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OI

Olo Inc. (OLO)·Q2 2025 Earnings Summary

Executive Summary

  • Olo delivered a strong quarter: revenue grew 22% YoY to $85.7M and beat Wall Street consensus ($82.23M*), while non-GAAP EPS was $0.07 vs consensus $0.075*; GAAP diluted EPS was $0.01 .
  • Non-GAAP operating income rose to $13.1M (15% margin), above prior guidance high-end ($11.8M), though GAAP operating margin was -3%, and GAAP gross margin compressed to 51% from 57% YoY .
  • Management withdrew FY25 guidance and did not host a Q2 call due to the definitive agreement to be acquired by Thoma Bravo for $10.25/share (≈65% premium to the unaffected price), a key stock catalyst near term .
  • KPIs remained healthy: ARPU ≈$955 (+12% YoY), NRR 114%, active locations ≈89k (+9% YoY), and Borderless accounts exceeded 19M across 450+ brands .

What Went Well and What Went Wrong

What Went Well

  • Revenue beat estimates and prior guidance; platform revenue grew 21% YoY to $84.1M, reflecting strong demand and module adoption .
  • Non-GAAP profitability improved: operating income $13.1M (15% margin) vs $7.6M (11%) a year ago; non-GAAP EPS $0.07 vs $0.05 YoY .
  • Healthy KPIs and product traction: ARPU +12% YoY to ≈$955; NRR 114%; Borderless surpassed 19M accounts; active locations +1,000 QoQ to ≈89k .
  • Quote: “Olo continued to execute… generating revenue and non-GAAP operating income that exceeded the high-end of their respective guidance ranges” — Noah Glass, Founder & CEO .

What Went Wrong

  • Year-over-year margin pressure: GAAP gross margin fell to 51% (from 57% in Q2’24); GAAP operating margin turned to -3% vs +1% a year ago; GAAP net income declined to $1.6M from $5.7M .
  • EPS miss vs consensus: non-GAAP EPS came in at $0.07 vs $0.075* estimate; company refrained from hosting an earnings call, limiting real-time commentary .
  • Guidance uncertainty: management suspended and withdrew FY25 guidance amid pending take-private transaction, reducing near-term estimate anchors .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$70.5 $76.1 $80.7 $85.7
GAAP Diluted EPS ($)$0.03 $0.00 $0.01 $0.01
Non-GAAP EPS ($)$0.05 $0.06 $0.07 $0.07
Gross Margin (GAAP, %)57% 53% 55% 51%
Operating Margin (GAAP, %)1% -6% -3% -3%
Operating Margin (Non-GAAP, %)11% 15% 14% 15%

Segment breakdown

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Platform Revenue ($USD Millions)$69.6 $75.2 $79.2 $84.1
Professional Services & Other ($USD Millions)$0.9 $0.9 $1.4 $1.6
Total Revenue ($USD Millions)$70.5 $76.1 $80.7 $85.7

KPIs

KPIQ4 2024Q1 2025Q2 2025
ARPU ($)≈$878 ≈$911 ≈$955
Dollar-based NRR (%)≈115% 111% 114%
Active Locations (#)≈86,000 ≈88,000 ≈89,000
Borderless Accounts (#)≈15M ≈16M >19M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q2 2025$82.0–$82.5 Actual $85.7 Raised vs guide; beat high-end
Non-GAAP Operating Income ($USD Millions)Q2 2025$11.5–$11.8 Actual $13.1 Raised vs guide; beat high-end
Revenue ($USD Millions)FY 2025$338.5–$340.0 Guidance withdrawn Withdrawn
Non-GAAP Operating Income ($USD Millions)FY 2025$48.6–$49.8 Guidance withdrawn Withdrawn

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Olo Pay Card-Present rampFreedomPay partnership to accelerate time-to-market; Card-present margin advantages; Pay scale improving Signed full card-present deployment with a public enterprise brand; $1M one-time COF benefit; expect gross margin compression as Pay scales No call; continued operational execution implied; NGOI beat Scaling; margin mix shifting to payments
Catering+Multiple enterprise & emerging deployments; high-margin software driver Chipotle pilot announcement; multi-module upsell motion Red Lobster returning with first-party catering (Q2 press release) Expanding across brands
AI/Technology/EngageAI menu recommendations; deeper Engage analytics Beta launch of Olo Guest Intelligence; strong adoption Borderless accounts >19M; network effects continue Data/AI engagement strengthening
Macro/trade-down/tariffsPositioning for resilience; limited service strength Early signs of trade-down; limited tariff exposure; limited service gaining share No call; press release only; operational momentum continues Resilient; tailwinds in LSR
Regulatory/legal/transactionN/AN/ADefinitive agreement with Thoma Bravo; guidance withdrawn; no Q2 call Take-private pending; disclosure limits

Management Commentary

  • “Olo continued to execute in the second quarter, generating revenue and non-GAAP operating income that exceeded the high-end of their respective guidance ranges.” — Noah Glass, Founder & CEO .
  • “By partnering with Thoma Bravo, we believe we can build on our success to date and accelerate our vision of helping our customers create a world where every restaurant guest feels like a regular.” — Noah Glass .
  • Transaction terms: $10.25 cash per share; ≈$2.0B equity value; ≈65% premium to $6.20 unaffected price; expected close by year-end 2025 (subject to approvals) .

Q&A Highlights

No Q2 earnings call or Q&A was hosted due to the pending acquisition . Notable Q1 2025 Q&A themes for context:

  • Chipotle Catering+ pilot as a multi-module validation of Olo’s modular platform strategy (features include tax-exempt handling, house accounts, Switchboard) .
  • Payments economics: ~$1M one-time gross margin benefit tied to processor agreement and card mix; full-year gross margin to compress ~250–275 bps as Pay scales .
  • Macro/tariffs: early trade-down signs benefiting limited service; limited tariff exposure for ingredients .
  • FreedomPay partnership: midyear GA for card-present; expands addressable GPV to >$160B across base .

Estimates Context

MetricPeriodConsensus EstimateActual
Revenue ($USD)Q2 2025$82,230,860*$85,724,000
Primary EPS ($)Q2 2025$0.075*$0.07
  • Result: Revenue beat; EPS slight miss vs consensus. The company also beat its own quarterly revenue and NGOI guidance ranges .
  • Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Strong top-line momentum and non-GAAP profitability: revenue and NGOI exceeded high-end guidance; platform revenue rose 21% YoY .
  • Margins mixed: GAAP gross and operating margins compressed YoY with payments mix shift, consistent with management’s prior commentary on payments scaling trade-offs .
  • Healthy customer economics: ARPU +12% YoY; NRR 114%; active locations +1,000 QoQ to ≈89k; Borderless >19M demonstrating network effects .
  • Guide withdrawal and no call reflect pending take-private: Thoma Bravo agreement ($10.25/share, ≈65% premium) is the dominant near-term stock driver; fundamental updates may be limited while transaction is pending .
  • Near-term estimate implications: revenue outperformance may warrant upward revenue revisions, while EPS slight miss and margin compression could temper EPS expectations; however, guidance suspension reduces forward anchors .
  • Strategic narrative intact: Catering+ expansion (including Chipotle pilot and Red Lobster) and card-present ramp via FreedomPay underpin medium-term flywheel strategy (Order, Pay, Engage) .
  • Trading lens: with a definitive agreement in place, risk/reward skews to deal completion dynamics and regulatory/shareholder approvals rather than incremental quarterly beats/misses .

Additional Press Releases and Prior Quarters Reviewed

  • Q2 2025 results press release (8/4/25) and accompanying 8-K with full financials .
  • Definitive agreement to be acquired by Thoma Bravo (7/3/25) .
  • Earnings date notice (7/22/25) stating no call and guidance withdrawal .
  • Red Lobster returns to Olo; launching first-party catering (6/26/25) .
  • Q1 2025 8-K and press release, guidance provided at the time .
  • Q4 2024 8-K and press release detailing FreedomPay partnership and FY25 initial guidance .