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Processors and service providers focused on restaurant point-of-sale systems are enjoying strong growth as restaurants remain one of the hottest markets in digital payments. Two companies reaping the fruits that growth are Toast Inc. and Olo Inc.
Toast Inc. posted annual recurring revenue of $1.3 billion during the first quarter of 2024, a 32% increase from a year ago, while gross payment volume totaled $34.7 billion, a 30% year-over-year increase.
In addition to posting strong financials for the quarter, Toast added more than 6,000 locations bringing the total number of restaurants in its portfolio to 112,000, up 32% from a year ago.
Boston-based Toast attributes the strong growth in part to the launch of new products that not only help restaurants operate more efficiently, but expands the company’s addressable market. For example, toast recently launched its restaurant management suite which includes such tools as the ability to schedule menu and price changes, manage partner integrations, and generates benchmarking analytics for restaurants chains and single location operators.
Toast also recently launched its Digital Storefront Suite which provides restaurants with website building tools, online ordering capabilities and the ability to gather data from online and POS transactions. The artificial intelligence-based app also enables restaurants to create and send marketing emails and create targeted marketing campaigns.
“One reason restaurant POS is such a hot, fast-growing market is that POS systems are so high functioning today and do so much for the merchant’s business,” says Cliff Gray, principal at Gray Consulting Ventures LLC. “In some cases, POS is just along for the ride.”
Olo finished the first quarter with revenue of $66.5 million, a 27% year-over-year increase. Active restaurants increased by 1,000 during the quarter to 81,000.
New York City-based Olo announced that coffee-house chain Dutch Bros, plans to deploy its Order and Pay apps across more than 850 locations by year’s end, marking the company’s first investment in digital ordering. In addition, Olo announced that fast-food restaurant chain Quiznos, has deployed its Ordering, Rails, Dispatch, Pay, and Engage Sentiment apps. In December, Olo landed a deal to update nearly 2,000 Waffle House locations with its POS technology.
On the product front, Olo recently announced POS integrations with NCR Voyix and Qu. The deals will expand Olo’s omnichannel data capabilities, the company says.
“We are also very excited about our new partnerships with NCR Voyix and Qu, which move us closer to launching full stack pay functionality later this year and will expand our guest data access into non-digital transactions, where more than 80% of restaurant industry transactions are conducted,” Olo founder and chief executive Noah Glass says in a statement.
