Yahoo Finance Live checks out Olo stock following data concerning the rate of restaurants switching ordering software.

Video Transcript

AKIKO FUJITA: Olo, the stock plummeting today, after cutting its full-year revenue forecast. This is a company that provides ordering software for restaurants. Its earnings and revenue in the quarter also came in weaker than expected as well, with its CFO citing macroeconomic challenges leading to longer deployment cycles.

But Olo's story stands in stark contrast to another restaurant software platform, Toast, who actually raised its full-year sales forecast on the back of a strong quarter. And we saw a big pop in the stock there, Rachelle for Toast specifically. I know you guys were on that story yesterday, but that seems to point to even more of Olo's story today. Saying, well, wait a second, if there are others who are in this restaurant software ordering business who are doing well, what does that mean for this particular company?

RACHELLE AKUFFO: And it was interesting, because one of the clients that they actually lost in this quarter was Subway, and they're actually in the process of losing-- they lost about 2,500 subway locations, and they're actually going to lose a total of 15,000, going to see that dropped by the end of the first quarter of 2023. Now, obviously, interestingly, they're not going to another competitor. Subway is actually going to be using its own software, but I think losing a client of that size also putting a big dent in Olo today.

AKIKO FUJITA: Well, I mean, that points to the competition they face. Right? It's not just them owning the market anymore. If Subway is building out their own platform, that doesn't necessarily bode well.

RACHELLE AKUFFO: At all.