The sole public order integration and logistics company, Olo, announced substantial growth in its latest earnings and a deeper partnership with delivery platform Grubhub.
Overall, the company (NYSE: OLO) beat analyst estimates on earnings and revenue in the second quarter, which the company announced on August 10. Total revenue was up 48 percent compared to the second quarter last year, landing at $35.9 million. Gross profit was near there at $28.5 million, up 42 percent. Operating income, however, dipped 7 percent to a loss of $2.4 million.
In all, earnings per share (EPS) were negative 2 cents per share or $2.4 million compared to net income of $3.9 million and an EPS of $0 last year. It was not quite the explosive growth of Olo’s last quarter and first earnings report, but CFO Peter Benevides said there is still positive traction as the digital transformation of the industry continues.
“Growth in active locations and transaction volumes reflect the continued digital transformation occurring within the restaurant industry. Increases in multiproduct adoption and evolving use cases of the Olo platform such as tableside ordering, virtual brands and kiosks, further highlight Olo’s opportunity and ability to digitize all industry transactions,” said Benevides on the earnings call. “In terms of key metrics, we ended the quarter with approximately 74,000 active locations on the platform, a 30 percent increase year-over-year and a 7 percent increase sequentially.”
He noted both Potbelly Sandwich Works and Jack in the Box as national brands that plugged into one or more of Olo’s products.
There was another notable plug-in to the brand: Grubhub is now part of the Rails product, the part of the Olo ecosystem that “makes it easy for restaurant brands to publish their menus, prices and location information on participating third-party marketplaces” according to Olo. Grubhub was one of the last of the major platforms to connect with the product. Previously, anyone that wanted to feed Grubhub orders into their Olo connection had to still manage menus and other information in Grubhub’s system.
The integration process will continue through the next year or so as CEO Noah Glass said.
“Olo’s deployments of the Grubhub integration will continue in the coming quarters. This new partnership with Grubhub means that all customers can now utilize Olo Rails to operationalize and manage all major national digital ordering aggregators, Caviar, DoorDash, Grubhub, Postmates, Seamless and Uber Eats in addition to the regional and local aggregators that are meaningful to operators in specific geographies,” he added. “Olo is fulfilling its promise to serve as a common carrier, ensuring a level playing field for all aggregator partners. We believe that Olo serving as a common carrier is in the best interest of our customers and the restaurant industry.”
Glass pointed to brands like Smoothie King as savvy delivery-forward brands that wanted to reduce steps to managing the delivery ecosystem.
“The digital landscape is rapidly expanding as guests continue to enjoy the convenience of ordering ahead. This makes it more important than ever for information like menus and pricing to be reflected accurately and updated in real time across all of our channels,” said Dan Harmon, president and COO of Smoothie King. “With Grubhub’s marketplace and delivery capabilities now integrated with Olo’s Rails solution, our store teams can better streamline their operations, eliminate human errors and duplication, and focus on providing great service to our valued guests.”
Kevin Kearns, senior vice president of restaurants at Grubhub, said it’s another step to ease the managerial pain points.
“By teaming up with Olo, our restaurant partners can now use Rails to provide a reliable and streamlined behind-the-counter process for restaurant team members, while also ensuring order accuracy and a great experience for diners,” said Kearns.
As for the next quarter, Olo projected revenues around $36 million and income between $3.4 million and $3.8 million. Fiscal year revenue is projected to reach $144.7 million and income is expected to reach $18.8 million, according to the company.