LSPD - Earnings call transcript Q1 2023 | Lightspeed Commerce Inc.

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Operator

Good morning. My name is Angela, and I'll be your conference operator today. [Operator Instructions]. I would now like to introduce Gus Papageorgiou. I do apologize for your name.

your begin now may conference. You

Gus Papageorgiou

and Thank Lightspeed's everyone. to morning, QX you, XXXX operator, Fiscal Conference Welcome good Call.

and Chief Joining me we Nussey, Officer; Brandon Chief will Executive Bakshani, today are for JP Lightspeed's Chauvet, open it Chief your prepared Officer. After Financial Lightspeed's up Officer; Asha remarks, our questions. Operating

material and were materially forward-looking cause law. actual could to in statements make today as from will except conclusions, projections that projected. our call forecasts required assumptions no these that update contained statements. to uncertainties differ factors are respect of We in by statements, on obligation subject applied We those Certain to and risks and results undertake these

issued the website, available these XXXX considered And assumptions, and financial in U.S. sedar.com carefully supplement dollars we dollars, which IFRS between regulators. earlier today Reconciliations in is measures, otherwise measures. discussed press which U.S. our and be on are will be review our substitute on non-IFRS should commentary You in These our securities Canadian adjusted first with two a U.S. finally, as unless Also, can available note our our results filings a factors, our should that in financial as the quarter found on release, system. for today and in measures. not SEC's report well to press EDGAR earnings on and as presentation risks because all uncertainties amounts today, website release our are earnings include indicated.

With new Standard go hosting at over I on everyone will turn over a to call I X:XX Lightspeed Retail XX register. JP. that be scheduled that, now will website to to flagship PM, it like offering, JP, remind to turn Eastern to IR Please I retail Before webcast the our Time. on our August we would

Jean-Paul Chauvet

to previously as our strong XX% Gus, Thank strong established Overall quarter to morning. and grew a shopping omni-channel you everyone. $XXX another for grew solutions. joining today, us million. Revenues demand were return which as reported by delivering was in-person $XXX revenues the drove outlook you, million quarter of public and of Lightspeed revenue this XXth million, of dining this GTV $XXX our Thank company, welcome, and for XX%. ahead

Retail Kualoa the marquee see complex California, Ranch We of have Kentucky premier locations, I thanks Michael Payments. customers: customer, where adopting our be world-renowned continue analytics our Park secured a restaurant most new our And the were higher Palm offering we one the leading strong luxury Palm they we are And to target XXX footwear use GTV addition in in were host growing within in retail customer The our especially Jurassic luxury will Lightspeed outbound platform. One than flagship multi-location experience to the several by will the America, in Restaurants Springs in flagship very five Lightspeed's customers. quarter. products market, by integration extensive locations some leading with Lightspeed hospitality, to a add and happy for had markets Lightspeed our quarter. believe our and solutions including of signed In products We of towards offering EMEA customers, to brand, travel XX internally of partners. expanded strong faster Panos, in adopt which the which success region, target will through both market, hospitality, Belgium encouraged We of also saw other adopt the locations, GTV European with our heavily SMBs, software built slanted the either Holland software. compelling any will region. e-commerce, are that we thoughtful were the also in is reception advanced developers retail sales among Hawaii, Kors. groups be in Parker Lightspeed flagship In BXB, we Springs, Covington, in and one Lightspeed modern features in in hospitality Lightspeed North and their Lightspeed's and were of a development independent platform this which find Restaurants the or And with happy retail, Payments. Group Lightspeed's market APIs, Lightspeed Australia. result hotels particularly filmed, which will including adopt force, of Payments. The across of base. can our using will following their many Payments restaurant Long-standing the which bakery developed modular of platforms of [have] for in movies Retail to with

Our are environment. and fast, easy from I like I believe macroeconomic is over many strong why stable this recognize are new products use, we to customers. that concerned of you our and are the reception end seeing ourselves

will noticed and which our call in greater we Asha have confident quarter. outlook, in you'll be annual last our outline to the press release, provided in from as As continue earnings we detail,

to conditions knockdown We immune are not and macroeconomic are risks. playing the

offset in not downturn, maintain focus growth Lightspeed strong believe increased does the shopping can execution return we to any conditions. through that to it's levers market of and and approach scenario important in-person are that for the challenging With change. our at at partially Even various on challenging our to macroeconomic influences dining an least believe I an However, help should this because of Lightspeed conditions. growth positive disposal, emphasize to economic

can of lower churn These Payments. take We will adopt software And addition, in deliver comprehensive the our economic weather low much to double-digit remains any be The of positioned Payments GTV better in they're growing to I focused Payments locations and platform is through available generally higher that remain adding locations. will ARPU, advantage investors range. the that remind customers SMBs and higher value. superior majority downturn. lifetime on our GTV customer also proportion complex of full of will our that the

of many will as get Brandon Payment solution to locations our possible. onto this as is these discuss shortly. focus Our

dominated the strong In Payments is I industry, two which benefiting opportunity, systems. in executing addition to Lightspeed our by currently is believe legacy trends from other

their that The are to drive simplify and inventory and operations, their and can profitability. every issues Lightspeed to turning shortages, better technology merchants for manage their productive chain them employees and merchants more less. disruptions with their their better industry, and first help serve labor supply Lightspeed they can become automate can improve With technology help customers in their more businesses. growth so merchants causing help do is

Lightspeed and valuable disparate manual the do paying simplify insights, a them. insights siloed extra because reconciliation this they economic merchants conditions are more become comprehensive shared their of as all systems, e-commerce more POS, these lower end deliver on are of complexity platform likely data, separate if systems deteriorate. through for one-stop The for a can to vendors the valuable unnecessary need increasingly where for for and reconcile for second of their important deliver price. relying so up create a generally believe that If an is can generate shop can remove these operations looking merchants in needs, we can solutions, work operations and example, data their and to payment will

will solid We is operating over take solutions. And this believe the are for now I to us I pass seeing reason. to and to again, customers demand are for this our of highlights. reason increasingly Brandon existing software through us both experiencing it part come new we some

wrap then us will Asha before I'll into financials Q&A. the outlook, and we take through and it go up

Brandon Nussey

progress to of focuses Thanks, some see look JP. as we continue. operational I'll main speak on our briefly core drivers about our

heads GTV $X.X control. in focus our you opportunities With is we And we base have available adoption. We've our over Payments vast as customers base, continues our And to outside on we're that on with the here backdrop in quarter, biggest business plans As the the to one in have new our remain said, still our can our cautiousness with of from us doubling efforts heard on of quarter customers' and have JP, of this trend to across in the from mind. the progress with making where globally good customer with to our given with is as billion, cautious set almost GPV we our things drive possible. doubling well majority our for install Payments at the opportunity in place, But year-over-year. drive of billion down plenty solutions across Payment $XX we uptake of GTV that made along many ahead. Ecwid. now Payments

execution POS for a partners to to it they to uncertainty and them elsewhere. them in having selling incentives in helping a looming economy. this this Payments that we this on focus save place from believe support here within incorporate to processes, opportunity, a our right for is and weakness offset ongoing any them, our space. With and face strategies ahead compelling more and aggregate becomes to customers, serve ongoing The help and toughening freeing workflow streamlined should and that number We volumes timing adjustments with customers, to together our have lie of in customers' our achieve good may money onboarding macro up time will

with that customers GTV less acquisition, for we e-commerce ahead. networked an on best long-term role to our highlighted are good growing We the focus locations, market and the our drive is in and churn the as excluding significant customers means examples strategy. still good XXX,XXX And are established before, winning Ecwid important also susceptible more eventually share JP substantial The on customer volumes said customers by of us. with believe customers earlier this. that we've have focused on of remain that standalone will play value That opportunity supplier this brought our through opportunities main we finding

that X,XXX churn profile. target we desired meet historical in our continue overall This line remain with customer these customers quarter, as added we our approximately to our locations trends. We saw net

food With locations as have upsell. our representative of lower However, product some typically label a not white do with in relationships closer where that represent having of we various base have and small both stands, retail hospitality. we number our monetize standalone I that customers a not compelling using Examples been strategy. for ARPU acquisitions, non-core not flagship customers are product our and for customers we are a concession supplier as average, the our single get to OEM our sold stores a of this have to and to or lower opportunity through GTV trucks GTV; inherited want integrate further these able some to customers for convenience These fit of customer than little desired a such and provide acquisitions will verticals, context profile. be

churn to base our to X,XXX we related for more and And our estimate on in expect efforts. lies categories, we the customer to locations despite X provide that are tracking progress churning quarters. we that location category acquisitions, estimate customer plans. through have given And expect churn will on this, continue these stat that be with acquired levels to speak continue to This are is who quarter opportunity grow to our X,XXX and healthy we of quickly customer between we our at we the this incorporated customer respect over Ecwid, XX,XXX Excluding integration will to that locations location up overall next helpful ahead. finally, our context X our I to progress per that. I'll those our into

technology Our We're primary pleased seamless go-to-market with the underlying integrating on with been has effort resources. a ensuring acquired our focus here. progress the to-date and

efforts effort talented on most the for focused market One well benefit the of We're now of important both well. production Lightspeed addition of end transitions, people. acquisitions complete getting the by With far Our most maximum retail we be these and one centers. integration to Other calendar of we internal environments our primary from to customer are year. in as we flagship our and thus benefits of has our some relate can brand And in finalize markets internally on lastly, complete, world. increased support industry's hospitality that this systems, to our around are the of the is tracking which been products ensuring largely now called This the expected is scale. are

delivering take teams our of now customers. Lightspeed on integration we important and these the to continue With in are redeploy overall the areas Asha check. value product output keeping you our allow of as will over resources of into to on this and outlook. us numbers to synergies innovation our largely complete, we're broader I'll growth the into path These it quarter's profitability costs effort seeing and in to our pass while through velocity now to

Asha Bakshani

was Thanks, business. the another quarter from Brandon. It strong

in-store to to well-positioned be to from our benefiting and from restaurant shift proven spend ongoing rebound has accommodate globally. balance omni-channel the the hospitality Our e-commerce is presence in

from $XXX.X million $XXX heard million million, our were overall. total able of we up and revenue year $XXX XX% with deliver transaction-based from on to outlook revenue, in subscription As and of basis organic XX% revenue, last JP, ahead you to up an

First, few observations what quarter, and into I'd discussion metrics. negative. saw like to performance financial positive the for address key both Then including about the the a quarter, we I'll our in around get a

Finally, will for our our QX ahead. XXXX for I full and end fiscal with year outlook fiscal the

The first diversity business streams. geographies this, our by observation us revenue is of that mean to serve and And the continues verticals, our diversity I in well.

the this North were Our EMEA region availability overall more in Payments expanded previous and on customers region. customers boost whereas and the hospitality reliant retail helped growth American we both quarters, in for quarter, primarily in

by by Retail base our revenue our of new new by offering. further our and Payments, offering putting to on American continue more hospitality North presence base retail international expect flagship our customer customers Lightspeed increasing hospitality our to through expanding We diversify our through

benefit to our growing multiple across $XX continue through GTV, processed the of the combination collectively the months. expanding Financial customers We and in from ARPU and and trailing of XX almost growth growth Payments Solutions our our location revenue billion levers,

do As compelling. you now, not opportunity the our have concurrently, we seen and to each for levers be remains hitting by need

to in like I discuss are we Secondly, seeing would GTV. trends the

customers some growth XX% For retail over by billion the Within stronger end decelerate. XX% highest In seeing growth the showing GTV are quarter, with of of the we we market grow EMEA quarter, any $XX than of our retail, organically processed hospitality showing the saw region. GTV. and GTV and growth overall,

For and the benefited such and lower apparel appears most bike better. as that conditions sectors are footwear though home garden challenging are more COVID part, it while as saw that the end COVID, under generally seeing during & growth as such performing markets

all spending GTV this factors rates as Hospitality XX% GTV organically. believe rising And hospitality terms on regions. a Europe, XX% as saw quarter organically hospitality Hospitality as total. in our entertainment. such than markets. Despite will in any as inflation remain remained uptick Payments believe more as cautious travel in as retail and persistent consumers rising we still levels particularly in which dining grew We than GTV the higher GTV growth. across and also GTV in that of our such out inflation our are and strong rates although in But interest travel healthy growth prioritize globe. mentioned, spending We we more retail at and in GTV the largely impacting adoption, under overall this, increasing impact and XX% can is consumers end grew resume Brandon interest control, offset face challenges we offset areas

results fully deliver except to periods were organic our in subscription integrating by reported our as of and organic growth acquisitions. the will XX% I ability comparative and revenues COVID Finally, new acquisitions, strong that while for equity, that note business' heavily quarter's as illustrating now which well transaction-based this or growth easier impacted order we all in lap

QX into from our grew to revenues results $XXX.X revenue for a QX was for ago. $XXX.X dollars representing of over revenue growing in $XXX a Gross deeper the million, guidance organically $XXX was Overall ahead XX% million, XX% Subscription year Going period transaction-based today. profit XX% and by year of and same total of million million. ago. reported QX

our incremental margin margin to way XX% which carry gross as Payment provide us to customer greater year, a by our location. revenue, of of lower gross now was per gross percentage coming portion but a important dollars a profit revenue, Solutions, As last for owing XX% compared QX of

loss increased are which rest brought which was losses hardware by of summit, format levels in more costs sales, we adjusted impacted million, and this customer from $XX and the outlook with which percent taper loss to the addressing quarter, expect annual was which the impact reflecting of in-person Our the the and in This year subsidies our COVID our back higher EBITDA virtual than we EBITDA down gross year. recent with and acquisitions moved we $XX.X year. we our of to to ago, during margin normal through associated to was million. line a a partner includes Adjusted

indicators, to ARPU standalone Turning excluding is on earlier. business significantly lower of was location, $XXX $XXX, from which approximately of which grew additional location, customers per Ecwid year approximately ARPU. ago. carries a Subscription-only a customer to from XXX,XXX $XXX through approximately those our quarter customer locations year standalone brought exclude these the Both XXX,XXX of customer provided a ARPU some up e-com acquisition, Ecwid a e-commerce base, up the from $XXX earlier. These

from churn we this we given customer categories. with location adds onboard, As in added net of are type the quarter. we have of customers continued And our our quality focus the heard Brandon, the by were you pleased impacted customers on successfully non-core

Looking $X.X at from our payment and Payments, billion, QX. gross up our XX% from year XX% up was last volume

quarter Although seasonally were is very actually from increase the this for sign XX% our 'XX, historically progress our is seasonally was slowest volumes overall. expected, and processing is of positive QX fiscal which quarter QX our that also a up historically we best our of fact sequential

working we ensure Capital. sheet off made of connection continue in XXXX. our advances deployed cash the million approximately cash capital million balance position. of arising paid in current of in the strong and in view will $XXX in in quarter environment with acquisition a end, from a declined $XX March. increase This quarter strong source and remain movements of loan to strength January debt the I from Our to drawdown a the the as in Gastrofix result was an to the for million operating in $XXX Subsequent position losses quarter, the Lightspeed certain cash we

although we're of inflation, XXXX, remain things there consumer overall exposure reasons the As spend, optimistic exchange backdrop. several the in fiscal forward for under macroeconomic foreign control, our look we believe given trends to we caution on we seeing are the the and remainder

our While while consumer our we year, of do and various any ability impossible growth opportunity our tested are the our the established we to multiple us, in our confident on the expect and we the forecast predict will customer of based meet continued to outlook. the previously for recession, severity And have stress spend continue levers, economic of ahead outcomes. in inflation of Payments diversity rest given revenue softness base

finding integration of continue the we we businesses, acquired and efficiencies continuous expenditures, previously focus Brandon remain in business addition, to In on to and spend through continue operating areas. across reducing on lower priority as mentioned, intentional disciplined

million For $XXX million to of in approximately EBITDA achieve revenue expect QX, and adjusted million. range of to we the $XXX loss $XX

fiscal our adjusted million at million fiscal previously the EBITDA from improved $XXX $XXX For profitability year, next at million X% X% our year. EBITDA approximately to the has of which adjusted remain guidance, loss revenue our revenues we full in of committed million year. maintain mid-range on outlook to to and $XX XXXX $XX of last or established We

we the a right JP as we year. one, our an given both see the realize our balance while have that, areas regarding seasonally to areas sheet synergies, to profitability approach We desire ahead, strongest over Furthermore, as we revenue the impact QX balanced of performance, business. As I'll is invest growth will reinvest to be EBITDA With we opportunity of whereby the our run for growth seasonally remarks. continue long-term to upcoming business, on and throughout our this allowing EBITDA quarter. core improving it hand performance in to to disciplined us to strength reminder our believe expect a ongoing plan in and QX the our closing and continue quarter weakest seasonality to outlook, our well adjusted as

Jean-Paul Chauvet

perform no has will few There but last Asha. the Lightspeed that pessimistic do again, challenges. Thanks months. believe the question downplay And grown outlook despite we I these want economic continue more to is the in to not situation,

most and that Retail than teams our of ever is flagship available Lightspeed delivered, ever customer Lightspeed and biggest Lightspeed the more are encouraged to best believe is the offering, influence I far the emphasize in cannot the now selling industry. dining of and the in experienced Restaurants we And go-to-market new are base Our our are best we've very return I Payments finally, offer. shopping believe seeing. and what with is macro And here, I'm by success. what to we enough this company's that in-person

Before globally continue to new that, Q&A And they It's and remain deliver moment the and execute roll a on want the doing. because I at all we able we strong prospects. that five acquisitions, Payments launched products, the to session, questions. two to job our take flagship I last go In growth take our to two we employees throughout. into optimistic of ability to in were Lightspeed, of recognize and out incredible years, digest the will confident them your with are

Operator

Instructions]. [Operator

now We with our will first Perlin Capital Markets. RBC question take Dan from

Daniel Perlin

I potentially wanted driving just weaken. offset little to -- bit on your drill the down really Payments around if commentary a clients

just given incentives as for You specifically? from doubling go drive talked into doing And existing means more and to success base, clients? back book you more talk terms going and there's an in of finding opportunity a or what could that on down to are your wondering meet new I'm you onboarding. what you little of incentive about that is customers about if this clients function those a your you're detail you bring into that

Brandon Nussey

where of Dan, customer it's here. volumes we've Yeah, macro here. Brandon go the on we're backdrop, course, -- cautious from given

So do focus the that make things we our to can sure control internally of under that. a creates we are lot offset on that

the all how made way more incentivize things customers make live get sales do to we we've got sure the just through a seen the few customers. that that number for sure selling the tried tried in We've for quarter have right process we We've headway. right things how of of So few the a incentives. to things making quickly. we've of -- areas from good And make a team we that sure you'll focus upfront that around done

we borne a macro through these of we And will what effect confidence cumulative early go any those offset of that the fruit year have as initiatives us have to industry. rest help that's weakness see gives the that the across already. Some and

Daniel Perlin

able saw have you particular to trends recent you'd wondering, would just as any the share be to I'm seeing of of you in bit have be you -- that July Definitely of indicate if in -- in cautious July? a quarter. materialize you and accelerate? on you through anything wondering, a consumer. of saw terms actually willing that through or that I'm And are kind follow-up, outlook the seeing kind just a are even hospitality may be you

Brandon Nussey

important And some the spending remember customers, consumer our last that quarter. shift to started of Yeah. happening about mix we talking of

some call, Asha trends July, of kind not last as like anything, July those stable to on we the seen on. we've shift any of in out so So you into from heard previously. quarter hospitality actually certain categories seen earlier. continued retail a and That anything other started from spending little retail of see we've QX, categories into more consumer different looks -- categories really. If our

been of about customer a with side. now. yeah, a just So the important everybody is the in we retail dealing months few We've base, for as macro about think that's lot that on our worried what actually

Operator

Next, with we Truist have Andrew Securities. Jeffrey

Andrew Jeffrey

little wanted appreciate on ask of focus. bit taking the questions. to a about, kind the I I color I appreciate the Brandon. you customer

given which which what huge sense just international the be? some this frame itself industry, it maybe profile. TAM can the to your given be given in questions I'm the focused differentiate the the get try is more we around competition One footprint. of customers especially to and continues me? market, the going TAM and very think it's specific, to way the But more about you And of Lightspeed in up of certainly that makes context is wondering seem to after, the you're customer a your just that Can I things

Brandon Nussey

I'll take this maybe one.

retailers in number TAM million So, more is And planet. we've the million. have shared addressable we and higher you of you and know, on the restaurateurs XX at one and if where focused so view ones, there's the industries established our as operate a TAM look our we're X roughly times the about TAM, the of direct GMV the who

are there would retailers again where the mind, lot their of I as today. are And they So and a market that's the you that offline. I oh, at competitive there's and and addressable room -- this the especially business get much customer, so products a churn a about for I've large basically much also still And grow there's back on that the And I limited in-store, released companies businesses to to not in in news vast I a said needs you that the think the systems. we the is on you perfectly that's market times, systems. world at look the operate, they've because failure, is a of streets. look than capabilities number that post-COVID have legacy what that world. they're we the but think with online have bridge And where the have. technology the are of we are restaurateurs, lot we latest world. the on the the simple, that And focusing is The are what around ever in very get very beauty I more offer think think not majority omni-channel have streets It's prone that good this them TAM of aligned there -- at TAM. and that you been, of fit The to majority those still segment very workflows when we and get of forever, argue they today, legacy

Andrew Jeffrey

Okay.

based change like. this very no your customer profile, in TAM no kind on it of focused modification So sounds or

Brandon Nussey

and strategy. doubling own, No, our attracting the the customers. know we're down absolutely. and know right to that we profile of no, want on We We segments

Andrew Jeffrey

Okay. just sort And also corollary. then of a

it some One the because sounds the the nature ability is And about year-and-a-half, of of of the companies to the has things that higher of acquired just than on how acquired think growth for businesses year, bought those past them in maybe etcetera, talked you've Lightspeed same-store Just a sense of last [Upserve], are and the like those businesses. accelerate churn business? it businesses in from might Can the customers past metric in in them. you I in something is some the sales have or talk have acquisitions. acquired about maybe been after of that ShopKeep, you merchants doing integrated you keep those

Jean-Paul Chauvet

Yeah.

adds have gross So net and adds the and where adds. the we're net you that's how presenting

the in Germany of also bit came that customers business at in do. nice course, with came of But thing the they a were tiny that And of very give a in of what not all with of were interested line Gastrofix customers acquisition, not do. they Brandon shared a valuable core a with to customers color the what number in -- come retailers. But are have we they If needed with Vend, that of customers we we and but on you that are a we majority lot every are the Same time line, to happened come. I'll with you basically customers that, of share an to us. reality do we look fair little

us is interesting again, interested segment highest on down company, or grocery stores think in I that one came to that's and the good really where us that's within for business. the of this we segment not with So not to want because, like to we it's were the we a our them see interesting double every and churn

in to that we're churn to so strong not acquisition. the segments down let to you're then see double churn are the that's see you'll what going And the to customers really us to are And us going you're that very from interesting see is going and them on heightened us.

when at mean, that look at the higher. But you that at we the if that interesting much So not fairly with of customers they're expected, churn is are lower. is churn much churn, in are to you segments line if within churn, the us, the much us, churn very look had interesting to I And what you good at look a level.

Operator

Josh Beck from comes KeyBanc. question next Your with

Josh Beck

penetration in of bigger pace of it jumps seems that the Payments. was about ask like It to wanted we've sequentially, I thing the seen. was One one Yeah.

respect read curious maybe to if there. back out there's platforms call to So any or into of the Just flagship the impact other? that anything with

Brandon Nussey

Yeah.

a and bit, under of top that doing sure So meant of on our of end that the things that we've about been the control make sort we well. attach talked Josh, focusing are we to little some funnel

Our flagship attach strong really see rates and retail we hospital, products there. in

get have this You're way then bring opportunity our as all base And our they up taken how a well. quickly focus sure and that customers. quickly it ARPU, to how we how initiatives and do ARPU inside those, existing landed -- our on as our we the of transactional to of new number ARPU tremendous seeing aggregate also We've in just make through convert to store we've we we well. show

So for initiatives the yes, to progress more some but outcomes us. lot of pleased some the those in do, on pretty I'm a good on quarter with early Obviously, that.

Jean-Paul Chauvet

Australia customers. and a Europe delay launched of recently the always we -- between the flow and you moment And is control selling here there's comment start on Payments. a then well whole you Brandon, Maybe,

seeing think right and delivering a here, and I just at of as and result the onboarding globally, what Payments you're the selling pace. So company processing

that's for that us, the why think by we're I progress so very here. encouraged And

Josh Beck

follow growth. Obviously, towards lot I wanted XX%. that's then on of That it was sense. the right of believe makes I your And model. middle the a also to longer-term up organic

than for of growth the should curious right be in mid-XXs forward. better kind -- imply expect XX% on quarter, up really on think Is location about? but guidance, so the bit sorry, that think we that how a that I think ARPU around growth framing us it don't I moving mid-XXs would algorithm just to side. the I was the little

Asha Bakshani

are an that totally, we've look in success to confident Hey is Brandon right Josh. basis. despite thing right And Yeah, QX Payments One that that initiatives last the continued with that. committed were of strong. for quarter a very should on wary We growth organic at the strong And year-over-year about or and the is year in want is XX% the to and is so able XX% JP the middle XX% an to be organic had last XX% annual XX% that we that And the talked that of both verticals see way of strong exceptional year. XX% far, we that, public in launched, to we guidance. Lightspeed where to grow uptick had we given year. We've remind it. to we we

So that's definitely the right way to look at it.

Operator

with Securities. comes Bauch question from Andrew Nico Next SMBC

Andrew Bauch

about to year that full early can to does BXB the feedback traction? or clients. we that the Just that full gaining network of hearing you when year, more consider you're contributions guys start in anticipate guide touch And upon the the of from thinking context from in some this wanted the of kind any and

Jean-Paul Chauvet

Yeah.

this one. maybe I'll address So

year, that again, we're BXB competitive and a did we expecting So start will. BXC is we're what to much revenues of going when by for we to an us forecast expecting lot the see building not way, we network. more our the you next if as over year where investment network platform, And are this for is expecting a is, from said, revenue. what time, we're The

doing instead of order, a very here, have videos front, businesses. order now for we enable we're of access then enabled now are doing Lightspeed an to now And is on is being on pretty pictures integrated manually. consolidated of launch, the the descriptions And to did new brands basis which side just ordering So items what small the and now luxury they the sell-through stores what also we're that the to platform. an that, anybody into we the on the automated is order game-changing. enabling flip new on for brands and it do store for the from integrated clear we've We

them through have basically the what were to and we're SMB So enabling to network do they an of consumers. is sell to as feedback selling directly level same

on that so brands order. can of is and it So we the just the learn brand is them, we approach first can we're us, take the for that value. is And for because and for value that for makes now the And iterate now, value this time is create them to key step within owner saves decided far store real new the a so and seeing automated really view focused is for we and what that's can and sell-through. the there the it ton we

one. want sports not more Now luxury to this and some But is do and outdoors we deploy we you'll step for to and as deploy brands, we but us, then year, a want to other Lightspeed, go verticals strong about that forward service just try hear this are in and verticals, repairs.

So building right we plumbing that's now plans that done. we are now the have the

and a right, anything. are not our of and This are if probably customers. hear we going going We progressing feedback. again, few zone before have because really customers the verticals to where it's have some we But with the do next game-changing horizon building on what and quarters plan first a We're can from the that for solve there. using we an this expecting when, investment problem us in seeing think a to But we now us start we'll it, revenues. months we very we you are being clear, more XX for be is start material tackle big we

Andrew Bauch

need see next platform. kind $X.X a your the a the afloat working can of base times? year know now, things the cash Yeah, in in additional stickiness I solution uncertain million as over business XX% the Where absolutely, and advances, going that definitely quarter-over-quarter. up do small right capital of keep may it to that you but it's guys in more drives piece be really

Brandon Nussey

That's of sticky. helps solid seen feedback the that. important there. make We've the our platform success part whole Yes. great evidence an portfolio merchants. had of We wonderful from get It us. for more We've

the into. customer very established low, that So this far, our loss we've base ratios have more launched reflecting been very,

So going keep growing this. to we're

it to at of a business, this very be mindful of continue of expect quite grow this clip, the still, part running but business healthy to We course, prudently.

Operator

with Your Richard Tse next Bank Financial. National question from

Richard Tse

With to now? months, at respect expect number next, you to call it the do Payments the XX it, accelerate increasing have given you of pace initiatives same or XX to actually underway over the continue

Brandon Nussey

our accelerate. volumes we economy The control, that's inside can tough Richard, we The that for baseline to and things base, what means to customer that expect predict. macro

our we'll cautious You customers amount continue heard that from a that of we we're control we that we're view of the rest can that base Asha new that on to see in through the the of number But we the onboard, terms how that things of that existing year. pretty accelerate. of looks convert, taking confident the

Richard Tse

the obviously, pipeline becoming the changed, that your Okay. profile your has of how And as responded? notably, you're How kind increased then business, sort much competition bigger. win guess, from landscape I the perspective, a of competitive and has of meaning rates

Jean-Paul Chauvet

Yes. know, we to one Look, I'll -- product. have take one. as we that strategy this you

hospitality. So the launched We've biggest but most product one we're product the U.S. which in one retail, in products, is us, market now for tackling now

well. And so is platform, what that tell payments. are retail few doing see higher We a We launched extremely see And we we the I rates, ARPU, we in launching better verticals. can launched if U.S. you look the this attachment we our are you see at verticals close better

because the Payments software obviously core we've in and very new well that's mingled platforms. and core -- So the the

and products. us So the at I is between more with rates we've competitive I our think launched on never new -- do broadened, we the look for mean, me, we products and The has this not the been gap see better way we we when it. competitors close

Richard Tse

quick Okay. And last just a here. one

operating about is OpEx EBITDA still Where come breakeven when to line? that of You're year. comes talking of next to leverage sort from going it most the

Asha Bakshani

our leverage past years. acquisitions the Richard. Thanks that comes few the over integration that really of of different we've made Most operating from

have Integration, the from comes we spend. disciplined at time, in integrate companies very that from we of these you've own two over and contracts. where so AWS rates. all volume, consolidate we heard not about also think opportunity the Cloud contracts as same last separate get Infrastructure things leverage from much you their When As contracts, but volume, those different had like all better people, companies only we're as our years. integrating our and we and we we more get we much us, But the and being teams rigorous bought get Google

more more those operating continue integration leverage. we're we as so to starting efforts, that of And see and

Operator

Next up, Securities. Chan we have with Daniel TD

Daniel Chan

year guidance. expectations. want -- your above came on in some color of The your to end Just QX the full get the revenue high

the rest wondering of for keep just So to the flat you're about despite it year what the QX? thinking

Asha Bakshani

on things So thanks, the on being Those as feel from there are we our to to that's Brandon, everything with is heard control, environment. about. very obviously respect how -- And transactional. Dan. how We're that good we quickly Payments our can platform, customers get we you've we macro which many in going under migrate that for customers cautious things control, are

those and see success these have We to we're continuing that with launched initiatives. recently, we've initiatives

spending, that spend, However, control. that make achieving. things sure and average an like inflation how want out our things we we guidance to we're hospitality retail GTV of reasons, will spend that these perspective, consumer there things cautious we're for impact like in in our guidance from are And very put out comfortable those

Daniel Chan

around caution on KPIs what I such you're And like seeing us, then you uncertainty? willingness macro any can rates, inbounds, conversion etcetera, adopt in color synergy, Just of new change in consumer with would share you guys -- be with merchants given helpful. around invest as Any appreciate spending, the gave the color technologies the or your there. to

Brandon Nussey

Yeah.

think So me, I it's simple. very for

need As recession, more we scarcity platforms go into have The basically vendors a of can less. with potentially, we do people. that hiring

I more live with what so less. feed -- -- doing think about exactly that's And there's is

platforms think seeing strong is for here, seeing what we're we're demand ours. I So really like

thing on see we to second vendors want The one. is to consolidate that

discounts people by very one of an we're might there's a acquisition. when So provider have and on have a they again, a happens aggressive proposing you might have then have cost Lightspeed provider. that maybe normally vendors What bundles And vendor and based and at the more then recession, on and to with you a e-com loyalty here, try bundle lower have Payments the and bundling platforms platform.

said, of the for of there's think a need who and there's lot me, I of and like as ours. a lot So cautious. people -- lot we greenfields there's -- But platforms we're a

Operator

Instructions]. [Operator

question apologize, Moschopoulos, Markets. BMO from Capital Next do Thanos comes from

Thanos Moschopoulos

exposure. significant had the headwind You Can obviously you speak from you're FX? to European seeing

ramp you've other So have like the that? FX of offset more you offsetting is to or some geographies module been implementing the adjustments fact and got of levers sort add-on in any pricing Payments it

Asha Bakshani

for Hey Thanos, the thanks question.

us, from for of the the the for majority such outside of day, just of fact Canadian currencies dollar expenditures the majority our end the FX the that the USD at So whereas are are as is USD Lightspeed great revenues our strengthening euro. operating USD, a in and

So overall strengthening USD is helpful for Lightspeed.

need we an your U.S. to dollar-denominated. but still are course, there keep revenues on impact to the Of is majority revenue point, in of that line, mind the our

the USD currencies strengthening on given overall. so revenue our a against that And fact, impact other X% caused X% to

huge a really deal So us at not time. for this

Thanos Moschopoulos

into And talked Great. before presence. you JP, in-person sales building out the on the back for platform about push then an new hospitality U.S. your and market hospitality the of

and of teams are whether in macro those building So this maybe out update point backdrop terms in local has in of investments at and the or not? sales your the plans timing terms you us just influenced where

Jean-Paul Chauvet

Yeah.

as last we with trying on with foot we were So the salespeople mentioned ground. time,

the better a the profile going with salespeople. is handfuls that I'm couple outbound started the LTV to And after. for report so we're of actual we initiative, of happy of over customers CAC that And

So we double down have decided to on that.

of continue now we to the and So pushing the and going that needle the on are LTV move size double front.

So we're adjusting the model.

our better when own unit seeing we're we with do marketing. we outbound we're For what happy and now, see, economics performance on

Operator

Morgan with Josh Next, we Stanley. have Baer

Joshua Baer

to transitions to versions other year. Just also Are flagship brand of be transitions legacy platforms Lightspeed, Lightspeed? all going end on expected One or the the at wanted ask complete the of those the to this

Jean-Paul Chauvet

Yeah.

back again, also cost what on saying that kind it So -- I to savings. touches of think, on Asha goes was

Lightspeed and brought And be all So what doing one brand. bringing is we're we're here going everybody everybody to flagship the to synergies, -- product. to

porting So as we're we're brand. the in getting them everywhere we're world, deploying the ready, products flagship the and

of see you have hospitality. -- is now So Upserve everything or What And next we're the is salespeople going one going to that, this all front, complete the our going brand and platform. U.S. sell be Lightspeed. move to step Lightspeed for quarters After out Zealand, And in anymore. to us is last the to Australia the done Upserve you'll the hospitality. you're retail we've going to on only in is the the the K-Series that is New new in the to but the see already next will for journey not now which under are

product to So and Lightspeed also we means to as product that for short for hospitality is, one to yes, one retail. your yes, go one the answer going question

Joshua Baer

total just year? of where by the base versions flagship of the the the that brand what percent outside today? product, transition, total then base, can And on about the the thinking customer go One of your end is And like

Jean-Paul Chauvet

Yeah.

utilities customers Step I going on conversion getting the So I here, on And we steps. one the see then will the and base management teams for enough think enough that focus those building moving on onto to new us progression of a very moment, one natural over. all that And we platform. platform. features there's get then new to functionality were think customers go-to-market from our clear we're and for account new new was

is We in everywhere top any I as we be, this, One but of the haven't on to brand our have soon mind mean, for going the data as shared world. this now

Operator

next from question Your comes with Coupland CIBC. Todd

Todd Coupland

it's reductions issues share seen impacting you your how guys and wondering the if around that any, We've about them plans, share with just quite if impacting tech are stock-based compensation you have headwind I'm down? thinking price and you how layoffs and prices share macro a any few compensation. hiring can

Jean-Paul Chauvet

Yeah.

simple. in. and jump address me, you So Asha, for it's also I'll Look, want one Brandon to if and this very

We the the and retailers our so a are this digital like lot of pure creating e-commerce physical restaurateurs to for is pure company. a demand is and or us. XX% of a of not The strength GMV world physical return

We this committed to XX% have hitting growth year. to XX% we a are forecast that

We are a being forecast cautious very cautious and the is it way. way we

incredible we're can our hit means to numbers, an continue investing. And customers need customers. and continue for us numbers. bringing we that those our need we experience going we to are So who hiring, to people it continue to confident deliver deliver need to hit to to We

for not that we're So now. in mindset

more gave the getting the hey, let's to getting really payments, customers focus a delivering higher on are ARPU of We we that more numbers in customers, the market. have mindset ensuring and on

Todd Coupland

citing And traveling. then as really quarter, follow-up, in in great. and you a the well hospitality performed That's people Europe

and the about summer us for we talking on is fall? headwinds the Europe, As concerns region into these think through anything you're that about, some think that for macro to there

Jean-Paul Chauvet

Yeah.

was I and answer And golf not again, well. not the well one was well. COVID for So in hospitality and well, was balanced. When work think, when other the We area is We work one me, Lightspeed doing doing even all retail that here doing we've hospital was is doing golf. through across well, continents. seen

seeing And for good X-Series really that's yeah, product, of GMV now new ton a launched maybe retail We're short in previous we there our is it's there much the demand really are rates so demand and demand UK I I Lightspeed for now. growth regions we're one. front. like think we're some also the what's and is and right answer, the a our now, Europe the interesting think And seeing hospitality platforms is product the than competitive a seeing mean, strong good. in which of strong We for more Europe, the And platform. in --

Operator

comes Chiodo with from Tim Credit question Next Suisse.

Timothy Chiodo

impact. and circle to back quick want real FX just guidance on the I the

I America appreciate more revenues of gross based. are the most North that completely Asha,

go to lesser a holds, gross think to down I profit but maybe when it revenue, net still extent. we or

was so context, FX revenue a can the for FX in context guidance for maintain in incremental still what the the FX in could impact maybe impact just the some you're that today? get the working the year? much to And give with impact Just and that you sense how what on able guide. we just of original So guidance is revenue

Asha Bakshani

Hey question. for thanks Tim, the

the are basis, coming mentioned the earlier, of our majority is mechanics Just of day, North at still of But the like slightly revenue on way revenue overall, America. I end net a by the right, different. you're Payments

net the majority is denominated. still we even revenue dollar So U.S. though diversified, the of are

our factored more range in that. in when very given to X%, and have we so FX, range, it's X%, And we a that guide than X% not small percent look really

Timothy Chiodo

incremental is brief suggests you my then confirm, back churn X,XXX X,XXX said I some to think of were trending from we the call fair And follow-up just of if is for non-core, legacy, ex-ShopKeep a the slightly want ARPU But think roughly the maybe roughly, higher. math I are out yes. to this lower to a locations characterization? core business, the sort ex-Gastrofix, the adds that Is let's smaller, it that that the of even of type mid-teens, in location I

Jean-Paul Chauvet

Yeah.

Operator

with Jeffries last Piper Sandler. Clarke Our question comes from

Clarke Jeffries

One brief me. for one

has there any change you the Just help in me seems maybe that rates, partners, to in could transaction take partners any there, GPV Lightspeed revenue? foot try integrated out to playing non-Lightspeed share approach As been the happening it to other negotiated payment but like with I typical there's agreements?? out pivot the a rev you dynamics Payments,

Brandon Nussey

No, nothing new there.

decline, continue. flows the Payments. have those prior core from core think Lightspeed continues are it, We you basically and business do those incremental to I call all through the to legacy, launch And expect revenue referral -- the of that partners our course, line same, we line and partners. to our that know of remain to of

So is that overall seeing. that's you're transaction-based that line that's might our while overall and declining this do what growing, revenue be overall what within perhaps we GTV line you're Payments seeing our and is have

Clarke Jeffries

kind feedback macro the change Any as initiatives the any squeeze receptivity good maybe of to year thinking you in. as of direct were you in rest you're Does could or I to the or one flagship if the of how in those know the have about field in approach then And or I seen way in in environment? Perfect. look investing part update releases. that initiatives? sales you go-to-market

Jean-Paul Chauvet

Yeah.

us only doing that course, for I and U.S. we're doing hospitality. the only in is, in reason on ground -- think why is hospitality to foot this the competitors the our the are the of And space. for

very all really have. economics very We with model space, it's a Close On we're monitored. very model. that the said we always rates understand the are predictable well the retail happy I very well.

a always So say ingredient. soup. us, We internally, doing know -- the for it's it's I almost like

is more losses if much into want front, to within the we EBITDA year. decide payback simple if to year. we breakeven And is for will fairly generate our grow because than months, the of customers. or profitable first getting next too are grow it's XX making So and balance that new from customer the again, important more, generating But more seriously we to marketing step committed because a us, more

take trying we no in the what see to we balanced to with So than we're of COVID recessions product. expected the go-to-market. customers, customers, it but approach getting they right most the one normally profile actually, actually change of buy to context want in or there's is there our and in see And more our difficulties

you Payments packages discount. that think well bundled think to geared here, more we're will every context buy And new the doing customer everything we more of previous bundled telecom the work pricing recession. in of from you I potential towards give and to towards I to where have the Lightspeed So can should associate a kind the operator approach of

Operator

you conference Thank for concluded. This participation. your has

disconnect. now may You

Lightspeed Commerce (LSPD) 4 Aug 222023 Q1 Earnings call transcript