Financial News

Olo Announces Fourth-Quarter and Full-Year 2023 Financial Results

Full-Year 2023 Revenue of $228.3 million, up 23% Year-over-Year

Fourth-Quarter Revenue of $63.0 million, up 27% Year-over-Year

Olo Inc. (NYSE:OLO), a leading restaurant technology provider, today announced financial results for the fourth-quarter and full-year ended December 31, 2023.

“We finished 2023 on a strong note by surpassing the high-end of both fourth-quarter revenue and non-GAAP operating income guidance, alongside notable enterprise deployments and continued product and platform innovation,” said Noah Glass, Olo’s Founder and CEO. “In 2024, we’re focused on delivering balanced growth with increased profitability, while making strategic investments in product development, go-to-market, and data-driven initiatives to help brands improve hospitality through technology. With our scale, reliability, and modularity, Olo is uniquely positioned to enable restaurants to drive sales, do more with less, and make every guest feel like a regular.”

Fourth-Quarter Financial and Other Highlights

  • Total revenue increased 27% year-over-year to $63.0 million.
  • Total platform revenue increased 27% year-over-year to $61.9 million.
  • Gross profit increased 6% (1) year-over-year to $36.4 million, and was 58% of total revenue.
  • Non-GAAP gross profit increased 10% (1) year-over-year to $40.8 million, and was 65% of total revenue.
  • Operating loss was $20.5 million, or (33)% of total revenue, compared to operating loss of $10.9 million, or (22)% of total revenue, a year ago.
  • Non-GAAP operating income was $6.8 million, or 11% of total revenue compared to $3.1 million, or 6% of total revenue, a year ago.
  • Net loss was $15.7 million or $(0.10) per diluted share, compared to net loss of $8.2 million or $(0.05) per diluted share a year ago.
  • Non-GAAP net income was $8.5 million or $0.05 per diluted share, compared to non-GAAP net income of $4.4 million or $0.02 per diluted share a year ago.
  • Cash, cash equivalents, and short- and long-term investments totaled $388.3 million as of December 31, 2023.
  • Total shares repurchased were approximately 2.8 million for approximately $14.9 million, bringing total repurchases under the program to 11.5 million shares for approximately $77.9 million and leaving approximately $22.1 million remaining on the authorization.
  • Average revenue per unit (ARPU) increased 38% year-over-year, and increased 6% sequentially, to approximately $787.
  • Dollar-based net revenue retention (NRR) was approximately 120%.
  • Ending active locations were approximately 80,000, up approximately 3% from the quarter ended September 30, 2023.
  • Gross merchandise volume (GMV) was more than $26 billion during the year ended December 31, 2023, and gross payment volume (GPV) reached $1 billion during the year ended December 31, 2023.

Fourth-Quarter and Recent Business Highlights

  • Waffle House selected Olo to power digital ordering and payment across all of its locations nationwide. Marking the iconic restaurant brand’s first significant investment in digital, Waffle House will leverage Order, Pay—including Borderless accounts—and Expo to streamline ordering and simplify payments for both guests and employees at scale.
  • A large casual dining company expanded its Olo relationship by launching Olo Pay across all of their concepts. This is the sixth consecutive quarter where an existing Olo enterprise customer expanded into the Company’s payment suite.
  • Five Guys, the Company’s first enterprise customer for online ordering in 2009, expanded its Olo relationship by deploying the Engage suite’s Guest Data Platform and Marketing modules to access guest data at scale, increase guest lifetime value, and measure campaign effectiveness to drive sales.
  • Olo continued to drive strong adoption in the emerging enterprise segment, which the Company defines as brands with five to 99 locations. Olo deployed multiple modules with brands like Barberitos, Carrot Express, Smalls Sliders, and Texas de Brazil.
  • Olo announced product enhancements to better serve its customers, many of which were showcased in Olo’s 2023 Winter Release event, which can be viewed at olo.com/quarterly-release. Olo announced the expansion of Borderless, Olo’s seamless guest account log-in and checkout functionality, to all customers on Serve, enabling more restaurants to meet the online ordering expectations of today’s digital guests. Additional product enhancements were released this quarter across all three product suites, Order, Pay, and Engage, to help brands unlock new revenue streams, encourage guest engagement, and simplify the ordering experience.

Financial Outlook

As of February 21, 2024, Olo is issuing the following outlook for the first-quarter of 2024 and fiscal-year 2024:

For the first-quarter of 2024, Olo expects to report:

  • Revenue in the range of $64.0 million to $64.5 million; and
  • Non-GAAP operating income in the range of $5.1 million to $5.5 million.

For the fiscal-year 2024, Olo expects to report:

  • Revenue in the range of $269.0 million to $272.0 million; and
  • Non-GAAP operating income in the range of $22.0 million to $24.0 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. Olo assumes 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, February 21, 2024 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 | Hospitality at Scale™

Olo (NYSE: OLO) is a leading restaurant technology provider with ordering, payment, and guest engagement solutions that help brands increase orders, streamline operations, and improve the guest experience. Each day, Olo processes millions of orders on its open SaaS platform, gathering the right data from each touchpoint into a single source—so restaurants can better understand and better serve every guest on every channel, every time. Approximately 700 restaurant brands trust Olo and its network of more than 300 integration partners to innovate on behalf of the restaurant community, accelerating technology’s positive impact and creating a world where every restaurant guest feels 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: 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 our 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 include the tax impact of the non-GAAP adjustments and conforms with the new 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 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 of our modules in, or at the end of, a quarterly period (depending on the module). Given this definition, 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, and while we aim to deploy all of a customer’s locations, not all locations may ultimately deploy.

Gross merchandise volume (GMV): We define GMV as the gross value of orders processed through our platform.

Gross payment volume (GPV): We define GPV as the gross volume of payments processed through Olo Pay.

Our management uses GMV and GPV metrics to assess demand for our products. We also believe GMV and GPV provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.

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 first-quarter of 2024 and the full-year 2024, 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, our expectations regarding the growth of active locations, revenue expectations for our Order, Pay, and Engage suites, our business strategy, and our expectations regarding other financial and operational metrics and 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: the effects of public health crises, macroeconomic conditions, including inflation, changes in discretionary spending, fluctuating interest rates, and overall market uncertainty; our ability to acquire new customers, have existing customers (including our emerging enterprise 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 continued growth of Olo Pay; 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 Annual Report on Form 10-K for the year ended December 31, 2023 that will be filed following this earnings release, 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

December 31,

2023

 

As of

December 31,

2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

278,218

 

 

$

350,073

 

Short-term investments

 

84,331

 

 

 

98,699

 

Accounts receivable, net

 

70,264

 

 

 

48,128

 

Contract assets

 

412

 

 

 

336

 

Deferred contract costs

 

4,743

 

 

 

2,851

 

Prepaid expenses and other current assets

 

12,769

 

 

 

11,687

 

Total current assets

 

450,737

 

 

 

511,774

 

Property and equipment, net

 

22,055

 

 

 

11,700

 

Intangible assets, net

 

17,738

 

 

 

21,698

 

Goodwill

 

207,781

 

 

 

207,781

 

Contract assets, noncurrent

 

352

 

 

 

241

 

Deferred contract costs, noncurrent

 

5,806

 

 

 

4,171

 

Operating lease right-of-use assets

 

12,529

 

 

 

15,581

 

Long-term investments

 

25,748

 

 

 

2,430

 

Other assets, noncurrent

 

73

 

 

 

186

 

Total assets

$

742,819

 

 

$

775,562

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

4,582

 

 

$

2,259

 

Accrued expenses and other current liabilities

 

68,240

 

 

 

52,411

 

Unearned revenue

 

1,533

 

 

 

2,527

 

Operating lease liabilities, current

 

2,859

 

 

 

3,220

 

Total current liabilities

 

77,214

 

 

 

60,417

 

Unearned revenue, noncurrent

 

57

 

 

 

661

 

Operating lease liabilities, noncurrent

 

13,968

 

 

 

16,827

 

Other liabilities, noncurrent

 

109

 

 

 

41

 

Total liabilities

 

91,348

 

 

 

77,946

 

Stockholders’ equity:

 

 

 

Class A common stock, $0.001 par value; 1,700,000,000 shares authorized as of December 31, 2023 and 2022; 108,469,679 and 105,053,030 shares issued and outstanding as of December 31, 2023 and 2022, respectively. Class B common stock, $0.001 par value; 185,000,000 shares authorized as of December 31, 2023 and 2022, respectively; 54,891,834 and 57,391,687 shares issued and outstanding as of December 31, 2023 and 2022, respectively.

 

163

 

 

 

162

 

Preferred stock, $0.001 par value; 20,000,000 shares authorized at December 31, 2023 and 2022, respectively.

 

 

 

 

 

Additional paid-in capital

 

867,152

 

 

 

855,249

 

Accumulated deficit

 

(215,829

)

 

 

(157,542

)

Accumulated other comprehensive loss

 

(15

)

 

 

(253

)

Total stockholders’ equity

 

651,471

 

 

 

697,616

 

Total liabilities and stockholders’ equity

$

742,819

 

 

$

775,562

 

OLO INC.

Condensed Consolidated Statement of Operations (Unaudited)

(in thousands, except share and per share amounts)

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Revenue:

 

 

 

 

 

 

 

Platform

$

61,944

 

 

$

48,932

 

 

$

225,179

 

 

$

181,293

 

Professional services and other

 

1,060

 

 

 

849

 

 

 

3,110

 

 

 

4,111

 

Total revenue

 

63,004

 

 

 

49,781

 

 

 

228,289

 

 

 

185,404

 

Cost of revenue:

 

 

 

 

 

 

 

Platform

 

25,658

 

 

 

14,293

 

 

 

85,195

 

 

 

52,634

 

Professional services and other

 

908

 

 

 

1,192

 

 

 

4,128

 

 

 

5,832

 

Total cost of revenue

 

26,566

 

 

 

15,485

 

 

 

89,323

 

 

 

58,466

 

Gross profit

 

36,438

 

 

 

34,296

 

 

 

138,966

 

 

 

126,938

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

17,108

 

 

 

20,080

 

 

 

73,914

 

 

 

74,203

 

General and administrative

 

28,112

 

 

 

16,309

 

 

 

85,098

 

 

 

70,356

 

Sales and marketing

 

11,752

 

 

 

8,819

 

 

 

48,190

 

 

 

34,043

 

Restructuring charges

 

 

 

 

 

 

 

6,848

 

 

 

 

Total operating expenses

 

56,972

 

 

 

45,208

 

 

 

214,050

 

 

 

178,602

 

Loss from operations

 

(20,534

)

 

 

(10,912

)

 

 

(75,084

)

 

 

(51,664

)

Other income (expenses), net:

 

 

 

 

 

 

 

Interest income

 

5,030

 

 

 

2,482

 

 

 

17,237

 

 

 

4,592

 

Interest expense

 

(43

)

 

 

(69

)

 

 

(208

)

 

 

(185

)

Other (expense) income, net

 

(2

)

 

 

1

 

 

 

(3

)

 

 

7

 

Total other income (expenses), net

 

4,985

 

 

 

2,414

 

 

 

17,026

 

 

 

4,414

 

Loss before income taxes

 

(15,549

)

 

 

(8,498

)

 

 

(58,058

)

 

 

(47,250

)

Provision (benefit) for income taxes

 

197

 

 

 

(272

)

 

 

229

 

 

 

(1,282

)

Net loss

$

(15,746

)

 

$

(8,226

)

 

$

(58,287

)

 

$

(45,968

)

Net loss per share attributable to Class A and Class B common stockholders:

 

 

 

 

 

 

 

Basic

$

(0.10

)

 

$

(0.05

)

 

$

(0.36

)

 

$

(0.28

)

Diluted

$

(0.10

)

 

$

(0.05

)

 

$

(0.36

)

 

$

(0.28

)

Weighted-average Class A and Class B common shares outstanding:

 

 

 

 

 

 

 

Basic

 

163,942,779

 

 

 

163,207,461

 

 

 

162,993,686

 

 

 

161,303,397

 

Diluted

 

163,942,779

 

 

 

163,207,461

 

 

 

162,993,686

 

 

 

161,303,397

 

OLO INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

 

 

 

Year Ended

December 31, 2023

 

Year Ended

December 31, 2022

Operating activities

 

 

 

Net loss

$

(58,287

)

 

$

(45,968

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

Depreciation and amortization

 

10,289

 

 

 

6,020

 

Stock-based compensation

 

52,862

 

 

 

46,024

 

Charitable donation of Class A common stock

 

1,136

 

 

 

1,406

 

Provision for expected credit losses

 

2,874

 

 

 

283

 

Change in fair value of warrants

 

 

 

 

 

Non-cash lease expense

 

2,726

 

 

 

2,388

 

Deferred income tax benefit

 

 

 

 

(1,519

)

Loss on disposal of assets

 

38

 

 

 

 

Non-cash impairment charges

 

 

 

 

2,806

 

Other non-cash operating activities, net

 

(2,328

)

 

 

(1,135

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(25,009

)

 

 

(5,642

)

Contract assets

 

(187

)

 

 

377

 

Prepaid expenses and other current and noncurrent assets

 

(969

)

 

 

(5,191

)

Deferred contract costs

 

(3,527

)

 

 

(839

)

Accounts payable

 

2,324

 

 

 

(130

)

Accrued expenses and other current liabilities

 

15,891

 

 

 

7,308

 

Operating lease liabilities

 

(2,905

)

 

 

(2,535

)

Unearned revenue

 

(1,597

)

 

 

(1,243

)

Other liabilities, noncurrent

 

101

 

 

 

(66

)

Net cash (used in) provided by operating activities

 

(6,568

)

 

 

2,344

 

Investing activities

 

 

 

Purchases of property and equipment

 

(93

)

 

 

(517

)

Capitalized internal-use software

 

(13,011

)

 

 

(8,480

)

Acquisitions, net of cash acquired

 

 

 

 

(49,241

)

Purchases of investments

 

(130,428

)

 

 

(151,723

)

Sales and maturities of investments

 

124,042

 

 

 

51,478

 

Net cash used in investing activities

 

(19,490

)

 

 

(158,483

)

Financing activities

 

 

 

Cash received for employee payroll tax withholdings

 

15,528

 

 

 

9,094

 

Cash paid for employee payroll tax withholdings

 

(15,527

)

 

 

(9,094

)

Payment of deferred offering costs

 

 

 

 

(423

)

Proceeds from exercise of stock options and purchases under the employee stock purchase plan

 

12,282

 

 

 

12,244

 

Repurchase of common stock

 

(58,080

)

 

 

(20,054

)

Net cash used in financing activities

 

(45,797

)

 

 

(8,233

)

Net decrease in cash and cash equivalents

 

(71,855

)

 

 

(164,372

)

Cash and cash equivalents, beginning of year

 

350,073

 

 

 

514,445

 

Cash and cash equivalents, end of year

$

278,218

 

 

$

350,073

 

OLO INC.

Reconciliation of GAAP to Non-GAAP Results (Unaudited)

(in thousands, except for percentages and share and per share amounts)

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Gross profit and gross margin reconciliation (1) :

 

 

 

 

 

 

 

Platform gross profit, GAAP

$

36,286

 

 

$

34,639

 

 

$

139,984

 

 

$

128,659

 

Plus: Stock-based compensation expense and related payroll tax expense

 

1,712

 

 

 

1,197

 

 

 

7,079

 

 

 

5,583

 

Plus: Capitalized internal-use software and intangible amortization

 

2,532

 

 

 

1,226

 

 

 

8,351

 

 

 

3,954

 

Plus: Certain severance costs

 

 

 

 

160

 

 

 

 

 

 

177

 

Platform gross profit, non-GAAP

 

40,530

 

 

 

37,222

 

 

 

155,414

 

 

 

138,373

 

Services gross profit, GAAP

 

152

 

 

 

(343

)

 

 

(1,018

)

 

 

(1,721

)

Plus: Stock-based compensation expense and related payroll tax expense

 

148

 

 

 

67

 

 

 

699

 

 

 

685

 

Plus: Certain severance costs

 

 

 

 

140

 

 

 

 

 

 

176

 

Services gross profit, non-GAAP

 

300

 

 

 

(136

)

 

 

(319

)

 

 

(860

)

Total gross profit, GAAP

 

36,438

 

 

 

34,296

 

 

 

138,966

 

 

 

126,938

 

Total gross profit, non-GAAP

 

40,830

 

 

 

37,086

 

 

 

155,095

 

 

 

137,513

 

Platform gross margin, GAAP

 

59

%

 

 

71

%

 

 

62

%

 

 

71

%

Platform gross margin, non-GAAP

 

65

%

 

 

76

%

 

 

69

%

 

 

76

%

Services gross margin, GAAP

 

14

%

 

 

(40

)%

 

 

(33

)%

 

 

(42

)%

Services gross margin, non-GAAP

 

28

%

 

 

(16

)%

 

 

(10

)%

 

 

(21

)%

Total gross margin, GAAP

 

58

%

 

 

69

%

 

 

61

%

 

 

68

%

Total gross margin, non-GAAP

 

65

%

 

 

74

%

 

 

68

%

 

 

74

%

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Sales and marketing reconciliation (1) :

 

 

 

 

 

 

 

Sales and marketing, GAAP

$

11,752

 

 

$

8,819

 

 

$

48,190

 

 

$

34,043

 

Less: Stock-based compensation expense and related payroll tax expense

 

1,675

 

 

 

1,235

 

 

 

7,981

 

 

 

5,625

 

Less: Intangible amortization

 

341

 

 

 

341

 

 

 

1,365

 

 

 

1,338

 

Less: Certain severance costs

 

 

 

 

204

 

 

 

121

 

 

 

316

 

Less: Transaction costs

 

 

 

 

 

 

 

 

 

 

79

 

Sales and marketing, non-GAAP

 

9,736

 

 

 

7,039

 

 

 

38,723

 

 

 

26,685

 

Sales and marketing as % total revenue, GAAP

 

19

%

 

 

18

%

 

 

21

%

 

 

18

%

Sales and marketing as % total revenue, non-GAAP

 

15

%

 

 

14

%

 

 

17

%

 

 

14

%

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Research and development reconciliation (1) :

 

 

 

 

 

 

 

Research and development, GAAP

$

17,108

 

 

$

20,080

 

 

$

73,914

 

 

$

74,203

 

Less: Stock-based compensation expense and related payroll tax expense

 

3,378

 

 

 

3,704

 

 

 

15,648

 

 

 

14,318

 

Less: Non-cash capitalized software impairment

 

 

 

 

 

 

 

 

 

 

475

 

Less: Certain severance costs

 

 

 

 

260

 

 

 

 

 

 

332

 

Research and development, non-GAAP

 

13,730

 

 

 

16,116

 

 

 

58,266

 

 

 

59,078

 

Research and development as % total revenue, GAAP

 

27

%

 

 

40

%

 

 

32

%

 

 

40

%

Research and development as % total revenue, non-GAAP

 

22

%

 

 

32

%

 

 

26

%

 

 

32

%

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

General and administrative reconciliation (1) :

 

 

 

 

 

 

 

General and administrative, GAAP

$

28,112

 

 

$

16,309

 

 

$

85,098

 

 

$

70,356

 

Less: Stock-based compensation expense and related payroll tax expense

 

4,749

 

 

 

4,838

 

 

 

21,259

 

 

 

20,654

 

Less: Charitable donation of Class A common stock

 

 

 

 

 

 

 

1,136

 

 

 

1,406

 

Less: Certain litigation-related expenses

 

12,787

 

 

 

 

 

 

21,590

 

 

 

 

Less: Costs and impairment charge associated with sublease of former corporate headquarters

 

 

 

 

 

 

 

 

 

 

3,272

 

Less: Loss on disposal of assets

 

 

 

 

 

 

 

38

 

 

 

 

Less: Intangible amortization

 

40

 

 

 

41

 

 

 

162

 

 

 

154

 

Less: Certain severance costs

 

 

 

 

417

 

 

 

709

 

 

 

1,358

 

Less: Transaction costs

 

 

 

 

133

 

 

 

358

 

 

 

1,521

 

General and administrative, non-GAAP

 

10,536

 

 

 

10,880

 

 

 

39,846

 

 

 

41,991

 

General and administrative as % total revenue, GAAP

 

45

%

 

 

33

%

 

 

37

%

 

 

38

%

General and administrative as % total revenue, non-GAAP

 

17

%

 

 

22

%

 

 

17

%

 

 

23

%

 

(1) 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.

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Operating loss reconciliation:

 

 

 

 

 

 

 

Operating loss, GAAP

$

(20,534

)

 

$

(10,912

)

 

$

(75,084

)

 

$

(51,664

)

Plus: Stock-based compensation expense and related payroll tax expense

 

11,662

 

 

 

11,041

 

 

 

52,666

 

 

 

46,865

 

Plus: Charitable donation of Class A common stock

 

 

 

 

 

 

 

1,136

 

 

 

1,406

 

Plus: Certain litigation-related expenses

 

12,787

 

 

 

 

 

 

21,590

 

 

 

 

Plus: Costs and impairment charge associated with sublease of former corporate headquarters

 

 

 

 

 

 

 

 

 

 

3,272

 

Plus: Loss on disposal of assets

 

 

 

 

 

 

 

38

 

 

 

 

Plus: Non-cash capitalized software impairment

 

 

 

 

 

 

 

 

 

 

475

 

Plus: Capitalized internal-use software and intangible amortization

 

2,913

 

 

 

1,608

 

 

 

9,878

 

 

 

5,446

 

Plus: Restructuring charges

 

 

 

 

 

 

 

6,848

 

 

 

 

Plus: Certain severance costs

 

 

 

 

1,181

 

 

 

830

 

 

 

2,359

 

Plus: Transaction costs

 

 

 

 

133

 

 

 

358

 

 

 

1,600

 

Operating income, non-GAAP

 

6,828

 

 

 

3,051

 

 

 

18,260

 

 

 

9,759

 

Operating margin, GAAP

 

(33

)%

 

 

(22

)%

 

 

(33

)%

 

 

(28

)%

Operating margin, non-GAAP

 

11

%

 

 

6

%

 

 

8

%

 

 

5

%

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Net loss reconciliation:

 

 

 

 

 

 

 

Net loss, GAAP

$

(15,746

)

 

$

(8,226

)

 

$

(58,287

)

 

$

(45,968

)

Plus: Stock-based compensation expense and related payroll tax expense

 

11,662

 

 

 

11,041

 

 

 

52,666

 

 

 

46,865

 

Plus: Charitable donation of Class A common stock

 

 

 

 

 

 

 

1,136

 

 

 

1,406

 

Plus: Certain litigation-related expenses

 

12,787

 

 

 

 

 

 

21,590

 

 

 

 

Plus: Costs and impairment charge associated with sublease of former corporate headquarters

 

 

 

 

 

 

 

 

 

 

3,272

 

Plus: Loss on disposal of assets

 

 

 

 

 

 

 

38

 

 

 

 

Plus: Non-cash capitalized software impairment

 

 

 

 

 

 

 

 

 

 

475

 

Plus: Capitalized internal-use software and intangible amortization

 

2,913

 

 

 

1,608

 

 

 

9,878

 

 

 

5,446

 

Plus: Restructuring charges

 

 

 

 

 

 

 

6,848

 

 

 

 

Plus: Certain severance costs

 

 

 

 

1,181

 

 

 

830

 

 

 

2,359

 

Plus: Transaction costs

 

 

 

 

133

 

 

 

358

 

 

 

1,600

 

Less: GAAP acquisition-related deferred income tax benefit (1)

 

 

 

 

(98

)

 

 

 

 

 

(1,519

)

Less: Tax impact of non-GAAP adjustments (2)

 

(3,159

)

 

 

(1,208

)

 

 

(9,275

)

 

 

(3,486

)

Net income, non-GAAP

 

8,457

 

 

 

4,431

 

 

 

25,782

 

 

 

10,450

 

Fully diluted net loss per share attributable to Class A and Class B common stockholders, GAAP

$

(0.10

)

 

$

(0.05

)

 

$

(0.36

)

 

$

(0.28

)

Fully diluted weighted average Class A and Class B common shares outstanding, GAAP

 

163,942,779

 

 

 

163,207,461

 

 

 

162,993,686

 

 

 

161,303,397

 

Fully diluted net income per share attributable to Class A and Class B common stockholders, non-GAAP

$

0.05

 

 

$

0.02

 

 

$

0.15

 

 

$

0.06

 

Fully diluted Class A and Class B common shares outstanding, non-GAAP

 

174,399,425

 

 

 

179,975,869

 

 

 

176,822,053

 

 

 

182,950,753

 

(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 26.93% and 26.27% for the years ended December 31, 2023 and 2022, respectively.

OLO INC.

Non-GAAP Free Cash Flow (Unaudited)

(in thousands)

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Net cash provided by (used in) operating activities

$

5,815

 

 

$

(54

)

 

$

(6,568

)

 

$

2,344

 

Purchase of property and equipment

 

(93

)

 

 

(63

)

 

 

(93

)

 

 

(517

)

Capitalization of internally developed software

 

(2,988

)

 

 

(1,483

)

 

 

(13,011

)

 

 

(8,480

)

Non-GAAP free cash flow

$

2,734

 

 

$

(1,600

)

 

$

(19,672

)

 

$

(6,653

)

 

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