Olo Inc. Takeover Buzz: Is Toast Or Oracle About To Snap Up This Restaurant Tech Powerhouse?

Olo Inc. (NYSE:OLO), a restaurant technology firm powering digital ordering and payment platforms, has seen its stock jump following reports that the company is evaluating a potential sale amid inbound takeover interest. According to Bloomberg, Olo has enlisted a financial adviser to weigh acquisition offers, with possible suitors including Toast Inc. and Oracle. While the deliberations remain preliminary and no deal is guaranteed, the timing coincides with Olo’s strong first-quarter 2025 results. The company posted 21% year-over-year revenue growth and exceeded guidance on both revenue and operating income. With approximately 88,000 active locations and strategic partnerships with major restaurant chains like Chipotle and Texas Roadhouse, Olo continues to expand its modular platform—Catering+, Olo Pay, and Engage—positioning itself as a mission-critical technology provider in a fragmented industry.

Strong Revenue Growth & Profitability Metrics

Olo’s consistent top-line growth and improving profitability metrics provide financial stability that enhances its appeal as an acquisition target. In Q1 2025, the company reported revenue of $80.7 million, marking a 21% year-over-year increase. Platform revenue, which makes up the bulk of total revenue, grew by 20%. The company also added approximately 2,000 new active locations, reaching a total of 88,000—a strong indication of customer demand and product stickiness. Gross profit reached $49.2 million, up 18% year-over-year, with a gross margin of 60.9%. Operating income rose to $11.5 million, nearly doubling from the year-ago quarter, and net income stood at $11.8 million, or $0.07 per share. Importantly, Olo also achieved GAAP profitability and a Rule of 40 performance of 42% in Q1, demonstrating solid growth and operational efficiency. While free cash flow was slightly negative due to a change in payment terms with a partner, it would have been approximately $4 million on a normalized basis. These financial metrics not only make the company self-sustaining but also reduce integration risk for acquirers, especially those looking to add a profitable and scalable SaaS platform to their portfolios.

Scalable Platform With Growing Customer Base & High Retention

Olo’s modular, scalable platform and deep penetration into the enterprise restaurant market are central to its strategic value. The company ended Q1 with 88,000 active locations, bolstered by strong deployment activity across both enterprise and emerging enterprise brands. New wins include Chipotle, Ben & Jerry’s, and Gong Cha, while expansion deals were secured with El Pollo Loco, Waffle House, and First Watch, among others. Gross revenue retention remains above 98%, and net revenue retention stands at 111%, driven by upselling additional modules such as Olo Pay and Catering+. The ability to land and expand—turning customers into multi-module users—supports recurring revenue growth and high customer lifetime value. Olo’s unique position in the guest-facing restaurant tech stack, aggregating and activating customer data through its Engage platform, enhances brand loyalty and operational efficiency for its clients. This makes Olo not just a technology vendor but a critical infrastructure partner, reducing customer churn and enhancing long-term growth prospects—attributes highly prized by strategic acquirers.

Differentiated Product Innovation & Data Flywheel Strategy

Olo’s differentiated product suite and guest data flywheel strategy provide both competitive moat and future growth potential. The company's offerings—Order, Pay, and Engage—operate as distinct but synergistic growth curves. Recent innovations include Catering+, card-present payment capabilities through Olo Pay, and Olo Guest Intelligence (OGI), which delivers actionable guest metrics through the core dashboard. Notably, OGI was adopted by over 700 brands within its first month of release, reflecting strong demand for data-driven decision-making. The integration of zero-, first-, and second-party data into a unified guest data platform allows brands to personalize guest experiences, improve marketing effectiveness, and optimize operations. Furthermore, the "Borderless" checkout feature now spans 450 brands and 16 million guests, with more than 2 million transacting across multiple brands, showing early signs of a network effect. This robust data infrastructure not only strengthens customer relationships but could also be a valuable asset for larger tech companies looking to enhance their own data ecosystems in hospitality or adjacent verticals.

Enterprise Customer Base & Industry Resilience Amid Macroeconomic Headwinds

Olo’s focus on enterprise-scale limited-service restaurants (LSRs) enhances its resilience in times of macroeconomic uncertainty, further strengthening its M&A appeal. The restaurant sector, particularly the LSR segment, tends to benefit from consumer trade-down behavior during economic downturns. Olo’s client base—predominantly enterprise LSRs—has historically outperformed during such periods, as evidenced during the 2008–2009 financial crisis and the pandemic era. This was reaffirmed in Q1 2025, where order volumes and same-store sales trends remained strong despite inflationary pressures and tariff-related cost increases. Enterprise clients, with deeper financial reserves and broader geographic footprints, are better positioned to withstand economic shocks compared to SMBs. Moreover, Olo’s near-20-year operational history, deep domain expertise, and demonstrated ability to help clients “do more with less” through digital transformation enhances its standing as a long-term partner. For potential acquirers like Toast or Oracle, acquiring Olo offers instant credibility and a foothold in a resilient, digitizing market vertical.

Final Thoughts

Source: Yahoo Finance

While Olo’s sale discussions are still in preliminary stages, the news of the acquisition interest itself has led to a massive jump in the company’s stock price. This jump is so significant that Olo’s LTM EV/ Revenue multiple, which was hardly 1.54x in June 2024, is now up to a staggering 3.68x. We believe that Olo’s compelling financial profile, expanding enterprise footprint, modular product ecosystem, and data-driven differentiation make it a prime acquisition target. The company has achieved significant momentum in 2025 through new customer wins, enhanced profitability, and strategic product innovation and we believe that there is an excellent chance of the company getting acquired in 2025.