Lightspeed Commerce Inc.

Thank you for standing by. My name is Jael and I will be your conference operator today. At this time, I would like to welcome everyone to the Lightspeed first quarter 2027 earnings 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, simply press star one again. I would now like to turn the conference over to Gus Papageorgiou, Head of Investor Relations. You may begin.

Thank you, operator, and good morning, everyone. Welcome to Lightspeed's fiscal Q1 2027 conference call. Joining me today are Dax Dasilva, Lightspeed's founder and CEO, Asha Hotchandani, Lightspeed CFO, and Gabriel Benavides, Lightspeed's Chief Revenue Officer. After prepared remarks from Dax and Asha, 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 that 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 first quarter fiscal 2027 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 in our earnings press release which is available on our website on Cedar Plus and on the SEC's Edgar System. 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 Dax.

Good morning, everyone, and thank you for joining us. Before we get started, I would like to welcome Lightspeed's Chief Revenue Officer, Gabriel Benavidez, on the call today. Six months into his new role, Gabe is having a tremendous impact on our go-to-market efforts. has already signed one of the largest partnership deals in the company's history, brought on strong new talent, and restructured our entire go-to-market team. I thought it would be helpful to have Gabe in our Q&A session so you can hear about our go-to-market momentum directly from him. Fiscal 2027 started off strong for Lightspeed, with the company surpassing its revenue outlook. In Q1, on an organic year-over-year basis, we delivered revenue and Gross Profit of $139 million, up 12%. Adjusted EBITDA of $18 million came in within our outlook range. Software growth accelerated to 8%, and payments penetration was very strong at 44%, up from 40% a year ago on an organic basis. Our performance was driven by strong execution in our growth engines, where we saw total revenue up 20%, GTV up 14%, customer locations up 10%, and payments penetration at 49% up from 45% last year. Thanks to our healthy performance and growing confidence in our strategy and operations, we returned approximately $86 million through share repurchases in the quarter as part of our commitment to return capital to shareholders. Last year, we launched our Refresh Strategy, sharpening our focus and concentrating our product and go-to-market resources on our two growth markets, retail in North America and hospitality in Europe. With the foundations of that transformation now firmly in place, year two is about pressing our advantage and executing with even greater discipline to drive stronger results. I'll walk through the progress we made this quarter and lay out some of the initiatives we're driving to accelerate our performance further. As always, I'll organize my comments around our three stated priorities. One, growing customer locations in our growth engines. Two, expanding subscription ARPU. And three, improving adjusted EBITDA and free cash flow. Let me start with customer locations in our growth engines. Total growth engine customer locations increased by approximately 10% year-over-year to a total of 99,000. Our strategy to create durable growth by focusing on higher quality agreements with ICP customers extends to our partner ecosystem. In Q1, a legacy white label partnership agreement was terminated, resulting in the removal of approximately 500 low RPRO locations from our customer base. Total customer locations, including growth and efficiency markets, were 146,000 at the end of the quarter, after giving effect to the divestiture of the non-core Abserve US Hospitality product line. We remain focused on winning more sophisticated multi-location SMBs with complex needs, the customer's best position to take advantage of LightSeed's full software suite. Examples include Adorn Boutique, which required advanced inventory management across multiple locations in Texas, and Synergy Sportswear, which operates seven locations and was already a user of New Order by Lightspeed before recognizing the benefit of the Lightspeed POS with wholesale built right in. Attracting existing New Order customers to the Lightspeed POS has become a leading driver of new retail customer locations for our recently expanded outbound sales teams. Also during the quarter, we were pleased to add brands including Lafayette 148, Slow Tide, and Head Golf to New Order. providing them with a modern, collaborative wholesale experience while enhancing their product discoverability across thousands of Lightspeed retailers. As we continue to expand the number of brands on your order, we deepen the value of our Lightspeed wholesale network for retail customers by making it easier to discover and purchase from the brands that matter most to them, all within a single platform. This strengthens our flywheel. More brands attract more retailers, and more retailers attract more brands. In Europe, we continue to build on our leading position in hospitality, driven by a product offering and go-to-market motion that we believe are unmatched. We added 19 locations of the Dutch chain Lansch Broodhuis, which needed a platform that could support table service, bakery, and kitchen workflows while centralizing management. Our product strength was reinforced by our robust partner ecosystem, an advantage that carries across our European markets. In the UK, we welcome 17 locations of Africana Perry Kitchen and Grill, a growing African-inspired restaurant chain. Golf also remains a strong vertical for Lightspeed. This quarter, we signed Encore Leisure Group, 16 locations across the US, and the prestigious Royal Latam Golf Club in Belgium. Combining our two flagship platforms, Lightspeed Retail and Lightspeed Restaurant, allows us to address this highly lucrative and Significant Growth Market. High-quality customer growth remains one of our top priorities and we've launched several new initiatives to sharpen how we target, onboard and support the right customers for Lightspeed. The first is improving seller productivity. By modernizing our go-to-market systems and processes, rolling out better training and enablement and optimizing our organizational structure, we expect to increase seller productivity which will allow us to drive revenue growth without scaling costs at the same rate. In addition, we are refreshing our partner and channel strategies. Strengthening and growing our ecosystem will help drive efficient revenue growth by expanding product availability, driving more value for our customers, partners, and Lightspeed while improving retention and lowering churn. Turning to software revenue in our group, Organic year-over-year software revenue growth accelerated from 6% last quarter to 8% this quarter. It was encouraging to see software growth accelerate this quarter, driven by continued efforts on upselling, sharper focus on ITP customers, a stronger end-to-end customer journey, and a continued stream of new software features. In this quarter, we continued to deliver new innovations across our flagship platforms of light-seed retail and light-seed restaurants, which is key for long-term software ARPU growth. In retail, we launched more AI enhancements, enabling our merchants to build blogs and websites faster and drive more traffic to their sites. Our new Klaviyo integration saves time building personalized marketing campaigns. And we simplified the omnichannel experience, enhanced LightSeed scanners in-store checkout, and rolled out better visibility into orders revenue and the most popular SKUs on New Order by Lightspeed. In hospitality, the latest upgrades to Lightspeed AI allow merchants to simply ask a question and get instant reports, charts, and insights about their restaurant, as well as manage operational checklists. And for multi-location restaurants, our new locations manager manages menus and syncs updates across every venue in just a few clicks. Our AI features have been well received by our customers. Of all the latest releases on LightSeed Restaurant, LightSeed AI is tracking as one of the fastest adopted by users, signaling an opportunity to expand agentic capabilities for restaurants. We are moving away from AI that just answers questions to specialized agents that can help run your business, to AI that can interpret and analyze data that actively suggests actions that can grow revenues or cut costs, such as reordering inventory of popular items, Marking down inventory that is not selling and switching suppliers when prices increase. Imagine that our merchants could hire someone with decades of knowledge about what makes their business succeed. We have that data and that knowledge, and our AI improvements are making it more accessible to our customers. We believe no one is better positioned to deliver AI-powered solutions that can help our customers run and grow their businesses. Our SMB and mid-market merchants' priority is to build better businesses, not build their own software. Now we're turning to profitability. Asha will take you through the numbers in detail, but overall, I want to stress that in the second year of our transformation, we are very focused on improving profitability, and in particular, increasing free cash flow. Our revenue growth remains strong, so delivering on our profitability goals comes down to disciplined execution. To that end, we have undertaken some key initiatives. We are continuing to rationalize all of our costs across the organization. The deployment of AI tools and a more focused strategy have allowed us to concentrate our efforts and improve productivity. This has led to lower headcount requirements, particularly in product development. We've also stepped up our efforts to monetize our back book, which was a driver of our improvement in payments penetration. which reached 44% in Q1, up from 40% a year ago on an organic basis. Within our growth engines, payments penetration was even higher at 49%. Driving more revenue from existing customers is a significant opportunity to scale the business efficiently. The entire executive team and I are focused on improving our profitability and cash flow, which we see as essential to creating long-term shareholder value. With that, I will turn it over to Asha.