Olo Inc. (OLO) Q2 2021 Earnings Call Transcript

Olo Inc. (OLO -0.20%)
Q2 2021 Earnings Call
Aug 10, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Sarah, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Olo second-quarter 2021 earnings conference call. [Operator instructions] I would like to turn the call over to Olo's vice president of investor relations, Ms.

Stephanie Daukus. Please go ahead.

Stephanie Daukus -- Vice President, Investor Relations

Thank you. Good afternoon, everyone, and welcome to Olo's second-quarter 2021 earnings conference call. Joining me today are Noah Glass, Olo's founder and CEO; and Peter Benevides, Olo's CFO. During our call today, some of our discussion and responses to your questions may contain forward-looking statements, which represent our beliefs and assumptions only as of the date such statements are made.

These forward-looking statements include, but are not limited to, statements regarding our future performance and our market opportunity, including our expected financial results for the third quarter and fiscal-year 2021. Expectations regarding future operating expenses, impacts, and expected results from changes in our relationship with our customers, our market opportunity and market trends, expectations regarding the impact of the COVID-19 pandemic and seasonality on our business and industry, predictions on consumer ordering volumes, our ability to sustain our profitability, customer adoption of products and expectations for capturing market share, and our delivery of new products or product features. We undertake no obligation of updating any forward-looking statements made during this call to reflect events or circumstances after today. These statements are subject to risks, uncertainties, and assumptions.

Should any of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A discussion of the risks and uncertainties related to our business is contained in our quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 12, 2021, and our quarterly report on Form 10-Q for the quarter ended June 30, 2021, that will be filed with the SEC following this earnings call, and our remarks during today's discussion should be considered to incorporate this information by reference. Also during this call, we'll present both GAAP and non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are available in our earnings release which we issued a short while ago.

This earnings release is available on the investor relations page of our website and is included as an exhibit in the Form 8-K furnished to the SEC. Finally, in terms of our prepared remarks or in response to questions, we may offer incremental metrics to provide greater insights, the dynamics of our business or quarterly or annual results. Please be advised that this additional detail may be onetime in nature, and we may or may not provide an update in the future on these measures. I encourage you to visit our investor relations website at investors.olo.com to access our earnings release, periodic SEC reports, a webcast replay of today's call or to learn more about Olo.

With that, let me turn the call over to Noah.

Noah Glass -- Founder and Chief Executive Officer

Thank you, Stephanie, and officially and on the record, welcome to team Olo. Q2 was another strong quarter of profitable growth for Olo, helping even more restaurant customers continue to drive digital sales while many restaurant dining rooms are reopened around the nation. On our last earnings call, I discussed Olo's transactional SaaS business model, and our new ambition to reach digital entirety as the restaurant industry transforms to digital, touching, adding value to, and deriving revenue from every restaurant transaction. As the U.S.

economy and restaurant dining rooms began to reopen in Q2, restaurant digital sales proved durable, demonstrating that the restaurant industry's digital transformation is not just about delivery, but all ordering modes and across all service models: delivery, drive-through, table service, and takeout. In fact, according to data from NPD group, there are more nondelivery digital orders than delivery digital orders. Olo's platform is enabling restaurant brands to digitize every transaction, not just delivery transactions. During Q2, we celebrated more restaurant brands replatforming to Olo, and we're proud to welcome Potbelly Sandwich works to the Olo platform.

Potbelly migrated from a legacy tech stack and like Papa Murphy's, Chili's, Maggiano's Little Italy, Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill, and many others before it, Potbelly replatforming to Olo again demonstrated that leading restaurant brands can no longer simply check the box and have just any digital ordering solution. Rather, they need to best meet the needs of the on-demand consumer by utilizing what we believe is the industry's most sophisticated on-demand commerce platform, benefiting from a broad and deep set of capabilities and an open partner ecosystem of over 100 best-of-breed restaurant technology partners. Our launch with Potbelly furthers Olo's conviction that open SaaS wins over homegrown and closed proprietary software. We also deployed new virtual brands, including Wingstop's launch of their virtual brand, Thighstop, a creative and successful solution for the chicken wing shortage that led to price inflation.

The launch of Thighstop demonstrates the flexibility that the Olo platform provides to its customers, allowing restaurant brands to operate more nimbly. In this case, helping to solve business challenges and bringing Wingstop closer to realizing its long-term strategy. Another critical business challenge Olo is helping to solve is the problem of driver availability for delivery service. Driver shortages are widespread and have led to reduced driver availability and delivery delays for restaurants and consumers.

Although Dispatch, our Delivery as a Service solution provides a nationwide network of more than two dozen delivery service providers, or DSPs, covering 97% of our customers' U.S. store locations. Dispatch's ability to provide redundancy and increased driver availability is highly differentiated and create substantial value for our customers. A great example of customers realizing Dispatch's value was the Q2 launch of Jack in the Box as a Dispatch-only deployment, which will enhance their existing digital ordering for takeout program.

This deployment with Jack in the Box further demonstrates Olo's ability to land major enterprise brands with one product module to initiate the customer relationship. Just as Subway launched with Olo Rails, Jack in the Box is another major enterprise brand launching with Olo Dispatch and gaining familiarity with Olo's broader capabilities and overall platform security, stability, and extensibility. Jack in the Box is also an exciting example of our success in the quick-service restaurant, or QSR, category. As the largest component of the restaurant industry by both locations and transactions, QSR brands represent the greenfield industry segment that we love for its high average location count, industry transaction share, and cornerstone commitments to convenience.

We've experienced early success in QSR with Checkers and Rallies, Culver's, Dairy Queen, Crystal, and now Jack in the Box, and this segment continues to represent a promising growth opportunity for Olo. As I mentioned in our Q1 earnings call, many QSR brands have grown through franchising, resulting in disparate technologies used throughout their fleet and the kind of heterogeneous environments that Olo has made a specialty, integrating into multiple restaurant technologies to create a unified consumer experience. We remain committed to helping the QSR segment go digital to better meet the needs of the on-demand consumer. As we discussed at length in our Q1 earnings call, the other side of Olo's two-sided network is our partner ecosystem of over 100 restaurant technology partners.

This two-sided network creates a flywheel, in which adding a new customer to our restaurant network benefits all Olo partners, and adding a new technology partner to our partner network benefits all Olo customers. This quarter, we continue to expand our ecosystem and are proud to have added Grubhub to our growing list of Olo Rails partners. Olo Rails enables restaurants to syndicate menu, prices, and content to digital ordering aggregators and allow such aggregators to send orders into the restaurant kitchen without requiring manual intervention of transposing an order from a tablet to a point-of-sale terminal. Brands such as Smoothie King have touted the benefits of the partnership in ensuring accurate menu information and reductions in order errors.

Olo's deployments of the Grubhub integration will continue in the coming quarters. This new partnership with Grubhub means that although customers can now utilize Olo Rails to operationalize and manage all major national digital ordering aggregators, Caviar, DoorDash, Grubhub, Postmates, Seamless, and Uber Eats in addition to the regional and local aggregators that are meaningful to operators in specific geographies. Olo is fulfilling its promise to serve as a common carrier, ensuring a level playing field for all aggregator partners. We believe that Olo serving as a common carrier is in the best interest of our customers and the restaurant industry.

Just as we continue to expand our network of Olo Rails partners, we're simultaneously investing in tools for restaurant operators to manage transactions across the growing number of integrated third-party channels. In Q2, we deployed the Olo Rails performance tool to help restaurants better assess, track and analyze digital performance and revenue across channels, ultimately helping corporate teams and operators to maximize digital sales revenues. Additionally, we completed development of the mobile app version of Serve, our white label branded ordering experience. Brands are now able to offer feature parity with the Serve web experience, which has boosted conversion rates through an improved user experience and faster order completion by five seconds on average.

The new Serve mobile app allows brands to offer an app version of their digital storefront without the need for large custom mobile app budgets. As I mentioned last quarter, team Olo continued to work from home in Q2 due to COVID-19 restrictions. In the second quarter, we provided our employees the flexibility to continue working from home and reopened our New York City headquarters office on a voluntary basis. We are proud to have adopted an inclusive work policy that recognizes that our employees need and deserve flexibility.

Additionally, as a continuation of our focus on ESG, as well as diversity, equity, and inclusion, I'm also excited to share that we've published our diversity demographics on olo.com as well as our DEI strategy and goals. Olo is committed to building a diverse and inclusive culture that promotes growth and equity for underrepresented groups as reflected by our transparency and continued work on this front. I'm personally honored to be deeply involved in these efforts along with my executive team as DEI is hugely important to our success as a company and as a pillar in the community. As the restaurant industry deals with record-setting consumer demand amid limited labor supply, Olo is a force multiplier for restaurant operations, enabling restaurants to provide greater hospitality by automating low hospitality manual tasks by keying in orders, tendering payments, managing tablets, and correcting outdated menus.

And at the brand level, Olo is also a force multiplier when it comes to restaurant brand digital transformation. As one executive of a major restaurant enterprise prospect recently articulated, our brand's digital ambitions are 10x our digital budget. If Olo can help accelerate our digital efforts, we're all in. The restaurant industry is rebounding from a difficult year in 2020, and Olo is eager to continue playing our part in helping Olo customers not just survive but thrive as they disproportionately benefit from the restaurant industry's digital transformation.

And now I'd like to turn things over to Peter Benevides, Olo's CFO, to share more details on Olo's Q2 performance. Peter?

Peter Benevides -- Chief Financial Officer

Thanks, Noah. Today, I'll review our second-quarter fiscal 2021 results in detail and provide guidance for the third quarter and full-year fiscal 2021. Before I start, for those of you new to the call today, welcome, and please take a moment to review last quarter's earnings call while I briefly review our financial model. With that, let's take a look at our second-quarter results.

Total revenue for the second quarter was 35.9 million, up 48% year over year. Platform revenue in the second quarter was 34.5 million, up 53% year over year, primarily due to an increase in active locations coming on to the platform as well as increased transaction volumes helping drive growth in average revenue per unit or ARPU. Growth in active locations and transaction volumes reflect the continued digital transformation occurring within the restaurant industry. Increases in multiproduct adoption and evolving use cases of the Olo platform such as tableside ordering, virtual brands, and kiosks, further highlight Olo's opportunity and ability to digitize all industry transactions.

That said, I would remind everyone that this time last year, many locations were emerging from temporary closures in March and began reopening in April as shelter-in-place restrictions ease. Therefore, this quarter's performance slightly benefited from lower ordering activity in the earlier part of the second quarter of last year. In terms of key metrics, we ended the quarter with approximately 74,000 active locations on the platform, a 30% increase year over year and a 7% increase sequentially. As Noah mentioned, this quarter's notable deployments included Potbelly Sandwich Works and Jack in the Box.

Average revenue per unit, or ARPU, was approximately $486 for the second quarter. This reflects a 13% increase year over year and a 7% decline sequentially. Fluctuations in ARPU from quarter to quarter can be expected due to the number of modules a brand initially deploys with as well as changes in transaction volumes. For example, this quarter, we observed a greater number of single module deployments such as Jack in the Box utilizing our dispatch module, and a continuation of Subway utilizing our Rails module.

Single module deployments inherently generate less ARPU than multimodule deployments but present a great opportunity to land and expand within a customer with additional products and services, a historically successful go-to-market motion for Olo. Additionally, as anticipated, average orders per location per day as compared to the prior quarter decreased slightly due to seasonality, increased vaccinations in the return to in-person dining, and the absence of ongoing fiscal stimulus. That said, on a full-year basis, we anticipate continued momentum in ARPU as seasonality is normalized and growth in multiproduct adoption and multi-partner usage continues. Lastly, net revenue retention remained strong, in excess of 120% for the quarter, a result of continuing to satisfy and retain our customers, growth in transaction volumes, and continued expansion of our partnership ecosystem.

For the remainder of the financial metrics disclosed, unless otherwise noted, I will be referencing non-GAAP financial measures. Gross profit for the second quarter was 29.5 million, representing a gross margin of 82%, in line with gross margins a year ago. Platform gross margin for the second quarter was 85%. This compares to platform gross margin of 87% a year ago.

The year-over-year decline in platform gross margin was driven by an increase in headcount and associated compensation cost to support the rapid growth in active locations added to the platform. Sales and marketing expense for the second quarter was 3.2 million or 9% of total revenue. This compares to 1.7 million and 7% a year ago. On a dollar basis, increases in sales and marketing spend were driven by continued expansion of our sales organization, including compensation costs, and technology spend.

As stated on last quarter's call, while we have a highly efficient one-to-many sales model in which we sell at the enterprise restaurant brand level and secure all locations within that brand to long-term exclusive contracts, we anticipate investments in sales and marketing to increase on a dollar basis and as a percent of revenue in the short term as we continue to invest in our ability to sell new products and increase the visibility of our brand to new and existing customers. Research and development expense for the second quarter was 11.4 million or 32% of total revenue. This compares to 7.3 million and 30% a year ago. We continue to invest in initiatives that align with the core tenets of enterprise customer needs: innovation, scalability, extensibility, and security.

This primary strategic focus for Olo ensures we are providing our customers with a flexible and differentiated offering. We anticipate investments in this area to increase on a dollar basis and as a percent of revenue in the short term as we continue to invest in innovative solutions and platform capabilities that address the evolving needs of our customers and align with Olo's open SaaS framework. General and administrative expense for the second quarter was 9.1 million or 25% of total revenue. This compares to 4.2 million and 17% a year ago.

On a dollar basis, the increase was the result of additional headcount and costs associated with operating as a public company. We expect that our general and administrative expenses will continue to grow on a dollar basis, while decline as a percentage of revenue as we continue to scale our operations over time. Operating income for the second quarter was 5.9 million, compared to 7 million a year ago. We believe our continued ability to deliver strong profitability reflects the power associated with our high leverage success-based pricing model.

That said, we remain committed to investing in growth to address the massive market opportunity ahead of us. And while we anticipate remaining profitable as we grow, we do expect some near-term decreases in profitability as we scale to further address our market opportunity. Net income for the second quarter was 5.8 million or $0.03 per share based on approximately 183.6 million fully diluted weighted average shares outstanding. Turning our attention to the balance sheet and cash flow statement.

Our cash and cash equivalents balance was 575.2 million as of June 30th, 2021. Regarding cash flows, operating cash flow for the second quarter was 11.3 million, compared to negative 4.4 million a year ago. Free cash flow was 10.8 million, compared to negative 4.7 million a year ago. I'll wrap up by providing our guidance for the third quarter and full-year 2021.

For the third quarter, we expect revenue in the range of 36 million to 36.5 million and non-GAAP operating income in the range of 3.4 million to 3.8 million. For the fiscal-year 2021, we expect revenue in the range of 144.7 million to 145.7 million and non-GAAP operating income in the range of 18.8 million to 19.6 million. I would highlight a few things to keep in mind about our outlook. We remain incredibly excited about the continued momentum and underlying trends of our business.

We believe that Olo is very well-positioned to execute on our vision to touch, add value to, and derive revenue from every restaurant transaction. And we're encouraged by the innovative ways customers are utilizing our platform and how that aligns with this vision. At the same time, we're continuing to remain prudent in our approach to forecasting given the environment in which we're in, whereby uncertainty exists with respect to the COVID-19 pandemic and the impact that may have on digital ordering. To summarize, we are extremely proud of our financial performance this quarter, which we believe reflects our continued ability to execute on our vision and the opportunity ahead.

With that, I'll turn things back over to the operator to begin Q&A.

Questions & Answers:

Operator

[Operator instructions] Your first question comes from the line of Sterling Auty from J.P. Morgan. Your line is open.

Sterling Auty -- J.P. Morgan -- Analyst

Yeah, thanks. Hi, guys. So I wanted to start with the question around the deal with Grub. I know you don't want to usually talk about specific customers, but is there any way for investors to kind of think about the opportunity there vis-a-vis the relationship that you have with Dash?

Noah Glass -- Founder and Chief Executive Officer

Sterling, this is Noah. I'll take that one. So I think, historically, what we've seen as we've had restaurant brands that are using one aggregator partner and then add a second and a third is that it drives incremental traffic to those restaurant locations. And so we're excited for the restaurant brands that we're working with through Olo Rails to now see Grubhub as an additional aggregator partner.

And to the extent that they're interested in engaging with Grubhub to initiate and manage that relationship through the Olo Rails platform. And we think that there's an opportunity for restaurants to drive more transactions through Grubhub in addition to what they're already doing through direct channels and through indirect channels. And this relationship really came together because of our restaurant customers, our common restaurant customers saying to both Grubhub and Olo, we're excited about working with both companies in an integrated fashion. And that's what we've brought to market with this announcement today.

We already have a customer in Smoothie King that has been in the pilot test of the engagement between Grubhub and Olo through Olo Rails. And they're noting, as you heard in the prepared remarks, both have a reduction in errors in orders flowing into the restaurants and an ease of use in syndicating their menu content and pricing content out to Grubhub as they do with other aggregator partners already utilizing Olo Rails.

Sterling Auty -- J.P. Morgan -- Analyst

That makes sense. And then one follow-up would be, during the IPO roadshow, there's plenty of investor questions around your eventual ambitions to move downmarket in addition to what you do with the enterprise brands already. Does this signify the first move in that strategy? And if so, what would be the next major step?

Noah Glass -- Founder and Chief Executive Officer

I wouldn't necessarily read this as a signal of our intent to change our strategy. There are plenty of restaurant brands that are in our defined universe of what we currently think of as our addressable market. Enterprise restaurant brands and what we define as emerging enterprise restaurant brands that also want to engage with Grubhub. So again, as a reminder, emerging enterprise brands, we think of as the restaurant brands that are between five and 100 restaurant locations, many of them, the great enterprise brands of tomorrow.

Those are the kinds of restaurant brands that we want to start working with early in their life cycle. Those are the brands that have the ambition of scale, and they're looking to put Olo in place early in their life cycle as a way of preparing for that growth. We don't, as you know, Sterling, focus on the true mom-and-pop independent restaurants that are out there. That is not our sweet spot.

We do want to find those restaurant brands that have an ambition of scale. And I think there are plenty of those and plenty of enterprise that work with both Olo and have a desire to, if they don't already work with, Grubhub.

Sterling Auty -- J.P. Morgan -- Analyst

Make sense. Thank you.

Operator

Your next question comes from the line of Brent Bracelin from Piper Sandler. Your line is open.

Brent Bracelin -- Piper Sandler -- Analyst

Thank you and good afternoon. Noah, I was -- [Technical difficulty]

Noah Glass -- Founder and Chief Executive Officer

Operator, I'm sorry. I think that we've lost Brent or at least I have.

Operator

Your next question comes from the line of Matt Hedberg from RBC Capital Markets. Your line is open.

Matt Hedberg -- RBC Capital Markets -- Analyst

Hey, guys. Good afternoon from me as well and congrats on the results. Noah, I wanted to start with you. The number of locations you've had now through the first half of the year was effectively what we thought you'd have for the full year, effectively kind of 10,000 or low double digits in terms of 10,000s.

I guess a couple of point question. One, I know in Q1, you talked about some early go-lives. Was there any early go-lives for Q2? And second, how should we think about active location growth? I know you don't guide to it, but is there a way that we should sort of think through what seems like an accelerated trend here of location adds?

Peter Benevides -- Chief Financial Officer

Hey, Matt. You have Peter here. I can take that one. So a couple of dynamics to point out through our first half of the year performance with respect to active locations.

So on a full-year basis, as we enter the year, our internal plans were to target the mid-teen thousands in terms of net new additions to the platform. We've obviously paced ahead of that and now have our sights set on the mid-teen thousands for net additions on the year. And what has happened is the deployments that we had originally planned for the second half of the year, some of those have now accelerated into the first half of the year. And strength in bookings is now replacing those units in the back half of the year.

The other interesting dynamic, and we called this out in our prepared remarks, is the trend in single module deployments. And we called out Jack in the Box as the example there. I think what's exciting is we view that as an opportunity or a way in which we can service the QSR segment, which is a great growth opportunity for Olo. But also what that presents is an opportunity for additional upsells.

And as history has shown, we've done a great job of landing a brand with an initial product and then expanding that relationship over time through additional product modules and use cases. So we're really excited about the trend that's developing.

Matt Hedberg -- RBC Capital Markets -- Analyst

That's really good to hear. I guess, a second question. Obviously, this was really the first post-COVID comp. But now with the rise of the delta variant, and obviously, New York has had -- has been in the news on that.

You see a lot of real-time data. Are you seeing anything now that would suggest that that might be better for, say, your delivery or pickups than it would have otherwise been? Just sort of curious on kind of how data seems real-time from that perspective.

Peter Benevides -- Chief Financial Officer

Yes. So I can take that one, Matt. This is Peter again. Yes, I mean what we're learning, and we mentioned this earlier, is that digital ordering has proved durable, and you saw that play out in our outperformance on the quarter.

That said, we're seeing information in real-time here. There continues to be a meaningful level of uncertainty given the varying levels of vaccination rates around the country and the impact of existing and potential variants. So it's something that we continued to monitor. It's something that we take into consideration when thinking about our forecast and setting guidance.

But again, this is something that's happening in real-time that we're keeping an eye on.

Matt Hedberg -- RBC Capital Markets -- Analyst

Thanks a lot, guys.

Operator

The next question comes from the line of Brent Bracelin from Piper Sandler. Your line is open.

Brent Bracelin -- Piper Sandler -- Analyst

Thank you and good afternoon. Can you hear me this time?

Noah Glass -- Founder and Chief Executive Officer

Loud and clear, Brent. Thank you.

Brent Bracelin -- Piper Sandler -- Analyst

Yeah. Great. Hey, listen thanks for this. Just a couple of questions from me, Noah.

Relative to just broader restaurant digitization trends, I started to encounter myself online ordering inside of the restaurant, not just online ordering remotely. Do you see an opportunity for Olo to extend its digital reach inside of the restaurant? Does the Serve app address external and internal needs? Love to just hear your kind of industry thoughts on online ordering inside the restaurant and how that opportunity could play out for Olo as well.

Noah Glass -- Founder and Chief Executive Officer

Thanks, Brent. So when we look at the industry data and the data source that we look at most is NPD and their results for Q2, we're fascinated by the trends that we see across different service models. And I think one of the things that the media likes to talk about is delivery and the scale of delivery and how delivery is growing. And delivery is growing quickly.

But delivery is just 8% of the overall transactions in the industry or was at least in Q2, meaning that 92% is nondelivery. And when we look at digital, what you see is that of the total, digital delivery is just 6%, whereas digital overall is 17%. So the other 11% is coming from non-delivery digital. And the breakdown of that is 10% of total is takeout.

And now, for the first time, we're seeing 1% on-premise. And that's a big move in an industry that does 60 billion transactions in a typical year to see 1% moving to digital on-premise. We've seen that within Olo in kiosk ordering, that's something that we've seen for a number of years of a consumer ordering from a kiosk or running on top of the Olo platform inside the four walls of the restaurant. And then as I mentioned on the Q1 call, QR code ordering at brands like Bluestone Lane cafe, where a consumer can scan a QR code on the table, utilize the same front-end experience of the web app or mobile app to place the order tagged to the table where they're sitting and having a runner or a server run the order out to them.

This all factors into what we have described as our new ambition of getting to digital entirety where Olo has the ability to touch every transaction, add value to every transaction, and derive revenue from every transaction. And we're seeing those behaviors by consumers and also, of course, by operators offering those new modes of ordering coming out of 2020, but remaining offerings that are made available in 2021. And that's part of what gives us the conviction that digital is durable across industry segments.

Brent Bracelin -- Piper Sandler -- Analyst

Super you're able to frame there. I guess my last question here for Peter. It looks like ending locations had a nice help in increase here sequentially, but platform revenue was still down. Was that, well, entirely tied to just lower volumes on the ordering side? Or are there other factors, i.e., pricing that also contributed to a sequential decline there in the platform revenue this quarter? Did you get that question? [Technical difficulty] Did you get that question?

Noah Glass -- Founder and Chief Executive Officer

Brent, I think we may have lost Peter. Sorry, Peter is dialing back in. Maybe, operator, if you wouldn't mind if we can move on and come back to that question, that would be great.

Operator

OK, sir. Your next question comes from the line of Brad Reback from Stifel. Your line is open. You may ask your question.

Brad Reback -- Stifel Financial Corp. -- Analyst

Great. Noah, in the last couple of quarters, you've obviously talked more about replatforming. Has it gotten easier in the sales cycle since the IPO?

Noah Glass -- Founder and Chief Executive Officer

Well, I think that our ambition of the IPO was really to make a statement to our customers and to the industry that Olo is going to be around for the long term as an open platform for on-demand commerce. And I think seeing Olo make that statement and then have a successful event in the IPO and come out on the other side with more resources has certainly given restaurant brands conviction that they don't have to worry in the way that they do about companies that are private and venture-backed that may get acquired, that might run out of funding, but they know that Olo is going to be around for the long term. And certainly, that has helped us in engaging with our customers and talking about long-term road maps and it's helped us with prospects. And I think it's given some prospects and some restaurant brands that have built in-house, but are constantly evaluating, does it make sense to continue to operate their on-demand commerce in-house.

Additional confidence that they can move over to the Olo platform, they can replatform to Olo, receive all of the benefits of working with a scaled enterprise-grade SaaS platform and do so at a lower cost of ownership overall. So I think on the sales cycle side, it's certainly been something that has been noted by the industry, and it's enabled us to have conversations with major restaurant enterprises, groups like Jack in the Box that we mentioned, having confidence that Olo is going to be a great platform and a service that they can then offer up to their end consumers knowing that we'll be around for the long term.

Brad Reback -- Stifel Financial Corp. -- Analyst

That's great. Thanks very much.

Noah Glass -- Founder and Chief Executive Officer

Thank you.

Operator

Your next question comes from the line of Terry Tillman from Truist. Your line is open.

Terry Tillman -- Truist Securities -- Analyst

Thank you. Congratulations from me as well. I don't know if we have Peter back, I was going to hit him with a financial question, but I can abstain and ask you one, Noah, first, depending on if Peter's back. Maybe, Noah, what I'll ask is on the go-to-market side, you are talking about increasing investments.

What I'm curious about is where are some of those incremental investments? I mean, you probably already have a good enterprise sales team, they know where to hunt. But is it more in that area? Is it adjacent markets that kind of have a feel like restaurants? Or maybe anything on the partnership side? Just would love to know a little bit about where you're going to put some of these incremental go-to-market investments. And then I did have a follow-up.

Noah Glass -- Founder and Chief Executive Officer

Sure. Terry, I can start out there, unless -- Peter, is that you back on? OK. Terry, I'll start out. So I think one big area of investment for us is in R&D.

And so we focus on some of the new product capabilities that we've talked about being early, things like our Olo Pay platform, that's an area of investment for the company as we go through beta and piloting with a handful of brands this year. And then other additional product capabilities like catering is something that we are excited about for future quarters and something that we're investing in to bring to life additional catering capabilities. Prepandemic, this is something that our customers were very excited about. And they remain very excited about it as they think about reopening.

This represented 8 to 10% of industry sales quarter to quarter. And so that's an area that we are interested in and developing capabilities in. We've also invested in our sales force on the emerging enterprise component of the market to sell more into those enterprises, as I define them that have five to 100 locations and represent the great enterprises of tomorrow. And we're excited about multiproduct adoption in that segment, and high utilization by consumers of those restaurants, leading to a greater ARPU opportunity for us in that segment.

And so we're investing behind that.

Terry Tillman -- Truist Securities -- Analyst

That's great to hear on Olo Pay as well as catering, particularly catering as we have more reopenings post this now new variant. But maybe the follow-up then, I'll just focus on you, Noah, is it's good to see the -- just kind of iterating existing technology. So I guess, the new mobile Serve technology. What I'm curious about is because there is a lot of technical debt, a lot of investments these big brands have made in their mobile app ordering.

Is this potentially a way you can get in the door initially as a wedge to just start with rebuilding their app as opposed to just their website? Just anything more you can help us on kind of the implications of this -- the new innovation on the mobile side. Thank you.

Noah Glass -- Founder and Chief Executive Officer

I think really the idea for the Serve app is to bring future parity into the mobile app, the white-label mobile app experience that we have through mobile web and that we have through web. I wouldn't characterize it as a wedge where we would only do a brand's mobile app and not the web. But the idea is to make onboarding even easier for brands to kind of build once on top of the Olo platform and then have it across all these different ordering modes, mobile app, mobile web, and web. And of course, as we add, as we typically do, incremental features and capabilities, having that feature parity across ordering modes through a brand's direct ordering channel.

So this, as we mentioned in the prepared remarks, is an experience already on the mobile web, we've seen reduce the transaction time by five seconds. And we count seconds, we count clicks at Olo. If we can improve the ordering experience for the end user, that results in better basket conversion, more transactions. That benefits the consumer, obviously.

It benefits the operator, but it also benefits Olo with our transactional SaaS model.

Terry Tillman -- Truist Securities -- Analyst

That's great. Thank you for taking my question.

Noah Glass -- Founder and Chief Executive Officer

Sorry, I believe that we have Peter back on now as well, Terry. So if you do have a question for him. And if we can return back to Brent's question, I think Peter is back.

Terry Tillman -- Truist Securities -- Analyst

Well. Thank you. That's a bonus. I feel bad.

I guess I'm getting three and hopefully bringing it back in. But yeah, yes. I was just going to ask Peter and then an answer to another question. Did I hear it right that mid-teens thousands would be the potential new incremental active sites in the back half of the year? Thank you.

Peter Benevides -- Chief Financial Officer

Yes. Not incremental. That is the full-year target. So again, roughly 9,000 to date through the first half of the year and now targeting the mid-teen thousands on a full-year basis.

Terry Tillman -- Truist Securities -- Analyst

Got it. Thanks.

Noah Glass -- Founder and Chief Executive Officer

And Brent, can we invite you to reask the question that you asked before?

Operator

Sorry, sir, but I can see the line of Mr. Brent got disconnected.

Stephanie Daukus -- Vice President, Investor Relations

Hi. It's Stephanie Daukus with Olo investor relations. So just to recap Brent's question. He was asking about how ending locations showed a healthy increase, but revenue remained pretty steady quarter over quarter.

So, Peter, if you could just talk to that dynamic and explain if that was related to multi-location ads or a possible change in rates or anything like that? Thank you.

Peter Benevides -- Chief Financial Officer

Yes, absolutely. So the platform revenue decline quarter over quarter was in line with our expectations. And really, it was the combination of a few factors, the net impact of reopening. So increased vaccination rates and the impact that had on in-person dining as well as the wind down of stimulus benefits that occurred in the first quarter of the year weren't a dynamic.

That was a factor in the second quarter. And then some seasonality impacts, which we typically experience in the second and third quarters of the year. And as I mentioned earlier, the deployments that had come on this quarter, half of those deployments were single module deployments where ARPU and the revenue impact from those deployments are inherently lower than multi-module deployments but present a great opportunity for future upsell and monetization. And of the remaining deployments that did come on in the quarter, half of those were deployments that occurred in the back half of the quarter.

So we didn't realize the full benefit of revenue from those deployments in the second quarter, but we'll do so in the coming quarters.

Operator

[Operator instructions] Our last question comes from the line of Stephen Sheldon from William Blair. Your line is open.

Stephen Sheldon -- William Blair & Company -- Analyst

Hey, guys. Thanks for taking my question. Wanted to follow up on the mobile app rollout and wanted to ask how this will drive incremental monetization opportunities for Olo. Will that help mainly from the perspective of driving more transaction volumes? Or is there also a separate add-on subscription beyond the core ordering module? I would appreciate just any detail there on monetization.

Noah Glass -- Founder and Chief Executive Officer

Hey, Stephen. This is Noah. So no, there's no additional charge specifically for the mobile app work. This is an additional front end that is part of the Olo platform.

Although there may be a savings to the brand versus what they would pay to build a mobile app on top of the Olo API if they were to do that in-house or they do that through a third-party mobile app developer. Where we see it as an opportunity for Olo and incremental revenue is in improving the consumer experience of placing the order, cutting down on the time to place the order, such that basket rate conversion increases, the transaction volume increases. And as I mentioned earlier, that's good for the consumer, good for the brand, but also good for Olo with our transactional SaaS model in the form of additional transactions and transactional revenue.

Stephen Sheldon -- William Blair & Company -- Analyst

Got it. Makes sense. And then it sounds like you're seeing a lot more traction with concepts and it sounds like specifically QSRs that are signing up for a single module like Jack in the Box. I think, Peter, you might have hit on it a little bit.

Just how much opportunity do you see to upsell QSR customers like this to all of your modules down the road, even if they signed up just for the immediate benefit of a specific module? Do you have many QSR customers that are using all three modules? Any detail there?

Peter Benevides -- Chief Financial Officer

Yes. So in terms of specific QSR customers that are using multiple modules, I think we mentioned on the last call, Bloomin' Brands that have cut over from a legacy platform or replatformed onto the Olo platform. And they've actually subscribed to more than one module as part of that program. I guess, from a high level, we absolutely think that over time, we can sell through additional product modules to single module brands.

And as history has shown, we've done that very successfully, selling both Dispatch and Rails to customers that we had initially had our initial entry being Ordering and then shortly following up with Dispatch and Rails. So we certainly see that as an opportunity ahead. And it's great to plant that initial flag with whether it's Dispatch-only or Rails or Ordering, and then use that as an opportunity to build that relationship and ultimately sell through additional products.

Stephen Sheldon -- William Blair & Company -- Analyst

Great. Thank you. Congrats on the results.

Operator

There are no further questions at this time. I would now like to turn the conference back to Mr. Noah Glass for closing remarks.

Noah Glass -- Founder and Chief Executive Officer

OK. Well, thanks to all of you participating or listening today. And I want to express my gratitude to Team Olo one more time. Thank you team for the incredible effort and solid performance of Q2.

I'm consistently inspired by this mighty Team Olo. The shared values that we live through our work and our unrelenting quest of continuous improvement. As I always say, we have miles to go before we sleep, and I'm deeply honored to be on this journey with all of you. Until next time, be safe.

Operator

[Operator signoff]

Duration: 50 minutes

Call participants:

Stephanie Daukus -- Vice President, Investor Relations

Noah Glass -- Founder and Chief Executive Officer

Peter Benevides -- Chief Financial Officer

Sterling Auty -- J.P. Morgan -- Analyst

Brent Bracelin -- Piper Sandler -- Analyst

Matt Hedberg -- RBC Capital Markets -- Analyst

Brad Reback -- Stifel Financial Corp. -- Analyst

Terry Tillman -- Truist Securities -- Analyst

Stephen Sheldon -- William Blair & Company -- Analyst

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