Lightspeed Commerce Inc.

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, press the star one again. For operator assistance throughout the call, please press star zero. And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Gus Papagiorgio, Head of Investor Relations, to begin the conference. Gus, over to you.

Thank you, operator, and good morning, everyone. Welcome to Lightspeed's fiscal Q2 2024 conference call. Joining me today are J.P. Chauvet, Lightspeed's Chief Executive Officer, and Asher Bakhshani, 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 second quarter 2024 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 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 on our earnings press release, which is available on our website, on CEDAR Plus, 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, everybody. This quarter, Lightspeed made great progress towards achieving our key goals for fiscal 24. Thanks to our powerful products and strong execution in our unified payments initiative, we delivered an excellent quarter with revenues of $230.3 million and 25% year-over-year growth. This is well ahead of our previously established revenue outlook of $210 to $215 million. We're making tremendous progress executing on our unified payments initiative with our GPV now exceeding 25% of our total GTV. And so the first time since we went public, we delivered positive adjusted EBITDA in the quarter. This again was well ahead of our previously established adjusted EBITDA outlook of negative 4 million and positions us well to meet our goals of adjusted EBITDA break even or better for fiscal year 24. At the beginning of this year, I promised that fiscal year 24 will be the year of execution. The results from this quarter firmly show that we are delivering on that promise. As a reminder, let me walk you through our main goals for the fiscal year. One, reap the benefits of One Lightspeed. Two, accelerate revenue growth from financial services, including Lightspeed Payments and Lightspeed Capital. Three, continue building products that solve our customers' problems. and help them run their businesses, particularly with our supplier network. And four, accomplish our goal of achieving adjusted EBITDA breakeven or better for the full fiscal year. In terms of One Lightspeed, we continue to see good progress. By the end of this quarter, excluding Ecwid customers, our new flagship products accounted for approximately one-third of overall customer locations. GTV from flagships grew 35% year-over-year, and total revenue for flagships grew 124% year over year. Our flagships are now code complete, compliant with regional regulatory requirements, and will very soon be available in all of our global markets. In fact, our two flagship products are the best code base we've ever delivered. With these two products in market, the competitive gap between our flagships and others in the market continues to grow. Delivering two industry-leading products in the last two years would not have been possible without the M&A strategy we deployed. We moved quickly to integrate some of the best technologies from our nine acquisitions into the flagships, such as industry-leading analytics from Upserve, ingredients management from Counter, advanced blockchain technology from ICAN2, and best-in-class headless commerce from Ecwid. We simply could not have developed these features on our own in such a short period of time. In part, thanks to these acquisitions, we have developed an organization with unparalleled depth of management and technical talent in these game-changing products. With industry-leading products that have scale and global reach combined with our continuously improving financial performance, Lightspeed is in its strongest position ever. This is helping us attract and win more high-GDP customers. Let me share a few examples of these who've joined Lightspeed in the last quarter. In hospitality, we were incredibly honored to add the iconic Joël Robuchon International as one of our newest customers. With dozens of owned and operated locations across Europe, North America, the Middle East, and Asia, the Joël Robuchon Group has been awarded more Michelin stars than any other restaurant group in the world, with over 15 current Michelin stars. They came to us looking for a global player that could manage their complex workflows under one integrated software and payment platform. We were also happy to add Gustoso Group in Germany, with over 100 restaurants operating under six different brands. We started rollout of a number of their restaurants on Lightspeed Restaurant. In the US, after a very competitive sales process, we signed seven locations with Indiana State Park Inns for both Lightspeed Restaurant and payments. And in Sydney, Australia, we were selected by Kensington Street, operator of nine Asian-inspired food vendors, two bars, two event spaces, and six full-service restaurants. Kensington Street is the exact type of complex SMB that can leverage the full power of our products to simplify and scale their operations. Kensington Street's management chose Lightspeed to deliver more data-driven decisions for their business. On the retail front, we had an incredible quarter. Lightspeed Retail is emerging as the leading cloud platform for complex multi-location, high-GTV retailers the world over. Notable wins this quarter included Getboards, the ski and snowboard retailer with three locations across California, wanted to upgrade from their legacy solution, and they've now adopted both Lightbeat retail and payments. Bluestar Eyewear, the independent high-end eyewear retail who chose Lightbeat to power their businesses across its four locations in Australia. And finally, Les Jumelles in Antwerp, Belgium, With 250,000 Instagram followers, this women's apparel boutique chose Lightspeed to power their two locations. In golf, we added two big wins. After an extensive due diligence process, we were selected by Great Life Golf to power 14 of their 56 U.S. locations. And Bluestar Resorts & Golf selected Lightspeed for all 15 of its Arizona courses. Both organizations will be using Lightspeed Restaurant and Retail in addition to golf to manage their dining facilities ProShop, as well as Lightspeed Payments. And finally, we were able to sign up several new brands to our supplier network, including Jordache, Ashley Lauren, and Esprit. Moving on to Unified Payments, we made great progress this quarter. Although too early to comment on the international rollout, I want to specifically call out our North American teams for their excellent execution this quarter. We onboarded a record number of payments customers, and September was our strongest month ever. I shared earlier this year that we were prepared for potential bumps along the way as we launched Unified Payments. Our biggest concern was that we would see higher customer churn as we made payments mandatory. Fortunately, this risk has not materialized. On the contrary, our churn levels remain very much in line with our historical ranges. We were confident that our customers would much prefer Lightspeed's Unified Commerce platform over their commoditized and dated payment solutions. And we were right. Lightspeed's commerce platform is at the core of our customers' operations. We act very much like an ERP system, managing inventory, employees, customer loyalty, payments, and accounting integrations, while also offering valuable data insights into their business. Changing your POS is far more complex and disruptive than changing payments provider. It's only when you combine payments with software that you can create real value for your customers. I'm also very encouraged that our close rates for new customers remain very consistent, and in many cases, better than historical levels. New customers understand the benefits of buying a unified solution. Our new customer funnel remains strong, even as we become more rigorous on marketing spend. Our ARPU is the highest it's ever been, given the impact of flagships commanding higher ARPU, unified payments, as well as our focus on targeting higher GTV customers. This is the best case scenario for us. close rates remaining consistent with historical levels while ARPU on new business is growing. I think it's safe to say that Unified Payments has been a great success in North America and we are now turning our attention to international markets. Market dynamics internationally are different than North America. European SMBs have a closer association with their regional banks. However, the value proposition of Unified Payments is the same no matter where our customers are located. There is absolutely no reason for our customers to isolate their payments offering from their software. An embedded solution allows them to reduce the time and effort needed to reconcile two disparate systems. It delivers far greater data insights into their business, and more often than not, comes at minimal to no additional cost. Although we have more to do, I am very encouraged by what we saw this quarter. Our new business is thriving, our teams are onboarding a record number of customers to payments, and churn remains in line with historical levels. Our focus now will be to keep the momentum going through the rest of the year as we expand this effort internationally. On the product side, we continue to deliver innovative features that help our customers scale their businesses. In hospitality, we created Smart Items, an AI tool that creates menu descriptions and even generates images for online ordering. Compelling descriptions and images can increase revenue for restaurants but many of our customers lack the time and expertise to properly develop these. We believe smart items can help them solve this problem and make our restaurant's customers more successful. It will also translate menu items into other languages, such as French or Spanish. It is also worth repeating that our Advanced Insights module is now fully available for our hospitality customers globally. We solve for regional regulatory and privacy requirements which our global scale and footprint are uniquely positioned to address. Advanced Insights has proven very popular with our North American customers, and because it requires payments in order to collect data, we believe it will be a driver of both higher ARPU and higher payments adoption for hospitality customers in EMEA and APAC. Delivering an advanced solution like Insights to a global audience requires a broad range of expertise that we do not believe any other organization can match. In retail, the company delivered new omnichannel capabilities for multi-location merchants that accommodate complex workflows around inventory management for physical and digital customers. For new order, by Lightspeed, we enabled vertical assortments, which allows brands with their own retail locations to merchandise, assort, and visualize their own products. Lastly, in terms of profitability, again, we are committed to being adjusted EBITDA breakeven or better in fiscal 24. This quarter, we came in with a positive adjusted EBITDA ahead of our outlook, which places us in an excellent position to meet our goal of breakeven or better for the fiscal year. I believe we will continue to drive operating leverage in our business. We are expanding financial services such as payments and capital, and we're seeing our strongest ever unit economics with new customers. As we continue to monetize more GTV, we expect to better align ourselves to the rule of 40 metrics focusing on balancing both sustained growth and profitability. And we are at the right path to get us there. I will now turn the call over to Asha to take us through the quarterly results and provide outlook.