Good day and thank you for standing by. Welcome to the Lightspeed Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instruction] I would now like to hand the conference over to your speaker today, Mr. Gus Papageorgiou. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Lightspeed's fiscal Q2, 2022 conference call. Joining me today are Dax Dasilva, Lightspeed's Founder and CEO; Brandon Nussey, Chief Financial Officer; and JP Chauvet, President of Lightspeed. After the prepared remarks, we will open it up for your questions. We will make Forward-Looking Statements on our call today that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Certain material factors and assumptions were applied in respect of conclusions, forecasts, and projections contained in these statements. We undertake no obligation to update these statements, except as required by law. You should carefully review these factors, assumptions, risks, and uncertainties in our earnings press release issued earlier today. Our first-quarter 2022 results presentation available on our website as well as in our filings with U.S. and Canadian securities regulators. Also, our commentary today will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Reconciliations between the two can be found in our earnings press release, which is available on our website, on sedar.com, and on the SEC's EDGAR system. In addition, our commentary today will include key performance indicators that help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. Such key performance indicators may be calculated in a manner different from similar key performance indicators used by other companies. And finally, note that because we report in U.S. dollars, all amounts discussed today are in U.S. dollars, unless otherwise indicated. Before I turn it over to Dax, I want to take this opportunity to remind everyone that Lightspeed will be hosting NuORDER’s Inaugural Capital Market Day at the New York Stock Exchange on Tuesday, November 23rd from 8:00 AM until noon. Please go to the events and presentation section of our IR site to register. We look forward to hosting as many of you as possible in New York City. With that, I will now turn it over to Dax.

Thanks Gus, good morning, everyone, and thank you for joining us today. As you will see from the press release we issued earlier today, Lightspeed had another strong quarter with revenue and adjusted EBITDA performance exceeding previously established guidance. Quarterly revenues, GTV customer locations, and our payments penetration rates all reached all time highs. At the same time, we continue to make progress on integrating our acquisitions, expanding the availability of Lightspeed Payments and launching our flagship Hospitality offering Lightspeed Restaurants. But before I move on to discussing these items in more detail, I would like to take a moment to address a short report that was recently issued on Lightspeed. As we stated in our press release on this matter, we found the report contained important inaccuracies and mischaracterizations, and also that it was misleading and clearly intended to benefit the author. I would like to note that Lightspeed has made genuine and consistent efforts to establish a trusted and transparent relationship with the investor community and we are always open to engaging with serious investors acting in good faith. Given the inaccuracies in this report, I want to address directly some of the key criticisms raised. First, since becoming a public company, we have always been consistent in how we account for revenue. Second, we have been transparent with the definitions of our key performance metrics, including ARPU, GTV and customer locations throughout our history, as a public company. We firmly believe that our KPIs allow investors to measure our operating performance and identify trends in our core business that may not otherwise be appearance with relying solely on IFRS measures. Third, our organic growth rate, which we disclose remains the positive driver of our overall business. Organic subscription and transaction-based revenue growth came in at 58% this…

Thanks, Dax. And I echo here earlier comments, overall it was another good quarter of progress. Our revenue for the quarter was 133 million up from 45 million a year-ago, and as compared to our guidance of 120 million to 124 million. This represents overall growth in revenue of 193% year-over-year. As we typically do, we also provide our organic growth rate to help the market understand our performance without the impact of recently acquired businesses. Our organic growth rate for software and transaction-based revenue was 58% in the quarter. As a reminder, when we calculate organic growth, we do so by excluding the impact of acquisitions that occurred since the end of the prior comparable period. You will find this definition and the others mentioned by me today in our filings on SEDAR and EDGAR. Accordingly, the revenue contributions from NuORDER then ShopKeep and Upserve are not included in our organic growth calculations in the quarter. We continue to be pleased overall with the progress across the main business model drivers. We continue to grow our customer base, expand our ARPU and increase our Payments penetration. And we will walk through these building blocks now. First is our customer locations, and we provide the number of customer locations using our solutions instead of the number of unique customers as this represents the primary driver of revenue for us, since our software is typically priced on a per location per month basis. As outlined in our filings, we define a customer location as a filling merchant or in the case of NuORDER, a brand with a direct or indirect paid subscription, for which the terms of services have not ended or with which we are negotiating a renewal contract. A single unit customer can have multiple customer locations, including physical…

Thank you. [Operator Instruction] Our first question comes from Dan Perlin from RBC. Your line is open.

Thanks guys. Good morning. I just had a question on guidance. I know you have just kind of walked through seasonality and COVID uncertainty, but you also have payments penetration rates that are definitely increasing you have got Lightspeed Capital seems to be gaining a lot of momentum. So I'm just trying to understand a little bit better like what you guys are actually embedding as you think about the cadence both for third quarter and fourth quarter here?

Hi Dan. This is Brandon here. I think the thing that are under our control, we feel really good about that we are going to continue to grow the customer base penetrate payments, as you mentioned, we are now available in new markets and off to a good start in Europe where we recently launched. There is just a lot going on in the macro environment right now that we are just being cautious in how we build that outlook supply chain challenges affecting Retails, it is really important period of time for retail. And as we look into Q4, we have got a growing part of our business now in transaction-based revenue, and those are seasonally slow months, January, February, March are low points for both Hospitality and retail. And given the transaction mix in our business now, we are factoring all that in. So, we are quite confident in the core drivers and our ability to execute. It is just some of these macro things. We will take our usual cautious view of.

Yes. Just a quick follow-up if I could. As you think about the supply chain issues, I'm just wondering in the context of your ability to kind of expand locations, at least in the near-term, is it a cost issue on the inventory or is it a problem actually getting inventory at this point and were you able to build a little bit in anticipation of some of these supply chain constraints? Thank you.

We are doing what we can. We have secured inventory wherever possible, in advance. So you see a slight increase on the balance sheet there, where we have done that. So, so far we have been managing it. It hasn't been easy. But we will keep doing our best there, but so far we have been managing and doing whatever we can.

Okay. Thank you.

Our next question is from Josh Beck from KBCM. Your line is open.

Thank you for taking the question. I wanted to just to ask about the organic growth with respect to locations obviously that shifted down as we went into the September quarter. Maybe just help us to walk through what were some of the major moving parts between say, the June quarter and September. And maybe not quantitatively, but just how we should be approaching organic growth for the remainder of the year? Thank you.

Yes, I will take this one. This is JP. Good morning. So, I mean, organically store count has grown by 19%. If you look at the gross take, we were very pleased with the quarter. It was one of our strongest quarters. But as you know, we do have some business in Asia Pacific and mainly in Australia and New Zealand, and those are being really affected by the lockdowns. And we have seen this actually, what had happened in Europe and in the U.S. there was kind of temporary churn that happens because the stores shut down during the pandemic, and then they reopened licenses and the markets reopened. So I think, again, just going back to what Brandon was saying under what we can control, we are very happy with the results. And organically, we are fairly happy with the progress there in terms of store count and also in terms of added MR.

Very helpful. Maybe just a quick follow-up. Obviously really pleased to see the launch of the flagship platform within the Hospitality industry. Maybe just help us understand what are some of the early learning, is it really kind of full on go-to-market now with that? Just we would love to hear a little more color there. Thank you.

Yes. So maybe just going a slightly stepped back. When we did all these acquisitions, we always mentioned that there are components that we liked from each one of those acquisitions. We also had the strategy, which was to actually put the majority of our developers on one product and build the future, and that is what we did. So, we started by launching a few countries in Europe. Now, we have launched this completely across Europe. So, every country is now are on the new platform, and we are extremely happy with the progress, the platform embeds payments, as you know, it embeds analytics, it embeds ingredient management. So it is really a full blown kind of builds from scratch platform in Hospitality. And as you have seen in the announcements at the last few days, we have now launched it in Beta in the U.S., and we have customers transacting with it. And for us, this is a really big milestone and we are very excited about how this is going to stand out in the coming months. And yes, this is arguably one of the best platforms out there for Hospitality and we are now launching it into the U.S. So the focus for us is next quarter, yet everybody and go to market excited around this in the U.S. and go off to the market.

Excellent. Thank you.

Our next question comes from Andrew Jeffrey from Truist Securities. Your line is open.

Hi. Good morning, gentlemen, I appreciate you taking the call. I guess I would like to understand that now that you have NuORDER under your belt, and I don't want to steal any thunder from the Analyst Day necessarily, but can you offer some thoughts around how you intend to commercialize the supply chain? On one hand, your supply chain solutions and on one hand, it sounds like supply chain is being somewhat disruptive to some of your customers and important verticals. On another hand, it feels like Lightspeed has the ability to alleviate some of these challenges with your solution. So I kind of wonder about the interplay there and whether this is sort of an air pocket from a supply chain standpoint in terms of what you can control?

Yes. Dax here. I think, what this current experience has shown us is that we do want to bring our merchants closer to their suppliers, give them greater inventory visibility, give just the ability to discover new suppliers and discovering new supply. And so, our focus on bringing NuORDER into our supplier network strategy. The first part is to get that experience right in our parties, it is going to be to roll out in features like inventory visibility as well as virtual showrooms to all of our 12 verticals in retail. A1fter that product is right, we can then start capitalizing on all the B2B opportunities on team. It will be a priority, but yes, given the importance of supply chain and supply to retail and leaders of Hospitality, it is important that this is a key part of the platform, and it is going to be a big driver for Lightspeed and driver for location growth in the future.

Okay. Yes. I look forward to seeing color on that. I guess timing is going to be important for, for the numbers and for investor sentiment. And then, Brandon, I just wanted to pick up a little bit on the commentary about sort of mix of new GTV growth in markets where Geos or verticals where payments attached is a little bit lower. Is that how much of that is COVID. How much of that is timing. I just want to understand, again, what you can put the company can control in terms of maybe driving that mix was it is such an important component of your ARPU expansion?

Yes, it is quite simple, Andrew. European Hospitality where we have a good base of customers across the continent, it continues to grow considerably volume there as those economies where you open. So we just launched our payments there last quarter, as I mentioned, 800 customers in the Hospitality segment in Europe, contractive for payments. Weren't able to capture, getting all of them alive necessarily in the period. So it is not hitting the numerator of that payments, penetration rate equation, but that is quite simply all that is happening is the Hospitality segment of our business continues to show really good growth in GTV. And we are just getting going on payments there. So it is been good for us for the long-term for sure.

Okay. And if I could just sneak a quick one in, just on the potential for a terminal shortage. My understanding was the most of your business runs on iOS and Android rather than vertically integrated tech. Is that mostly with acquired businesses or what do you see in terms of any internal shortages?

Terminals we have been working through our partners and that scenario where they have helped us secure inventory and meet demand there. The rest of our hardware solutions are things like iPads and generic third party devices, and obviously supply on those things is tight at the moment.

Okay. Thanks.

Our next question comes from Timothy Chiodo from Credit Suisse. Your line is open.

Thank you. Good morning. And thanks for taking the questions. I wanted to touch also on the 19% organic location ads, but not so much on the near-term, but more about the longer term comments that you have made, generally talked about that organic location edge. It'd be sort of in the 15%, maybe 15% to 20%, depending on the quarter, but that is a fair way to think about it over the call at the medium term? I think it just would be helpful for investors, if you just flush out a little bit the location additional strategy in terms of marketing, whether it is the online content, the telesales, the new locations that could be driven to you via the supplier network, and just a path for maintaining that call it 15% to 20% organic cultivation growth ahead. Thanks a lot.

Yes. So maybe I will take this one. So if you step back, the majority of the market is on legacy systems. Okay. And these are kind of on-premise terminals. So I think everybody in this market knows that the replacement cycle is up. And so I think for us it is fairly straightforward. We have a very good marketing engine where we have a blend of word of mouth organic paid for we triangulate basically consumers, and we get them to try the software. And then from there, we bring them into a complete sales cycle. So I think this year nothing has changed. The only thing we have seen that has changed in the year is that to kind of cost really is going back to normal, because the demand is going back to normal. So I think for there we just readjusted the dials, the good news with Lightspeed is because of payments and ARPU expansion, we can now keep a very good unit economic and still accelerate the growth. So I think that is the fundamental of this. Of course we do have content-driven strategies. I mean, I think we have a very strong 360 team in terms of marketing. Now long-term and going back to what facts were told to operator suppliers, that is where we get very excited. What we know is that the industries, where we have a full integration between the suppliers, the stores and the consumers, and sports goods and bikes we talked about this lot. We know that in those verticals, the suppliers are the ones that are selling Lightspeed, because the value for them is to get the sales through within the network, and also the values for them to be able to expand reach within the Lightspeed network. So that is where we get really excited with the integration of NuORDER. And Lightspeed's is we want to as we go very deep into verticals that matter for us, and within those verticals, as we go deeper and reintegrate basically we call it the golden triangle or the flywheel between the suppliers stores and consumers. What we do for you that, the cost of acquisition goes down and actually intake of customers go up. And that is obviously because everybody gains and there is a ton of value. So here, I think for us, what you can expect moving forward, if you can expect us to focus on the 10, 12 verticals where we are strong and you will start to see a strong integration between you ordering Lightspeed with regards to suppliers, that are generating a lot of demand for Lightspeed, and there, when we do this right, what we see is, LTV over CAC, going really in the right direction. And we see the cost of acquisition going down and intake for customers going up.

That is excellent. Thank you so much. And a quick follow-up. I apologize, I'm sure many of us are juggling a few different calls this morning. You may have given this context. But in terms of the whole supply chain issue or potential issue, I just want to clarify, is it something that is actually you are seeing at the moment. In other words, it is impacting potential location ads at the moment, or is it more just something that may or may not impact location additions over the next few months?

Yes. So, it is not impacting at the moment. The only thing we have done at the moment is, we have we stocked ahead of time to be sure that we could get through this. So, I don't think it is going to be so much a problem for us in our sales ability. I think the issue that we are questioning is, with our merchants, so will our merchants have the merchandising for Christmas, where they have a strong retail month and that is the non-predictable part of this. So, it is not so much about our ability to sell and ignite our customers, it is really about our customers. We know that normally Christmas for them is like the strongest month of the year for our retailers. And so, I think we are very conservative in our views of, is this going to do the usual hockey stick or is this going to be more difficult for them, because they will not get the supplies they need.

Okay. That is great context in terms of your hardware. I appreciate that. Thank you.

Our next question comes from Josh Baer from Morgan Stanley. Your line is open.

Great. Thanks for the question. I wanted to focus on the flagship Lightspeed Restaurant platform. What are the best parts of the platform and how do you think that it is competitively differentiated and maybe focusing on North America or the U.S. can you talk a little bit about the competitive environment and how you are positioned there? Thank you.

Yes. A very good question. So, the focus of Lightspeed for the last 18-months. So, look, the first comment I want to make is, we are interested in complexity. So, we are not that interested in coffee shops and we really want to serve kind of the established restaurants that have - most of them have table service at multi locations. And I think what this version does really well is that, it handles the depths in a very simple way. And what do I mean by this is that it really has everything you can expect with ingredient management, routing rules that are very complex on printers. It also manages all the multi location, kind of this logic of having one menu that is across multiple locations. And the last piece that does incredibly well. It triangulates the consumer with the consumption and payments. So I would say, one of the key things as customers grow and restaurants become bigger, they really need a lot of data. And I think now, when we look at what we have taken from Upserve and what we sell with Lightspeed Payments, and we package this with our core ingredient management and workflow capabilities of the platform, I think this is what makes it unique. So, I think what you will see is that toughness will scale very easy with us and we will provide them data that they do not see with other platforms right now.

Okay.

Our next question comes from Daniel Chan from TD Securities. Your line is open.

Hi, good morning. I know you mentioned that the supply chain constraints weren’t impacting you now, but can you quantify how much you have kind of factored into your guidance?

No specific number there, Dan. I think JP articulated it really well. The primary concern is what we are being taught us on is, will our customers be able to secure the inventory that they need to meet consumer demand in this holiday season. With respect to our own hardware, yes, we have taken a cautious and conservative forecast in the mind as well. But the primary impact is how we are just being careful on what our customer GTV looks like in this holiday season and how that translates into our own payments revenue.

Okay. That makes sense. Maybe sticking with the supply chain challenges, has that driven any increased interest in the supplier network are you getting more inbound?

Look, well we are getting a lot of, I think we were kind of expecting this is a lot of the brands that are on the sitar network are now kind of pushing us to connect to the POS, because they want to have a consumer insights. They want to see sells through. So again, within SMB, I mean it is kind of a broken supply chain today and the brands do not see anything about what's selling in real time at what discounts and what are the consumers buying. So I think what we are getting a ton of is a lot of suppliers now are willing to work with us in NuORDER so that they can get sell through with small businesses. And so, I think that is very exciting because it actually shows that it is the right move. I think for us now, the real question is how fast can we launch a product that has an incredible experience. And so that is what our teams are working hard on right now is we integrating very tightly you order with Lightspeed. So that someone within Lightspeed can order inside of the NuORDER marketplace and vice versa someone orders in the marketplace of NuORDER that when they show up inside of the Lightspeed POS that all of the description, the images, everything is loaded without them having to do anything. And so, all in to say we are very excited about it but we need to now work hard at getting the products together exactly as we did with K series, and the Hospitality launch. I don't think it is a magical overnight, there a lot of work to do to get this product out. The good news nobody has done this before. So we will be ahead of the markets if we can get this out fairly rapidly.

Great. Thank you.

Our next question comes from Raimo Lenschow with Barclays. Your line is open.

Hey, this is [Ravi] (Ph) on for Raimo. Thanks for taking my question today. So, you mentioned the subscription contribution to ARPU being 19% year over year. I was wondering if you could take us through how customer use of modules has progressed and maybe also touch on where that could go as we look ahead given some of the new product introductions you mentioned today? Thank you.

Yep. So, I mean, maybe just going back in time, the strategy of Lightspeed is we started with the POS and then over time, we have built a number of modules that creates value for the customer. So, I think maybe a good way to look at it as kind of be Apple's strategy. You know, you start with the iPhone and then you buy more products and they are still well integrated within each other but there is more value in buying more from the same, and that is exactly our strategy. So what we have seen over time, and I think this is really what helped us during the pandemic is because we have the capabilities for in-store the capabilities for online, the advanced analytics engine, the loyalty platform, now we have payments. Basically, what we are seeing over time is our customers that are just buying more modules from us, and this has never changed, never stops. And I think here when we look back at the quarter as usual. More customers bought more modules and adoption of payments was strong and so that is why we are just excited about where we are heading is we don't see kind of ARPU per location slowing down and then just even with payments 11% is our payments penetration so there is a ton of runway there to sell to the rest. We just launched Payments in Europe. We just launched Payments in Asia. We are about to launch - we started launching Payments for advent and we are going to have it released by the end of the year. So it just gives a ton of opportunity for us to just continue up-selling. Well, maybe one last point here is Ecwid. We acquired Ecwid because we wanted our customers to have the best capabilities with commerce and we worked really hard, and now Ecwid is fully available to our customers within our retail products. So there again, what we can expect is for our customers to buy more from us and follow the trend. So I don't know how much more you want, but I think that is pretty much, our view is that ARPU is going to continue expanding, customers are going to continue buying more modules from Lightspeed.

Perfect that is very helpful and maybe carrying out that last point on Ecwid. I know Ecwid didn't have a big sales team, but they did have a lot of self-serve and big front of customer. So maybe you could talk to us about the potential synergies there as you layer on some of your [SNM] (Ph) efforts.

Yes. So that is the key, what we do with companies that have good tech and not call it strong go-to-markets. So we are working hard now that the product is integrated. We are now kind of beating up all of our teams globally. And I think, again, what do we bring to the table. Lightspeed has local offices in every major country in Europe. We have local offices in Australia, so we can be hyper-local in our go-to-market once the product is integrated, which it is now. So the focus is going to be okay. Let's get now this product in the hands of the lower sales got globally, and let's continue selling it.

Perfect. Thank you so much.

Our next question comes from the Thanos Moschopoulos with BMO Capital Markets. Your line is open.

Hi, good morning. Just clarify points on a new Restaurant platform you alluded to the peak analytics functionality. And so is that something that would represents up-sell sale to existing customers migrating from current platforms or is that included in the base offering?

No, this is going to be a, an option where we are going to have a tiered approach, but I think maybe just being clear with the analytics, the full power of analytics come, if you use like pre-payments. And so that is why we are very happy about this is that customers we want to have the advanced analytics need to buy Payments. So it is going to create - I mean our view is that it is going to create a much stronger ARPU per customer and per location, because we are triangulating basically multiple products together to create the value.

Great. And can you see the churn rate that you mentioned, that churn was elevated in APAC, but how does the churn under geographies. Last quarter you said it was a near record lows that remain the case sort of anything would help there?

Pretty normal quarter, otherwise Thanos for churn, and just as JP mentioned what we saw happen in Australia and New Zealand is what we have seen happen as we have done through this, the various ways of this over the past 18-months or however long it is been. So, otherwise pretty normal quarter on churn.

Great. Thanks a lot.

Thanks Thanos.

The next question comes from Richard Tse from National Bank Financial. Your line is open.

Yes. Thank you. As you guys, get bigger today, just wondering maybe if you can maybe give us some perspective on the competitive landscape, with that sort of growth and scale, as it sort of increased your win rates and kind of changed in any way, how you market the brand going forward.

Yes. So I think, few things. I mean, of course the brand now has a lot of visibility, people know Lightspeed. So, the organic portion is doing well. Now this being said, it is all set by the fact that paid since the end of the, since everybody is doing back to normal, it is going back to the previous year. So, we are happy. I mean, I think we are very confident that, our growth rates will remain the same. Now going back to your question on close rates, we have seen close rates maintain. We haven't seen any kind of degradation. So I think, I would say we were doing a good soup and we know the ingredients. And I think for me, nothing has changed on that front. The soup is still is good and we control the metrics well. And then the last piece, when I think about competition is, do we have one single competitor showing up somewhere a bit more often. And the answer is no. I think we have remained very consistent. I would argue that, what we are doing with K series, and then you launch in Hospitality and all the work we are doing now with the new launch of our retail platform, following the ShopKeep and Vend activations, I would argue we are in a stronger position than we have ever been in terms of a competitive advantage. And I think now for us, what we are seeing is that, the reopenings are also playing very strongly in our favor and we have a very strong on-premise platform. So, now feeling really good about the competitive landscape and the value that we bring in the market.

Okay. Great. Just one other quick one for me. On the transaction based revenue, beyond Payments, which obviously I think is probably the bulk of it. What would be the next sort of service that you offer there in terms of, the next biggest in size?

Beyond Payments, that will be capital, capital is in its early stages still, Richard. We did give some disclosure on that in the press release itself. So, it is growing. We have extended capital now to more of the customer base in this past quarter. We are seeing good uptake. Still think this is going to be a nice driver of growth for us in the long run, a good profitable driver of growth, a lot of good value add to the customer as well, but that would be the next in line for sure.

Okay, great.

Maybe just to give a bit of clarity there, the obsession now is to embed this very tightly inside of the product, and inside of the entire product portfolio. So, we can then make it available to as many customers as possible.

Our next question comes from Andrew Bauch from SMBC Nikko. Your line is open.

Good morning, guys. Thanks for taking my question. I mean, how should we think about the cadence of these penetration gains kind of changed throughout the rest of this year and into 2022, when you really start getting in all these markets and how does kind of capital provide that incentive to convert to the platform.

Great question. Yes, it is tough to give you a precise answer to how payments penetration will be at quarter to quarter or as we go, we gave a bit of color on we have been one quarter in Europe, basically now with our Hospitality 800 customers took it and we have got to now make sure that they get transactional. We got to make sure we continue to attach all new customers in that region. We are now entering Hospitality in Australia as well. So we are going to go through the similar exercise and we also integrated the payments platform, our payments platform with the Vend product as well starting with the U.S. customer base there. So, all those things, I mean, those are big chunky parts of our GTV and how our GTV builds up. Just the initial launches of these things, while we get smarter and better with every time we do it, we going to be lumpy or we going to be have growing pains, especially in new markets. But we did publish something last quarter about a 50% GTV penetration rate and we still feel good about that, given how we have now got payments coverage across a much bigger part of our customer base.

That is helpful. Thank you. There is just a follow-up. Could you provide us an update on what total locations are today versus the 156,000 at the end of September?

No, that is not something we disclose just yet. We will update you next quarter on that one.

Alright. Thanks guys.

Alright.

Our next question comes from Martin Toner from ATB Capital Markets. Your line is open.

Hi, guys, thanks for taking the question. The advertising track transparency tracking issues that sorted online advertisers this quarter, did that have any impact on your marketing efficiency and how will you adjust going forward?

No. net zero impact. We are marketing to businesses, we use I mean Google 360. So, we haven't changed anything. As I said before, we know how to do the soup, we know the ingredients and we have seen nothing but standard kind of adoption and growth.

Thank you.

Our last question comes from Todd Coupland of CIBC. Your line is open.

Good morning, everyone. I just wanted to ask what type of hardware is required for a payments rollout once a customer attaches and how much of a constraint specifically this is the supply chain having on that part of your hardware offer?

That scenario we have been navigating pretty well, Todd. The payment terminals we deliver from our partners are primarily Stripe and Adyen. They have been quite supportive of us and making sure we have what we need to meet customer demand there. So, that part that part's gone okay so far.

Okay. And when you talk about the hardware issues for you going into the next couple of quarters, does that impact sort of this comment from Stripe and others like are you expecting that to change?

No. there is lots of lots of industry talked about chip shortages and that sort of thing. I think on the payment terminal side, Todd, we have been able to secure inventory. As some of the peripheral devices and so on that we are just being cautious. Like I think we said earlier in the call, we haven't, we have been managing through it so far, but this is just one of those macro factors right now that I just think we have to be mindful of as our customers are a new customer last, we are going to need an iPad, a scanner, a printer, all these things that are in tight supply for awhile.

Okay. Thank you for that. And then my second question related to your growing pains, observation in Europe, what types of things might be an issue as you roll out in Europe and I guess now Australia, where you have just introduced it. What types of things are you talking about in terms of growing things? Thanks.

Yes, so maybe I will take this one. I think for me, the way we look at it the adoption within the new markets have been smoother than the initial adoption in the U.S. So, you know, we started in the U.S. we now have roughly 20% of our GTV in North America from on payments. And we see that continuing to grow. Then we launched in Europe. I mean, Brandon mentioned, we signed 800 customers within the first quarter, which was very much in line or much better actually than what we did in the U.S. and we are launching now in Australia. And I'm certain we will have very good adoption. So I don't think there were any issues there. I think we are just going to see the rollouts. And I mean, generally speaking, the way it works is the customer side, and then what we have to look at is between the moment they sign with us and they become transactional. Our job is to try and shorten that time as much as possible. You need to ship the terminals. We need to ensure that they took them in that they configured them in the right way. So I think nothing out of the norm feeling really good about knowing how to sell it, and knowing how to present the value to the customers. I think it is the typical kind of lag that we have seen everywhere else between the moment you sign, and then they start being transactional. So the 800 we signed this quarter, we will probably be transactional within the coming months. And so there is always this lag. So we are very just again to be clear, we are very happy with the uptake. We are very happy with the sales efforts. We now just need to be patient enough to start seeing the uptake in the revenues.

Great. Thanks for that color. I appreciate it.

This does conclude the Q&A part. You may now continue.

Okay. Thank you everyone for joining us today, as usual managements around if anyone has any follow up questions, please reach out to myself. Goodbye, and have a great day.

This concludes today's conference call. Thank you all for joining. You may now disconnect.