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OI

Olo Inc. (OLO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was a strong start: revenue $80.68M (+21% YoY) and non-GAAP operating income $11.5M both exceeded the high end of guidance; ARPU rose 12% YoY to ~$911; active locations grew ~2,000 sequentially to ~88,000 .
  • Wall Street consensus was beaten on both revenue ($80.68M vs $77.44M*) and EPS ($0.07 vs $0.063*); note Q4 EPS was slightly below consensus, but Q1 resumed beats*.
  • FY 2025 guidance was raised: revenue to $338.5–$340.0M (from $333.0–$336.0M) and non-GAAP operating income to $48.6–$49.8M (from $45.5–$47.0M) .
  • Catalysts: Chipotle Catering+ pilot and a full card-present Olo Pay deployment with a publicly traded enterprise brand; management emphasized ramping card-present payments and the guest data flywheel strategy .

Values with asterisk retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Exceeded the high end of guidance for revenue and non-GAAP operating income; added ~2,000 net new locations in Q1; ARPU +12% YoY to ~$911 .
  • Strategic wins: “a Catering+ pilot with Chipotle, a new top 25 brand for Olo, and an Olo Pay card-present full deployment deal with an existing publicly traded enterprise customer” .
  • Non-GAAP operating income rose to $11.5M (14% margin) from $5.6M (8% margin) YoY; GAAP turned profitable at $0.01 diluted EPS .

What Went Wrong

  • Gross margin benefited from ~$1M one-time cost-of-revenue adjustment tied to Olo Pay; normalized Q1 gross margin would have been roughly in line with prior quarter .
  • Free cash flow was negative ($1.9M) due to a partner billing change (advanced to arrears); normalized FCF would have been ~$4M .
  • Management guided to gross margin compression of ~250–275 bps in 2025 as payments scale and card-present ramps, a headwind to margins despite growth .

Financial Results

Actuals by Quarter

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$71.85 $76.07 $80.68
Diluted EPS (GAAP) ($)$(0.02) $0.00 $0.01
EPS (Non-GAAP) ($)$0.06 $0.06 $0.07
Gross Margin (GAAP, %)54% 53% 55%
Gross Margin (Non-GAAP, %)61% 59% 61%
Operating Margin (GAAP, %)(12)% (6)% (3)%
Operating Margin (Non-GAAP, %)11% 15% 14%

Segment Revenue and Gross Profit

MetricQ3 2024Q4 2024Q1 2025
Platform Revenue ($USD Millions)$71.00 $75.19 $79.23
Services & Other Revenue ($USD Millions)$0.85 $0.88 $1.45
Gross Profit (GAAP, $USD Millions)$39.01 $40.30 $44.31
Gross Profit (Non-GAAP, $USD Millions)$43.61 $45.24 $49.17

KPIs

KPIQ3 2024Q4 2024Q1 2025
ARPU ($)~$850 ~$878 ~$911
Dollar-based NRR (%)Above 120% ~115% 111%
Ending Active Locations (units)~85,000 ~86,000 ~88,000
Cash + Short/Long-term Investments ($USD Millions)$391.9 $403.1 $401.8

Results vs S&P Global Consensus

MetricQ3 2024Q4 2024Q1 2025
Revenue Consensus ($USD Millions)$70.94*$72.76*$77.44*
Revenue Actual ($USD Millions)$71.85 $76.07 $80.68
EPS Consensus ($)$0.0517*$0.0667*$0.0633*
EPS Actual (Primary/Non-GAAP) ($)$0.06 $0.06 $0.07

Values with asterisk retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$333.0–$336.0M $338.5–$340.0M Raised
Non-GAAP Operating IncomeFY 2025$45.5–$47.0M $48.6–$49.8M Raised
Gross Margin (YoY compression)FY 2025~250 bps ~250–275 bps More compression
RevenueQ2 2025—$82.0–$82.5M New
Non-GAAP Operating IncomeQ2 2025—$11.5–$11.8M New
Operating ExpensesFY 2025Mid-single-digit % YoY growth Reaffirmed; annual comp increases hit Q2 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24 and Q4’24)Current Period (Q1’25)Trend
Olo Pay card-present rampGA on Qu POS in Q3; FreedomPay partnership + deeper Stripe collaboration announced in Feb (Q4 materials) Signed full card-present deployment with a publicly traded enterprise brand; margins improve with scale and card mix Accelerating
Catering+ adoptionMultiple enterprise and emerging wins in Q3 and Q4 (BJ’s, Black Bear Diner, Raising Cane’s; many emerging brands) Chipotle Catering+ pilot; continued expansions (El Pollo Loco, Halal Guys, Salad & Go) Broadening
Guest data flywheel & BorderlessEmphasis on Engage; Borderless grew to ~15M in Q4 Borderless guests ~16M; >2M used at 2+ brands; Olo Guest Intelligence beta widely used Building network effects
Macro/trade-down dynamicsPrudent 2025 guide; limited-service resilience Early signs of trade-down: limited service gaining share vs full service; limited tariff exposure cited Supportive
Gross profit trajectoryQ4: Rule of 36; expect reacceleration in back half of ’25 Q1 Rule of 40 = 42% (Rule of 38 normalized); reacceleration expected from Q3 Improving 2H
Cost disciplineLate-Sept 2024 cost reductions; OpEx dollars down sequentially in Q4 All OpEx lines lower YoY as % of revenue; comp increases hit Q2 Sustained discipline

Management Commentary

  • “We exceeded the high end of our revenue and non-GAAP operating income guidance ranges, and…added approximately 2,000 locations quarter-to-quarter” .
  • “Chipotle…will pilot multiple Olo modules across a subset of locations to support their catering channel…a great validation of our platform’s strength and modularity” .
  • “Gross profit…benefited from approximately $1 million of one-time cost of revenue adjustments associated with Olo Pay” .
  • “We anticipate on a full-year basis, gross margins to come down…about 250 to 275 basis points…as we…scale into the card-present opportunity” .
  • “Borderless guests are now over 16 million…more than 2 million…have used Borderless at two or more brands, up more than 10x from a year ago” .

Q&A Highlights

  • Chipotle Catering+: multi-module pilot; Catering+ addresses catering-specific needs (tax-exempt, house accounts, production/prep slips), with attach opportunities (Olo Pay, Dispatch, Rails, Switchboard for phone orders) .
  • Olo Pay margin/color: ~$1M Q1 one-time benefit from processor agreement and debit mix; FY25 gross margins compress ~250–275 bps as card-present scales .
  • Macro/tariffs: enterprise limited-service brands showing trade-down share gains; customers have relatively limited tariff exposure, inputs mostly sourced domestically .
  • Gross profit outlook: reacceleration from Q3 onward; Q1 strength from pulled-forward deployments and strong order volumes in QSR/limited service .
  • Catering+ economics: primarily drives ARPU; high software-like margins; creates cross-sell pathways to Dispatch, Rails, Pay, Engage .

Estimates Context

  • Q1 2025 beat: revenue $80.68M vs $77.44M consensus*; EPS $0.07 vs $0.063*; both above expectations.
  • Prior quarters: Q4 revenue beat ($76.07M vs $72.76M*), EPS slight miss ($0.06 vs $0.0667*); Q3 revenue beat ($71.85M vs $70.94M*), EPS beat ($0.06 vs $0.0517*).
  • Implication: FY 2025 guidance raised; estimates likely to move up on revenue/NGOI, while margin models should reflect 250–275 bps gross margin compression from payments mix .

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Strong execution and beats in Q1 set a positive tone; sequential growth in locations and ARPU underscores demand across suites .
  • Guidance raise for FY 2025 (revenue and NGOI) is a clear bullish signal; monitor card-present ramp pacing through 2H25 .
  • Payments mix will pressure gross margins (250–275 bps compression), but scale and card-present economics should improve blended Pay margins over time .
  • One-time Olo Pay cost-of-revenue benefit in Q1 (+$1M) is non-recurring; normalize gross margin/FCF when modeling .
  • Chipotle pilot signals top-25 inroads for Catering+ and multi-module expansion; watch for conversion from pilot to broader deployment .
  • Borderless network effects and Olo Guest Intelligence adoption support the guest data flywheel; expect Engage-driven monetization and cross-sell .
  • Near-term trading: favor on guidance raise and new logos; be mindful of margin optics into Q2 (comp increases; tougher YoY GP compare) and look for reacceleration from Q3 .