Olo (OLO) 2024 RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference summary

Industry trends and digital transformation

• Digital penetration in the restaurant industry has grown from 8% pre-COVID to 18% currently, surpassing pandemic highs and indicating a lasting shift in consumer behavior.

• Digital ordering, takeout, and delivery remain critical, with expanded offerings like Olo Pay and Olo Engage enhancing the ecosystem.

• Restaurants face higher labor and food costs, leading to reduced traffic and a need for more personalized, data-driven guest engagement strategies.

• The use of transaction data and AI is enabling more targeted marketing and guest experiences, moving away from traditional discounting.

Product innovation and platform expansion

• The platform now offers 16 modules, including Order, Pay, Engage, and Catering+, driving both new customer acquisition and deeper cross-sell opportunities.

• Olo Pay has seen rapid growth, with processing volume rising from $250 million in 2022 to over $2.5 billion in 2024, and guidance for high $60 million in revenue this year.

• Card present payments represent a significant new opportunity, with pilots underway, and are expected to yield higher gross margins than card not present.

• The platform's two-sided network includes 85,000 restaurant locations, 400 technology partners, and over 10 million guest accounts.

Financial performance and outlook

• Achieved a record 3,000 location adds in the most recent quarter, bringing the total to 85,000, with a gross retention rate above 95% and net revenue retention over 120%.

• The total addressable market in North America is estimated at 300,000 enterprise locations, with current penetration just over a quarter.

• Gross profit growth is expected to accelerate in 2025, with a focus on stabilizing OPEX to drive higher operating margins.

• Card present payments are expected to improve gross margin profile due to better card mix and scale benefits.