Olo Inc

Greetings and welcome to the OLO Incorporated Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Gary Fugis, Senior Vice President of Investor Relations. Thank you. You may begin.

Thank you. Good afternoon and welcome to OLO's second quarter 2024 financial results conference call. Joining me today are Noah Glass, NOAA's founder and CEO, and Peter Benavides, OLO's CFO. During this call, we will make forward-looking statements, including but not limited to statements regarding our expectations of our business, our industry, our operations, and future financial results. These statements reflect our beliefs and assumptions only as of today and are subject to a variety of risks and uncertainties that could cause actual results to differ materially. For a discussion of these material risks and uncertainties, please refer to our Form 10Q, which is filed today, and our other SEC filings. 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 on our earnings release which is available on the investor relations page of our website. 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. We may or may not provide an update in the future on these metrics. With that, I'll now turn the call over to Noah.

Thank you, Gary. Hi, everyone. Thank you for spending time with us today. Team OLO delivered another strong quarter in Q2. Once again, revenue and non-GAAP operating income exceeded the high end of their respective guidance ranges, and we're raising full-year 2024 revenue and profitability guidance in excess of our Q2 outperformance. We added new enterprise and emerging enterprise brands and expanded with existing customers. We also announced our third POS integration partnership for OloPay and Engage with Trey. which brings us closer to supporting full-stack payment processing and enabling brands to use omnichannel guest data to drive profitable traffic, a critical restaurant metric. I'll review our customer and innovation-related highlights from the quarter, and Peter will discuss our Q2 financial performance and updated guidance. We continue to win new brands and retain and expand with existing customers. We ended the quarter with approximately 82,000 active locations. adding approximately 1,000 net new locations sequentially. Second quarter ARPU of $852 increased 19% year over year, and net revenue retention was again in excess of 120%. In enterprise, we deployed our core order suite with Bonchon, a fast casual Korean chicken concept, and we launched ordering with Mission Barbecue. I'm excited to share a number of large brands expanded into Pei, including El Pollo Loco, Miller's Alehouse, and Pollo Tropical. And we're very pleased to announce that Culver's expanded into both Pei and Rails in the quarter. In Emerging Enterprise, more than a dozen brands deployed Ollo products across our order and pay suites, including And Pizza and Dig. we're especially excited to welcome back AND Pizza, who returned to Ollo after leaving to build their own ordering solution. AND Pizza reignited their growth strategy with new operating and franchising models, and believed that in order to keep up with expansion without cumbersome processes and draining resources, they needed to upgrade their tech stack. With our gross revenue retention exceeding 95%, most brands remain on our platform, And the trend we've seen since our IPO is that more brands migrate from in-house tech and to the Olo platform. We're proud and Pizza chose to come back to Olo and are excited to help them do more with less while improving their guest experience. We also continue to drive product innovation and partner expansion in our ecosystem, which is foundational to our long-term success. In Q2, we announced 19 major product enhancements in our summer release, including loyalty for Olo Borderless accounts. This new feature allows guests to earn and redeem rewards from a brand's existing loyalty program through Borderless, our passwordless guest checkout solution. We see great potential in Borderless, which has grown to now more than 7 million accounts, and we believe it can evolve beyond a seamless, high-conversion checkout experience. into yet another OLO offering that enriches guest data to help restaurants drive profitable traffic. We also added enhanced order management capabilities for our new Catering Plus solution that helps brands reward their high-value customers and enable their guests to pay for delivery orders through their personal devices. We're very excited about the success of Catering Plus, which has been a strong performer out of the gate since we launched it less than a year ago. In Q2, we deployed CateringPlus across 14 existing OLO brands, including Doghouse, The Flame Broiler, and Freddy's Frozen Custard and Steakburgers. CateringPlus is winning with enterprise and emerging enterprise brands and across both full-service and limited-service concepts. We'll continue to add features and expect to make CateringPlus an expansion driver as well as a vector for landing new business, including within the top 25. In our ecosystem, Loop AI's integration into the Ollo platform is enabling brands to run more efficiently by automating accounting reconciliation with third-party marketplaces. And Grubber recently announced it will integrate Ollo's digital ordering and full-stack Ollo Pay into its self-ordering kiosks. This is our third Ollo Pay kiosk partnership, and we're bullish on the value kiosks bring to enterprise restaurants. from streamlining operations to providing exceptional guest experiences. And we continue to expand our POS integrations beyond digital ordering and delivery to include Olopay and the Engage Guest Data Platform, or GDP. In May, we announced an Olopay and Engage integration agreement with Trey, a cloud-first POS focused primarily on full-service concepts. Trey joins NCR Voyex and Q, and we have expanded relationships in the works with additional POS providers. These expanded POS partnerships move us closer to processing card-present transactions, which can help us drive meaningful scale in our OLO Pay business and help reaccelerate our gross profit growth. For example, we mentioned on our last call that HoneyGrow, a core order customer, was our first brand to expand into full-stack payment processing with OLO Pay. running nearly all on-premise transactions through OloPay enabled kiosks. By powering both digital ordering and all payment transactions, we estimate that Olo's gross profit per HoneyGrow location was more than six times higher than Olo's gross profit per average location over the last three quarters. This is an encouraging early data point about where we can take our OloPay business. We believe we can drive similar results within our base over time as OloPay's card present functionality becomes broadly available through kiosk and POS partners and as brands revisit their payment vendor relationships. The strategic rationale for a brand to replace their incumbent payment processor with OloPay is OloPay's differentiated ability to leverage transaction data to drive profitable traffic. We believe brands can significantly benefit from consolidating their on and off premise transactions into one guest data platform that ties digital ordering and full stack payment transaction data into one guest profile and provides a comprehensive view of each guest. Given the industry's historical reliance on discounting to improve traffic, we believe our approach offers a compelling and differentiated value proposition. This is what Ollo is best positioned to do, as our guest-centric solution and data platform capabilities, combined with the scale of our 700-brand, 82,000 location-strong network, give us the ability to empower brands to convert transactions into profitable traffic and increase sales. And with the platform-level data capabilities of borderless, we see a future where a brand can deliver even more personalized experiences for every guest. regardless of whether they visited that brand before, with enriched OLO-level data. We're already helping brands succeed with data. Consider Five Guys, one of our first order enterprise brands, who recently began deploying the Engage GDP and marketing modules. In just over six months, OLO's GDP ingested millions of orders, created 4.5 million guest profiles, and automatically identified cohorts of Five Guys' most loyal and highest lifetime value guests. From there, our marketing module helped Five Guys create hyper-targeted marketing communications and measure their impact on sales. The results? $2 million of incremental revenue attributable to the email campaigns, a 1% increase in shake sales, and a large base of new guest profiles that Five Guys can use for future campaigns. With the addition of card-present transactions to our guest data, we believe we can turbocharge a brand's ability to better know its guests and engage with them in ways that have guests come back to the brand again and again without an over-reliance on discounts and value menus. We're just getting started, and we believe no one else in the industry has the network scale, guest-centric offerings, and data capabilities to help brands succeed like Olo. We're excited about the progress to date in 2024, and Team Olo is focused on building on this momentum. We're landing and expanding with brands, delivering more value through product innovation and valuable partnerships, and moving closer to unlocking even more value from greater guest data. I'll now turn the call over to Peter to review our Q2 results and updated guidance.