Good day, and welcome to the Olo Inc. Q3 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Stephanie Daukus, Vice President of Investor Relations. Please go ahead. Thank you. Good afternoon, everyone, and welcome to Olo's third quarter 2022 earnings conference call. Joining me today are Noah Glass, Olo's founder and CEO, and Peter Benevides, 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 opportunities, guidance and strategy, the restaurant ordering processing trends, ability to increase usage of our platform and upsell, including with respect to growth and average revenue per unit, and the durability of our customer adoption of multi-modules. 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 and quarterly reports on Form 10-Q. You should not rely on forward-looking statements as predictions of future events. We undertake no obligation to update 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 8-K 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 the investor relations page of our website at www.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. We're proud of our third quarter results. We generated $47.3 million in total revenue, a 26% increase year-over-year, as our platform supported increased module adoption within our existing customer base, increased transaction volumes, and continued growth in new locations. We increased average revenue per unit, or ARPU, to $558, up 15% year- over- year and 3% sequentially, and deployed roughly 2,000 new locations to the platform, with ending active locations increasing 11% year- over- year and 2% sequentially to approximately 84,000. The Olo Platform is purpose-built to help our customers do more with less and create a differentiated and memorable guest experience. As restaurant executives and operator conversations increasingly focus on sales and margin maintenance due to challenges related to increased inflation, supply chain constraints, and labor dynamics, we believe that Olo's platform is best positioned to meet restaurants' needs. In particular, this quarter's customer deployments, partnership announcements, and product enhancements are representative of this belief that technology is instrumental in enabling restaurants to be more operationally efficient while enhancing the guest experience. We're honored to play this role in the $1 trillion and growing restaurant industry. Olo's ability to address this massive market opportunity is a function of increasing ARPU through further Multi-Module Adoption and continued growth in transaction volume, as well as adding more locations to the platform. We're happy to report continued momentum across all of these key drivers. Specific to our ability to expand ARPU, we broadened our relationship with Jack in the Box, a top 25 quick service restaurant or QSR brand with more than 2,200 locations. We initially supported Jack in the Box with our dispatch module, enabling direct delivery at scale. More recently, we deployed our ordering module, replacing their homegrown solution. We're excited about this expanded partnership as it reflects our ability to expand within our existing customer base even when ordering is not the lead module. Importantly, this expanded partnership also reflects our ability to support the industry's largest brands and largest segment, QSR. Other examples of expanded relationships within brands this quarter include BJ's Restaurant and Brewhouse, as well as Wetzel's Pretzels, adding dispatch and Olo Pay in addition to our ordering, rails, and network modules. A number of existing brands such as IHOP and Krystal adding virtual restaurants to their existing ordering, dispatch, and rails modules, and brands such as Another Broken Egg Cafe and Capriotti's adopting our guest engagement and/or front of house solutions in addition to their existing ordering, dispatch, and/or rails modules. Our existing customer base presents a sizable opportunity to expand ARPU by providing additional solutions to improve our customers' operations and delight guests as brands on average utilize 2.7 out of 12 modules on a per location basis at the end of 2021. At the same time, on-premise solutions unlock additional ARPU expansion opportunities. Momentum in this area continues, with more than 50 brands and over 1,000 locations processing on-premise digital orders through Olo. We believe this is the beginning of a larger trend whereby restaurants will process 100% of their orders digitally through the Olo Platform. Furthermore, when restaurants pair on-premise solutions with Olo Pay, they're able to realize the incremental value of utilizing one single digital platform, driving a better experience for their guests and staff, as we've already seen at brands like Nando's with their adoption of QR code ordering and Olo Pay. We believe if restaurants utilize Olo Pay and the Olo Platform to process 100% of their orders that ARPU has the potential to increase by 25x. Another exciting trend that continued this quarter relates to enterprise brands replacing legacy Technology Partners and implementing Olo solutions. This quarter, we welcomed Smashburger, a rapidly growing fast casual concept with more than 200 locations, Ruby Tuesday, a casual dining concept with more than 200 locations, and Zaxby's, a fast casual concept with more than 900 locations to the platform. All three enterprise brands selected Olo to replace their legacy technology providers through the adoption of our ordering, dispatch, and rails modules. The implementation of Olo as their consolidated digital commerce solution allows each brand to provide a highly customized and personalized digital program to their guests while increasing operational efficiencies. Over the last two years, we've proven through many instances that investing in an enterprise-grade SaaS Platform is a compelling alternative to building in-house. That means a fundamentally superior platform, lower costs, faster time to market, tapping into platform best practices, leveraging a large partner and customer ecosystem, and harnessing platform-level innovation. Names such as Papa Murphy's, Potbelly, and now Jack in the Box, Ruby Tuesday, and Smashburger, and Zaxby's further affirm our long-held conviction that SaaS is a better alternative to homegrown solutions. We've also continued to successfully deploy our solutions within the emerging enterprise segment. This quarter, we welcome names such as Grimaldi's and Jinya Ramen Bar to the platform as they adopted the full stack of Olo solutions, which include order management, Delivery Enablement, Guest Engagement, front of house, and Olo Pay. Throughout the year, we've seen an increasing number of emerging enterprise new logos adopt multiple modules from the onset of our relationship, inclusive of Olo Pay. We believe this trend will continue and further drive ARPU. Also this quarter, we deployed our ordering, dispatch, and rails modules at convenience stores or C-stores. Two examples include Maverik, Adventure's First Stop, an Intermountain West operator with nearly 400 stores across 12 states. Second, an East Coast operator with more than 200 locations. With Olo solutions, guests of these C-stores are now able to order fresh food for pickup or through delivery. As I've mentioned in the past, C-stores are an exciting emerging vertical for Olo, given their 55,000 location opportunity, representing C-stores with fresh food programs. We also continued to grow our partner network this quarter, which enables our customers to leverage our platform to tap into best-in-class applications and services that are fully integrated into Olo. Our open platform provides restaurants with access to more than 300 technology providers, significantly more integrations than many other platforms. This quarter, we added Technology Partners in both autonomous and piloted delivery, as well as voice artificial intelligence, or AI. We're excited to offer these cutting-edge technologies to our customers. More specifically, Olo's dispatch network now offers autonomous and piloted delivery robots through partnerships with certified delivery providers Coco, Refraction AI, and Serve Robotics. Last mile delivery is oftentimes the most complicated and costly aspect of the delivery experience, on average, accounting for 40% of the total cost of delivery. Through these partnerships, we enable brands such as Modern Market Eatery and Newk's Eatery to empower automated last mile delivery in specific markets, lowering transportation costs through automation while decreasing pollution. We've also introduced partnerships with voice AI ordering solution providers ConverseNow, SYNQ3, and Valyant AI. These partners provide premier ordering automation technology, facilitating the seamless placement of guest orders at the drive-thru and enhancing the guest experience through shorter drive-thru lines. For operators, these partners increase average ticket size and alleviate labor shortages by allowing staff resources to focus on food prep, order fulfillment, and guest services. Panda Express, a top 25 brand with more than 2,400 locations, leverages voice AI Technology Partners to transform the drive-through. Leading to an enhanced digital experience while paving the path to 100% digital. We believe unique solutions like voice AI ordering will enable Olo to expand further into the QSR segment, as well as increase our penetration of digital orders in the space. Notably, the conversion of drive-through to digital doesn't require consumer behavior change. Operators make the decision to enable digital in drive-through, converting all orders from analog to digital through voice AI. This represents an exciting leap in the digital transformation of the drive-through service model that represents the plurality of restaurant industry transactions over four times larger than delivery. We also continue to implement product enhancements to better serve our customers, many of which we showcased in our quarterly public release event held last month. In particular, at the end of October, we announced commercial availability of Borderless, Olo's password-less and platform-level sign-on offering. With Borderless, guests can save and access their on-file payment information along with contact information and delivery addresses across all participating Restaurant Brands, securely speeding through checkout. By eliminating the need for guests to create an account, remember a password, or manually enter payment details at every purchase, Borderless strives to help restaurants meaningfully increase basket conversion, retention, and visit frequency, driving increased revenue and profitability. Borderless also aims to enable brands to capture valuable guest data on more orders that were previously anonymous, adding new guests and order data to their guest data platform in the industry's race to de-anonymize every order and uncover guest lifetime value. As our latest platform-level innovation, we believe Borderless is the next step to improving the on-demand commerce experience, empowering brands to capture valuable guest data while delivering superior hospitality through added convenience. We're excited by the opportunity for Borderless functionality to transform the sign-on and checkout experience for guests, unlocking additional revenue opportunities for restaurants and Olo. Additionally, this past quarter, we introduced new capacity management capabilities across our order management solutions. As off-premise volumes increased dramatically during the pandemic, and as labor challenges persist, it's imperative that operators effectively manage kitchen order flow in order to ensure smooth operations in the kitchen, accurate order handoff for delivery service providers, and properly set guest expectations. This became a key problem for our customers that we believe Olo is best positioned to solve. Through our acquisition of Omnivore earlier this year, and by integrating with kitchen display systems, or KDS, data, our platform can now capture crucial on-premise information. Now, restaurants are able to provide more accurate quote times to guests and delivery service provider partners for when orders will be ready for handoff. Noodles & Company, a fast casual brand with more than 400 locations, is one customer enrolled to pilot this feature. By providing more accurate quote information, Olo enables brands to be as productive as possible and as profitable as possible, all while elevating the guest experience. This is a win-win-win scenario for our partners, our customers, and their guests, as well as a win for Olo as our platform becomes an essential integrated layer in our customers' everyday operations. These product features play an important part in improving the guest experience and empowering restaurant teams to provide hospitality through optimized operations and personalization. I'm proud of the tools we provide our restaurant customers and the continuous hard work the Olo team does in order to help our customers do more with less. I'm honored that the industry recognizes our hard work. Recently, we earned Vendor of the Year awards by fast casual brands Cousins Subs as well as Noodles & Company. Over the last two years, we've dramatically expanded our core value proposition. Olo's platform now provides a modular end-to-end restaurant technology offering that encompasses all guest touch points, on-premise, off-premise, guest engagement, and payments. We're laser-focused on providing and delivering these solutions to enterprise and emerging enterprise brands, and we're working to ensure that we're aligned from a go-to-market perspective to fully capitalize on our broader opportunity. As we think about our future potential, we continue to believe that ARPU expansion will be the most meaningful driver of growth and the best measure of our success. We expect product adoption to increase across brands as we become an essential layer that aligns customers with Olo's vision of enabling hospitality at scale and empowering restaurants to operate as one business. Finally, as I typically do on earnings calls, I'd like to provide a corporate update. We recently debuted our updated corporate website at Olo.com, which showcases the platform's modular end-to-end restaurant technology offering that encompasses all guest touch points. We also published a refresh page for our partner program, Olo Connect, which includes a tiered partner directory of our expansive technology partners. Additionally, we published our first environmental, social and governance, or ESG site. This site takes a big step towards our ESG disclosure efforts by publishing our environmental and social initiatives and aspirations. We believe the future of hospitality is sustainable. We hold ourselves accountable to managing the impacts that our material topics impose on our company, stakeholders, and planet. Our ongoing ESG strategy development will harness opportunities to enrich our social impacts and lessen our environmental impacts while centering on strong corporate governance and ethics. To close, I'm excited about our future. The Olo Platform provides restaurants with mission-critical tools that drive value, allowing brands to do more with less while elevating the guest's experience. We believe that Olo's platform is best positioned to meet restaurants' needs and drive growth. We're focused on executing to create positive outcomes for our customers, partners, and shareholders. With that, I'll hand it over to Peter to discuss more detailed results. Peter? Thanks, Noah. Today, I'll review our third quarter results in detail, as well as provide guidance for the remainder of the year. In the third quarter, total revenue was $47.3 million, an increase of 26% year-over-year. Platform revenue in the third quarter was $46.4 million, an increase of 28% year-over-year. In terms of key metrics, ARPU for the third quarter was approximately $558, representing a 15% increase year-over-year and a 3% increase sequentially. Continued growth in ARPU was driven by further expansion within our existing customer base, including continued adoption of Olo Pay. Year-over-year, the impact from Subway locations transitioning from the platform positively impacted ARPU by approximately $25. As a reminder, Subway is a single module customer with significantly lower ARPU than the average. As locations transition from the platform, this will have a positive impact on ARPU. As Noah mentioned earlier, we expect ARPU to continue to expand and be a meaningful driver of growth as we further increase multi-product adoption and transaction volumes on the platform. We believe we have a 25x opportunity to expand ARPU from its current levels. The early momentum we are seeing with Olo Pay and guest engagement adoption, as well as on-premise ordering trends, gives us conviction in being able to significantly expand ARPU over time. In terms of active locations, we ended the quarter with approximately 84,000 active locations on the platform, an 11% increase year-over-year and a 2% increase sequentially. This number was in line with expectations as Subway locations held constant over the quarter and as we continue to actively work to alleviate elongated deployment timelines, which we discussed last quarter. Lastly, net revenue retention was approximately 107%, up 100 basis points sequentially. For the remainder of the financial metrics disclosed, unless otherwise noted, I'll be referencing non-GAAP financial measures. Gross profit for the third quarter was $34.7 million. This compares to $30.2 million a year ago. The year-over-year increase in gross profit was driven by continued growth in revenue, partially offset by incremental costs associated with our Wisely and Omnivore acquisitions, increased compensation costs to support new locations coming onto the platform, and to a lesser extent, processing costs associated with Olo Pay. Sales and marketing expense for the third quarter was $6.1 million or 13% of total revenue. This compares to $4.2 million and 11% a year ago. Over the past year, we have significantly increased our product portfolio, and in the near term, plan to continue to invest in our go-to-market team to fully capitalize on the growth opportunities we have with the new and existing customers. Research and development expense for the third quarter was $15.4 million or 33% of total revenue, compared to $11.9 million or 32% of total revenue a year ago. General and administrative expense for the third quarter was $10.3 million or 22% of total revenue. This compared to $9 million and 24% a year ago. The year-over-year percentage decline was due to continued optimization of expenses within G&A as initial costs to support Olo as a public company continued to scale. Operating income for the third quarter was $3 million compared to 5.1 million a year ago. Net income in the third quarter was $4.3 million or 0.02 per share, based on approximately 181.9 million fully diluted weighted average shares outstanding. Turning our attention to the balance sheet and cash flow statement. Our cash equivalents, and short and long-term investments totaled $469.2 million as of September 30, 2022. This quarter, there were no impacts from the $100 million stock buyback program we announced in September, as we did not initiate share repurchase activity before the quarter ended. Regarding cash flows, net cash provided by operating activities was $3.3 million in the quarter as compared to $10.7 million a year ago. Free cash flow was $1.4 million compared to 10.2 million a year ago. I'll wrap up by providing our guidance for the fourth quarter and full year 2022. For the fourth quarter, we expect revenue in the range of $48.2 million-48.7 million, and non-GAAP operating income in the range of $2.6 million-3 million. For the fiscal year 2022, we expect revenue in the range of $183.8 million-184.3 million, and non-GAAP operating income in the range of $9.3 million-9.7 million. In terms of guidance, our outlook for the fourth quarter and the full year is consistent with the assumptions we discussed last quarter. Elongated sales cycles and deployment timelines have continued, and while we have a robust pipeline and are actively working to speed up deployment, we anticipate these dynamics to continue in the near term. Secondly, we remain committed to driving profitable growth. Inclusive of this past quarter's operating income outperformance, we are targeting slightly higher profitability in the second half of 2022 as compared to last quarter's guidance. As we've exhibited all throughout Olo's history, we are a financially disciplined organization and plan to continue to maintain this operating principle going forward. Lastly, in the fourth quarter, we entered into a sublease for our headquarters at One World Trade Center. As we continue to embrace a hybrid work environment, we plan to reinvest some related savings into an exciting and more fitting New York-based headquarters, as well as initiate other remote employee engagement activities. To summarize, we continue to deliver an attractive combination of strong revenue growth and profitability as we take meaningful strides towards becoming the engine of hospitality. We believe we have a long runway for growth through cross-selling our robust and comprehensive product suite, expanding the use cases of the platform, and continuing to add locations to the platform. With that, I'd now like to turn it over to the operator to begin the Q&A session. Operator? Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Gabriela Borges with Goldman Sachs. Please go ahead. Hi, guys, and thanks for taking my question. Maybe to start, I'd love to get an update on some of the catalyst points or trigger points for relationships like Jack in the Box, where you're seeing really nice product module expansion. You know, Noah, the issues that you talked about, the supply chain, the labor shortages, they've persisted for a handful of quarters now, so would love to get an update. What are you seeing in terms of commonalities of trigger points that are leading to expansion within the Olo Platform? Well, Gabriela, thank you for the question, and welcome to the group. I'd say, you know, with Jack in the Box, and maybe extrapolating beyond Jack in the Box specifically, you know, we've seen great engagement from these large Restaurant Brands in the enterprise segment from QSR brands specifically, and it's really about how they want to engage with guests. I think the digital transformation of the industry is something that is permeating every segment of the industry. It has become a guest expectation and it's operator table stakes. It's about, as you heard from our prepared remarks, better productivity, better profitability, and upleveling the guest experience. We see a lot of these brands, Jack in the Box amongst them, saying, you know, "We had a homegrown solution, but we see that there are benefits in engaging with a SaaS Platform like Olo," and not so much a buy versus build, but more of a buy and build, to buy into the platform and then to build on top of it, in the case of Jack in the Box, with a third-party agency doing some of the aesthetic on top of the Olo engine. I think that's sort of a natural progression. In the past, we have landed with a single module in some of these relationships, proven ourselves out, shown the benefits of platform-level innovation and all that Olo can do, and then introduced brands to the other modules. There are 12 in total now. Going from dispatch into dispatch and also ordering is a very natural progression and growth of the relationship, and we're excited to have the ability to land with one module and then expand into a larger suite of capabilities for all Restaurant Brands. That's helpful. As a follow-up for Peter, I wanted to pick up on your comments on profitability and balancing the investments that you're making and the opportunity that lies ahead. When do you think we might see a more pronounced inflection in profitability in the model as we think about internal planning assumptions for 2023 and beyond? Yeah. Thank you for the question, Gabriela. In terms of profitability trends, I think at this point, you know, what we've shared is that we remain committed to maintaining profitability while delivering strong growth. We believe we can do that because, one, just the core DNA of Olo and the discipline we have in terms of financial management, I think we've shown that over our history. Burning less than $6 million in total investment to reach $100 million of ARR. That discipline, coupled with our highly efficient go-to-market and support motion, enables us to drive profitability and growth at the same time. You know, as we look ahead for 2023 and beyond, we believe that we continue to do that in terms of driving profitable growth and attractive growth for the long term. Just to put a finer point on that, do you think 2023 will be a year of margin expansion? Yeah, I think. Look, I think there's, you know, a lot that's happening in real time as it relates to both the top line and the bottom line. What I will say is that, you know, where we stand today, we are, you know, highly focused on making sure that we are allocating capital to the parts of the business that we believe will drive the greatest long-term value for our shareholders and long-term growth, and in doing that, maintaining profitability. Thanks for the color. Our next question comes from Terry Tillman with Truist. Please go ahead. Hey, good afternoon, Noah, Peter, and Stephanie. First, I guess on Zaxby's, they're all throughout Atlanta, so that's nice to see. I'll be sure to find out how those, that experience is, firsthand. Maybe the first question for you, Noah, is just, you know, when we talked to investors in the past, it's like, how big is this TAM? Is there a low ceiling, a high ceiling, et cetera, because it's just online ordering. We're now hearing you talk about digital entirety and on-premise over a number of quarters. I think you said 50 brands, 1,000 locations. So I'm kind of curious, where do you see, like, revenue now? Where does that stand in terms of on-premise dynamic. The transactional SaaS model, are built. Just back to your TAM comment for a moment, and then I'll pass it over to Peter to see if he wants to add on to that. You know, we really think that no matter how you look at it, we are in the very, very early innings of penetrating our TAM. We are well below 2% of the addressable TAM that's out there in the segment that we serve. I think we look at these drivers of growth, ARPU being the biggest one, and of course, moving on-premise is part of capturing more transactions. Olo Pay is another part of making each one of those transactions a higher revenue event for Olo. We think that that's the largest part of the TAM expansion, or the revenue expansion into that TAM. There's location growth as well. I'm proud also that, you know, we have in Dairy Queen and in Jimmy John's and in Panda Express and Jack in the Box, some great top 25 brands that are showing our expanded opportunity to work with those brands as well and to really add value regardless of the scale of the restaurant enterprise. Then Peter, I'll pass it over to you in case you wanna double down on some of the economics of on-premise. Yeah. Terry, just to answer your question on where the on-premise transaction volumes will appear within the financials, it has the potential to appear both in subscription and transaction. In terms of subscription, by having more orders processed over the platform, that will then graduate customers into higher priced subscription packages. That will help to drive subscription revenue. To the extent that customer is utilizing Olo Pay, that will help to drive transaction revenue because of the associated processing fees with Olo Pay. Got it. That's wonderful. Thank you both for the answer there. I guess, Peter, just a quick follow-up in terms of anything you can share at all about how visibility is into 2023 compared to how visibility was going into 2022. I know obviously we have the macro. The way I'd like to kind of add to that big picture question I just asked, which is probably a hard question, is, are you seeing the revenue come in as you expected for Olo Pay? I think you said up to $2 million now. And I think customer engagement was gonna do about $10 million. Maybe you could talk about how they're performing and just any comments about visibility going into 2023. Thank you. Yeah. We've been pleased with the progress across both Olo Pay and guest engagement. Specific to Olo Pay, this past quarter, we generated just under $2 million of revenue associated with Olo Pay. For the year, we're now estimating $5 million of revenue contribution. Great momentum there. I think part of the momentum that you're seeing with respect to Olo Pay is, you know, brands and operators prioritizing deployment of products that are a relatively light lift to deploy and also provide very fast time to value. That is the case with Olo Pay. It's a light touch deployment and the time to value is immediate. I think part of that prioritization by brands and operators is due to that continued labor dynamic labor challenges that we've discussed in prior calls. In terms of 2023, obviously it's still a little early. There's a lot that's happening in real time. I think where we stand today, we are planning as though the sales and deployment dynamics continue into 2023. That said, I think despite the macro challenges, I think there is a lot of reasons to remain excited about the go forward. I think first off, our sales pipeline for both new business and upsells remains robust, and we anticipate that's gonna continue as brands continue to look to do more with less and leverage digital to increase sales and improve margins. Secondly, food away from home and Digital Ordering in general has remained durable, and that is in part because food is not discretionary. Everyone must eat. You're seeing that across a variety of data points within the industry. Then lastly, I think our enterprise focus and the market share we have within the limited service segment, I think provides some additional resiliency as we head into 2023. Certainly still a lot going on at the moment, but you know, a lot of positives to you know, to remain excited about going forward. Thank you very much. Our next question comes from Stephen Sheldon with William Blair. Please go ahead. Hey, thank you. First wanted to ask about just the longer sales cycles. I know that's happening for a lot of enterprise SaaS companies. You still had plenty of wins this quarter, but what do you think is specifically driving the delay in decision-making here? Are a lot of the enterprise restaurant concepts that you know you're kind of going after just distracted with a variety of other issues? What do you think it could take for those cycles to more or less normalize? Hey, Steve, this is Noah. Thanks for the question. I think, you know, we are being prudent as we look at this quarter and think about the near term. We are sort of staying consistent with what we guided to last quarter. At the same time, I think there is some light at the end of the tunnel. There are some of those dynamics that are causing Restaurant Brands or that were causing Restaurant Brands to be a little bit slower to make decisions or to implement those decisions that are normalizing. There are things like wholesale food prices that are starting to come in. There are things like the labor environment starting to tick back up, not quite yet at pre-pandemic levels, but getting closer to it. I, you know, I think we're being prudent. We're being financially responsible in the way that we're modeling and the way that we're bidding. I think that, you know, what is abundantly clear as we look at Olo's business, we think about the current macro as something that is kind of a temporary crosswind. I think, you know, we've seen moments in time like this in our history, 2008, 2009. I would contrast that with the digital transformation of this $1 trillion restaurant industry. That is a mighty and persistent tailwind that's been at our back for 17 years and will be at our back for many, many years to come, especially as Restaurant Brands are looking to lean into digital transformation for the very reasons that Peter just mentioned, being productive, getting more profitable, and at the same time upleveling the guest experience. Got it. That's really helpful. As a follow-up, just as we model active locations for the fourth quarter, can you just help us frame the moving pieces on locations, especially with Subway continuing to roll off? I think you'd talked before about that being progressive in the fourth quarter and potentially in the early 2023. Is that still the right expectation for those remaining locations, just given the visibility you have right now? Yeah, that's right. Consistent with what we shared last quarter, we are targeting 2,000 net new locations in the fourth quarter. Specific to Subway, you know, the way in which we count an active location for rails is a location having had at least one order in the period. Even as remaining locations begin to offboard this quarter into early Q1 of next year, they'll show up in the active location count, having generated at least one order in the period. We'll just make sure to be very clear on how that is evolving throughout the quarter and into early next year. Sounds good. Thank you. Again, if you'd like to ask a question, please press star then one at this time. Our next question comes from Matthew Hedberg with RBC. Please go ahead. Great. Thanks, guys. Following up on the question on sales cycles. Noah, I know last quarter you talked about a little bit different implementation, headwinds, tailwinds between corporate owned and franchisee owned restaurants. I'm wondering if there's anything that changed in the dynamic of those two restaurant styles, I guess. Then maybe as a follow-up, Diego's been on now for a few months as CRO. You know, I guess from that perspective, are there things that you guys are doing specific that could counter or that could cut through macros, and maybe it's something he's implemented thus far? Hey, Matt, thanks for the two questions. I would say, you know, no pronounced difference between corporate-owned brands. Those are pretty rare, those brands that have all corporate locations. Most of the industry, whether we're talking about enterprise or emerging enterprise, are a smattering of corporate stores, but primarily franchisee locations. Last quarter, we mentioned some of the efforts that we were taking, making things easier on the Restaurant Brands to do the implementation themselves, do the deployment themselves. Also using third parties to do deployments, you know, as an augmentation for the restaurant brand, and then Olo taking on more of the work. I think, you know, when I talk about these deployments that we're celebrating this quarter, take one, take Jack in the Box of rolling out to 2,200 locations. That is deploying to 2,200 locations in a highly franchised environment. I think it's showing how those efforts that we're making are helping to get brands that have been sold and are showing up in bookings actually deployed and live on the platform for their operators' benefit and for the guests' benefit, and obviously for Olo's benefit. When I think about Diego and some of the things that he's focused on in the role of Chief Revenue Officer, it really aligns with our commentary around the growth drivers of the business. We are very focused on ARPU as a huge driver of growth, and that is about selling additional modules into existing restaurant customers who are asking us to play a larger role because we're a mission-critical platform, and we've become something of a digital transformation consigliere to these brands, so they're asking us to do more with them. We now have a lot more to offer because of our great product R&D and the M&A activities that have added new modules into our platform. We're focused on that. We're focused on selling in Olo Pay, selling in guest engagement. Of course, we're still focused, very focused on landing additional Restaurant Brands from the enterprise segment and the emerging enterprise segment. I'd say, you know, we are rightsizing our investments to go after all of those opportunities and believe that we have, you know, so much room to grow and a huge TAM to grow into under Diego's leadership. Thanks, Noah. Really appreciate the color. Our next question comes from Brent Bracelin with Piper Sandler. Please go ahead. Hi, this is Clarke Jeffries on for Brent. You know, first question is around ARPU growth. You know, 3% sequential growth in ARPU certainly looks healthy. Just wondering, maybe, Peter, what kind of ARPU growth do you think you can achieve either based off of the Olo Pay rollout or multiple software module rollout? You know, do you think it could be sustainable at these kinds of levels for sequential ARPU growth? you know, maybe second on that, you know, reaching a point where there are now 12 modules to sell, from a philosophy perspective, from a growing efficiently perspective, do you think you might change to preference more overall ARR or total contract value added at a lower growth addition level, as in more multi-module lands and that growth additions could take a backseat to the growth model over the, you know, next 12-18 months? Yeah. In terms of the ARPU sequential growth trend, I think, you know, if you, if you go back in time, I think the growth has been from a trend line perspective, you know, it's lumpy at times, and part of that is because of how products are deployed, as well as the number of products that are subscribed to from the onset of the relationship. Depending on even if a customer subscribes to, say, three products at the onset of the relationship, they may roll out one at one time and then the second and third at a subsequent time, which would make the trend line a bit smoother versus some customers deploying all three modules right from the onset. The way I would think about the long-term kind of growth rate or growth potential for ARPU is really through that 25x opportunity lens, and that is really by driving more transactions on the platform as well as increasing the adoption of Olo Pay. Looking at the ARPU from where it stands today on a quarterly basis, having a 25x opportunity to expand that number over time. If I'm understanding that right, I think the question is around the ability to expand ARPU over time, if more and more customers are landing with more products from the onset of the relationship. I would say we've seen more of that in the emerging enterprise segment of the business which we noted on the call where oftentimes that segment of the market is coming to us and they're wanting us to solve a number of pain points from the onset of the relationship. They're typically taking order management, delivery enablement, and now more recently Olo Pay. I think that obviously you know presents some challenges to further expand ARPU when you're taking everything up front. I think we would obviously enjoy that problem in being able to have a higher ARPU from the onset of the relationship. Makes sense. I think I had you know, a follow-up related to it seems like a lot of the enterprise land you noted this quarter were relationships that took more of the modules up front instead of just ordering. But no, I wanted to ask around how do you view the industry changing around proprietary versus legacy replacement? Maybe you can help us frame the sort of portion of engagements where you're going in and replacing proprietary versus a legacy solution. It seems like the Jack in the Box deal was very much based off of your competency in integrating with the proprietary. I'd love to just get your thoughts on how that's evolved over the history of the company and where you sit today. Well, Clarke, thank you. I think that's teed me up for an important point, which is that the trends has certainly been that brands are migrating from homegrown to Olo. If I just think about the time really over the last 18 months since our IPO, you know, there are 10 sizable brands that have made that transition. Carl's Jr., Carrabba's Italian Grill, Hardee's, Jack in the Box, Outback, Potbelly, Ruby Tuesday, Smashburger, TGI Fridays, and now Zaxby's. I think this is exactly what we were hoping to see by becoming a public company, by brands seeing the strength of Olo's business, the strength of Olo's balance sheet, hearing our philosophical commitment to being an independent and open platform, and then seeing some of the platform level innovation that we've been able to bring to life, first in Dispatch, then in Rails, most recently in Borderless. I wanna come back to that in a moment. These are things that brands can't build themselves. They are things that you can build once you've built a two-sided network of many brands on one side and many partners on the other. If I think about Borderless as the extreme example of this point, this is a two-sided network that we've created that connects the 84,000 restaurants on our platform. For those of you who don't know the industry super well, 84,000 restaurants is very large. Take every McDonald's in the United States, it is six times every McDonald's in the United States, the number of locations. It connects those to 85 million restaurant guests that order through Olo. That's more than the entire population of Germany. Olo is then serving as the conduit between those restaurants and those restaurant guests and creating a win-win, a better experience for those restaurant operators and for those restaurant guests who no longer have to create an account, remember a password, reenter payment details. They have a better, faster experience, and it leads to those Restaurant Brands getting more of that guest data into their guest data platform, which is really the holy grail. This is what restaurants are looking for, ways in which they can get guest data into their guest data platform, de-anonymize transactions, and tie every transaction back to a guest account so they can unlock and uncover the guest lifetime value. I think that's something that Olo is uniquely able to do and really where the industry is headed. I think when you compare that to just the tactical building of functionality for on-demand commerce, it just, there's no comparison to what we're able to build as a platform serving the industry as a whole. Certainly appreciate the color. Thank you very much. Thank you. Again, if you'd like to ask a question, please press star then one at this time. Hearing no further questions, this concludes the question and answer session. I'd like to turn the conference back over to Noah Glass for any closing remarks. Okay. Well, thank you all for joining us again today. We are honored to be a mission-critical platform for the restaurant industry and to serve as the engine of hospitality, helping restaurants to drive sales, do more with less, and make every guest feel like a regular. Thank you, Team Olo, for your hard work and execution. We have miles to go before we sleep. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.