Lightspeed(US:LSPD)2023-08-03 16:56Financial 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]