Olo Inc. (OLO): BCG Matrix [Dec-2025 Updated]

You're looking at Olo Inc. (OLO) right after its $2.0 billion acquisition by Thoma Bravo in July 2025, a moment where the business is clearly shifting from its old software roots to a more complex, integrated payments model. We need to see where the money is really being made now, given that Olo Pay is driving Average Revenue Per Unit up 12% while the core Ordering platform still locks in customers with >98% gross revenue retention. This analysis breaks down the portfolio-from the high-growth Stars like Olo Pay and Dispatch to the stable Cash Cows and the speculative Question Marks-to show you exactly where the new private equity owners will focus investment and where they might trim the fat. Let's map out the four quadrants to see the real strategic picture post-deal.

Background of Olo Inc. (OLO)

You're looking at Olo Inc. (OLO), which you know is a leading open Software as a Service (SaaS) platform for restaurants. Honestly, what they do is provide the digital backbone for restaurants to manage everything from digital ordering to payment processing and operational flow. Think of it as the tech layer that lets big restaurant chains handle their own digital channels without being totally reliant on third-party delivery aggregators for every transaction.

The company has been showing solid, consistent growth, which is what we look for in a mature SaaS player. For the second quarter of 2025, Olo Inc. reported total revenue of $85.7 million, marking a 22% increase year-over-year. This growth is supported by expanding its footprint; as of the end of Q2 2025, they served approximately 89,000 active locations. Furthermore, the monetization per location is improving, with the Average Revenue Per Unit (ARPU) climbing to about $955 in that same quarter.

A key indicator of customer satisfaction and platform stickiness is the Dollar-based Net Revenue Retention (NRR), which stood strong at 114% in Q2 2025. That means existing customers spent 14% more than they did the prior year, even before adding new logos. On the profitability front, Olo Inc. demonstrated tangible progress, reporting a Non-GAAP operating income of $13.1 million for Q2 2025, translating to a 15% operating margin. They even achieved GAAP profitability in Q1 2025, which is a significant milestone for a scaling tech firm.

However, the near-term strategic landscape shifted dramatically in mid-2025. Olo Inc. announced a definitive agreement to be acquired by Thoma Bravo, a major software investment firm, in an all-cash deal valuing the company at approximately $2.0 billion. This transaction, which implies a price of $10.25 per share, is expected to close by the end of 2025, meaning the company will transition from a public entity to a private one, suspending future public guidance. This context is crucial as we map their product portfolio onto the BCG Matrix.

Olo Inc. (OLO) - BCG Matrix: Stars

Stars are the business units or products with the best market share and generating the most cash, operating in high-growth markets. For Olo Inc., these units consume significant cash to maintain their leadership position but are critical for future Cash Cow status.

The following components of Olo Inc.'s business fit the Star quadrant profile based on recent performance metrics:

• Olo Pay: High-growth payment processing driving ARPU up.
• Olo Dispatch: Positioned in a rapidly expanding delivery management sector.
• Card-Present Payments: Strategic ramp-up expanding Olo Pay's market.
• Multi-Module Deployments: Accelerating cross-sell growth across enterprise deals.

Olo Pay is clearly a Star, evidenced by its strong financial contribution. In the second quarter of 2025, Average Revenue Per Unit (ARPU) increased by 12% year-over-year, reaching approximately $955. This metric demonstrates Olo Inc.'s increasing ability to monetize its existing customer base through product adoption. Platform revenue, which is the core of Olo Inc.'s recurring business, grew 21% year-over-year to $84.1 million in Q2 2025, showing the high-growth environment this product operates in.

Olo Dispatch operates in a market characterized by high growth expectations. While Olo Inc. has not published a specific CAGR for Olo Dispatch, the broader Same Day Delivery Market, which encompasses this functionality, is projected to grow at a compound annual growth rate (CAGR) of 20.6% from 2025 to 2030. This high-growth backdrop supports the classification of Olo Dispatch as a Star, provided Olo Inc. maintains its relative market share within that segment.

The expansion into Card-Present Payments is a key strategic move to capture more wallet share. This initiative is designed to bring in-store digital transactions onto the Olo platform, directly feeding data into Olo Guest Intelligence alongside online order data. Olo Inc. reported in Q1 2025 that the ARPU growth of 12% year-over-year was supported by the expansion of Olo Pay, and management confirmed that the 2025 guidance included the impact of the Olo Pay card-present deal. By Summer 2025, Olo Inc. reported that Olo Pay reports now differentiate between card-present and card-not-present transaction data, indicating active operational scaling.

The success of Multi-Module Deployments reinforces the Star status by showing strong cross-sell momentum, which is essential for sustaining high growth. The Q2 2025 results showed total platform revenue growth of 21% year-over-year, which management attributed to strong demand and module adoption. New enterprise deals increasingly include multiple suites, such as Ordering, Rails, and Pay, which accelerates this cross-sell growth. The Dollar-based Net Revenue Retention (NRR) was 114% in Q2 2025, meaning existing customers spent 14% more than they did the prior year, even before accounting for new customer additions.

Here is a summary of the key 2025 performance indicators for these Star components:

The investment thesis for Stars is to continue funding their growth to secure future market dominance. Olo Inc.'s focus on scaling these integrated solutions is what drives the high NRR and ARPU growth seen in the mid-2025 reporting period. Finance: draft 13-week cash view by Friday.

Olo Inc. (OLO) - BCG Matrix: Cash Cows

You're looking at the core engine of Olo Inc. (OLO), the business units that generate more cash than they consume, which is exactly what a Cash Cow should be doing. These are the mature, high-market-share assets that fund the rest of the operation.

Olo Ordering: The core white-label SaaS platform with superior unit economics and a highly sticky, stable >98% gross revenue retention.

While the exact gross revenue retention figure is stated as '>98%' in the prompt's outline, the latest reported Dollar-based Net Revenue Retention (NRR) for Q2 2025 was 114%. This metric shows that existing customers spent 114% of what they spent the prior year, indicating strong expansion within the base, which is the definition of milking a mature product. For comparison, the NRR in Q1 2025 was 111%.

Enterprise Customer Base: Provides a stable, recurring revenue base from over 750 large restaurant brands across 89,000 active locations.

This base provides the stability. As of June 30, 2025, Olo Inc. served approximately 89,000 active locations, an increase of 9% year-over-year. This base is spread across over 750 restaurant brands. The pending acquisition by Thoma Bravo valued the entire company at approximately $2.0 billion, reflecting the high value placed on this recurring revenue stream.

High-Margin Core Subscriptions: Generates the bulk of the high non-GAAP gross profit, which was $48.8 million in Q2 2025.

The profitability of this core business is clear in the non-GAAP figures. The Non-GAAP gross profit for the second quarter of 2025 reached $48.8 million. This represented a 57% margin on total revenue for the quarter. Non-GAAP operating income for the same period was $13.1 million, or 15% of total revenue.

Platform Middleware: Its position as the central integration layer (Rails) makes it difficult for large customers to churn, ensuring long-term cash flow.

The stickiness is quantifiable through the Average Revenue Per Unit (ARPU) and location growth. ARPU in Q2 2025 was approximately $955, a 12% increase year-over-year, showing customers are adopting more services. The company generated Non-GAAP Free Cash Flow of $24.03 million in Q2 2025, a significant cash generator that requires minimal new investment for growth.

Here are the key operational and financial metrics supporting the Cash Cow classification for Olo Inc. as of Q2 2025:

The characteristics that define these products as Cash Cows are evident in the following:

• The platform supports over 750 brands.
• Active locations grew to approximately 89,000 by June 30, 2025.
• Non-GAAP gross profit was $48.8 million in Q2 2025.
• NRR of 114% shows existing customers are spending more.
• ARPU increased by 12% year-over-year to $955.
• The company held $428.5 million in cash, cash equivalents, and investments as of June 30, 2025.

Olo Inc. (OLO) - BCG Matrix: Dogs

The Dogs quadrant in the Boston Consulting Group Matrix represents business units or product lines characterized by low market share in a low-growth market. For Olo Inc. (OLO), these are the areas that consume management attention without providing significant cash flow or growth potential, making divestiture or minimization a key strategic consideration.

Non-Integrated Professional Services fit the profile of a Dog because they are inherently non-scalable one-off engagements. While the company is focused on platform sales, these services represent a small, lower-margin portion of the overall business. For the second quarter ended June 30, 2025, Professional Services and other revenue was only $1.578 million out of total revenue of $85.724 million. This segment's lower profitability is evident when comparing its GAAP gross margin to the core platform business; for the first quarter ended March 31, 2025, Services GAAP gross margin was 47%, while Platform gross margin was 55%. This lower margin and lack of scalability mean these activities are candidates for de-emphasis or elimination to free up resources for higher-growth areas.

The remaining active locations that have not fully adopted the multi-module suite fall into the Low-ARPU Locations category, which dilutes the overall average revenue per unit. The company is clearly driving multi-module adoption, as evidenced by the overall Average Revenue Per Unit (ARPU) increasing to $955 in the second quarter of 2025. However, the existence of a tail of locations that only use the basic Ordering module means their individual ARPU is significantly below this average, classifying them as potential Dogs.

The core issue with these low-ARPU locations is the low market share within the Olo ecosystem for the higher-value modules (Dispatch, Pay, Engage). The goal is to move these locations up the value chain, but the base itself represents low current value. The company ended the second quarter of 2025 with approximately 89,000 active locations, and the low-tier customers are the ones failing to contribute meaningfully to the overall growth in ARPU.

Here's a look at the financial metrics that characterize these lower-value segments as of mid-2025:

The Legacy Basic Subscription Tiers are those locations that have not yet adopted the higher-value modules, which are the primary drivers of the company's growth and retention metrics. The success in upselling is reflected in the Dollar-based Net Revenue Retention (NRR) of 114% in Q2 2025, but this metric inherently means that the locations not expanding their module usage are the ones dragging down the potential NRR.

You should focus your review on the following characteristics that define these Dog segments:

• Locations with ARPU significantly below the $955 average for Q2 2025.
• Professional Services revenue contribution of approximately 1.84% of total revenue in Q2 2025 (based on $1.578M / $85.724M).
• The GAAP gross margin for Services at 47% in Q1 2025, which is lower than the platform's 55% GAAP margin.
• The need to minimize resources allocated to non-scalable, one-off implementation work.

Olo Inc. (OLO) - BCG Matrix: Question Marks

You're looking at the products in Olo Inc.'s portfolio that are fighting for market position in rapidly expanding segments. These units demand capital to fuel their growth trajectory, hoping to transition from consuming cash to generating significant returns.

Olo Guest Intelligence: Beta-launched data and AI product, requiring significant investment to capture the high-growth restaurant data insights market.

This product, which surfaces data-driven insights within the Olo Dashboard, was announced as being in beta during the 2025 Spring Release event. Its placement in the Question Mark quadrant reflects the high potential of the restaurant data insights market, which necessitates substantial ongoing investment to achieve broad adoption and market share dominance over competitors offering similar analytics modules.

Catering+: New expansion module with high growth potential, evidenced by the strategic pilot with a top-25 brand like Chipotle.

The strategic importance of this module is underscored by the announcement of a Catering+ pilot with Chipotle, which is identified as a new top 25 brand for Olo Inc. as of the first quarter of 2025. Scaling this module requires investment in features like the announced calendaring function to streamline order planning, aiming to convert this high-potential offering into a reliable revenue stream.

Borderless Checkout: Passwordless feature with 19 million user accounts, a high-adoption feature whose direct monetization strategy is still developing.

The adoption rate for this feature, now often referred to as Olo Accounts, is substantial, having recently exceeded 19 million total accounts across more than 450 brands as of the second quarter of 2025. While adoption is high, indicating strong buyer discovery, the path to direct, standalone monetization for this specific feature remains a focus area, consuming resources to integrate it deeply across the platform.

Emerging Enterprise Brands: Smaller, high-growth customers where Olo has low current share but is investing sales resources for future scale.

Olo Inc. is actively investing sales resources to secure multi-suite deployments with these growing entities. In the first quarter of 2025, new deployments included brands such as Cupbop Korean BBQ and Swensons. This segment represents a low current market share opportunity where heavy investment is required to secure long-term, high-value enterprise relationships.

Here's a quick look at the scale and investment context for these growth areas as of mid-2025:

The company's overall financial position, with cash, cash equivalents, and short- and long-term investments totaling $428.5 million as of June 30, 2025, provides the necessary liquidity to fund the aggressive investment required by these Question Marks, assuming the pending transaction does not alter near-term capital allocation strategy.

You need to track the conversion of these units closely, as the full-year 2025 revenue guidance was set between $338.5 million and $340.0 million, and success here is critical to achieving those top-line targets.

The key actions for these units involve:

• Secure full-suite adoption from pilot customers like Chipotle.
• Drive Olo Guest Intelligence out of beta and into mainstream enterprise deployment.
• Increase the monetization rate per user within the 19 million Borderless accounts.
• Convert initial deployments with Emerging Enterprise Brands into multi-module wins.

If onboarding takes 14+ days for these new modules, churn risk rises.