Q2 2021 Olo Inc Earnings Call
Yeah.
[music].
Good afternoon, My name is Sarah and I'll be your conference operator today at this time of would like to welcome everyone to the <unk> second quarter 2021earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session to ask the question.
During the session the need to press star 1 on your telephone I.
I would now like to turn the call over to all of <unk>, Vice President of Investor Relations Ms. Stephanie Douglas. Please go ahead.
Thank you good afternoon, everyone and welcome to <unk> second quarter 2021 earnings Conference call. Joining me today are nowhere glass, <unk> founder and CEO and Peter then of BD <unk> 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 future performance and our market opportunity, including our expected financial results for the third quarter and fiscal year 2021.
Expectations regarding future operating expenses impacts and expected results from changes in our relationship with our customers our market opportunity and market trends expectations regarding the impact of the COVID-19, pandemic and seasonality on our business and industry predictions on consumer ordering.
<unk>, our ability to the senior profitability customer adoption of the product from the expectations for capturing market share and our delivery of new products or product features.
We undertake no obligation of updating any forward looking statements made during this call to reflect events or circumstances after today.
These statements are subject to risks uncertainties and assumptions.
Should any of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect actual company results could differ materially from these forward looking statements.
A discussion of the risks and uncertainties related to our business is contained in our quarterly report on form 10-Q for the quarter ended March 31, 2021 filed with the SEC on May 12, 2021, and our quarterly reports on form 10-Q for the quarter ended June 32021 that will be <unk>.
Filled with the SEC. Following this earnings call and our remarks during todays discussion should be considered to incorporate this information by reference.
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 web site and is included as the exhibit in the form 8-K furnished to the SEC.
Finally in terms of our prepared remarks or in response to questions. We may offer incremental metrics to provide greater insights the dynamics of our business or quarterly or annual results.
Please be advised that this additional detail maybe onetime in nature, and we may or may not provide an update in the future on these metrics.
I encourage you to the net.
Our Investor Relations website at investors thought of low dot com to access our earnings release periodic SEC reports a webcast replay of today's call or to learn more about all of them.
With that let me turn the call over to Noah.
Thank you Stephanie and officially in the on the record welcomed the TMO low.
Q2 was another strong quarter of profitable growth for <unk>, helping even more restaurant customers continue to drive digital sales, while many restaurant dining rooms reopened around the nation.
On our last earnings call I discussed all of those transactional SaaS business model and our new ambition to reach of digital entirety of the restaurant industry transforms to digital touching adding value to and driving revenue from every restaurant transaction.
As the U S economy in restaurant dining rooms began to reopen in Q2 restaurant digital sales proved durable.
Constraining that the restaurant industry of digital transformation is not just about delivery, but all ordering mode and across all service models.
Delivery drive thru table service and takeout.
In fact, according to data from NPD group, there are more non delivery digital orders been delivery of digital orders.
Of those platform is enabling restaurant brands to digitize every transaction not just delivery of transactions.
During Q2, we celebrated more restaurant brands re platforming to <unk> and we were proud to welcome Potbelly Sandwich works to the <unk> platform.
Potbelly migrated from a legacy tech stack and like Papa Murphy's Chili's, Marginals, Little Italy, Outback Steakhouse, Carrabba's, Italian grill, Bonefish grill, and many others before at Potbelly re platforming to although again demonstrated that leading restaurant brands can no longer simply check the box and have just any day.
Little ordering solution, rather they need to best meet the needs of the on demand consumer by utilizing what we believe is the industry's most sophisticated on demand commerce platform.
Benefiting from our broad and deep set of capabilities and an open partner ecosystem of over 100 best of breed restaurant technology partners.
Our launch with Potbelly further as all of those conviction that opened SaaS wins over homegrown and closed proprietary software.
We also deployed new virtual brands, including Wingstop launch of their virtual brand 5 stop of creative and successful solution for the chicken wing shortage that led to price inflation.
The launch of <unk> demonstrates the flexibility of the older platform provides to its customers, allowing restaurant brands to operate more nimbly in this case of helping to solve business challenges and bringing wingstop closer to realizing its long term strategy.
Another critical business challenge all of us helping to solve the problem of driver availability for delivery service driver shortages are widespread and of led to reduce driver availability and delivery delays for restaurants and consumers, although dispatch our delivery as a service solution provides a nationwide network.
Of more than 2 dozen delivery service providers or DSP is covering 97% of our customers use store locations.
Dispatches the ability to provide redundancy and increased driver availability is highly differentiated and create substantial value for our customers.
A great example of customers realizing dispatches value with the Q2 launch of the Jack in the box of the dispatch only deployment, which will enhance their existing digital ordering for takeout program.
This deployment with Jack in the box further demonstrates <unk> ability to land of major enterprise brands with 1 product module to initiate the customer relationship.
Just the subway launch with the older rails Jack in the box is another major enterprise brands launching with a low dispatch and gaining familiarity with all of those broader capabilities and overall platform security stability and extensibility.
Jack in the box is also an exciting example of our success in the quick service restaurants or <unk> category.
As the largest component of the restaurant industry by both locations and transactions.
<unk> brands represent the Greenfield industry segment that we'd love for its high average location counts industry transaction share and cornerstone commitment to convenience.
We've experienced early success in the <unk> with checkers, and Rally's Culver's dairy Queen Crystal and now Jack in the box and this segment continues to represent a promising growth opportunity for <unk>.
As I mentioned in our Q1 earnings call. Many of <unk> brands have grown through franchising, resulting in disparate technologies used throughout their fleet and the kind of heterogeneous environments that although has made of specialty.
The integrating into multiple restaurant technologies to create a unified consumer experience.
We remain committed to helping the <unk> segment go digital to better meet the needs of the on demand consumer.
As we discussed at length in our Q1 earnings call. The other side of all of those 2 sided network is our partner ecosystem of over 100 restaurants technology partners.
This 2 sided network creates a flywheel and which adding of new customers to our restaurant network benefits all of low partners and adding of new technology partner to our partner network benefits all of our customers.
This quarter, we continued to expand our ecosystem and are proud to have added grubhub to our growing list of all the rails partners all.
<unk> enables restaurants to syndicate menu prices and content to digital ordering aggregators and allows such aggregators defend the orders into the restaurant kitchen without requiring manual intervention of trans posing the order from a tablet to a point of sale terminal.
Brands, such as Smoothie King have touted the benefits of the partnership and ensuring accurate menu of information and reductions in order errors.
All of those deployments of the Grubhub integration will continue in the coming quarters.
This new partnership with Grubhub means that all the customers can now utilize all the rails to operationalize and manage all major national digital ordering aggregators.
Caviar door Dash Grubhub post meets seamless and Uber eats in addition to the regional and local aggregators that are meaningful to operators in specific geographies.
<unk> is fulfilling its promise to serve as a common carrier ensuring a level playing field for all aggregator partners.
We believe that all of those serving as the common carrier is in the best interest of our customers and the restaurant industry.
Just as we continue to expand our network of all of the rail partners. We're simultaneously investing in tools for restaurant operators to manage transactions across the growing number of integrated third party channels.
In Q2, we deployed the older rail performance tool to help restaurants, better assess track and analyze digital performance and revenue across channels.
Ultimately, helping corporate teams and the operators to maximize the digital sales revenues.
Additionally, we completed development of the mobile App version of serve our White label branded ordering experience brands are now able to offer feature parity with the serve web experience, which has boosted conversion rates through an improved user experience and faster order completion by 5 seconds on average the.
The new serve mobile App allows brands to offer an app version of their digital storefront without the need for large custom mobile app budgets.
As I mentioned last quarter team also continued to work from home in Q2 due to COVID-19 restrictions in the second quarter, we provide our employees the flexibility to continue working from home and reopened our New York City headquarters office on a voluntary basis. We are proud to have adopted an inclusive work policy.
That recognizes that our employees need and deserve flexibility.
Additionally, as a continuation of our focus on ESG as well as diversity equity and inclusion I'm also excited to share that we've published our diversity of demographics on older Dot com as well as our <unk> strategy and goals.
Although it is committed to building a diverse and inclusive culture that promotes growth in equity for underrepresented groups as reflected by our transparency and continued work on this front.
I am personally honored to be deeply involved in these efforts along with my executive team as DDI is hugely important to our success as the company and as the pillar in the community.
As the restaurant industry deals with a record setting consumer demand amidst the limited labor supply.
<unk> is a force multiplier for restaurant operations, enabling restaurants to provide greater hospitality by automating low hospitality manual tasks by keying in orders tendering payments, managing tablets and correcting outdated menus.
And at the brand level, although as also a force multiplier when it comes to restaurant brand digital transformation.
As 1 executive of of major restaurant enterprise prospect of recently articulated our brands digital ambitions, our tenex our digital budget, if all low can help accelerate our digital efforts we're all in.
The restaurant industry is rebounding from a difficult year in 2020, and although as eager to continue playing our part in helping all of the customers not just survive, but thrive as they disproportionately benefit from the restaurant industry of digital transformation.
And now I'd like to turn things over to Peter <unk> CFO to share more details on all of those Q2 performance.
Peter.
Thanks, Noah today I'll review, our second quarter of fiscal 2021 results from detail and provide guidance for the third quarter and full year fiscal 2021 the.
Before I start for those of you new to the call today welcome and please take a moment to review last quarter's earnings call, where I briefly reviewed our financial model.
With that let's take a look at our second quarter results.
Total revenue for the second quarter was $35.9 million up 48% year over year.
Platform revenue in the second quarter was $34.5 million up 53% year over year, primarily due to an increase in active locations coming onto the platform as well as increased transaction volumes, helping drive growth in average revenue per unit of <unk>.
Growth in active locations and transaction volumes reflect the continued digital transformation occurring within the restaurant industry.
Increases in multi product adoption and evolving use cases of the low platform such as table side ordering virtual brands and kiosks further highlight all of those opportunity and ability to digitize all industry transactions.
That said I would remind everyone that this time last year. Many locations were emerging from temporary closures in March and began reopening in April and shelter in place restrictions ease.
Therefore, this quarter's performance slightly benefited from lower ordering activity and the earlier part of the second quarter of last year.
In terms of key metrics, we ended the quarter with approximately 74000 active locations on the platform a 30.
The percent increase year over year and of 7% increase sequentially as Noah mentioned this quarter's notable deployments included Potbelly Sandwich works and Jack in the $186 for the second quarter. This reflects a 13% increase year over year and of 7% decline.
Sequentially.
Fluctuations in our improved from quarter to quarter can be expected due to the number of modest changes in transaction volumes for example, this quarter.
Single module deployments such as.
Jack in the box utilizing our dispatch module and a continuation of subway utilized.
And multi module deployments.
Land and expand within a customer.
A historically successful go to market.
The motion for OLED.
Additionally, as anticipated average orders per Luke.
Location per day as compared to the prior quarter decreased slightly due to seasonality increase the vaccinations in the returns of in person dining and the absence of ongoing fiscal stimulus that said on a full year basis. We anticipate continued momentum in <unk> of seasonality is normalize.
<unk> and growth in multi product adoption and multi partner usage continues.
Lastly, net revenue retention remains strong in excess of 120% for the quarter. The result of continuing to satisfy.
For the remainder of the financial metrics.
So the disclosed unless otherwise noted I will be referencing non-GAAP financial measures.
Gross profit for the second quarter was $29.5 million, representing a gross margin of 82, 2% in line with gross margins a year ago.
Platform gross margin for the second quarter was 85%. This compares to platform gross margin of 87% of year ago.
The year over year decline in platform gross margin was driven by an increase in head count and associated compensation cost to support the rapid growth in active locations attitude of the platform.
Sales and marketing expense for the second quarter was $3.2 million or not.
9% of total revenue this compares to $1.7 million, 7% of year ago.
On a dollar basis increases in sales and marketing spend were driven by continued expansion of our sales organization, including compensation costs and technology spend.
As stated on last quarter's call, while we have a highly efficient 1 to many sales model in which we sell at the enterprise restaurant brand level and secure all locations within that brand to long term exclusive contracts, we anticipate investments in sales and marketing to increase on a dollar basis and as a percentage of revenue in the short.
Term as we continue to invest in our ability to sell new products and increase the visibility of our brand to new and existing customers.
Research and development expense from the second quarter was $11.4 million or 32% of total revenue. This compares to $7.3 million and 30% of year ago.
We continue to invest in initiatives that align with the core tenants of enterprise customer needs innovation scalability extensibility and security. This primary strategic focus for auto insurers, we are providing our customers with a flexible and differentiated offering we anticipate investments in this area to increase on a dollar.
<unk> and as a percentage of revenue in the short term as we continue to invest in innovative solutions and platform capabilities that address the evolving needs of our customers and align with all of his open SaaS framework.
General and administrative expense for the second quarter was $9.1 million or 25% of total revenue. This compares to $4.2 million and 17% of year ago on a dollar basis. The increase was the result of additional head count and costs associated with operating as a public company we.
We expect that our general and administrative expenses will continue to grow on our operating income for the second quarter was $5.9 million.
Compare to <unk>.
The $7 million a year ago.
We believe our continued ability to deliver strong profitability reflects the power associated with.
To investing in growth to address.
10 of us and while we anticipate remaining profitable as we grow we do expect some near term.
Term decreases in profitability as we scale to further address the current market opportunity.
Net income for the second quarter was $5.8 million or <unk> <unk> per share based on them.
Standing.
Turning our.
Tension to the balance sheet and cash flow statements.
Our cash and cash equivalents balance was $575.2 million as of June 32021.
The 1.
Regarding cash flows operating cash flow for the second quarter was $11.3 million compared to negative $4.4 million a year ago free cash flow was $10.8 million.
From the third quarter, we expect.
To $36.5 million.
And non-GAAP operating income in the range of $3.4.
For the fiscal year 2000.
The range of 144.
$7 million to $145.7 million and non-GAAP operating income in the range of <unk>.
$8.6 million.
I would highlight a few things to keep in mind about our outlook, we remain incredibly excited.
Very well positioned to execute on our vision to touch and value.
Restaurant transaction.
Phase customers are utilizing our platform.
Form and how that aligns with this vision at.
At the same time, we're continuing to remain prudent in our.
The environment in which we're in whereby uncertainty exists with respect to the COVID-19 pandemic and the impact that may have on digital ordering.
To summarize we are extremely proud of our financial performance this quarter, which we believe reflects our continued.
Can you the ability to execute on our vision and the opportunity ahead with that I'll turn things back over to the operator to begin Q&A.
As a reminder, cash annually.
Need to press, the Taiwan Khalaf Allen can we try of question fast accounts.
Non key.
Jamie if he would like to ask the question Press Star then the number 1 on your telephone keypad. Please stand by while we compile the Q&A roster.
Your first question comes from the line of Sterling Auty from Jpmorgan. Your line is open.
Yeah. Thanks, Hi, guys. So wanted to start with the question around the.
The deal with Grub.
I know you don't want I, usually talk about specific customers, but is there any way for investors to kind of think about the opportunity there.
Hey, Sterling this is Noah I'll take that 1.
It drives incremental traffic.
2 of those restaurant locations.
So from brands that we're working with through.
The grubhub as an additional.
For the aggregator partner and.
To the extent of their interest in engaging with.
And with Grubhub to initiative.
We had to manage that relationship through the old the rails platform.
Through Grubhub.
Through direct channels and through indirect channels and this relationship really came together because of our restaurant customers are common restaurant customers, saying to both grubhub and a low we're excited about working with both companies and the integrated fashion and that's what we brought to <unk>.
With this announcement today, we already have a customer in smoothie King that has been in the pilot test of the.
The engagement between the Grubhub and the old low through all of the rails and they're noting as you heard in the prepared remarks.
Both of a reduction of <unk> and errors in the orders flowing into the.
In syndicating their menu content and pricing content out to grubhub as they do with other aggregator partners already utilizing all of the rails.
During the IPO roadshow theirs.
Plenty of the investor questions around your eventual ambitions to move down market.
In addition to what you do with the enterprise brands already.
Move in that strategy and if so what would be the next major step.
I wouldn't necessarily read this as a signal of our intent to change our strategy. There are plenty of restaurant brands that are in our defined the universe of what we currently think of as our addressable market enterprise restaurant brands and what we define as emerging enterprise restaurant brands.
That also want to engage with Grubhub.
So again as a reminder, emerging enterprise brands, we think of as the restaurant brands that of between 5 and 100 restaurant locations.
Many of them the great enterprise brands of Tomorrow. Those are the kinds of restaurant brands that we want to start working with early in their lifecycle. So as of the brands that have the ambition of scale and Theyre looking to put in place early in their lifecycle as a way of.
Pairing for that growth.
We don't as you know Sterling focus on the true mom and pop independent restaurants that are out there that is not our sweet spot. We do want to find those restaurant brands that have the ambition of scale and I think there are plenty of those and plenty of enterprise that work with both <unk> and have a desire to you if they don't already work with Grubhub.
Makes sense. Thank you.
Your next question comes from the line of brand from <unk> from Piper Sandler Your line is open.
Thank you and good afternoon.
No I was.
Operator, I'm, sorry, I think that we have lost brands or at least I have.
Your next question comes from the line of Matt Hedberg from RBC capital markets. Your line is open.
Hey, guys. Good afternoon from me as well congrats on the results I wanted to start with you.
The number of locations that you've had now for the first half of the year. It was effectively what we thought you would have for the full year effect of the kind of 10000 are low low double digits.
In terms of 10 thousands.
A couple of point of question 1 I know in Q1, you talked about some early the lives was there any early go lives for Q2 and second how should we think about active location growth I know you don't guide to it but is there a way that we should sort of think through what seems like an accelerated trend here of location adds.
Hey, Matt Peter here I can take that 1 so.
Couple of dynamics to point out through our first half of the year performance with respect to active location. So.
On a full year basis as we enter the year.
Our internal plans were to target the mid teens thousands in terms of net new additions to the platform. We've obviously pace ahead of that and now have our sights set on the mid teen thousands for net additions on the year and what has happened is the dips.
<unk> that we had originally planned for the second half of the year. Some of those have now accelerated into the first half of the year and strength in bookings is now replacing those units in the back half of the year the.
Other interesting dynamic and we call this out in our prepared remarks is the trend.
<unk> trend and single module deployments and we called out Jack in the box as the example, there I think what's exciting is we view that as an opportunity of our way in which we can.
The service the <unk> segment, which is a great growth opportunity for <unk>, but also what that presents as an opportunity for additional upsells and as history has shown we have done a great job of landing a brand with an initial product and then expanding that relationship over time.
Through additional product modules and use cases, so we're really excited about the trend that's developing.
That's really good to hear the good to hear.
I guess the second question obviously.
Was that really the first post COVID-19 comp.
But now with the rise of the Delta There and obviously New York is that it's been in the news on that.
A lot of real time data.
Are you seeing anything now that would suggest that that might be better for you say youre delivery of pickups of them than would've otherwise been sort of curious on the kind of how data seems the.
Real time from that perspective.
Yes, so I can take that 1 Matt this is Peter again.
Yes, I mean, what we're learning and we mentioned this earlier is that digital ordering has proved durable and <unk> and you saw that play out in our in our outperformance on the quarter.
That said.
We're seeing information in real time here, there continues to be a meaningful level of uncertainty given the varying levels of vaccination rates around the country.
And.
And the impact of existing and potential variance so.
Something that we continue to monitor it's it's something that we take into consideration when thinking about our forecast in setting guidance, but again. This is something that is happening in real time that we're keeping an eye on.
Thanks, a lot guys.
The next question comes from the line of Brent price clean from Piper Sandler Your line is now open.
Thank you. Good afternoon can you hear me this time.
Loud and clear Brent Thank you.
Great.
Thanks for the couple of quick.
The <unk> lower relative to just broader of restaurant the generation trends start to encounter myself online ordering side of the restaurant not just online ordering remotely.
We see an opportunity from <unk> to extend its digital reach on the side of the restaurants is the do serve app addressed external and internal needs throughout the third year, we're kind of.
The industry thoughtful.
Online ordering inside of the restaurant and how that opportunity of class are low as well.
Thanks, Brent so when we look at the industry data and the data source that we look at most is NPD and their results for Q2, we're fascinated by the trends that we see across different service models and.
Think 1 of the things that the media likes to talk about is delivery and the scale of delivery and how delivery is growing and delivery is growing quickly, but delivery is just 8% of the overall transactions in the industry or was at least in Q2.
The 92% is non delivery and when we look at digital what we see is that of the total digital delivery is just 6%, whereas digital overall of 17%. So the other 11% is coming from non delivery digital and the breakdown of that is 10% of total.
Is takeout and now for the first time, we're seeing 1% on premise.
And Thats, a big move in the industry that does 60 billion transactions in a typical year to see 1% moving to digital on premise, we've seen that within the low in kiosk ordering of something that we've seen for a number of years of of consumer ordering from a kiosk were running on top of the low platform in <unk>.
Side of the 4 walls of the restaurant and then as I mentioned on the Q1 call QR code of ordering of brands like Bluestone Lane Cafe, where a consumer can scan a QR code on the table utilize the same front end experience of the web app or mobile app.
To place the order tagged to the table, where theyre sitting and having a runner or of server run the order out to them.
This all factors into what we have described as our new ambition of getting to your digital entirety, where although has the ability to touch every transaction added value to average transaction and derive revenue from every transaction and we're seeing those behaviors by consumers and also of course by operators offering those.
New modes of ordering.
Coming out of 2020, but remaining offerings that are made available in 2021, and that's part of what gives us the conviction that digital is durable across industry segments.
So part of our framing there I guess my last question here for Peter It looks like in the locations I don't know the increase.
Free.
Platform revenue was still down was that.
Entirely tied to just lower volumes on the ordering side or are there other sectors. The pricing also contributed to a sequential decline there in the platform revenue this quarter per quarter.
Did you get that question.
Alright.
I think we may of last Peter.
Sorry, Peter is dialing back in maybe operator, if you would mind if we can move on and then come back to that question that would be great.
Please say your next question comes from the line of Brad Reback from Stifel. Your line is open you may ask your question.
Great.
The last couple of quarters, you've obviously talked more about re platforming.
Has it gotten easier in the sales cycle since the IPO.
Well I think that our ambition of the IPO was really to make a statement to our customers and to the industry that <unk> is going to be around for the long term as in the open platform for on demand Commerce and I think.
The <unk> make that statement.
And then have the successful events in the IPO and come out on the other side with more resources of certainly given the restaurant brands conviction that they don't have to worry in the the way that they do about.
Companies that are private and venture backed that may get acquirer that might run out of funding.
But the they know that all of it is going to be around for the long term.
And certainly that has helped us in engaging with our customers and talking about long term roadmaps and it's helped us with prospect and I think it's given some prospects and some restaurant brands that have built doesn't make sense to continue to operate.
Additional confidence that they can move over.
Virtually all of the platform. They can re platform to low receive all of the benefits of working with the scale.
As platform.
And.
Of the ownership overall.
So I think on the on the sales cycle side, it's certainly been from us to have a conversation.
The group's like Jack in the book.
Fox that we mentioned.
Having confidence that <unk> is going to be of great platform and the.
Service that they can then offer up to there and the consumers knowing that we'll be around for the long term.
That's correct.
Thank you.
Okay.
Your next alright, Tom Madden from Covid.
Your line is open.
Thank you congratulations from me as well I don't know if.
Peter back I was going to hit him with the financial question, but I can I can abstain announced the 1 no of first it depending on the therapeutic <unk>.
Maybe now of what I'll ask is on the go to market side, you are talking about increasing investments.
What I'm curious about is where are some of those incremental investments I mean, you probably already have a good enterprise sales team, they know where to hunt but is it.
The more in that area is an adjacent market the kind of have a feel like restaurants or maybe anything on the partnership side, just would love to know a little bit about where you're going to put some of these incremental.
Sure Jerry I can I can start out there.
Unless Peter is that does that.
Are you back on.
Okay, Jerry I'll start out.
So I think 1 big area of investment for US is in RMB and so we focus on.
Some of the new product capabilities that we've talked about being early things like our <unk> platform. That's an area of investment for the company as we go through beta and piloting with a handful of brands this year.
And then the other.
But the additional product capability as like catering is something that we are excited about for future future quarters, and something that we're investing in to bring to life additional catering capabilities.
Yeah.
The pandemic. This is something that our customers were very excited about and they remain very excited about it as they think about reopening this represented 8% to 10% of industry sales quarter to quarter and so thats an area that we are.
Interested in.
And developing capabilities in.
We've also invested in our sales force on the emerging enterprise and that have 5% to 100 locations and represent the great enterprises of tomorrow.
And we're excited about multi product adoption in that segments and high utilization.
By consumers of those restaurants, leading to a greater or <unk> opportunity for us net segment until we're investing behind that.
That's great to hear on the low pay as well as catering of particularly catering is as we have more re openings.
Post the Suriname the variant, but the maybe the follow up then I'll just focus on you know it is.
Good to see the kind of iterating existing technology. So I guess, the new mobile server technology, what I'm curious about is because there is a lot of technical debt of lot of investments. These big brands of made in the mobile App ordering is this potentially a way you can get in the door initially of the wedge to just start with rebuilding their app as opposed to just the website just anything.
Laura you could help us on kind of the implications of the new innovation on the mobile side. Thank you.
I think really the idea for the serve App is to bring feature parity into the mobile App is the white label mobile App experience that we have through mobile web and that we have through web of I wouldn't characterize it as a wedge where we were the only do of brands mobile app enough the web.
But the idea is to make onboarding, even easier for brands to kind of build 1 on top of the old platform and then the habit across all of these different ordering modes mobile App mobile web and the web and of course as the leading capabilities, having that feature parity across the ordering mode. This.
As we mentioned in the prepared remarks is an experienced of already on the mobile web we've seen reduced the transaction time.
The 5 seconds and we count seconds.
Hence, we count clicks at all if we can improve the ordering experience for the end user that results in better basket conversion more transactions that benefits the consumer obviously it benefits the operator, but it also benefits of OLED with our transactional SaaS model.
That's great to have you do have a question for him and if we can return back to <unk> question I think Peter's back.
Well. Thank you that's the bonus until.
And then an answer to another question.
Thousands would be the potential new incremental active sites.
Net non incremental.
Until that is the full year target so again.
Roughly 9000 to date through the first half of the year and now targeting the mid teen thousands on the.
On a full year basis.
Got it thanks.
And Brent can we.
<unk> you the re ask the question that you asked before.
First half of that AT&T. The the line of Mr. Brent of disconnect net.
Hi, it's Stephanie <unk> with all of our Investor Relations, So just to recap.
He was asking about how ending locations share with a healthy increase but revenue remained steady quarter of Arthur corridors.
Peter if you could just talk to that dynamic and explaining it that was related to.
Amy.
Multilocation ad or a possible change in rates or anything like that thank you.
Yes, absolutely so.
The platform revenue declined quarter over quarter was in line with our expectations and.
Really it was the combination of a few factors the net impact of reopening so increased the back explanation.
The rates and the impact that had on an in person dining.
As well as the wind down of stimulus benefits that.
Occurred in the first quarter of of the year award of warranty dynamic that was.
That was a factor in the second quarter and then from.
From <unk> seasonality impacts, which we typically experience in the second and third quarters of of the.
Of the year.
And as I mentioned earlier the the.
The deployments that hey come on this quarter.
Of those deployments were single module deployments, where.
<unk> and the revenue impact from those deployments are inherently lower than multi module.
Deployments of what presents a great opportunity for future future up sell of monetization.
And of the remaining deployments that didnt come on in the quarter half of those were.
Deployments that occurred in the back half of the quarter. So.
Yeah.
Realize the full benefit of revenue from those deployments in the second quarter book, but we'll do so in the coming quarters.
Again, if we would like to ask the question Press Star then the number 1 on your accounts.
On the phone keypad.
Our last question comes from the line of Stephen Sheldon from William Blair. Your line is open.
Hey, guys. Thanks for taking the questions wanted to follow up on the mobile App rollout and wanted to ask how this will drive incremental monetization opportunities per how low will that help mainly from the perspective of driving more transaction volume or is there also.
The separate add on subscription beyond the core order amount of award would appreciate just any detail there of monetization.
Hey, Stephen this is Noah so no theres no additional charge specifically for the mobile App work. This is an additional front end that is part of the <unk> platform. Although there may be a savings to the brand the versus what they would pay to build a mobile app on top of the low API.
If they were to do that and how much of the do you add through of third party mobile App developer.
Where we see it as an opportunity for low and incremental revenue is in improving the consumer experience of placing the order of cutting down on the time to place the order such that the basket rate conversion increases the transaction volume increases and as.
As I mentioned earlier, that's good for the consumer goods for the brand, but also good true, although with our transactional SaaS model in the form of additional transactions and transactional revenue.
Got it makes sense.
And then it sounds like you've seen a lot more traction with concepts and it sounds like specifically <unk> that are signing up for a single module like Jack in the box.
I think Peter you might have hit on it a little bit just how much opportunity to see the upsell.
Our customers like this to all of your module of down the road, even though they signed up.
Just for the immediate benefit of a specific model do you have.
You have many <unk> customers that are using all of 3 modules.
Any detail there.
Yeah. So.
In terms of specific <unk> customers that are using multiple modules I think we mentioned on the last call Boonen brands without.
Kind of work from a legacy platform of our re platform onto the <unk> platform and Dave actually subscribe to more than 1 module as part of that.
As part of that program I guess from a high level, we absolutely think that.
Over time, we can sell through additional product modules to the single module brands and as history has shown we've done that very successfully.
Selling both dispatching rails.
2.2 customers that we had initially.
Our initial.
Entry being ordering and then shortly following up with with dispatch in rail so we.
We certainly see that as an opportunity ahead and.
It's great to plant that initial flag with whether its dispatch only of rails of ordering and then use that as an opportunity to build that relationship and ultimately sell through additional products.
Great. Thank you congrats on the results.
There are no further questions at this time I would now like to turn the conference back in the Sterno of glass for closing remarks.
Okay, well, thanks to all of you participating in or listening today, and I want to express my gratitude to team of although 1 more time.
Thank you team for the incredible effort and solid performance of Q2 I am consistently inspired by this mighty team of all of the shared values that we lived through our work and our unrelenting quest of continuous improvement as I always say, we have miles to go before we sleep and I am deeply honored to be on this journey with all of you.
Until next time.
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This concludes today's conference call. Thank you for participating you may now disconnect.
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