Lightspeed(US:LSPD)2022-11-03 18:33Financial Data and Key Metrics Changes - Lightspeed reported revenue of $184 million, exceeding the previous outlook of $178 million to $183 million, with organic software and transaction-based revenue growing by 35% [8][9] - Total ARPU increased by 25% to $337 per location, excluding Ecwid [9] - On a constant currency basis, revenue was $187.2 million, representing a 41% year-over-year growth [9][28] - Adjusted EBITDA loss was $8.5 million, better than the previously established outlook of $10 million [28] Business Line Data and Key Metrics Changes - GPV grew by 86% year-over-year to $3.7 billion, while GTV increased by 18% to $22.3 billion, or $23.8 billion on a constant currency basis, representing a 26% year-over-year increase [21][30] - The hospitality segment experienced a GTV growth of 16%, impacted by foreign exchange rates [31] - The number of customer locations processing over $500,000 in annual GTV grew by approximately 25%, and those processing over $1 million grew by approximately 30% [34] Market Data and Key Metrics Changes - The overall omnichannel retail GTV grew by 21%, significantly higher than the forecasted worldwide retail sales [30] - The macroeconomic environment has led to consumer spending shifts, with average volume shrinking in many verticals [30][31] - Foreign exchange fluctuations negatively impacted revenue, estimated at approximately $3.5 million for the current quarter [39] Company Strategy and Development Direction - The company aims to integrate acquisitions into one brand and two core product offerings globally, labeled as "One Lightspeed" [15][16] - Focus on upselling payments to existing customers and attracting larger, more established customers to improve profitability [18][20] - The strategy emphasizes quality over quantity in customer acquisition, targeting high GTV customers to reduce churn and increase ARPU [10][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by inflation, staff shortages, and potential recession, but sees opportunities for technology adoption among SMBs [12][14] - The company remains committed to profitable growth, with a focus on improving unit economics through upselling and expanding payments [18][41] - For the full fiscal year, the company expects revenue in the range of $730 million to $740 million, incorporating the impact of new foreign exchange rates [41][42] Other Important Information - The company ended the quarter with approximately $863 million in cash, a decrease of $52 million due to loan paybacks and working capital movements [40] - New executive appointments were announced, including Ryan Tabone as Chief Product and Technology Officer and JD St-Martin as President [44][45] Q&A Session Summary Question: Growth of locations processing over $500,000 - Management indicated that the focus is on larger GMV customers, which are less prone to churn, and that the growth in locations is expected to stabilize [49][50] Question: Outbound sales team productivity - The company is hiring outbound sales representatives, and initial results show that the cost of acquisition is favorable compared to inbound efforts [52][53] Question: Pricing environment and discounts - Management is willing to offer discounts to existing customers to encourage the adoption of payments and additional modules [59][60] Question: Attributes of larger customers - The focus is on established customers with complex inventory needs and multi-location operations, which align with the company's strengths [64][65] Question: Near-term trajectory for third-party payment referral revenue - This revenue stream is expected to decline as the company sheds non-core customers and converts them to Lightspeed Payments [68] Question: Competitive positioning in global markets - The company is optimistic about its competitive edge in both the U.S. and international markets, particularly with new product offerings [75][76] Question: Unit economics of larger customers - While larger customers may yield lower payment acceptance rates, the overall strategy focuses on growing GTV and net take rates, which is beneficial in the long run [88][89] Question: R&D priorities - Key R&D priorities include developing a unified product globally, enhancing the B2B network, and leveraging big data for financial services [90][91]