Financial Data and Key Metrics Changes - The company reported revenue of $230.2 million for Q4 2024, a 25% year-over-year increase, and for the full fiscal year, revenue grew by 24% to $909.3 million [17][41] - Adjusted EBITDA for Q4 was $4.4 million, improving from an adjusted EBITDA loss of $4.3 million in the same quarter last year [47] - The company achieved a net retention rate of approximately 110% and gross payments volume as a proportion of GTV ended the year at 32%, up from 19% the previous year [41][53] Business Line Data and Key Metrics Changes - Subscription revenue increased by 7% year-over-year to $81.3 million, while transaction-based revenue grew by 40% to $139 million [43][45] - The gross margins on subscription revenue improved to 77%, up from 75% in the same quarter last year [43] - Lightspeed Capital revenue grew by 135%, indicating strong demand for this service among customers [45] Market Data and Key Metrics Changes - Total GTV for the quarter was $20.7 billion, up 2% year-over-year, with flagship products showing a 29% increase in GTV [50][94] - Customer locations with GTV exceeding $1 million a year grew by 6%, while those with GTV under $200,000 a year continued to decline [51] - The company expects payments penetration to reach 40% to 45% by the end of fiscal 2025 [76] Company Strategy and Development Direction - The company is focused on three key operational objectives for fiscal 2025: accelerating software revenue growth, advancing adoption of financial services, and controlling costs [6][34] - There is a strong emphasis on improving the customer journey and increasing outbound sales efforts to attract higher-GDP customers [31][32] - The company plans to continue investing in product innovation, particularly leveraging AI to enhance customer experiences and operational efficiencies [26][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term profitable growth, with expectations of at least 20% revenue growth and adjusted EBITDA of no less than $40 million in fiscal 2025 [66] - The macroeconomic environment remains challenging, particularly in certain retail verticals, but management believes that growth will accelerate once these verticals recover [88][89] - The restructuring efforts are expected to yield benefits throughout fiscal 2025, with a focus on operational efficiencies and cost reductions [37][56] Other Important Information - The company announced a share repurchase program allowing for the buyback of up to 10% of its public float, valued at approximately $140 million [64] - The company closed the quarter with over $722 million in cash and cash equivalents, down from approximately $749 million in the previous quarter [60] Q&A Session Summary Question: Impact of sales force pivot on subscription revenue - Management indicated that the account management team, which typically accounts for about 50% of software bookings, will return to a balanced approach of cross-selling payments and upselling software, which is expected to improve subscription revenue [74] Question: Transaction gross margins outlook - Management expects transaction gross margins to remain stable or increase due to the growth of the capital business and international expansion of Lightspeed Payments [81] Question: Macro environment impact on growth - Management noted that certain retail verticals have not returned to pre-COVID levels, but they remain confident in achieving at least 20% top-line growth [89] Question: GTV growth components - Management highlighted that GTV growth in flagship products has been strong, and they expect GTV to grow as they focus on increasing customer locations and software revenue [94] Question: Lightspeed Capital growth potential - Management sees significant growth potential for Lightspeed Capital, with plans to grow cautiously and explore partnerships for funding [114]

& lightspeed Fourth Quarter FY2024 Results All references in this presentation to the "Company", "Lightspeed", "us" or "we" are to Lightspeed Commerce Inc. All references in this presentation to dollars, "$" or "US$" are to United States dollars, and all references to Canadian dollars and "C$" are to Canadian dollars. This forward-looking information and other forward-looking information are based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, curr ...

[Financial & Operational Highlights](index=1&type=section&id=Lightspeed%20Announces%20Fourth%20Quarter%20and%20Full%20Year%202024%20Financial%20Results) Lightspeed reports strong Q4 and full-year 2024 financial results, marked by revenue growth and improved profitability [Fourth Quarter Financial Highlights](index=1&type=section&id=Fourth%20Quarter%20Financial%20Highlights) Lightspeed's Q4 2024 revenue grew 25% to $230.2 million, achieving positive Adjusted EBITDA of $4.4 million Q4 Fiscal 2024 Financial Highlights (vs. Q4 Fiscal 2023) | Metric | Q4 FY2024 (in millions) | Q4 FY2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $230.2 | $184.2 | +25% | | Transaction-based Revenue | $139.0 | $99.6 | +40% | | Subscription Revenue | $81.3 | $76.2 | +7% | | **Net Loss** | ($32.5) | ($74.5) | Improved | | Net Loss per Share | ($0.21) | ($0.49) | Improved | | **Adjusted EBITDA** | $4.4 | ($4.3) | Improved | | **Adjusted Income (Loss)** | $8.5 | ($0.4) | Improved | | Cash and Cash Equivalents | $722.1 | - | - | [Full Fiscal Year 2024 Financial Highlights](index=1&type=section&id=Full%20Fiscal%20Year%20Financial%20Highlights) Lightspeed's full fiscal year 2024 revenue grew 24% to $909.3 million, achieving positive Adjusted EBITDA for the first time Full Fiscal Year 2024 Financial Highlights (vs. FY 2023) | Metric | FY2024 (in millions) | FY2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $909.3 | $730.5 | +24% | | Transaction-based Revenue | $545.5 | $399.6 | +37% | | Subscription Revenue | $322.0 | $298.8 | +8% | | **Net Loss** | ($164.0) | ($1,070.0) | Improved | | Net Loss per Share | ($1.07) | ($7.11) | Improved | | **Adjusted EBITDA** | $1.3 | ($33.9) | Improved | | **Adjusted Income (Loss)** | $24.5 | ($25.1) | Improved | - Fiscal 2024 was a milestone year, with the company exceeding its revenue outlook and achieving a full year of **positive Adjusted EBITDA** for the first time[3](index=3&type=chunk) [Fourth Quarter Operational Highlights & Corporate Updates](index=2&type=section&id=Fourth%20Quarter%20Operational%20Highlights) Q4 operational highlights include strong ARPU and GPV growth, new AI-powered product launches, and strategic corporate updates Q4 2024 Key Performance Indicators (YoY) | KPI | Q4 2024 | Change (YoY) | | :--- | :--- | :--- | | **ARPU** | ~$431 | +29% | | **GPV** | $6.6 billion | +75% | | **Total GTV** | $20.7 billion | +2% | | **Lightspeed Capital Revenue** | - | +135% | | Customer Locations GTV >$500k/yr | - | +5% | | Customer Locations GTV >$1M/yr | - | +6% | - GPV as a percentage of GTV reached **32%** in the quarter, a significant increase from 19% in the prior year, demonstrating strong adoption of Lightspeed Payments[1](index=1&type=chunk) - New product releases include AI-powered configuration recommendations, margin-based pricing, enhanced order tracking with Apple Wallet, and Payment Links[6](index=6&type=chunk) - The company announced a reorganization to reduce headcount-related expenses by approximately **10%** (eliminating ~280 roles) and authorized a share repurchase program for up to **10%** of the public float[7](index=7&type=chunk) - Dax Dasilva has been reappointed as Lightspeed's permanent CEO, removing the interim tag[2](index=2&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) Lightspeed provides a positive fiscal 2025 outlook, projecting revenue growth exceeding $1 billion and minimum Adjusted EBITDA of $40 million [Fiscal 2025 Outlook](index=3&type=section&id=Fiscal%2025%20Outlook) Lightspeed projects at least 20% revenue growth and a minimum of $40 million in Adjusted EBITDA for fiscal year 2025 Fiscal Year 2025 Outlook | Metric | Outlook | | :--- | :--- | | **Revenue Growth** | At least 20% | | **Adjusted EBITDA** | A minimum of $40 million | - The company expects to exceed the **$1 billion revenue mark** in Fiscal 2025[3](index=3&type=chunk) [First Quarter 2025 Outlook](index=3&type=section&id=First%20Quarter%202025%20Outlook) Lightspeed forecasts Q1 2025 revenue between $255 million and $260 million, with Adjusted EBITDA of approximately $7 million First Quarter 2025 Outlook | Metric | Outlook | | :--- | :--- | | **Revenue** | Approx. $255 million to $260 million | | **Adjusted EBITDA** | Approx. $7 million | - Subscription revenue growth for Q1 2025 is expected to be consistent with Q4 2024[10](index=10&type=chunk) [Supplementary Information](index=5&type=section&id=Supplementary%20Information) This section details financial outlook assumptions and defines key non-IFRS measures and performance indicators [Financial Outlook Assumptions](index=5&type=section&id=Financial%20Outlook%20Assumptions) The financial outlook relies on stable macroeconomic conditions and successful payment adoption, while acknowledging risks - Key assumptions include continued uptake of payments solutions, manageable churn rates, and successful migration of existing customers to flagship offerings[15](index=15&type=chunk) - Major risks include macroeconomic factors affecting SMBs, exchange rate fluctuations, inability to increase customer sales, competition, and information security breaches[17](index=17&type=chunk) [Non-IFRS Measures and Ratios & Key Performance Indicators](index=7&type=section&id=Non-IFRS%20Measures%20and%20Ratios%20%26%20Key%20Performance%20Indicators) This section defines key non-IFRS measures and KPIs like Adjusted EBITDA, ARPU, GPV, and GTV - **Adjusted EBITDA:** Defined as net loss excluding interest, taxes, depreciation, amortization, and adjusted for items like share-based compensation, transaction-related costs, and restructuring[22](index=22&type=chunk) - **ARPU (Average Revenue Per User):** Represents total subscription and transaction-based revenue divided by the number of Customer Locations[37](index=37&type=chunk) - **GPV (Gross Payment Volume):** The total dollar value of transactions processed through Lightspeed's payments solutions where it acts as the principal[39](index=39&type=chunk) - **GTV (Gross Transaction Volume):** The total dollar value of transactions processed through the software platform, an indicator of customer success and platform strength[40](index=40&type=chunk) [Financial Statements & Reconciliations](index=13&type=section&id=Financial%20Statements%20%26%20Reconciliations) This section presents Lightspeed's consolidated financial statements and reconciliations of IFRS to non-IFRS results [Condensed Consolidated Statements of Loss and Comprehensive Loss](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) The statement details FY2024 total revenue of $909.3 million and a significantly reduced net loss of ($164.0) million Fiscal Year Ended March 31 (in thousands of US dollars) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | **Total Revenues** | $909,270 | $730,506 | | Gross Profit | $385,250 | $331,961 | | Operating Loss | ($203,019) | ($1,099,040) | | **Net Loss** | ($163,964) | ($1,070,009) | | Net Loss per Share | ($1.07) | ($7.11) | [Condensed Consolidated Balance Sheets](index=14&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, Lightspeed reported total assets of $2.575 billion, with cash and cash equivalents at $722.1 million Balance Sheet as of March 31 (in thousands of US dollars) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $722,102 | $800,154 | | **Total Assets** | $2,575,154 | $2,668,732 | | Total Liabilities | $162,753 | $171,283 | | **Total Shareholders' Equity** | $2,412,401 | $2,497,449 | [Condensed Consolidated Statements of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) FY2024 saw improved net cash used in operating activities at ($97.7) million, with cash and cash equivalents ending at $722.1 million Cash Flows for Fiscal Year Ended March 31 (in thousands of US dollars) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | **Cash flows used in operating activities** | ($97,667) | ($125,284) | | Cash flows from investing activities | $25,950 | $8,817 | | Cash flows used in financing activities | ($6,226) ($35,411) | | **Net decrease in cash** | ($78,052) | ($153,500) | | **Cash and cash equivalents – End of year** | $722,102 | $800,154 | [Reconciliation from IFRS to Non-IFRS Results](index=16&type=section&id=Reconciliation%20from%20IFRS%20to%20Non-IFRS%20Results) This section reconciles IFRS net loss to non-IFRS measures, including Adjusted EBITDA and Adjusted Income, for Q4 and full fiscal year 2024 [Adjusted EBITDA Reconciliation](index=16&type=section&id=Adjusted%20EBITDA) This sub-section details the reconciliation of net loss to Adjusted EBITDA for both quarterly and full fiscal year periods Adjusted EBITDA Reconciliation (in thousands of US dollars) | Period | Net Loss | Adjustments | Adjusted EBITDA | | :--- | :--- | :--- | :--- | | **Q4 2024** | ($32,540) | $36,931 | $4,391 | | **Q4 2023** | ($74,468) | $70,120 | ($4,348) | | **FY 2024** | ($163,964) | $165,229 | $1,265 | | **FY 2023** | ($1,070,009) | $1,036,128 | ($33,881) | [Adjusted Income (Loss) Reconciliation](index=17&type=section&id=Adjusted%20Income%20%28Loss%29) This sub-section provides the reconciliation of net loss to Adjusted Income (Loss) for quarterly and full fiscal year results Adjusted Income (Loss) Reconciliation (in thousands of US dollars) | Period | Net Loss | Adjustments | Adjusted Income (Loss) | | :--- | :--- | :--- | :--- | | **Q4 2024** | ($32,540) | $41,066 | $8,526 | | **Q4 2023** | ($74,468) | $74,066 | ($402) | | **FY 2024** | ($163,964) | $188,499 | $24,535 | | **FY 2023** | ($1,070,009) | $1,044,955 | ($25,054) |

Total revenue of $230.2 million grew 25% year-over-year and annual revenue exceeded previously-established outlook Net loss and Adjusted EBITDA1 improved to ($32.5) million and $4.4 million, respectively GPV as a percentage of GTV was 32% in the quarter, up from 19% in the prior year ARPU2 of ~$431 grew 29% year-over-year with Net Retention Rate of ~110% Lightspeed reports in US dollars and in accordance with IFRS. MONTREAL, May 16, 2024 /PRNewswire/ - Lightspeed Commerce Inc. ("Lightspeed" or the "Company" ...

Q4 product updates feature new data-driven innovations in retail and hospitality to unlock additional customer value and operational efficiencies MONTREAL, April 30, 2024 /PRNewswire/ - Lightspeed Commerce Inc. (NYSE: LSPD) (TSX: LSPD) ("Lightspeed" or the "Company"), the one-stop commerce platform empowering merchants to provide the best omnichannel experiences, today highlighted the multitude of products and services shipped in Q4 to increase scalability through data-driven insights, and improve the exper ...

Financial Data and Key Metrics - Revenue for Q3 2024 was $239.7 million, up 27% year-over-year, exceeding the high end of the previously established outlook of $232 million to $237 million [34] - Adjusted EBITDA for Q3 2024 was $3.6 million, stronger than the outlook of $2 million, marking the second consecutive quarter of positive adjusted EBITDA [34] - Gross Payment Volume (GPV) increased 69% year-over-year to $6.6 billion, with GPV as a percentage of GTV improving to just under 30% from 25% last quarter [57] - Total GTV for the quarter was $23.1 billion, up 3% year-over-year, with growth in Europe and APAC hospitality offsetting declines in certain retail categories in North America [50] - Subscription revenue increased 9% year-over-year to $80.9 million, with gross margins on subscription revenue at 76%, up from 73% in the same quarter last year [47] - Transaction-based revenue grew 38% to $147.8 million, driven by the growth in GPV and the capital business, which more than doubled year-over-year [48] Business Line Data and Key Metrics - Unified Payments initiative is on track to achieve GPV representing 30% to 35% of GTV by fiscal year-end, with strong adoption in North America and progress in Europe and APAC [42] - The capital business saw revenue more than double year-over-year, contributing to a 95% gross margin [88] - Software revenue growth was impacted as account managers focused on Unified Payments, but is expected to rebound in fiscal 2025 as teams return to upselling software [66] - The supplier network continues to expand, with new high-value brands like Tommy Bahama, Baffin, and UNTUCKit joining the platform [41] Market Data and Key Metrics - Europe saw strong GTV growth, with GPV in Europe up 250% year-over-year, driven by new customer adoption and existing customer upselling [17] - APAC hospitality also experienced double-digit GTV growth, though retail in North America faced challenges, particularly in categories like bikes and home [23] - North America remains more advanced in Unified Payments adoption, with efforts now focused on expanding the Total Addressable Market (TAM) by targeting high-risk verticals [7] Company Strategy and Industry Competition - The company is shifting focus towards growth in fiscal 2025, with investments in outbound sales to target high-GTV customers, particularly in retail and hospitality [44] - The company plans to continue expanding its product offerings, including Lightspeed Capital and new POS solutions like Lightspeed Tableside, to enhance customer experience and drive growth [43] - The competitive gap between the company and others in the market is widening, with the company's integrated software and payments platform being a key differentiator [35] Management Commentary on Operating Environment and Future Outlook - Management is confident in achieving the fiscal 2024 goals, particularly in Unified Payments and profitability, with a focus on growing the top line while maintaining adjusted EBITDA positive performance [39] - The company expects to see a rebound in software revenue growth in fiscal 2025 as account managers return to upselling software modules [66] - The company is committed to achieving adjusted EBITDA breakeven or better for fiscal 2024 and expects to continue generating positive adjusted EBITDA in the future [44] Other Important Information - The company closed the quarter with $750 million in cash and cash equivalents, with cash burn excluding the capital business at just under $5 million [52] - The company is focused on improving unit economics through Unified Payments, with LTV to CAC more than doubling for customers taking both software and payments [93] - The company is exploring M&A opportunities to further enhance its product offerings and expand into new verticals and geographies [95] Q&A Session Summary Question: Unified Payments long-term goals and geographic mix [6] - The company aims to achieve 50% GPV attachment, with 30% to 35% expected by fiscal year-end, and 40% to 45% the following year. North America is more advanced, while Europe is seeing slower but steady adoption [7] Question: Software revenue growth and potential inflection point [8] - Software revenue growth was impacted by the focus on Unified Payments, but is expected to rebound in fiscal 2025 as account managers return to upselling software [9] Question: Churn experience in Europe [12] - Churn in Europe has been consistent with North America, with no significant changes post-Unified Payments rollout. The company is focused on retaining high-GMV customers [12][13] Question: Supplier network and vertical differentiation [14] - The supplier network is strongest in apparel and bikes, with expansion into sporting outdoors. The company is enhancing the experience for apparel customers and expanding into new verticals [14] Question: Outbound sales and EBITDA cadence [18] - The company is investing in outbound sales to target high-GTV customers, with investments expected to precede revenue growth. Adjusted EBITDA is expected to remain positive in fiscal 2025 [19] Question: GTV trends and macro impact [22] - GTV growth was mixed, with strong growth in Europe and APAC hospitality offset by declines in North American retail and hospitality. Weather impacted January performance in North American hospitality [23][25] Question: Small merchant GTV contribution [26] - Customers with under $200k annual GTV represent 5% of total GTV and are expected to churn over time, with minimal impact on overall GTV [26] Question: International market adoption and software growth [31] - The company is bundling software and payments for new customers in Europe, with strong adoption rates. Existing customers are being upsold to payments, with slower but steady adoption [17] Question: Direct sales force expansion [79] - The company plans to expand its outbound sales force, particularly in retail in the U.S. and hospitality in Europe, Canada, Australia, and New Zealand [82] Question: Gross margin outlook [97] - Gross margins are expected to remain above 40%, with declining referral fees offset by higher margins from international payments and growth in the capital business [97] Question: Software ARPU and growth potential [114] - Software ARPU has significant growth potential, with customers potentially paying 4x to 5x current levels as they adopt more modules and migrate to flagship products [120] Question: Vertical eligibility for Lightspeed Payments [102] - Approximately 80% of GTV is monetizable, with 15% to 20% in industries or geographies where payments are not yet supported. The company is working on solutions for high-risk verticals [103]

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 As used in this management's discussion and analysis ("MD&A"), unless the context indicates or requires otherwise, all references to the "Company", "Lightspeed", "we", "us" or "our" refer to Lightspeed Commerce Inc. together with our subsidiaries, on a consolidated basis as constituted on December 31, 2023. This MD&A dated February 8, 2024, for the three and nine months ...

[Management's Discussion and Analysis of Financial Condition and Results of Operations](index=1&type=section&id=MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) [Overview](index=2&type=section&id=Overview) Lightspeed offers a cloud-based commerce platform for SMBs, with its strategy focused on integrating POS and payments, driving 25% revenue growth to $230.3 million in Q2 FY2024 - Lightspeed provides a cloud commerce platform for SMBs, integrating omni-channel sales, back-office operations, and payments[14](index=14&type=chunk)[15](index=15&type=chunk) - The company's flagship solutions, Lightspeed Restaurant and Lightspeed Retail, are being sold as a unified offering with embedded payments, a key strategic initiative to increase customer adoption and monetize a larger portion of GTV[16](index=16&type=chunk)[17](index=17&type=chunk) Q2 FY2024 Key Metrics vs. Q2 FY2023 | Metric | Q2 FY2024 (3 months ended Sep 30, 2023) | Q2 FY2023 (3 months ended Sep 30, 2022) | YoY Growth | | :--- | :--- | :--- | :--- | | Total Revenue | $230.3 million | $183.7 million | 25% | | Gross Payment Volume (GPV) | $5.9 billion | $3.7 billion | 59% | | Gross Transaction Volume (GTV) | $23.5 billion | $22.3 billion | 5% | | Monthly ARPU (ex-Ecwid) | ~$425 | ~$337 | 26% | - Transaction-based revenue has become the largest revenue stream, accounting for **60% of total revenues** for the quarter, up from **55%** in the prior year, reflecting the success of the payments strategy[22](index=22&type=chunk) [Sustainability and Macroeconomic Conditions](index=6&type=section&id=Sustainability%20and%20Macroeconomic%20Conditions) Lightspeed commits to sustainability and DEI, viewing macroeconomic uncertainties as drivers for SMB adoption of its cloud-based solutions - Sustainability efforts include the Carbon Free Dining program, which has planted over **1.5 million trees**, and partnerships with carbon-neutral cloud providers like AWS and Google Cloud[26](index=26&type=chunk) - The company maintains a target of at least **37.5% female representation** on its board and grants equity to all permanent employees upon hiring[27](index=27&type=chunk) - Despite macroeconomic pressures, Lightspeed sees an opportunity as SMBs increasingly replace legacy on-premise systems with modern, cloud-based platforms to manage labor shortages and find new efficiencies[29](index=29&type=chunk) - The company has no significant operations in the Middle East, Russia, or Ukraine but has relocated many personnel from Russia and increased cybersecurity monitoring in response to geopolitical instability[31](index=31&type=chunk) [Key Performance Indicators](index=7&type=section&id=Key%20Performance%20Indicators) Lightspeed tracks ARPU, GPV, and GTV, reporting strong Q2 FY2024 growth in ARPU and GPV, reflecting payments solution scaling Key Performance Indicators (Q2 FY2024 vs Q2 FY2023) | KPI | Definition | Q2 FY2024 (3 months ended Sep 30, 2023) | YoY Growth | | :--- | :--- | :--- | :--- | | **ARPU (monthly, ex-Ecwid)** | Total subscription & transaction revenue per customer location. | ~$425 | 26% | | **GPV** | Total transaction value processed through Lightspeed Payments. | $5.9 billion | 59% | | **GTV** | Total transaction value processed through the software platform. | $23.5 billion | 5% | [Non-IFRS Measures and Ratios](index=8&type=section&id=Non-IFRS%20Measures%20and%20Ratios) Lightspeed uses non-IFRS measures like Adjusted EBITDA and Adjusted Income, achieving positive results in Q2 FY2024, signaling profitability progress Reconciliation of Net Loss to Adjusted EBITDA (Q2 FY2024 vs Q2 FY2023) | (In thousands of US dollars) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | | :--- | :--- | :--- | | Net loss | (42,492) | (79,943) | | **Adjusted EBITDA** | **242** | **(8,523)** | Reconciliation of Net Loss to Adjusted Income (Loss) (Q2 FY2024 vs Q2 FY2023) | (In thousands of US dollars) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | | :--- | :--- | :--- | | Net loss | (42,492) | (79,943) | | **Adjusted Income (Loss)** | **6,404** | **(7,468)** | | **Adjusted Income (Loss) per Share** | **$0.04** | **($0.05)** | Reconciliation of Cash Flows to Adjusted Cash Flows (Q2 FY2024 vs Q2 FY2023) | (In thousands of US dollars) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | | :--- | :--- | :--- | | Cash flows used in operating activities | (24,846) | (23,859) | | **Adjusted Cash Flows Used in Operating Activities** | **(26,455)** | **(22,840)** | [Summary of Factors Affecting our Performance](index=11&type=section&id=Summary%20of%20Factors%20Affecting%20our%20Performance) Lightspeed's performance depends on platform adoption, unified POS/payments strategy, AI investment, and international expansion, facing economic, competitive, and FX risks - A core strategy is the mandatory adoption of Lightspeed Payments for eligible new and existing customers to increase transaction-based revenue and simplify operations[47](index=47&type=chunk) - The company plans to continue investing in product development, including Lightspeed B2B and AI tools, to enhance its platform and drive cross-selling opportunities[48](index=48&type=chunk)[49](index=49&type=chunk) - Performance is sensitive to economic conditions that impact consumer spending and SMB health, as well as competition from a fragmented market of both large and small vendors[46](index=46&type=chunk)[51](index=51&type=chunk) - Foreign currency risk exists as a portion of revenues and expenses are in non-USD currencies. The company uses hedging for some expenses but not for revenue[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Key Components of Results of Operations](index=14&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section details Lightspeed's revenue streams (Subscription, Transaction-based, Hardware) and cost categories, with operating expenses expected to decrease as a percentage of revenue - **Revenue Streams:** - **Subscription Revenue:** Fees for software solutions, sold on monthly or annual plans - **Transaction-based Revenue:** Fees from payment processing (Lightspeed Payments), revenue sharing with partners, and merchant cash advances (Lightspeed Capital) - **Hardware and Other Revenue:** One-time sales of POS hardware and professional implementation services[64](index=64&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) - **Cost Structure:** - **Direct Cost of Revenues:** Includes hosting, support salaries, payment processing fees (interchange), and hardware costs - **Operating Expenses:** Comprises G&A (finance, legal, HR), R&D (product development), and Sales & Marketing[69](index=69&type=chunk)[70](index=70&type=chunk)[72](index=72&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Lightspeed reported Q2 FY2024 total revenue of **$230.3 million**, up **25%**, narrowing operating loss to **$52.0 million** through disciplined expense management Consolidated Statement of Loss Summary (Q2 FY2024 vs Q2 FY2023) | (In thousands of US dollars) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | | :--- | :--- | :--- | | **Total revenues** | **230,273** | **183,699** | | Total cost of revenues | 134,105 | 102,230 | | **Gross profit** | **96,168** | **81,469** | | Total operating expenses | 148,154 | 168,285 | | **Operating loss** | **(51,986)** | **(86,816)** | | **Net loss** | **(42,492)** | **(79,943)** | [Revenues](index=18&type=section&id=Revenues) Total revenue for Q2 FY2024 increased **25.4%** to **$230.3 million**, driven by **35.9%** transaction-based revenue growth and **59%** GPV rise Revenue by Type (Q2 FY2024 vs Q2 FY2023) | Revenue Type | Q2 2023 ($ thousands) | Q2 2022 ($ thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription | 81,043 | 74,494 | 6,549 | 8.8% | | Transaction-based | 137,672 | 101,304 | 36,368 | 35.9% | | Hardware and other | 11,558 | 7,901 | 3,657 | 46.3% | | **Total revenues** | **230,273** | **183,699** | **46,574** | **25.4%** | - The increase in transaction-based revenue was primarily due to accelerated adoption of payments solutions driven by the unified POS and payments initiative, leading to a **59% increase in GPV**[82](index=82&type=chunk) [Direct Cost of Revenues](index=20&type=section&id=Direct%20Cost%20of%20Revenues) Total direct cost of revenues for Q2 FY2024 rose **31.2%** to **$134.1 million**, with hardware costs showing negative margins due to promotional incentives Direct Cost of Revenues by Type (Q2 FY2024 vs Q2 FY2023) | Cost Type | Q2 2023 ($ thousands) | Q2 2022 ($ thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription | 19,963 | 20,657 | (694) | (3.4)% | | Transaction-based | 99,425 | 70,011 | 29,414 | 42.0% | | Hardware and other | 14,717 | 11,562 | 3,155 | 27.3% | | **Total costs of revenues** | **134,105** | **102,230** | **31,875** | **31.2%** | - Hardware and other revenue had a **negative margin (127.3% cost of revenue)** due to discounts and free hardware provided to assist customers in transitioning to the unified Payments and POS offering[93](index=93&type=chunk) [Gross Profit](index=22&type=section&id=Gross%20Profit) Gross profit for Q2 FY2024 increased **18.0%** to **$96.2 million**, with margin decreasing to **41.8%** due to revenue mix shift Gross Profit and Margin (Q2 FY2024 vs Q2 FY2023) | Metric | Q2 2023 | Q2 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit ($ thousands) | 96,168 | 81,469 | 14,699 | 18.0% | | Gross profit % of total revenues | 41.8% | 44.3% | - | - | [Operating Expenses](index=23&type=section&id=Operating%20Expenses) Operating expenses showed significant leverage in Q2 FY2024, decreasing as a percentage of revenue due to lower share-based compensation and restructuring savings Operating Expenses as a Percentage of Total Revenues (Q2 FY2024 vs Q2 FY223) | Expense Category | Q2 2023 (% of Revenue) | Q2 2022 (% of Revenue) | | :--- | :--- | :--- | | General and administrative | 11.4% | 13.7% | | Research and development | 14.4% | 19.9% | | Sales and marketing | 26.2% | 35.0% | - Acquisition-related compensation expense decreased by **95.6%** to **$0.6 million** as amortization schedules for past acquisitions like NuORDER and Ecwid concluded[107](index=107&type=chunk)[109](index=109&type=chunk) - Share-based compensation and related payroll taxes decreased to **$23.3 million** from **$34.9 million** in the prior year, contributing to lower operating expenses across all functions[77](index=77&type=chunk) [Other Income and Income Taxes](index=27&type=section&id=Other%20Income%20and%20Income%20Taxes) Net interest income for Q2 FY2024 increased **121.5%** to **$10.7 million**, while income tax shifted from a recovery to a **$1.3 million** expense - Net interest income grew significantly to **$10.7 million** from **$4.9 million** year-over-year, driven by higher interest rates on the company's cash balances[113](index=113&type=chunk)[115](index=115&type=chunk) - The company shifted from a total income tax recovery of **$2.0 million** in Q2 FY2023 to a total income tax expense of **$1.3 million** in Q2 FY2024[116](index=116&type=chunk) [Key Balance Sheet Information](index=29&type=section&id=Key%20Balance%20Sheet%20Information) As of September 30, 2023, Lightspeed maintained a strong balance sheet with **$761.5 million** in cash and total assets at **$2.61 billion** Balance Sheet Summary | (In thousands of US dollars) | September 30, 2023 | March 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | 761,491 | 800,154 | | Total assets | 2,610,857 | 2,668,732 | | Total liabilities | 162,607 | 171,283 | - Total assets decreased by **$57.9 million**, mainly due to a **$38.7 million** decrease in cash from operating activities and a **$43.6 million** decrease in intangible assets from amortization[119](index=119&type=chunk) - Total liabilities decreased by **$8.7 million**, driven by reductions in accrued compensation, income taxes payable, and deferred revenue[120](index=120&type=chunk) [Quarterly Results of Operations](index=31&type=section&id=Quarterly%20Results%20of%20Operations) Eight-quarter data shows consistent revenue growth and steady gross profit, with operating loss significantly improving to **$52.0 million** in Q2'24, reflecting cost management - Quarterly revenues have increased successively, except for seasonal weakness in the March quarters (Q4), which are historically the weakest for GTV post-holiday season[123](index=123&type=chunk) - Operating expenses have generally decreased sequentially in recent quarters (excluding a large goodwill impairment in Dec 2022 and restructuring charges in Mar 2023), reflecting cost control measures[127](index=127&type=chunk) Selected Quarterly Data (In thousands of US dollars) | Quarter Ended | Revenues | Gross Profit | Operating Loss | Net Loss | | :--- | :--- | :--- | :--- | :--- | | Sept. 30, 2022 | 183,699 | 81,469 | (86,816) | (79,943) | | Dec. 31, 2022 | 188,697 | 86,006 | (824,493) | (814,802) | | Mar. 31, 2023 | 184,228 | 86,961 | (82,839) | (74,468) | | Jun. 30, 2023 | 209,086 | 87,905 | (58,242) | (48,703) | | Sept. 30, 2023 | 230,273 | 96,168 | (51,986) | (42,492) | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Lightspeed maintains strong liquidity with **$761.5 million** in cash and a **$775.3 million** working capital surplus, sufficient for its needs Cash Flow Summary (Q2 FY2024 vs Q2 FY2023) | (In thousands of US dollars) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | | :--- | :--- | :--- | | Cash flows used in operating activities | (24,846) | (23,859) | | Cash flows from investing activities | 7,855 | 1,853 | | Cash flows used in financing activities | (1,485) | (28,829) | | **Net decrease in cash** | **(18,786)** | **(52,213)** | - The company has a working capital surplus of **$775.3 million** and believes it has sufficient liquidity for its requirements[130](index=130&type=chunk) - In May 2023, the company filed a new base shelf prospectus, allowing it to offer various securities over a 25-month period to raise capital if needed[131](index=131&type=chunk) [Financial Instruments and Risk Management](index=36&type=section&id=Financial%20Instruments%20and%20Other%20Instruments) Lightspeed faces credit, liquidity, foreign exchange, interest rate, share price, and inflation risks, managing FX with forward contracts - Credit risk is primarily from cash and trade receivables, including merchant cash advances. The company maintains an allowance for expected credit losses (ECL)[145](index=145&type=chunk)[147](index=147&type=chunk) - Foreign exchange risk is managed by using forward contracts to hedge cash flows for certain expenses (primarily USD/CAD), but revenue is not hedged[150](index=150&type=chunk) - Inflation risk is identified as a factor that could increase operating costs and negatively impact customer spending, which would affect transaction volumes[153](index=153&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statement preparation requires judgment in revenue recognition, asset impairment, and deferred tax assets; a goodwill impairment test in Q2 FY2024 resulted in no charge - Key estimates involve revenue recognition (principal vs. agent), business combinations (fair value of intangible assets), and share-based compensation (valuation models)[155](index=155&type=chunk)[158](index=158&type=chunk)[161](index=161&type=chunk) - An impairment test for goodwill was performed as of September 30, 2023, because the carrying amount of net assets exceeded market capitalization. The test, using a fair value less costs of disposal model, demonstrated no impairment of goodwill[157](index=157&type=chunk) [Outstanding Share Information](index=39&type=section&id=Outstanding%20Share%20Information) As of October 31, 2023, Lightspeed had **152,585,256** Subordinate Voting Shares outstanding, plus stock options, DSUs, and RSUs Outstanding Securities as of October 31, 2023 | Security Type | Number Outstanding | | :--- | :--- | | Subordinate Voting Shares | 152,585,256 | | Stock Options (all plans) | 11,532,552 | | Deferred Share Units (DSUs) | 97,238 | | Restricted Share Units (RSUs) | 6,641,497 | [Disclosure Controls and Procedures and Internal Control Over Financial Reporting](index=40&type=section&id=Disclosure%20Controls%20and%20Procedures%20and%20Internal%20Control%20Over%20Financial%20Reporting) Management concluded Lightspeed's DC&P and ICFR were effective as of September 30, 2023, with no material changes identified - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[171](index=171&type=chunk) - No changes were identified during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[173](index=173&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q1 2024 was $209.1 million, representing a 20% year-over-year increase and exceeding previous expectations [24][32] - Subscription revenue increased by 7% year-over-year to $78.7 million, with gross margins remaining at 75% [10][12] - Transaction-based revenue grew by 32% to $121 million, with gross payments volumes increasing by 56% year-over-year to $5.1 billion [11][24] - Adjusted EBITDA loss improved to $7 million from a loss of $15.6 million in the same quarter last year [12][32] - Total adjusted gross margin was 43%, down from the previous quarter and year-over-year [12][107] Business Line Data and Key Metrics Changes - Subscription revenue growth was driven by a temporary reallocation of the account management team to onboard new payments customers, yet still achieved a 7% increase [10][25] - Transaction-based revenue, which is over 50% of total revenues, is highly dependent on GTV growth, which was reported at $23.4 billion, up 6% year-over-year [14][110] - The fastest-growing customer cohort was those with over $1 million in annual GTV, which grew by 11% year-over-year [28] Market Data and Key Metrics Changes - The company noted that 50% of its customer locations are outside North America, which may impact GTV growth due to varying market conditions [30][134] - Churn rates remained consistent with historical ranges despite the launch of Unified Payments, with most churn occurring in customers processing under $200,000 in annual GTV [29][104] Company Strategy and Development Direction - The company is focused on executing its Unified Payments initiative, which aims to integrate payments with its POS platform, making it mandatory for eligible customers [8][99] - The strategy includes attracting larger, more sophisticated customers who can leverage the full capabilities of the software platforms [15][115] - The company aims to achieve adjusted EBITDA break-even or better for the fiscal year, with a commitment to sustainable long-term growth [32][105] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance in Q1 2024, highlighting strong customer feedback and the potential for growth through Unified Payments [5][106] - Concerns were raised about the macroeconomic environment, particularly regarding rising interest rates and inflation, which may affect future GTV expectations [41][110] - The company expects revenue for Q2 2024 to be between $210 million and $215 million, with an adjusted EBITDA loss of approximately $4 million [32] Other Important Information - The company has planted over 1.4 million trees as part of its sustainability initiatives [19] - Share-based compensation costs decreased significantly to $18.7 million from $38.3 million a year ago, improving as a percentage of revenue [27] Q&A Session Summary Question: What are the trends in retail versus hospitality? - Management noted that both categories are growing at similar rates, with luxury apparel and jewelry performing well, while outdoor sports categories have not recovered [37] Question: How are costs for transitioning customers to payments trending? - Costs are trending slightly better than expected, with less hand-holding required from customers during the transition [38] Question: What is the outlook for revenue and adjusted EBITDA in the second half of the year? - Management expects both revenue and adjusted EBITDA performance to improve significantly in the second half of the year [39] Question: What are the expectations for subscription revenue growth? - Subscription revenue growth is expected to be softer in the first half of the year but may improve in the latter half [48] Question: How is the adoption of Unified Payments progressing? - Adoption is progressing well, with a strong contingent of customers adopting the payment solution almost immediately [108]

First Quarter FY2024 Results Gross Payment Volume grew 56% (1) YoY to $5.1 billion (2) Fiscal 2024 Fiscal 2021 Fiscal 2022 Fiscal 2023 Launch Date GPV as a % of GTV(1) 22% (2) (1) Excluding Customer Locations and GTV attributable to Ecwid eCommerce standalone product, Lightspeed Golf and NuORDER by Lightspeed product. A Customer Location's GTV per year is calculated by annualizing the GTV for the months in which the Customer Location is actively processing in the last 12 months. (2) As at June 30, 2023 vs a ...