Obviously, I'm a Managing Director in Citi's Investment Banking team. I focus my time on covering vertical software and payments companies. With me, I have Noah, who is the CEO of Olo, and Peter, who is the CFO of Olo. Thanks for joining us. Thanks for having us. Thank you. Just to kind of quickly start and kind of level set with people, especially with people who are less familiar with Olo. At a high level, could you talk about the business overview of the business today? Sure. Well, obviously, thank you so much for having us. Thank you all for coming. Thank you to Citi for hosting. I'm Noah Glass. I'm the Founder and CEO of Olo. So our mission at Olo is hospitality at scale. And what that means to us is helping enterprise restaurant brands who are our customers really make every guest feel like a regular. And the way that we do that is through our open and modular software platform, providing ordering capabilities, payment capabilities, and engagement capabilities. And that means that restaurants can take orders, can take payments for those orders, and then use the data thrown off by orders and payments to better engage their guests. Of course, that's a nice flywheel because that engagement then drives more orders and more payments. So if you haven't heard of Olo, but you have used apps like the Shake Shack app or the Sweetgreen app, then you've used Olo without knowing it. In terms of scale, we are now at the scale of 80,000 individual restaurant locations that use the Olo platform across 700 enterprise brands. And I think about Olo really as almost a three-sided network. That's one part of the network, one side of the network. We also have 85 million restaurant guests that use Olo on an annual basis. And then the third and very important part of the network is our partner ecosystem. So part of being an open platform, we have 300 integrated technology partners that really augment the things that Olo is able to do organically ourselves, and allow our restaurant brands to kind of design the perfect digital stack for their business and accelerate their future. In terms of the market opportunity, or just, I guess, a little bit more about our scale, I founded the company in 2005. We have, since inception, processed over 2 billion orders. And we process about 2 million orders every day. Each one of those is really a packet of clues and very data-rich in terms of the items the guest has ordered, modifications, substitutions, additions. So very powerful to pull that data back into the, the guest data platform. In terms of scale of the business, you know, we did $26 billion in gross merchandise value last year. I'm sure we'll get more into our payments component of the business given the audience and the event. We processed over $1 billion in gross payments volume last year. So kind of early stages of growing that payments business into the total merchandise value of the business. It's a massive industry. It is a $1.2 trillion industry, restaurants. And it is still only 16% digital. So we look at that. We have an incredible, you know, positioning. And it's still very early innings for the restaurant industry's digital transformation. Put that another way, there's about 60 billion transactions in the restaurant industry every year. And only about 10 billion of those today are digital transactions. That is very interesting. The way you talk about it sounds like there is really like a very strong network effects in your business. The way restaurants operate today, restaurants and consumers and the partners that you have operate today. Can you talk to us a little bit about kind of what your ideal customer profile looks like. How that has changed over time between your founding the company and where the company stands today. Yeah. So I'd say that we think about enterprise restaurant brands as our ideal customer profile. And within that category of enterprise, we kind of divide it into three segments. We think about enterprise as we define it as 100+. That's really how Olo made its name. That's sort of our, our anchor territory. And those, you know, brands like Sweetgreen, brands like Shake Shack are good examples of that. We think about top 25. And top 25 are probably in the 1,000+ or 2,000+ unit category. We have a number of examples of Olo customers in that category. Dairy Queen, Jack in the Box, Jimmy John's, Panda Express are, are all good examples. But I'd say that's sort of the less penetrated territory, at the moment. And then we think now about a really exciting component of enterprise that we call emerging enterprise. That takes the most definition. Emerging enterprise are those brands that have between five and 99 locations today. They have a proven model and the ambition to scale. We've seen so many brands. A great example, this is Dave's Hot Chicken start off with us as emerging enterprise, knowing that they're gonna scale and become the big enterprises of tomorrow, and wanting to have that digital stack in place. They take advantage of both the modularity of our platform, the scalability of the platform, and also that partner ecosystem that we have. So that's kind of how we think about it. We, we do not play, important to note, in the true SMB space. So when you say a restaurant to somebody, they got this idea of, you know, an independent restaurant, sit-down dining experience. That's not really where Olo plays. It's really those enterprise brands, and the emerging enterprise brands with that ambition to scale into multi-location restaurant concepts. Got it. Got it. That's very interesting. As you think about the enterprise and emerging enterprise customer, which is your kind of ideal, target customer. How should we think about some of the modules that you talked about, as you talked about the business in terms of engagement, payments, and you, newer products as well, like Borderless. Could you double click on, some of that? Like, how do you, how do you yourself engage a customer? What do you lead with? How do brands think about, about, on-prem, off-prem, ordering, and management? Yeah. I'd say, you know, when we started out as a company, Order was the only kind of software suite that Olo offered. We started out with digital ordering for takeout transactions. And delivery really wasn't a thing outside of the pizza realm. That changed really in 2015, 2016, with the rise of restaurant delivery marketplaces. And with them, guests who wanted food delivered at delivery driver capacity. So we expanded into delivery in two ways. One, enabling restaurant brands to take orders themselves through their own direct channels and match an order with a delivery courier to offer delivery through their native experience. And the other, that's called Dispatch. And then the other was a product called Rails, which enabled our restaurant brands to list their menus and pricing on third-party restaurant delivery marketplaces. Get rid of the tablets inside of their operation, have orders that came from those marketplaces still come into the point of sale. So that's really, like, where we made our name with the enterprise segment, that 100+ unit segment. And, we're, we're well penetrated with the order platform in that segment. So typically, what that means today is that we're going back to these existing customers where their digital business has grown on the back of Olo. And we're having conversations about the newer things that we do. Pay is something that we just started offering, post our IPO in March 2021. First real year of, of being generally available was in 2022. And then Engage was an acquisition that we made at the end of 2021, acquiring what we saw as the foremost marketing stack for, for restaurant brands. So the sequence of that Order, and then Pay, and then engage is typically how we have conversations with brands. They know us as the ordering platform. Then we have the integrated payments offering within the ordering platform that's Olo Pay. And then Engage is when you have all of this data, when you have all this knowledge, and it's tied back to a guest, every single order they've placed through the platform that makes up a great profile of that guest. How do you then score your guests based on lifetime value and really make sure that you're using the data and using the Engage platform to personalize their experience, how you communicate with them, what their experience using the platform looks like? So I'd say most of what we're doing in enterprise is going back to those customers and selling them pay and selling them Engage. We had last week the pleasure of announcing that Five Guys Burgers and Fries, which is one of our very first enterprise customers from 15 years ago, from 2009, had just signed on and implemented Olo Engage. That was really exciting, because they were a great calling card deal for us in the order suite. Now they get to play that same role in the engage suite. We get to help grow their digital business together. It's different in the two other segments. In top 25, a lot of the time we have restaurant brands who have built some homegrown tech. The sales motion there is typically starting with, are there components of what Olo does as a platform company that has 14 different software modules that you could use to enhance the homegrown solution? Are there things that we could do that could enable you to do delivery, as an example, when today you're only using digital for takeout? And a great example of that is Jack in the Box. Jack in the Box started using Olo just for one module to enhance their homegrown solution. And then we built up enough credibility and a track record of success with the brand. And they said, you know, this would be a great thing for us to migrate off of the homegrown stack and onto Olo. That's really been the trend in top 25, because brands don't need to build and maintain in-house. There are great reasons from an economies of scale perspective. There are great innovative things that we're doing as a platform that a brand couldn't do on its own. That's leading to us landing with one module and expanding into the full stack. Then emerging enterprise, you know, these are concepts that really tend to land with, you know, more of the capabilities initially at the onset of the relationship, where we might be selling order and pay and engage to a brand. Because they know that this is the footprint that they're going to need to kind of play some catch-up with those more digitally mature enterprises that are a bit larger. Yeah. Yep. That is ample opportunity for kind of land and expand and kind of grow your footprint within every customer from the story that you just laid out. My next question is somewhat; it's a two-part question. One is, like, who do you see as the core competition today? And the second part of the question is, like, when you think about competition, there is POS and payments companies trying to go towards the software angle and kind of add more engagement, guest engagement type of modules. And then there is companies like yourself, which are actually software-led companies trying to add more payments because just because they can. Where do you see that advantages, disadvantages in the approach to that dynamic with competition? Yeah. I would say, we're very well differentiated based on, number one, our scale. I mean, the numbers I quoted of 700 enterprise brands, 80,000 locations, 85 million guests, and importantly, 300 integrated technology partners is, to my knowledge, unrivaled scale for enterprise restaurant software. And that's important because our brands are looking for not just the best solution, but what they define as the best solution. And that could mean parts of Olo and parts of our partner network. It is dangerous to suggest to an enterprise restaurant CIO that you have all the things that they need and that they can't do other things that they think that they need. Yeah, we've learned that the hard way. It is much better to be an open platform and say, "Hey, if we don't have somebody that you want to work with today in our partner network, we'll work with them. We'll integrate in. We have developer support to help them integrate to our open API. We want to help you design your future and do that heavy lifting." I would say that in those different segments, the thing that we compete against most is really in that top 25. And I alluded to it, I alluded to it earlier. And that's those homegrown tech stacks. Yeah, and it was a big reason for our desire to become a public company, to be a company that was seen as independent, around for the long term, well capitalized, strong financials, profitable business. There had been a number of times in our space where restaurant brands had relied on third-party technology companies that were private. Those companies shut down, or they got acquired and shut down. It led to just a chaotic moment for these restaurant brands because they had to scramble and find a way to provide those capabilities and not disrupt the guest experience. Those were all good things in isolation for Olo. They led to a lot of brands coming onto our platform and off of competitors. But as a narrative, it was a very scary thing for brands to feel like, "Oh my gosh, if this became mission critical, and my mission critical provider goes away overnight, what am I gonna do? I need to build something in-house so I control it." So we really wanted to differentiate Olo by saying, as a public company, you know that we're gonna be around for the long term playing this role. Once you're kind of past that concern, there are just so many arguments from economies of scale perspective and from an innovation perspective. I like to talk about platform level innovation that we're able to do that make using a scaled SaaS provider like Olo far superior than trying to build in-house. That's the case that we're making to those brands. Yeah. And that's an interesting comment because one of the things I was gonna talk to you about was kind of some of the enterprise restaurant platforms kind of making acquisitions and working to build out their own kind of order routing platforms like, Inspire Brands acquired Vromo. Do you see that dynamic changing? Like, as you talk to more and more CIOs, how do they think about kind of Olo versus, doing something on their own? Is that a pure economic math, or is that more of like an innovation math that they have to do? I'd say as a point of order that Vromo was an acquisition that Inspire Brands made. Vromo is an Olo partner. They are a delivery fleet routing software company. That's the role they play. There's about four of those that I can think of off the top of my head in our partner ecosystem. They'll continue to be a partner. We do work with Inspire Brands today through Jimmy John's, which is a great customer of ours and has been for the long term. I really see the paradigm shifting from a pure black and white build versus buy decision to one that is much more gray of build and buy. That's where that approach of landing with one module. So it could be, you know, Olo offers a great catering suite that we've spent a lot of time developing over the past year. That could be a way that we engage with a top brand. They're focused on a different part of the business, but Olo does catering. It could be dispatch and taking advantage of what we've built for connecting to those delivery service providers. You mentioned Borderless earlier. This might be a good time to hit on that. Borderless is the latest example of something that is really a platform level innovation that we've done and that no individual brand could really do and have success with. What it is, is taking inspiration from what Shopify did with Shop Pay. Where instead of requiring a guest on every single app that they download or on every single site that they go to to create a brand new account with an email address and a password, instead, just letting the guest put in their mobile number or their email address and have a passwordless experience. And the thing that we're doing that is similar to Shop Pay, not just in that dynamic, but is enabling that guest to create that account at the Olo platform level. Doing away with passwords might sound like a small thing, but think about just the the pain that you've experienced as an individual consumer and the joy of using something like Shop Pay, where it starts to become the expectation and having to create an account with a password becomes intolerable. That's been a big win and something that we've landed with brands with. It's also a great thing for that brand's ambition of having more of the orders happen in a logged in state so that order can get resolved back to an existing guest in their guest database and add more data to the record about that guest. Yeah. That was gonna be, your comment, last comment kind of leads to my next question is, like, you and your leadership team have talked a lot about data. How do you use data today to drive business decisions for brands and shape the experiences of consumers as well? Yeah. There are some kind of obvious and frequently talked about in restaurant, trade media kind of sexier applications of things like data and AI, like Voice AI in the drive-through. People love to talk about that. Yeah, we play in that space really with partners. We have, I think at least five, maybe six Voice AI partners that connect into our order API and are able to engage with the guest, process an order, push it through our API into the restaurant point of sale. I think the less sexy but much more exciting stuff is what we're doing in the back of the house. And by that, for those not familiar, I mean the kitchen. So one of the things that we've done recently is a product called OrderReady AI. And OrderReady AI connects to the kitchen display system. Instead of just a kind of a theoretical notion of how long an order will take, it's really using machine learning to get very, very close to exactly how long an order will take to process given the current conditions in that kitchen. That also impacts how much extra capacity does that kitchen have to take another order? Or should that order get pushed out into a future time because we just don't have capacity? That stuff really, really matters to a restaurant's profitability, their efficiency, their ultimate bottom line. It's really, you know, a game of inches, that sort of tweaking the model, using AI, using machine learning. Then we're also doing things on the engage front of the business, helping restaurant marketers to kind of write email copy and, choose the right image, choose the right headline, and that sort of thing. And then there's a ton of different uses of data and AI within the payment suite. Fraud scoring is an absolute win for our restaurant operators. One of the big problem statements that encouraged us to launch Olo Pay was, you know, my operators are spending so much time fighting fraud with online transactions. And they're fighting so much, they're spending so much time fighting chargebacks with online transactions. Can you please, please help us with that? And the work that we've done ourselves and with partners like Stripe and Adyen as well has really proven to be a huge win at the very basics of payments around fraud, around chargebacks, around authorization rate. And it makes Olo Pay into the best converting checkout, we believe, in the restaurant experience. That's very interesting. It's, it's interesting to see that your customers are pulling you into directions, and kind of enabling you to add more products. One thing I would love to double click on is payments. So where, how should we think about kind of what's the monetization model there? What does, what role does Olo Pay versus kind of your partners like a Stripe and Adyen? Can you, can you touch upon that a little bit? Yeah. So, in terms of monetization, we, you know, we charge per transaction fees for the facilitation of that, of that payment transaction. Today, that's solely for the card-not-present experience. The hope is later on this year, we will be in market with card-present as well, which, is important just given the quantum of GMV that's processed in the restaurant industry for that card-present transaction. I'll come back to that, in a moment. In terms of the role that Stripe and Adyen play, it's really about the backend connectivity to the acquirers. So really from, you know, from the acquirers to Stripe and/or Adyen, from that point on, it is all Olo technology that's facilitating that transaction on the, on the front end. And of course, all of the tooling that's required for, administration of, of the payments product, that, that's all Olo technology. In terms of the opportunity, Noah touched on earlier, the amount of GMV that's processed over the platform this past year, $26 billion. And if you think about that in the context of total industry transactions and what share is digital, card-not-present is sort of synonymous with digital. I think that's a fair way to think about it. And if 16% of transactions today are digital, that means that there is 6x more transactions that are non-digital today that would be addressable with a card-present offering. So when we think about the $26 billion that is processed on the platform, that's really more like $150 billion plus with a card-present offering as an immediate SAM. And that's what we're really excited about to, you know, again, get to market later on this year. While we, you know, having achieved $1 billion of GPV this past year is a great milestone, that's still sub 1% of the immediate SAM once card-present is ready. That is very interesting and a massive, massive opportunity in front of you. One question that comes out of like this conversation about kind of different modules that you've talked about is, ARPU expansion. How should we think about kind of growth in the near term as well as longer term from adding locations, new locations versus, ARPU expansion and an expand motion? Yeah. There's a slide in our presentation where we talk about the 100x opportunity. Just to maybe simplify that, 4x, 4x opportunity to expand location count from where we are today to the 300,000+ enterprise restaurant locations in the U.S. 25x opportunity to expand ARPU from where we are today to what we ultimately think we can get to with 100% of payment processing over the platform. Because of that, just the magnitude of that ARPU expansion opportunity in the near term, growth will be driven primarily by ARPU expansion. How we do that is through continued adoption of multi-modules. So this past year, we talked, we disclosed on our last call that on average, locations subscribe to 3.5 modules per location. We have a suite of over 14 product modules to sell. A lot of room to grow there. If you go back over time, the year prior in 2022, we had three modules per customer. The year prior to that in 2021 was 2.7. We continue to make progress in multi-module adoption, which then results in higher ARPU and higher revenue. That's very interesting. That's a big track that could kind of expand, landing and expanding and kind of consistently delivering, delivering on, on that part. One of the things that kind of stuck with me was your cohort data presentation as part of your earnings. That's a very strong cohort data where you see the, the cohort, even like the pre-2020 cohort kind of still growing at a, at an accelerated rate. How should we think about that, that cohort data even more in that, like, what's the, what's the churn? How should we think about churn? Obviously, you are landing and expanding customers and expanding ARPU. How should we think about kind of churn? And if there is churn in the, in, in the customer base today, where do they, where do the customers go? What do they do? Yeah. The cohort data is super impressive. I mean, Noah touched on earlier, Five Guys expanding into the Engage suite. They had initially, you know, began working with Olo back in 2009. So just to give you a sense of the kind of staying power of the platform. In terms of, you know, some data to think through from a cohort perspective, on last quarter's call, we talked about gross retention continuing to be north of 95%, right? So we're, you know, we're really sticky once a customer is engaged. And then from there, we expand the relationship. So this past quarter, we reached 120% NRR. And I think that's maybe the fourth or fifth quarter in a row where that number has continued to increase. That, again, foots back to the multi-module adoption comment I made earlier. In terms of churn, I think, again, I, I would point to the gross revenue retention as sort of like the key metric to think about. I think it's natural as a, as a company continues to scale that occasionally you have, you have churn. But if you look at it in the context of the entire platform and the ability to maintain that high gross retention, I think gives you a better sense of maybe some of the, the singular data points that are out there. Yeah. Yeah, makes sense. Makes, makes a lot of sense. One of the things that has come up in our conversations are payments. As you expand more into payments, how do you see your gross margin profile kind of changing? It has changed. And, and how do you foresee that change going to 2024? Yeah. I'd say this is probably what we spend the most time talking about. Certainly with kind of pure software investors or even on, on the sell side, pure software-focused sell side analysts, what, as the, as the business has evolved into both software and payments, the blended gross margin profile of the company has gone down. You know, when we look at that internally, we, we see that as a, as a great sign. We want that to happen because that's showing us that, that pay is, is continuing to scale. The one point that I've tried to make is that, you know, as opposed to if you think about pure software versus pure payments businesses, typically software, you'll see 80% gross margins with 20% drop to, to op margins. It's kind of the inverse for payments where all of the leverage lives in R&D. So we think we can get to a blended gross margin profile of payments of about 20% with a large portion of that falling to the bottom line over time because all of the leverage in payment sits in R&D. Yeah. So we're obviously not there yet. Olo Pay has been in the market now for a little over 18 months. And like I mentioned earlier, $1 billion of GPV is a great milestone, but there's, you know, much, much more to, to, to, to go after. Yep. Talking a little bit more about the operating leverage in the business model, could you touch upon a little bit around expense side of the things, in terms of S&M, G&A, and R&D? Yeah. Yeah. So we talked a little bit about this on our, on our last call, just like as we, as we talked through kind of the, our guidance for the year. If you, if you go back, say 18-24 months, really sales and marketing and R&D, we went through an investment cycle where within sales and marketing, there was investments that we needed to make to right-size the organization to the multi-suite offering we now have, which meant building in a layer of, you know, specialization within the team in the form of sales engineers and solution consultants that could go really, really deep on, on those particular suites. So there was investment that we need to make to, to better enable the team. Much of that is now behind us. And now we're really focused on, on execution within that team. Similarly for R&D, we went through an investment cycle in addition to bringing on two acquisitions, one in the form of Wisely, which gave us our marketing technology capabilities. Then with Omnivore, which was a tuck-in acquisition on the integration front. Those are now behind us. We feel like we're at a level of R&D where we can start to drive leverage in the business while continuing to execute on the product roadmap. That's what we're focused on this year. It's really driving incremental leverage within OpEx while continuing to have success within sales and marketing and execute against the product roadmap. Got it. Very helpful. Over the last few years, you've kind of made a lot of investments and decisions, significant decisions around your product expansion, and the acquisitions that you made. How do you see that going forward? Like, are there any key pivot points in the business? What's the next frontier for Olo, short term, long term? I think there's just still so much opportunity to help our restaurant brands accelerate the future of their digital transformation. In many ways, that's just having them take up more of the modules that we offer, because of that flywheel effect. I mean, it works, it works for us from driving revenue, but it works for them in driving their digital mix. So much of it is centered around guest data. I think that's why we've centered as a company with this mission of hospitality at scale. We believe that that guest data being captured and then having insights derived from that guest data is the key to personalizing that guest experience, which leads to greater visit frequency, greater spend from the best guests that the restaurant has. That's such a key area of focus within the industry right now. So I think, you know, that is really the third leg. We think about sort of stacking S-curves. Order was the first S-curve. Pay was the next S-curve. Engage is the third S-curve. That Engage S-curve, I think, is really ready to rock. It's so resonant for our industry. It's really going through this marketing stack, kind of refresh cycle. You know, it used to be that email marketing and social media was all that there was from a digital marketing perspective. Then loyalty came, and I would argue has proven not to be super ROI positive, broadly speaking. And I think you have restaurant marketers who now have greater scrutiny, greater challenges with profitability, given what's happened with commodity costs and labor, inside the industry as input costs. And they need to figure out now how to make digital marketing work for them. I feel like Olo has the database. Olo has the tools. Olo is now helping these restaurant brands make that migration to a more sophisticated marketing stack. I think that's the big area of focus for the team. Yep. Very interesting. We've covered a lot of ground between your network effects, between your guests, customers, and partners. Any closing remarks? Anything we should take away with? I just continue to think, I mean, and it's crazy when you've been nearly running a business for 19 years, but it's crazy to think just how much we've scaled and what a massive opportunity the restaurant industry represents. There are a lot of things that we say no to, right? We don't sell to one to four unit restaurant brands. We don't really sell outside of the U.S. and Canada. We have a pretty focused product stack. Yet that opportunity in what we do sell just still has so much further to run. We're, we're excited. We think we're really well positioned and able to help our customers have a competitive advantage versus everybody else in terms of digital transformation and, and winning the heart of the guest. Yep. Yep. And Olo's offerings are truly eating the restaurant. Indeed. Thanks for joining us. This was very insightful. Thank you. Yeah.