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OI

Olo Inc. (OLO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $76.1M, up 21% YoY, with non-GAAP operating income of $11.5M (15% margin) and non-GAAP EPS of $0.06; GAAP net loss improved to $(0.6)M, reflecting disciplined OpEx and higher Olo Pay mix .
  • KPIs stayed healthy: ARPU rose ~12% YoY to ~$878, NRR was ~115%, and active locations reached ~86k; full-year GPV more than doubled to ~$2.8B, driven by Olo Pay momentum .
  • 2025 outlook initiated: Q1 revenue $77.2–$77.7M and NGOI $8.7–$9.0M; FY25 revenue $333–$336M and NGOI $45.5–$47.0M; management expects ~250 bps gross margin compression as payments scale, Olo Pay revenue of ~ $110M, and ~5k net new locations in 2025 .
  • Strategic catalyst: FreedomPay partnership positions card-present Olo Pay to be generally available by mid-2025, broadening TAM and accelerating data capture across on-premise transactions; management called it a “game-changer” for Olo Pay .
  • Consensus estimates were unavailable at the time of this report due to an S&P Global rate-limit error; we cannot present vs-consensus comparisons for Q4 (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • Revenue and profitability outperformance: Q4 revenue of $76.1M and non-GAAP operating income of $11.5M exceeded the company’s Q4 guidance ranges issued in November ($72.5–$73.0M revenue; $8.7–$9.0M NGOI) .
  • Payments scaling: GPV reached ~$2.8B for 2024 (vs. >$1B in 2023), with management highlighting card-present pilots and a new FreedomPay partnership to expand reach into on-premise payments and guest data .
  • Robust customer metrics: ARPU (~$878) rose ~12% YoY; NRR ~115%; active locations ~86k, adding ~1k sequentially and ~6k in 2024 . Management tone: “We are confident in executing further in 2025,” and called the FreedomPay partnership a “game-changer” for Olo Pay .

What Went Wrong

  • Gross margin pressure: Total non-GAAP gross margin fell to 59% in Q4 (65% in prior-year Q4), reflecting a higher Olo Pay mix (payments carry lower gross margin than software) .
  • GAAP results still negative: Despite better operating leverage, GAAP operating loss was $(4.4)M and GAAP net loss was $(0.6)M in Q4 .
  • Outlook implies further margin compression: For FY25, management expects gross margins to compress by ~250 bps YoY as Olo Pay scales; gross profit growth to reaccelerate primarily in H2’25, making H1 comps tougher .

Financial Results

Headline P&L (GAAP & non-GAAP)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($M)$70.5 $71.9 $76.1
Platform Revenue ($M)$69.6 $71.0 $75.2
Professional Services & Other ($M)$0.9 $0.9 $0.9
Gross Profit (GAAP, $M)$39.9 $39.0 $40.3
Gross Margin (GAAP, %)57% 54% 53%
Gross Profit (non-GAAP, $M)$44.3 $43.6 $45.2
Gross Margin (non-GAAP, %)63% 61% 59%
Operating Income (non-GAAP, $M)$7.6 $8.2 $11.5
Operating Margin (non-GAAP, %)11% 11% 15%
Net Income (non-GAAP, $M)$9.2 $10.4 $11.3
EPS (non-GAAP, $)$0.05 $0.06 $0.06
Net Income (GAAP, $M)$5.7 $(3.6) $(0.6)
EPS (GAAP, $)$0.03 $(0.02) $(0.00)

Revenue Mix (Segments)

Revenue Component ($M)Q2 2024Q3 2024Q4 2024
Platform$69.6 $71.0 $75.2
Professional Services & Other$0.9 $0.9 $0.9
Total$70.5 $71.9 $76.1

KPIs

KPIQ2 2024Q3 2024Q4 2024
ARPU ($)~$852 ~$850 ~$878
Active Locations (#)~82,000 ~85,000 ~86,000
NRR (%)≥120% ≥120% ~115%

Notes: Payment volumes and data scale-up supported by ~$29B GMV and ~$2.8B GPV for 2024, underscoring a growing payments contribution to revenue and margins .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q1 2025—$77.2–$77.7 New
Non-GAAP Operating Income ($M)Q1 2025—$8.7–$9.0 New
Revenue ($M)FY 2025—$333–$336 New
Non-GAAP Operating Income ($M)FY 2025—$45.5–$47.0 New
Olo Pay Revenue ($M)FY 2025—~$110 New
Gross MarginFY 2025—Compress ~250 bps vs FY24 Lower
Net New Locations (#)FY 2025—~5,000 Maintained vs recent trends
OpEx GrowthFY 2025—Mid-single-digit % YoY New
Rule of 40 (Gross Profit-based)FY 2025—Meet or exceed in Q4 2025 New
Revenue ($M)Q4 2024 (Actual vs Nov Guide)$72.5–$73.0 $76.1 Beat vs guide
Non-GAAP Operating Income ($M)Q4 2024 (Actual vs Nov Guide)$8.7–$9.0 $11.5 Beat vs guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Olo Pay card-present rampQ2: On track for H2’24 seeding; Honeygrow case showed 6x gross profit per location when full-stack payments deployed . Q3: Five pilots planned on Qu & NCR Voyix POS; building pipeline .FreedomPay gateway partnership to broadly enable card-present; GA by mid-2025; labeled a “game-changer”; sales enabled in Q1 .Accelerating distribution, broader TAM, clearer monetization path.
Catering+ adoptionQ2: Strong early traction; 14 deployments; high-margin software dollars . Q3: Continued expansion, ezCater integration; multi-brand wins .Additional enterprise and emerging wins; expected to help reaccelerate gross profit as deployments go live in 2025; software-like margins .Expanding, solid ARPU contributor with high margins.
AI/personalizationQ2: Five Guys GDP/marketing impact (4.5M profiles; $2M rev uplift) . Q3: Borderless scaled to >10M accounts .Winter release with AI-powered menu recommendations; continued AI across suites (Order Ready AI, fraud/authorization in Pay, 1:1 messaging in Engage) .Steadily deepening across product suite; central to guest data flywheel.
Macro/digital orderingQ2: Digital at ~18% of industry transactions with absolute growth . Q3: Margin outlook reflecting mix shift to Pay .2025 assumes similar macro to 2024; continued digital growth; gross margins compress as Pay scales, but gross profit growth to reaccelerate H2’25 .Stable demand drivers with mix shift dynamics.
Leadership/GTMSQ3: CRO departure announced; CTO appointment; cost actions .New CTO Jason Ordway; CRO search ongoing; CEO directly engaged with sales leadership .Focus on bookings and commercialization synergy under COO; stable execution.

Management Commentary

  • Strategy and 2025 focus: “Our top priorities for 2025: scaling Catering+, ramping Olo Pay Card-Present and increasing our base of full flywheel customers.”
  • Payments distribution: “We think our FreedomPay partnership is a game-changer for Olo Pay… general availability… by midyear, and we've already enabled the sales team to take this new offering to market in Q1.”
  • Data moat: “Regardless of how a brand chooses to work with Olo Pay, we can match their full stack payment data and our wealth of digital ordering data… to build a 360-degree view of their guests and help… drive profitable traffic.”
  • Profit model: “We are focused on managing the business for Rule of 40 performance based on gross profit… we anticipate the business will meet or exceed [it] in Q4 2025.”
  • AI deployment: “We released… AI-powered menu item recommendations… We’re using AI extensively throughout Olo Pay… and Engage… to communicate… in a personalized manner.”

Q&A Highlights

  • FreedomPay rollout and timing: Card-present via FreedomPay to be generally available by mid-2025; sales motion began in Q1; expands addressable ~$130B card-present GPV, lifting overall GPV opportunity to >$160B .
  • Payments economics: Card-present expected to improve blended Pay margins over time (better on-premise card mix and scale benefits); 2025 Pay revenue outlook ~ $110M .
  • Growth mix and locations: Net new locations guidance ~5k in 2025 reflects prudent planning rather than pipeline constraint; 2024 delivered ~6k net adds .
  • Gross profit trajectory: Expect trough growth in H1’25 with reacceleration in H2; company flagged Q2 as the likely “trough” for YoY gross profit growth before improving .
  • Catering+ monetization: Currently an ARPU lever with software-like margins; many 2024 wins come online in 2025 and can cross-sell into Dispatch, Rails, Pay, and Engage .

Estimates Context

  • S&P Global/Capital IQ consensus data was unavailable due to a rate-limit error at the time of retrieval, so we cannot provide vs-consensus revenue or EPS comparisons for Q4 2024, Q3 2024, or Q2 2024 at this time. We default to company-reported results and guidance throughout this report (values and statements cited from company filings and transcripts).

Key Takeaways for Investors

  • Payments-led flywheel is scaling: Olo Pay GPV more than doubled to ~$2.8B in 2024, with 2025 revenue guided to ~ $110M; FreedomPay adds broad distribution for card-present, deepening Olo’s data advantage and monetization potential .
  • Margin math: Payments mix compresses gross margins (to ~59% non-GAAP in Q4) but management expects gross profit growth to reaccelerate in H2’25 as scale improves Pay economics and high-margin software (Catering+, Engage) contributes more .
  • Strong unit economics momentum: ARPU up ~12% YoY in Q4 to ~$878; NRR ~115%; modules per location rising, with cross-sell opportunity across 16 modules, underpinning medium-term growth .
  • Execution discipline: Q4 beat prior guidance on revenue and NGOI; cost actions in late 2024 support leverage while investing in growth priorities (Beyond4, product, GTM) .
  • 2025 setup: New guidance (Q1 and FY25) frames a year of top-line growth, gross margin compression, and improving gross profit growth, with H2 stronger than H1; Rule-of-40 (gross profit basis) targeted by Q4 .
  • Stock catalysts: Visible milestones include FreedomPay GA mid-2025, card-present deployments at scale, Catering+ go-lives driving ARPU and software margins, and progress toward Rule-of-40 by Q4 2025 .
  • Watchlist: Track Pay attach rates to large brands, card-present ramp pace, gross margin trajectory vs. Pay scale, and cross-sell uptake of Engage and Catering+ in 2025 .