Restaurant software company (NYSE: OLO) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 21.3% year on year to $80.68 million. Guidance for next quarter’s revenue was better than expected at $82.25 million at the midpoint, 0.5% above analysts’ estimates. Its non-GAAP profit of $0.07 per share was in line with analysts’ consensus estimates.
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Olo (OLO) Q1 CY2025 Highlights:
- Revenue: $80.68 million vs analyst estimates of $77.47 million (21.3% year-on-year growth, 4.1% beat)
- Adjusted EPS: $0.07 vs analyst estimates of $0.06 (in line)
- Adjusted Operating Income: $11.53 million vs analyst estimates of $8.66 million (14.3% margin, 33.1% beat)
- The company lifted its revenue guidance for the full year to $339.3 million at the midpoint from $334.5 million, a 1.4% increase
- Operating Margin: -3%, up from -10.8% in the same quarter last year
- Billings: $82.76 million at quarter end, up 22.2% year on year
- Market Capitalization: $1.46 billion
StockStory’s Take
Olo’s first quarter results were shaped by ongoing product expansion, strong customer deployments, and growing adoption of its guest engagement tools. CEO Noah Glass highlighted the addition of approximately 2,000 net new restaurant locations and early momentum in key initiatives such as scaling Catering Plus and expanding Olo Pay card-present solutions. The company also secured a multi-module pilot with Chipotle, described by Glass as “a great validation of our platform’s strength and modularity,” and announced the onboarding of a major enterprise customer to its card-present payment system. These developments contributed to higher average revenue per unit and robust gross revenue retention, reflecting Olo’s increasing integration into enterprise restaurant operations.
Looking ahead, Olo’s raised full-year revenue outlook and improved guidance are underpinned by expectations of continued module adoption and deeper integration with large restaurant brands. Management cited positive early signs from the trade-down effect, with limited service concepts gaining share as consumers shift away from full-service dining during periods of economic uncertainty. CFO Peter Benevides noted, “We are still forecasting a reacceleration of gross profit starting in Q3 and through the back half of the year,” attributing this to a combination of increased location deployments and new product modules. However, the team acknowledged macroeconomic headwinds, including rising input costs and potential margin pressures as Olo Pay card-present volumes scale, emphasizing a cautious approach to expense management and profitability targets.
Key Insights from Management’s Remarks
Management pointed to new enterprise wins, early adoption of recently launched modules, and strong performance in limited service restaurant segments as key contributors to first quarter growth.
- Chipotle pilot win: Olo secured a multi-module pilot with Chipotle for its Catering Plus solution, marking a significant step in penetrating top 25 restaurant brands and validating the modularity of its platform for specialized use cases like catering.
- Olo Pay card-present expansion: The company signed a full deployment agreement with an existing publicly traded enterprise customer for Olo Pay card-present, which will enable comprehensive aggregation of in-store and digital payment data and strengthen its guest data platform strategy.
- Guest data flywheel traction: The number of brands leveraging multiple Olo modules—including Order, Pay, and Engage—exceeded 70, supporting the company’s goal of enhancing customer engagement through integrated guest data analytics and marketing automation.
- New Chief Sales Officer: Olo appointed Parrish Chapman as Chief Sales Officer, bringing deep industry experience and a focused mandate to build bookings and expand enterprise relationships, particularly among large chains.
- Borderless network effects: The Borderless passwordless checkout feature saw adoption by over 450 brands and reached more than 16 million users, with a marked increase in multi-brand usage signaling organic growth and broader platform stickiness.
Drivers of Future Performance
Management expects near-term performance to be shaped by enterprise adoption of new modules, macroeconomic trends favoring limited service restaurants, and disciplined cost controls.
- Module adoption and cross-sell: Continued rollout of Catering Plus and Olo Pay card-present is anticipated to drive higher revenue per location, especially as more enterprise brands implement multiple modules.
- Economic environment tailwinds: The company expects to benefit from a consumer shift toward limited service dining during times of economic pressure, a trend observed in past downturns and now supported by early Q2 order volume data.
- Margin management and investment: Olo is planning for gross margin compression as payment mix shifts toward card-present transactions, but management aims to offset this through expense discipline and leveraging scale in its enterprise customer base.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) the progress and potential expansion of the Chipotle pilot, (2) the full deployment and early results from Olo Pay card-present at an enterprise client, and (3) sustained growth in new module adoption across both enterprise and emerging brand segments. The impact of macroeconomic pressures and execution by the newly appointed sales leadership will also be essential markers of future performance.
Olo currently trades at a forward price-to-sales ratio of 4.4×. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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