olo-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________

FORM 10-Q

_______________________________________________________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-40213

Olo Inc.

(Exact name of registrant as specified in its charter)

______________________________________________________________________________


Delaware			20-2971562
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

99 Hudson Street

10th Floor

New York, NY 10013

(Address of principal executive offices) (Zip Code)

(212) 260-0895

(Registrant’s telephone number, including area code)

_______________________________________________________________

Securities registered pursuant to Section 12(b) of the act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.001 per share	OLO	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of May 5, 2023, 104,449,461 shares of the registrant’s Class A common stock and 57,535,360 shares of registrant’s Class B common stock were outstanding.

OLO INC.

TABLE OF CONTENTS



	PART I - FINANCIAL INFORMATION	Page



Item 1.	Financial Statements (Unaudited)	1

	Condensed Consolidated Balance Sheets	1

	Condensed Consolidated Statements of Operations	2

	Condensed Consolidated Statements of Comprehensive Loss	3

	Condensed Consolidated Statements of Stockholders ’ Equity	4

	Condensed Consolidated Statements of Cash Flows	5

	Notes to the Condensed Consolidated Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Mine Safety Disclosures	37

Item 5.	Other Information	37

Item 6.	Exhibits	38

	Signatures	39

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “if,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions.

Forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and assumptions. Actual results may differ materially from the forward-looking statements we make. Factors that may cause or contribute to such differences include, but are not limited to:

•our expectations regarding our revenue, expenses, and other operating results, including overall transaction volumes, average revenue per unit, ending active locations, dollar-based net revenue retention, gross merchandise volume, and gross payment volume;

•our ability to acquire new customers and successfully retain existing customers;

•our ability to develop and release new products and services and the success of any new products;

•our ability to develop and release successful enhancements, features, and modifications to our existing products and services;

•our ability to increase usage of our platform and upsell and cross sell additional modules;

•our ability to attain or sustain our profitability;

•the durability of the growth we have experienced in the past due to the COVID-19 pandemic and the associated government-imposed restrictions on guest preferences for digital ordering and customer adoption of multi-modules;

•the effects of the COVID-19 pandemic or other public health crises, macroeconomic conditions such as inflation and fluctuating interest rates, and overall market uncertainty;

•future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;

•our ability to repurchase shares at all or at the times or in the amounts we desire, and the results of our share repurchase program;

•our ability to compete effectively with existing competitors and new market entrants;

•the costs and success of our sales and marketing efforts, and our ability to promote our brand;

•our ability to identify, recruit, and retain skilled personnel;

•our ability to effectively manage our growth, including any international expansion;

•our ability to realize the anticipated benefits of past or future investments, strategic transactions, or acquisitions, and risk that the integration of these acquisitions may disrupt our business and management;

•our ability to protect our intellectual property rights and any costs associated therewith;

•the growth rates of the markets in which we compete;

•our ability to successfully combine and integrate the businesses that we acquire, and to realize the synergies and anticipated strategic, financial, and other benefits from such acquisitions;

•our ability to successfully defend or resolve any current or future litigation matters, and to discharge those matters without significant financial penalty or payments, restrictions on our business and operations, or other remedies; and

•other risks and uncertainties, including those listed under the caption “Risk Factors.”

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information.

The outcome of the events described in these forward-looking statements is subject to risks, assumptions, uncertainties, and other factors described elsewhere in this Quarterly Report on Form 10-Q and those listed in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

Unless the context otherwise indicates, references in this report to the terms “Olo,” “the Company,” “we,” “our,” and “us” refer to Olo Inc.

“Olo” and other trade names and trademarks of ours appearing in this Quarterly Report on Form 10-Q are our property. This Quarterly Report on Form 10-Q contains trade names and trademarks of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.

Table Of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

OLO INC.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share amounts)


	As of March 31, 2023		As of December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	331,481	$	350,073
Short-term investments	90,726		98,699
Accounts receivable, net of expected credit losses of $1,239 and $612, respectively	50,381		48,128
Contract assets	431		336
Deferred contract costs	3,635		2,851
Prepaid expenses and other current assets	11,752		11,687
Total current assets	488,406		511,774
Property and equipment, net of accumulated depreciation and amortization of $5,324 and $4,328, respectively	14,971		11,700
Intangible assets, net of accumulated amortization of $5,294 and $4,304, respectively	20,708		21,698
Goodwill	207,781		207,781
Contract assets, noncurrent	329		241
Deferred contract costs, noncurrent	4,696		4,171
Operating lease right-of-use assets	14,458		15,581
Long-term investments	16,082		2,430
Other assets, noncurrent	106		186
Total assets	$	767,537	$	775,562
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,027	$	2,259
Accrued expenses and other current liabilities	61,860		52,411
Unearned revenue	2,170		2,527
Operating lease liabilities, current	2,766		3,220
Total current liabilities	67,823		60,417
Unearned revenue, noncurrent	2,002		661
Operating lease liabilities, noncurrent	16,132		16,827
Other liabilities, noncurrent	33		41
Total liabilities	85,990		77,946
Commitments and contingencies (Note 10)
Stockholders’ equity:
Class A common stock, $0.001 par value; 1,700,000,000 shares authorized at March 31, 2023 and December 31, 2022; 104,114,669 and 105,053,030 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively. Class B common stock, $0.001 par value; 185,000,000 shares authorized at March 31, 2023 and December 31, 2022; 57,535,360 and 57,391,687 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	162		162
Preferred stock, $0.001 par value; 20,000,000 shares authorized at March 31, 2023 and December 31, 2022	—		—
Additional paid-in capital	852,689		855,249
Accumulated deficit	(171,248)		(157,542)
Accumulated other comprehensive loss	(56)		(253)
Total stockholders’ equity	681,547		697,616
Total liabilities and stockholders’ equity	$	767,537	$	775,562

The accompanying notes are an integral part of these financial statements.

Table Of Contents

OLO INC.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended March 31,
		2023		2022
Revenue:
Platform		$	51,371	$	41,466
Professional services and other		869		1,290
Total revenue		52,240		42,756
Cost of revenue:
Platform (1)		17,613		11,241
Professional services and other (1)		1,136		1,819
Total cost of revenue		18,749		13,060
Gross Profit		33,491		29,696

SEC Form 10-Q filed by Olo Inc.