Q1 2022 Lightspeed POS Inc Earnings Call
[music].
Yes.
Thank you operator, and good morning, everyone and welcome to Lightspeed fiscal Q1, 2000, and trying to conference call joining.
Joining me today are debt to sell the founder and CEO, Brandon <unk>, Chief Financial Officer, and J P. <unk> president of Lightspeed and.
After prepared remarks, we will open it up for your questions.
And we'll make forward looking statements on our call day and are subject to risks and uncertainties that could cause actual results to differ materially from Dallas projected.
Certain material factors and assumptions were applied in respect of the.
Conclusions forecasts and projections contained and 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.
First quarter 2022 results presentation is available on our website as well as and our filings with U S and Canadian Securities regulators.
Also our commentary today will include adjusted financial measures, which are non <unk> measures and this should be considered as a supplement to and not a substitute for ifr rest of financial measures reconciliations between the 2 can be found in our earnings press release, which is available on our website on SEDAR dot com and at the SEC Edgar.
System.
In addition to the commentary today will include key performance indicators that help us evaluate the business measure our performance and identify trends affecting our business formulate business plans and make strategic decisions and.
Such key performance indicators may be calculated in a manner different kind of similar key performance indicators used by other companies and finally note that because we report and U S. Dollars. All amounts discussed today are in U S dollars unless otherwise indicated with the.
I will now turn the call over to Dax.
Thanks, guys. Good morning, everyone and thank you for joining us today.
Before I get started I just wanted to welcome everyone from the order to the Lightspeed team.
Together Lightspeed and the order are going to redefine the suppliers and retailers and interact with each other and revolutionize supply chain management and the industry I could not be more excited about the opportunity the waitressed of all welcome aboard.
And as everyone is likely seen from the results released earlier today Lightspeed had an exceptional quarter delivering revenue and adjusted EBITDA, well ahead of street expectations and better than our previously established guidance.
Total revenue was up 220% year over year with organic software and payments revenue of 78%. The company now maintained over 150000 retail and hospitality locations globally.
<unk> was strong growing 203% year over year to $16.3 billion organic GTT growth was 91% payments.
Payments penetration and continues to increase with approximately 10% <unk> GTD processed through our payment solutions from.
Some notable customer wins and the quarter include Spacex The American Aerospace company founded by Elon Musk has chosen lightspeed restaurant, lightspeed ordering and lightspeed payments to support its hospitality operations and its California headquarters.
The right ski resort the world renowned Colorado Ski resort has chosen lightspeed as its core commerce platform.
<unk> will use lightspeed retail lightspeed e-commerce, and lightspeed payments help run its vast resort activities.
And finally restaurant K K is the first aerospace Japanese restaurants to secure a 3 star Michelin rating and addition to acknowledgment from Les ground hub demand and growth and mellow K, we'll be using lightspeed restaurant to run its award winning establishment.
In addition to the strong execution this quarter, we managed to events and key strategic initiatives Lightspeed launched payment and the international markets, starting with the UK and earlier this week announced 5 more European launches, including Germany, Switzerland, France, Belgium, and the Netherlands, We closed the acquisition of the ended the quarter with that group delivering better.
And expected results would establish a partnership with the leading restaurant reservation platform open table and finally, we announced definitive agreements to acquire new order of that grid, which will help transform lightspeed into 1 stop commerce platform.
The new order transaction was closed last month with equity of expected to close by the end of this quarter.
As economies reopen and around the world and new business creation accelerates, we believe lightspeed 1 stop commerce platform remains a crucial lifeline for independent businesses. Our goal is to help them simplify their operations provide them unparalleled opportunities of scale and equip them to deliver exceptional customer experiences.
As the step into a new world of Commerce forever altered by the COVID-19 crisis, both the traditional challenges they have faced as well as the new customer expectations. They will seek to meet will be best solved by Lightspeed solutions.
From the customary complexities of supply chain management, and accounting to the new demands of online ordering and contactless payments Lightspeed is the technology that will ignite businesses everywhere.
Following our customary routine brand and will take you through the details of the financial results, but I wanted to first highlights and key business themes this quarter, including.
The benefits of the economies reopening and exceptional performance of payments.
Our early but promising success of Lightspeed capital and finally, the ongoing integration of our recent acquisitions.
And as economies begin to reopen we are seeing a very positive impact on our overall business not just from new customers, but also increased demand from existing customers. Our hospitality business saw very strong performance this quarter, which helped drive great results in EMEA.
Hospitality GTD was up 380% year over year and new location additions were by far the highest we've ever had France, Germany, and Belgium showed particular strength greatly exceeding expectations.
And although we did see growing demand from new customers demand from existing customers was also strong with our order ahead and loyalty offerings showing continued strength.
<unk> also maintains a strong partner network and helps drive adoption of our offerings.
During the depths of Covid, our partner channels were relatively subdued at this quarter, we saw them come Roaring back.
Payments of course continue to be a major source of growth for our company transaction based revenues were up over 5 times from last year, thanks, largely to the payments came.
Payments benefited from the strong growth and GTD as well as increasing adoption by our customer base.
Currently our payments business leans towards retail and although GTD growth here was overshadowed by the resurgence of the hospitality this quarter omni channel retail GTD growth still increased 139%.
European adoption is off to a strong start with the total number of active payments customers growing strongly from last quarter and while Europe's still only represents a very small portion of our total payments customers. We believe this number will grow rapidly as we launched the solution and 5 more markets in that region.
Overall, approximately 10% of our total GTD was processed through our payment solutions, giving us plenty of runway in the months and years ahead.
I would also like to call out of our capital business Lightspeed capital had its best quarter by far and we are starting to see numbers that are becoming meaningful.
430 capital advances were made in the quarter with revenue from capital growing 68% from the previous quarter.
We continue to maintain 2 offerings here Lightspeed capital, where we leverage our payments partner strike and the shop keep capital business, which we inherited when we acquired Schottky.
This quarter, we are extending the shop keep capital model to serve customers and have already seen some initial success. There for now this remains a small but highly profitable business for us with revenue still under $1 million quarterly, but given our growing customer base and expanded the availability. We believe capital can become a very meaningful driver of growth and especially profitability.
And the longer term.
We also believe the with the addition of the order with the potential to extend capital services into the <unk> side of our network.
Finally, I want to provide and update on the integration of our latest acquisitions, we continued to integrate management from our acquisitions into our own senior executive team Michael the Simona the former shop keep CEO was recently named our Chief business officer with responsibilities for retail hospitality golf and payments and that of whites. The former <unk> CEO is now.
Of our general manager for retail.
From a product perspective, we continue to drive towards 1 core solution for retail and 1 Prost fatality.
And hospitality, we are busy integrating <unk> industry, leading analytics engine and to our core hospitality offerings and expect that to be completed by the end of the summer. We are also working diligently on integrating the <unk> offering into a retail solution, which is 1 of the many reasons and white now leads that business. The shop keep the integration is even further advanced with that offering.
Fully part of the core Lightspeed retail solution with.
And we recently closed the new order acquisition, and we'll be turning our attention to unlocking the potential within our broader network.
Once integrated into Lightspeed, we will be able to give brands real time sell through information from their SMB customers of <unk>.
Each of that we believe none of our competition can match and 1 that we hope will make the lightspeed supplier network indispensable. So all suppliers in the verticals on which we are focused.
In closing I want the stress again, what a strong quarter of this was.
From new customers to higher ARPA to greater payments adoption. The company really fired on all cylinders. When Covid first hit Lightspeed was able to help our customers pivot their business models and adapt to a new omnichannel business reality as we emerge from the crisis. We believe lightspeed can help these same customers take advantage of the economic rebound the scale.
And their businesses and simplify their operations.
And and the longer term, we continue to see great opportunities payments adoption can go higher delivering of unified solution and retail and hospitality should allow for greater software adoption amongst our customer base. Our capital business is still very much in its infancy and the potential from the <unk> side with new order and our supplier network does not yet even begun to impact the top.
Line and finally once we close our proposed acquisition of <unk>. We believe we can help our SMB customers to fully recognize the potential of omni channel commerce.
The remains of lot of heavy lifting and long hours ahead, but the potential for lightspeed as a true 1 stop commerce platform has never been greater and the probability of success has in my mind never been higher and with that I will turn it over to Brandon.
Thanks Dax.
We're really pleased with these results today.
As you heard from Dax, what we're seeing is the strong uptick and our customers' volumes strong new customer demand and continued adoption of our value added offerings like payments.
The combination of these factors produced some terrific financial results for us this quarter and keep us quite enthusiastic about the future.
As usual, we will look at the building blocks of our business and everything starts with customer locations, which grew to over 150000 at June 30.
From over 140000 on a pro forma basis last quarter.
The hospitality business, particularly in Europe performed great this quarter as economies reopen.
And retail continued to perform well also it.
And it ended as of record quarter for new customer location additions, which were over 60% higher than a year ago organically.
And over 90% higher and total.
We saw some of the lowest churn rates, we've ever seen in the quarter and a number of customers come back after pausing of shutting down operations during lockdowns.
Combination of this improved churn with record new location additions led to the healthy growth and customer locations, we reported today.
But we're even more encouraged by the volume was driven by our customers. We are optimistic that as the economies reopened.
<unk> would be beneficiaries and we saw that happen this quarter.
CTV was an outstanding $16.3 billion up from $10.8 billion, just last quarter and was 203% higher than a year ago.
On an organic basis GTD grew on a 90% from last year's depressed levels.
And we're thrilled to see our customers and the communities they serve and come back to life.
The <unk> TV or omni channel retailers continue to do really well of 64% organic growth of that segment.
You sound more business shift back to physical and the quarter with the portion of our retail G television driven through physical locations growing 3 times faster than online.
As mentioned hospitality roared back to life as economies reopen and organic growth and <unk> was 164% and the quarter and was up 380% overall.
This wonderful performance by our customers translated into our payments revenue performing well above our plans.
Volume increases with expanding payment scalability around the world and.
Strong ongoing customer demand led the overall transaction based revenue growing more than 450% year over year.
Really encouraged to see all of this come together for customers and from <unk>.
All told than what you reported of $115.9 million of revenue up 220% over last year, and well ahead of our guidance of $90 million to $94 million excluding.
Acquisitions completed in the last 12 months revenue grew by 81%.
Subscription and transaction based revenue was 92% of our total revenue out of $106.4 million and grew by 218% on on organic basis.
Software and payments grew 78% year over year.
As mentioned earlier this growth was fueled by transaction revenue, which was $56.4 million up from $10.2 a year ago.
Gross.
<unk> grew by 154% and the quarter with overall gross margins of 50%.
The growth and gross profit was driven by higher <unk>, which grew 44% over $230 and the quarter up from 160 a year ago.
And the decline in gross margin year over year reflects the growing impact of our payments business and lower hardware and margins achieved this year due to the due to various incentives we extended to our customers to encourage adoption of our solutions as economies reopen.
Adjusted EBITDA loss for the quarter was $6 million ahead of our guidance of approximately $10 million and represented 5% of our revenue.
This has improved from prior year levels and continues to exhibit the leverage we see and the business model is more and more of our customers grow their business with lightspeed and.
The more of our solution footprint.
And finally, adjusted EPS loss was <unk> and the quarter.
So all told some outstanding results reported today that we're really encouraged by.
We will remain conservative and our near term view as we are seeing some pockets of challenges of the delta very enforces some countries back into the lockdown.
But these results today reaffirmed to us of the long term outlook is in good order and I will share some thoughts on that day or shortly.
On the back of today's results, we are updating our guidance for the full year and introducing Q2's outlook.
For the second quarter, we expect revenue and the range of $120 million to $124 million with adjusted EBITDA loss and the range of $12 million.
And these numbers incorporate some caution around the ongoing are reinstated lockdowns and reflect the full quarter of new authors of operations.
As is often the case as we absorb newly acquired companies they come with the near term increase and EBITDA loss until we integrate more fully.
And this is incorporated into the near term outlook, we've provided here.
For the year with the assumption that we closed the <unk> acquisition on or about October 1.
We now expect between 510 and $530 million of revenue.
And an EBITDA loss from the range of $35 million.
The EBITDA loss would represent approximately 6% to 7% of revenue guidance and it was improved from 10% last year and 18% 2 years ago.
As we look beyond fiscal 'twenty 2 we're encouraged by the progress we're making the macro trends, we are seeing and our improving market position.
You'll see and on our Investor deck posted on our Investor Relations website the.
We've provided on our preliminary views on the longer term operating model.
We believe we are well positioned to continue increasing our market share is the.
The Lightspeed brand continues to gain prominence and given our best in class solution suite and rapid adoption of cloud based solutions.
We further believe that we will be able to grow our software are true for new and existing customers as our customers adopt more of our solution footprint and we introduce new functionality to our customers.
We also believe the payments penetration will continue at the pace, we are seeing today, such that 50% penetration of our payment solutions and do our customer base.
Is achievable in the foreseeable future.
It should continue to contribute to the strong organic growth rates over this period.
As a reminder, our payment solutions and result in higher contribution margin and sold to our customers that are already using our cloud based solutions.
As the payments penetration increases, we expect more revenue per customer to contribute to our bottom line profitability.
So as of these business dynamics of occur we believe it will support strong operating leverage and drive profitability to that point over the long term, we anticipate expanding our software gross margins and expect the decline in operating expenses as a percentage of revenue and we're already seeing that happening and our results.
Now.
We further expect our increased scale over this period will allow us to realize better economics for our payment solutions.
And capture a greater opportunity within financial services for our customers and their suppliers more broadly.
On sequentially the should help drive our overall EBITDA margins and we believe that 20% margins are achievable over time.
While we expect to remain active and M&A, we have not factored any new M&A opportunities into this outlook and what their impact could be.
With that we'd like to open it up for questions operator.
Thank you and I'll now open of quick question.
You May press star 1 on the telephone keypad to ask the question and then that would be tier 1 on the telephone keypad to ask the question to the J. Your question press the pound key.
The first question comes from the line of Tim <unk> of Credit Suisse. Your line is now open you may ask the question.
Great. Good morning, everyone. Thanks, a lot for taking my question I just wanted to dig into locations. So a very strong number there and important leading indicator I know and important number for investors and I want.
Of the dig into the 2 things there first being if we could put a little bit of context around the mix of E com locations versus in store, how those are shaping up and that's very strong number for the quarter and then also when I think about location adds going forward sure Theres. The reopening play which is extremely bullish for you guys, but also we've talked about <unk>.
And expansive areas for location adds in terms of E. Com first merchants and then we've also talked about the potential and maybe move down market slightly to more of a self onboarding on line sort of direct board opportunity, maybe you could expand upon those thoughts all around the the key topic of locations growth.
Sure I'll start on that 1 Tim.
It's Brendan here.
So I think the you hit on some of the points.
What we saw happened on the quarter of first and foremost was benefits of reopening and.
And the economies around the world and we saw on many of our customers.
And that had previously paused or slowed or even shutdown operations come back to life and particularly in the hospitality sector and.
And that that was wonderful oversee and and then training and certainly a nice bounce back and and location growth.
We gave a bit of color on the physical versus the e-commerce.
Did see commerce, returning to the physical stores at a faster pace and E Commerce and I think that same trend showed and our.
And our location growth and the quarter as well.
The the Big story was more about the return of physical and this quarter than it was online.
Pete on longer term and maybe let JP weigh in on.
And sort of how and how we see.
Our market position and new pockets of opportunity and in terms of the Zion was kind of a quarter I think of us.
Namely around the economies reopening customers coming back to life.
And on a lot more commerce happening and physical locations.
J P. The you'd want to mention anything about the AD and then longer term debt.
Absolutely and I think also here what we saw is a lot of customers.
Remove some of the modules went back to buying more modules from lightspeed because of the reopening so I think all and all very happy and and ready to serve the core of all of it which is physical force as you all know.
Now going forward, yes.
Of course, we know we.
And we announced the of the accurate.
Acquisition and the goal of that is to be able to tackle within the verticals where were strong the Tac both digital first and we're very excited with the offering that we're going to break the market. We're very excited about the capabilities, where we we think that we have a very strong offering for digital first but.
Again, what's important for US is omni channel and it's really the vertical and you want to go deep inside of the verticals, where there's a lot of inventory and manage and in those verticals. Yes, we do what have digital first customer of now and digital only customers.
Excellent. Thank you so much both of the Brandon.
<unk>.
Okay.
Thank you.
Thanks, Tim. Thank you next question comes from the line of Dantrolene of RBC capital markets. Your line is now open you may ask a question.
Great Thanks, and the <unk>.
And Brad on some some really fantastic results here.
Wanted to just touch base on the payments monetization and kind of thinking through this quarter.
How much is really coming from repricing from recent acquisitions.
And then also from kind of incremental new wins, and then how youre thinking that maybe plays out.
As we as we kind of go throughout the year and then secondarily on the <unk> another incredibly strong quarter, I think up 44% and the passenger kind of broken out what was what was from payments and what was kind of from software expansion. Thank you.
Yeah, I'll take that 1.
Dan.
So I think the main driver of payments.
And if I kind of take a step back and look at the of look at the quarter.
Tony on Tim's questions.
The previous 1 with customer locations.
Gross exceptionally well on the quarter.
And then we also saw GTD grow really really significantly $16 billion of GTA V and the corner.
From 10, 8 just 90 days ago, So big resurgence of GTA V and that drove payments and it was not.
Not anything to do with re pricing or anything like that.
And it really just a function of the customer volumes and customer receptivity of the solution.
We've seen.
Continue to sell this or that.
Got it.
Really healthy clip.
And now you would've seen some news this week, we've now got it and in more markets across Europe, which is wonderful and we've got a much.
Router coverage and all of our customer base from a payment solution.
So yeah that was the main driver of the.
Of the great results on the payments line really encouraged by that.
And really optimistic as to what it holds for the future.
And we're still 10% penetrated of overall GTA V on that line, so lots and lots of opportunity ahead, and really pleased with the progress there.
On <unk>, we do give some supplemental disclosure so youll see our true.
On software Standalone was up 14% year over year on J P mentioned.
We saw a lot of customers.
The kind of lean back into the additional modules this quarter, which was wonderful to see.
And our belief is and the long run this will continue to be of good revenue driver for us.
And and I think overall ARPA was up 44% year over year inclusive of boats of.
And the payments revenue as Paul.
That's great. Thank you and I appreciate it.
Brian and maybe.
Just on the adults. So we're very comfortable and very happy with our ability to attach from your customers and payments. We've seen the attach rates go up and up and we're just very excited about launching in Europe, now and and the first few months of in Europe are really on a good trajectory for us. So we can expect to have deeper penetration of payments throughout the customer base as we go forward.
Thank you next question comes from the line of Bleach I'd share from National Bank Finance. Your line is now open you may ask your question.
Yes. Thank you.
Can you maybe update us on the competitive environment today, given the scale that you've built up here and in recent years like is that changing your billing sort of win against the sum of the part of our competitors.
And maybe I mean of.
And when we started doing this.
That's true too.
Become the go to brand within the verticals that we operate in and hospitality and and retail and the second of all we had was the a global company and not just North America.
<unk>.
From the results we've seen this quarter and.
On the pick up the speed over the last few quarters.
We can say the today likely that the go to graduate from the verticals that we operate and of course, the beauty of all of the acquisitions that we've done is that they come with a lot of technology. So what this is Don and basically.
Penetrated the brand and I think now and most countries, where we operate lightspeed and the Goto brand.
And I think also the value of basically every 1 of those have broadened our portfolio and Thats why we have now a lot of modules that we can sell and of course because of the overall solution.
Go very deep we are the factor of more competitive than.
And the other players and the market within the markets that we serve.
No.
Very happy with the strategy very happy with where we are and very very.
Very comfortable debt within the markets, where we operate VR and more competitive and we run.
Okay and does the sales.
The related question just quickly.
In terms of the your focus before it has been sort of complex enterprises, and these gains and sort of the more cachet and your brand it's more recognized and the market was including some of these acquisitions.
But you're kind of moving into kind of of the last complex retailers in terms of just kind of increasing the potential addressable market in front of me that's it. Thanks.
Chicken and we can't hear you.
J P. Your line's on mute.
And yes, I can think of our debt.
I think that as we do more.
And we will brought and we will do things that are that are outside of our outside of our targets just as we bring on more customers, but our focus remains on <unk>.
Being the go to Windows and those 12 key verticals.
Thanks, Operator, we'll take the next question.
Thank you we have the next question comes from the line of Andrew Jeffrey of to the Securities. Your line is now open and ask the question.
Hi, Yes, good morning, gentlemen, I appreciate you taking the question.
I Wonder if we could dig in a little bit on the.
And b to B and the.
The supply chain opportunity sort of broadly, but also specifically as it relates to new order and what and the order brings to the table just thinking about potential commercialization of those offerings this year or next.
And what that might look like and what it could mean to your financials.
Yes.
And as you know the.
And the and the vertical and which we operate.
There is the number of suppliers that have the acting lightspeed.
To fully integrate the ordering process and.
And actually give stores visibility on some of <unk>.
High level at the suppliers.
And here the number 1 goal of the order for us and it enables us basically it accelerates our road map.
Hi, a couple of years and enables us to now offer to our customers.
Fully integrated supply chain between suppliers and stores and consumers and gain a ton of visibility there.
Alright.
And look forward to the here and the details as they.
Come out it sounds like that's incremental.
Brandon.
And again reiterate excellent when.
And when you look out and think about software modules and payments attach and what do you think the since we're talking on our long term targets, but what do you think the deal to the RFP and potential is for the company.
Yeah, we haven't given any specific numbers, there, but because.
As we as we sit here today we're.
We're really comfortable with the progress, we're making on growing market share and.
And we've taken a look at the.
And the rates, we're growing the customer base and the size of our market. We remain really optimistic there we've been growing.
And we've always said that we saw an opportunity to grow the software are approved.
No.
The.
10% of year or thereabouts.
And as we sit here today and think about the.
The reception of our customers to incremental modules on our value prop of being.
And largely 1 stop shop for the core offerings, we feel very good and that we're going to continue to see that play out.
And we've mentioned the about half of our customers use.
At least 1 lightspeed module.
And have felt and also theres lots of white space there for us to continue to grow that.
Software and <unk>, and our and our view.
And then the rest of the ARPA of it comes from of course financial services payments.
Lightspeed capital and things of that nature or about 10% today.
We see certainly and the opportunity to get the 50% and the foreseeable future and.
And but all told the first successful doing that and we're going to see <unk> growth.
Consistently at a healthy clip here and the M&A notwithstanding.
Helpful. Thank you.
Thank you and we have the next question comes from the line of Josh debt of Kb.
Your line is now open you may ask your question.
Thank you team for taking the question really good set of results.
I wanted to ask just a little bit about the pace of M&A, obviously, you've had of a tremendous track record.
Really for the number of years, but the particular in the last year. So as you look out to the market do you still see.
And really lots of attractive opportunities and maybe have the.
Those become less interesting because you've done so many of them just just curious about your overall.
M&A appetite at this point.
Yes, I'll take the beginning maybe in the back and Brendan Q and I'll jump in.
I mean, we're always at the.
T J opportunities.
As you know I think it's part of our DNA, we're very good at buying.
Buying companies and integrating them into our business and seeing good returns.
And I think what we're going to remain with what we always said, which is we have 3 big categories. The first 1 is reads the increased geographical and geographic penetration and the second 1 is to go into the new verticals and the third as we accelerate our roadmaps and weight loss.
Examples of debt with equity and the order of reading.
About accelerating our roadmap.
Now maybe with 1 of the caveat you might see.
And the next acquisition focus more.
On the on technology and scale, because I think we've now reached scale and move.
And those geographies, where we where we wanted to have a presence, but we will remain opportunistic and we see the district and the right opportunities.
I think what Youll also CFO of focus from us on integration and Youre going to see the benefits of us.
Bringing all of those all of those companies that we've acquired.
And rolling out some of the incredible flagship products and things.
Things that had been combined efforts.
And the integration is the big big priority on the.
On our on our current roadmap, but but we will always continue to look at opportunities to enhance capability.
That is very helpful and maybe just a follow up for you and branded probably a little bit more of a housekeeping item, but when we start to build and.
New order and equity into our models should we be counting those as regular customers, which I think would effectively make the reported <unk> look lower just curious how and how we should build those in.
Yes, I think thats right approach.
Most of it's just going to carry on and lower our accrual based on the.
The the numbers, we've provided you Paul in terms of customer count and revenue.
And new order will offset that because it's the exact opposite.
Smaller number of customers of that much more.
Significant contracts.
So I think that's the right way to do it.
So we will we'll continue to report on total customers, obviously breakout subscription and transaction revenue.
And we will start to track the B to B cornering side of things in terms of order volume and what that opportunity.
It represents 4.
Financial services for Us and will start to track that and reported on non of little separately, but and.
In terms of software and I think that's the right way to do it.
Okay. Thank you.
Thank you next question comes from the line of Daniel Chan of TD Securities. Your line is now open you may ask your question.
Hi, good morning, and congrats on the great results.
Reported that 10% of your GGP and attached the payments.
And to clarify it was doing that in March I believe you said and the prior quarter. Excluding the acquired GTD. So I just wanted to confirm that the flat attach rate is because youre not taking it on a larger GTT base. As you include acquired GCB and to that calc.
Yes.
Nuanced part of the Sterne and the last quarter. We said we are approaching 10% of the final month of the quarter and this corner, we set of 10% for the entire quarter, but you're spot on.
In terms of the attach rates themselves and those continue to be really strong J P.
You mentioned that earlier, we're selling and awful lot of payments around here, the new customers and existing customers and opening up new markets.
And in terms of what affects that ratio and the current quarter.
Just a couple of things 1 obviously the phone then and.
And then the GTA V and and our payment solution.
Yes, the available there.
And then 2 we've seen hospitality of GTA V just come Roaring back and.
Everyone is well aware or not as far along on.
And on payments penetration and hospitality as we on a retail so that of course affects the ratio but.
I mean look all told 10% penetrated is wonderful and we're really pleased with our progress, but there's just a ton of opportunity still ahead, and thats, probably even more exciting for us.
But that's the mechanics of what's playing out of play.
Okay. Thanks, that's helpful.
And then I wanted to ask another question on the competitive dynamics, obviously shopify, saying they are seeing an acceleration and their point of sales system, just wondering whether you're seeing the more now on the marketplace that before.
So our close rates are fixed.
The strong as they've ever been.
Within the markets that we serve.
And again, our view is we're not trying to be everything to everyone. What we want to do it we wouldn't be strong within the segments that we serve which are merchants that have.
And of heavy inventory lifting.
And in that market, I think we're stronger than ever and.
We're not feeling any kind of threats on from other companies.
Thank you we have the next question comes from the line of pass muster policy of BMO capital markets. Your line is now open you may ask the question.
Hi, good morning, and.
And that's early days for payments and Europe.
How should we be thinking about that trajectory do you think it will play out very similar and North America as far as the ramp and the attach rates or is there any nuances of cost.
So far so good and fair enough.
Sure.
We're just launched obviously some of its early days, we announced availability of more markets. This week, which is wonderful.
And so far so good and where you're seeing.
The teams and really embrace it in terms of and the teams on the ground with the customers.
And we're seeing good signs of early uptake. So we remain we remain pretty enthusiastic there for sure.
Great.
And the effect of capital.
We look at the growth this quarter and going forward just to clarify is that being driven predominantly by the stripe partnership or is the growth more weighted towards shockey, which I think with the accurate algae.
We're growing both sides of it right now.
We'll continue to work through what the longer term model is for us, but I think the most encouraging thing is.
430 customers took on events this quarter.
And that grew significantly.
From just a couple of quarters ago.
So pretty pretty excited we always felt like this was going to be well received product and our customer base.
And we thought that.
Through this reopening and that we might see an uptick in demand.
<unk> brought the the offering now the some of the newly acquired customer bases like ups. There would be 1 of her from tax and so we've started to introduce this offering that serves customers. In addition to shop pizza customers and in addition to lightspeed customers and North America.
So we're still kind of.
Finalizing what the go forward model won't be but I think most importantly, we are seeing.
Customer receptivity and the product and.
We expect that will continue to grow.
And you think of us create opportunity here.
Great great.
Great quarter, guys and the other fine thanks.
Thank you we have the next question comes from the line of Raimo <unk> of Barclays. Your line is now open and you may ask the question.
Okay. This is the anchor on the thanks for taking my question. If you could give on the guidance going forward could you talk us through some of the assumptions of expectation do you add with respect to hospitality and retail and maybe the different geographies as well with particular restrictions being put back and forth. Thank you.
Yes, it's a tricky 1.
And we obviously hopefully the takeaway from this quarter as well.
<unk>.
Hopefully everyone.
Hearing us unclear and we think the.
The long term signs and signals, we're seeing right now are really strong.
Near term.
The remains of unpredictable environment, we're seeing certain.
Geographies the.
Go back into the Lockdowns.
And we're seeing constant of headlines of the delta variance and what that might be what that might mean.
And so.
We'll continue to be cautious and.
Prudent and the near term, we're thinking about that we've obviously seen a quarter here where.
And we saw really significant.
<unk> expansion.
All of them.
And it's prudent to assume that that's the.
That's a permanent thing hopefully it is but.
I think there is enough variability out there right now of that.
We're going to continue to take a cautious with its conservative stance and the near term but.
We're really still excited about the long term and on what.
And what we see and some of the results we reported today.
Yes that definitely makes sense and then just separately I wanted to touch on the partnership that you announced the open table quickly and maybe you could just talk us through what that partnership gains and look at what can.
And it means for lightspeed going forward.
The third the partnership with open table.
Very exciting for us basically it enables someone on on open table to reserve a table and a lightspeed restaurants without having the Nick.
External terminal to deal with open table. It just gets completely managed within the lightspeed platform. So making it again the obsession is to make it easier for our customers. So we're very excited about the opportunity because of lot of our customers who are of high end restaurants.
Our reliance on Opel cable for all of the bookings so we needed the beauty areas. The book and open table instead of having your site there and then I'll, let you would and all of the out of restaurants, if you're using lightspeed. The reservation directly goes into the POS goes into the table and we're going to of course in a lot of data and could you comment on anything you'll do it while youre booking on your table.
Got it thank you.
And it has the next question comes from the line of Paul steep of Scotia Bank. Your line is now open you may ask your question.
And then Mr. Paul steep your line is now open you may ask a question share. Thanks.
Morning, Thanks for providing the longer term.
On the ramp to 50% of GTA V. Brandon can you maybe set the table for US just in terms of the status of availability I think it's clear on geos, but maybe what your assumptions are around portfolio and any sort of gating factors in terms of doing that and I don't know that helps inform us but.
Could you give us a sense of where those early cohorts are in terms of uptake in terms of payments because it sounds like you've you've stressed the foreseeable future a number of times. So I just wanted to try and get a sense of how we should think of at that time.
Yes, so I mean, we've gone from not having payments not that long ago to now.
10% of the.
The $16 billion and GTP being processed by payments here this quarter.
So in terms of of how we go from 10% and out of 50.
And I don't see any.
And the step function blocks necessarily as CNS is just ongoing execution.
And we continue the attach new customers and at the pace and we've been attaching which so.
60% to 70% and that range.
And then continue to see on our existing base might migrate over at the pace, we've been seeing and I think it.
Based on the status on the availability of Paul to your question now now having covered most of Europe with our solution and those teams seeing kind of early uptake.
The teams internally on and working hard to make sure we rent payments into our Australia and market and.
And so some of our recently acquired customer bases as well like bend.
So.
We have in the near term line of sight to that availability as well.
And so I think it's just.
The kind of steady execution from here, we don't worry a lot about whether customers are going to buy this and I think we've proven that now it's the value prop of strong of integrated payments with our software.
So I really do think it's just.
Steady execution from along the along the lines of the pace you've been seeing from us.
From here to 50.
That's helpful. Just a follow up tied to that and also on 1 of the DOCSIS earlier comments that you you highlighted the comment around new flagship products. Obviously, you have on ongoing release cycle, but it's been awhile on Io. Please could you give a refresher on where you're at on the overall integration in terms of.
Launching newer products that of have built in some of the acquisitions you've done. Thanks, guys. Yeah. So we have our.
Our flagship product that we are building towards and retail and 1 and hospitality.
And those those will bring together the all of the technology assets.
Of the of the acquired companies onto a parcel of industry, leading best of class.
Our platform so wanted to get 1 good example would be.
Upsurge of analytics, which are.
A big differentiator for hire and restaurants and Thats.
Coming to the to the flagship.
Series of restaurant platform, that's and data, but we will be released later this summer.
1 example of another 1 is schottky capital, which is a which is coming into being brought into all of the into both platforms.
And cash.
Counter the.
The Australian points of sale that we acquired.
Is is developing and the inventory module for our hospitality platform. So all of the all of these engineering teams are coming together and building on what are very formidable comp.
Commerce platforms from retail and hospitality and where we're thrilled with what we're seeing across really what is best in class teams.
And for Commerce.
Thank you.
And then and I had to ask the question you will need the Pos tier 1 on the telephone keypad that'll be the tier 1 on the telephone keypad to ask the question next question comes from the line of Jack Day of Morgan Stanley. Your line is now open you may ask your question.
Great. Thanks for the question.
I wanted to double click on the on hospitality and the U S.
I think 2 out of the 3 new customer wins that you highlighted and I think were U S hospitality restaurants related and the area that you're really.
Bolstered your presence through acquisitions recently can you talk a little bit about the momentum you are seeing specifically and U S hospitality and restaurants kind of where your sweet spot is and how youre thinking about the competitive environment.
Yeah.
Yes.
I'll take the suite.
<unk> is the.
The more established restaurants, a lot of them or find the table table service.
As you know.
Dax mentioned, we've been working towards the launch of our product and the U S. That's going to be called K series, which is our flagship and.
And really that product is going to be a combination of lightspeed payments.
And the case here of the ingredient management and the advanced analytics platform and that is due to be launched by the end of summer and the U S.
And we believe that's going to be and extremely competitive products of the markets.
We we have today up serve and lightspeed that serve that market, but we're very bullish and excited about the launch and we've been preparing for some time now and and we feel that the combination of everything that we're putting together and can be very unique and the market and.
And of course, the opportunity of now with all of that the reopening with a lot of demand there.
A lot of new concepts that are created there is a lot of the of.
The current restaurants Earth, we're opening new facilities, but we feel the market is up the growth right now and let's not forget that the majority of this market and the legacy systems.
And as the big opportunity here for the.
To go and grab it.
Great. Thank you.
Operator, I think of the time for 1 more question.
Thank you. So we had the question comes from the line of Todd Coupland of CIBC. Your line is now open you may ask the question.
Oh, Thank you good morning, everyone.
I wanted to ask a question in.
And in light of the square acquisition of buy now pay later $29 billion acquisition of Big move and Fintech, Youre, obviously seeing great traction with payments.
Is the buy now pay later button and something that you think is important to your customer base and if it is how are you thinking about that opportunity. Thanks a lot.
So I'll start on the customer side and then if you guys want to jump in.
I mean again display of the consumer play where the consumers purchasing from a vendor and we.
We're giving them financing and payment terms.
So I think it is valuable for lightspeed.
Merchants, but for now we are actually working with the number of partnerships and we do not handle this ourselves.
And maybe just when we think about going forward and you think about what we're building here and we're going to hold the ton of data between supplier stores and consumers.
This will help us of course as we go forward better understand.
Credit and how we can handle it but I think for now we're just going to focus on what we are.
What we launched as you know we're launching payments if the very important to us we're creating a lot of value with all of the acquisitions and the acceleration of roadmap, we're going to finalize this so I think that's going to be.
If we think about it it will be the.
The coming 12 months it'll be later for now we're going to partner with companies and provides.
And we'll provide lending.
Okay, I think we'll wrap it up there so thank you everybody for joining us today.
And again, the senior management team will be available for questions. If anybody has any please feel free to reach out to me.
What's the schedule a call and thank you for joining again and have a great day.
Thank you that concludes today's conference call. Thank you all for participating you may now disconnect.
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