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

8:00. My name is Josh Baer, software analyst at Morgan Stanley. We have the honor of having Dax Dasilva back here, Founder and CEO of Lightspeed. Research disclosures, for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. So Dax, welcome back.

Thanks, Josh.

And thanks for joining us. I want to start off with the recent leadership changes at Lightspeed that resulted in your return at CEO position. I guess, you held that position from when you founded the company in 2005 through 2022. So -- if you could talk a little bit about what prompted the change at the CEO role?

Yes. As many of you will know, first of all, thanks for having me. I was CEO for 17 years, Exec Chair for the last 2 years, and CEO again for the last few weeks. So I'm excited to be back. I think we're in a really exciting phase for Lightspeed. It's a phase that the focus is profitable growth. And I think it is different from the phase that preceded it. And so JP and I -- where we were like, where we had 10 acquisitions, we were consolidating into flagship products, rolling out unified payments. I think JP and the team did a phenomenal job of that. But now we're in a phase where we're growing profit margin, and we need to find operational efficiency across the business in order to do that. And I think we all agreed that I was -- that a new type of leadership was needed for this phase. And so here I am excited and energized to take it on.

Excellent. And the press release used the word interim CEO, but how should we think about the -- how permanent...

Yes, there's no end date for me. I'll be there as long as needed. And of course, it's at the discretion of the Board. So if I do a good job, I'll be sticking around for sure.

Got it. And so just -- does that mean that there's -- is there a another search going on or...

The Board will have its own succession planning, but I'm the CEO.

Great. Wanted to ask a few just to expand on sort of the strategy looking ahead and maybe try to pick up on some of the nuances and how you're thinking about seeing some of the differences. The 1 question I have is around Unified Payments, which has been really like a dominant theme over the last year. With your return to the CEO role is like that's still the #1 priority? I mean, obviously, you've already been talking about operational efficiency. So is it correct that there's a little bit of a change in how we should think about top priority.

Yes. So how JP and I saw this overall sort of period was -- we call it [ Love One Lightspeed ] The first phase was getting our 2 flagship products, right? So our product to retailer, product in hospitality. These are the best products like you've ever seen, including the ones I built at the beginning. The second phase is Unified Payments, and that's going to be a great support for all the years to come making sure that this company is well profitable. But this third phase is the profitable growth phase. And Unified Payments, we've done some amazing work. We're projected to be -- we were forecasting about 30% to 35% payments penetration by the end of this fiscal year. We're going to come in at the -- probably at the lower end of the range of that for a number of reasons. 1 being that EMEA has been a bit slow going. We had great success in North America, of course, and some legal headwinds in APAC with our Tyro agreement will be delayed until September until so we can approach those customers. But it's all it's within range. But yes, that's a continuing focus, an important 1 for the company. And -- but I think that in terms of strategy, we're still on the same strategy. It's still those high GTV customers that we're bringing on to the platform that are going to be amazing payments customers for us. And if all of us don't -- aren't on the same page, it's about -- it's customers that are in retail and hospitality that are $500,000 and greater in annual revenue. So that's really our focus, and we're orienting all of our go-to-market towards that perfect customer for -- that's a perfect fit for our solutions.

Great. And 1 follow-up, just thinking about retail versus restaurants. Are they both of equal priority for you. Company was -- the history more on the retail side and then restaurants through acquisitions. How are you thinking about the 2?

We have a very, very strong retail base and amazing close rates in North America for retail. And that's growing in Europe and in APAC. The hospitality business is primarily Europe and some in APAC, and it's growing here. But we -- I think those are both very important parts of the business. They have -- we have our ICP, our ideal customer profile, that high GTV customer in both segments. And so -- and we've got the products to serve them in both places.

Okay. Great. I want to ask a few on location additions, merchant adds because I think it's really important to -- that it hits on the themes around competition, TAM. And over the years, we've seen different growth in your customer count and your disclosures there. So I guess the question is like what is your message to investors about recent location growth, either overall or across those important cohorts?

Yes. So we do have -- as we do the acquisitions, we do have customers that are outside of our ideal customer profile or are outside of our ICP that are sub $200,000 in annual revenue that will churn. So that does impact our overall location count as we -- especially as we transition to focusing on this high GTV customer. And so there is the -- so we've tried to take the focus off location count because we'll be smaller location count, and there will be churn in some of those cohorts that are not our focus. But overall, I think we also -- regarding software sales, we're definitely gaining ground in that high GTV category and where we've got the marketing sort of strategies that are going to be necessary for winning in that segment. For example, we're moving slowly off performance marketing. Your average high GTV customer is not growing social media to find their next POS vendor. So it's more brand-based marketing. There's trade shows. There's vertical publications. There are sponsorships, partnerships, all of that. So that's a blend that will happen over the next couple of years. So that's a transformation that will happen. And we're getting better and better at finding this ICP and bringing it -- making that our main motion. Outbound, I think, is an important part of that story as well -- as well as leveraging the ecosystem these are all sort of the efforts that have to be built up at Lightspeed.

That's helpful. And in thinking about that less than $200,000 group of customers, obviously, by definition, lower GTV -- but what about on the software side? Does it make up like a more equitable mix of software revenue?

Yes. I mean they're still going to be a part of our mix. They're just not going to get the white glove service that the higher GTV customers get. And they just have higher churn rates in general. They're less at scale. They're less established. And so they're a part of our mix, but they will have higher churn rates, and that's just the nature of the segment.

Got it. And so thinking about like forward-looking growth, is there -- does that churn eventually stabilize? And then like overall, any frameworks for thinking about growth in the -- in your target customer segment.

Yes. Definitely, we will see stabilization of churn in those cohorts. Like for example, Gastrofix was our German acquisition there was OEM customers in that segment, and that's definitely that churn is over. And we'll start to see that in other cohorts of that low GTV customer. But our goal is to have 10% to 15% software growth. We're not there at the moment, and that's primarily because we brought a lot of our AMs or account management team for unified payments like we've made a major push in this last year to move the needle meaningfully. And I always say, when Lightspeed wants to do something and focus on something, we always execute very, very well, making -- getting to our flagships, executing on unified payments, but it has come at the expense of some of the software growth. And so the AMs will return to focusing on software growth by middle of the year. That doesn't mean that unified payments will stop as a motion, but that initial process, that initial year of having that great focus will start to become a part of our regular process. And the AMs are a part of like half of software sales. So it's a big piece to take out of the machine. So I think you can -- I think that you will see that software -- that software growth return, maybe not in the next quarter, but in the quarters to come.

Great. And just to clarify the return of AMs, is that just in North America? Or is that globally?

That's globally. Well, primarily North America, that's been the focus of the first year. There's probably more work to do in Europe and there is more work to do in Europe and APAC for payments.

Yes. Got it. I want to shift gears for just a couple of minutes and talk a little bit about macro and GTV, obviously, with higher payments attach, more reliance on the macro from that perspective. So just throw it out there, like what you're seeing in the current environment, like obviously, GTV growth as expected, has slowed and want to ask what's really embedded in the assumptions around in guidance?

Yes. Obviously, we don't guide to GTV. The macro is going to do what it will. What I will say is that for some of our strongest -- our largest verticals in retail, for example, Bike and Home & Garden these verticals had massive years during COVID. And so there's some consequence for right now in the amount of people that are buying Bike and Home & Garden when they invested a lot of money in those segments during COVID. So we'll see that come back to normal levels over time. So we're not concerned, but it does have an impact on Lightspeed because that's such a meaningful part of our business.

Okay. Great. A couple of questions on international. And maybe tying in competition. But how does the competitive landscape differ in North America versus the rest of the world, maybe we need to break it up between retail and hospitality.

Yes. There's less competition internationally overall. So the CAC is lower. Obviously, the payments opportunity is not as needy because it's -- the take rates are lower. But conversely, the cost of acquisition is lower. We do have some very high-end restaurant customers in EMEA, for example. So the GTV is greater. So it sort of offsets the lower take rate.

Got it. And in -- in North America, in hospitality, could you sort of refine what parts of the restaurant market like you are going after? What might not be attractive based on like the competitors in North America?

Yes. Our restaurant platform is designed to -- it's designed for the higher end restaurants. And the analytics insights platform, that's like -- that's the big differentiator. And that is really something that a larger GTV hospitality business is going to really leverage. It's not worth it for a smaller operation. So that's, I think, very consistent with the kind of customer profile that we have in Europe. And so I think how we win globally is we make sure that how we're designing our retail and our hospitality product is tailor-made for that ICP. We're not trying to win all sorts of segments. We're trying to really compete hard in that ICP and build features that are very differentiated and have great software moat. And I think that for hospitality, I think that lies in the analytics, the insights that we can give restaurant owners. And then I think because there's such challenges around staffing shortages and the cost of supplies, the cost of inventory, focusing on inventory, focusing on how to manage staff and shifts and so on is primary importance. And on the retail side, I think for that ICP, it's also those deeper inventory workflows that Lightspeed has been known for from the very beginning, going deeper with that. And then connecting those workflows to those complex omnichannel workflows that are connected into those inventory workflows. And that also connects also to our B2B strategy. So it's overall as a solution. It's going to be much, much more powerful than a solution that maybe applies to across a number of different segments or is online-only or is a little bit less focused than our very, very sort of laser-focused approach.

That's helpful. And have you talked about win rates in any of those markets? North America, international, hospitality.

Yes. I mean, our win rates in North America retail are the best in the company, and our win rates in EMEA hospitality are the best in the company for hospitality. So we obviously have a lot of marketing dollars focused there. And I think that's also a part of making us operationally efficient in this period is making sure that we double down on areas where we have great win rates and maybe defocusing on areas that don't have the kind of TAM or don't have the kind of win rates that are worth it for us. I think in many places around the world, we thought, okay, we made acquisition in a place in the hospitality segment where we have a great market. Why don't we bring our retail team over there. And I think that some of that has peanut butter like -- peanut buttered our go-to-market efforts spread too thin across international markets. So I think that we -- that refocusing in this period is going to is going to have a really positive impact on the business.

Got it. In the context of operational efficiency, I mean, one of the things that we were looking for this year was starting to invest and build out and feet on the street sales force, particularly in hospitality, like is that still in the plan?

Yes. I think that's a core strategy for capturing this high GTV merchant. Like, for example, Joël Robuchon International, that's a marquee customer that we just brought on. That was brought on through outbound. Outbound is one of the key ways that we're going to get this customer. In addition to those new marketing efforts that expand beyond performance and into more brand building in verticals as well as the -- leveraging the ecosystem partners, other players, for example, in hospitality, have a very close system. And we want to leverage ecosystem partners that are providing some of the other modules or some of the other elements like workforce management or scheduling or payroll to be a part of our go-to-market. So all of those pieces, I think, are important to us really winning this segment. But outbound is key. I think that just the little bit of shift between what was said by previous leadership and how we're going to approach it now is -- if we want to do outbound efforts, I want to pay for it with operational efficiencies. I don't want it to be taken out of EBITDA to pay for that. So we're going to be bringing that -- bringing those outbound reps in, in a measured way but they are impactful. We know it works. And not just in hospitality, where we've been working in a number of cities in North America and Europe, but also in retail. I think that that's -- it's a really interesting go-to-market strategy for our retail segment, which is very, very strong for us. And nobody is doing it.

Great. Before we get into some of the efficiencies and ways to pay for these investments, let's stick to the investments. So we're talking about outbound sales. You mentioned partners. Just wanted to ask what -- where are you investing in the year ahead?

Yes. I think that -- in terms of partners?

Partners? And then more broadly, like what are the key investments.

Yes. I think it is -- as you said, it's outbound. I think that the blend of marketing is going to change to more of the vertical and brand marketing. And then, of course, I think we need to build out the partnership and the ecosystem go-to-market. And those are all key investments. Obviously, on the product side, there's big investments that we're doing for building workflows for the ideal customer profile.

Got it. So the commentary around EBITDA margin has been breakeven or better for a while. Margins this year were reiterated and then like talking about modest improvements looking ahead to fiscal '25. I guess does this -- like how -- what we've been talking about, how does that sort of change how we might think about the trajectory of margins ahead?

Yes. So I think some of the things that are coming up in terms of payments are going to help, like, for example, instant deposit, capital-expanding international payments will help. But Lightspeed has been known as a high-growth company, 25% plus growth. That's always going to be the case of us being a high-growth company, but we'll invest slightly less in growth in order for us to increase EBITDA margins meaningfully year upon year. So right now, I think we're at 1.5% adjusted EBITDA margin. But that should -- I'd like to have that increase meaningfully year upon year, still low single digits, but that's the goal. And anything new we want to do in terms of the investments we're talking about will come out of operational efficiencies. For example, on day 1, there's a lot to come in terms of announcements in terms of what we're going to be doing to make the company more efficient and consolidate some of the allocation around all of the acquired companies and so on. But there's some easy things that I've been able to do immediately. For example, we have a sales summit that's internal that's grown a lot. It's $5 million. It's like those are the kinds of things that are that we're evaluating and cutting their facilities, et cetera. So I think that we've been focused on lots of other things and now is the moment to sort of focus on all of the different elements of the business where we can be a lot more efficient.

Very helpful. So I don't want to get ahead of ourself.

We're not back to be popular. So it's good to be focused on this as a company.

Don't want to get ahead of ourselves as far as what might come around those efficiencies, but maybe you are able to talk a little bit about like you did all these acquisitions years ago. You're now on the flagship products, like what cost efficiencies have you already realized in the last couple of years after integrating some of those platforms in the team?

I think there's a lot to do. So I really feel that we've done a tremendous job of building those flagships. Like I said, they're the best products we've ever had. There's going to be an amazing software ARPU opportunity with those as we have lots of really key modules. A lot of those individual products that we acquired didn't have a really great software ARPU path for them. They are very vertical or very region-specific. So the flagships are a huge opportunity. We already have more than 30% of our base on the flagships. So we're very excited about how it's going with them. So a big accomplishment and then, of course, unified payments is the second big accomplishment. But has the company focused on all of the rationalization of all of those acquisitions -- the answer is no. So that's a big opportunity for us. And so those are the things that we'll be focused on. And yes, I think it's going to be -- what I want is for investors to be able to look at this company and have a really clear sense of our model. And I think right now, because of all the acquisitions and because of the perceived heaviness of the company, there's -- and also just the shifts in location counts because there's different cohorts that are lower GTV that are churning out. I think it's complicated for investors to model. That's why in the fall, we're looking to do a 3-year outlook that contemplates some of these efficiencies baked in that we, by then will have done a lot of the planning. And I want it to be super clear by that point that investors will know how when we pour marketing dollars on 1 end, there's an efficient machine that knows how to capture those high GTV merchants and out the other end comes a very predictable, understandable margin. So that, I think, is the goal to be able to present that in the fall at Investor Day. And that I think is -- that's, I think, the biggest complaint that I hear from shareholders. They say, 2019, when you went public, I could model this company. It was very, very simple in terms of all the different metrics. And now, yes, you have your flagships, but there's been complexity added to the business. So the job is to decomplexify that from an operational efficiency standpoint, but also I think it will help investors understand how this is an efficient machine for winning that ICP.

Great. Talking about the 30% on the flagships. What's the conversation like with customers? What's the -- is there a push? Is it up to the customer to go to the flagship -- like any sense for the time line for getting everyone over?

So that, I think, is going to come this year in terms of like what is our 3-year plan to move piece by piece, some of these customers to flagships where it makes sense because a lot of them -- some of them are low GTV and maybe it doesn't make sense for them to move on to 1 of these platforms. A lot of them have already. Like, for example, if you are a ShopKeep customer and you wanted to go multi-store multi-location, you can't do that in the ShopKeep platform. So you're moving on to our retail platform because you have tons of ways you can grow your business. So if you are a business that's -- like we love those $200,000 GTV customers that are growing into $500,000 customers. So for all of those kinds of customers, we're targeting them to be able to grow them into 1 of the flagships. And that's been happening naturally. But yes, so I think that's going to be a big part of the effort over the next couple of years. We'll go bit by bit. But yes, there's lots of opportunity in our base to move them to the flagships. And I think 30% already is, I think, pretty good.

And what happens from an economic perspective when someone moves to flagship, any changes?

Well, there's tremendous opportunity in ARPU, right? So there's a lot more modules on the flagships. Like I said, there's not a lot of modules on some of these other -- these legacy platforms. So there's not in addition to payments, there's all of these other ways for us to grow them as a customer. And of course, that's all stickiness for us and value for them.

You talked a little bit about some of the insights as far as modules and differentiation. Maybe you could expand on what are the key modules in the flagships across your different segments? What's really differentiated, what our customer is excited about.

Yes. I think like on the retail side, obviously, the biggest module that attaches is e-commerce and omnichannel. A lot of that technology comes from the Ecwid acquisition. That's been a real winner for us. And we've been able to give our retail customers really easy access to incredible ways to sell on online channels. So that's been great. Like I said, we want to continue to invest heavily in those omnichannel workflows so that the high inventory scenario that our retail customers have that we have workflows that are unbeatable in terms of omnichannel inventory across channels and across not just online and in-store, but across different locations, across different warehouses. So that's a really strong module that we will continue to build on. On the hospitality side, it is the analytics and the insights that's powerful. I think there's opportunity on both -- our teams are building AI-powered workflows on both. There's a place where we can take analytics and insights to another level. that we can do on the hospitality side. There's -- the more that -- when it comes to these verticals, the business owner has to deal with an increasingly complex world. They have not only to deal with higher costs and challenging -- challenges around staffing. But now there's multichannels. They're not necessarily a technologist. So the more that they can get from Lightspeed in terms of modules or in terms of intelligence, we're giving them real leverage to be able to compete, not just locally, but often with big box or with large competitors. So we need to continue -- as those competitors have better and better tooling themselves, these customers have to be able to compete at another level. So it's that module adoption that I think gives them more and more advantages that they can grow into. And many customers choose Lightspeed because they see that path of module growth. So whether that's starting with e-commerce, but then the later moving into loyalty or online ordering or different Tableside devices, all of that all of those options or modules are opportunities for growth for the customer.

Excellent. I was hoping you could take a couple of minutes and talk about the B2B strategy, supplier network, something that I think is really exciting, but when you look at the model it's tough to tell where it's really making an impact today talk about that strategy and how to think about that.

Yes. So I think the B2B strategy is really interesting because in our retail segments, we have -- it's all about high-value inventory, right? And it's about our retailers being the curators and adeptly ordering from these key brands, right? And -- for example, our acquisition of NuORDER brings a lot of those brands into direct connection with our retailers. We have large department stores that access those brands through that B2B platform. And now we're opening it up to all the smaller independent retailers that -- obviously they have a contract with the brand. But now they can they can procure and they can fulfill all within Lightspeed and have catalogs that feed into Lightspeed. My goal for B2B because I do -- I'm really excited that we're not just monetizing and we're not just participating in from the merchant to the consumer, but now we're working between the merchant and the brand. And that's exciting because there's a -- if Capital is a business that we're excited about growing we can lend to that merchant so that they can buy inventory from the brands. So that's a big opportunity for us. We want to build Capital into $100 million business over time. And then there's also this payment flow between the merchant and the brand that over time, I think that we'll be able to facilitate to some degree. So those are all exciting opportunities. And also, it just provides so much more value to the Lightspeed platform that they can do all their activities in 1 place that they're not -- once they're able to do all of their purchasing inside Lightspeed and all of their transactions, then the merchants are not going to want to do it any other way. It's just so time consuming what they have to do across multiple B2B platforms. So I think it's really exciting. And then we'll have brands recommending Lightspeed, recommending that ecosystem -- so that's very powerful. But one of my goals, because it is abstract for investors is to have a monetizable metric as a part of this 3-year plan that you can track our progress of like how meaningful is B2B to the Lightspeed's overall business. So I think we're working on that, and we want to make it really clear. I think it sounds exciting to everyone, and the promise is really there. But what does it mean for the company in terms of monetization and in terms of an overall opportunity.

Perfect. Looking forward to it. I wanted to ask a few on capital allocation. Maybe starting with M&A. Under your leadership looking back, obviously, a lot of acquisitions. In this conversation, we've only been talking about it from a...

The rearview mirror.

Rearview mirror. Yes. Is that the right way to think about...

That's the right way to think about it. I mean large M&A is not a priority for me. And I think -- right now, we don't want the distraction of trying to add more complexity to the model when I'm trying to -- we want to decomplexify -- we want to make it a very investable model. And I think that, that's going to it's going to get more and more exciting for investors to believe that Lightspeed is the best way to be able to capture this really highly valuable segment of the small business market. And so adding another large investment, a large acquisition to the picture right now, I think we would just be a large distraction for us. And I think we can do much better for the business by investing in other things in terms of our time and our resources. I think small tuck-in M&A is always something that we always look at. But that -- if it can add to -- add something to software ARPU and drop to the bottom line, I think that's a no-brainer or something that's very, very key to the strategy.

Got it. And I'll poll for questions in a minute. I just want to ask about the potential for other forms of capital return. Buybacks, definitely an area that I've gotten a lot of questions from investors just given where the stock is trading and your confidence in the business.

Well, I think it's -- it is an interesting conversation that is a popular topic right now with our Board. So whereas before would probably be off -- not be something that we'd really be talking about. Given where the stock is trading at the moment, I think we have that -- we are having a discussion.

Got it. Any questions from anyone in the audience. .

Obviously, all the M&A you guys have done. What have you learned that you all have in terms of a skill at doing it. Obviously, there's distraction, there's the time it takes. But if you actually look back, what was it that Lightspeed built the muscle do, right? And kind of if you have to rekindle that or if you're doing the small tuck-in, it reduces your concerns about the quantum being smaller, but the success being more certain.

Yes. I think that there was a lot of doubt as to whether we'd be able to take 10 acquisitions and build 2 amazing flagships. But I think we've proven that we can really -- we're really, really good on the technology side and bringing the best engineers from different countries, different cultures, different code bases and building 2 incredible retail -- an incredible retail products and incredible hospitality products. I'm like super proud of that. Where I think we have some learning to do is the other part of it is like how do we -- after we've done that, how do we rationalize the size of the company. And I think that we -- that's the focus right now. And maybe we could have done it before, but I think that the getting to 2 flagships and doing unified payments were very high-value things to do for the company. And I think they set us up to be able to be in this period where we've had 2 profitable quarters on an adjusted EBITDA basis. But now we have all this opportunity to find the efficiencies, and I think that should be easier. It's -- it's -- I think it's easier to do than merging all these different platforms into -- and finding the best elements of it to build 2 technology platforms. So hopefully, that next phase is something that we learned from in this period, and we'll maybe be able to do a little bit more in concert with doing a technology integration/payments integration both.

I wanted to ask a follow-up on payments attached in EMEA and APAC. If you could go through a little bit what -- you mentioned little bit slower in EMEA? What are some of the factors to consider there? And then in APAC, you mentioned some legal hurdles, I believe, like how to think about the timing and...

Yes. For APAC, it's just a bit of a delay. Like I think there's a segment that's with Tyro that we won't be able to approach until September. So it's not forever. It just changes and moves out some of our time line. EMEA, it's -- there's a lot of -- there are a lot of annual contracts. I think 30% of the payment space has an annual contract. So we have to we have to be opportunistic of like when those things expire and sort of gauge our time line that way. But those are -- there's a resolution for all of that. We will get it eventually in terms of APAC -- we just had very aggressive time lines. And then the reality is of like once we're in market, it -- there's different -- there's those kinds of considerations compared to what we're able to do in North America. There's also -- overall with payments, there is the high-risk category that -- when you talk about overall payments penetration, we're going to be getting to between 30% and 35%, probably the low end of that in this fiscal year. I think we can get to 40% and 50% in subsequent years. But I think there's always going to be a percentage of cash in the system. There's also going to be a portion that's high-risk retail. I think with the high-risk retail, we're already working with partners that we could be able to capture that piece. You talk about things like vape or CBD or other kinds of categories that are interesting and that use Lightspeed. So some of it is not lost forever. And there are some initiatives internationally that we are rolling out in terms of financial services. Like right now, U.K. is a great market, but Ireland is coming online for payments and as well as Capital in EMEA. Capital has been -- we've had a great start in North America, but we think it's going to be well received as well in EMEA.

Great. Maybe just the final question sort of to sum up the conversation, and I'll turn it over to you, but I'm hearing about continued success and continued room to go as far as payment attach a return to software growth 10% to 15%.

Absolutely.

And doing this all more efficiently. You got some ideas for new long 3-year targets and different KPIs sort of coming potentially in the fall. Anything else that you want to kind of say to leave to investors after the sum of the session.

I just think the takeaway is that Lightspeed has to be ultra focused on building product to win that ICP, that high GTV customer. I think that we need to let go of markets where it doesn't make sense in terms of market fit. We're transitioning marketing to this model that we can capture this ICP. And this period is all about profitable growth. So it's finding the efficiencies and finding the customers and rolling out the payments that -- in areas that make all of that possible. So that's the formula. We got to keep our heads down. And ultimately, I think that by the fall, that business model should be really, really clear of how we do that. And it will -- in my view, it's going to be a very investable business model because we're capturing a very, very highly valuable segment of the business market.

Perfect. Great place to stop. Thank you, Dax. Welcome back. .

Thank you.