Shares of restaurant-technology company Olo (OLO 3.31%) jumped higher on Thursday after the company closed out 2023 with strong financial results. As of 10:15 a.m. ET, Olo stock was only up 6%. But it had been up as much as 18% earlier in the day.
A strong ending to 2023
For the fourth quarter of 2023, Olo's management had expected to generate revenue of $59 million at most. But in Q4, the company generated revenue of $63 million, which was a 27% year-over-year increase.
Among its big wins for the quarter was Waffle House, which will use multiple Olo products. And Five Guys expanded the amount of Olo products it's using.
The market liked seeing this better-than-expected growth. And Olo's outlook for 2024 is respectable as well. The company expects full-year revenue of at least $269 million, which would be an 18% increase from 2023.
Can Olo stock climb higher?
Olo founder and CEO Noah Glass said, "In 2024, we're focused on delivering balanced growth with increased profitability." And regarding the last part of that, Olo had a net loss of $58 million in 2023, surprising considering the company was profitable in 2020 just prior to going public.
Olo's operating expenses have climbed far faster than revenue, particularly sales and marketing expenses, which is depriving the company of profits. While management expects a small profit in 2024 on an adjusted basis, it seems net profits still won't be there.
To be sure, Olo's growth outlook for 2024 is good, but it might not be quite enough to excite growth investors. And with only slim adjusted profits, it might be hard to excite value investors. For shareholders, its results in 2023 were encouraging. But the stock could go sideways until there's a better catalyst.
