Q1 2024 Olo Inc Earnings Call

Participants

Peter Benevides; Chief Financial Officer; Olo Inc

Noah Glass; Founder, Chief Executive Officer, Director; Olo Inc

Gary Fuges; Senior Vice President, Investor Relations; Olo Inc

Terry Tillman; Analyst; Truist Securities

Stephen Sheldon; Analyst; William Blair

Clarke Jeffries; Analyst; Piper Sandler

Kevin Kumar; Analyst; Goldman Sachs

Presentation

Operator

Greetings and welcome to the -- welcome to Olo Inc's first-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Gary Fuges, Senior Vice President of Investor Relations. Please go ahead.

Peter Benevides

Thank you. Good afternoon and welcome to Olo's first-quarter of 2024 financial results conference call. Joining me today are Noah Glass, Olo's Founder and CEO; and Peter Benavides, our CFO.
During this call, we will make forward-looking statements, including but not limited to, statements regarding our expectations of our business, our industry and future financial results. These statements reflect our beliefs and assumptions only as of today, and are subject to a variety of risks and uncertainties that could cause actual results to differ materially.
For a discussion of these material risks and uncertainties, please refer to our Form 10 Q, which was filed today and our other SEC filings. 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 is available on our Investor Relations page of our website.
And 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 onetime in nature, and we may or may not provide an update in the future on these metrics with that, I'll turn the call over to Noah.

Noah Glass

Thank you, Gary. Hi, everyone. Thank you for spending time with us today, although got off to a great start in Q1, we increased revenue 27% year over year and expanded non-GAAP operating margin to 8%. And we're raising our 2024 revenue and profitability guidance. We announced new integrations with NCR voice, X and Q that move us closer to launching full stack pay functionality later this year.
And we'll provide access to ingredient level and guest linked data from non digital transactions where more than 80% of restaurant business is conducted today with omnichannel guest data at scale and the AI and machine learning solutions to leverage it, we believe Olo is uniquely positioned to help brands deliver more personalized guest experiences that increase sales and grow guest lifetime value.
I'll review our customer and innovation highlights and share more about our new POS integrations and then Peter will discuss our Q1 performance and updated guidance. We ended the quarter with approximately 81,000 active locations, adding approximately 1,000 net new locations Sequentially, first quarter RPU of $816 increased 29% year over year, and net revenue retention was in excess of 120%. We continue to land and expand with enterprise and emerging enterprise brands.
And we further strengthened our open platform through new features and ecosystem partners in enterprise, Quiznos, deployed ordering rails, dispatch pay and engages sentiments and seek a three suite implementation. And we're super excited to announce today that Dutch growth will deploy our ordering and pay modules to enable guests to order ahead through their app.
It's a great example of digital moving into the drive-through channel, and we're thrilled to help this fast-growing brand deliver on their core values of speed, quality and service. Dutch Bros has completed a successful pilot, and we expect them to deploy Olo across their 850 plus locations across 17 states throughout 2024.
In emerging enterprise, we continue to land and expand more than a dozen brands like Moon bowls and rock. And Robin had multi-module implementations while brands like Bluestone lane and Mendocino Farms, expanded InterPay and Panini Cabana Grill and uncle Julio has expanded into Engage. We spent time with more than 100 of our brands in March at our beyond four customer conference. This was a fantastic event with record attendance overall and among senior level decision makers.
Customers love our roadmap presentation, the hands-on demos of our three suites and our announcement to integrate Olo pay and engages guest data platform with Q. It was great validation that our products and strategy are resonating with brands. In Q1, we announced 13 major product enhancements in our spring release and further expanded our ecosystem partnerships, I'll share a few highlights. Catering is an increasingly important channel for brands. It's rebounding significantly post COVID and it generates high average order values, and it's a large TAM.
Third party Research estimates that U.S. workplace and event catering is a $60 billion market. However, MANAGING catering orders can be inefficient, often requiring manual order entry and customer cross-referencing with POS data to address this opportunity, although launched its catering plus module in the fall. And this spring, we released a new production sheet feature that streamlines the prep for large volume orders improving staff efficiency and enabling brands to capture more high-value catering sales.
We are very excited about our early success here with brands expanding into catering plus in Q1 since implementing catering plus soft Cerritos Fresh Mexican Grill has increased catering same-store sales by 22% and has improved order accuracy and staff efficiency with catering plus we believe we can do for catering, what we've done for mealtime ordering and delivery, integrate the channel into the brand's operations and drive sales and efficiency like rails and dispatch.
Catering plus is a standalone module and it's generating interest from large brands not currently working with Olo as well as restaurants within our base. We look forward to sharing more this year as we focus on making catering plus a larger part of our business. We also announced smart cross-sells and AI powered feature that surfaces personalized dynamic items, suggestions during the ordering and checkout process by recommending items based on contextual data such as order history, location, menu and cart contents.
This new feature is improving guest engagement and average order value. In a recent Olo test. Smart cross-sells accounted for 10% more basket value on average than static cross-sells. Smart cross-sells is live today and we see an opportunity to combine it with borderless, which has doubled since year end. And now exceeds 4 million guests to flex the auto network effect and power cross-sells across the Olo network to drive even more guest engagement and sales lift in pay.
We announced the general availability of card present functionality in self-service kiosk, which is another step toward bringing card presence to market this year. Sunny grow a high growth, stir fry and Solid Concepts. He's a digital first brand that runs nearly all of its orders through all those platforms. They're also the first to adopt Olo pay for both on and off-premise transactions, which reduced chargeback costs by 83% and increased authorization rates for card-not-present transactions by over 7%.
By running all their payments through Olo pay. We enabled honey growth to improve their financial performance and their guest experience, and they are generating significantly higher RPU than our platform. Average RPU expansion is a key growth lever, and we believe we can replicate our success with honey grow throughout our base. And in ENGAGE, we released new features to help brands assess ROI, manage contact lists and analyze campaign effectiveness.
We also enhanced the guest data platform's user interface to make it easier for brands to develop a comprehensive view of their debt across all channels and platforms. In real time, these Engage enhancements give brands more power to convert their data into the insights and actions that increase sales and guest lifetime value in our ecosystem, which now exceeds 400 partners.
We announced a number of new integrations, including Kermit for kitchen capacity order and delivery management, Kia for voice ordering and Spark fly for guest engagement. We remain committed to providing an open platform that helps restaurants benefit from innovation provided by Olo and other best-of-breed technologies.
Before I turn the call over to Peter, I want to discuss our new POS integration announcements with NCR of Wickes and Kew and why we believe these are so important to our strategy by integrating Olo pay into POS providers like MCRBOXNQ., we will expand our payment processing and data footprint into non digital transactions where 84% of U.S. restaurant business occurs coupled with ENGAGE integration capabilities, although we'll be positioned to touch 100% of restaurant transactions and offer brands, a differentiated omnichannel guest data platform at scale.
We believe that's an unlock for scaling pay and engage revenue and a game changer for all those ability to help brands drive sales, grow guest lifetime value and make every guest feel like a regular. Today, our open platform enables brands to aggregate guest data from Olo solutions and our ecosystem partners to better understand their guest lifetime value, personalize the guest experience and drive sales and operating efficiencies.
For example, Sunday barbecue ingest data from multiple sources across its tech stack, including ordering rails and dispatch into the Engage GDP. to better understand guest lifetime value order frequency and average spend, Sony's leverage this data to drive 50% growth in marketing subscribers and learned that the top 15% of their guests account for half of their sales.
First, what's used with Olo to unify their data and increased frequency with repeat customers, engage enabled first watch to deliver personalized automated e-mail campaigns that resulted in a 20% lift in spend by recipients over 30 days and 2.7 million in total spend in the campaigns first, 90 days. And as brands face the challenges of continued food cost inflation, minimum wage legislation and a tight labor market, the benefits of data-driven personalization are becoming increasingly important to a brand's success with greater data breadth, depth and scale than alternatives.
Although we'll be in an even stronger position to help brands within our network of 700 brands, 85 million guests and 400 ecosystem partners drives data breadth. Our API.'s pulled deeper levels of transaction data than alternative providers, and our expanding POS integrations will provide a meaningful increase in data scale.
This is why we believe auto has a durable competitive advantage versus the traditional walled garden approach of POS providers, data-driven personalization yields success for restaurants and we believe, although it's set to become the clear leader in restaurant data and therefore best positioned to leverage AI and machine learning to drive insights and action that results in greater sales, guest lifetime value and hospitality.
I'll now turn the call over to Peter to review our Q1 results and guidance. Peter?

Peter Benevides

Thanks, known. Today, I'll review our first quarter results as well as provide guidance for the second quarter and the full year 2024. In the first quarter, total revenue was 66.5 million, an increase of 27% year over year. Platform revenue in the first quarter was 65.8 million, an increase of 28% year over year revenue from all three suites quarter paying and engage outperformed our expectations. Active locations were 81,000, up approximately 1,000 sequentially.
Note that the vast majority of Dutch proved locations are yet to be deployed, so they are not included in the Q1 active location count. We expect location count to ramp throughout the year, and we continue to expect to add approximately 5,000 net new locations. This year. Rpu for the first quarter was approximately $816, up 29% year over year and 4% sequentially year over year. Increases in RPU were driven by increased order volumes and modules per location.
In particular, Olo pay in net revenue retention was above 120%, the second consecutive quarter where NRR was at or above 120% for the remainder of the Q1 financial metrics disclosed unless otherwise noted, I will be referencing non-GAAP financial measures. Gross profit for the first quarter was 41.5 million. This compares to 37.2 million a year ago.
The year-over-year growth in gross profit was driven by continued revenue growth, partially offset by the increasing revenue mix of OpEx. Sales and marketing expense for the first quarter was $12.7 million or 19% of total revenue. This compares to $9.9 million and 19% a year ago.
Research and development expense for the first quarter was $13.9 million or 21% of total revenue. This compares to 15.7 million or 30% of total revenue a year ago. General and administrative expense for the first quarter was $9.3 million or 14% of total revenue this compares to $10.4 million in 20% a year ago. Operating income for the first quarter was 5.6 million.
This compares to $1.2 million a year ago. Operating margin was approximately 8% in Q1, and the year-over-year improvement reflects the combination of our focus on managing costs as well as growth in revenue sequentially the decline in profitability from Q4 2023 reflects seasonality around factors such as tax resets and benefit expense increases associated with the new calendar year as well as costs associated with hosting our annual customer conference beyond four in March.
Net income in the first quarter was $7.8 million, or $0.05 per share based on approximately $172.7 million fully diluted weighted average shares outstanding.
Turning our attention to the balance sheet and cash flow statements, our cash, cash equivalents and short and long-term investments totaled approximately $377 million as of March 31st, 2024. Pursuant to our current share repurchase program. In the first quarter, we repurchased 2.8 million shares for a total of approximately 15 million. Since the introduction of our share repurchase program, we have repurchased 14.3 million shares for approximately 93.1 million.
We had approximately $6.9 million remaining on the authorization as of the end of the quarter and have since completed the program. And today we announced that our Board has authorized a new 100 million share repurchase program. Net cash provided by operating activities was 6 million in the quarter compared to 7.2 million in the quarter a year ago, free cash flow was $2.8 million compared to $3.9 million a year ago.
I'll wrap up by providing our guidance for the second quarter and full year 2024. For the second quarter of 2024, we expect revenue in the range of 67.5 million and 68 million and non-GAAP operating income in the range of 5.5 million and 5.9 million for the fiscal year 2024, we are raising revenue and non-GAAP operating income guidance. We now expect revenue in the range of 274.5 million and 276.5 million, and non-GAAP operating income in the range of 23,000,024.5 million.
A few things to keep in mind, as you consider our outlook for the year, we got off to a solid start to the year as reflected in our raised full year guidance. That said, we continue to take a prudent approach to our full year outlook. We expect trends in the restaurant industry will remain similar to what we saw in 2023. Consistent growth in digital ordering, the continued need to improve efficiency to offset rising costs and macro uncertainty.
Revenue guidance continues to assume a two-thirds one-third split between incremental revenue from existing projects currently in deployment and new projects signed and deployed in year, which will be driven primarily by RPU expansion as Olo pay scales, and we have further success in selling multiple modules in our quarter and engage suite.
In terms of gross margin, we now expect the sequential decline will be less pronounced. Specifically, we expect Q2 gross margin to decrease approximately 100 to 150 basis points from Q1's gross margin. Therefore, this range of decline to occur from Q2 to Q3 and from Q3 to Q4, the change from our initial expectation of 150 to 200 basis points is due to a shift of certain costs from cost of revenue to operating expenses as well as from better cost optimization within the platform.
In terms of non-GAAP operating income, we expect to generate operating leverage in the second half of the year compared to the first half, directionally consistent with prior year trends.
Finally, as a reminder, the quarterly pacing of operating expenses will be slightly different in the first half of 2024 versus prior years. As we stated on our last call, this year's annual compensation increases began hitting in Q2. Historically, annual comp increases began in Q1 to wrap up, we got off to a strong start this year. We are making good progress across our key strategic priorities and believe we are well positioned to deliver on our updated financial targets for the year.
We remain at the early stages of the digitization of the restaurant industry and believe Arlo's portfolio of solutions helps brands solve many of their most pressing operational challenges. Further, our open platform approach is allowing us to significantly increase the scale of our data assets and do more to help brands increase their sales and improve their operations.
With that, I'd now like to turn it over to the operator to begin the Q&A session. Operator?

Question and Answer Session

Operator

(Operator Instructions) Terry Tillman, Truist Securities.

Terry Tillman

Yes, hey, good afternoon, gentlemen. Can you hear me okay?

Noah Glass

Loud and clear, Terry.

Terry Tillman

Thanks, wonderful. So congrats on some of these wins like Dutch Bros. And some of the other transactions. First of all, I've got two questions. The first one's a multi-partner, the second when it might also be a multi-partner. So bear with me, but in terms of you've got a couple of U.S. relationships now integrating Endo will pay. I would love just some qualitative perspective on what are you hearing from your large customer base as now that's starting to unlock.
And then secondly, I think, Peter, you had talked about if I'm not mistaken, about a doubling of Olo pay for the year to 60 million. Does that still hold true or does that change? And then I had a follow-up.

Noah Glass

Terry, I'll get started on the qualitative part. This is Noah. So it's been fun to work on these POS partnerships that go beyond the traditional way that we integrate to the three dozen point-of-sale providers that we integrate to with just order injection, but to now include both Olo pay and also Olo Engage. So we're able to process those on-premise transactions happening inside of the restaurants or through the drive-through and have all of the data from those transactions. The 84% of transactions that take place in nondigital channels.
But in on-premise channels flowing into the guest data platform, it's been even more fun to see the reaction from customers who many of whom describe this kind of capability of being able to see 100% of transactions and tie every transaction back to a guest. It is something of a holy grail that they've been waiting for this industry to get to being able to unlock that Holy Grail because it drives please think about marketing and guest engagement differently and enables them to really understand guest lifetime value, not just for the 16% of digital transactions, but for all 100% has been a really, really encouraging. So we've seen that reaction as we posted about these relationships with two initially, which we announced at our beyond four customer conference about six weeks back. And then more recently with NCR Wix, we've seen these reactions and social media.
But then we've also had direct conversations with the executives at the restaurant brands that are today, common customers of Olo and these point-of-sale platforms. They are really excited about the future for both pay and for engage and the unlock that this represents. And beyond that, it's been really fun to see what prospects are saying and thinking about these capabilities as they're evaluating POS partners and seeing this as a real competitive advantage for the POS partners that are working with Olo beyond just order injection. But across all three of our product suites. So we have these two announced and we obviously are seeking to do this across our point of sale partner RELATIONS.

Gary Fuges

Apologies, Gary here. I think we may have lost Noah to give us a second.

Peter Benevides

Well, I connect I can jump in there, Terry, in your question around the the estimates for pay this year. So you're right we are still estimating a doubling of the business to over $60 million of revenue for the year. And again, that will just include the card-not-present portion of the business with card-present being a revenue contributor in 2025.
That's great. Thanks for that. And I know, Gary, I don't know if we've had I think you're thinking of it, Peter, Gary, did I know I rejoined, I believe, Terry, he's dialing back in.
So apologies for that.

Terry Tillman

Okay. Well, maybe what I'll do is just for the spirit of letting other folks get in here. Maybe I could just ask you, Peter, and then I'll just jump back in the queue as it relates to free cash flow for the year. Just any updated thoughts there on how you're thinking about free cash flow for the year? Thank you.

Peter Benevides

Yes, I'm sure you noticed this quarter we generated a free cash flow, which is about half of what we brought in from an operating income perspective with the difference there being really on cap software driven, I would expect holding aside from any one-time items that we're not foreseeing currently for that dynamic to continue through the balance of the year and being free cash flow positive for the year.

Terry Tillman

Thank you.

Peter Benevides

Operator, next question, please.
Apologies.
We seem to be having a continued difficulties here.

Noah Glass

I'll just hang loose here second, as folks were working through this year, we're still here and we'll work on getting in QA.

Peter Benevides

See folks in the Q&A, and we'll work on getting it through. So please be patient.
Thank you.
Backs at Lake Street, can you hear me?
Yes, I can.
Sorry, just said you are not radar or if they were talking to me?
Yes, that's right, Omar.
I'm taking over airMAX.
I ChinaEdu's remotely. So we've got your line live so far. I've got Peter, and I are so far away again already something.
And so if we just go to the Q and NCROX. a partnership, I guess what I'm wondering here is this arrangement dependent on the launch at present or we see card-not-present revenue from them today.
And so we currently have the integrations. Maxis is known for order injection and Olo can the the digital ordering provider with and card-not-present processing. The idea of this relationship is really tied to the launch of card present processing where the transaction is happening, orders being taken on the POS, the payments is being done, POS adjacent tech into the point of sale and then be receiving the data from that order, not just the transaction data of the total amount that you typically get from a payment transaction, but we're actually getting ticket data.
So we're able to see item-level data ingredient level data. What was modified adjusted substituted added to an item, and that's getting pulled back into the Olo engage guests and data platform. And all of that is tied back to a guest profile. And that's what I mean when I say, being able to suit 100% of transactions for 100% of guests, and we're really seeing a level of depth of those transactions, a granularity that is typically associated with digital transactions.
We were able to see all of that customization detailed down to the ingredient level, but we're now able to do that. We're now able to do that rather for on-premise transactions through these two different point-of-sale platforms, Q and NCRBOX. And our ambition is to replicate that kind of arrangement across all of the point-of-sale partners that we work with in serving enterprise restaurant brand guest data needs.
Yes, already.
And then I guess on top of that, I mean, is there a possibility for a similar arrangement Migros?
Yes, we don't take any of the POS partners that we currently work with today off the table. We're sequencing this based on a variety of factors and we're excited to work with Q as a challenger point of sale that is kind of relatively new on the scene and gaining share. And with NCR as our longest term POS partner and the largest POS partner that we have the most number of restaurant brands and locations with today and everything in between already.
Hey, great quarter, guys.
Thanks for taking my questions.
Thank you.

Operator

Stephen Sheldon, William Blair.

Stephen Sheldon

I know And Peter, you have that filing on for Stephen. Thanks for the questions. Wanted to start with a macro level question, just curious on what trends you are seeing in consumer spending and engagement and how you feel about the overall health of the consumer heading into the second half of the year?

Noah Glass

Well, great question.
And certainly one that's been in focus as we've listened to restaurants reporting earnings. I would say there is certainly the same sort of sentiment with consumers of trade down into lower expensive restaurant offerings. You've heard restaurant brands talk about losing some of the lower income consumers. What we really see at this moment in the industry is that restaurants are dealing with two different forces. One is labor pressure, the higher cost of labor, some of that is based on regulations.
As in California. The difficulty of getting enough labor inside the restaurants and traffic declining and part of traffic declining used some of that price sensitivity. I think also some of it is driven by food costs and the inflation in food costs leading to restaurants taking price. And that's always a trade-off when restaurants take price and charge higher prices for traffic to a big thing that we're focused on and Olo is addressing those two challenges that restaurants are facing the first around labor, helping them to do more with less.
And that is something that Olo has always been all about in every solution that we brought to market, helping the restaurant be more efficient in their use of labor, putting more of the ordering and payments in the hands of the guests to the restaurant and focus on really delivering on high hospitality interactions with the guest and be more efficient from a labor standpoint.
On the other fronts, really helping restaurants know their guests better understanding all of the different touch points with the guest and being able to personalize their marketing to the guests, increased conversion, have guests increasing their guest lifetime value without necessarily requiring restaurants, you resort to things like discounting or offers to drive guests back in. So these two value propositions of both helping you do more with less and better know your guests to drive traffic are really resonance with restaurants, given those challenges that they're experiencing with consumers at this moment. And if that's helpful in our Thank you.
For that.
And then can you just talk some more about the recently announced smart cross sells product, particularly what early customer feedback has been like? And do you think that's something that could be a driver to RPU growth over the longer term?
Yes, smart cross sells is one that we are really proud of. I mentioned there were 13 different capabilities that we announced in our spring release, smart cross sells is one that is really, really fun because it is using that ordering and checkout experience and all of the data that we're able to see to utilize the context of what is in the cart and what we've seen in terms of product affinity from one product to other products that go nicely with that product in a really data-driven way to make a name suggests mark cross sell rather than just saying, do you want fries with that?
Or do you want to drink with that as we're all used to hearing the results really speak for themselves. We've seen a 10% lift in basket size when using smart cross sells versus using that sort of traditional upsell. And all of this is automated. This does not require that somebody is manually doing upkeep to do that affinity mapping of one product to another product, which is very similar to the way that services like Netflix or Spotify use collaborative filtering.
We use AI to use machine learning to use the data that we see to have the best offering put in front of the customer at the right moment. I'm very proud to announce this was not in the prepared remarks, but we now have over 10,000 locations already adopting smart cross-sells, and we're very excited that it also means no manual upkeep. This will continue to get smarter and smarter. And we hinted a little bit at how this can get smarter from here. So understanding who that guest is what they've ordered in their order history is one way that we're focused on making smart cross sell even smarter.
And then also pulling in the data that we can see about the guests from across the older platform, really flexing the Olo network through our Board with identity to understand who that guest is and what they've done in other ordering scenario that other brands to make the smart cross-sells even smarter for that specific guest with a network and board list already 4 million strong So we're excited about continuing on that personalization journey using data using AI using machine learning. And certainly, we believe that there is a revenue opportunity there and therefore, an RPU opportunity there over time.

Stephen Sheldon

Got it. Thanks for that added color. That's helpful. I appreciate the time. Nice quarter, guys.
Thank you.

Operator

(Operator Instructions) Clarke Jeffries, Piper Sandler.

Clarke Jeffries

Hello. Thank you for taking the question. No appear, could you be sticking with, you know, I wanted to ask you, though and coming away from from beyond 2024, I think it was it was very interesting to see the progress one year in the sort of mindshare of the marketing products and sort of the help on the marketing side that you've built with the ENGAGE suite.
And I was just curious about your takeaways on the appetite balance between engage and pay as you look at this year, does engage seem like a product that might and bump up in the priority list or the demand list. Looking at 2020 for four. And when you think about smart cross-sell as an accelerant to that and could that be a factor in the final part of that question is just could you remind us how many customer profiles you have powered by the borderless data today? And then and then one follow-up, Dorothy and Clark.

Noah Glass

Well, first, thank you for attending, and thank you to all of you in the analyst community who rejoined us at beyond four, I think it was hard to come away from that event, not feeling like although customers are really leaning into the relationship with Olo, looking for new capabilities from Olo and really viewing Olo as their digital configured area that's going to help them on their digital journey as they become more and more digitally mature.
And certainly one of the things that we really wanted to focus on was the way in which the solution suites of play off of one another, we think about this data flywheel that order and pay it together, drive a ton of data. And that data enriches our ability to know the guest and our ability to help the brand know the guest and then to engage, they speak with them and how they personalize the experience and smart cross-sell is just a great example of that in terms of what brands are focused on. I think that what we see is we talk about Olo pay engage in that sequence, and that's very intentional.
That's how we think brands are sequencing. Their efforts that order and pay of our the great feeders of data. And then there's all this data to use for engagement. Certainly a lot of restaurant customers who are there beyond four. We're really eager to hear about what we're doing with Engage. And I think borderless was almost a cherry on top of on board Lewis, what was it? 180 days ago, we announced that we had reached a million guests on board less than 90 days ago. In our last call, we were up to 2 million guest accounts on borderless.
And then today, we've announced we're at 4 million guest accounts on board well. So you can really see that exponential growth of restaurant guests who have Olo level profiles that they can then use across multiple brands. And that's what we mean when we talk about this network effect, although sitting in between restaurant brands and restaurant guests and being able to leverage the data that we can see about the guest across multiple brands for an even more personalized experience that leads to higher conversion, higher frequency and greater guest lifetime value.
So I think all of these things are really a direct hit for restaurant brands and what they're thinking about given the environment that they're operating in and also given and of what they're able to do now with digital ordering and payments throwing off so much data and giving them the opportunity to leverage that data, a great co-product of the digitization of their business to really offer hospitality in a new way in a digital realm and make every guest feel like a regular.

Clarke Jeffries

Great.
Perfect. And then I had one follow-up. Just in relation to the the point of sale partnerships, very encouraging to hear those. Our vendors be brought broader proactively before the announcement was even said about a flagship point of sale partner and I just wanted to be clear about when you think about go to market with these partnerships, where would you rank order the partnerships where they could be an additional distribution channel will you be have proactively pulled into a new customer relationship and in situations where they'll be a preferred partner? And this is about technical integrations and compatibility within the ecosystem. Just kind of clarity around where you're thinking about point-of-sale partners in that regard would be helpful.

Peter Benevides

Thank you.
Yes, I think it's a great question, and we like to be an open platform, as you've heard us talk about from the very beginning, and that has really been our ethos and we don't want to prioritize one partner over another. It has been great to be able to walk into our customers and say you're all the partners that we work with and you can look them up in our great Olo Connect partner directory, our website. And you can see exactly what we're doing with each, how many other brands and how many other locations are working with them, what they have to say about it and how long that relationship has been in place.
Obviously, we're walking into a restaurant brand and we have a capability like what we now have with Q & TRVX. We think that puts them as POS providers at a competitive advantage to be able to say we can be a POS partner who works with Olo for order for pay for engage and really helps you to have this Holy Grail kind of capability where you can get every transaction tied back to a guest, whether it's off-premise or on-premise digital or non-digital
Our hope is that we can do that with every point-of-sale provider that we work with over time. And I think it's incumbent upon the POS providers to embrace that open philosophy as Kew and NCR blocks have done and do that before it really innovation to flourish for our common customers and for the industry as a whole.
Really appreciate it.
Thank you.

Operator

Gabriela Borges, Goldman Sachs.

Kevin Kumar

Hi, this is Kevin Kumar on for Gabriela. Thanks for taking the question.
Noah, can you give an update on the ramp of the professional services team, how is that coming along and anything you can say, I guess on the impact it's having on customers from a time to value perspective, you are saying, well, it's something that was another really hot topic at beyond four.

Noah Glass

We talked about it a little bit on our last call about professional services and how we saw a need for Olo to do more. And I would put it under that same heading of helping restaurant brands to do more with less a lot of restaurant brands don't have somebody necessarily in-house, who is a digital marketing guru and knows how to use all the data that they now have access to or use all the tools that they now have access to through the Olo Engage platform.
So we see a great opportunity. I mentioned this with announcing California Pizza Kitchen and five guys last quarter coming on to Olo Engage. So they can leverage, although professional services to operationalize and optimize a program. And they can also use us on an ongoing basis to kind of be that digital can area almost like a fractional, a Chief Digital Officer for the brand and really help to optimize the programs over time.
That's true.
And I mentioned it for Olo Engage. It's also true of on the ordering. It's also true of pay and how we sort of set up the program and get brands up and running beyond just implementation, but make sure that we're fine tuning the program as it goes. And I wouldn't I would say this is a bit anecdotal, not as quantified as you may wish, but from the beyond four conference, we had stickers that were out at check-in when people are registering.
Now, remember well that the yellow stickers were the ones that indicate that it was a and although restaurant customer who wanted to hear about the professional services offering. We had other stickers for the different product suites. We had stickers for catering plus, et cetera. The yellow stickers ran out very quickly, a lot of restaurant brands want over to play this role of professional services, and we're excited about building that muscle.
As we look today, it's a very small portion of our overall revenue mix but again, we think that professional services is a important part of our revenue story going forward and a huge unlock for software revenue in addition to just being another revenue stream that will help our customers get to value faster and use more of those capabilities as they get more digitally mature faster.

Kevin Kumar

Thank you and congrats on the record.

Peter Benevides

Thank you, operator. We'll take one more question, please.

Operator

Terry Tillman, Truist.

Terry Tillman

Thanks. I hope it didn't cause you to hang up there earlier. I know I'm glad you're back up just as a follow-up, is the I think you have a question from somebody else earlier asking about the you know that the other products and including Engage but I think you talked about the sequential order. The way it release the cadence can work is on OPay and then Olo engaged.
But I'm curious about is because now you have these POPS relationships with Olo pay. I just wanted to have a go to market. Are you set up to go sell, engage more aggressively? Like is it a dedicated sales force? Or is your whole sales team trained? It's more kind of in the how the sausage gets made in terms of how you're going to monetize this to go to market Thank you.
Yes, Terry, it's a great question. Sorry about the difficulties earlier with the call.

Noah Glass

I'm sure the way that they'd go to market.
I've had an awesome time of the past couple of weeks, really witnessing this first hand, being out with our team talking to customers talking to prospects and seeing the magic of the way they go to market works today with a more nuanced structure really working. And I would describe it as we have in many cases, a long-standing trusted relationship with a restaurant brand at the C-suite level and they know us typically from being their ordering platform over several years.
And when we have these new capabilities, whether it's a new solutions suite like pay like Engage, whether it's something like catering, which is a module catering plus with in the order suite, we have the ability to have that relationship here about what they're looking to do and then bring in our great sales engineering team to do a demo in real time showcase studies of other brands and what they're doing using some new module that the brand has expressed interest in and that one-two punch of a long-standing relationship that's kind of broad in nature.
And that deep and specific knowledge of that sales engineer was really an awesome model and credit to Diego Panama, our Chief Revenue Officer, who came in and reshaped our team in that way. But that model is really working and it's helping us to educate our restaurant customers and prospects about the new capabilities that we offer, that's helping our salespeople that understand broadly all the things that we can do, but also know that in their back pocket, they have a team of experts who can go deep on those things, do those live demos, answer any questions that brands have. And I think that's really showing up in success for our go-to-market team in these new product modules and in these new solution suites.
Thanks.

Terry Tillman

No, that's helpful. Yes. Thank you.

Operator

Ladies and gentlemen, we have reached the end of the question-and-answer session. I'd like to turn the floor back to Noah Glass for closing remarks.

Noah Glass

Okay. Well, thank you for joining us today and bearing with us through some of the technical difficulties we started off 2024 with strong Q1 financial results raised full year guidance and expanded partnerships to help brands leverage 100% of their transactions and drive guest lifetime value through our open platform, we believe we are uniquely positioned to capitalize on the increasing demand for guest personalization. Olo is accelerating the future of hospitality, and we're laser-focused on executing on the opportunity in front of us.

Peter Benevides

Have a great evening. Thank you.

Operator

This concludes today's conference. You may disconnect your lines at this time.