Revenue up 22%, ARPU up 33% Year-over-Year
Olo Inc. (NYSE:OLO) (“Olo” or the “Company”), a leading open
SaaS platform for restaurants, today announced financial results
for the third quarter ended September 30, 2023.
“In the third quarter, we continued to deliver on our 2023
goals. We generated strong financial results, continued to land and
expand with enterprise and emerging enterprise brands, and drove
innovation that helps our customers increase sales and provide
superior guest experiences,” said Noah Glass, Olo’s Founder and
CEO. “Our guidance reflects our confidence in building on our third
quarter results, and we believe we are well positioned to help
restaurant brands run their businesses more efficiently, and
harness the power of guest data to drive more traffic.”
Third Quarter Financial and Other Highlights
- Total revenue increased 22% year-over-year to $57.8
million.
- Total platform revenue increased 24% year-over-year to $57.3
million.
- Gross profit increased 9%(1) year-over-year to $34.6 million,
and was 60% of total revenue.
- Non-GAAP gross profit increased 12%(1) year-over-year to $38.8
million, and was 67% of total revenue.
- Operating loss was $16.3 million, or 28% of total revenue,
compared to operating loss of $15.9 million a year ago.
- Non-GAAP operating income was $5.7 million, or 10% of total
revenue, compared to $3.0 million a year ago.
- Net loss was $11.8 million or $0.07 per share, compared to a
net loss of $14.6 million or $0.09 per share a year ago.
- Non-GAAP net income was $7.6 million or $0.04 per share,
compared to non-GAAP net income of $3.6 million or $0.02 per share
a year ago.
- Cash, cash equivalents, and short- and long-term investments
totaled $397.6 million as of September 30, 2023.
- Total shares repurchased were approximately 2.0 million for
approximately $13.0 million, bringing total repurchases under the
program to 8.8 million shares for approximately $63.0 million and
leaving approximately $37.0 million remaining on the
authorization.
- Average revenue per unit (ARPU) increased 33% year-over-year,
and increased 4% sequentially to approximately $742.
- Dollar-based net revenue retention (NRR) was approximately
119%.
- Ending active locations were approximately 78,000, up
approximately 1,000 from the quarter ended June 30, 2023.
Third Quarter and Recent Business Highlights
- Olo achieved solid wins within the enterprise segment,
expanding relationships within its existing customer base. Olo
expanded its relationship with FAT Brands, a large portfolio of
casual, fast casual, and quick serve concepts. Olo now has a
parent-level partnership with FAT Brands that includes Olo’s Order
and Pay suites as well as Borderless, Olo’s password-less checkout
feature. As part of this expanded relationship, FAT Burger, a
net-new brand for Olo, deployed Olo’s Order and Pay suites in the
quarter, and Great American Cookie became the first FAT Brand
concept to deploy Borderless.
- Olo had strong multi-module adoption in the emerging enterprise
segment, with several brands deploying four or more product
modules; including Eataly, GSR Brands, La Madeleine, Lou Malnati’s,
and Margaritaville Restaurants. 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 Fall Product
Release event, which may be viewed at olo.com/quarterly-release.
Olo announced a number of platform-level innovations as well as new
features, such as Catering+ with House Accounts, automated dispute
response within Olo Pay, and numerous enhancements to its Sentiment
module within the Engage suite.
Financial Outlook
As of November 6, 2023, Olo is issuing the following
outlook:
For the fourth quarter of 2023, Olo expects to report:
- Revenue in the range of $58.5 million to $59.0 million;
and
- Non-GAAP operating income in the range of $6.2 million to $6.6
million.
For fiscal year 2023, Olo expects to report:
- Revenue in the range of $223.8 million to $224.3 million;
and
- Non-GAAP operating income in the range of $17.6 million to
$18.0 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, November 6, 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 X (formerly 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, equity expense
related to charitable contributions of our Class A common stock
(non-cash 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),
costs and impairment charges associated with the sublease of our
former corporate headquarters, 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, professional
services and other 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
fourth quarter of 2023, our future performance and growth and
market opportunities, including new products and continued module
adoption among new and existing customers, the continued expansion
of ARPU, revenue expectations for our Order, Pay, and Engage
suites, our business strategy, and our expectations regarding
advancements in our industry. 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 the 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
experienced in the past, including due to the COVID-19 pandemic,
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 September 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 September 30,
2023
As of December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
286,401
$
350,073
Short-term investments
90,382
98,699
Accounts receivable, net of expected
credit losses of $1,589 and $612, respectively
70,213
48,128
Contract assets
395
336
Deferred contract costs
4,088
2,851
Prepaid expenses and other current
assets
8,954
11,687
Total current assets
460,433
511,774
Property and equipment, net of accumulated
depreciation and amortization of $8,479 and $4,328,
respectively
20,201
11,700
Intangible assets, net of accumulated
amortization of $7,274 and $4,304, respectively
18,728
21,698
Goodwill
207,781
207,781
Contract assets, noncurrent
339
241
Deferred contract costs, noncurrent
5,522
4,171
Operating lease right-of-use assets
13,176
15,581
Long-term investments
20,824
2,430
Other assets, noncurrent
83
186
Total assets
$
747,087
$
775,562
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
189
$
2,259
Accrued expenses and other current
liabilities
59,534
52,411
Unearned revenue
2,215
2,527
Operating lease liabilities, current
2,796
3,220
Total current liabilities
64,734
60,417
Unearned revenue, noncurrent
160
661
Operating lease liabilities,
noncurrent
14,711
16,827
Other liabilities, noncurrent
83
41
Total liabilities
79,688
77,946
Stockholders’ equity:
Class A common stock, $0.001 par value;
1,700,000,000 shares authorized at September 30, 2023 and December
31, 2022; 109,857,980 and 105,053,030 shares issued and outstanding
at September 30, 2023 and December 31, 2022, respectively. Class B
common stock, $0.001 par value; 185,000,000 shares authorized at
September 30, 2023 and December 31, 2022; 54,891,834 and 57,391,687
shares issued and outstanding at September 30, 2023 and December
31, 2022, respectively
165
162
Preferred stock, $0.001 par value;
20,000,000 shares authorized at September 30, 2023 and December 31,
2022
—
—
Additional paid-in capital
867,721
855,249
Accumulated deficit
(200,083
)
(157,542
)
Accumulated other comprehensive loss
(404
)
(253
)
Total stockholders’ equity
667,399
697,616
Total liabilities and stockholders’
equity
$
747,087
$
775,562
OLO INC. Condensed Consolidated
Statements of Operations (Unaudited) (in thousands, except
share and per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue:
Platform
$
57,261
$
46,357
$
163,235
$
132,361
Professional services and other
533
909
2,050
3,262
Total revenue
57,794
47,266
165,285
135,623
Cost of revenue:
Platform (1)
22,203
14,114
59,537
38,341
Professional services and other (1)
1,026
1,368
3,220
4,640
Total cost of revenue
23,229
15,482
62,757
42,981
Gross profit
34,565
31,784
102,528
92,642
Operating expenses:
Research and development (1)
18,035
19,391
56,806
54,123
General and administrative (1)
21,307
20,295
56,986
54,047
Sales and marketing (1)
11,363
8,016
36,438
25,224
Restructuring charges
166
—
6,848
—
Total operating expenses
50,871
47,702
157,078
133,394
Loss from operations
(16,306
)
(15,918
)
(54,550
)
(40,752
)
Other income, net:
Interest income
4,598
1,525
12,207
2,110
Interest expense
(43
)
(70
)
(165
)
(116
)
Other (expense) income
(1
)
(7
)
(1
)
6
Total other income, net
4,554
1,448
12,041
2,000
Loss before income taxes
(11,752
)
(14,470
)
(42,509
)
(38,752
)
Provision (benefit) for income taxes
7
90
32
(1,010
)
Net loss
$
(11,759
)
$
(14,560
)
$
(42,541
)
$
(37,742
)
Net loss per share attributable to Class A
and Class B common stockholders:
Basic
$
(0.07
)
$
(0.09
)
$
(0.26
)
$
(0.23
)
Diluted
$
(0.07
)
$
(0.09
)
$
(0.26
)
$
(0.23
)
Weighted-average Class A and Class B
common shares outstanding:
Basic
163,991,486
162,364,654
162,674,062
160,667,412
Diluted
163,991,486
162,364,654
162,674,062
160,667,412
________________________ (1) The following reclassifications
were made to conform the prior year periods presented to the
current year presentation:
- For the three months ended September 30, 2022, $0.6 million was
reclassified from general and administrative expense as follows:
$0.2 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 nine months ended September 30, 2022, $2.0 million was
reclassified from general and administrative expense as follows:
$0.6 million into platform cost of revenue, $0.1 million into
professional services and other cost of revenue, $0.3 million into
sales and marketing expenses, and $1.0 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 September 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)
Nine Months Ended
September 30, 2023
Nine Months Ended
September 30, 2022
Operating activities
Net loss
$
(42,541
)
$
(37,742
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
7,283
4,285
Stock-based compensation
41,341
35,104
Charitable donation of Class A common
stock
1,136
1,406
Provision for expected credit losses
1,495
263
Non-cash lease expense
2,079
1,706
Deferred income tax benefit
—
(1,421
)
Loss on disposal of assets
38
—
Non-cash impairment charges
—
2,806
Other non-cash operating activities,
net
(1,883
)
(560
)
Changes in operating assets and
liabilities:
Accounts receivable
(23,580
)
(602
)
Contract assets
(156
)
(66
)
Prepaid expenses and other current
assets
2,835
(404
)
Deferred contract costs
(2,588
)
(537
)
Accounts payable
(2,069
)
(452
)
Accrued expenses and other current
liabilities
7,189
927
Operating lease liabilities
(2,226
)
(1,893
)
Unearned revenue
(812
)
(558
)
Other liabilities, noncurrent
76
136
Net cash (used in) provided by operating
activities
(12,383
)
2,398
Investing activities
Purchases of property and equipment
—
(454
)
Capitalized internal-use software
(10,023
)
(6,997
)
Acquisitions, net of cash acquired
—
(49,241
)
Purchases of investments
(96,501
)
(114,006
)
Sales and maturities of investments
88,155
11,388
Net cash used in investing activities
(18,369
)
(159,310
)
Financing activities
Cash received for employee payroll tax
withholdings
13,902
7,083
Cash paid for employee payroll tax
withholdings
(13,896
)
(7,012
)
Payment of deferred offering costs
—
(423
)
Proceeds from exercise of stock options
and purchases under employee stock purchase plan
10,208
9,218
Repurchase of common stock
(43,134
)
—
Net cash (used in) provided by financing
activities
(32,920
)
8,866
Net decrease in cash and cash
equivalents
(63,672
)
(148,046
)
Cash and cash equivalents, beginning of
period
350,073
514,445
Cash and cash equivalents, end of
period
$
286,401
$
366,399
OLO INC. Reconciliation of GAAP
to Non-GAAP Results (Unaudited) (in thousands, except for
percentages and share and per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Gross profit and gross margin
reconciliation (1) :
Platform gross profit, GAAP
$
35,058
$
32,243
$
103,698
$
94,020
Plus: Stock-based compensation expense and
related payroll tax expense
1,717
1,380
5,367
4,386
Plus: Capitalized internal-use software
and intangible amortization
2,344
1,132
5,819
2,728
Plus: Certain severance costs
—
17
—
17
Platform gross profit, non-GAAP
39,119
34,772
114,884
101,151
Services gross profit, GAAP
(493
)
(459
)
(1,170
)
(1,378
)
Plus: Stock-based compensation expense and
related payroll tax expense
171
169
551
618
Plus: Certain severance costs
—
36
—
36
Services gross profit, non-GAAP
(322
)
(254
)
(619
)
(724
)
Total gross profit, GAAP
34,565
31,784
102,528
92,642
Total gross profit, non-GAAP
38,797
34,518
114,265
100,427
Platform gross margin, GAAP
61
%
70
%
64
%
71
%
Platform gross margin, non-GAAP
68
%
75
%
70
%
76
%
Services gross margin, GAAP
(92
)%
(50
)%
(57
)%
(42
)%
Services gross margin, non-GAAP
(60
)%
(28
)%
(30
)%
(22
)%
Total gross margin, GAAP
60
%
67
%
62
%
68
%
Total gross margin, non-GAAP
67
%
73
%
69
%
74
%
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Sales and marketing reconciliation (1)
:
Sales and marketing, GAAP
$
11,363
$
8,016
$
36,438
$
25,224
Less: Stock-based compensation expense and
related payroll tax expense
1,608
1,395
6,306
4,390
Less: Intangible amortization
342
341
1,024
997
Less: Certain severance costs
—
112
121
112
Less: Transaction costs
—
—
—
79
Sales and marketing, non-GAAP
9,413
6,168
28,987
19,646
Sales and marketing as % total revenue,
GAAP
20
%
17
%
22
%
19
%
Sales and marketing as % total revenue,
non-GAAP
16
%
13
%
18
%
14
%
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Research and development reconciliation
(1) :
Research and development, GAAP
$
18,035
$
19,391
$
56,806
$
54,123
Less: Stock-based compensation expense and
related payroll tax expense
3,760
3,603
12,270
10,614
Less: Non-cash capitalized software
impairment
—
—
—
475
Less: Certain severance costs
—
72
—
72
Research and development, non-GAAP
14,275
15,716
44,536
42,962
Research and development as % total
revenue, GAAP
31
%
41
%
34
%
40
%
Research and development as % total
revenue, non-GAAP
25
%
33
%
27
%
32
%
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
General and administrative
reconciliation (1) :
General and administrative, GAAP
$
21,307
$
20,295
$
56,986
$
54,047
Less: Stock-based compensation expense and
related payroll tax expense
5,756
5,559
16,510
15,816
Less: Charitable donation of Class A
common stock
1,136
1,406
1,136
1,406
Less: Certain litigation-related
expenses
4,944
—
8,803
—
Less: Costs and impairment charge
associated with sublease of former corporate headquarters
—
3,272
—
3,272
Less: Loss on disposal of assets
—
—
38
—
Less: Intangible amortization
40
40
122
113
Less: Certain severance costs
—
386
709
941
Less: Transaction costs
—
(19
)
358
1,388
General and administrative, non-GAAP
9,431
9,651
29,310
31,111
General and administrative as % total
revenue, GAAP
37
%
43
%
34
%
40
%
General and administrative as % total
revenue, non-GAAP
16
%
20
%
18
%
23
%
___________________________ (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 for
percentages and share and per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Operating income (loss)
reconciliation:
Operating loss, GAAP
$
(16,306
)
$
(15,918
)
$
(54,550
)
$
(40,752
)
Plus: Stock-based compensation expense and
related payroll tax expense
13,012
12,106
41,004
35,824
Plus: Charitable donation of Class A
common stock
1,136
1,406
1,136
1,406
Plus: Certain litigation-related
expenses
4,944
—
8,803
—
Plus: Costs and impairment charge
associated with sublease of former corporate headquarters
—
3,272
—
3,272
Plus: Loss on disposal of assets
—
—
38
—
Plus: Non-cash capitalized internal-use
software impairment
—
—
—
475
Plus: Capitalized internal-use software
and intangible amortization
2,726
1,513
6,965
3,838
Plus: Restructuring charges
166
—
6,848
—
Plus: Certain severance costs
—
623
830
1,178
Plus: Transaction costs
—
(19
)
358
1,467
Operating income, non-GAAP
5,678
2,983
11,432
6,708
Operating margin, GAAP
(28
)%
(34
)%
(33
)%
(30
)%
Operating margin, non-GAAP
10
%
6
%
7
%
5
%
OLO INC. Reconciliation of GAAP
to Non-GAAP Results (Unaudited) (in thousands, except for
percentages and share and per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net income (loss)
reconciliation:
Net loss, GAAP
$
(11,759
)
$
(14,560
)
$
(42,541
)
$
(37,742
)
Plus: Stock-based compensation expense and
related payroll tax expense
13,012
12,106
41,004
35,824
Plus: Charitable donation of Class A
common stock
1,136
1,406
1,136
1,406
Plus: Certain litigation-related
expenses
4,944
—
8,803
—
Plus: Costs and impairment charge
associated with sublease of former corporate headquarters
—
3,272
—
3,272
Plus: Loss on disposal of assets
—
—
38
—
Plus: Non-cash capitalized internal-use
software impairment
—
—
—
475
Plus: Capitalized internal-use software
and intangible amortization
2,726
1,513
6,965
3,838
Plus: Restructuring charges
166
—
6,848
—
Plus: Certain severance costs
—
623
830
1,178
Plus: Transaction costs
—
(19
)
358
1,467
Less: GAAP acquisition-related deferred
income tax benefit (1)
—
—
—
(1,421
)
Less: Tax impact of non-GAAP adjustments
(2)
(2,666
)
(726
)
(6,116
)
(2,278
)
Net income, non-GAAP
7,559
3,615
17,325
6,019
Fully diluted net loss per share
attributable to Class A and Class B common stockholders, GAAP
$
(0.07
)
$
(0.09
)
$
(0.26
)
$
(0.23
)
Fully diluted weighted average Class A and
Class B common shares outstanding, GAAP
163,991,486
162,364,654
162,674,062
160,667,412
Fully diluted net income (loss) per share
attributable to Class A and Class B common stockholders,
non-GAAP
$
0.04
$
0.02
$
0.10
$
0.03
Fully diluted Class A and Class B common
shares outstanding, non-GAAP
176,719,100
181,863,142
177,626,336
182,334,581
_________________________ (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 24.45%
for the nine months ended September 30, 2023 and 2022,
respectively.
OLO INC. Non-GAAP Free Cash Flow
(Unaudited) (in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net cash (used in) provided by operating
activities
$
(21,649
)
$
3,268
$
(12,383
)
$
2,398
Purchase of property and equipment
—
(45
)
—
(454
)
Capitalized internal-use software
(2,744
)
(1,872
)
(10,023
)
(6,997
)
Non-GAAP free cash flow
$
(24,393
)
$
1,351
$
(22,406
)
$
(5,053
)
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version on businesswire.com: https://www.businesswire.com/news/home/20231104445033/en/
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