Lightspeed Commerce Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Lightspeed First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star, then the number 1 on your telephone. Please be advised that today's call is being recorded. And at this time, I would like to turn the conference over to our speaker, Mr. Chris Mamone. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Welcome to Lightspeed's fiscal first quarter 2021 conference call. Joining me today are Dax DeSilva, Lightspeed's founder and CEO, Brandon Nussie, chief financial officer, and J.P. Chauvet, president of Lightspeed. After prepared remarks, we will open it up to your questions. we will make forward-looking statements on our call today that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements except as required by law. You can read about these risks and uncertainties in our earnings press release issued earlier today, as well as in our filings with Canadian Securities Regulatory Authority. Also, our commentary today will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Reconciliations between the two can be found in our earnings press release, which is available on our website and at cgr.com. And finally, note that because we report in U.S. dollars, all amounts discussed today are in U.S. dollars unless otherwise indicated. With that, I will now turn the call over to Dak.

Thanks, Chris. Our solid execution this past quarter under historically challenging conditions worldwide, helped to cement Lightspeed's position as a leading cloud-based omni-channel solution in our segment. Nimble and innovative SMBs rising to the occasion are abandoning inadequate legacy systems in both the merchant points of sale and payment spaces in favor of Lightspeed's modern cloud-based platforms, gaining these businesses the capability to run digital strategies alongside physical ones in a simple and integrated manner. The global pandemic has altered consumer behavior in everlasting ways, and accelerated the next three to five years' worth of adoption of omnichannel strategies for SMBs in both the retail and hospitality sectors. The digital transformation forced by COVID-19 has become a permanent state of business. Retailers have doubled down on a shift to omnichannel that was already underway before the pandemic. Plans to overhaul operations in the next few years were accelerated and businesses were brought online overnight. The hospitality sector from quick surf to fine dining, is in a similar state of digital transformation, driven by new consumer needs. As new challenges and consumer behaviors emerge, so does the opportunity for small and medium-sized businesses worldwide to build truly end-to-end, multi-channel shopping and dining experiences with Lightspeed. It is a moment to be seized on, facilitated only by the right technology. Lightspeed has been a clear beneficiary of these digitization tailwinds. Total revenue grew by 51% compared to the same quarter a year ago and topped $36 million. More than 90% of this base consists of recurring software and payments revenue, which grew 57% during the first quarter compared to the same quarter a year ago. The scale and diversity of our customer base has served us well in light of the pace of recovery and reopening markets. As LightSeed's core business has seen a return to levels ahead of last year, driven by strong merchant adoption of omnichannel software and integrated payments. According to our internal data, Lightspeed retail merchants grew their GTV more than four to six times faster year over year than the industry average retail GTV in 2019. All indications are that our merchants have continued to enjoy this level of success during the pandemic. We've seen retail GTV continue to accelerate through June, and our restaurant GTV has bounced back sharply. evidence that the resilience of our customer base remains strong. Our customers are well-established, innovative industry leaders, ready to evolve with the new commerce economy, inspired to amplify their sales channels and eager to use technology to future-proof their business for these increasingly digital and virtual realities. Fortunately, this inevitable shift is happening at a time when product innovation at light speed is accelerating, ensuring that we have the right set of solutions in place, as our customers rely on us more than ever to enable their digitization journeys. On the retail omnichannel front, we rolled out major improvements to our digital checkout experience, including the availability of our new mobile tap custom hardware and software mobile POS solution, which extends the sales perimeter to anywhere inside the store, as well as outside to curbside pickup. And we're now offering digital wallet which supports a broad range of payment methods globally in a secure and seamless one-click e-commerce checkout experience, driving improved conversion online. Our retail POS app saw further upgrades to its analytics capability with the rollout of Analytics Core, a slimmed-down version of our analytics module at a lower price point for customers that, for now, don't require the full solution. By offering a tiered product for reporting, it gives our merchants greater options to grow with Lightspeed at the pace of their business. This further builds upon the inventory management and point-of-sale upgrades we rolled out throughout this past fiscal year to solidify our status as the premier solution in cloud-based retail POS. In this regard, we believe no other retail system operates with the power, depth, and sophistication of features required by our segment of merchants, further appealing also to merchants that may have fewer requirements at the outset but want to do more with technology to differentiate their business in this environment. There's a ton happening also within restaurant. First, I'm pleased to share that we've launched our order ahead capability, featuring enhanced pickup and delivery tools and other integrations. Also, our new e-commerce for restaurant offering is now in beta and features a complete redesign to better fit the evolving needs of customers. Yet another example of rapid innovation from Lightspeed and Hospitality Vertical. Finally, the full convergence of our hospitality engineering teams globally into our flagship restaurant POS product will be completed on schedule during the current quarter. A fully redesigned hospitality system delivering on the Lightspeed promise of greatly simplifying complex hospitality workflows will be rolled out to all of our regions methodically over the next several months. Last quarter, we announced our new omni-channel loyalty customer engagement tool to help Lightspeed merchants across our entire landscape foster personalized, targeted relationships cohesively within their clientele across channels In a moment where this means more to business success than ever, we've seen strong initial adoption of this new product. As our customers begin to switch focus from stabilizing their operations today to optimizing their future growth, we're very excited to be announcing the initial availability of Lightspeed Capital for our U.S. retail customer base. For those customers utilizing Lightspeed Payments, our new capital offering will assist these SMBs with fast access to up to $50,000 in funds per location, that they can use to invest in their businesses much more quickly than they'd be able to accomplish with traditional banks. At Leipzig Capital, SMBs benefit from a much shorter application and eligibility process versus all of the bureaucracy and paperwork they encounter with traditional financial institutions. Our pre-integration with these customer systems provides us with the data and comfort to offer frictionless approval standards. This streamlined process is very important during the pandemic. as it gives SMBs capacity to be nimble and strategic as the retail industry undergoes significant transformation. In addition to the foregoing, we will continue investing through this period to ensure our technology remains at the cutting edge of the industry and that we remain the clear leader for our focused market segments. The importance of our work has never been more crucial, and as such, the market opportunity for Lightspeed has never been bigger. That said, the importance of going to market globally as one Lightspeed is paramount. To this end, we've made great progress in terms of the major rebranding initiative we've had underway to fold in the systems, processes, and feature sets of our acquired platforms as one Lightspeed, offering all core products in all core markets. At this stage, both the ChronoGolf and iCAN2 brands have been completely rebranded as Lightspeed. We expect to complete this same exercise for CalTA later this summer and for Gastrofix to achieve this status by the end of the calendar year. I'd now like to highlight some recent successes within our partner strategy as yet another lever we are utilizing to bolster our go-to-market approach. LightSeed works with many great partners to help our complex SMB customers manage all aspects of commerce in their business. We're thrilled to welcome Google into the Lightspeed ecosystem as one of our newest strategic partners. With Google, we're working on several broad-based initiatives to make physical businesses more discoverable in the digital space. The first of these initiatives is the Google My Business Advanced Profile Listing solution. Currently in beta, Google My Business greatly enhances the speed to market for Lightspeed customers, compressing the lead time it takes to get a professional business listing set up and running online from what had been a multi-week process down to just a few days. Before I conclude my remarks, I would like to once again thank the Lightspeed family for the tenacity they have shown over the last few months. They continue to deliver for our merchants every single day. They live and breathe our company mission of bringing cities and communities to life through the economic empowerment of SMBs. They believe deeply that all communities and all entrepreneurs deserve to be successful. That is why I founded Lightspeed 15 years ago. The team I did so with was unique as we identified entirely as members of the LGBTQIA plus community. We built the principles of diversity and inclusion into the very DNA of this company. This year, our inaugural global diversity and inclusion survey showed that nearly one in five Lightspeeders identify as LGBTQIA plus. Nine out of 10 Lightspeeders report that they felt comfortable talking about their culture and background with their colleagues, while 83% of Lightspeeders feel that they can be their authentic selves in the workplace. I'm exceptionally proud of the culture and family we have fostered here at Lightspeed, especially during the last few challenging months. In closing, the coronavirus pandemic has made it clear to our merchants that the cloud-based omni-channel solution Lightspeed provides is no longer simply a competitive advantage, but a business imperative as we move forward. Our merchants have demonstrated that they are the thought leaders that will redesign the retail and hospitality experiences of the future to shore up the economies and livelihoods of the communities that love and appreciate them now more than ever. With that, I'll turn it over to Brandon to review the quarter and our recent business trends.