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| And in many ways, as Noah mentioned earlier, I think the success in Pay actually sets us up really well for more success in Engage because now we have both the order and the payment transaction being processed over the platform |
| I'm proud of what we accomplished in 2023 and we're more excited than ever about the opportunities for 2024 and beyond |
| With our scale, reliability, and modularity, Olo is uniquely positioned to enable restaurant brands to drive traffic and frequency that result in more sales and greater operating efficiency |
| The great enterprises of tomorrow, the ones that we are going after, who are going to represent great ARPU out of the gates and also great location growth going forward as they're accelerating into those great enterprises of tomorrow |
| And so, the data imperative is so strong for our brands to really collect all data from opt-in guests and be able to serve them better, personalize their experience, increase conversion, increase frequency spend, and, ultimately, lifetime value |
| As a result of Team Olo's great work, we also delivered continued growth and profitability in 2023, increasing revenue by 23% year-over-year and expanding non-GAAP operating margins by close to 300 basis points |
| And we ended the year strong |
| Fourth quarter revenue and non-GAAP operating income, again exceeding the high end of their respective guidance ranges |
| In Q4, we increased revenue 27% year-over-year, expanded non-GAAP operating margin to 11%, and deployed with marquee enterprise brands |
| That's why we're having such great customer advocacy and why we're excited about expanding our relationship with the point-of-sale providers to be a payment option for Olo Pay card-present in the back half of '24 |
| We believe no one is better positioned to help the restaurant brands leverage the power of digital commerce and data to drive guest lifetime value and operational efficiencies |
| Fourth quarter ARPU increased 38% year-over-year and net revenue retention expanded for the sixth consecutive quarter to 120% |
| This is Waffle House's first brand-wide digital investment, and they chose Olo for our "exceptional online ordering experience" and the "strategic and financial value of Olo's reliable platform" |
| We're excited to be part of the Waffle House success story, and we believe we can expand further with this iconic brand as we deliver value |
| Revenue growth will continue to be driven primarily by ARPU expansion as Olo Pay scales, and we have further success selling multiple modules in our Order and Engage suites |
| It was a big reason for our wanting to become a public company to show that you can build, on top of Olo, as an open and independent platform that has conviction for the long term, that has a strong balance sheet |
| To wrap up, Q4 was a strong finish to a solid year |
| So, I think we're set up actually really well going into 2024 to have more success in sort of the pure software offerings of Engage |
| We had another record number of orders on Super Bowl Sunday, including record sales days across more than 40 brands |
| I've seen better results in authorization rates, fighting fraud, chargebacks, et cetera |
| So, those are the things that get us really excited about that opportunity |
| And I think we have a really good jumping off point in terms of -- from a from a lead gen perspective |
| It was also another successful quarter with emerging enterprise brands, which we define as brands with five to 99 locations today and aspirations to scale |
| We had a lot of success in bookings, which obviously is now showing its results in revenue |
| I think these are really exciting proof points for us and for our customer base to see brands adopting the marketing stack and being able to use all of the data that they can see from the Order platform, from the Pay platform, to ultimately personalize the guest experience and how we communicate with guests and how we personalize the guest ordering experience |
| So, we found a lot of great progress in net revenue retention over the past |
| This is a great first step in giving brands the ability to simplify the guest checkout process and capture more data to help them run their operations more efficiently and increase guest lifetime value |
| So, we feel good about that |
| We saw growth across all three product suites, most notably Olo Pay, which is tracking ahead of our expectations |
| More Olo restaurant brands will be able to provide a passwordless and convenient sign-in and seamless checkout experience, which is shown to help brands increase guest account sign-ins, grow expected order frequency and improved checkout conversion rates by up to 7.5% |
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| In terms of gross margin, we would expect 150 basis points to 200 basis points in sequential margin decline throughout the year as Olo Pay continues to become a larger portion of our revenue mix |
| I mean, this is an industry that has been under pressure from commodity prices, from labor, from other input costs |
| We expect trends in the restaurant industry will remain similar to what we saw throughout 2023, with consistent growth in online ordering, a continued need to improve efficiency and offset rising costs, and an uncertain macro environment |
| And then, you talked about the 2024 -- basis for the 2024 forecast involving some level of an uncertain macro |
| Based on our current expectations, we would expect 2024 to be the trough in terms of gross profit growth |
| Of course, there are notable outliers to that trend |
| Free cash flow was $2.7 million compared to negative $1.6 million a year ago |
| It's also an industry that has seen kind of the raising of prices coming at the expense of traffic in recent quarters |
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