Q3 2024 Olo Inc Earnings Call
So from my presentation.
Speaker Change: If anyone should require operator assistance. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
I'd like to turn the conference over to our host Gary <unk> Senior Vice President of Investor Relations. Thank you you may begin.
Speaker Change: Thank you good afternoon, and welcome to all those third quarter 2024 financial results Conference call. Joining me today are no glass, all those founder and CEO and Peter <unk> all those CFO. During this call we will make forward looking statements, including but not limited to statements regarding our expectations of our business our industry are.
Speaker Change: Our operations 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.
Speaker Change: 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.
Speaker Change: During today's call will also present, 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 on our website.
Speaker Change: 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 maybe 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: Thank you Gary Hi, everyone. Thank you for spending time with us today.
Noah: <unk> executed well on our top priorities in the third quarter and positioned to OLED to complete a successful 2024 with.
Noah: With customers, we continued to win retain and expand and product and we drove further innovation across our three product suites and the ecosystem.
Noah: A deeper partnership with easy cater to provide an additional demand channel for our fast growing catering plus module.
Noah: And although pay we announced the general availability of card present functionality on <unk> S.
Noah: And we expect to deploy multiple overpay card present pilots with enterprise and emerging enterprise brand customers on Q and NCR Boy ex pass a four year at.
Noah: Financially we hit our 2024 location growth target one quarter ahead of schedule and delivered yet another beat and raise quarter for revenue and non-GAAP operating income.
Speaker Change: I'll discuss our customer product and partnership highlights for the quarter and Peter will review, our Q3 financial performance and updated guidance.
Peter: We ended the quarter with approximately 85000 active locations, adding approximately 3000 net new locations since the end of Q2.
Peter: <unk> for Q3 was $850 an increase of 15% year over year.
Peter: Net revenue retention was above 120% for the fourth quarter in a row.
Peter: We're particularly proud of our locations performance, we reached our 5000 net new location additions target for 2020 for one quarter ahead of schedule.
Peter: The only restaurant network has never been stronger.
of card-present functionality on QPOS. And we expect to deploy multiple Olopay card-present pilots with Enterprise and Emerging Enterprise brand customers on Q and NCR VOIX POS before year-end.
In Enterprise Q3 implementations included the full launch of desk rose on OLED ordering and overpay card not present across its 800 plus locations.
Financially, we hit our 2024 location growth target one quarter ahead of schedule and delivered yet another beat-and-raise quarter for revenue and non-GAAP operating income.
Peter: We deployed multiple order modules and <unk> card not present with bakery Cafe brand Paris Baguette.
Peter: Went from signing to launch within two quarters.
Speaker Change: I'll discuss our customer, product, and partnership highlights for the quarter, and Peter will review our Q3 financial performance and updated guidance.
Peter: We also deployed with long John Silver's on rails, and nothing bumps kicks on dispatch two great. Examples of how all those modular platform can meet brands, where they are on their tech journeys and to offer expansion opportunities as we deliver value.
Speaker Change: We ended the quarter with approximately 85,000 active locations, adding approximately 3,000 new locations since the end of Q2.
Peter: We also saw momentum with existing enterprise customers eager to realize the power of guest data.
Speaker Change: ARPU for Q3 was $850, an increase of 15% year-over-year, and net revenue retention was above 120% for the fourth quarter in a row.
Another broken egg cafe and P. F chang's deployed although engages guest data platform during the quarter.
Peter: In emerging enterprise, we had a strong quarter of multi suite deployment, including Popaginos and Pizza Inn, who both deployed ordering dispatch rails and OLED pay card not present.
Speaker Change: We're particularly proud of our location's performance. We reached our 5,000 Met New Location Additions target for 2024, one quarter ahead of schedule. The Olo Restaurant Network has never been stronger.
We're also pleased to welcome Oak, Barry a provider of healthy organic oxide E bowls.
Speaker Change: In Enterprise, Q3 implementations included the full launch of DeskPros on Ola Ordering and Ola Pay card-not-present across its 800-plus locations.
As one of multiple emerging enterprise flywheel customers that launched with all three although product suites in the quarter.
Peter: We're also seeing the same momentum with existing emerging enterprise customers regarding <unk> engage with Kolache factory and Thompson restaurants, each deploying multiple modules from the engage suite.
Speaker Change: We deployed multiple order modules and Olope Carve Knot presents with bakery cafe brand Paris Baguette, who went from sign-in to launch within two quarters.
Speaker Change: We also deployed with Long John Fillers on Rails and Nothing Bunch Cakes on Dispatch, two great examples of how Ola's modular platform can meet brands where they are on their tech journeys, and offer expansion opportunities as we deliver value.
Peter: We're landing and expanding with brands through the strength of our open platform and this was on display at our inaugural partner summit in Chicago.
Attendance was at capacity and the event brought together a select members of our 400 plus ecosystem partners alongside some of our most innovative customers.
Speaker Change: We also saw momentum with existing enterprise customers eager to realize the power of guest data. Both Another Broken Egg Cafe and P.F. Chang's deployed Olo Engage's guest data platform during the quarter.
Peter: Discussions focused on how we can collaborate to solve the industry's biggest challenges like proving ROI, creating a seamless guest experience and moving beyond the limitations of in house development and data silos.
Speaker Change: In emerging enterprise, we had a strong quarter of multi suite deployment, including Popaginos and Pizza Inn, who both deployed ordering dispatch rails and although pay card not present.
Speaker Change: In Emerging Enterprise, we had a strong quarter of multi-suite deployments, including Papa Geno's and Pizza Inn, who both deployed Ordering, Dispatch, Rails, and Olope Cardnot Presents.
We remain committed to the philosophy that open be.
Peter: Closed and that our open platform approach can accelerate technological advancements in our industry.
Speaker Change: We're also pleased to welcome Oak Barry a provider of healthy organic <unk>, who is one of multiple emerging enterprise flywheel customers that launched with all three although product suites in the quarter.
Speaker Change: We're also pleased to welcome Oakberry, a provider of healthy organic acai bowls, who is one of multiple Emerging Enterprise Flywheel customers that launched with all three Olo product suites in the quarter.
Peter: And we delivered further innovation through direct investment in our platform and our October fall release, we announced over a dozen product enhancements to help brands increased orders.
Speaker Change: We're also seeing the same momentum with existing emerging enterprise customers regarding although engage with Kolache factory and Thompson restaurants, each deploying multiple modules from the engaged suite.
Speaker Change: We're also seeing the same momentum with existing emerging enterprise customers regarding Olo Engage, with Kolachi Factory and Thompson Restaurant each deploying multiple modules from the Engage suite.
Mine operations and improve the guest experience.
Peter: In border lists we integrated loyalty program sign it so.
Peter: <unk> can now enjoy the benefits of both of their board with accounts and their loyalty rewards through one password list experience.
Speaker Change: We're landing and expanding with brands through the strength of our open platform and this was on display at our inaugural partner summit in Chicago.
Speaker Change: We're landing and expanding with brands through the strength of our open platform. And this was on display at our inaugural partner summit in Chicago. Attendance was at capacity and the event brought together select members of our 400 plus ecosystem partners alongside some of our most innovative customers.
Peter: Borderlands continues to scale at a rapid pace with more than 10 million accounts up Tenex from 1 million accounts, just one year ago.
Speaker Change: <unk> was at capacity and the event brought together a select members of our 400 plus ecosystem partners alongside some of our most innovative customers.
Peter: And we believe this new loyalty program integration will further increase borderlands adoption and improve the guest experience when.
Speaker Change: Discussions focused on how we can collaborate to solve the industry's biggest challenges like proving ROI, creating a seamless guest experience and moving beyond the limitations of in house development and data silos.
Speaker Change: Discussions focused on how we can collaborate to solve the industry's biggest challenges, like proving ROI, creating a seamless guest experience, and moving beyond the limitations of in-house development and data silos.
Peter: When we began this journey it was because we believe that border list could be the true manifestation of a scaled two sided network to connect enterprise restaurants, and their guests a unique offering that only OLED could bring to life.
Speaker Change: We remain committed to the philosophy that open beach closed and that our open platform approach can accelerate technological advancements in our industry.
Speaker Change: We remain committed to the philosophy that open beats closed and that our open platform approach can accelerate technological advancements in our industry.
Peter: We're thrilled to see border list and its network effect proving out our thesis and scaling tenex over the past year.
Speaker Change: And we delivered further innovation through direct investment in our platform.
Speaker Change: And we delivered further innovation through direct investment in our platform.
Peter: We added functionality to catering plus to help operators manage complex business accounts within their existing although dashboard and gift sales managers, a comprehensive view of their guest data.
Our October fall release, we announced over a dozen product enhancements to help brands increased orders streamline operations and improve the guest experience.
Speaker Change: In our October fall release, we announced over a dozen product enhancements to help brands increase orders, streamline operations, and improve the guest experience.
Speaker Change: In border lists we integrated loyalty program sign it.
Peter: And today, we announced a new menu integration with easy cater to make it easier for brands to manage their third party marketplace catering demand and scale. This increasingly important channel.
Speaker Change: In Borderless, we integrated loyalty program sign-in. So guests can now enjoy the benefits of both their Borderless accounts and their loyalty rewards through one passwordless experience.
Speaker Change: Guests can now enjoy the benefits of both their border with accounts and their loyalty rewards through one password list experience.
Speaker Change: Borderlands continues to scale at a rapid pace with more than 10 million accounts up Tenex from 1 million accounts, just one year ago.
Peter: Catering plus continues to ramp within our base with new Q3 deployments with brands of all sizes and service models like Bojangles' Cowboy chicken and Mendocino farms.
Speaker Change: Borderless continues to scale at a rapid pace with more than 10 million accounts, up 10x from 1 million accounts just one year ago.
Speaker Change: And we believe this new loyalty program integration will further increase borderlands adoption and improve the guest experience.
Speaker Change: And we believe this new loyalty program integration will further increase borderless adoption and improve the guest experience.
Catering plus adoption has been a strong expansion driver and we believe it sets us up well to sell additional although modules like although pay dispatch and rails to support our brands catering channel.
Speaker Change: When we began this journey it was because we believe that border list could be the true manifestation of a scaled two sided network to connect enterprise restaurants, and their guests a unique offering that only OLED could bring to life.
Speaker Change: When we began this journey, it was because we believed that Borderless could be the true manifestation of a scaled, two-sided network to connect enterprise restaurants and their guests, a unique offering that only Ola could bring to life.
And most importantly, we've made great progress towards bringing although pay card presence to market.
Speaker Change: We're thrilled to see border list and its network effect proving out our thesis and scaling tenex over the past year.
As we shared in our fall release brands on Q Pos can now use <unk> to process card present transactions and aggregate the associated basket level data into the <unk> engage GDP.
Speaker Change: We're thrilled to see Borderless and its network effect proving out Arthesis and scaling 10x over the past year.
Speaker Change: We added functionality to CateringPlus to help operators manage complex business accounts within their existing OLO dashboard and give sales managers a comprehensive view of their guest data.
Peter: Q is our first generally available direct Pos integration for <unk>.
Peter: We're completing our integration work with NCR works and we have discussions underway with additional providers to further expand our overpay and engage integrations.
Speaker Change: and today we announced a new menu integration with Easy Cater to make it easier for brands to manage their third party marketplace catering demands and scale this increasingly important channel.
Peter: We've been running the <unk> go to market motion in parallel with our technical work and we're excited to share that we expect to launch five although pay card present pilots in Q4 with brands on Q and NCR avoid X.
Speaker Change: Catering Plus continues to ramp within our base with new Q3 deployments with brands of all sizes and service models like Bojangles, Cowboy Chicken, and Mendocino Farms.
Peter: We're working with brands across multiple restaurant categories and the majority of these pilots are with enterprise brands.
Speaker Change: Catering Plus adoption has been a strong expansion driver, and we believe it sets us up well to sell additional Olo modules, like OloPay, Dispatch, and Rails, to support a brand's catering channel.
Peter: We see this as a great start and the OLED <unk> pipeline is building with our existing brand customers as well as with new enterprise brands interested in all those full stack payments offering.
Speaker Change: And most importantly, we've made great progress toward bringing Olope card presents to market.
Peter: We have work ahead of US. However, the early signs are encouraging for older paste product market fit for off and on premise transactions.
Speaker Change: As we shared in our fall release, brands on QPOS can now use OloPay to process card-present transactions and aggregate the associated basket-level data into the OloEngage GDP.
Peter: We listened to our brands when they told us they needed a payment solution purpose built for enterprise restaurants, and we're bringing it to market.
Speaker Change: Q is our first generally available direct POS integration for Olopeh.
Peter: We also have news regarding team Ola.
Peter: We're excited to welcome Jason Ordway, as our new Chief Technology Officer, overseeing all of his engineering function as part of COO, Joe Lambert's leadership team.
Speaker Change: We're completing our integration work with NCR-VOIX, and we have discussions underway with additional providers to further expand our OLAPE and ENGAGE integrations.
Peter: Jason brings a wealth of technology leadership experience to OLED, particularly in the areas of enterprise scale platforms and the management of remote engineering teams.
Speaker Change: We've been running the Olopay Go-To-Market Motion in parallel with our technical work, and we're excited to share that we expect to launch five Olopay card-present pilots in Q4 with brands on Q and MCR Voyex.
Peter: For the last seven years, Jason with CTO at slice a restaurant tech platform used by 20000 Pizza relocations, where he led a fully distributed team of 225 professionals across nine countries.
Speaker Change: We're working with brands across multiple restaurant categories, and the majority of these pilots are with enterprise brands.
Speaker Change: We see this as a great start, and the OlaPay pipeline is building with our existing brand customers, as well as with new enterprise brands interested in Ola's full-stack payments offering.
Speaker Change: <unk> a great fit for OLED in terms of cross functional leadership experience and culture, and we're looking forward to him, helping OLED deliver even greater innovation to our restaurant brands and their guests.
Speaker Change: We have work ahead of us. However, the early signs are encouraging for Olope's product market fit for off and on-premise transactions.
Finally, we shared in todays 8-K filing that Chief revenue Officer, Diego, Panama will be leaving <unk> at the end of the year Diego joined US in July 2022, and has led all aspects of the customer journey for our brands, including sales marketing customer success and business development and partnerships.
Speaker Change: We listened to our brands when they told us they needed a payment solution purpose-built for enterprise restaurants, and we're bringing it to market.
Speaker Change: We also have news regarding Team Olo. We're excited to welcome Jason Ordway as our new Chief Technology Officer, overseeing Olo's engineering function as part of COO Joe Lambert's leadership team.
He built our sales engineering team to support the increased technical selling required as we added the PE and engaged suites exceed.
Speaker Change: Succeeded in ramping up our emerging enterprise sales motion and streamlined operations to shorten deployment timelines and more efficiently support our customers.
Speaker Change: Jason brings a wealth of technology leadership experience to Olo, particularly in the areas of enterprise-scale platforms and the management of remote engineering teams.
Speaker Change: As we look to 2025 and beyond Diego and I concluded that <unk> needs, an executive to focus solely on driving bookings.
Speaker Change: For the last seven years, Jason was CTO at Slice, a restaurant tech platform used by 20,000 pizzeria locations.
Speaker Change: And we have mutually agreed to part ways.
Speaker Change: <unk> will help us execute on our Q4 plan assist with a smooth transition and act as an adviser to me.
Speaker Change: where he led a fully distributed team of 225 professionals across nine countries.
Speaker Change: Sales leadership will report to me on an interim basis, and we will initiate a search for a new sales leader shortly additionally.
Speaker Change: Jason's a great fit for Olo in terms of cross-functional leadership, experience, and culture, and we're looking forward to him helping Olo deliver even greater innovation to our restaurant brands and their guests.
Speaker Change: Additionally, CLO, Joe Lambert expand her role to oversee the marketing customer success and business developments and partnerships functions going forward.
Speaker Change: Finally, we shared in today's 8K filing that Chief Revenue Officer Diego Panama will be leaving OLO at the end of the year.
Speaker Change: We believe this will strengthen the connective tissue between product development and commercialization, we think Diego for his contributions to <unk> and wish him continued success in his career.
Speaker Change: Q3 was another strong quarter across the board.
Speaker Change: As we move to the end of the year and begin setting our sights on 2025, I'm energized by team <unk> ability to serve our customers drive further product innovation and industry collaboration and deliver financial results.
We are winning with the strength of our open enterprise grade platform, while setting the table for future success by enabling data driven personalization of the guest experience.
Speaker Change: Other verticals have shown personalization drives profitable traffic and true customer loyalty.
Speaker Change: Although we are laser focused on being the clear leader in guest personalization for enterprise restaurants.
Speaker Change: I'll now turn the call over to Peter who will review, our third quarter financial highlights and updated guidance.
Speaker Change: Peter.
Peter: Thanks, Noah today, I'll review, our third quarter results as well as provide guidance for the fourth quarter and the full year 2024.
We believe this will strengthen the connective tissue between product development and commercialization, we think Diego for his contributions to <unk> and wish him continued success in his career.
Peter: In the third quarter total revenue was $71 $9 million, an increase of 24% year over year.
Speaker Change: Q3 was another strong quarter across the board as we move to the end of the year and begin setting our sights on 2025, I'm energized by team <unk> ability to serve our customers drive further product innovation and industry collaboration and deliver financial results.
Peter: <unk> revenue in the third quarter with $71 million, an increase of 24% year over year.
Peter: <unk> had another strong revenue quarter, and we generated year over year subscription revenue growth of 10%.
Speaker Change: Active locations, where approximately 85000 up approximately 3000 locations sequentially due to the deployment activity Noah mentioned.
Speaker Change: We are winning with the strength of our open enterprise grade platform.
Speaker Change: Setting the table for future success by enabling data driven personalization of the guest experience.
Speaker Change: We've added approximately 5000 net new locations year to date through September 30th meeting our full year target for net new locations one quarter ahead of schedule.
Speaker Change: As other verticals have shown personalization drives profitable traffic and true customer loyalty.
Speaker Change: Although we are laser focused on being the clear leader in guest personalization for enterprise restaurants.
Speaker Change: Based on our location performance year to date and line of sight into Q4, we now expect to add approximately 6000 net new locations. This year.
Speaker Change: I'll now turn the call over to Peter who will review, our third quarter financial highlights and updated guidance.
Speaker Change: <unk> for the third quarter was approximately $850 up 15% year over year and flat sequentially.
Speaker Change: Peter.
Peter: Thanks, Noah today, I'll review, our third quarter results as well as provide guidance for the fourth quarter and the full year 2024.
Speaker Change: The year over year increase in <unk> was driven by increased order volumes and modules per location in particular all okay.
Peter: In the third quarter total revenue was $71 9 million, an increase of 24% year over year.
Speaker Change: Net revenue retention was above a 120% the fourth consecutive quarter, where <unk> was at or above 120%.
Peter: Platform revenue in the third quarter with $71 million, an increase of 24% year over year.
Peter: <unk> had another strong revenue quarter, and we generated year over year subscription revenue growth of 10%.
Speaker Change: For the remainder of the Q3 financial metrics disclosed unless otherwise noted I will be referencing non-GAAP financial measures.
Peter: Active locations, where approximately 85000 up approximately 3000 locations sequentially due to the deployment activity Noah mentioned.
Gross profit for the third quarter was $43 $6 million up 12% year over year.
Speaker Change: Gross margin for the third quarter was approximately 67%.
Peter: We've added approximately 5000 net new locations year to date through September 30th meeting our full year target for net new locations one quarter ahead of schedule.
Speaker Change: Down about 200 basis points sequentially and in line with the expectations, we set on our prior call.
Speaker Change: Gross profit and gross margin performance reflect the impact of this quarters revenue outperformance.
Peter: Based on our location performance year to date and line of sight into Q4, we now expect to add approximately 6000 net new locations. This year.
Speaker Change: As well as the increasing mix of all of them pay revenue.
Speaker Change: We continue to exercise operating expense discipline.
Peter: <unk> for the third quarter was approximately $850 up 15% year over year and flat sequentially. The.
In Q3, all three operating expense line items improved year over year on a percentage of revenue basis.
Speaker Change: Sales and marketing expense for the third quarter was $11 million or 15% of total revenue.
Peter: The year over year increase in <unk> was driven by increased order volumes and modules per location in particular, okay.
This compares to $9 $4 million and 16% a year ago.
Peter: And net revenue retention was above 120% the fourth consecutive quarter, where NR was at or above 120%.
Speaker Change: Research and development expense for the third quarter with $14 $3 million or 20% of total revenue.
Peter: For the remainder of the Q3 financial metrics disclosed unless otherwise noted I will be referencing non-GAAP financial measures.
Speaker Change: This compares to $14 $3 million or 25% of total revenue a year ago.
General and administrative expense for the third quarter with $10 1 million or 14% of total revenue.
Gross profit for the third quarter was $43 $6 million up 12% year over year.
This compares to $9 $4 million and 16% a year ago.
Peter: Gross margin for the third quarter was approximately 67% down.
Speaker Change: Operating income for the third quarter was $8 2 million up from $5 $7 million a year ago opt.
Peter: Down about 200 basis points sequentially and in line with the expectations, we set on our prior call.
Operating margin was approximately 11% in Q3, an increase of approximately 160 basis point year over year.
Gross profit and gross margin performance reflect the impact of this quarters revenue outperformance.
Peter: As well as the increasing mix of all of them pay revenue.
Speaker Change: This strong performance reflects a combination of continued expense discipline and revenue outperformance.
Peter: We continue to exercise operating expense discipline.
Peter: In Q3, all three operating expense line items improved year over year on a percentage of revenue basis.
Speaker Change: The workforce reduction, we announced on September 20th, which I'll speak to when we discuss guidance.
Sales and marketing expense for the third quarter was $11 million or 15% of total revenue. This.
Speaker Change: It was an immaterial contributor to the non-GAAP operating income performance.
Speaker Change: Net income in the third quarter was $10 4 million or six cents per share based on approximately $171 9 million fully diluted weighted average shares outstanding.
Peter: This compares to $9 $4 million and 16% a year ago.
Peter: Research and development expense for the third quarter with $14 $3 million or 20% of total revenue.
Speaker Change: Turning our attention to the balance sheet and cash flow statement.
Peter: This compares to $14 $3 million or 25% of total revenue a year ago.
Our cash cash equivalents and short and long term investments totaled approximately $392 million as of September 32024, we.
General and administrative expense for the third quarter with $10 1 million or 14% of total revenue.
Speaker Change: We did not repurchase any shares in the third quarter due to related shareholder litigation discussed in our SEC filings.
Peter: This compares to $9 $4 million and 16% a year ago.
Peter: Operating income for the third quarter was $8 $2 million up from $5 $7 million a year ago opt.
Speaker Change: This matter was settled in early August.
Speaker Change: In Q4, we expect to initiate a <unk> one plan for $100 million share repurchase program.
Peter: Operating margin was approximately 11% in Q3, an increase of approximately 160 basis point year over year.
Speaker Change: Net cash provided by operating activities was $6 $2 million in the quarter compared to a negative $21 $6 million in the quarter a year ago free.
Peter: This strong performance reflects a combination of continued expense discipline and revenue outperformance.
Peter: The workforce reduction, we announced on September 20th, which I'll speak to when we discuss guidance.
Speaker Change: Free cash flow was $3 2 million compared to negative $24 $4 million a year ago.
Peter: It was an immaterial contributor to the non-GAAP operating income performance.
Speaker Change: Q3 cash flow metrics, primarily reflect operating income performance and working capital timing.
Peter: Net income in the third quarter was $10 4 million or six cents per share based on approximately $171 9 million fully diluted weighted average shares outstanding.
Speaker Change: I'll wrap up by providing our guidance for the fourth quarter and full year 2024.
Speaker Change: For the fourth quarter of 2024, we expect revenue in the range of $72 $5 million and $73 million and a non-GAAP operating income in the range of $8 $7 million and $9 million.
Peter: Turning our attention to the balance sheet and cash flow statement.
Peter: Our cash cash equivalents and short and long term investments totaled approximately $392 million as of September 32024, we.
Speaker Change: For the fiscal year 2024, we are again, raising revenue and non-GAAP operating income guidance. We now expect revenue in the range of 281 $4 million and $281 9 million and non-GAAP operating income in the range of $32 million in <unk>.
Peter: We did not repurchase any shares in the third quarter due to related shareholder litigation discussed in our SEC filings.
Peter: This matter was settled in early August.
Peter: In Q4, we expect to initiate a <unk> one plan for $100 million share repurchase program.
Speaker Change: $35 million.
Peter: Net cash provided by operating activities was $6 $2 million in the quarter compared to a negative $21 $6 million in the quarter a year ago.
Speaker Change: A few things to keep in mind as you consider our updated outlook for the year.
Speaker Change: We continue to expect the trends in the restaurant industry to be similar to what we saw in 2023.
Peter: Free cash flow was $3 2 million compared to negative $24 $4 million a year ago.
Speaker Change: Consistent growth in digital ordering.
Speaker Change: Continued need to improve efficiency to offset rising costs and macro uncertainty.
Peter: Q3 cash flow metrics, primarily reflect operating income performance and working capital timing.
We now expect <unk> to contribute revenue in the high $60 million range in fiscal year 2024.
Peter: I'll wrap up by providing our guidance for the fourth quarter and full year 2024.
Speaker Change: From the mid $60 million range, we shared on our Q2 call.
Peter: For the fourth quarter of 2024, we expect revenue in the range of $72 $5 million and $73 million.
We continue to expect <unk> revenue for the year to be essentially all card not present revenue.
Speaker Change: We also continue to expect full year 2020 for gross margin to be in the low 60% range.
Peter: And non-GAAP operating income in the range of $8 $7 million and $9 million.
Speaker Change: And that full year 2024 will be the trough and annual year over year gross profit growth.
For the fiscal year 2024, we are again, raising revenue and non-GAAP operating income guidance.
Speaker Change: We anticipate Q4 2024 gross margin will be flat compared to Q3 2024.
Peter: We now expect revenue in the range of $281 $4 million and $281 9 million and non-GAAP operating income in the range of $32 million and $35 million.
non-GAAP gross profit and operating income for Q4 and full year 2024 reflect the impact of the workforce reduction we announced on September 22024.
Peter: A few things to keep in mind as you consider our updated outlook for the year.
Speaker Change: We lowered total head count by approximately 9%.
Peter: We continue to expect the trends in the restaurant industry to be similar to what we saw in 2023 <unk>.
Speaker Change: We consistently review our cost structure and we took this action to streamline operations prior to our 2025 budget process.
Peter: Consistent growth in digital ordering.
Peter: Continued need to improve efficiency to offset rising costs and macro uncertainty.
Speaker Change: We primarily consolidated teams and reduced spans and layers across implementation and customer success marketing and sales.
Peter: We now expect <unk> to contribute revenue in the high $60 million range in fiscal year 2024.
This action lowered our total annual cost base by approximately $8 million.
Peter: From the mid $60 million range, we shared on our Q2 call.
Speaker Change: We expect about 60% of the cost savings to flow to Ngos.
Peter: We continue to expect <unk> revenue for the year to be essentially all card not present revenue.
Speaker Change: With the remainder being reinvested into the business.
Speaker Change: To wrap up third quarter financial performance continued to build on our first half momentum.
Peter: We also continue to expect a full year of 2020 for gross margin to be in the low 60% range.
And our updated guidance reflects our increased confidence in the business.
Peter: And that full year 2024 will be the trough and annual year over year gross profit growth.
Speaker Change: We're adding logos and expanding with existing brands to drive the top line doing the work to accelerate gross profit growth in 2025, and driving greater operating leverage through disciplined expense management.
Peter: We anticipate Q4 2024 gross margin will be flat compared to Q3 2024.
Peter: non-GAAP gross profit and operating income for Q4 and full year 2024 reflect the impact of the workforce reduction we announced on September 20th 2024.
Speaker Change: With that I'd now like to turn the call over to the operator to begin the Q&A session operator.
Speaker Change: Great. Thank you at this time, we will be conducting a question and answer session. If you'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 to remove yourself from the queue.
Peter: We lowered total head count by approximately 9%.
Peter: We consistently review our cost structure and we took this action to streamline operations prior to our 2025 budget process.
Peter: We primarily consolidated teams and reduced spans and layers across implementation and customer success marketing and sales.
Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please pool for questions.
Peter: This action lowered our total annual cost base by approximately $8 million.
Speaker Change: Our first question is from Terry Tillman from true Securities. Please go ahead.
Peter: We expect about 60% of the cost savings to flow to NGO lie with the remainder being reinvested into the business.
Speaker Change: Great. Good afternoon, guys Conor pasteurella on for Terry I. Appreciate you taking the questions first one I wanted to start with old okay.
That business looks like it will more than double again with the new guidance here.
Peter: To wrap up third quarter financial performance continued to build on our first half momentum.
Speaker Change: The opportunity is still a card present on the Pls partnerships just curious how we should be I guess thinking about the continued growth trajectory of that business.
Peter: And our updated guidance reflects our increased confidence in the business.
Peter: We're adding logos and expanding with existing brands to drive the top line doing the work to accelerate gross profit growth in 2025, and driving greater operating leverage through disciplined expense management.
Speaker Change: Sharp is starting to play out throughout the end of this year.
Speaker Change: Next year.
Speaker Change: This is Noah. Thank you for the question, Yes, we're very excited about the progress the continued progress with OLED PE looking back now over two years, we were about $250 million in our first year in market with overpay just card not present in gross processing volume than up.
Peter: With that I'd now like to turn the call over to the operator to begin the Q&A session operator.
Speaker Change: Okay. Thank you.
Speaker Change: Time will be conducting a question and answer session. If you'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 to remove yourself from the Kid.
Two 1 billion last year, and now projecting $2 5 billion and processing volume this year and as you heard going from $30 million in revenue last year up to now the high $60 million range.
Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: So very excited about that opportunity and especially when we compare it to the <unk>.
Speaker Change: Fact that our brands are processing in <unk> about $26 billion through the <unk> platform on an annual basis. So on that basis, we're just about 10% or less than 10% from a gross payments volume running through overpay as compared to that gross merchandise value.
Speaker Change: One moment, please pull for questions.
Speaker Change: Our first question is from Terry Tillman from true Securities. Please go ahead.
Speaker Change: Great. Good afternoon, guys Conor fastener aisle on for Terry I. Appreciate you taking the questions first one just want to start with old okay.
Speaker Change: That business looks like it will more than double again with the new guidance here lots of opportunities still a card present in the Pls partnerships. Just curious how we should be I guess thinking about the continued growth trajectory of that business.
Speaker Change: But especially as we make this jumped into card present payments. That's when we see the full <unk> of the brands, we work with being addressable to OLED does that takes us because of the fact that card present and card not present together are about six times the size of card not present alone.
Speaker Change: Sharp start to play out throughout the end of this year.
Speaker Change: Next year.
Speaker Change: This is Noah. Thank you for the question, Yes, we're very excited about the progress continued progress with OLED PE looking back now over two years, we were about $250 million in our first year in market with overpay just card not present in gross processing volume than up.
Up to about $116 billion of DMV addressable as gross payments volume ultimately for Autopay. So from that standpoint, the $2 5 billion of gross payment volume on our PE is.
Speaker Change: Quite substantial but very early in the overall opportunity under 2% and we're very excited to see that progress with although pay card present in the form of these five pilots that we announced Tonight.
Speaker Change: Two 1 billion last year, and now projecting $2 5 billion and processing volume this year and as you heard going from $30 million in revenue last year up to now the high $60 million range.
Speaker Change: So very excited about that opportunity and especially when we compare it to the fact that our brands are processing in <unk> about $26 billion.
Speaker Change: Two different Pos partners, Q, Pos and NCR <unk> launching in the fourth quarter of this year. We expect a lot of continued momentum heading into 2025, and we're very excited about that it will pay opportunity I'd also say, it's an exciting opportunity for <unk>, but it's also an opportunity that our customers are very excited about because they see that.
Speaker Change: Through the <unk> platform on an annual basis, so on that basis.
Speaker Change: Just about 10% or less than 10% from a gross payments volume running through overpay as compared to that gross merchandise value.
Speaker Change: When overpay is processing the transactions for card present, it as an opportunity to pull data about those transactions back into the guest data platform to understand what the guest is ordering and to collate that data back to a guest profile. So really understanding every transaction that a guest places whether it's.
Speaker Change: But especially as we make this jumped into card present payments. That's when we see the full <unk> of the brands that we work with being addressable to OLED does that takes us because of the fact that card present and card not present together are about six times the size of card not present alone.
Speaker Change: Digital transactions already non digital transaction that is the Holy Grail opportunity that oil pay card present represents in a time in this industry. When brands are really looking to understand their guests to know all of their guests and to really personalize the guest experience as a way of standing out from their competition.
Speaker Change: <unk> up to about $116 billion of DMV addressable as gross payments volume ultimately for Autopay. So from that standpoint, the $2 5 billion of gross payment volume on our PE is.
Speaker Change: Quite substantial but very early in the overall opportunity under 2% and we're very excited to see that progress with although pay card present in the form of these five pilots that we announced Tonight.
Speaker Change: Great. Thanks, Thanks, Tom that's really helpful. Just maybe as a follow up on the go to market motion with Diego departing I guess what are you looking for in terms of the next CRO that gets the point isn't that role and maybe what would you want to see from a go to market organization. As you guys look towards the next phase of growth.
Speaker Change: Two different Pos partners, Q, Pos and NCR <unk> launching in the fourth quarter of this year. We expect a lot of continued momentum heading into 2025, and we're very excited about that it will pay opportunity I'd also say, it's an exciting opportunity for <unk>, but it's also an opportunity that our customers are very excited about because they see that.
Speaker Change: Yes, it's a great question I mean I'm excited for in the interim period.
Speaker Change: Myself getting closer to the go to market organization is something that I've been involved with from the very beginning of OLED as you'd imagine, but especially co selling into larger opportunities and going deeper with existing partners I think as we initiate the search what we're really looking for is a greater focus on bookings.
Speaker Change: When overpay is processing the transactions for card presence its an opportunity to pull data about those transactions back into the guest data platform to understand what the guest is ordering and to collate that data back to a guest profile. So really understanding every transaction that a guest places whether it's.
Speaker Change: And our sales leader, who is a proven executive with industry experience with relationships in this industry and important that they are based in New York City and have a tight partnership with our New York City based team Peter our CFO, Joe <unk>, our COO and me.
Speaker Change: A digital transaction of worry non digital transaction that is the Holy Grail opportunity that oil pay card present represents.
Speaker Change: Time in this industry when brands are really looking to understand their guests to know all of their guests and to really personalize the guest experience as a way of standing out from their competition.
Speaker Change: And we're excited about that focus and also for those non sales activities to then be part of Joe Lambert organization, as our COO and really having innovation and commercialization, although living together I think that's a very healthy combination and we're looking forward to that change as well I should.
Speaker Change: Great. Thanks, Thanks, Tom that's really helpful. Maybe as a follow up on the go to market motion with Diego departing I guess, what are you looking for in terms of the next CRO that gets appointed as in that role and maybe what would you want to see from a go to market organizations, you guess look towards the next phase of growth.
Speaker Change: Also say, we're very excited about our sales leaders at the SVP level acuity cohort KD Lang one layer down.
Speaker Change: Yes, it's a great question I mean I'm excited for in the interim period.
Speaker Change: I'm very excited to get closer to that and be working with them as they lead our sales team.
Speaker Change: Myself getting closer to the go to market organization is something that I've been involved with from the very beginning of OLED as you'd imagine, but especially co selling into larger opportunities and going deeper with existing partners I think as we initiate the search what we're really looking for is a greater focus on bookings.
Speaker Change: Any in the foreseeable future and especially as I am working closely with them in this interim period before we brought on a new sales leader.
Tom: Thanks, Tom.
Speaker Change: Your next question is from Stephen Sheldon from William Blair. Please go ahead.
Speaker Change: <unk> and our sales leader, who is a proven executive with industry experience with relationships in this industry and important that they are based in New York City and have a tight partnership with our New York City based team Peter our CFO, Joe <unk>, our COO and me.
Stephen Sheldon: Hi team you Pat Mcinally on this afternoon.
Speaker Change: My first question. So when you completed the September risks, which included some Hudson. Your go to market function. You noted plans to focus more on <unk> expansion in the existing client base.
Speaker Change: And we're excited about that focus and also for those non sales activities to then be part of Joe Lambert organization, as our COO and really having innovation and commercialization and although living together I think that's a very healthy combination and we're looking forward to that change as well I should.
Speaker Change: And this quarter you added the most locations in a quarter since 2022, and <unk> was roughly flat sequentially. So I wanted to ask if you feel that initiative will take time to materialize or if you've kind of remain focused more so on winning new business rather than count expansion.
Speaker Change: And.
Speaker Change: Just what youre seeing in terms of underlying momentum for upsell and cross sell.
Also say, we're very excited about our sales leaders at the SVP level Kt Cofer KD Lang one layer down.
Speaker Change: Yes, I can take that one Peter here Pat so.
Speaker Change: I'm very excited to get closer to that and be working with them as they lead our sales team.
Speaker Change: We're.
Speaker Change: Trying to accomplish both right. So we want to grow both <unk> as well as add more locations to the platform over time.
Speaker Change: Any in the foreseeable future and especially as I am working closely with them in this interim period before we brought on a new sales leader.
Speaker Change: <unk> dynamic this quarter was driven by two factors. One this was the first quarter, where you felt the full impact of Wingstop transitioning from three product modules down to one <unk>.
Noah: Thanks Noah.
Speaker Change: Our next question is from Steve Sheldon with William Blair. Please go ahead.
Steve Sheldon: Hi team you Pat Mcinally on this afternoon.
Speaker Change: And you had a.
Speaker Change: A subset of the locations that did come on this quarter were single module locations I think know called one out in the prepared remarks, and long John Silver's, which when only utilizing one product module you inherently have a lower RPC. So through the combination of those two things. That's why you saw the <unk>.
Steve Sheldon: My first question. So when you completed the September risks, which included some Hudson. Your go to market function. You noted plans to focus more on <unk> expansion in the existing client base.
Steve Sheldon: And this quarter you added the most locations in a quarter since 2022, and <unk> was roughly flat sequentially. So I wanted to ask if you feel that initiative will take time to materialize or if you've kind of remain focused more so on winning new business rather than count expansion.
Speaker Change: Selling growth from an <unk> perspective.
Speaker Change: That said we've shared.
Speaker Change: Historically, the number of product modules per location that averaged around three to three and a half product modules per location. We have now upwards of 16 product modules to sell within the installed base.
Steve Sheldon: And.
Steve Sheldon: Just what youre seeing in terms of underlying momentum for upsell and cross sell.
Speaker Change: Just the sheer magnitude of the ability to expand from where we are today up to that 16 product modules per location.
Speaker Change: Yes, I can take that one Peter here Pat so.
Speaker Change: We're.
Speaker Change: Trying to accomplish both right. So we want to grow both <unk> as well as add more locations to the platform over time.
Just have such an outsized impact on our ability to grow <unk> relative to our ability to grow location count which is why we've.
Speaker Change: Shared and continues to be the case that arent, who will be a larger driver of growth in the near term.
Speaker Change: <unk> dynamic this quarter was driven by two factors. One this was the first quarter, where you felt the full impact of Wingstop transitioning from three product modules down to one.
Speaker Change: And then locations will be that doesn't mean to say that we're taking our eye off the ball as it relates to the locations, we still want to do a great job there as well.
Speaker Change: And you had a subset of locations that didn't come on this quarter were single module locations I think know called one out in the prepared remarks, and long John Silver's, which when the only utilizing one product module you inherently have a lower <unk>. So through the combination of those two things that's why you.
Speaker Change: This quarter in particular was.
Speaker Change: Was emblematic of that.
Speaker Change: Okay that helps thanks, Peter and it sounds like after the.
Stephen Sheldon: Stepped down in gross margins this quarter, you're expecting this to be a pretty good baseline heading into year end.
My question is how.
Speaker Change: So are the diesel and growth from an <unk> perspective.
Speaker Change: How should we frame any further potential pressure on margins from the continued scaling of all OPEC heading into 2025 and 26.
Speaker Change: That said we've shared.
Speaker Change: Historically, the number of product modules per location that averaged around three to three and a half product modules per location. We have now upwards of 16 product modules to sell within the installed base.
Speaker Change: Yes so.
Speaker Change: The sequential <unk>.
Speaker Change: <unk> and gross margin Q3 to Q4, what we what we messaged earlier on the prepared remarks, that's being driven by continued growth of <unk> revenue mix being offset by.
Speaker Change: Just the sheer magnitude of the ability to expand.
Speaker Change: From where we are today up to that 16 product modules per location.
Speaker Change: Just have such an outsized impact on our ability to grow our <unk> relative to our ability to grow location count which is why we've sure.
Speaker Change: Continued cost optimization in particular the portion of.
Speaker Change: Shared and continues to be the case that arent, who will be the larger driver of growth in the near term.
Speaker Change: The costs pulled out of the business as part of the recent reduction in force that being an offsetting factor to that continued revenue mix shift.
Speaker Change: Then locations will be that doesn't mean to say that we're taking our eye off the ball as it relates to the locations, we still want to do a great job there as well.
Speaker Change: In terms of how margins trend longer term I think thats going to largely depend on how quickly we ramp into.
Speaker Change: Which this quarter in particular was.
Speaker Change: The <unk> opportunity in particular card present, we haven't shared a perspective on that that's something I think we will share as we set guidance for 2025.
Speaker Change: Was emblematic of that.
Speaker Change: Okay that helps thanks, Peter and it sounds like after the.
Speaker Change: Step down in gross margins this quarter, you're expecting this to be a pretty good baseline heading into year end.
Speaker Change: But in many ways if that were to happen.
Speaker Change: My question is.
Foster: Foster I think that would be a good thing because what that then means is we're ramping quickly into that pay opportunity and gross profit growth.
Speaker Change: How should we frame any further potential pressure on margins from the continued scaling of all OPEC heading into 2025 and 26.
Foster: Is re accelerating which is really what we're focused on.
Foster: And continue to believe that for 2025 on a full year basis gross profit growth will reaccelerate as compared to 2024.
Speaker Change: Yes so.
Speaker Change: The sequential.
Speaker Change: Change in gross margin Q3 to Q4, what we what we messaged earlier on the prepared remarks, that's being driven by continued growth of all okay revenue mix being offset by.
Mhm, Okay. That's helpful. Thank you Peter I appreciate the color.
Speaker Change: The next question is from Bruce Goldfarb from Lake Street Capital. Please go ahead.
Speaker Change: Continued cost optimization in particular the portion of.
Speaker Change: Hey, Greg Peter Congrats on the results congratulations thanks for taking my call.
Speaker Change: The costs pulled out of the business as part of the recent reduction in force that being an offsetting factor to that continued revenue mix shift.
Speaker Change: My questions.
Speaker Change:
Speaker Change: What's been the trend in <unk>.
Speaker Change: In terms of how margins trend longer term I think thats going to largely depend on how quickly we ramp into.
Speaker Change: What's been the trend.
Speaker Change: <unk>.
Speaker Change: For like first emerging enterprise.
Speaker Change: The <unk> opportunity in particular card present, we haven't shared a perspective on that that's something I think we will share as we set guidance for 2025.
Speaker Change: Versus enterprise.
Speaker Change: Regard to the pipeline.
Speaker Change: Yeah.
Speaker Change: Thanks for the question. This is Noah here, so I think a really good quarter as you heard on both fronts. Some great enterprise wins and Dutch Bros. That's a very exciting one that we talked about a bit past that in the last quarter, Paris bag, yet and as Peter mentioned long, John Silver's and nothing bumps cakes coming on.
Speaker Change: But in many ways if that were to happen.
Speaker Change: Faster I think that would be a good thing because what that then means is we're ramping quickly into that pay opportunity and gross profit growth.
Speaker Change: Re accelerating which is really what we're focused on and.
Speaker Change: And continue to believe that for 2025 on a full year basis.
In the enterprise segment.
Speaker Change: And then the emerging enterprise segments.
Speaker Change: Gross profit growth will reaccelerate as compared to 2024.
Speaker Change: Great set of wins this quarter as a Boston native I'm, particularly excited about.
Speaker Change: And Gino is coming onto the platform pizza in Oak, Barry and more.
Speaker Change: Okay. That's helpful. Thank you Peter I appreciate the color.
Speaker Change: I think what's interesting to look at is kind of how we're landing in those different segments in the emerging enterprise segment. We've noted for a couple of quarters now the tendency for brands to land with all three of our product suites, we call those flywheel.
Speaker Change: The next question is from Bruce Goldfarb from Lake Street Capital. Please go ahead.
Speaker Change: Okay.
Speaker Change: Hey, Greg Peter Congrats on the results congratulations thanks for taking my call.
Speaker Change: My questions.
Speaker Change: <unk>.
Speaker Change: Customers, where they're using order, they're using pay and they are using engage there really getting up the digital maturity curve quickly it's.
Speaker Change: What's been the trend in <unk>.
Speaker Change: What's been the trend.
Speaker Change: It's a little bit different in an enterprise and also in top 25, when we tend to land with a more typically a single module or single suite for an engagement.
Speaker Change: For like for emerging enterprise.
Speaker Change: Versus enterprise with regard to the pipeline.
Speaker Change: Thanks for the question. This is Noah here, so I think a really good quarter as you heard on both fronts. Some great enterprise wins and Dutch Bros. That's a very exciting one that we talked about a bit past that in the last quarter, Paris bag, yet and as Peter mentioned long John Silvers.
Speaker Change: And then build that over time and continue to sell additional modules as Peter noted, we're now up to 16 different modules across those three suites.
Speaker Change: Suite 16 of modules and it gives us a lot of opportunity to continue to sell additional capabilities into brands once we've proven out.
Speaker Change: Nothing bumps cakes coming on in the enterprise segment.
Speaker Change: All of those capabilities as a partner for their digital maturity.
Speaker Change: And then the emerging enterprise segments.
Speaker Change: A great set of wins this quarter as a Boston native I'm, particularly excited about.
Great. Thank you in terms of like technology are there certain areas.
Speaker Change: Papa Gino's coming onto the platform pizza in Oak, Barry and more.
Speaker Change: That you'd like to you know as M&A focused on.
Speaker Change: I think what's interesting to look at is kind of how we're landing in those different segments in the emerging enterprise segment. We've noted for a couple of quarters now the tendency for brands to land with all three of our product suites, we call those flywheel.
Speaker Change: I'm, sorry, I missed that could you repeat that last part.
Yes, there are certain areas of technology, you guys would like to acquire.
Speaker Change: Either developing or.
Speaker Change: Through M&A.
Speaker Change: Yeah.
I think we feel pretty good when we look at our product roadmap and the things that we are planning over the coming year and really three years on that time horizon about what we plan to build from an R&D standpoint.
Speaker Change: Customers, where they're using order, they're using pay and they are using engaged they're really getting up the digital maturity curve quickly.
Speaker Change: It's a little bit different in an enterprise and also in top 25, when we tend to land with a more typically a single module or single suite for an engagement.
Speaker Change: We're excited about.
Speaker Change: Jason Ordway, joining although as our CTO and leading our engineering team and accelerating those innovation efforts.
Speaker Change: And then build that over time and continue to sell additional modules as Peter noted, we're now up to 16 different modules across those three suites.
Speaker Change: And we also have a great partner ecosystem of over 400 ecosystem partners, who are integrated into <unk> and enable us to really experiment with additional capabilities beyond what we do ourselves and thats historically been a really interesting opportunity for us to watch what brands are using in deriving value from.
Speaker Change: Suite 16 of modules and it gives us a lot of opportunity to continue to sell additional capabilities into brands once we've proven out.
Speaker Change: All of those capabilities as a partner for their digital maturity.
Speaker Change: And to learn from that and lean into those partnerships. So I think that's really how we think about R&D and innovation at <unk> and how we can sometimes accelerate R&D through potential M&A of those partners that we work with closely and where we see our common customers.
Speaker Change: Great. Thank you in terms of like technology are there certain areas.
Speaker Change: That you'd like to as M&A focused on.
I'm, sorry, I missed that could you repeat that last part.
Speaker Change: Yes, there are certain areas of totality, you guys would like to acquire.
Speaker Change: Experiencing a lot of value.
Speaker Change: And then my last question when you announced the 9% Writhe in September you said, you were going to reinvest 6 million and growth are there certain areas, where you're hiring.
Speaker Change: Either developing or.
Speaker Change: Through M&A.
Speaker Change: I think we feel pretty good when we look at our product roadmap and the things that we are planning over the coming year and really three years on that time horizon about what we plan to build from an R&D standpoint.
Speaker Change: Are you running marketing campaigns.
Speaker Change: Yeah, just to clarify that so the reduction in force that we announced in September.
Speaker Change: Very excited about.
Speaker Change: Jason Ordway, joining although as our CTO and leading our engineering team and accelerating those innovation efforts.
Speaker Change: Removes about $8 million of costs annualized of that we are.
And we also have a great partner ecosystem of over 400 ecosystem partners, who are integrated into <unk> and enable us to really experiment with additional capabilities beyond what we do ourselves and thats historically been a really interesting opportunity for us to watch what brands are using in deriving value from.
Speaker Change: Dropping 60% of that to the bottom line, so about $4 $8 million of that would be savings going forward with the remainder of the $3 two being reinvested into the business and that's really broadly across various areas of opex and within our cost of revenue as well but.
Speaker Change: And to learn from that and lean into those partnerships. So I think that's really how we think about R&D and innovation at <unk> and how we can sometimes accelerate R&D through potential M&A of those partners that we work with closely and where we see our common customers.
For the most part.
Speaker Change: Throughout various areas of Opex.
Speaker Change: Great. Thanks for the clarification.
Speaker Change: Those are my questions congrats on the results.
Thank you.
Speaker Change: Experiencing a lot of value.
Speaker Change: This concludes the question and answer session I'd like to turn the floor back over to Noel glass for any closing comments.
Speaker Change: And then my last question when you announced the 9% Writhe in September you said, you were going to reinvest $6 million and growth are there certain areas, where you're hiring.
Noel Glass: Okay, well, thank you for joining US Tonight, while we're pleased with our Q3 and year to date performance in 2024, whereby no means satisfied we remain laser focused on doing more to help brands convert their transaction data into personalized guest experiences and profitable traffic we're committed to achieving this objective as an open.
Speaker Change: Are you running marketing campaigns.
Speaker Change: Yeah, just to clarify that so the reduction.
Speaker Change: Enforced that we announced in September.
Speaker Change: Removes about $8 million of cost annualized of that we are.
Noel Glass: <unk> platform that serves as a force multiplier for hospitality and through operating discipline that drives profitable growth I have a great evening.
Speaker Change: Dropping 60% of that to the bottom line, so about $4 $8 million of that will be savings going forward with the remainder of the $3 two being reinvested into the business and that's really broadly across various areas of opex and a bid within cost of revenue as well but.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.
Speaker Change: For the most part.
Speaker Change: Throughout various areas of Opex.
Speaker Change: Great. Thanks for the clarification.
Speaker Change: Those are my questions congrats on the results.
Speaker Change: Thank you.
This concludes the question and answer session I would like to turn the floor back over to Noah glass for any closing comments.
Noah Glass: Okay, well, thank you for joining US Tonight, while we're pleased with our Q3 and year to date performance in 2024, we're by no means satisfied we remain laser focused on doing more to help brands convert their transaction data into personalized guest experiences and profitable traffic we're committed to achieving this objective.
Noah Glass: As an open platform that serves as a force multiplier for hospitality and through operating discipline that drives profitable growth have a great evening.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change:
Speaker Change: Mhm.
Speaker Change:
Speaker Change: Hum.