Olo (OLO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 24% year-over-year to $71.9 million, with platform revenue at $71 million and ARPU up 15% to $850; active locations reached 85,000, up 3,000 sequentially.

• Olo Pay adoption and new product innovations, including card-present functionality and expanded POS partnerships, drove growth; Olo Pay revenue is projected to more than double year-over-year.

• Net loss narrowed to $3.6 million ($0.02 per share) from $11.8 million ($0.07 per share) a year ago; non-GAAP net income was $10.4 million ($0.06 per share).

• Gross margin declined to 54.3% from 59.8% due to higher transaction processing costs and increased amortization of capitalized software.

• Leadership changes included a new CTO and the planned departure of the Chief Revenue Officer; a 9% workforce reduction was completed in Q3 2024.

Financial highlights

• Gross profit for Q3 was $43.6 million (non-GAAP, 61% margin), up 12% year-over-year; GAAP gross profit was $39.0 million (54% margin), up 13%.

• Non-GAAP operating income was $8.2 million (11% margin), up from $5.7 million a year ago.

• Free cash flow for Q3 was $3.2 million, compared to negative $24.4 million a year ago.

• Cash, cash equivalents, and investments totaled $391.9 million as of September 30, 2024.

• Dollar-based net revenue retention exceeded 120% for the fourth consecutive quarter.

Outlook and guidance

• Q4 2024 revenue expected between $72.5 million and $73 million; non-GAAP operating income between $8.7 million and $9 million.

• Full-year 2024 revenue guidance raised to $281.4–$281.9 million; non-GAAP operating income to $30.2–$30.5 million.

• Olo Pay revenue for 2024 expected in the high $60 million range, nearly all from card-not-present transactions.

• Full-year gross margin expected in the low 60% range, with Q4 margin flat to Q3.

• Gross profit growth expected to re-accelerate in 2025.