What Happened?

Shares of restaurant software company (NYSE:OLO) jumped 17.5% in the pre-market session after the company reported impressive fourth-quarter 2024 results that exceeded analysts' expectations for billings, revenue, and operating profits, while EPS was inline. Sales rose 21% year on year, driven by higher average revenue per unit and growth in active locations. However, net revenue retention declined to 115%, indicating that existing customers are not expanding usage as aggressively as before. Looking ahead, full-year revenue guidance points to a potential slowdown, with projected growth trailing this year's 25% increase. Overall, this was a mixed yet decent quarter.

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What The Market Is Telling Us

Olo’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. But moves this big are rare even for Olo and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 7 months ago when the stock gained 26.3% on the news that the company reported a "beat and raise" quarter. Olo exceeded analysts' revenue, billings, and adjusted operating income expectations. Moving on, it lifted its revenue guidance for the next quarter, which came in higher than Wall Street's estimates. Overall, this was a strong quarter that should satisfy shareholders.

Olo is down 9.9% since the beginning of the year, and at $6.94 per share, it is trading 14.5% below its 52-week high of $8.12 from January 2025. Investors who bought $1,000 worth of Olo’s shares at the IPO in March 2021 would now be looking at an investment worth $199.83.

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