Olo, Inc. ((OLO)) has held its Q4 earnings call. Read on for the main highlights of the call.
Olo, Inc. has reported a robust performance in its latest earnings call, showcasing significant growth and expansion throughout 2024. The company highlighted impressive increases in gross merchandise and payment volumes, alongside successful strategic partnerships and high customer retention rates. While there are concerns about expected margin compression due to the scaling of Olo Pay, the overall sentiment remains positive, with achievements outweighing the challenges.
Record Gross Merchandise Volume
Olo powered an impressive $29 billion in gross merchandise volume in 2024, positioning itself as the second-largest brand in North America by sales volume. This milestone underscores the company’s expanding influence and market presence.
Doubling Gross Payment Volume
In a remarkable achievement, Olo more than doubled its gross payment volume, reaching $2.8 billion in 2024, up from $1 billion in 2023. This growth highlights the company’s successful efforts in scaling its payment solutions.
Expansion of Borderless Accounts
Olo significantly increased its borderless accounts from 2 million to nearly 15 million year-over-year, demonstrating the company’s ability to expand its user base and enhance customer engagement.
Strong Financial Performance
Olo reported a Q4 revenue of $76.1 million, marking a 21% year-over-year increase and exceeding its revenue and non-GAAP operating income guidance ranges. This strong financial performance reflects the company’s effective growth strategies.
High Customer Retention
With a net revenue retention rate of 115% and a gross revenue retention rate above 98%, Olo has maintained high customer retention, further evidenced by a 12% year-over-year growth in average revenue per user (ARPU).
Strategic Partnerships
The company announced a partnership with FreedomPay to enhance Olo Pay’s card-present functionality, which is expected to accelerate the time to market and strengthen its payment offerings.
Successful Product Innovations
Olo released 13 product enhancements, including AI-powered menu recommendations and deeper analytics in Engage, showcasing its commitment to innovation and improving customer experience.
Operating Margin Compression
Despite the positive growth, Olo anticipates a compression in gross margins by approximately 250 basis points in 2025 due to the scaling of Olo Pay revenue, which remains a concern for the company.
Forward-Looking Guidance
Looking ahead, Olo has provided optimistic guidance for 2025, expecting revenue between $333 million and $336 million, with non-GAAP operating income ranging from $45.5 million to $47 million. The company aims to accelerate gross profit growth and drive operating leverage, supported by the integration of Olo Pay card-present functionality through its partnership with FreedomPay, anticipated to be available by mid-year 2025.
In conclusion, Olo, Inc. has delivered a strong performance in 2024, with significant achievements in merchandise and payment volumes, customer retention, and strategic partnerships. While there are concerns about margin compression, the company’s forward-looking guidance reflects confidence in continued growth and innovation. Investors and market watchers will be keen to see how Olo navigates the challenges and opportunities in the coming year.