Olo Inc

Good afternoon. My name is Ariel and I will be your conference operator today. At this time, I would like to welcome everyone to the OLO first quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, You may signal an operator by pressing star and zero. As a reminder, the conference is being recorded. I would now like to turn the conference over to OLO's VP of Investor Relations, Ms. Stephanie Dawkus. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to OLO's first quarter 2022 earnings conference call. Joining me today are Noah Glass, OLO's founder and CEO, and Peter Benavides, OLO's CFO. During our call today, some of our discussion and responses to your questions may contain forward-looking statements which represent our beliefs and assumptions only as of the date such statements are made. These forward-looking statements include but are not limited to statements regarding our expectations of our business, future financial results, total addressable market and growth opportunity, and guidance and strategy. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in our forward-looking statements, and such risks are described in our earnings press release and our risk factors, including in our SEC filings, including our annual report on Form 10-K for the year ended December 31, 2021. You should not rely on forward-looking statements as predictions of future events. We undertake no obligation of updating any forward-looking statements made during this call to reflect events or circumstances after today. Also during this call, we'll present both GAAP and non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are available in our earnings release, which we issued a short while ago. This earnings release is available on the investor relations page of our website. and is included as an exhibit in the form 8K furnished to the SEC. Finally, in terms of our prepared remarks or in response to your questions, we may offer incremental metrics. Please be advised that this additional detail may be one time in nature, and we may or may not provide an update in the future on these metrics. I encourage you to visit our investor relations website at investors.olo.com to access our earnings release, investor presentation, periodic SEC reports, a webcast replay of today's call, or to learn more about OLO. With that, let me turn the call over to Noah.

Thank you, Stephanie. Hi, everyone. Thank you for spending time with us today. In the first quarter, OLO's revenue and profitability momentum continued. We grew revenue 18% year over year as our platform supported continued growth in active locations coming onto the platform and transaction volumes. Our ending active location count increased 19% year-over-year to approximately 82,000, and we surpassed more than 600 restaurant brands utilizing our platform. This quarter, we had success with the adoption of our customer engagement and front-of-house solutions, which expanded our platform offerings through the Wisely acquisition. Notably, Bojangles and El Pollo Loco, both QSRs, deployed our Marketing Automation and Customer Data Platform, or CDP, modules in a matter of weeks. Both brands will leverage the Marketing Automation module to provide personalized campaigns in order to increase their return on investment for marketing campaigns, as well as leverage the CDP module, which creates unified guest profiles, enabling brands to power business decisions and growth. In addition to adding several new restaurant brands to the platform this quarter, we added a new type of customer to the platform, convenience stores, or C-stores. Multi-unit C-stores represent an emerging vertical for Olo, expanding Olo's total addressable location count by an estimated 55,000 locations. And this quarter, we deployed our ordering module at Quick Trip, an enterprise C-store, enabling the brand to help its guests order ready-to-eat meals. Also in the first quarter, we took meaningful strides towards enabling digital hospitality, which we define as harnessing the power of first-party data to enable personalized and memorable guest experiences. OLO board member and legendary restaurateur Danny Meyer coaches his team members to deliver enlightened hospitality to guests and, quote, always be connecting dots to do so. With OLO's customer data platform purpose-built for the restaurant industry, we're helping to connect the dots at enterprise speed and scale, enabling digital hospitality with the ultimate ambition to make every guest feel like a regular. First quarter product advancements include, first, we expanded product use cases. using Serve, our white-label branded ordering experience, to enable on-premise ordering. Nando's, a fast casual restaurant, began utilizing Serve as its exclusive dine-in ordering system, increasing its on-premise digital orders per store by more than 600% in one year's time. And as I mentioned earlier, we showcased the extensibility of our platform by deploying our ordering module at QuickTrip. Both of these examples highlight our platform's ability to allow operators to focus on the guest experience. And from a technological standpoint, these two examples highlight our platform's ability to quickly append additional elements and features to our existing products to expand our market opportunity. Second, we grew our technology partner network by more than 100 technology partners to more than 300 providers. through our acquisition of Omnivore, which we closed on March 4th. Holo's open ecosystem, which connects to apps and technologies that streamline operations, improve efficiency, enhance the guest experience, and increase operator profitability, now encompasses additional partners in on-premise ordering, kitchen display systems, labor management, and inventory management. Third, we added a new premium feature to our offerings, introducing Sync, a simplified listing management product, which enables restaurants to provide up-to-date data that is automatically synced between OLO and more than 50 digital publishers to ensure store information is consistent no matter where guests search. Sync's ability to enable restaurants to be discoverable through local digital listings will drive increased direct orders and improve listing return on investment. Fourth, we continue to invest in enhancing the Ollo platform, adding real-time career tracking abilities, as well as adding reminder tools for operators to re-enable digital ordering. These enhancements provide restaurant operators with the ability to better manage their digital programs, improving operations as well as the guest experience. All of these advancements in our products, platform, and network are for the benefit of our customers. Ollo will continue to innovate and invest in capabilities that provide our brands with the tools to provide digital hospitality to their guests. This is our North Star and the thread that runs through Ollo's expanding product suite. And since the first quarter ended, we had a great chance to share our digital hospitality vision with our customers. A few short weeks ago, we hosted Beyond Four, our annual customer conference, which returned in person this year. Beyond4 is named to reflect Olo's mission to serve our restaurant brands, not just within, but beyond the four walls of the restaurant. At Beyond4, Oloites and Olo customers explored our platform and technologies in order to maximize the restaurant's footprint in the on-demand world and unlock digital hospitality. At the conference, our customers were excited about the ways the expanded Olo platform can solve even more of their operational challenges, expand their digital programs, increase efficiency, drive revenue, and ultimately delight their guests. Their enthusiasm during the conference further deepened my belief that digital leaders in the restaurant space will use one platform, the Olo platform, to understand and serve every guest that transacts with them. At the conference and in less than three months since launching general availability of our payment solution, we're heartened by our customers' significant interest in OloPay. And data from existing and new customers demonstrates OloPay's benefits. In a recently released testimonial, Waba Grill, a fast casual restaurant, highlighted OloPay's ability to reduce friction for their business and guests alike, mainly through PCI compliance, decreasing credit card fraud, and allowing operators to view daily orders, chargebacks, failure of payment, and reconciliation, while also creating a seamless experience for their guests that enables credit card, Apple Pay, Google Pay, and more payment options. Adam Kinzinger, Director of Technology at Waba Grill Franchise Corp., stated, the benefit of streamlining the digital stack is immense. allowing brands to focus on the guests and their experience. Furthermore, during a standing room only Beyond4 OloPay breakout session, one of the panelists stated that OloPay doesn't force its operators to choose between the guest experience or protecting their brand from fraud, as traditional payment processors have. OloPay's modern and industry-specific approach to fraud prevention is vital and enables an elegant guest experience. Another panelist said that fees from vendors in order to fight chargebacks or fraudulent orders could be $35 an order, which could be double the check average for some orders. However, Olopay's fully integrated solution enables restaurants to fight chargebacks without additional vendor fees, while also increasing authorization rates and reducing friction for guests. And excitement for borderless Olopay capabilities was palpable. As a reminder, borderless payments capabilities, which we plan to introduce later this year, will allow guests to securely speed through checkout at any participating restaurant within the OldoPay network with a single tap, quickly and seamlessly connecting 82,000 restaurant locations, 600 brands, and 85 million guests. Unprompted, four panelists who represent customers across various service models all indicated their intent to deploy Olopay due to its unique ability to fight chargebacks, integrated advanced fraud prevention, and future borderless capabilities. We believe Olopay is a differentiated payment solution that can deliver significant financial and operational benefits for restaurants, as well as a seamless and easier-to-use solution for their guests. It's a win-win. the kind of innovation we love at OLO. Borderless, as was the case with Dispatch and subsequently with Rails, is another example of the network effects OLO can leverage for continued product innovation on behalf of our customers. The common denominator across all networks OLO enables is data. And our unique positioning means we can harness this data to build and provide solutions to our customers that others frankly cannot. This is what gets us excited about the future and gives us confidence in our ability to provide our customers with a suite of solutions that enables digital hospitality at scale. In return, our customers are better equipped to interact with their guests in truly informed and differentiated ways. The end result is our customers enjoying the benefits of higher customer lifetime value the net effect of getting digital hospitality right. That said, we're committed to remaining true to our core tenets while continuing to execute on our ambition to enable digital hospitality at scale. These core tenets are open and integrated with more than 300 technology partners, vertical and purpose-built for restaurants, focused on enabling digital hospitality, innovative, and relentlessly focused on providing adaptive tools to enable restaurants to expand their digital programs, increase efficiency, drive revenue, and delight their guests. We observe in technology-dependent industries that platforms that are extensible, secure, and reliable are the platforms of choice. And I believe now more than ever that restaurants must have a full-stack offering in order to thrive. in our digital world and Ollo answers that call. And finally, as I typically do on earnings calls, I'd like to provide two corporate updates. First, I'm thrilled to welcome Diego Panama to the Ollo executive team as chief revenue officer. Diego is a seasoned public company executive with a proven track record of successfully scaling fast companies bringing deep and relevant domain knowledge as well as go-to-market experience on a global scale. He's worked at some of the most innovative tech companies, including LiveRamp and previously Microsoft, on digital transformation for enterprise-scale customers. Importantly, Diego has a great understanding of data applications and how enterprise brands can use data as a strategic lever in their business, an integral part of our restaurant customer strategy as they look to increase digital hospitality for all of their guests by leveraging guests and operational data. Diego will support Olo's relationships with its restaurant brands, champion their success, drive our sales and marketing initiatives, and importantly, drive Olo's next chapter of execution and growth as we realize our 100X scale opportunity. Diego will assume the role of Chief Revenue Officer at the beginning of July as our current Chief Customer Officer, Marty Honfeld, plans to retire. Marty has been a key leader in OLO's efforts toward digital entirety and in our growth throughout the industry. On behalf of the entire leadership team, I'd like to congratulate Marty on his retirement and thank him for his dedication and significant impact to OLO and its customers throughout his tenure. And second, I'm pleased to share an update in connection with our OLO for Good initiative. As a reminder, we launched OLO for Good in 2021 and joined the Pledge 1% movement, committing to donate 1% of our time, equity, and product to doing good. As part of that, we committed to donating 1% of OLO shares over 10 years to our independent donor-advised fund managed by Tides Foundation. Last year, we recommended Tides Foundation make grants to nine nonprofit organizations. This quarter, in our second round of grant recommendations, we advised Tides Foundation to grant $2.1 million in total from our donor advised funds to the following nine organizations. American Forests, Appalachian Trail Conservancy, Emma's Torch, Giving Kitchen, Heart of Dinner, the LEE Initiative, or the Let's Empower Employment Initiative, the OCRA Project, Partnership with Native Americans, and World Central Kitchen. Grant recipients are nonprofits focused on diversity, equity, and inclusion, ending childhood hunger and increasing access to food, supporting the restaurant industry's frontline workers, and protecting natural resources and reducing waste and emissions. We continue to be enthusiastic about our ability to use OLO as a platform for social impact and positive change for our communities. We love to do well and do good in parallel. And now I'd like to turn things over to Peter Benavides, OLO's CFO, to share more details on OLO's first quarter performance. Peter?