Lightspeed Commerce Inc.

Speaker's remarks. There will be a Q&A session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, again, press the star 1. I would now like to turn the call over to Gus Papageorgiou. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to Lightspeed's fiscal Q4 2023 conference call. Joining me today are JP Chauvet, Lightspeed's Chief Executive Officer, and Asha Bhakshani, our Chief Financial Officer. 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 2023 results presentation available on our website, as well as in our filings with US and Canadian securities regulators. Also, our commentary today will include adjusted financial measures, which are non-IFRS measures and ratios. 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 SEC'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. Thanks for joining us this morning. Overall, I was very happy with our results this quarter. Revenue grew in line with our outlook. We achieved an organic revenue growth rate of 26%. Our GPD volumes were up by 70% year over year, and our adjusted EBITDA loss of 4.3 million came in significantly better than expected. As we enter fiscal 24, let me walk you through how we see this year unfolding. Since we went public on the Toronto Stock Exchange in 2019, we've been laser focused on becoming the go-to platform for sophisticated retailers and restaurateurs around the world. Delivering on the strategy meant building our payments platform from ground up. It meant making key strategic acquisitions. It meant honing on our sales and marketing organization to better target higher GTV customers. And earlier this year, it meant reorganizing how we operate to become a more nimble and streamlined company. I would say that we have spent the last four years establishing the foundations of this formidable company. And now fiscal 24 will be our year of execution. As we look to better align ourselves to the rule of 40 metrics, this fiscal year Lightspeed expects to, one, reach the benefits of having our one Lightspeed flagship product in market. We expect this to show up as an increased platform adoption among high GTV merchants higher ARPU, and more efficient and rapid product innovation. Two, accelerate revenue growth from financial services, including both Lightspeed Payments and Lightspeed Capital. Three, continue building products that solve our customers' problems and help grow their businesses, particularly with our supplier network. And four, accomplish our goal of becoming adjusted EBITDA break-even or better for the full fiscal year. In terms of One Lightspeed, I'm really happy to report that we have achieved our goal of going to market with our two flagship products, Lightspeed Retail and Lightspeed Restaurants, by the end of fiscal 23. In fact, at the end of Q4, 70% of new customer locations were on these flagship platforms, and with very few exceptions, our entire go-to-market team is now exclusively selling these two products. These industry-leading platforms are the best we've ever shipped, and offer our merchants unique features that help simplify and scale their businesses. We've seen their added value reflected directly in our customer wins this quarter. A few examples. In retail, we're pleased to welcome Eastern National, an entity that operates 127 locations across America's national parks. We're also thrilled to call Apricot Lane one of our own. With 150 locations, this California-based women's fashion franchise will be using our flagship offering with payments in 12 of their locations with plans to roll out across the entire network. I'm super excited to announce a four-year contract extension with SACS Fifth Avenue for our B2B platform, which SACS uses to automate their ordering and curating activities. In the world of hospitality, we were honored to sign two locations from Joël Robuchon Group, one in Morocco and one in their newest concept in Monaco. The Joël Robuchon Group maintains more Michelin star restaurants than any other organization in the world. We also welcomed Rosie O'Grady's, one of the busiest restaurants in New York Times Square, and Locanda Locatelli, a Michelin star restaurant located in a five-star Churchill Hotel in London. Both of these customers adopted Lightspeed restaurants with payments. We're also thrilled that Sandal's all-inclusive Caribbean resort in Jamaica, St. Lucia, and the Bahamas joined the Lightspeed family. The road to one Lightspeed was challenging but rewarding. Now that we're focused on two platforms instead of nine, Lightspeed is able to dedicate efforts to achieving more rapid innovation and more focused go-to-market output, which gives me confidence that we'll continue to grow our high GTV customer base. Speaking of which, this quarter alone, we delivered several key product features. We enabled self-serve capital advances in our flagship products and expanded the offering to several new geographies, including the UK and New Zealand. In hospitality, we brought even more value to our US customers with new features such as tip management and enhanced APIs, but I'm most excited about the launch of Tap to Pay on iPhone. This removes the need for expensive payment terminals and allows restaurants to serve their customers better and turn tables faster. Our customers are thrilled with these features, which we believe is unmatched by our competition. In retail, we went upmarket with new features that facilitate repairs and installations, making it easier than ever for merchants to streamline their business. With our service modules, retailers can now create, schedule, track, and sell services offering within the Lightspeed retail. And we continue to roll out our payments to all paid e-commerce standalone customers in the US with plans to expand into Canada in Q2. Moving on to our financial services. It's been four years since we launched our initial Lightspeed payments offering for retail customers in the US. And in that time, we've evolved into an exceptional global payments platform now available across three continents. Today, we've reached a point where if we want to provide our customers the best possible experience to scale their businesses, it is important for us to think about payments and POS platform as one unified product. We have heard from our merchants that they have seen noticeable uplift in their business operations when they use our entire suite of tools. That's why we launched Unified Payments and POS earlier this month. Moving forward, both new and existing customers will be asked to sign up for one cohesive and comprehensive product offering where Lightspeed Payments is embedded directly into their POS. For new customers globally, this change is immediate. For existing customers, this change will roll out gradually, starting with our retail customers in North America then expanding to hospitality and across all regions globally throughout the year. We've spent considerable time understanding how best to streamline the onboarding process and have made it as easy and compelling as possible by offering free hardware, free installation, competitive rates, and contract buyouts where necessary. In North America, Lightfeet Payments delivers lower rates than competing solutions the vast majority of the time, giving me confidence that we can save our customers money. but we also want to deliver a better service. One example of this is the fact that Lightspeed will now offer North American customers cash deposits within one business day in contrast to some competitors typically taking twice as long. Merchants who currently use our embedded payments and POS platforms have shown us the value we have added to their business. It saves them time and money, eliminates the need to reconcile separate systems, improves accuracies, reduces manual tasks, and gives them far better data insights into their business. It's clear to us that trying to use a modern software platform with legacy payment systems and outdated terminals holds them back and limits their experience they provide to their own customers. I think it's important to understand how much our customers love Lightspeed Payments. So here's some direct feedback from Silo and Crate, one of our restaurant customers in the UK.