$
44,538
$
105,974
$
86,004
Professional services and other
648
1,063
1,517
2,353
Total revenue
55,251
45,601
107,491
88,357
Cost of revenue:
Platform (1)
19,721
12,986
37,334
24,227
Professional services and other (1)
1,058
1,453
2,194
3,272
Total cost of revenue
20,779
14,439
39,528
27,499
Gross profit
34,472
31,162
67,963
60,858
Operating expenses:
Research and development (1)
18,298
17,576
38,771
34,732
General and administrative (1)
18,469
16,503
35,679
33,752
Sales and marketing (1)
12,194
9,015
25,075
17,208
Restructuring charges
6,682
—
6,682
—
Total operating expenses
55,643
43,094
106,207
85,692
Loss from operations
(21,171
)
(11,932
)
(38,244
)
(24,834
)
Other income, net:
Interest income
4,155
533
7,609
585
Interest expense
(53
)
(46
)
(122
)
(46
)
Other income, net
—
7
—
13
Total other income, net
4,102
494
7,487
552
Loss before income taxes
(17,069
)
(11,438
)
(30,757
)
(24,282
)
Provision (benefit) for income taxes
7
235
25
(1,100
)
Net loss
$
(17,076
)
$
(11,673
)
$
(30,782
)
$
(23,182
)
Net loss per share attributable to Class A
and Class B common stockholders:
Basic
$
(0.11
)
$
(0.07
)
$
(0.19
)
$
(0.15
)
Diluted
$
(0.11
)
$
(0.07
)
$
(0.19
)
$
(0.15
)
Weighted-average Class A and Class B
common shares outstanding:
Basic
162,324,314
160,429,125
162,005,150
159,813,053
Diluted
162,324,314
160,429,125
162,005,150
159,813,053
____________________ (1) The following reclassifications were
made to conform the prior year periods presented to the current
year presentation:
- For the three months ended June 30, 2022, $0.7 million was
reclassified from general and administrative expense as follows:
$0.3 million into platform cost of revenue, $0.1 million into sales
and marketing expenses, and $0.3 million into research and
development expenses.
- For the six months ended June 30, 2022, $1.4 million was
reclassified from general and administrative expense as follows:
$0.5 million into platform cost of revenue, $0.1 million into
professional services and other cost of revenue, $0.2 million into
sales and marketing expenses, and $0.7 million into research and
development expenses.
Such reclassifications had no effect on previously reported
operating loss, net loss, or accumulated deficit. See “Note
2—Significant Accounting Policies” to our condensed consolidated
financial statements included in Part I, Item 1 of the Quarterly
Report on Form 10-Q for the period ended June 30, 2023 that will be
filed following this earnings release for additional information on
the reclassifications.
OLO INC. Condensed Consolidated
Statements of Cash Flows (Unaudited) (in thousands)
Six Months Ended
June 30, 2023
Six Months Ended
June 30, 2022
Operating activities
Net loss
$
(30,782)
$
(23,182)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
4,462
2,624
Stock-based compensation
28,828
23,185
Provision for expected credit losses
1,079
276
Non-cash lease expense
1,436
1,125
Deferred income tax benefit
—
(1,421)
Loss on disposal of assets
38
—
Non-cash impairment charges
—
475
Other non-cash operating activities,
net
(1,553)
(174)
Changes in operating assets and
liabilities:
Accounts receivable
(9,101)
911
Contract assets
(207)
(99)
Prepaid expenses and other current
assets
620
(2,016)
Deferred contract costs
(1,954)
(462)
Accounts payable
5,476
(286)
Accrued expenses and other current
liabilities
12,069
(1,103)
Operating lease liabilities
(1,557)
(1,248)
Unearned revenue
393
561
Other liabilities, noncurrent
19
(36)
Net cash provided by (used in) operating
activities
9,266
(870)
Investing activities
Purchases of property and equipment
—
(409)
Capitalized internal-use software
(7,279)
(5,125)
Acquisitions, net of cash acquired
—
(49,308)
Purchases of investments
(72,941)
(82,394)
Sales and maturities of investments
62,262
4,306
Net cash used in investing activities
(17,958)
(132,930)
Financing activities
Cash received for employee payroll tax
withholdings
3,039
3,033
Cash paid for employee payroll tax
withholdings
(3,105)
(2,866)
Payment of deferred offering costs
—
(420)
Proceeds from exercise of stock options
and purchases under employee stock purchase plan
6,803
6,278
Repurchase of common stock
(30,099)
Net cash (used in) provided by financing
activities
(23,362)
6,025
Net decrease in cash and cash
equivalents
(32,054)
(127,775)
Cash and cash equivalents, beginning of
period
350,073
514,445
Cash and cash equivalents, end of
period
$
318,019
$
386,670
OLO INC. Reconciliation of GAAP to
Non-GAAP Results (Unaudited) (in thousands, except for
percentages and share and per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Gross profit and gross margin
reconciliation (1) :
Platform gross profit, GAAP
$
34,882
$
31,552
$
68,640
$
61,777
Plus: Stock-based compensation
expense and related payroll tax expense
1,751
1,454
3,650
3,006
Plus: Capitalized internal-use
software and intangible amortization
1,825
968
3,475
1,596
Platform gross profit,
non-GAAP
38,458
33,974
75,765
66,379
Services gross profit, GAAP
(410
)
(390
)
(677
)
(919
)
Plus: Stock-based compensation
expense and related payroll tax expense
182
190
380
449
Services gross profit,
non-GAAP
(228
)
(200
)
(297
)
(470
)
Total gross profit, GAAP
34,472
31,162
67,963
60,858
Total gross profit, non-GAAP
38,230
33,774
75,468
65,909
Platform gross margin, GAAP
64
%
71
%
65
%
72
%
Platform gross margin,
non-GAAP
70
%
76
%
71
%
77
%
Services gross margin, GAAP
(63
)%
(37
)%
(45
)%
(39
)%
Services gross margin,
non-GAAP
(35
)%
(19
)%
(20
)%
(20
)%
Total gross margin, GAAP
62
%
68
%
63
%
69
%
Total gross margin, non-GAAP
69
%
74
%
70
%
75
%
Sales and marketing
reconciliation (1) :
Sales and marketing, GAAP
12,194
9,015
25,075
17,208
Less: Stock-based compensation
expense and related payroll tax expense
2,131
1,375
4,698
2,995
Less: Intangible amortization
341
355
682
656
Less: Certain severance costs
—
—
121
—
Less: Transaction costs
—
—
—
79
Sales and marketing, non-GAAP
9,722
7,285
19,574
13,478
Sales and marketing as % total
revenue, GAAP
22
%
20
%
23
%
19
%
Sales and marketing as % total
revenue, non-GAAP
18
%
16
%
18
%
15
%
Research and development
reconciliation (1) :
Research and development,
GAAP
18,298
17,576
38,771
34,732
Less: Stock-based compensation
expense and related payroll tax expense
3,759
3,460
8,510
7,011
Less: Non-cash capitalized
software impairment
—
—
—
475
Research and development,
non-GAAP
14,539
14,116
30,261
27,246
Research and development as %
total revenue, GAAP
33
%
39
%
36
%
39
%
Research and development as %
total revenue, non-GAAP
26
%
31
%
28
%
31
%
General and administrative
reconciliation (1) :
General and administrative,
GAAP
18,469
16,503
35,679
33,752
Less: Stock-based compensation
expense and related payroll tax expense
5,672
5,161
10,754
10,257
Less: Certain litigation-related
expenses
2,975
—
3,859
Less: Loss on disposal of
assets
—
—
38
—
Less: Intangible amortization
41
42
82
73
Less: Certain severance costs
—
555
709
555
Less: Transaction costs
322
351
358
1,407
General and administrative,
non-GAAP
9,459
10,394
19,879
21,460
General and administrative as %
total revenue, GAAP
33
%
36
%
33
%
38
%
General and administrative as %
total revenue, non-GAAP
17
%
23
%
18
%
24
%
____________________ (1) Effective January 1, 2023, we began
allocating certain employee-related costs to platform cost of
revenues, sales and marketing, and research and development
expenses. Previously, such costs had been presented within general
and administrative expenses on our condensed consolidated statement
of operations. These costs are allocated based on each department’s
proportionate share of total employee headcount. We determined that
these changes would better reflect industry practice and provide
more meaningful information as well as increased transparency of
our operations. Prior period amounts have been reclassified to
conform with the current year presentation. Such reclassifications
had no effect on previously reported operating loss, net loss, or
accumulated deficit.
OLO INC. Reconciliation of GAAP to
Non-GAAP Results (Unaudited) (in thousands, except
percentages and share and per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Operating income (loss)
reconciliation:
Operating loss, GAAP
$
(21,171
)
$
(11,932
)
$
(38,244
)
$
(24,834
)
Plus: Stock-based compensation expense and
related payroll tax expense
13,495
11,640
27,992
23,718
Plus: Certain litigation-related
expenses
2,975
—
3,859
Plus: Loss on disposal of assets
—
—
38
—
Plus: Non-cash capitalized internal-use
software impairment
—
—
—
475
Plus: Capitalized internal-use software
and intangible amortization
2,207
1,365
4,239
2,325
Plus: Restructuring charges
6,682
—
6,682
Plus: Certain severance costs
—
555
830
555
Plus: Transaction costs
322
351
358
1,486
Operating income, non-GAAP
4,510
1,979
5,754
3,725
Operating margin, GAAP
(38
)%
(26
)%
(36
)%
(28
)%
Operating margin, non-GAAP
8
%
4
%
5
%
4
%
Net income (loss)
reconciliation:
Net loss, GAAP
(17,076
)
(11,673
)
(30,782
)
(23,182
)
Plus: Stock-based compensation expense and
related payroll tax expense
13,495
11,640
27,992
23,718
Plus: Certain litigation-related
expenses
2,975
—
3,859
Plus: Loss on disposal of assets
—
—
38
—
Plus: Non-cash capitalized internal-use
software impairment
—
—
—
475
Plus: Capitalized internal-use software
and intangible amortization
2,207
1,365
4,239
2,325
Plus: Restructuring charges
6,682
—
6,682
Plus: Certain severance costs
—
555
830
555
Plus: Transaction costs
322
351
358
1,486
Less: GAAP acquisition-related deferred
income tax benefit (1)
—
—
—
(1,421
)
Less: Tax impact of non-GAAP adjustments
(2)
(2,243
)
(3,678
)
(3,450
)
(1,552
)
Net income (loss), non-GAAP
6,362
(1,440
)
9,766
2,404
Fully diluted net loss per share
attributable to Class A and Class B common stockholders, GAAP
$
(0.11
)
$
(0.07
)
$
(0.19
)
$
(0.15
)
Fully diluted weighted average Class A and
Class B common shares outstanding, GAAP
162,324,314
160,429,125
162,005,150
159,813,053
Fully diluted net income (loss) per share
attributable to Class A and Class B common stockholders,
non-GAAP
$
0.04
$
(0.01
)
$
0.05
$
0.01
Fully diluted Class A and Class B common
shares outstanding, non-GAAP
177,843,165
181,859,483
178,069,754
182,704,378
____________________ (1) As a result of our prior acquisitions,
we recognized deferred tax liabilities relating to the basis
differences for acquired intangible assets. The recording of these
deferred tax liabilities resulted in a reversal of our valuation
allowance which is included in the GAAP provision for income taxes.
(2) We utilized a federal rate plus a net state rate that excluded
the impact of NOLs and valuation allowances to calculate our
non-GAAP blended statutory rate of 26.06% and 24.57% for the six
months ended June 30, 2023 and 2022, respectively.
OLO INC. Non-GAAP Free Cash Flow
(Unaudited) (in thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Net cash provided by (used in) operating
activities
$
2,019
$
19
$
9,266
$
(870)
Purchase of property and equipment
—
(333)
—
(409)
Capitalized internal-use software
(3,897)
(2,663)
(7,279)
(5,125)
Non-GAAP free cash flow
$
(1,878)
$
(2,977)
$
1,987
$
(6,404)
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