Lightspeed Commerce Inc.

Good day and thank you for standing by. Welcome to the Lightspeed second quarter 2022 earnings conference call. At this time, all participants are in 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 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Goswami Pajarjo. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Lightspeed's fiscal Q2 2022 conference call. Joining me today are Dax De Silva, Lightspeed's founder and CEO, Brandon Nessie, Chief Financial Officer, and J.P. Chauvet, President of Lightspeed. After prepared remarks, we will open it up for your questions. We will make forward-looking statements in our call today that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Certain material factors and assumptions were applied in respect of conclusions, forecasts, and projections contained in these statements. We undertake no obligation to update these statements except as required by law. You should carefully review these factors, assumptions, risks, and uncertainties in our earnings press release issued earlier today our second quarter 2022 results presentation available on our website, as well as in our filings with U.S. and Canadian securities regulators. 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, on cedar.com, and on the FCC's Edgar system. In addition, our commentary today will include key performance indicators that help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. Such key performance indicators may be calculated in a manner different from similar key performance indicators used by other companies. And finally, note that because we report in U.S. dollars, all amounts discussed today are in U.S. dollars unless otherwise indicated. Before I turn it over to Dax, I want to take this opportunity to remind everyone that Lightspeed will be hosting its inaugural Capital Markets Day at the New York Stock Exchange on Tuesday, November 23rd, from 8 a.m. until noon. Please go to the Events and Presentations section of our IR site to register. We look forward to hosting as many of you as possible in New York City. With that, I will now turn it over to Dax.

Thanks, Gus. Good morning, everyone, and thank you for joining us today. As you will see from the press release we issued earlier today, Lightspeed had another strong quarter with revenue and adjusted EBITDA performance exceeding previously established guidance. Quarterly revenues, GTV, customer locations, and our payments penetration rate all reached all-time highs. At the same time, we continued to make progress on integrating our acquisitions, expanding the availability of Lightspeed payments, and launching our flagship hospitality offering, Lightspeed Restaurants. But before I move on to discussing these items in more detail, I would like to take a moment to address a short report that was recently issued on Lightspeed. As we stated in our press release on this matter, we found the report contained important inaccuracies and mischaracterizations, and also that it was misleading and clearly intended to benefit the author. I would like to note that Lightspeed has made a genuine and consistent effort to establish a trusted and transparent relationship with the investor community and we are always open to engaging with serious investors acting in good faith. Given the inaccuracies in this report, I want to address directly some of the key criticisms raised. First, since becoming a public company, we've always been consistent in how we account for revenue. Second, we've been transparent with the definitions of our key performance metrics, including ARPU, GTV, and customer locations throughout our history as a public company. We firmly believe that our KPIs allow investors to measure our operating performance and identify trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. Third, our organic growth rate, which we disclose, remains a positive driver of our overall business. Organic subscription and transaction-based revenue growth came in at 58% this quarter. Any suggestion that our business lacks organic growth is categorically false. And finally, we are proud of the acquisitions we have undertaken. They've brought us talented management teams and industry-leading technology, which we are integrating into the core platform. And in the case of our hospitality solution, has already shipped. In addition, these acquisitions have granted us scale, which helps tremendously in negotiating with our payments partners, investing in sales and R&D, and attracting strategic partners such as Google and OpenTable, And finally, they have given us access to a large and growing GTV, which creates opportunity for our payments offering. With that said, I will move on to our latest quarter. Lightspeed had another strong quarter with total revenue of $133.2 million, up 193% year-over-year, with organic subscription and transaction-based revenue up 58%. The company now maintains approximately 156,000 customer locations including approximately 3,000 brands brought on by new order. GTV more than doubled from the same quarter last year, coming in at $18.8 billion. Organic GTV growth was 39%. Payments penetration continued to increase during the quarter, with our payments penetration rate at 11%. We had several key customer wins in the quarter. Within hospitality, our newly released flagship platform, Light Food Restaurant, secured a contract for over 200 restaurant locations in Germany, which includes both the POS and payments. The original Pancake House, which signed on for 10 locations, was secured thanks to the Lightspeed Analytics functionality, as was Indigo Road, with 18 locations in South Carolina. And we also added the Locarno Film Festival in Switzerland, the annual film festival that has been running since 1946. Within retail, we secured the Australian Football Club with all AFL clubs now using Lightspeed. Cocoa Mat, the luxury mattress company, will be running its three stores in New York City using Lightspeed retail and payments. And last but not least, Group CH, with 16 locations, operates all of the Montreal Canadiens' official retail outlets, along with large events such as the Montreal Jazz Festival. Group CH will be using Lightspeed retail, analytics, payments, and e-commerce. In golf, we secured an additional seven locations with Pinnacle Golf through North Carolina, Salt Lake Country Golf with six locations, and the San Rafael Golf Course in Ile de Zard, Quebec. We also continued to extend the number of suppliers on our network with brands such as Crocs, Stussy, Alaia, and Augustinus Bader. In addition to continued strong operations in the quarter, the company also advanced some key strategic initiatives. First and foremost, after the quarter, LightSuite launches integrated hospitality platform, LightSuite Restaurant. Initially available in Europe, LightSuite Restaurant made its North American debut recently, and we will be rolling it out globally over the months ahead. LightSuite Restaurant combines the best of breed from multiple acquisitions to deliver an industry-leading solution. Second, in October, we closed the acquisition of Ecwid as planned, and I would like to welcome the Ecwid team aboard. Equid's headless commerce solution will allow Lightspeed to offer no compromise omnichannel experience that will not only help us attract new customers, but also help our existing customers become more successful with their omnichannel strategies. And finally, Lightspeed undertook a successful financing, raising gross proceeds of $823.5 million and issuing just under $8.9 million shares to help fund the company's operations and growth. Brandon is going to take you through the numbers more thoroughly but I wanted to touch on a few topics beforehand. Specifically, the official launch of our core hospitality platform, Lightspeed Restaurants, the integration of Ecwid as our core e-commerce solution, and the continued growth of our payments offering. First off, Lightspeed Restaurants. There's no better evidence of integrating our acquisitions than shipping product. And after the quarter, we announced the availability of our flagship hospitality platform, Lightspeed Restaurant. This offering brings together the best features of Lightspeed UpServe, Astrofix, Counta, and iCAN2 to deliver an industry-leading platform which we believe is second to none. But in addition to industry-leading analytics, reporting, inventory management, and ease of use, Lightspeed Restaurant was engineered with payments at its core. Adding payments greatly enhances the data insights of Lightspeed Restaurant, allowing restaurateurs to determine which menu items drive the highest guest retention and helping them differentiate between new and repeat customers in order to better tailor the experience. We believe the added insights the payments brings to the restaurant platform will make adopting payments with LightSuite Restaurant an easy decision. As I've mentioned in the past, LightSuite has no interest in maintaining a portfolio of brands and solutions. All of our acquisitions will be merged into two core flagship offerings, LightSuite Restaurant and LightSuite Retail. With the restaurant offering launched, we expect our integrated retail offering to be made available early in the new year. Staying with retail, last week we announced that the Ecwid solution is now fully integrated into our retail offerings. Our new and improved Lightspeed e-commerce was launched less than three months after the Ecwid deal closed and is now available to Lightspeed customers around the world. Lightspeed e-commerce will give our customers a no-compromise e-commerce experience, allowing them to extend their channels into popular social media platforms like Facebook and Instagram and integrate into popular digital marketplaces. We also announced a direct partnership with TikTok, allowing Lightspeed merchants to seamlessly access core functions of TikToks for Business Ads Manager without leaving our platform. E-commerce has evolved beyond being just a website, and Lightspeed's easy-to-use headless commerce offering allows merchants to reach consumers wherever they are, maximizing their reach while reducing business complexity. Payments had another great quarter, with transaction-based revenues now almost half of our overall revenues. and our payment penetration rate at 11% versus 5% for the same quarter last year. Earlier this week, we announced the availability of payments in Australia, addressing the last major region that was not covered by payments. We've committed to launching payments in all of our major international markets before the end of calendar 2021, and we are well on our way to meeting that goal. As a reminder, our international footprint is biased towards hospitality customers. With the availability of payments now in all of our key geographies and the newly launched hospitality solution that deeply embeds payments functionality, we expect to see adoption of payments increase considerably in our markets outside of North America. Before I hand it off to Brandon, I wanted to thank our dedicated and extremely hardworking employees at Lightspeed. This past 12-month period has been the most transformative in the company's history with five acquisitions, several new product launches, and a string of strong quarterly results not to mention weathering a global pandemic. Our success would not be possible without their efforts. And with that, I will hand it over to Brandon.