Q4 2021 Olo Inc Earnings Call
Relationship with door Dash in 2021 further bolster the OLED dispatch and rails offerings benefiting restaurant brands by broadening channel management, and increasing driver supply leading to increased operational efficiency for brands and a better consumer experience.
The unique capabilities of our two sided networks and <unk> comprehensive relationships with marketplaces and delivery service providers helped drive module expansion and expanded platform usage within our customer base.
One example of our ability to expand relationships within brands is Papa Murphy's Papa Murphy's the largest taken big Pizza company began their relationship with <unk> through the <unk> ordering module. This quarter. The brand expanded their relationship to include the auto dispatch module, enabling pizza delivery via their own website.
And the App.
<unk> taken big pieces are made at the store and baked at home and traditionally have required an individual to go to the store to pick up their pizza, enabling delivery via dispatch allow us Papa Murphy's to increase digital sales and compete directly with traditional pizza delivery companies.
In the fourth quarter restaurant brands also adopted our virtual brand module as virtual brands continued to flourish. Examples include applebee's cosmic wings, and virtual dining concepts, adding mario's towards us and poly <unk>, Italian subs, allowing restaurants to reach new customers and.
Maximize their revenue per square foot.
Additionally, in the fourth quarter several brands added the although network module to their technology stack <unk>.
Notable brands included Bj's, Buzzy's, Taco shop, Hacienda, Colorado, Jack stacked barbecue Miller's Ale House, Tijuana flats and uncle Julio's.
Although network provides brands the ability to grow their direct digital business through affiliate partners, such as Google food ordering while owning and maintaining direct consumer relationships.
Restaurant brands recognize the importance of owning commission free direct ordering channels and the consumer relationship is imperative to avoid being disintermediation.
Our acquisition of wisely provides brands the tools to improve their digital engagement with consumers, which will enable them to measure and grow customer lifetime value or CLO.
And drive more orders onto the <unk> platform in the few months since acquiring wisely, we've successfully integrated on our go to market basis their suite of solutions, including the host module, which streamlines reservations and table management as well as the marketing sentiment and customer data platform or CDP module.
<unk>, which strengthened consumer engagements.
Digital first engagement is increasingly critical for restaurant brands as the industry continues to shift toward digital.
In 2021, almost 9 billion restaurant orders or 15, 1% of total industry orders took place digitally according to the NPD group the.
<unk> platform is at the center of this digital transformation processing more than $20 billion in total gross merchandise value or <unk>, representing an increase in digital orders are completed on the <unk> platform of more than 35% year over year.
Throughout 2021, it became clear to us that our restaurant business should not be bifurcated between digital or non digital.
Or on premise versus off premise, it's one business and it should operate with one thing in mind the consumer.
<unk> order every transaction and every interaction should be customer centric.
Our emboldened ambition is to help restaurant brands more effectively satisfy the consumer by connecting the consumers on and off premise transactions through digital orders and data in order to empower in known consumer experience.
We seek to touch add value to and derive revenue from every quarter.
<unk> to move from 15% of the industry's orders being digital to 100% of the industry has 55 billion of orders being digital a concept I call digital entirety.
This will empower restaurant brands to best meet the needs of the on demand consumer.
As we enter 2022, we've never been more confident in our position and more excited about our opportunity ahead. We believe that we have a 100 X growth opportunity in the U S enterprise restaurants, representing a tam of more than $15 billion within the U S.
Enterprise segments.
Currently the <unk> platform offers brands the falling differentiated and mission critical solutions ordering network switchboard kiosk and virtual brand modules, which provide on demand digital commerce and channel optimization solutions dispatch and rails modules, which provide.
Delivery enablement.
Optimized front of house operations needs through our host module, which streamlines reservations and table management and customer engagement through our marketing automation sentiment and customer data platform or CDP modules.
And today, we announced general availability of low PE, which will create uniform brand experiences improving the restaurant, operator and consumer experience.
Just as restaurants have fragmented point of sale systems. They also have fragmented payment processors and these payment processors, our horizontal solutions that are not purpose built for restaurants, nor built for digital transactions. Historically, although has served as the gateway into existing.
Payment processors and these processors have led to suboptimal experiences for the consumer manifesting in an elevated level of fraud charge backs and a lack of tools for brands to fight those charge backs.
<unk> fully integrated vertical payment solution goes beyond core credit card processing functionality and will benefit both the operator and the consumer by offering advanced fraud prevention that results in improved authorization rates for valid transactions by supporting and allowing credit card.
On file to be used at any of our brands participating locations for the consumer, enabling apple pay and Google pay and through simplifying the ordering interface for a faster checkout. All of these features will grow and protect restaurant brands digital business through increased basket conversion.
Our vision for <unk> extends beyond the existing capabilities. Our ambition is to bring a much better user experience and optimize basket conversion of a seamless payment solution to the restaurant industry through our <unk> solution in border lists form, which we plan to make.
Available later this year.
One example of this experience is shop pay which is an accelerated checkout that lets customers save their payments and delivery information. This can save customers time, when they check out, especially if they have already opted into shop pay elsewhere, providing security for all merchants offering shop pay and enabling them to offer.
<unk> improved the user experience manifested in a dramatically higher basket conversion rate of 172 X. According to Shopify studies.
We believe that removing the friction typically associated with online ordering account creation log in and checkout is beneficial for users and for restaurants, leading to higher basket conversion and more orders.
With a network of 79000 restaurants, and 85 million consumers. Although has achieved a critical mass to unlock shop pay like capabilities in the form of our border list, although pay offering we have conviction that this two sided payment network is a win for consumers.
Wind for restaurants, and a win for OLED.
Our historical success in bringing to market platform level innovations like dispatch and rails by creating two sided networks gives us both the experience and the confidence that we can do the same with the launch of borderlands, although pay.
Restaurant brands are telling us they want to operate as one digital business they are pulling us into payments and on premise opportunities.
And in order to accelerate the restaurant's ability to operate as one business, we must unlock on premise solutions.
That is why I am excited to announce that <unk> has signed a definitive agreement to acquire omnivores.
Omnivore Power's restaurants to connect to apps and technologies that streamline operations improve efficiency enhanced consumer experiences and increase profitability by allowing restaurant technology partners to inject and extract data from multiple points of sales through one integration unlocking.
The potential of restaurants point of sale system through these technologies.
Omnivore enables restaurant technology partners to focus on their core products rather than Pos integrations.
Although plus omnivore will allow our restaurant brands to one insert and extract back of house data through faster easier to weigh connections with technology partners via their developer friendly Pos API further unifying disparate data and simplifying data review.
To increase data extraction from the Pos, enabling new and enhanced <unk> capabilities, such as increased visibility into on premise orders and improved OLED powered capacity and throttling management.
III access to features and capabilities to increase monetization of on premise digital orders and on premise digital card present transactions and for access to enhanced developer tools and increased access to key partners not already part of all those robust ecosystem.
Ultimately <unk> plus omnivore will allow our restaurant brands to immediately gain access to new on premise capabilities as well as an expanded technology partner network outside of core ordering broadening OLED platform capabilities. In addition, all those existing Pos integrations will be updated with expanded functionality.
<unk> and be backed by a large combined team of top specialists in the industry.
<unk> is expected to increase our technology partnerships more than 50% to more than 300 partners, increasing our ability to unify and enhance the utility of disparate technologies across the restaurant industry and reaffirming our commitment to an open ecosystem of partners.
I believe <unk> to be the platform that restaurants will need in the future. Our all encompassing platform will enable leading brands to better understand and serve every customer that transact with them leveraging the new currency for 2022 customer intelligence enhanced digital first interaction.
I am extremely proud of our work in 2021 and I am excited about the significant opportunity that lies ahead for <unk> as our leading open SaaS platform supports restaurants and empowers the restaurant industry is digital transformation.
Our emboldened ambition seeks to increase OLED opportunity by 100 X through the following three growth opportunities.
First through focusing on the enterprise restaurant segment, we have a four X opportunity to capture all 300000 enterprise restaurant locations.
By striving to move from 15% of orders being digital to 100% of restaurant orders being digital we have an opportunity to capture and process 625 X more orders on our platform as our technology will simplify restaurant capture of orders into one common digital channel, allowing brands.
To better understand and engage their consumers increasing customer lifetime value.
Third the launch of overpay enables <unk> to generate four X more revenue per order then we capture today by acting as a payment processor for our restaurants through higher conversion rates improved authorization rates and streamline reporting although pay creates ROI positive transactions for brands.
Reducing overhead and G&A costs.
Altogether Forex time, 625 X times Forex leads to a 100 X opportunity and a Tam within these three core growth vectors of $16 billion.
While this opportunity is large for <unk> more importantly, the efficiency of our platform will provide for leading brands are greater and that is why I believe that leading brands will use one technology platform to understand and serve every consumer that transact with them.
Restaurants will need an open platform to one consumer relationships and leverage consumer data to prioritize channels that maximize profitability and access to the data that allows them to do one to one marketing to manage orders through the front of house and to use technology to be operationally efficient and informed every.
Facet of their business with customer centric data.
Finally, as I typically do on earnings calls I will provide an update on our commitments to our low for good and pledge 1%.
This quarter, we continued our commitment to the pledge, 1% movement in which OLED <unk>, 1% of our time product and equity to OLED for good initiatives.
I am excited to announce that this quarter, although launched its first nonprofit partner Ms Torch, a woman's founded restaurant, which provides refugees assai lease and survivors of human trafficking with culinary training ESL classes and interview preparation.
As part of our product pledge.
Although is waiving fees for the fast casual restaurants use of the <unk> ordering and dispatch modules.
We expect to add other nonprofit restaurants to the platform in order to use <unk> as a platform for social impact and positive change for our communities.
And now I'd like to turn things over to Peter <unk> CFO to share more details on <unk> fourth quarter performance.
Peter.
Thanks, Noah the fourth quarter was a great close to our first fiscal year as a public company.
As order volumes grew in multi product adoption increase although continued to drive momentum and beat expectations in the fourth quarter, demonstrating the mission critical nature of our solutions, which are enabling the digital transformation within the restaurant industry.
Total revenue in the fourth quarter was $40 million, an increase of 31% year over year.
Platform revenue in the fourth quarter was $38 9 million, an increase of 33% year over year due to an increase in active locations coming onto the platform further multi product and multi partner adoption and the durability of digital ordering.
In terms of key metrics, we ended the quarter with approximately 79000 active locations on the platform, a 23% increase year over year, and a 4% increase sequentially as we deploy new brands, such as insomnia cookies, Ruby Tuesday Tomorrow.
And wet foods pretzels.
<unk> for the fourth quarter was approximately $504, representing an increase of 7% year over year and an increase of 4% sequentially.
This quarters key drivers of <unk> included continued strength in order volumes as well as module expansion within our existing customers.
Related to module expansion this past quarter as customers continued to add modules, such as network virtual brands dispatch and rails to their <unk> suite <unk>.
Specific to dispatch and rails.
Ager partnership launches throughout 2021, such as Grubhub, Lyft and Uber eats.
To further increase adoption in transaction volumes from our delivery enablement solutions.
For the year ARPA with more than $2000, representing a 16% year over year increase.
Additionally, as of yearend on average brands utilized $2 seven modules per location and as Noah outlined earlier, we see a lot of momentum ahead in <unk> as customers continue to expand their adoption of multiple modules.
Lastly, net revenue retention remained strong in excess of 120% for the quarter.
For the.
There are the financial metrics disclosed unless otherwise noted I will be referencing non-GAAP financial measures.
Gross profit for the fourth quarter was $32 $6 million.
Renting a gross margin of 82%.
This compares to gross margin of 84% a year ago.
As expected the year over year decrease in gross margin was driven by an increase in head count and associated compensation cost to support the continued growth of active locations added to the platform.
Platform gross margin for the fourth quarter with 84%.
This compares to platform gross margin of 87% a year ago.
Sales and marketing expense for the fourth quarter was $4 6 million or 11% of total revenue. This compares to $2 3 million and 8% a year ago.
As expected increases in sales and marketing spend were driven by continued expansion of our sales marketing and business development teams in an effort to continue to add more locations to the platform increased upsell and retention efforts and expand our partnership ecosystem.
Research and development expense for the fourth quarter was $12 9 million or 32% of total revenue. This compares to $9 $6 million and 32% a year ago.
General and administrative expense for the fourth quarter was $10 9 million or 27% of total revenue. This compares to $6 1 million and 20% a year ago as expected increases were primarily due to increased costs associated with operating as a public company.
Operating income for the fourth quarter was $4 3 million as compared to $7 $6 million a year ago.
Net income in the fourth quarter was $4 2 million or <unk> <unk> per share based on approximately $185 5 million fully diluted weighted average shares outstanding.
Turning our attention to the balance sheet and cash flow statement, our cash cash equivalents and marketable securities balance was $514 4 million as of December 31, 2021.
This total reflects the $75 2 million of net cash paid in conjunction with the acquisition of wisely, which closed on November four.
Regarding our full year cash flows operating cash flow was $16 3 million compared.
Compared to $28 million, a year ago free cash flow was $14 4 million compared to $19 $5 million a year ago.
I'll wrap up by providing our guidance for the first quarter and full year 2022.
For the first quarter, we expect revenue in the range of $41 5 million to $42 million and non-GAAP operating income in the range of $600000 to $1 million.
For the fiscal year 2022, we expect revenue in the range of $194 million to $196 million.
And non-GAAP operating income in the range of $7 4 million to $9 million.
In terms of our guidance for the year, we remain prudent in our approach to forecasting given evolving industry dynamics, specifically anticipated factors that may impact. Our forecast include the residual impacts from COVID-19, and transitory impacts due to continued industry labor challenges.
That said, we believe COVID-19 related challenges will be lapped beginning in the second quarter of this year and that revenue growth rates in net revenue retention will begin to reaccelerate.
Throughout 2022, we believe the main drivers of revenue growth will be <unk> expansion as well as increasing the number of active locations on the platform.
Related to <unk>, we expect year over year growth to be around 10% as order volumes continue to grow and brands adopt additional product modules.
While we were making <unk> commercially available to all brands on the <unk> platform. We are still early in the sales and deployment process and at this point do not expect <unk> to be a material driver of growth for 2022.
As we previously noted the use cases and adaptation of the <unk> platform throughout the past year has emboldened a broader vision for <unk>, one in which we can touch and value too in derived revenue from all industry transactions on and off premise and what we referred to as digital entirety.
We're filling this vision requires some near term investments in the platform to capitalize on the opportunities our customers are pulling us into and as we have seen first with dispatch and subsequently with rail customer led opportunities have been great growth drivers for the company.
Much of this investment is expected to occur in the first half of the year and as we progressed throughout the year, we expect to return to more normalized levels of profitability.
More specifically incremental investments in R&D in 2022 or threefold.
First our acquisition of Omnivore, which will unlock a faster path to the development of solutions to address our on premise opportunity will decrease profitability by a couple of million dollars. This year.
Secondly, we are increasing our investment in <unk> to more quickly bring border with capabilities to market. While also setting the stage for processing card present transactions.
And lastly, we are increasing our investment in customer engagement and front of house solutions to tie it altogether, a suite of digital ordering solutions to address both off premise and on premise ordering underpinned by a best in class customer engagement suite and a seamless payment experience.
We're confident that these investments will unlock future growth opportunities for <unk> in 2023 and beyond.
To summarize we delivered another strong quarter of operational and financial performance. We are delivering on our mission and believe <unk> position at the center of the digital restaurant experience will continue to drive an attractive combination of strong revenue growth and profitability.
I'd now like to turn it over to the operator to begin the Q&A session operator.
Thank you and at this time, we will be conducting a question and answer session.
I'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
And our first question comes from the line of Ryan Brinkman.
<unk> with Piper Sandler. Please proceed with your question.
Hi, good afternoon, and thanks for taking the question here to see the seventh straight quarter of profitability.
Even with on boarding the acquisition of wisely, but I wanted to spend a little time with omnivore. If we could know what's the difference between kind of the omnivore menu management system and a low dispatch rails outside looking in it does look like similar functionality and then Peter was hoping.
You could frame the revenue contribution you are factoring in from this acquisition in 'twenty, two or at a minimum walked through the the pricing model from Nevada.
Hey, Brent this is Noah thanks for the questions. So thinking about <unk> and the capabilities that we are pulling into the OLED platform. As a result of the acquisition one of the things that really appeals to us about omnivores integration is the way in which they are two way integration.
It allow for what's.
What's called sort of an open check so think about this as a putting your card on file at the bar and the ability to keep that tab and you can keep adding to it we think of that kind of open check two way interaction with the point of sale is really compelling for those on premise <unk>.
<unk> when you are pacing multiple orders on the same check and thats going to be key for the table service ordering experience. It's also just an incredible library of partners that are partners today with on reward not yet partners with although adding to that partner ecosystem taking us.
Over 200 partners to now over 300 partners and really staying true to that philosophy of being an open platform and an open ecosystem.
The benefits restaurant brands, our customers and the industry to create the most flexible stack that they choose from the best in class technology partners out there.
Yes, Brian .
No.
Yes specific to the revenue contribution so.
The revenue contribution is immaterial as Noel mentioned, there its really about acquiring the capabilities to enhance all of those on premise opportunity and ecosystem.
Then.
In conjunction with doing that really adding a fantastic product and engineering team to the existing <unk> team. So we're really excited about bringing me on laborde team over to Ola.
Great and just as a quick follow up if I go to the.
More customer paid at Lyft customers like Outback Steakhouse Burger King.
HMS host as customers.
Is this a technology that's broadly deployed across all of these locations or is it an oftentimes partially deployed just trying to think through the existing footprint that fit on the war has and that will be folded into the <unk>.
Location footprint overtime.
Yes, I think the best way to understand how omnivore is used today as an independent entity, mainly by a partner ecosystem of other technology solution. There are restaurant brands that are utilizing the omnivore stack for things like the menu management solution or whats <unk>.
Jordan that macro netted to MMS, but those might be some of the restaurant brands that you're naming.
But I would I would Moreover think about this as a Pos integration suite that enables technology partners to integrate into the in store environment on the back of housing environment without having to do all of the heavy lifting that we know very well from 10 plus years.
Doing Pos integrations into legacy Pos platform is used by the enterprise restaurant segments.
As a way of integrating into first restaurant technology environments.
Helpful. Great to see the streak of profitable growth continued here all of our cede the floor and get back in the queue. Thanks.
Thanks, Brett.
Our next question comes from the line of Stephen Sheldon with William Blair. Please proceed with your question.
Yeah.
Okay.
And congrats on the overpay launch.
So on that I get that youre, not including much financial contribution in 2022, but how are you thinking about the potential financial contribution as we think about the medium term or the next two to three years what are you targeting.
And what levels of interest have you seen in your existing enterprise customer base.
Yes, so I can take the first part part of Noah. Please pile on so in terms of.
How do we think about the revenue opportunity, we talked earlier as part of our prepared remarks the.
The quantity of GNP that was processed over the platform. This year over $20 billion <unk> up from $14 6 billion last year. So.
When we think about the revenue opportunity, it's really through that lens and it's through that lens, coupled with the continuation of more and more orders being digital in nature and Thats what gets us really excited about the revenue opportunity and as we've shown in the past.
Surely with dispatch subsequently with rails.
Have a very effective upsell motion in which we sell into the brand and are adopted across all locations within that brand. So the combination of those trusted relationships and the and the magnitude of <unk> processed over the platform gives us conviction that this is a really exciting opportunity.
And Steve maybe just to tack on to that from a long term perspective, as we think about the Tam for OLED.
And we look at this if we were to Peel it out as a discrete Tam, it's a $9 billion or thereabouts Tam that we're going after an OLED pay and.
And that's really what makes it incredibly compelling we look at it as a four X multiplier and the amount of revenue that we can generate on a per order basis and.
It's compelling from an investment perspective.
Is something that.
We're being pulled into frankly by by although customers, although restaurant brands, saying I need to have a more streamlined payment solution that I have today theres tons of friction in the way that payments works restaurants on demand commerce today.
And if I can tap into a network of 85 million consumers that don't have to create a user name and don't have to create a password or don't have to remember that user name and password and don't have to re enter their credit card. Each time, but can have that magical one tap experience that many have experience with platforms like shop pay in the past.
Another two sided payment network and that is a huge unlock and it's something that enables the restaurants to make their direct digital ordering program more convenient than the restaurant delivery marketplace experiences from an ordering and payment perspective. So we think it's a really big idea.
We've heard that from our customers is what gives us conviction that we've got a really exciting massive two sided payment network to build here between our 79000 restaurants on one side and to 85 million consumers on the other side I know, we can bring to life a solution that that.
Truly represents OLED going from strength to strength.
A two sided network that benefits everybody who touches it.
Got it that's really helpful and it sounds like.
Very large opportunity.
Maybe shifting gears follow up virtual brand it seems like Youre getting a lot of traction there.
How important is that become to the overall <unk> overall business and if an existing <unk> customer expand to add the virtual brands module how does.
The contract and monetization there work does that create additional subscription revenue or is it just monetize more so by.
More transaction volume through the platform.
Yes, so in terms of how that is monetized Steven it is monetize through a combination of incremental.
SaaS fees in addition to per transaction fees.
And I.
I guess going back to your earlier question around the level of importance really I would I would answer that through the lens of the customer which is.
Our goal is to make sure that we are developing a platform that allows our brands too.
<unk> to the environment as well as maximize revenue per square foot and virtual brands allow our customers to do that and in conjunction with that we are fortunately.
Monetizing that initiative, but it is it is certainly important to our customers in an area of focus for the company.
Great. Thank you guys.
Our next question comes from the line of Matt Hedberg with RBC capital markets. Please proceed with your question.
Great. Thanks for taking my questions guys and congrats on both the acquisition and a low pay super exciting.
Peter.
The midpoint, if I'm doing the math right. It looks like your guidance is kind of low 30% revenue growth. This year. Obviously, you noted the really difficult compare in <unk> and then acceleration from there.
What do we think about the full year guide it sounds like youre, not including anything from omnivore.
I'm wondering when you acquired wisely I think he said it might contribute mid single digit revenue this year or I should say in 2021, and maybe about $10 million for 2022.
Is that kind of still the assumption that we should be using.
Yes, that's right.
Got it okay. Okay.
And then.
Obviously.
You talked about several growth drivers here, obviously, one of them that you I think in your guidance Peter you talked about 10% growth in ARPA as sort of the expectation for 2022.
Yes, I'm wondering on the location adds I think you added about 15000. This year, maybe 14000 organic excluding wisely do you think youll add sort of the same.
Maybe more locations in 2022, that's sort of what's embedded in sort of the initial revenue guide.
Yes, so our expectation for 2022 is to add a similar amount of.
Net new locations to the platform coupled with full year growth of <unk> of around 10% in terms of how we think about the.
The active locations quarter to quarter.
I would I would estimate a pretty even distribution quarter to quarter, although noting that there can be.
No changes quarter to quarter, depending on.
A number of factors. So we tend to think about things on a full year perspective, and for 2022 again, where we're targeting.
The number of net adds as we achieved in 2021.
Got it thanks, a lot congrats guys.
Our next question comes from the line of brand right back with <unk> with Stifel. Please proceed with your question.
Great. Thanks very much.
There was a lot of talk and <unk> around restaurants needing to throttle digital orders because of head count issues.
What type of impact that you guys see from that and has that continued here in <unk>.
Hey, Brad Thanks for the question I really feel like our platform is designed for exactly this sort of challenge for restaurants, and I think in the past I have commented on helping restaurants to do more with less and being a force multiplier for them and I think thats what restaurants.
Are seeing about digital broadly and about all those specifically at all of the different solution suites, we've broken it down into five different solution suites, I think we talk a lot about ordering dispatch and rails and we're more than just a three trick pony, we have 12 different products now across.
Five product suites in order management and delivery and customer engagements in front of house management and payments and all of these things in their own way are helping a restaurant brands to do more with the labor that they have.
And to focus there.
Hospitality.
Really on delivering excellent consumer experiences informed by all the data that's being thrown off by these digital interactions with customers. So I think that is part of all of those mandates something that we've historically done over our entire lifespan as a company and that especially in times of our labor.
<unk>, a labor shortage is really being felt by restaurants and helping them to manage both their off premise experiences and their on premise experiences and ultimately deliver hospitality to the consumer.
Got it and then switching gears a bit the digital entirety strategy. It seems extremely forward looking clearly where the.
The market is going.
That being said, it's pretty broad so as you think about go to market and your current resources your salespeople et cetera, where do you think they are in that learning curve and how long do you think it takes to get them fully up to speed on selling the vision.
Well I think this is a great segue from your last question I mean, this is where we're being pulled into the on premise opportunities from our customers, saying to us we want the same digitally enriched experience for our consumers on premise that we have off Prem.
It's now one business, we don't want to have two different systems to manage off premise customers versus on premise customers. We want it to be one system. One platform, we want that to be digitally informed platform that has customer centricity at its core.
So that's really.
The thing Thats pulling us into the four walls of the restaurant and I think that it's something that we've talked about seeing glimpses of before in kiosk ordering and QR code ordering <unk>.
But imagining how restaurants can guide consumers, there and ultimately create higher hospitality experiences for consumers, while also requiring less labor from the restaurant, because I think where you see a win for the operator and a win for the consumer and we think that although is the best positioned company.
To play that role of being the platform that ties together off premise and on premise and connects it all back to the 85 million consumers and then some that are utilizing the <unk> platform is there way of engaging with the restaurants that they love and our network.
Excellent thanks very much.
Okay.
And our next question comes from the line of Sterling Auty with Jpmorgan. Please proceed with your question.
Hi, This is Joe on for Sterling.
Given that the 2020 outlook include that $10 million of by the contribution what else might be softening in the business to get to that full year revenue guidance.
I can take that one too so.
From a high level.
Underlying fundamentals of the business remain really strong I think as we think about the year ahead.
We just we remain prudent and the assumptions that we put forward and making sure that we're setting expectations that we feel comfortable with and.
Having communicated north of 30% as.
Our target.
Growth rate for the foreseeable future we're excited about.
What we've what we've set ahead for this year.
Okay got it thank you.
And as a reminder, if anyone has any questions you May press star one on your telephone keypad in order to join the Q&A queue.
Our next question comes from the line of Conor Pasteurella, which was securities. Please proceed with your question.
Hey, Tim Connor here on for Terry Thanks for taking my questions I just want to start with one on the <unk> segment. So we're really beginning to realize its definitely ripe for additional transformation just curious how the pipeline and new activity has been in that segment and maybe do you see any notable new business demand shifts from various sub segments served in.
2022.
Hey, Cotter you got nowhere here. Thanks for the question Yeah. We've noted on previous calls and continue to believe that <unk> is a segment that is really ripe for digital and I think all of the solutions that we have brought to market for different segments. The early.
Adopting segments like fast casual and casual dining and family dining and coffee and snack are now.
Available for <unk> in a way that helps them too.
Win back that that edge in convenience that maybe as others have gotten into on demand of commerce.
<unk> has lost a bit of that convenience and I think that is the legacy of.
Have the food business is that the most convenient channels tend to gain the most transaction volume over time and so when you have on demand Commerce and you have all of these other competitors now in these other segments, enabling consumers to have their food ready and waiting when they arrive or delivered to them the drive through experience doesn't look.
As fast or convenient anymore. So I think that has been one of the drivers of <unk> restaurant brand jumping into digital ordering.
And really being able to benefit from all of the work that we have done on the platform over the years to get started and get up the learning curve quickly.
<unk> certainly seen that throughout 2021, we believe that will continue throughout 2022, there's been a lot of activity in restaurant brands in the <unk> segment thinking about how they can create an optimal.
Pick up experience or hand off experience from the operator side of handing the order over to the consumer or over to a delivery courier picking up on behalf of the consumers. Some have experimented with double way and drive throughs in order to do that.
Some of the experience with.
Parking spots or slots, where they can do curbside pick up like the casual dining brands experimented with years ago. So I think it's a time of great excitement from the <unk> segment's.
Urgency from the <unk> segment to get into the world of on demand Commerce.
And with it to understand the consumer through those digital interactions that.
On demand commerce enables.
And we imagine we will continue to see growth in that segment I have noted in the past and will do so again. This is a segment that's super compelling to us given that it represents a large number of restaurant location broadly and in the enterprise segment, specifically and that it represents the largest number of transactions.
Per location, so really perfectly set up for our transactional SaaS model to be a big driver of growth going forward.
Great. That's really helpful color I appreciate that just had one quick one on wisely. So for customers on wisely are there are you seeing any correlation there with maybe more successful customer engagement, leading to lift in <unk> and <unk>. Thank you.
Well I think one thing to comment on with wisely is.
Being able to use a platform like wisely is truly about the brand understanding customer lifetime value that is really compelling.
Capability that wisely as platform unlocks and so a brand for the first time being able to identify who those top 20% of their customers are the tend to correlate with 60% of the order volume at their restaurants are the sales volume at the restaurant, that's incredibly compelling I think that's something that.
Wisely enables that helps brands to focus their marketing attention and expenditure on those high value customers, who really move the needle from a sales perspective.
And also these customers then inform every facet of the business. If you could understand who this cohort of high value customers are you can understand what correlates to that high value customer cohort you can understand the menu mix that they like you could understand the servers that serve them.
Therefore, you would imagine are the most skilled servers, who deliver the best experience as you can imagine are aware of other customers that fit the same profile.
Live work and play at where you should launch additional restaurant locations.
That metric of customer lifetime value is really a true north metric that is helping restaurants make better decisions across every facet of the enterprise.
We think that is something that.
Is oftentimes Miss this is not just a customer engagement tool. This is really a new way of viewing the business and a customer centric manner that improves every facet of the business and certainly if you were to talk to you why is the customers and why the customers who are also digital ordering customers of all those.
I would echo those sentiments.
Great. Thank you.
And we have reached the end of the question and answer session and I will now turn the call back over to CEO Nava glass for closing remarks.
Okay, well. Thank you all for joining US again as I hope you can hear from the content of our prepared remarks or responses to your questions and our general tone, we've never been more confidence about our position we're enthusiastic about our opportunity than we are today I want to say thank you to team for another great quarter, we have Meyer.
To go before we sleep.
And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Okay.