Lightspeed Commerce Inc. (LSPD) Earnings Call Transcript & Summary

Okay. We are live. Welcome, everyone, to our latest webcast, the new Lightspeed Restaurant. Before we get started, I have to read our disclosures here. We may make forward-looking statements in our presentation today that are based on assumptions and, therefore, subject to risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements, except as required by law. You can read about these risks and uncertainties in our filings with U.S. and Canadian securities regulators. Most of you know myself, I'm Gus Papageorgiou, Head of Investor Relations here at Lightspeed Commerce, and I'm happy to be hosting our latest product-focused webcast. A few housekeeping items before we move forward. Firstly, please note that this webinar will be recorded; secondly, you will have the opportunity to ask questions today. [Operator Instructions] And as a reminder, we will be answering questions at the end. Joining me today will be Peter Dougherty, our General Manager of Hospitality; Evan Johnston, who will be providing a brief product demo; and JP Chauvet will be joining us for the Q&A section. Here's our agenda for today. So a brief overview. Peter will take us through a presentation of where we are today and how we plan to win in the U.S. market. We will view a customer testimonial and Evan Johnston will take us through a brief demo, and then we'll get to the Q&A section. Peter Dougherty, our GM for Hospitality will be taking you through most of the content today. Peter is based in Montreal and has been with Lightspeed since 2011. He has held a range of leadership roles across the company and has been involved in several product rollouts, including the rollout of Lightspeed's initial SaaS-based retail offering. More recently, Peter headed our account management and global partnerships teams before taking over the role as General Manager for Hospitality. And with that, I'll hand the microphone over to Peter.

Thanks, Gus. And great to be here with everybody to talk about the new Lightspeed Restaurant. My story at Lightspeed started when we were a tiny start-up and now we have people around the world changing the way that we think about commerce. So before we talk about the new product and entering the U.S., I want to talk a little bit about where we started this platform and why we have such a great foundation to build on to enter the U.S. And that really starts in EMEA. The European market is notoriously difficult to penetrate effectively. And I want to tell you a few things about why we believe we have such a successful position there. First, the challenges start with the significant regulation that vary from country to country. Second is all the languages, currency, taxes and fiscalization, which we're going to talk about in a second, that vary by country. And then last is each market expects to have local go-to-market and product teams on the ground in each country. So what that means is you have to make major investments in each fragmented market to really succeed there. And we've done it. We've built all the local practices from taxes to tipping to currencies to languages into the platform. We've invested in local go-to-market teams from marketing to sales to support in each market. And we have development teams based in Europe to handle the requests that come up from those markets. And by doing all that, is what it means is we've built a major competitive barrier for anyone else to try and enter these markets to go up against Lightspeed. And so we're very confident in our position there, and we believe we've built a highly defensible position there. What that also means from a product perspective is we've made investments that are really hard for someone else to replicate. And so let's talk about fiscalization because that's a bit of a special one. So what is fiscalization? Ultimately, what it is, is in each country in Europe and in many other countries around the world, in fact, the tax authority wants the commerce platform to upload daily, weekly, monthly, all the sales that are happening through the platform. And the difficult thing about fiscalization is every country does it very differently. And every country wants you to certify your platform against their process, and that's expensive and time consuming. And we've done that in all the markets that matter in Europe. In the U.K., Germany, France, Italy, Belgium, Norway, we've made those investments. And at its core, the new Lightspeed Restaurant is designed to handle fiscalization and fiscal complexity. And that's a major competitive advantage as we roll this platform out around the world. When we talk about anybody else in the commerce platform space, the road ahead to enter Europe is long and time-consuming, and we've already made those investments, and it's an excellent foundation for us to enter into the U.S. and the rest of the world after that. And so when we talk about building a new Lightspeed Restaurant, the complexity there has really taught us how to execute well. And the reality is what we've seen is in that market, we've seen other -- some of our competitors who maybe even are large organizations than Lightspeed, are not even trying to enter those markets because it is notoriously difficult. And really because Lightspeed is such a well-run company, we've been able to execute there. So when we talk about the last couple of months, we talk about the acquisitions, and all these great companies who've joined Lightspeed. We really made an effort to go out and find all the specific functionality that we are looking for, and we talk about iKentoo as the basis, Kounta in Australia and the inventory. Gastrofix, ShopKeep, all bringing their unique positions. What we've done is we've built -- brought all these companies together with their specific functionality to build on that success in Europe. And we're really the only hospitality platform that has brought this level of innovation together into 1 place. And we're really excited for what that means for our future, not only in Europe but also around the world. And so when we talk about specific functionality, we always start with the guest experience. And when you think about what is a restaurant diner looking for in today's world and today's restaurant world, we think about, obviously, order anywhere. The new module we just launched, allowing guests to order ahead for pickup or delivery or even using that same module order at that table with a QR code. Or use -- or for a staff member using a table-side device to make those orders. That's a necessity in today's world. And if anyone here has worked in a restaurant, they know how hard it is to split a check in a high-volume restaurant. And what we've done is we've built a best-in-class experience when it comes to check-splitting and solving this complex problem. And this is something we've built. All these teams that have come together from all these different companies have built us as net new innovation into the platform. What we've also done is through all these experiences, be it through order anywhere or check-splitting or table-side functionality, payments as part of that experience. And we've been really thoughtful of what does that mean? It's not just taking a payment. It's about what is the guest experience on Lightspeed Payments? What kind of value does the merchant get out of ensuring if their guests are actually transacting with Lightspeed Payments, and we're really excited about the progress we've made there. The other thing we've really thought about is margin management for the restaurant operator. Upserve power is a key part of this, but we've brought that analytics engine into the new Lightspeed Restaurant. It's a tool that helps restaurateurs really course-correct earlier than with any other platform. It provides advanced analytics. And the other thing is it reinforces the use of payments to get the most of the data out of Lightspeed Analytics, you have to have payments data coming in with the POS data. We released a report a few weeks ago actually, talking about how our restaurateurs using our new platform and using our various platforms are outperforming their peers. They're growing faster. And that's a massive validation for us on the road maps and the tools that we're building in the new Lightspeed Restaurant. On top of all this, we've included ingredient management, waste tracking, and we're starting to look at solving one of the biggest problems that restaurateurs are facing, which is employees and employee performance. So all of this is built into the new Lightspeed Restaurant, and it's a key tool to help restaurant operators just have more levers to pull in today's challenging environment for a restaurateur. Next up, we're thinking about automation. If you ask a restaurateur, the #1 challenge they're facing in 2022, it's staffing. And one of the areas we've invested heavily in with this new platform is automation to help staff serve that extra table or two and help restaurant operators to work through these staff shortages. It really is a key way that we're thinking about helping restaurateurs succeed in 2022. And you can see in this video, we've built a truly elegant solution that helps staff move quickly between tables in the platform and solve their problems really effectively. We've also thought about multi-location with centralized menu management and check splitting and payments, again, all weaved into the experience to reinforce the use of Lightspeed Payments. We're really excited about the progress on the new platform. And so what does that kind of come together into? Well, we really believe that we are poised for the success in the U.S. market. And where we started is with that foundation in EMEA, all the investments we've made to build this really defensible market with really powerful go-to-market teams, that's a perfect fit for that market. We've also brought together these best-in-class companies through all of our strategic acquisitions, all this great functionality that these companies are bringing together to really build this new Lightspeed Restaurant. And then last, and I think this is a key one, which is a bit of a new -- something new to share with everybody here today. As we knew before, we didn't necessarily have the right product market fit for the U.S. with our previous restaurant platform. And because Lightspeed is such a well-run company, we were incredibly disciplined to know that at the time, it wasn't the time to invest and to focus our energies in other regions or in other verticals. But it also told us what we needed to -- it told us and informed us on what we needed to win in the future. And so based on that experience and all the work that we've done there, we knew what companies we had to bring in into Lightspeed. We knew what functionality we had to build, and now we know we have the tool to invest in and intensify our investments and focus on the U.S. market. That is really the final piece that we knew we needed to nail to succeed in the U.S., and we're there today. So let's talk about the U.S. and entering the U.S. market. And when you think about the U.S. market, we hear a lot from this audience about Toast. And it's important to remember that we're looking at businesses that are very similar in size. And I think before we get into -- why we think we're going to win in the U.S., actually, what I'd like to do is turn to one of our early testers and one of our early users of the new Lightspeed Restaurant platform. And hear from Antonio about his experience and why he made the choice to go with the Lightspeed Restaurant platform. He's based in New York State, but I'll hand the mic over to Antonio to hear a little bit from him.

My name is Antonio Arias, I'm the owner of Once Finger Lakes. I grew up in Mexico, where thanks to my mom-side, Spanish-side family, I developed a passion for wine very early on. Once, it's a -- as do you think it's on Spanish courses. It's the normally the 11 letter in Spanish because there is 11 lakes that form the Finger Lakes region. So it's a place that brings the region together. That's the idea behind the name. So Once Finger Lakes, it's a unique concept that focuses on creating memorable hospitality experiences. You can come and try some of the best of the best wines from around the region. We also have some small finger foods, some wine by the glass, and it's in a beautiful setting overlooking one of the lakes. So we talk from some of the big companies like Square, Toast, Clover, TouchBistro and of course, Lightspeed. And after talking to everybody and discussing with the team some pros and cons, and we all agreed that Lightspeed have the most robust, adaptable and flexible system from all, which is exactly what we were looking for. And after working with Lightspeed L-series for a while and learning about all the new improvements that were coming with the all new Lightspeed Restaurant, we didn't hesitate to and jumped on board to be part of the new project. In our case, for example, we had to postpone the opening of the business a full year. We were supposed to open at the beginning of 2020, we couldn't open until 2021. And even when we opened just like every other hospitality industry business, we had to deal with a lot of staffing shortages. So probably one of our biggest issues last year. And so we had to add up our original floor plan and also flow of people, flow of information, how people came into the building, left the building, our team was organized to bring wine and food around the building in accordance to all the official guidelines to just make sure that everybody was safe. But at the same time, feel pampered and engaged. It's very easy to use for the staff and also gives us, management, all the information and resources that we need on the back end to be able to efficiently run the business. From structuring a menu to keeping track of employees hours and also the easy reporting has helped us not just set track, but also have already achieved a lot of goals that have improved everyone's performance. It is a place where we can take payments, connect automatically to other systems. We can bring a lot of the different pieces for the business together to help to save time and also prevail errors. So one of the main reasons we had to go with Lightspeed Restaurant was because of the depth of the add-ons and integrations. So being able to process payments seamlessly, automatically flow to an accounting system, managing inventory, costing, keeping track of employees' times. So allowing us all to accomplish all these activities in 1 place has really helped us say, between 2/3 to 1/2 the time that we will wait with other systems. I will definitely recommend all the hospitality businesses to use Lightspeed Restaurant. It's not just that you're getting a great software, but you also get to work with a great team that cares. There are a lot of providers out there that specialize in a lot of different areas for the restaurant industry. But we didn't find anybody else that covers as much ground as Lightspeed does.

Thanks, Antonio. It's really great to hear from somebody who's been through this journey with us and has given us such tremendous feedback on the new Lightspeed Restaurant. So let's talk about the product itself. Well, ultimately, all this work we've done in Europe with that amazing foundation, all the feedback we've been getting from our North American users has culminated in really that one-stop restaurant platform. It's been -- it's not a new product. It's been optimized by years of user testing in Europe and in other places around the world. It's easy to use. It's fast for staff to learn and get up and running on because we know staffing is a key issue. We offer all the key modules, order ahead, curbside pickup, contactless ordering, table-side payments with unique and efficient bill splitting options. We've built a best-in-class analytics engine with menu insights, labor planning and margin recommendations to help an operator really pull all the levers to run their business effectively. And that's core. We have a private blockchain that is underpinning all of the security, compliance and a rock-solid offline mode built into the platform. And then finally, we have a single platform that is ready to scale around the world. We don't need a separate product for Europe, North America and APAC. We have 1 platform, 1 engineering team and all the synergies that come with focusing on 1 really rock star platform. And so when we talk about software development and the focus that being a software company brings, I think it brings me to real comparisons to some of the other players out there. And now we're focused on the U.S., so let's talk about Toast. That's the one that this audience asked us about the most. And I just want to put up these 2 screen shots between Lightspeed and Toast up on screen. And ultimately ask this audience, which one would you pick? One is a very simple, elegant solution designed to make it easy for staff to be efficient. And the other is really just designed to be a tool to push payments and active payments as a edge. Part of our value prop is we're building an amazing software that it helps restaurateurs to be more efficient and staff be more efficient. And we have core software payments and have reinforced payments throughout the experience. But ultimately, we are a software company first. And I think these screen shots really tell that story. And as we continue to look at other parts of the software and again, I want to show this comparison, this is the table management view. The power of good design is really hard to describe, but it is valuable. As a software company, we are focused on the value that good software and good design brings, it ultimately becomes a competitive advantage for Lightspeed as we enter new markets. This drives focus on delivering real value for our customers all the way through their experience on Lightspeed platform. Of course, Lightspeed Payments enhances the unit economics, but at its core, Lightspeed is a software company. But what that also means is we need to know who we're building our software for, and we've been very intentional about the type of customer that we're building for. And so what does that mean? That means we're looking for independent bars and restaurants and local chains. We're looking for fine dining Michelin Star restaurants with complex workflows and hotel and multi-revenue center properties that also have complex workflows. These are customers who are looking for what we've built. Easy to set up and onboard for themselves and their staff, really easy to use and train on interfaces, restaurant grade hardware, and they're looking to add on all the modules we have to offer, order anywhere, our accounting integrations, our multi-location menu management. We also offer that high level of customization and service as well as the powerful partner ecosystem and open API. So we know what kind of customers we're going after. And now we're going to shift our U.S. go-to-market team into gear. We have a successful retail business and a successful U.S. go-to-market business in retail, where we're going to leverage our paid acquisition expertise and our inside sales teams, both from Lightspeed and Upserve to go after this segment. But we're going to add on 2 new things. First is a major focus on our U.S. hospitality brand. We want Lightspeed to be known as a hospitality brand in the U.S., and we started last year, building these partnerships, and we've made a ton of progress here. Second is our outbound and field process as well. We started this in Germany with our launch over there last year, but we're going to bring that to the U.S. now. And this means teams who are focused on outbound sales but also in-market, feet-on-the-street salespeople that we know are important for cracking the hospitality market in the U.S. And this is all going to be supported by the unit economics of payments, which we all know are very powerful. And because we've built in the experience of Lightspeed Payments into the product and it reinforces it all the way through, it's going to reinforce that attach rate on Lightspeed Payments to support this new model, and we're really excited about the progress here. And so what's the opportunity for all of us? Well, the U.S. hospitality business has about 620,000 restaurants that we care about according to the U.S. Census. There's 11.5 million employees in that business as well. And we know that this segment is ripe for the picking. And then last, from a GTV perspective or a sales perspective, the National Restaurant Association predicted that 2021 was going to end with almost $790 billion of sales in the segment that we're talking about. So we can see a ton of upside for all of us in attacking this opportunity. We've built the right product, we have the right teams, and we're ready to go after this market. And the last thought I want to leave this group with is really looking back. Lightspeed as an organization has a track record of launching new products in new segments in new geographies around the world. And we've done it a lot. At my own experience at Lightspeed is launching new lines of business for the company. Lightspeed OnSite, our very first product, massive success. Our first cloud-based retail platform is something that we are really proud of, and we are known as the leader in that space, not only in the U.S. but around the world. Our original Lightspeed Restaurant platform, whilst we didn't make the investment to bring it into the U.S. has been a tremendous success in Europe and the rest of the world. And then finally, our Lightspeed e-commerce platform, a market leader for a great big customer segment. We have a track record of succeeding with SaaS for main stream. And so of course, we've built this great business. We have a great product. We've brought it. We've invested in Europe. We have all the teams in place to bring it to the U.S. and we're showing tons of early success. But I think for everybody here, we want you to see the product. We are a software company. We're proud of what we've built. And to do that, I'm going to hand the mic over to Evan to take us on the tour of the new Lightspeed Restaurant.

Thanks so much, Peter. My name is Evan. I'm a sales engineer here at Lightspeed, and I'm going to take us through a quick look at the new Lightspeed Restaurant, a leading cloud-based point-of-sale and commerce platform for restaurants, featuring in-depth customer insights and inventory management, all wrapped in a sleek and intuitive user interface that allows staff to process orders and payments quickly and easily. Let's take a look at a few of our industry-leading features. First, we'll clock into the POS. And here, we can use a 4-digit pin or even a QR code for employees to scan in through the iPad camera. We'll clock in as manager, and this is where I can set an impression for the day. So it's looking like a 5-star day to me. The weather here is sunny. And I also have the opportunity to add a note. And this could be, it was a holiday yesterday or somebody left the lights on last night. And so this gives merchants even more insight through reporting as to why a day's sales might have been higher or lower than expected. It also allows us to set proper expectations for our staff throughout the day. So let's start our shift, and we're ready to sell. A unique feature of the new Lightspeed Restaurant is the ability to manage both quick service and full service from the same point of sale. But I'd like to view my floor plan, I can select it from the bottom here. Now I can view my entire dining area and open up a table from this view. Alternatively, I can go to my register for a quick sale. I know the number of my table, I can enter it here. In this case, we'll open up Table 6. Let's explore the layer to the register. Here in our center column, we've got our main screens. We can see starters, mains, wines, cocktails and desserts. And our customers have requested sub-menus that allow them easy access to all the menus within them. So we've implemented that right here in the new Lightspeed Restaurant. If we go to wines, you can see that we've got sub-menus for red, white, orange and rose, and I can enter into each one of these sub-menus to see the products within them, and we're not just limited to 1 sub-menu. Let's add one of these bottles of wine to the table. So this bottle of wine is going to be shared. So I've not assigned it to a particular seat. If we want to begin taking orders for our customers, let's add a seat. So here, we'll go to starters. And if the person at C1 is curious about what's in the citrus salad, I can tap and hold on that product. And here, we see an image as well as a full description and any tagged allergens. Allergens can easily be tagged to products in the back office. So let's add this to our order. So let's go to our mains as we've got a dinner special running right now. C1 is going to choose the dinner special. And here, we've got options for starters, mains and desserts. They're going to choose the Ceviche, with the Plenta and the chocolate mousse. You can see here that as we add each one of these products to the order, each one is included within that fixed price menu of $65. So let's add it to our order. Now let's add another seat. So C2 will take the Tuna Tataki, the Grilled Egg Plant and the Creme Brulee. So you'll notice that these items are actually part of the original dinner special that we saw earlier. And merchants can enable a feature to allow them to be notified when this happens, just so that they aren't doing any mental math while interacting with the customer. And let's get this off to the kitchen by hitting send. Let's check in on our tables. Let's select tables from the bottom menu and in a view mode that's unique to Lightspeed, we can view some different metrics for each one of our tables. In our conversations with customers, we realized the managers were looking for a little bit more insight into what was happening at their tables such as total spend, how long customers had been seated and course information. So we implemented that into the new Lightspeed Restaurant. This gives merchants all the information they need to keep things running smoothly and to figure out if any table needs any extra attention. Right now, we can see how many covers are on each table. So if I look at Table 3, we have 2; and Table 5, we have 6 and so on. We can also see a green icon on some of these tables, and that means that those belong to me. And if I had other employees or staff that were working with me, I'll be able to see different colored icons with their initials on each table. If I move over here, I can see total spend for each one of my tables. The next section here is time. And so this will show us how much time it's been since each one of these tables has been seated. Finally, if I look at status, this will show me how many courses have been served and the most recent course that has been served to that table. If we move over to our orders menu, this is where we can see a different view of all those tables that we were looking at on the previous screen. So here, I can see my table numbers, what user has been assigned to each one of those tables as well as when it was created and the last time it was edited. You'll note on the right-hand side, we've also got a section for pickup and delivery. And this is a spot where we'll be able to see all of the orders that are placed through Lightspeed Order Anywhere, which is our online ordering and through third-party delivery channels integrated through Lightspeed Delivery. Let's head back to Table 6, and we'll complete this order. So the customers at this table want to split their bill and Lightspeed Restaurants new bill-splitting feature makes it a breeze for customers and servers as well. So let's head into the split-check menu and we'll distribute by seat. Here, we can see the dinner special ordered by C1 and the Tuna Tataki, Grilled Egg Plant and Creme Brulee ordered by C2 separated accordingly. The bottle of wine, however, was shared, so we can see each half on each one of these checks. If C1 said they wanted to pay for the whole bottle of wine, it's really easy to do. I can just select the half on C2. And then select move here on C1. As you can see, both those halves have recombined and they're just listed as 1 total bottle of wine. If C1 wanted to split their dinner special with C2, all I have to do is hit Split. And now I can choose which check I want that to actually be split with. I can even add a new receipt that wasn't there before, and I can split that between Check 1 and the newly created Check 3. And now we're ready to start taking payments. With Lightspeed Payments, we can quickly and easily settle all these checks. I can print them all out at the same time or I can print each one individually so we can use different payment types. In this case, let's settle Check 3 with Lightspeed Payments. I'm going to select Pay. I'm going to choose Pay By Card. And so instantly, the total is going to be sent directly to the Lightspeed Payments terminal, and we can enable a feature that allows customers to even tip directly on that terminal. Here, I'm going to give 20%. I'm going to use contactless payment to settle this check. And just like that, the check has been settled, and we can move on to the next bill. With Lightspeed's advanced insights module, we take analytics to a whole new level by leveraging data from Lightspeed Payments. Today's restaurateurs need all the data that they can get in order to make the best business decisions but they can't always be physically present at the establishment. Lightspeed's advanced insights allows merchants to see at a glance, which customers spend the most, which servers generate the biggest tabs and tips, and which menu items keep customers coming back. Let's take a short tour through Lightspeed Insights. We'll start with the sales tab. Here, we can see our net sales. Gross sales, covers, card sales and the time of day report. The time of day report is extremely useful to allow merchants to properly manage their schedule. Here, we can see when the majority of our sales are taking place. Instead of scheduling staff during dead times, we can schedule staff when we might need more or less based on this time of day report. Let's head to our server section. Here, we can see which server is selling the most per check, which server sells the most per cover, which server has the fastest turn time. And our discount report, which shows which server has the most discounts and the percentage of gross sales. This allows you to make updates to modify your menu before margins start shrinking. Here, we can see our most popular items, repeat customer favorites and a feature that is unique to Lightspeed that we know our customers love, the Magic Quadrant. This grid shows your best-selling items on the right and your less popular items on the left by order volume. The share of customers that return after ordering one of your menu items is called retention. Your most popular items here are on the top. We use these splits in order to create 4 different sections in this grid, Hidden Gems, Greatest Hits, One-Hit Wonders and Underperformers. Our merchants love having real data to be able to update their menus. So here if we take a look at the Magic Quadrant, let's start with Underperformers. You can see here that these are items that are unpopular and have a low retention, so you might want to deemphasize these items from your menu. Next up, we'll look at One-Hit Wonders. And these are items that are popular, but also have a lower retention. These are items that might look great on a menu, but don't necessarily have customers coming back a second time. Next up is our Greatest Hits. And these are items that are popular with the high retention. These are our greatest hits, so you're going to have customers coming back for these all the time. Finally, we've got our Hidden Gems. And these are items that are unpopular, but have a high retention. Without Lightspeed Insights, you may look at your reporting and see that these are unpopular items and remove them from your menu. But here, we've got the insight to know that despite being unpopular, these keep customers coming back. So you may want to start emphasizing these more on your menu. And that was a real quick walk-through of the all-new Lightspeed Restaurant. As we saw, Lightspeed Restaurant is a powerful platform that provides restaurateurs with the tools that they need to manage and grow their business. And Lightspeed also offers a full suite of different products to support each one of our hospitality customers. Thank you so much for watching. And back to you, Gus.

Okay. I think we're all live here. We'd wait for JP to join us as well. And I think we'll start with the question-and-answer period.

Okay. Competitively -- versus your competition, you highlighted your stronger UI and design as well as international presence and support. Are there any key differentiators you'd call out from a feature function perspective? Pete, maybe you can take that one.

Sure. Thank you, Thanos, for the question. So I think that -- when I think about what are the key standouts especially against Toast in the U.S., I think about 3 things. First, is the Insights module. And so actually, we just saw with Evan on the demo some of the highlights there and some of the key functionality, and we really see that as being a key differentiator. That is something that we believe being head and shoulders above anybody else in the market. So I think that's first. And we've successfully integrated that into the new Lightspeed Restaurant and are in the process of rolling out to all of our markets. Second, when you look at the core of K Series, really that product that came from EMEA, from Europe. We think about the private blockchain and all the technology that underpins that platform and all the stability when it comes to speed, when it comes to security and when it comes to a rock solid offline mode, there -- well, it's not maybe necessarily sexy features adds all of the little details that are important when you run your restaurant. So if it means that a staff member doesn't have to worry about their iPad disconnecting from the WiFi or the Internet going down. And we all know Internet in downtown New York City is not necessarily super reliable. And so when you have a platform that you don't even have to think about that, it means you can run your restaurant on a busy Saturday night that much more effectively. And we see that as a key differentiator for us. Reliability is something that our restaurants look at us for. And then third, I think it goes back to automation. We saw a little bit about that earlier. But when you look at the elegant design, all the functionality, all the user flows actually we saw in the demo of the check-splitting, which we built net new into the new Lightspeed Restaurant. It didn't come from the acquisitions. You look at all of the automation and the thinking that's going into it. What does that mean? It means a waiter can handle that extra table. Maybe they can do 5 tables instead of 4. They can -- all of a sudden, they're 20% more efficient or the restaurant has to spend 20% less on labor. When we think about the amount of time it takes to train a new staff member. Well all of a sudden, it's not a week to train a new staff member, I can get them on the floor the same day. So my hiring costs are that much lower. And then when we just think about all the guest experience and the management side of things that come for the owner, we heard from Antonio, his time is reduced between 1/3 and 2/3 in terms of managing his staff and scheduling his stuff, not only from how many people do I need on the floor to run a shift. But also just his own time and making sure he's optimizing his revenue as he goes throughout. So I think for me, there's obviously many more, but those are the 3 big headlines that I see.

Okay. Great. This one is probably more for JP. There's lots of established platforms in the U.S. Is it more of a competitive displacement opportunity? Or is there lots of greenfield opportunity for these -- for the subsegments you target? And then in terms of displacement, is it more an issue of the legacy vendors or against more modern solutions?

I'll give it a first shot and then Peter, if you want to. Look, simply put, we've always said we were going to work with the higher-end SMBs. So we're not interested in small, medium, large coffees. And within that segment, going back to what Peter was saying is we are -- it's 100% certain that we have a really good offering and that it's very competitive. Now the reality of that market is that the vast majority of those restaurants are on legacy systems. And legacy, the Alohas of the world that are -- they're rich functionally, but they're not in the cloud, they're on-premise, they're pretty difficult to use. And they don't connect to the new world, so they don't online. So that market is up for grabs. And our view is once we're out of COVID, and I think we're getting there. I think, hopefully, all of this is going to be an endemic soon. We will have tons of tailwinds. And I think that's where we can really go and pick up this market. Maybe the last point there is after COVID, what we see and what we've seen in every market when they reopen, there's a ton of new concepts of creation of new restaurants. And I think that's also a great opportunity for us to go get those. So I think just net-net, a very competitive offering. We're going to launch it before summer, super excited about it. We really are dedicated to getting a significant market share in the U.S. market. And let's not forget, the majority of this market is all legacy systems, so it's up for grabs.

Okay. Great. Pete, I think this one's for you. What functionality exists on the new restaurant platform for controlling off-premise orders and specifically prioritizing channels that may be more accretive to restaurant margins?

Absolutely. So thank you, [ Clark ]. So there's 2 things that come to mind to manage off-premise with the new Lightspeed Restaurant. The first is our new Order Anywhere module. And I just mentioned it, we didn't go into detail just for the purposes of time. But the new Order Anywhere module solves for a couple of things for our restaurants. First, if I'm a restaurateur and I want to have my own presence online, I want to market my own website. I want to have my own ordering experience where I own the consumer relationship, that's -- and it's branded to my restaurant, that's what Order Anywhere powers. And that's available on the web, on my computer, it's mobile, so it's on my phone. It also will bring all those orders directly into the POS. So it goes directly in. There's no mistakes when the kitchen needs to prepare it go straight to the KDS in the kitchen. That's the first part where it helps. Order Anywhere also helps where maybe I want to come and do curbside pickup or connect to delivery, Order Anywhere helps there. So that's a holistic module and not for the purposes of the question, but also that module also helped us with in-restaurant dining where I want to maybe do contactless. So if I'm sitting at a table and I want to scan the QR code to look at the menu, well, it's pulling up that same web experience so that a diner can see that and then order, and then we will start thinking about splitting the check directly on, call it, the bring-your-own device experience for the consumer. So a lot of great innovation happening on Order Anywhere. The second part to that question is delivery. And so when we talk about off-premise, obviously as a restaurateur, I want to own that consumer experience and consumer relationship because then I'm not paying one of the delivery aggregators 20%, 30% of my margin, which we know is a key concern for restaurants today, that margin compression that they're facing. So with Order Anywhere, we can help the restaurant own that consumer experience and own that extra margin. But we know the value of a DoorDash or a Uber Eats, et cetera, is the marketing, is getting my name out there to make sure that I'm attracting more consumers. And so for that, we offer Lightspeed Delivery, where whenever I list my menu on Uber Eats, DoorDash and it also works in Europe, it works in the continent, we sell it in Australia so we integrate with all the key aggregators around the world. And my menu directly from the POS is uploaded into those platforms and orders flow back into the POS and then do all the [indiscernible] there. And so between those 2, we surface the restaurants menu and brand to help them gain new consumers. But once they've gained them through the, call it the Uber Eats, then they can try and own that consumer experience directly to lift their margin on maybe that same consumer's order, on the same order, a week later. And so those are the 2 tools that we're helping restaurateurs manage an off-premise.

Okay. Great. Moving on to the next question. Is there any more tech you would like to add to Lightspeed Restaurants? And how are you planning to develop it internally or via acquisition? Maybe Pete, you can talk about rounding off the feature set and maybe JP, the build-versus-buy decision.

I'll start with just some of the things we're thinking about. I mentioned earlier, Order Anywhere and starting to think about even allowing guests to split the check directly on their phones, so something we're thinking about. I think another topic that we are thinking about is that hardware experience in the restaurant. We work with best-in-class hardware, we work on iPads. But what is the rest of the hardware that happens in the restaurant? What does that ecosystem of hardware look like? And how do we create hardware experiences where the software is made for the hardware and the hardware is made for the software. And so today, we have that great experience. We've worked closely with Apple to make that happen. But we want to keep going further there and improving that.

JP?

Yes. Maybe if I could add, there's also another big component that we need to look at is employee scheduling and payroll. I think historically, it's not being viewed as something inside of the commerce platform. And I think we're I mean, we're going to make a move there. I think we're going to -- and just maybe answering the other question is build versus buy. Right now, we are very much in a build mode. So we've acquired a lot of companies. We've put, I think, best-of-breed tech together. The focus right now is ruthless execution to get the best products out. So right now, that's more the mindset. I think when we look at payroll and scheduling, it will probably be a white label where we will have an underlying component of tech and then we'll build our layers on top. So I think for now, especially with -- given the stock price and I think given everything we've been doing lately, we want to get those products out to market and we want to show organic growth.

Distribution question. So what do you view as Lightspeed's secret sauce in terms of distribution? And beyond feet on the street and online leads, do you see Lightspeed leveraging bank distribution channel like some of the incumbents in the U.S.? JP, maybe that one -- you can take that one?

Look, very binary answer here. We know how to get leads. We know how to convert those leads into qualified leads. We know how to bring them as customers. We're doing a soup that works well. We know the ingredients. I think for me right now and for Peter, it's -- we got to get this product ready for the U.S. and then we've got to put more oil on the fire. So getting the product ready to the U.S. It is an extremely competitive product, but there are a few little bits and bites that are very specific to the U.S. market that we need to bring out, and we'll get that done before May. But then after that, we've got to put more oil on the fire. So I think the other way of looking at this, it's not like we don't know how to get leads. We know exactly how to get the lead. We know how to sell to those leads. We just want to be sure that we do the big push when the product is ready and when it's really going to win. So that's really, again, obsession, maybe a very simple thought process here. Get the product ready, which we are getting very close to, get it really competitive, let's have some really unique differentiators, which I think we have. And then step 2, let's just open the valves and reap the benefits of this.

Great. Next question. So if I'm on a platform like iKentoo or Upserve, do I get all the new features for free? Or is there an incremental opportunity for Lightspeed to charge more?

I'll start with that and Peter, I'll let you. So the reality is we -- Lightspeed, we've acquired companies, and you mentioned 2 here that are mainly point solutions. And so what that means is they do one thing very well, and the customers have access to one solution. Of course, what's happened through the acquisitions, we've basically put together all of the best development teams to build the latest version, which is called Lightspeed Restaurant. Internally, the code name is K Series. The difference between K Series and all these point solutions is that it offers a much broader scope, and it enables people to buy more from Lightspeed. People could now do order ahead. They can now do likely payments there. We've got this whole list of functionalities that we've added. So what we're doing here, it's very simple. We're letting people stay as long as they want on the current platform, but we're enabling them with a bunch of account managers to bridge on to the greater platform. And what happens there is, as we bridge them on, of course, the core POS, we try to make it pretty much at the same price. But then when you look at all the functionality we've added, of course, as we bring customers onto the new platform, the ARPU goes up because they buy more than just a point solution, they buy the entire platform. So it's a very well thought through process. We've done it before. It's not the first time we launched new products, as Peter was saying. And so we have full account management teams, and a good example is Payments. So what we'll do is we'll probably bring them on to the platform and give them multiple modules and give them discounts on the software so that they bundle payments. Because we know that ultimately, what we're after is to grow the net ARPU per customer. And I think we've been very successful with this. And again, I need to say it's a sequence. Sequence #1, get the product out in the region. So in the example of iKentoo, yes, they now have access to the entire platform, but not yet in the U.S. We haven't fully launched in the U.S. So I think step 1 for us is fully launch in the U.S., start with the new customers. And then when we know the product is really stable and competitive, then we're going to go and see Upserve and ShopKeep all these customers and port them on to the new platform with the strategies I just described.

Peter, anything to add?

No, I think the only thing I would add is the catalog -- and even this goes back to the decision to not necessarily make major investments with the old platform in the U.S. The catalog of modules that we've built out now with all these companies joining on K Series is extensive. And so when we bring these customers, it's not just payments, which in and of itself is kind of at the peak of what we want to touch into. But insights, inventory, kitchen display, hotel integration, kiosks, the list is long. And so the opportunity to lift that net ARPU is large. And so we're very excited to bring that. And that's what we're in now is we're getting the feedback on all these modules to make sure that they're very well tied into K.

Going to merge 2 questions here. What -- I mean, we bolstered about the scalability of our go-to-market strategy of inbound calls. Why do we need to put feet on the street? And why do we figure -- why do we think now that there's the time to put feet on the street? And what are the benefits? And how are we approaching these? Are these sales people all coming from external hires? How many cities or territories do we expect to cover by the end of the year?

Maybe I'll start. So first part of just why are we going for feet on the street? So I think there's 2 parts. As an organization in North America, we've been mostly focused on the retail segment. And in that segment, we've proven that it's highly effective to have virtual or inside sales teams to go after that market. And we've shown the world that we know how to do it very well. When we talk about the Hospitality segment, that business just inherently through the experience that these restaurant operators live in their day-to-day lives, very much are still in the world that they see value in meeting people face-to-face, and they see value in having somebody able to come more on the support side, less on the sales side, at 2 a.m. when your printer -- someone pours a beer down your printer to be able to fix it or replace it. And so because of that, we know that's the expectation of the market. So that's something that we want to offer. I think the second part of it is, with K Series, and we talked about the complexity and the types of customers we want to go after here. These -- the customers who have multiple locations who have larger businesses with higher transaction volumes also have more complex needs. And so to be able to get an effective sales cycle with good unit economics, we want to make sure we have a sales person on site to evaluate their needs, quote them, show them the value of K Series and get them signed up for Lightspeed and Lightspeed Payments. And so we know we can do that effectively with the outside sales teams. We've proven the model in Germany, and so we're going to apply that in the U.S. In terms of the second part of the question of, is this net new hires, and how many cities do we want to do this in? So we have a very strong inside sales team, both from Lightspeed and the Upserve team and those have now come together into 1 sales team. And so we see this as a massive opportunity. In the U.S., there's 620,000 restaurants, large transaction volumes going through those. And so that existing team is going to become the basis or is the basis of our go-to-market there. And we see this opportunity to layer on, on top of that with net new people to go after that. But always, there's an obsession with the unit economics. And we know we're not going to spend until we know we have the right unit economics. The early progress is very encouraging. We know the attach rate on Lightspeed Payments is very strong with K Series, and the early tests are showing that. The product -- the thesis of all these product features that reinforce the value of payments is working. And so as we dial up the investment and we open more cities, we're going to continue to monitor that and continue to increase the investment. But as JP says, as we get to this full launch, we're just going to keep adding cities and keep adding markets. And so we're in a handful of cities today, and we're going to continue to scale that as the numbers tell us to do it. But so far, we're very encouraged by the results. JP, I don't know if you want to add anything to that?

No. Nothing to add.

Pete, can you discuss -- so in the early go-to-market actions that we've taken, how has been the attach rate with payments on the new Lightspeed Restaurant platform?

So before I answer that, I just want to talk about some of the work that we've done in integrating these companies to reinforce that because I think it's really important. I mean I saw a question come in about should Lightspeed Payments be mandatory, and I think this will help answer that as well. So actually in the demo with Evan, let's start there. We saw the Insights platform in the new Lightspeed Restaurant has a lot of the information powered by the card data coming through Lightspeed Payments. So we know in product and now the restaurateur knows, again, unique to the new Lightspeed Restaurant that if somebody is coming back and they're ordering a certain dish or certain let's say, hamburger, they know that, that's a very profitable dish and that brings guests back. We know that a pizza, somebody orders, we make a lot of money on. And most other platforms reporting engines that will say, "Hey, this is a profitable item. You should be pushing it more." But we've added that extra layer where we know that not only is it a profitable item, but it's bringing that guest back. And so when a restaurateur thinks about what is the LTV of a guest that's coming into the restaurant and making sure they're planning their menu, which is ultimately a key part of their business. They can plan it so that their CAC to acquire the customer is reasonable for the LTV that they're getting back from the customer, and we're going to lift the LTV of the consumer for a restaurant. And so we've planned that out very intentionally in the integration between Upserve and the new Lightspeed Restaurant. We also talked just 2 seconds ago about Order Anywhere. Well, there's consumer and card data coming in from that. How do we help a restaurant convert somebody who ordered on Order Anywhere or Uber Eats into a guest that they own? And then how do they convert them into somebody who dines on-premise, so their staff can make more tips. So that's all the intentional thinking we've been doing. So how -- what does that look like in the results? Well, the early data is very encouraging. We're seeing very, very high attach rates compared to some of our other products, especially in the U.S. I'm not necessarily -- I'm not sure if we can disclose the exact number, but very encouraged by that. And to answer the other question that came in I saw about why make it mandatory. The reality is everyone's taking Lightspeed Payments, well, why do we need to make it mandatory. And for the few customers that we do sign because we do know we work in large complex operations, where maybe they do payments processing for other things that we don't necessarily serve. We still want to sign that customer on our software because we are a software company, and we have very good unit economics on the software alone. The payments just reinforces that.

Can we talk a little bit about just -- rather than just specific go to market, what are we doing to kind of increase the mind share in the market about Lightspeed as a solid restaurant offering? Maybe talk a little bit about the plans there.

So we're -- first talked about brands, talked about what are the partnerships in the space that we know restaurateurs look at as who are the brands that they recognize. So we're doing a lot of work to associate ourselves with that. Second, the product itself, we have customers across the U.S. giving feedback, telling everybody around them about why the new Lightspeed Restaurant is so powerful. We're starting to look at how do we do our ad buying and switching our ad buying to the new Lightspeed Restaurant platform from the old Lightspeed Restaurant platform. We're in the midst of starting to sunset the Upserve brand. And all of the work that we've done there to continue selling that product as we're dialing that down and then dialing up the ad spend on the new Lightspeed Restaurant platform. So we're making that shift. And as we make that shift, we get closer and closer to, call it, the full launch of the platform in the U.S. I think there's things as simple as in May, National Restaurant Association. It's the trade show over the years. It's one of the largest trade shows in the United States. We will be there, and we'll have a major presence, and we'll be talking about the new Lightspeed Restaurant and all the wonderful modules we have there. All of our partners will be there talking about Lightspeed and the new Lightspeed Restaurant and how they interact with us. And so we're making these investments, and we're taking the time to really bring this product to market properly. And as we've seen every step along the way, every -- we just talked about the attach rates on payments, very encouraged. Major validation point, invest more. And then at every step, we're going to continue to dial up that investment. We're a well-run company. We look at the CAC to LTV, and we dial up investments as we see the progress.

Okay. We're running out of time here, but I think we can squeeze in 1 last question. In terms of the feet-on-the-street approach, what does that do to our LTV to CAC and how do we plan to maintain a strong LTV to CAC ratio?

So the feet-on-the-street approach is really focused on the new restaurant platform. So first, we have the strong product with -- that reinforces very strong payments attached. So we know, yes, the feet-on-the-street approach is more expensive. But we also know with the strong attach rate of Lightspeed Payments, it's going to offset those costs. We know that there's very strong unit economics there. So ultimately, payments helps justify that so we can increase the volume of customers we're bringing on to the platform with very strong new economics. But also, we talked about all these other modules we made the investment in. So you layer on core POS, Payments, Insights, Order Anywhere, Inventory and all of a sudden, the LTV or the value of those customers just continues to lift. And again, we're going to measure that. We're going to look very closely as we roll out these new strategies, along with the new product and make sure that the LTV to CAC is always where we want it to be.

Okay. We're running out of time, so maybe JP, any closing comments, and then we'll wrap it up.

No, I think -- just closing comments. I just want to reiterate, we're -- as Peter said, we're a software company at the heart of what we do is software. And I think for me, just look at the elegance of what we're putting on the market, we -- nobody matches this. That's number 1. Number 2, we are a true global player. And so unlike our competitors who are focused on the U.S., we love the diversification. We love the fact that we operate -- we have a strong market share in Australia and New Zealand, a very strong market share in Europe. And very soon, we'll have a good market share in the U.S. So a global company, 1 code base, 1 experience, very elegant and 1 platform for the entire world, I think, is very unique. The third thing I want to talk about is payments. Same logic here. Our payments are here to create value, but they are not the core value of what we offer. Payments is here just because it makes it simpler for our customers. They have a better experience with it, but it doesn't replace the core platform. And so for me here, same comment, we're one of the only software companies that has 1 payment platform globally for card present that works with debit and credit schemes everywhere in the world, pretty unique, and we're super excited about this. So I think for me, just end by saying proof is in the pudding. I've read a lot about everybody and saying, "Oh, you've done a ton of acquisitions, these roll-ups," and I hope you see from this that these are not roll-ups. These are very intentional. Each of the acquisitions brought something and now we've integrated all this together with an exceptional customer experience. And so we're just looking forward and excited to bring this to the U.S. I think we have to be a bit patient still. There's still quarter of work to finalize. And it's not finalize the core differentiators. Those are out there. We just need a quarter or so to get those beta customers into full-fledged release to just remove the quirks. Taxation in the U.S., as we all know, is a nightmare. So we just need a little bit of time. But once that is out, we are very confident that we will have a clearly differentiated product that is going to win this market. And not win this market for small, medium, large coffees, but win this market in the segment we're interested in, which is fine dine, complex table service. And again, in the segment of the customers we like those who are less contour. So super excited. Thanks for joining. And yes, we look forward to show you what we can do with this. And I think -- I mean, Peter has been with us for 10 years at least now. And he's always been the guy likely who launched products in new regions and very confident in his ability to bring this to market in the U.S. So that -- I hope you enjoyed it. I'm super thrilled and thank you very much, guys.

Okay. With that, we'll wrap it up. Thanks, everybody, for joining us this afternoon. If you have any follow-up questions, please feel free to e-mail me, and we'll get right back to you. Thanks, everyone.

Thank you. Thanks, everybody. Bye-bye.