Olo Inc. Reports Remarkable $26 Billion in Gross Merchandise Volume for 2023
2024-02-23
Olo Inc., a prominent provider of digital ordering and delivery solutions for the restaurant industry, recently conducted its fourth quarter and full year 2023 earnings conference call. The call was headlined by key speakers, including Noah Glass, Olo's founder and CEO, and Peter Benevides, Olo's CFO.
During the call, various crucial business topics were addressed. One notable announcement was the remarkable performance of Olo's platform in 2023. The platform facilitated over $26 billion in gross merchandise volume, catering to approximately 80,000 locations and 700 brands. This growth was primarily fueled by the substantial increase in gross payment volume processed through Olo Pay, which saw nearly a quadruple rise from 2022 to 2023.
In 2023, Olo also witnessed robust financial results, boasting a 23% year-over-year revenue growth and an expansion of close to 300 basis points in non-GAAP operating margin. In the fourth quarter alone, Olo achieved a 27% revenue increase, elevated the non-GAAP operating margin to 11%, and surpassed high expectations.
A significant development highlighted during the call was the partnership between Olo and Waffle House. This collaboration marked Waffle House's initial brandwide digital investment, selecting Olo for its exceptional online ordering experience and the strategic and financial value offered by Olo's reliable platform.
The call emphasized Olo's capability to support large enterprises, with key differentiators being modularity and open architecture. Brands have the flexibility to purchase the full suite or specific modules to complement existing technology, along with access to over 300 partner integrations. Successful partnerships with large brands were cited, such as Olo's collaboration with a major casual dining company to address their payment needs and Five Guys expanding their relationship with Olo by leveraging the Engage suite's guest data platform and marketing modules.
The Winter release of Olo's platform introduced the expansion of Borderless availability, offering a passwordless and convenient sign-in and seamless checkout experience for Olo restaurant brands. This feature has demonstrated an increase in guest account sign-ins, expected order frequency, and checkout conversion rates.
The growing significance of digital in the restaurant industry was underscored, with NPD data indicating that digital accounted for 16% of US restaurant orders, up 1 point from 2022. Olo aims to drive sales across all three suites and brand categories by educating top brands on the benefits of the modular platform, leading expansion within the installed base in enterprise, and focusing on fast-growing emerging enterprise brands.
Olo's future plans entail investing in tooling to enhance efficiency, adding functionality to the catering module, launching full card present functionality, and further enhancing Engage with enterprise-grade features. The company anticipates revenue growth to be driven by ARPU expansion as Olo Pay scales and by selling multiple modules in the Order and Engage suites.
The financial outlook for Olo appears positive, with Olo Pay revenue anticipated to double in 2024 and around 5,000 net new locations expected to be added to the platform. The updated Wingstop relationship is projected to have a significant impact on revenue contribution, and Olo intends to manage operating expenses while funding growth initiatives.
In conclusion, the Olo Inc. fourth quarter and full year 2023 earnings conference call delved into critical business topics such as financial performance, key partnerships, platform enhancements, and future growth plans. The company's strong results and strategic initiatives position it favorably for sustained success in the digital ordering and delivery realm.