Olo’s stocks plummeted last week after the company lowered its revenue outlook for the rest of the year, and founder and CEO Noah Glass said part of the problem was that restaurants were taking longer to make decisions about adding new technology.
In a press release, the B2B Software-as-a-Service (SaaS) company now says its revenue for the full fiscal year will be in the range of $183 million to $184 million, a drop from the previous expectation of around $195 million.
Speaking on a conference call with investors Thursday (Aug. 11), Glass attributed this to “major challenges” with the supply chain and a possible recession, resulting in longer sales cycles and companies having fewer resources for new upgrades, along with operators not deploying things with the same speed as before.
The company said it was working on those issues, expanding its network of partners and managing more deployment directly. And Glass said the company believes that over time, restaurants will come to use technology more to add business and cut down on economic pressures.
The company also noted some highlights of the quarter. On the call, Glass said Olo added 3,000 new restaurants in the quarter, an increase of 11% year over year.
He noted that the company welcomed several new brands to its platform this quarter, ranging from quick service restaurants (QSRs) to fine dining establishments to convenience stores.
“Most notably, Freddy’s Frozen Custard & Steakburgers, a fast-casual restaurant with hundreds of locations, deployed Olo’s full stack of digital ordering solutions this quarter, including ordering, dispatch, rails, network, and Olo Pay,” Glass said. “Freddy’s represents one of our newest and largest customers to adopt Olo Pay.”
Launched in February, Olo Pay makes consumers’ saved payment credentials accessible for use at any restaurant that uses the Olo Pay network for a more seamless payment experience.
The company said in a press release it expanded its relationships with existing customers, with chains like California Fish Grill, CiCis Pizza and Duck Donuts upping their use of ordering solutions and Twin Peaks and Whataburger increasing their usage of Olo’s delivery enablement tools.
The new brands, expanded partnerships and an increase in transaction volume added up to what Glass said in the release were “solid second-quarter results,” with the company generating $45.6 million in revenue, 27% higher than the second quarter of 2021.
PYMNTS spoke to Glass earlier this year, soon after the launch of Olo Pay. He said as eCommerce payments evolve, restaurants that fail to provide faster, more seamless payment options could end up being left behind.
“The status quo for ordering from restaurant brands’ sites, where the digital order provider is a gateway into a credit card processor really meant for in-restaurant card swipes that doesn’t have to operate in a consumer-facing layer … that’s no longer a good enough solution,” he said.