Presto Automation is laying off 17% of its staff in an effort to cut costs as revenue slows.
The company, which supplies AI-powered voicebots for drive-thrus, said the layoffs and other cost-saving efforts would immediately save it $400,000 a month, and $1.2 million after eight months.
Presto had 137 employees as of June 30, according to an SEC filing, suggesting that 20 to 25 people lost their jobs.
The company has struggled to generate much growth since going public last year. In its most recent quarter, it reported revenue of just $4.9 million, a decrease of more than 38% year over year, but within its expected range for the period. It reported net income of $5.4 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of negative $8.8 million.
In a vote of confidence, Presto Chairman Krishna Gupta led a group of investors in acquiring 7 million shares of outstanding Presto stock, giving the company a roughly $7 million capital infusion. Gupta is the CEO of longtime Presto investor Remus Capital.
“I have greater conviction in Presto than I've ever had before, as AI and automation technology gains significant traction among restaurant operators,” Gupta said in a statement.
It follows a $3 million investment from Cleveland Avenue, the fund founded by former McDonald’s CEO Don Thompson, in October.
More than 400 restaurant locations use Presto Voice to take drive-thru orders. Customers include Checkers & Rally’s, Hardee’s/Carl’s Jr. and Del Taco. Drive-thru transaction fees brought in $2.8 million for Presto in the period. The rest of its revenue came from transaction fees on Presto Touch, an ordering and payment device for dine-in restaurants.
Despite the slowdown in top-line growth, Presto CEO Xavier Casanova said he expects 2024 to be “a definitive step-change” in Presto’s growth.
“We are witnessing a significant change in the receptiveness to technology-based solutions,” he said in a statement, noting that California’s new wage hike for fast-food workers is driving demand for drive-thru automation. “We are experiencing significant interest from franchise operators today who are interested in talking to us about Voice AI and we expect network effects to take hold.”
He added that Presto has a total of $117 million worth of revenue opportunities from customers who have signed master service agreements or are currently piloting Presto Voice.
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