Q2 2020 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the light speed second quarter 2020 earnings call. At this time all participants are in a listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During this session you will need to press Star. One then your telephone.
If you require any further assistance. Please press star zero I would now like to handle the conference over to your speaker today, Chris Mammone <unk> Investor Relations. Please go ahead.
Thank you operator, and good morning, everyone welcome to like speed fiscal second quarter Conference call. Joining me today, our debt like be founder and CEO bread and not be chief financial officer, and JP Charvet president of like be after prepared remarks, well open it up for your questions. We will make forward looking statements on our call today that are based on assumptions in there.
For subject to risks and uncertainties I could cause actual results could differ materially from those projected.
We undertake no obligation to update these statements except as required by law you can read about these risks and uncertainties in our earnings press release issued earlier today involved in our filings of Canadian Securities regulatory authorities.
Also our commentary today will include adjusted financial measures, which are non I f. RF matters, you should be considered at December two and not accepted to four I FRS financial measures reconciliation between the two can be found in our earnings press release, which is available on our website.
And finally, not the because the report and U.S. dollar all amounts discussed today are in U.S. dollar unless otherwise indicated with that I will now turn the call over to decks.
Thanks, Chris and thank you everyone for joining us today.
Pleased to announce another quarter of progress and solid execution as we continue our journey of building a global leading cloud based omni channel Commerce platform for complex Smbs in retail and hospitality.
Living our topline growth during the second quarter total revenue grew by 51% versus last year and top $20 million to exceed the high end of our guidance range more than 90% of this piece consists of recurring software and payments revenue, which grew 52% during the second quarter.
We believe the complex SMB seeking a recognized global market leader for the solutions, we provide and we're making great progress in our journey to be known as that go to player for many high performing global brands. We've now reached almost 57000 customer locations across our increasingly worldwide footprint.
Our customers continuing to succeed through greater uses the lightspeed platform Invigorates us the most.
To this end GTV growth of greater than 37% over the last 12 months to approximately $17.4 billion isn't effective gauge the healthy growing customer base that is finding increased success through partnering with light sweet.
We expect the lights, we've long term growth will be driven predominantly by a three main organic growth vectors.
Number one attracting new merchants, where we are well positioned to continue growing our overall location count.
Number two entering new markets, where we see significant opportunity given that less than one third of our revenue comes from outside North America today.
And number three expanding ARPU, where we have tremendous white space to capitalize for both new and existing customers paying for more than one like feed product.
Let's see payments has continued to be V. notable product success story for us and 29 team and we gained very good traction this quarter as attach rates. Once again were approximately 50% for eligible new customers in our U.S. futility.
It's remained uncharted territory for us, but as we talk closer to watching payments traditional large customers.
Canada in restaurants, we're more confident than ever and those two segments will embrace payment in a big way.
Affirming our overarching strategy of being a one stop shop, where there's a core commerce needs for our customers.
Well, we're very pleased with our progress against our longer term strategic objectives, we're still at the start of our pursuit of Das global market opportunity.
We believe this fragmented market needs a leader and we believe that leader will be like fee.
We are moving decisively to achieve this vision.
First through continued sharp execution organically, but also accelerating that foundation, Brent, bringing together the best of breed players in the space in our quest to create a global powerhouse.
We're finding that the best companies in the world with the best mines, the best Technology, and the best customers want to joined forces with like feet.
Most recently, we acquired counter a rapidly growing leading cloud based hospitality Pos platform in Australia, and New Zealand, serving more than 7000 customer locations across that region.
Counter fits perfectly into our growth strategy to enhance our organic global growth opportunity by combining the most innovative and disruptive teams and technology working to modernize the merchant point to sell environment.
Counts his team believes our strategy of building a one stop shop for their complex SMB customers offering advanced analytics and purchasing modules and they've recently begun modest to monetize their own payments opportunity.
We intend to leverage counts his experience in relationships in the region to accelerate the adoption of light feeds retail offering to further our data strategy into eventually leverage like see payments as well.
This team fits culturally with lightspeed and we're fully aligned on how to build a global leader in this segment.
From our perspective as a leader we also believe like feeds breadth of expertise can help immensely to that and I'd like to share. Some statistics on the performance of Krona golf and acquisition, we completed six months ago that brought us instant leadership in the golf course, operator vertical.
As a result could be amazing team effort from our new employees and leveraging the value of leasing spreads more closely as well as our expertise and partnering with conflicts smbs critical growth and new customers accelerated to 114% over the past six months up from 53% a year ago.
This type of growth acceleration is a great proof point that our strategy is the right one close to 700 golf courses now used the likes it offering to power their operations.
Since the acquisition, we side, many multicourse operators highlighted by Kemper sports in Illinois piece, operator, with more than 100 courses landscapes golf and Nebraska base course, operator, with 50 total locations and several others, but at least 10 or more courses.
Turning to I can to cloud based Pos system specializing in the hospitality segment in Europe that we acquired in July is integrating well into light speed.
I can choose had some new customer wins, such as the Mantia Jazz Fest one of the world's most renowned just festivals held annually in Switzerland in early July .
We will provide a more thorough update I can't you in a future call.
Turning to our product innovation efforts that further our position as the leading cloud based end to end solutions platform in our space during the second quarter, we rolled up the newest version of our core like feed retail platform like food retail 3.0.
Key features behind this faster and more streamlined user experience, including sleek, new design simplified navigation capabilities more mobile friendly functionality and a more seamless fields workflow engine designed to optimize the selling process in complex retail environments.
We have other major new product releases enhanced since coming with within both the lights in retail and restaurant platforms throughout the year and I look forward to sharing with would you more of the details around this rapid product loss me, a hallmark treat lightspeed and future earnings calls.
Let's see continues to enjoy strong momentum from complex retailers and restaurant owners in North America and around the world many of whom continued to select lightspeed, given our ability to manage their omni channel business needs seamlessly.
Customers, such as international fashion brand Gabriela Hurst, New U.S. decreased chain Joc tourists chocolate and the four seasons operated cost apartments resort in Mexico, All selected light speed in the quarter.
I'd now like to highlight some recent successes with our channel partner strategy as yet another lever where you are utilizing to bolster our go to market approach. We work with many great channel partners in the light speed ecosystem to help complex SMB customers manage all aspects of commerce in their business research.
It's strategic partners brought into the Lightspeed ecosystem include Aveiro, which has integrated its hospitality management software analytics suite into the lights food restaurant solution lend deal to offer at small business loan marketplace to applicant directly inside the like food offering and finally, mailchimp, which offers our omnichannel Murray.
Surgeons additional ways to engage with their customers.
Recently, we hosted the annual legacy partner summit in Montreal, and Amsterdam will be recognized the latest let's see partners of the year for their efforts and helping to grow the lightspeed brand into important new growth markets for our company.
To sum up I'm extremely proud of entirely to be team for their relentless spirit and enthusiasm around our vision.
It's gratifying to see their hard work payoff with these quarterly results, we have the team division and the technology to become the clear leader for complex Smbs globally.
I'll now turn it over to Brandon to provide greater detail around the financials for the quarter as well to provide our updated outlook for fiscal 2020 Brandon.
Thanks, Jeff our second quarter results are a reflection of the solid progress we continue to make across all of the important areas of the business.
Our I covered the numbers just a quick worried about how our financial model works for anyone that may be new to lightspeed.
Approximately 90% of our revenues earned through recurring subscription and payment revenue streams, our subscription revenues priced on a per location per month basis with rates that increase as customers adopt incremental functionality offered by lightspeed as customers open new locations are adopt new modules our subscription revenue grows.
We also generate recurring payments revenue, which is earned as a percentage of the underlying transaction value today, mainly from payment referral partners with the introduction of life Lightspeed payments.
Now the ability to earn a much larger portion of the transaction value that we expect that this will become a growing portion of our revenue overtime.
Looking at some of the key metrics, we used to track our progress total customer locations is now at almost 57000 up from approximately 40 to 45000, a year ago. The increase was driven by continued organic growth and the addition of I can twos customer base, which was 3800 as of the date of acquisition.
ARPU expansion is an important metric for us as well and we saw that continue to grow by double digit percentages versus a year ago.
Total GTV process by our customers during the second quarter was $5.4 billion, 48% from a year ago in total and 32% when excluding the initial impact of I can twos customer base pay TV as an important measure for us as we rollout lightspeed payments.
And I'd like to be payments. We saw continued strong overall customer receptivity for this important long term growth driver to our business. During this initial rollout here in the quarter new customer adoption of payments remained robust were close to 50% of new U.S. retail customers contracting lightspeed payments at the time of purchasing lightspeed.
Core software once again this quarter.
Alongside continued progress and seeing our existing base moved from their incumbent solutions to light speed.
Turning now to overall financial results for the second quarter, we saw accelerating revenue growth again this quarter revenue for the quarter was $28.0 million up 51% from the same quarter a year ago and ahead of our previous guidance of between 26.5 and $27 million.
Software and payments revenue is over 90% of the total revenue at $25.4 million and grew 52% in the quarter.
When excluding approximately $1 million, if I can to revenue our software in payments revenue growth rate was 46% in the corner.
Gross profit from software payments revenue was $18.3 million up 39% from the prior year.
Hardware another gross margin was breakeven in the quarter, reflecting the hardware subsidy, we are providing for new lightspeed payments customers and this initial launch phase overall gross margin of 66% revenue in the quarter.
Adjusted EBITDA loss for the quarter was 5.1 million ahead of our guidance and as compared to 2.7 million loss a year ago.
The increase loss from a year ago reflects incremental costs are being a public company.
And the result of our purposeful investment in marketing in the quarter to drive greater brand awareness, primarily in North America.
Net loss for the quarter was $10.1 million compared to $8.2 million a year ago.
And it was a strong quarter for cash generation cash used in operations was 2.6 million for the quarter ahead of our guidance for use of around 5 million and compared to 1.0 a year ago.
We ended the quarter of $172 million in cash on the balance sheet with no debt.
As backs mentioned on November 1st we completed the acquisition of Count a leading cloud base point of sale solution provider in Australia for aggregate committed proceeds on closing of just over 43 million us dollars through a mix with cash and stock.
For additional cash and share based incentives payable over the next two years.
Amount of 15.5 million tied to continued employment of key team members and financial performance milestones.
For the most recently completed fiscal year ended June 30, count there and 6.5 million revenue in us dollars.
As part of this acquisition, we have entered into an agreement with them itll be a leading accounting software platform and the Australian market. This marketing lives will further promote lightspeed in the region for our retail products as well as provide ongoing support for the hospitality offerings from counter and light speed.
Counter brings us over 7000 customer locations, many compelling brands in Australia, New Zealand.
On a tremendous platform to further grow lightspeed brand, our retail offering our data strategy and ultimately lightspeed payments, we have a proven track record here and excited to get to work with the team at countdown.
Well conclude my remarks by discussing our financial outlook as a quick build on our currency our guidance does not consider any potential impact with foreign exchange gains or losses, as we did not try to estimate future movements in currency rates.
Third quarter ending in December we expect between 31.5 and $32 million in total revenue representing growth of between 57% to 59% from the prior year period.
For the full fiscal year, ending March 2020, we now anticipate $117 million to $119 million in total revenue. This represents growth of between 51 and 54% compared to fiscal 19.
Looking at adjusted EBITDA, reflecting a small incremental loss from counters operations. This year, we now expect an adjusted EBITDA loss in the range of 19 million to 21 million for the year.
And for our fiscal third quarter, we expect an adjusted EBITDA loss in the range of five to five and a half million dollars with that we're now ready to take questions operator.
Thank you as a reminder to ask a question you need to press star one on your telephone to withdraw your question press the pound or hash key please standby, while we compile the culinary roster.
And your first question comes from the line as Daniel Chan with TD Securities. Please go ahead. Your line is now open good morning, guys great quarter.
So significant increase in the guidance can you give some color on what's driving that change and how much of that was from counter.
Hey, Dan Thanks.
Yes, no the guidance this reflects our ongoing confidence in the core business.
Count did six and a half million for the for the period ended just before we bought them we close of the on November 1st.
We know that should give you had kind of a sense as to how much.
We expect from counter here in the back part of the year, obviously want to be conservative with any new business that we bring onboard as part of our own expectations.
But that's that's kind of how that builds up.
Help us think about a the council contribution can you give us a sense of what the growth rate on that business was.
Yes, I mean, there's been a it's a tax mentioned in his comments, what we're really trying to do here is bringing to Brett bringing together the best of breed.
To build this global platform.
Oh, you know I wasn't business growing nicely I won't say there were growing quite the pace of late speeds core, but that's a good healthy business.
Okay.
I Wonder if we can get an update on the progress of Romeo payments to your other geographies.
Yes, we are currently entering betas in our in our main markets.
Our focus right now is North America.
To get to to get payments out into.
That's our top priority through but we've done onboarding and Canadian retail and restaurant for beta testing and Red and it's a deliberate rollout schedule much like us retail.
Pretty pleased with that 50% adoption thus far.
And that's a you know you'll see continued progress from us.
Particularly important thing Dan as you know, we will take a really as Doug said the deliberate approach to our rollout just like we did when we launched the main.
Our us retail this.
It's important for us to do this properly and this is smbs cash flow and.
So you know you should expect us to continue to be.
Deliberate and.
I'll try dramatic about that rollout.
And are you going to subsidize the hardware in these in these regions. So just like you're doing in U.S retail.
Yeah, it's tough to argue with the results so far on that so we do think it's an important.
We're still we're happy with our progress where we forgot life long way to go here and it's just a friction point.
But.
Just to us makes tons of centers to remove out of the process.
So yes, we will continue to do that for the foreseeable future. Okay makes sense and then final one for me consumer spending are still seems pretty strong in the U.S., but are you seeing any slowing in consumer spending in other regions and what's the potential impact for you guys are there. Thanks.
I mean, our customer bases are still quite well, we disclosed our GTV growth there, 32% when we exclude kind of the initial impact of I can too.
So our customers are continuing to grow.
We're pretty happy with that.
Great. Thank you.
Your next question comes from the line of Richard Tse with National Bank. Please go ahead. Your line is open.
Yes, thanks on the payment side I'm kind of curious to see if you should look at your existing customer base, which is quite significant.
Wondering you sort of update us on the process for bringing those.
We are legacy customers on a payments and perhaps the timeline for that.
Yes.
Good morning, Yeah. So we are a progressing on that front to where we now are looking at segments of the customer base and we're starting to deploy strategy there to support them over and it seems to be working well.
I hear what we're going to be doing in the in the coming months is we're going to be looking at new new kind of hardware because there's a number of scenarios. When you think about existing customers around mobile payments versus six terminals and and so what we're doing is as we.
Our delivering on the on the software front when were as we deliver new devices, a new methods in the workflows, we're basically attacking those segments of the database and we're putting them over so again, we're very new and this we're starting but we're seeing the results were expecting and I think for us. The most exciting part is as document.
Fund is we are you know we're going to be looking at U.S. restaurant Canadian restaurants, Canadian retail, which really in larger to segments. We can go. After an also we're looking at new new formats of hardware, which are going to enable us to accelerate its actually penetration within the existing base.
Okay and then the current on golf members you guys put out there it's pretty impressive like kind of curious to see I'm going through a library in terms of what you contributed to sort of accelerate that growth was that sort of things you brought to the table post acquisition. Obviously, it's important because if you guys are making other acquisitions here in apply the same methodology.
I'm just trying to understand how you do that.
Yeah, I think krona is a fantastic example, actually when you think about our strategy moving forward, we targeted a vertical and within that vertical we actually just acquired is one of the leading vendors and we knew the this vertical were undertaking a lot of transformation from legacy players and from all the legacy Pos.
Players into the kind of the modern world So perfectly with very easy when you think about its going to go.
Prior to the acquisition with a much smaller company.
The way less sophistication in marketing and how they would approach the market and also when you think about it they would they would talk to customers and they had multiple companies within the portfolio. So they have to explain lightspeed versus current ago debt to explain the restaurant versus retail, whereas now with all under lightspeed and so I think it just accelerates the penetration.
And here, what we're seeing with krona growth is that the larger Gulf operators with the bigger ones that a lot of location I'd like Kemper sports as a good example, I think just having life would be brand and being sure. We're a big large well funded company just accelerates the penetration. So net net I think it's a for up to.
It's a very good kind of blueprint for our next acquisitions, where we want to go into verticals, we want to dominate the verticals and we want to bring our know how so we can accelerate picked up the penetration.
Okay, and just one last one for me.
Sure look the history and then even some of the recent acquisitions, you're making you know law them and then on the international upfront.
Kind of curious to see what do you think about the relative low competition and these international markets versus North America is it plus more fragmented just trying to get understanding on that thanks.
Yeah, I look I think for US what is important is to be a global company. Because we think that this is a global market. We know that a lot of our customers operate across different geographies. So we want it to be sure that lightspeed had a real strong coverage or will have even a stronger coverage in every geography as well.
Move forward and I think that's what you see with like into encounter. These these acquisitions really give us a local presence in fairly interesting markets.
When you think about competition.
And I think that's what's kind of exciting is that the market. So fragmented that there's no. We do not have the same competition in Australia as we have in Europe or we'd have in North America and all these markets are fairly fragmented I think the opportunity for us is really when when you. When you think about the acquisitions. We did we actually took the best products and the best teams within the regions we.
Wanted to we wanted to have a strong market share and I think you can see you can expect to the strategy to remain as we go forward, which is we're going to go deep into verticals and we're going to go into geographies that are interesting to us and here. We always have the thought process is should we go directly or should we acquire and if theres a great company that actually wants to join like freedom.
I could add value on the product front I could also help us accelerate penetration and the third one is cross pollination of all the products. These are much better fit for us so.
We're seeing.
Yeah, what we're seeing very different competition and count out within their markets are really the leader.
Australia.
Great. Thank you.
Your next question comes from the line of say no smoking shuffling from BMO capital markets. Please go ahead. Your line is now open hi, good morning, I'm looking at the locations. It seems like the organic location growth was in the high teens year over year is that the level of location growth you'd expect in the back half or were there any specific factors relate to the quarter that me.
I've influence that growth rate.
Yes, good question actually.
So.
The first of all we're very confident but with our you know what we did this store can be expected to having a year is still on track to be to be reached for US again just to go back to the strategy. The most important piece of our strategies were focused on cat to LTV and we're focused on the let's say the more sophisticated the higher segment of the.
Markets. So when you think about ARPU ARPU is expanded because we're working with larger and larger retailers and restaurants and here for US were three important has to be sort of we attract the right profile with customers.
Now when you think about this quarter versus last year does lower fluctuations, we're not we're not concerned a tool and actually when you. If you dig down to the quarter. We just had we signed a number of much larger deals than we did in the past and when you find the deal does it does this a delay between the moment you selling them and they go live in the bigger they are the more time it yet.
For them to go lives. So when you out when we actually think about the absolute number of customers. We've onboarded Oh, we're very satisfied with the quarter and Wifi or we see great confidence for the rest of the year, yes, and offsets a active customers that just a pending what what JP mentioned, so we signed a customer and they're not yet deployed it won't show up in those numbers.
But even for larger customers deployment, we tend to happen within say two or three months or what would the timeframe be for converting those bookings yep.
Yes, it two to three months, but we.
I mean, I guess, it's good news that we signed really much larger customers and we did in the path and so those might take a little bit longer. Okay. Maybe related question GMB per location seems to be up significantly year over year would that increase on that metric much of that is that related to the acquisitions or is it. The fact as you said.
Something larger customers.
I think it's a bit of both there that US you know and.
We gave you the breakdown of GTV without the impact of countries GTV base as well there.
Yeah. It is growing.
And the GDP per customers growing.
And.
Though like take the Gulf vertical those are much higher GTV customers for us So that's certainly contributing.
And then some of the comments of JP just made in terms of the profile of customers, helping to increase as well.
Great and finally can you comment on how a softer ARPU growth has been trending and your traction in upselling customers to more modules.
The do I think I said on the call double digit percentage growth. So that's continuing.
Loyalty analytics.
Obviously payments all those things continue to go well that also no no.
Change in trend line, there everything continues to.
We continue to go reasonably well for US there sorry, just to clarify was talking about a software RPU ex team. It's so it's on that metric or is there from that metric as well on the back of the upside Yep Yep.
Okay.
Okay offline thanks, guys.
Thanks, Adam Thank you.
Your next question comes from the line of Josh back with Keybanc. Please go ahead. Your line is now open.
Yes. Thank you for a for taking my question I wanted to follow up little bit on this [noise] slightly larger customer that you're seeing I mean is that having to influence on.
Maybe your CAC in anyways and that you need to spend more to go find them or is it more of a matter of you're finding the products have a good fit for these larger customers and that's just just kind of where you are gravitating towards.
Yes so.
Our model hasn't changed so we have no salespeople with put on the ground that the way we attract the customers are identical and when you think about customers we attractive in two ways. One is through our channel. So we have a number of partners all over the world who generate leads for us and the other way is read through our website. So there is really at this stage no correlation between cash.
Growing and customers who are just larger what happens is sometimes you know.
Even though were built for you know the the two to five locations, sometimes we attract much larger customers and we bring them through a process in the same same way and that's really what we're seeing is happening is.
And we're very pleased with that is as we continue to developed more sophisticated solutions. We have more modules. You know now we have I mean pretty much everything it takes for a retailer restaurant to run their business, we're seeing larger larger or profiles of customers being attracted by the offer but it's a yet for us doesn't change in anyway.
We attract them to cost of acquisition of customers.
Okay, that's good to hear.
The M&A front it seems like you've done about an acquisition quarter I'm just wondering on the backend from a technology perspective.
Do you envision yourselves runny multiple platforms, maybe by geography or vertical or do you have a goal to consolidate just like to understand a little bit about the the tech integration strategy, resulting from M&A.
Yeah, you see it there's been a number of hospitality acquisitions of course in over the last couple of quarters. The long term goals have won one one go to platform one best of breed platform a part of the evaluation of these acquisitions is some of the amazing technology, that's come come as part of them.
The way that we build software.
Lightspeed is a using micro services and and we can bring together the best technologies into a reference platform that that's the most competitive globally and that's it that's the strategy.
Yes, I think maybe just to add to what actually saying, but ultimately this is a data play because when when you think about all the acquisitions were doing these are all aercap modern cloud based systems that also kind of expose services absolutely and here. When you think about the volume of transaction in the kind of data we hold.
You got to look at this was a data play and maybe the last thing just talking about these acquisitions.
The tons of cross pollination, we can do they all come with a lot of unique components that we can add to ours and vice versa. There's a lot of our components that we can after these acquisitions and Brendan talked about payments as being one of them, but loyalty and upsells and the way. We've built the software is all microservices and these can all be into exchange.
You know the platform. So there's a lot of synergies every time we duties.
Okay very helpful. In the last one for me I know that you [laughter] fairly recently launched this new.
Three point, though [noise] Pos up so maybe just any early learnings and you know maybe just kind of what you would expect from Oh.
Benefit or.
Perspective from a you know the sellers in the customers.
Yeah, I mean retails been our flagship product and we this summer we we did open heart surgery and rebuild the inventory core with with us for the negative inventory pieces, if the Oh.
No.
The the pieces that can get managed negative inventory managed backorders manage all the all the complex inventory workflows. What you saw in the fall with with Lake Street retail 3.0 is tackling the front end. So you know really rewriting all the different major components of retail to make it tends to increase our lead increase the distance between other competitors and actually.
Really match what was available on legacy players, but in the cloud you know what I think that that in terms of a retail solution, we're really unmatched.
But we are tackling part by part and just upgrading continuously with with new innovations. So 3.0, I think is gonna be a much better.
Sales sales workflow a you know on the front end for for regular retail staff and will also allow a lot better management of locations.
Very helpful. Thanks, guys.
Your next question comes from Paul steep with Scotia. Please go ahead. Your line is now open.
Great. Thanks could you talk a little bit more with hospitality, but the plans now that you have counter to maybe more aggressively go after the broader north American market.
In hospitality in how we should think about maybe the sales and marketing plan I got one quick follow up on the technology and street given.
Okay could you maybe address the go to market and so.
Obviously, the U.S. is the biggest market for hospitality.
And we have a very competitive product there I think for us.
Tax mentioned, we're going to be deploying payments into into hospitality in North America. We're very confident that that once that is out we're going to have extremely compelling offer and we'll be able to comes to really compete with the other players because we we really strongly believed that our solution has more decks, but the payments component is a big is it.
Big piece. So here our view is as soon as we have that out we're going to be doubling down on North America, and we're going to be taking the same approach as we've taken everywhere in the world, we want to be sort of as we tackle sales and marketing in North America. The product is the most competitive out there and we're on the verge of are being there.
So actually maybe related to that and the technology on the answer before you talked tax, but moving towards a single platform. So trying to J.P. easy answer how should we think but the timeline to get towards that single platform, obviously, you're running yonah incredible pace here and then meet what are the key elements of the function.
Now that we should look at how would I can to encounter.
We'll make the product maybe even more interesting overtime. Thank you.
Yeah, I mean convergence is something that a that we are approaching aggressively we were going we're we're we're already moving in the direction and so.
I think you're going to you're going to see timelines that are not that are not multiple years.
But I think that one of the reasons for you I can chew acquisition with some very very strong technology Fiscalization technology, if it's thats block chain.
And in that that that was I think that that was a tick all you want to see in this in this reference platform for hospitality.
The other component that we're really excited about as well was very strong peer to peer offline. They can do hundreds and actually thousands of concurrent Pos terminals and something like a festival.
For a very large hotel resort without skipping a beat when do matter no matter the quality of Internet. So very very strong technology pieces. These are micro services that will bring to the main hospitality platform. So extremely excited about a about all of that potential.
And of course.
We as JP mentioned earlier, we had we had elements of the platform.
Such as such as our loyalty loyalty services data services payment services, although fees have been built in we just need to bring them together.
As you want to platforms over hospitality and we'll have a retail platform that are best of breed.
And I think for counter maybe just.
When you think I think that's what's kind of exciting is every even though on paper kind of they will operate in the same field every acquisition brings a lot of value and in the case of counter when you look at their components that were maybe not the best out that they do really well like ingredient management or supplier integration. They also have a they do a lot with data.
So here over the next month, we're going to be thinking about okay. What components are going to be package together. So that we can have the best product every region and here again the way we look at this is we're bringing the best brings in the industry together to accelerate the penetration of Lightspeed and we're very confident going back to the U.S.
Market that will be ready very few especially when you think about payments to really Taco this market with the best product out there.
Great. One last one I just thought of list on the M&A side, you've been deal very faster to the blocks here in deploying capital and buying some businesses how should we think about it maybe in the next 12 months is there a bit of a pause here as you work through de aggressive plans you just laid out to execute on those or do we still have capacity in the team.
Actually do further further deals overtime. Thanks.
Yeah, I think we've been pretty clear that so you know we do view the the M&A angle as a component to how we build.
Leadership position, we want globally.
Paul those are all things, we think about as we embark on this.
Right deals do we have the capacity is going to influence our ability to continue to execute.
And so you know we think weve.
We know we've been pretty thoughtful about that today and you should expect that to continue. So if you do see more from us and are certainly as an active pipeline.
It will be because we think we can continue to meet our commitments to.
To our shareholders and at the same time, moving even more quickly towards achieving our goals, what's encouraging is to see acquisitions thrive within like feed.
You see a krona golf.
Dramatically.
Accelerate its growth as part of the broader company.
And as we see that with each acquisition and get better at these integrations that the piece that we're going.
You know that gives us confidence to really run run this robust pipeline that we have.
Hi Tech to execution.
And going back maybe to our initial strategy, we are going to look at geographical penetration and we're going to look at going deeper into certain verticals with more functionality and we're just going to double down and execute on those maybe one one other comment just with regards to our ability to ingest. We have obviously, an internal team and every department has.
As you know people dedicated to these mergers acquisitions to be sure that we can do we can operationally ingest them very well.
Thank you.
And once again, ladies and gentlemen, if he would like to ask a question. Please press Star. One then your telephone. Your next question comes from the line of Gus Papageorgiou with Pi Financial. Please go ahead. Your line is now open.
Thanks, and congrats for the nice quarter, just wanted to come to acquisition. So their ARPU is significantly below your own ARPU in terms of software revenue per location.
Talk a little bit about now with the potential to bring that up to your levels and timing.
Yeah, Hey, guys I'll start with an eye one no count as it has done a great job a growing through word of mouth from their their customers love their point of sale offering they are pretty new into kind of the module a adoption in their own journey, so they've just launched and analytics offering that.
On the same stock as what lights, pizzas and and so on that just launch some inventory management capabilities and and payments is just beginning for them as well.
So thats the main driver between the art food Delta, but.
One of the things that attracted us to this team in this company is they just chair the similar mindset that a one stop shop approach to this customer base is what makes most sense and.
You know as a young company Theyre, just starting down that journey together more fulsome, a product offering and we hope to be helpful. There and I think maybe just to complemented.
I mean, we've been.
Doing land and expand for many years now and here or know how on how to up sell customers and how to create value and how to the actually create demand within the software for more modules I think we'll be a great help and should have good results.
Okay and couple of follow ups, you generally provide some sort of indication of.
The port portion of your customers that have.
More than one module I think you something last time, you said it will return to the customers had.
More than one module can you talk a little bit about the trend of.
[noise] Oneplus module adoption amongst your customer base.
Yes. So the trend is continuing we are seeing more and more adoption and if you remember in the last summer we launched loyalty. We now we launched loyalty in Europe , we're launching analytics in Europe . So we're seeing the adoption.
Every month, we follow that and we're very pleased with the adoption.
Yes, so more and more customers buy more module from Lightspeed and it's it's what we want.
Okay and just finally, if you look at your GTV I mean, obviously payments adoption will be highly dependent on GTV is there any portion of the GTV either by industry segment or by geography that you think payments cannot cover or do you think that that payments can go after about a 100% of that GTV.
I mean, 100%, it's probably ambitious skus, but.
Uh huh.
The bulk of our GTV.
Opportunity is in North America, I think where we have differences as the European GTV will carry a different card mix to what we see in North America.
So thats all stuff that we need to factor in.
But in terms of customer.
Adoption of payments.
It's certainly in the vast majority of it we think we have an opportunity was.
And so and that's why I think for US right now the we're focused on what is the next priority and so we're looking at the biggest segments and they're trying to cover the biggest segments and then once those are covered we'll be looking at sub segments and sub industries, where we.
We will have different partners basically to fulfill those payment needs.
Okay, great. Thanks for answering questions.
Your next question comes from the line of Todd Coupland must see Ibcs. Please go ahead. Your line is now open.
Hi, good morning, everyone I.
I wanted to ask about.
Innovation as well you you've answered a few questions. So yes, you talked about Microservices innovation and certainly the pace of updates has been very rapid this year.
Do you feel that it.
You can call out your unique nothing in the in the sector to actually get to lead in the in the complex area that you want to get that lead in or is it too early to tell.
Well I think that we the <unk> lately technology product and technology group is I think.
Very strong right now and I think we're also adding some of the best mines around the world through these acquisitions. So there's a ton of energy and a ton of innovation that we've delivered and that that's that's going to come to market. So I think that <unk>. Since we are so focused and.
[noise] focused on winning this segment you know I think we we are product road map is very tailored to being able to win this customer set, especially vis-a-vis other competitors or other people in this space, where we are laser focused on making sure that our innovation sort of is is pinpointed towards making sure this customer.
Successful I think that that's what you see bear out in the numbers.
And the adoption and as well the success if these customers.
They're GTV rises.
And then my second question had to do with international adoption I think you called out two new languages, German and French just talk about your your approach to those markets and what we should expect over the next couple of quarters. Thanks a lot.
Yeah. So you asked me lunchtime omni channel retail in Switzerland.
Where we have three offices now recently visited them.
<unk>, a French we already have Dutch as well, but German is actually a big.
Very big opportunity for us.
To bring our retail products I think we have and immense opportunity in some of these new markets.
We're in Europe , but so where we have some of the largest markets yet to just still to still approach.
Maybe just complementing when you think about it the three largest markets in Europe , or Germany, France and the UK.
In one of them, we have a physical presence and we're doubling down friends is a very new market for us, but you can expect to have more of this given now that we have a very competitive product and obviously, we're thinking about Germany, and we're going to.
On deal with strategy as we move forward for Germany.
Yeah.
Thanks, a lot.
And I'm showing no further questions that are in the queue at this time, ladies and gentlemen. Thank you. This concludes today's conference call. Thank you for participating and you may now disconnect.