Lightspeed Commerce Inc.

Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Lightspeed fourth quarter and 2022 fiscal year end conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, Again, press star one. Thank you. Gus Papagiorgio, head of investor relations. You may begin your conference.

Thank you, operator, and good morning, everyone. Welcome to Lightspeed fiscal Q4 and full year 2022 conference call. Joining me today are J.P. Chauvet, Lightspeed CEO, Brandon Nussie, chief financial and operations officer, and Asha Bhakshani, our incoming CFO. After prepared remarks, we will open it up for your questions. We will make forward-looking statements on 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 fourth quarter and full year 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. 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 JP.

Thank you, Gus, and welcome everyone. Thank you for joining us this morning. Before I get started, I want to welcome some of our new members to our executive leadership team. Rani Hammond, who has recently joined Lightspeed as Chief People Officer, Asha Bhakshani, who has been promoted to Chief Financial Officer, and Brandon Nussie, who has also been promoted to Chief Operating Officer. I'm honored to be working with such brilliant executive team. Great companies are built by great people, and I'm confident that together, our senior executive team and our thousands of dedicated employees will continue to make Lightspeed an extraordinary company. And now onto the quarter. Lightspeed reported another strong quarter today and closed off another year of solid growth. In the quarter, Lightspeed delivered revenues of $147 million ahead of our previously established outlook. We experienced an overall revenue growth of 78% and GTV growth of 71%. This was our 13th quarter as a public company, and I'm proud of the fact that Lightspeed has been able to meet or exceed our revenue outlook in every quarter. Brand International will discuss the financials in greater details, but I want to address top three matters on my mind. Number one, the prospects for Lightspeed as we enter a post-pandemic world. Number two, the continued launch and success of our flagship offering, Lightspeed Restaurant and Lightspeed Retail. And finally, our path to profitability. With the world returning to in-person shopping and dining, we are seeing increased demand for omni-channel solutions. As a result, this March we had the strongest month ever for new business and customer locations. In hospitality, I was excited to see the following customers adopt the Lightspeed Restaurant platform. hawaiian poke bowl with 27 locations in belgium table a two mission star restaurant in paris ranked by forbes as one of the top 10 coolest restaurants in 2021 and 1858 caesar bar a toronto-based brand with three locations with payments in night feed retail we were happy to sign the following customers all with payments simply 10 with 46 locations a us-based fashion apparel retailer a five-location chain of jewelry stores in Virginia with estimated annual sales volume of over 40 million, Goldie's Locker Room with 21 locations in Wisconsin and Minnesota. We continue to see strength with mid-market customers, which are generally larger, more established customers that tend to carry higher ARPU and GTV, exhibit far less churn, and deliver superior livestock values. Our e-commerce solution also saw strong traction, recently partnering with France's largest mobile carrier, Orange, that will act as a distributor of the solution to potentially thousands of SMB customers in France. And we continue to expand our supplier network, adding brands such as Reebok, Eddie Bauer, and Intermix as partners and customers. As I look to the year ahead, I see several trends that are really encouraging. I think the most important of these is the return to in-person shopping and dining. We performed well during the pandemic because we were able to help our customers thrive online. But our solutions are primarily targeted for brick and mortar. And with the world reopening, merchants are ready to open new locations, develop new concepts, and invest in our technology. There is nothing more encouraging for me to see customers back in stores and restaurants. Today, omni-channel strategies are no longer optional. Yes, consumers are again gathering in stores and restaurants, but they are not going to forget the habits they developed during the pandemic. We believe trends like buying online and picking up in store or ordering ahead for restaurants are here to stay. Consumers have become more demanding in the past few years, and our merchants have to adapt. And we are in an excellent position to help them do so. The pandemic reinforced the notion that physical retailers need digital strategies, and this is an environment where Lightspeed can really shine. And finally, there is a global rollout of payments. When we began our fiscal 2022, payments was available in North America and seeing strong adoption with our retail merchants. A year later, Lightseat Payments is now available in all major markets, in both our retail and hospitality offering, in both card present and digital channels. We are one of the very few companies that have rolled out a global physical and digital payment solution. I'm very encouraged by the early signs we are seeing in international markets for our payments offering. In Europe, the proportion of new customers that contract for payments alongside their core software subscription is now similar to the rates we see in North American retail. Delivering on these trends takes a strong product offering, which I'm thrilled to dive into with more detail. But first, let me remind everyone of our strategy here. Lightspeed has no interest in maintaining multiple brands and product offerings. Our goal, which will be substantially recognized this year, is to be an all-market with these two core offerings, Lightspeed Restaurant and Lightspeed Retail. Earlier this month, we announced the release of our latest retail offering, Lightspeed Retail, bringing together the best aspects of Lightspeed, Venn, and Equit to our new flagship retail offerings. The new Lightspeed retail expands our availability to the Android platform, offers a truly headless commerce experience, completely reimagines the user interface, and of course, maintains industry-leading multi-store inventory management. Although our position in retail is very strong, we are far from being done. By integrating our supplier network into the offering, we will transform how SMBs work with their suppliers. I'm very excited about our progress here and look forward to making some announcements on this initiative in the not-too-distant future. In hospitality, we are continuing to see strong momentum with the global rollout of our new flagship Lightspeed restaurant, accounting for more than half of new customers in March. Our momentum continues to build and I'm encouraged by how this product is also driving payments uptakes. Finally, I want to touch on our path to profitability. Branded International will discuss our outlook for the year and will provide more details. As you will see, we expect to achieve our target organic subscription and transaction-based revenue growth of 35% to 40% in fiscal 23 and reach adjusted EBITDA profitability for the following fiscal year. Getting to profitability starts with strong unit economics. This has always been a priority for this company, and the trends we are seeing in the business are very supportive. We see good momentum in the mid-market, our flagship offering are showing strong evidence of boosting software ARPU, and global payments adoption is growing. Expanding software ARPU and growing payments penetration is very supportive of improving unit economics. When we went public, we committed to making payments a substantial portion of our revenue stream. In fiscal 2022, the transaction-based revenue is almost half of the total revenue. I believe that we have delivered on this commitment. We pursued an aggressive strategy with the goal of consolidating the best players in the industry and bringing game-changing technology to our customers. With our new flagship restaurant offering launched last year on time and the new retail omnichannel flagship recently making its debut slightly ahead of schedule, I believe we have also delivered on this commitment. It is very important to me that we do what we say we are going to do and continue to drive value for our customers and shareholders. And the next two big goals for me are the commercial availability of supplier network and getting to profitability. We have the team, operating discipline, resources and ambitions to make it happen. And now I'll pass it over to Brandon.