Olo, Inc. ((OLO)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for Olo, Inc. showcased a predominantly positive sentiment, highlighting significant revenue growth, new customer acquisitions, and robust financial performance. Despite facing challenges such as negative free cash flow and macroeconomic uncertainties, the company remains optimistic about its strategic initiatives and market position.
Record Revenue Growth
Olo, Inc. reported a remarkable total revenue of $80.7 million for the first quarter of 2025, marking a 21% increase year-over-year. Platform revenue also saw a substantial rise, increasing by 20% compared to the previous year. This growth underscores the company’s ability to enhance its financial performance consistently.
Expansion in Active Locations and ARPU Growth
The company ended the first quarter with approximately 88,000 active locations, adding around 2,000 net new locations. Additionally, the average revenue per user (ARPU) grew by 12% year-over-year, indicating increased customer engagement and higher order volumes.
Successful Customer Wins and Deployments
Olo achieved significant milestones with new customer wins, including a Catering Plus pilot with Chipotle, a top 25 brand. The company also secured a full deployment deal with an existing publicly-traded enterprise customer for its Olo Pay card presence, showcasing its expanding market reach.
Strong Financial Performance
The company’s non-GAAP operating income soared to $11.5 million, a substantial increase from $5.6 million a year ago. The operating margin improved by approximately 580 basis points year-over-year, reflecting Olo’s strong financial management and operational efficiency.
Positive Market Position
Olo’s recognition as Texas Roadhouse’s 2024 Vendor of the Year highlights its strong customer satisfaction and solid market position. This accolade underscores the company’s reputation for delivering exceptional service and value to its clients.
Negative Free Cash Flow
Despite the positive financial indicators, Olo experienced a negative free cash flow of $1.9 million in Q1 2025, compared to $2.8 million a year ago. This was primarily due to changes in partner payment terms, which the company is addressing to improve cash flow management.
Impact of Macroeconomic Uncertainty
The company acknowledged the challenges posed by rising input costs and macroeconomic uncertainty. However, Olo believes these factors could potentially benefit limited service restaurants, driving a trade-down effect that may favor its business model.
Forward-Looking Guidance
Looking ahead, Olo exceeded the high end of its revenue and non-GAAP operating income guidance ranges for the quarter. The company expects full-year 2025 revenue to be between $338.5 million and $340 million, with non-GAAP operating income ranging from $48.6 million to $49.8 million. Olo remains focused on expanding its Olo Pay card presence, scaling Catering Plus, and increasing the number of Olo flywheel brands while maintaining strong financial discipline.
In summary, the earnings call for Olo, Inc. reflected a positive outlook with impressive revenue growth and strategic customer wins. Despite challenges such as negative free cash flow and macroeconomic uncertainties, the company is well-positioned to continue its growth trajectory, supported by strong financial performance and a robust market position.