Dive Brief:

• Presto has laid off 18% of its workforce, or 24 corporate staff members, as it winds down its tablet business, the company said in an SEC filing Monday.
• The company said the reductions, which will be largely completed by the end of fiscal Q4 2024, will save $3.1 million annually. 
• In September, Presto laid off 17% of its workforce, or about two dozen employees. At the time, it employed 137 full-time workers. 

Dive Insight:

In addition to its layoff notice, Presto said it sold 4.8 million shares, raising $1.2 million. Along with other cash resources and projected revenue, the company said it has sufficient funding to operate through April 1. It is also “exploring alternatives” and talking with other potential investors to raise capital. 

Presto still has a long way to go to generate a profit, however. Last quarter, its losses grew to $19.9 million even though it generated $4.9 million in revenue. It may take some time for its drive-thru AI business, Presto Voice, to generate a profit, as it only contributed 12% ($600,000) to its income in Q4 2023.

Presto is now focusing on Presto Voice instead of its tablet business, which it would either sell, partially sell or abandon. The company’s Presto Voice clients currently include Checkers, Carl’s Jr., Hardee’s and Wienerschnitzel. Its previous client, Del Taco, which anticipated bringing drive-thru AI to its system, decided not to continue with Presto Voice as of last year, the company said in an SEC filing. 

Presto’s decision to focus on its drive-thru AI product coincided with the departure of its biggest Touch clients: Applebee’s, Red Lobster and Chili’s. These three clients made up 88% of the company’s Touch revenue in the second half of 2023. When Presto began focusing on its Voice business, its Touch business became less of a priority, even though Touch generated about 90% of the company’s 2023 revenue. 

The company has also undergone several leadership changes. Earlier in March, Presto announced that its chief revenue officer Justin Foster resigned from his role after only a few months in the position. Lead independent director Edward Scheetz replaced Krishna Gupta as chairman of the board this month, as well. At the end of last year, the company hired Kat Hoffman-Flynt as chief operating officer. Dan Mosher left the company in October 2023 after almost three years with Presto. He served as president and chief revenue officer. 

Last year, Presto’s founder and CEO Rajat Suri resigned from his post after 15 years with the company. His replacement, Xavier Casanova, resigned suddenly in early February after joining the chain in August. The company has yet to name a new CEO.