The past 14 months have supercharged the digital shift, and consumers have come to expect the seamless convenience of online ordering.
Propelled by these shifting behaviors, ordering platform Olo has had a banner year, as reflected in its first quarter earnings results, the company’s first earnings release since it went public in March.
The company’s total revenue grew 125 percent year over year to $36.1 million, with gross profit increasing 150 percent to $29.3 million. The company saw a net loss of $26.5 million, amounting to a loss of $0.63 per share.
The surge in orders is impressive, but not especially surprising, given the circumstances. The question remains — now that the vaccine is rolling out across the country and around the world, will demand remain for digital ordering?
To that, Olo Chief Financial Officer Peter Benevides, Olo’s told analysts on a call, “We’re seeing a lot of momentum in brands wanting to have their digital ordering systems up and running as really an opportunity to increase revenue and address consumer demand, given that consumers have come to appreciate and enjoy the benefits associated with digital ordering.”
However, there may nonetheless be a dip in sales in the immediate future.
Benevides conceded, “Our expectation has been that order volumes would start to see some near-term impact from increased vaccinations and pent-up demand for in-person dining, which, from our perspective, is likely to play out a bit more in Q2 and Q3. And while early, we have started to see some signs of that in April.”
At the end of the quarter, news broke that Olo was locked in a legal dispute with DoorDash over the software company allegedly overcharging the delivery service. The two companies soon settled the dispute and dismissed the case, agreeing to a new “multi-year deal.”
On the call, Benevides specified that this was a “three-year agreement” and that it would “reinforce the long-term commercial partnership between Olo and DoorDash and will enable us to continue to work together on products and features that will unlock value for both companies.”
Looking ahead, Olo Founder and CEO Noah Glass said he is hopeful about the company’s role not only in off-premises digital ordering, but also in in-restaurant technologies. As an example — one that offers value to restaurants feeling the impacts of the labor shortage — Glass pointed to what he calls “Table Service 2.0,” which looks like “the consumer, scanning a QR code that then tags that order with the table number so that the server or a runner can run the order out to them.”
He added that these sorts of digital integrations “are going to help brands do more with less from a labor standpoint and [help them to] be efficient.”
Ultimately, with these sorts of on-premise offerings, Glass said he hopes to make Olo essential to restaurant orders of all kinds.
“We think that digital and Olo have a big role to play both in off-premise and a big role to play in on-premise,” said Glass. “And that is why our new ambition is not just about the 63 percent of transactions in the industry that are off-premise, but all 100 percent of the transactions in the industry, and we’re excited about that new ambition.”
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