Thank you for standing by. My name is Bailey and I will be your conference operator today. At this time I would like to welcome everyone to the Lightspeed First Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a Q&A session. [Operator Instructions]. I would now like to turn the call over to Gus Papageorgiou. You may begin.

Thank you, operator. And good morning, everyone. Welcome to Lightspeed's fiscal Q1 2024 conference call. Joining me today are JP Chauvet, Lightspeed's Chief Executive Officer, and Asha Bakshani, our Chief Financial Officer. After 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 2024 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 and ratios. 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. And finally note that because we report in U.S. dollars, all amounts discussed today are in U.S. dollars unless otherwise indicated. With that, I will now turn the call over to JP.

Thank you Gus and welcome everyone. Thanks for joining us this morning. Overall, I was very happy with our results this quarter. Revenue came in better than expected with revenue growth of 20% versus the approximately 14% concentrated in our outlook. Our GPV volumes increased by 56% year-over-year and our adjusted EBITDA loss of $7 million came in lower than our outlook of adjusted EBITDA loss of $10 million. As I mentioned in our last conference call this year fiscal 2024 Lightspeed is focussed on execution and better aligning ourselves to the rule of 40 [Ph] financial measures. Our main goals for the year remain the same namely; reap the benefits of one Lightspeed, accelerate revenue growth for financial services including both Lightspeed payments and Lightspeed capital, continue building products that solve our customers problem and help them run their businesses particularly with our supplier network, and finally accomplish our goal of becoming adjusted EBITDA breakeven or better for the full fiscal year. In terms of One Lightspeed we are closer than ever to deploying our flagships in all key markets. At the end of the quarter, we attained [Indiscernible] for Belgium, one of the last remaining markets where our flagship hospitality product was not available and we expect to receive approval and the problems of Quebec for it’s full launch. One Lightspeed has allowed us to simplify our operations and reduce cost and complexity across the organization. If I think more importantly, it’s helping us win the right customers. The customers with higher sales volume and more complex needs. Our day shows that these complex SMBs adopts more software and shown less. Drawing our customer base with the right customers remains an important goals for Lightspeed. In this quarter, we saw ARPU reach all-time highs. Our flagship products are…

Thanks, JP. Overall, Lightspeed started the year strong, delivering revenue and an adjusted EBITDA loss that were better than our previously established outlook. We continue to execute on our strategy of attracting high-GTV customers and expanding our payments offering across our new and existing customer base. On today's call, I will provide a recap of the quarter, discuss the progress of our Unified Payments launch, and then provide an outlook for the upcoming quarter and full year. I was pleased with the progress we've made this quarter. Despite the attention and resources that our Unified Payments initiative is demanding, we were able to maintain our discipline on costs, increase the number of high-GTV locations, and drive towards our goal of adjusted EBITDA break-even or better for the fiscal year. I was also happy to see our total cash balance, excluding merchant cash advances, went down by less than $10 million in the quarter. In the quarter, revenue came in at $209.1 million, an increase of 20% year-over-year and ahead of our previously established outlook. Subscription and transaction-based revenues grew by 21% year-over-year. Subscription revenue increased 7% year-over-year to $78.7 million. Gross margins on subscription revenue remained consistent with last quarter at 75%, the highest in the past two years, thanks to a dedicated effort to consolidate cloud vendors and improved overall efficiencies. I want to stress again that in the quarter, our account management team, which is a key component of our financial management team, which is usually focused on upselling our customers on software, has been temporarily assigned the job of onboarding new payments customers. Our account management team historically accounts for half of our added software MRR in any given quarter, and so it was encouraging to see that despite their temporary reallocation of duties, subscription revenue grew…

Thanks, Asha. Before we take your question, I thought it was worth highlighting one more item from our sustainability report. A third of the executive roles at Lightspeed are occupied by women, which is approximately three times the average of the tech sector for women in leadership roles, an accomplishment I am proud of. We are committed to hiring and promoting the best and brightest in this company, and maintaining a diverse workforce is crucial to obtaining this goal. So far, our fiscal 2024 is off to a good start, and our goals are simple. One, benefit from One Lightspeed. Two, expand payments, three build great product for our customers and finally four gets a profitability. We are fully committed to meeting these goals. With that, I will turn it over to the operator to take your questions.

[Operator Instructions] And we will take our first question from Daniel Chan with TD Cohen. Your line is open.

Good morning. Nice to see some good progress on the payments front, but sounds like there's some uncertainty on the time you go and forward. Are you still on track to get the majority of customers on payments by the end of the year?

Hey Daniel thanks for your question, it’s Asha. What we had committed to was a North America launch in both hospitality and retail. And then APAC and Europe follows. We had mentioned that we expect the penetration to be in the 30% to 35% range as we exit the year. And we're still very much aligned with that trajectory. We have to keep in mind that when we say the majority of our customers, we have to keep a couple things in mind. There are still certain verticals that we don't underwrite and certain regions where light feed payments is still not available. We plan to unlock those regions in the coming quarters and verticals as well. But the goal that we had outlined at the beginning of the year for fiscal 24, we're still very much aligned with that.

Great, thanks for that, Asha. And then on the fiscal 24 guidance, you reiterated that despite the beat this quarter relative to the guidance that you had, anything to call out there that's changed that you think in the next three quarters. You call that macro and timing. Are those have had those gotten worse than what you expected last quarter considering the beat this quarter?

No, not at all, actually. The beat in our first quarter really resulted from two things, as you mentioned. The first is gross payments volume growth. That is an expected and that's just given the verticals where we're well penetrated on payment. As well as some early signs that are quite encouraging on Unified Payments, such as lower churn than we forecast it as well as time to transact much more quickly in certain contingents of customers. However, as we look forward into the following three quarters, we're choosing to remain very modest on our GTV assumptions. We do believe that the end consumer hasn't fully felt the impact of rising interest rates and inflation to actually being more modest on our GTV expectations for the next three quarters. And with respect to Unified Payments, we have to keep in mind that 50% of Lightspeed’s customer base is international and we haven't yet fully launched in those markets. So we're not, we don't want to take the early encouraging signs of Unified Payments and apply it to those regions. We feel it's still early days and we're choosing to remain cautious.

Thanks, I'll pass it away.

And your next question comes from Andrew Jeffrey with Truist Securities.

Hi, good morning. Appreciate you taking the question. I wanted to dig in a little bit on retail versus hospitality trends. Interesting to see that both categories are sort of growing at the same rate right now and I appreciate Asha the high level macro commentary. But that's a notable change from recent periods. How would you sort of anticipate those two categories growing it sounds like there may be a shift back to more sort of discretionary spend from experiences and maybe you could parse that by geography a little bit just a little more color on expectations.

Thanks, I'll, take this Asha and then we can. I think it's very similar to what we, we talked about last quarter. What people are wearing to go to restaurants, those categories are doing well. So we're seeing luxury apparel, apparel footwear and also jewelry going very well. And we're continuing to see call it the COVID that's positive not to do that well. So outdoors sports bike have still not recovered and it's still down year-over-year. And on the hospitality side, we're seeing still good demand globally. So, but I think for us, we just want to remain cautious because we think there might be -- we don't know what's going to happen. But we want to be cautious as we get into the second half of the year.

Okay, I can appreciate that given the uncertainty. And then just wondering whether or not some of the sort of fee issues that have a risen customer fee issues that have a risen in the U.S. with sort of a nominal competitor and some of the noise around that has helped has hurt has made your selling motion and easier. I know you're not big in U.S. restaurant, but I wonder just generally the cost of payments for merchants. It sounds like you think you have a price advantage. I’m wondering if you're sort of seeing anything in the market that's notable in that regard.

Yes, maybe on payments, what we're seeing is one customer's use Lightspeed Payments they love it. So I think that's very encouraging to us. They're saving time. They love the consolidated reports. They love the actual hardware and the ease of use and mobility and all of these are important. And I think what they like also is they're getting all of that at a rate that is very competitive. So we're so confident now with our rates that we're telling your customers we're going to match or beat your rates. Regardless of what happens. So I think what we're seeing is that people, you like to eat is a very good choice at a good price. And again, we're seeing our close rates and I think maybe that's the most exciting to us. As you know with Unified Payments we were really looking at making payments mandatory for all new customers. And here what we're seeing is our close rates are just as good. Our times to close are just as good. And ARPU is gone up pretty significantly because a lot of our customers are now using payment. So nothing to add except that we're very happy with the outcomes for now. But we want to say just cautious for the rest of you.

All right, appreciate it.

Your next question comes from Thanos Moschopoulos with BMO Capital Markets.

Hi, good morning. With respect to the costs for transitioning customers to payments such as buying other contracts. The hand holding required to get them up and running are those funding pretty well expected or something to call out in that regard?

Hey, Thanos thanks for the question. Those costs are actually trending slightly better than the expectations. What we are finding and again, we it's only really the North American launch because it's very, very early days for the others. But we are finding in North America that there is a lot less hand holding that our customers are requiring. Many customers are not requiring onsite installations. We still have some significant cause of Unified Payments in the quarter. And we expect to have some in Q2 as well, but they are lower than the original expectation.

Okay, and then as far as subscription revenue, just given some of the puts and takes you referenced, how should we think about the trajectory. Would you expect growth to be sort of similar to what we saw this quarter to the remainder of the year or any color on that line?

Yes, for the first half of the year we expect a softer subscription revenue growth. We do expect that to improve slightly in the back half of the year, but as we said last quarter, we -- fiscal 24 for us is really the year of execution on Unified Payments. And so even for the full year at large, we do expect overall subscription revenue growth to be softer than what we've seen in previous years. And once we exit the year, we expect that to improve to historical, more historical level.

That's fine, thanks.

Your next question comes from Koji Akito with BofA Securities.

Hey guys, thanks for taking the question. I got a question on GTV here as a percentage of GTV. So in the quarter 22%, that's great, an increase of three points quarter-over-quarter. And the way I understand it is much of that near-term growth is fueled by payments adoption. But as payments get more and more penetrated within your, your base GTV becomes, it’s just a factor [Ph] GTV as a driver of growth. And that metric grew 6% year-over-year this quarter. So, how do we think about the puts and takes the GTV growth over the next 12 months to 24 months?

Thanks, thanks for the question Koji. So, you're right, you're absolutely right. The relationship between GTV growth and GPV growth today for Lightspeed is quite disconnected. Because we're only 22%, 23% penetrated at the end of the quarter. And as, as we become more and more penetrated, GTV growth will become much more aligned with our gross payments volume growth. What we need to keep in mind with the 6% which was single digit year-over-year growth, not super high, is the fact that 50% of our locations at Lightspeed are outside North America. And so we have, we do have some effects, heads wins that are impacting that number. In addition, there are certain verticals where we're well penetrated from a GTV perspective like as JP mentioned, and there's still declining year-over-year. And so, that is impacting our overall GTV growth. We do find that as we focus more and more upmarket on the over 500K cohort of customers as you know is our main focus that we do expect that Lightspeed GTV growth year-over-year should be better than overall GTV growth in the SMB market.

Got it. Asha thanks for that. And one follow-up if I may here. In your prepared remarks you were mentioning capital and you mentioned that you would be pushing harder but given the macro you're being conservative on the ramp, but then you will also mention that there is demand for it. So if there is demand, why not push a little bit harder for capital.

Yes you're absolutely right. Capital is a very promising business for us, but what we have to keep in mind is that it still represents today a low single digit millions in terms of revenue and so when the company is fully focused, our sales teams are fully focused on Unified Payments, there was some distraction in the quarter on capital. And in addition we want to make sure that in today's macro that we're not rushing anything. We want to make sure that we ensure that we stick with the very very high rated credit rated customers for eligibility, but you're absolutely right there's tons of demand. We're just we are taking our time intentionally given the macro. Our default rate still remain extremely low, but we definitely should see that pick back up in the back half of the year when Unified Payments is behind us.

Got it. Thanks that makes a lot of sense. Thank you so much.

Your next question comes from Matt Coad with Autonomous Research.

Hi. Hey guys thanks for taking the question here. Just one on Unified Payments, you guys mentioned that's the gateway light sea that's going to be implemented is going into effect in a couple months. Just curious if you could kind of like bifurcate for us that strategy just focused on the smaller customers or will that be impacting the larger customers as well -- like any color there on your strategy would be helpful.

Yes so that fee is really the thick. So when you look at our Unified Payment strategy what we're trying to do is we're trying to get all of our customers on payments and I think that's the expected outcome as we want everybody on Unified Payments. But what we're doing there the carrot is we're giving away hardware, we're giving away installation, we're beating your rates, we're committed to matching or beating your rates, we're sending people on site. So we're giving a lot. But the stick here is. we're saying well, if you don't move to Lightspeed payments, we're going to be charging you a transaction fee of 50 basis points. And so that's been now communicated to our customers we have a certain percentage of our customers that are now paying this fee, but just being very clear we have a whole set of people that are actually reaching out to those customers that are paying this transaction fee and telling them hey you shouldn't be paying the fee because you'll be paying way less if you're using Lightspeed payment. So it is just the stick and I think…[Technical difficulty]

Hey, I think we lost JP. I'm going to continue, but I think to answer your question, I think JP answered it but we are ensuring that the transaction fee at 0.5% is across the base. It's not just for the smaller customers. And so, we are finding that there's a large contingent of customers that have taken the transaction fee still very early days on Unified Payments and what we are doing is reaching out to those customers to ensure that they understand the implications and trying to again reiterate the benefit of Lightspeed payment. But so far, there's no concern on our in there.

Awesome, super helpful Asha. One other one just on the transaction base gross margin you mentioned the onetime items there, but could you just kind of like walk us through the puts and takes of should we be modeling that similar to what we've seen in the past couple of quarters, should that be coming down a little bit due to the shift maybe payment is growing faster than capital, just and any puts and takes that would be helpful.

Right. So the transaction base gross margins, you’re right, there were several temporary items impacting margins this quarter one of which is the one time cost or the launch cost and Unified Payments. We do expect that to dissipate in the coming quarters. There will still be some launch costs in the second quarter but beyond that we expect that to dissipate the commentary on Lightspeed Capital we should see that improve in the second quarter from the front that you've just seen in Q1 and to further improve in the back half of the year. So those are the one-time items that will improve and we do expect transaction based gross margins and overall gross margin growth year-over-year to improve in Q2 and then improve even further beyond. We have to keep in mind referral fees are declining as expected that's not one time and that will happen every quarter as we take those cohorts of customers on to Lightspeed payments, but we do expect Q2 and beyond transaction based gross margin and overall gross margins to improve given the one time.

Thanks, Asha.

Your next question comes from Richard Tse with National Bank Financial Markets.

Yes, just had a question on certain payments adoption, and obviously with the focus on larger merchants. What are your existing large merchants saying in regards to adoption like what do they need to be condensed on, like what sort of any obstacles for their adoption. I'm sure you'd had conversations with them, but if you're going to share that that'd be helpful.

Yes I'll take this one. Sorry, I've got kicked out early on, but the higher GMV merchants are actually more inclined to go with Lightspeed. It's a much easier conversation, it's a business conversation and at the end of the day what they want is they want, they're really focused on optimizing productivity and optimizing number of transactions per employee basically. And so here, the conversation is very easiest like if you can accommodate my rate core, let's go let's do it. So I think the conversation is actually easier with the big ones than the small ones. The only thing with the larger ones that have multiple locations like what happens there is there's a role out. So between the moment they say yes, we're ready to go ahead and we roll it out to all of the locations to take time. But generally speaking, we're feeling very confident with the high GMV merchants because the conversation is really a business session and there's no motion that's really around productivity.

Okay. Thanks and then I think you touched briefly in your prepared comments the new order, can you give us a sense of what that revenue model may look like going forward now that you've sort of had it for the time with it and then also the potential time when that sort of commercial model would be available.

Yes as you know new order is a business by itself inside of Lightspeed. They work with brands, and they -- the pipeline for the distribution of all of all there goods to all the networks for the brands. So that's being in place that's continuing to generate revenue every quarter work we are continuing to sign big brand, but here the real value of the order for Lightspeed is the network between the brand and the store. And so we have nothing to this year that is in our revenues for that, but we're continuing to develop. But what we are seeing is that for the store that are using Lightspeed and new order they're seeing tremendous value. We’re seeing the NPS for those customers much higher and they actually think is -- we've heard it's better than slide for them because of all the time they're saving and removing pen and paper and being more efficient. So we're confident in the order for the future. We are investing a lot this year in the development to continue to integrate it in a very tight way into Lightspeed. We actually hired John Shapiro who's now going to be leading this initiative for Lightspeed, he’s a pretty senior executive with a lot of technology background with suppliers and POS. So we're progressing well, but we're being cautious again. There's no revenue this year recorded for the integration. We think we need to, spend another to end [Ph] this fiscal year or continuing to leave this integration before we see the benefits. Now the benefits we're going to see as I go with that suite [Ph] distribution we will be between the brands and the store so we will help brands to find or identify new store. We will also help brands see sell through throughout the entire Lightspeed network so that they can they can readjust manufacturing. And finally for the store, we think that's huge value there as a differentiator where we're going to automate everything that's manual with our competitors. So I think it's very exciting as you've always said, a very exciting product. We're -- I mean we're building history here, and it's going to take time but we are very confident in the outcome once this is done.

Okay. And just a quickly last one for me. No doubt your balance sheet is strong, so you've got a lot of financial flexibility and with the sort of path to break even our positive EBITDA exiting sort of the year, you do have sort of increasing flexibility. So what do you think in light of the relative valuation on a stock and any possibility it's kind of buying back some of your shares?

Yes, thanks for the question. We talked about a stock buyback. We're always evaluating our options there. We discussed it with our board regularly as well, it's very important to us that we maintain flexibility around our option, whether it be M&A or anything of the sort, it's not, we're not going to be like we're raising any time soon in these markets. And so we want it, we're trying to balance buying back our stock with what we need to cash for, things like our merchant cash if that's business is thriving. But we continue to evaluate our options there, but no one, no real decision yet.

Okay, thank you.

Your next question will come from Tien-Tsin Huang with JPMorgan. Tien-Tsin Huang your line is open.

Hey, apologies. Hope you can hear me now. Thanks for the, the good detail here. I think Andrew asked you JP on the, on the toast, the consumer fee that they initiated, and then they subsequently had to retract that. I'll just ask you more explicitly any lessons learned from that. I know you're going to the transaction fee intro and you're bracing for an extra good outcome. But I'm just curious if there's any lesson learned from that and how you might respond to any negative feedback?

Yes, I think the only comment I can make, this is not a short term. We're not here for the short term. I think you have to be careful when you just jack up prices, just because it's a fairly easy exercise. To grow revenues by just increasing, increasing fee in a way that's not, that's not accessible to the customers. So I think for me, the feedback is we have to be cautious, and we, we look at our customers as a long-term relationship. And so we have to, we have to act well, especially in the context of Unified Payments. We want our customers to know that we will not, because I think it's a question of power. Once you have the power and you do everything to the customer, you have to behave well, and I think for us we just have to be cautious in how we do product increases, and they have to be reasonable. Because if not the customers are going to react very poorly to that.

And it’s fair. Thank you.

Your next question comes from [Indiscernible] Capital.

Thanks guys, for taking my question. Maybe just one on the unified offering. Are you fighting -- in the new product development that you guys talked about this quarter? Can you give us a sense of how the unified platforms are now kind of helping you across up some motion? Are you finding that customers are much more recipient, recipient to it given this tougher macro in terms of labor and everything around that?

Absolutely. So actually, the reason why we launched Unified Payments when we launched it. When you look at the market, basically, prices are going up, cost of labor is going up, costs of goods are going up, margins are tightening. And the only way out for our customers is to do more with that. And that is really the main driver of Unified Payments is we are helping our customers face time. And we have numbers like productivity gain of 20% in some instances of customers. So the idea of Unified Payments is to say, it's one solution. So when you're, if you're a clerk and you're selling or you're a waiter, you don't have to, pull out multiple things. Everything happens within one environment. And I think when you look at the back office capabilities also, when you look at the reporting and you look at -- if you have two payments. If you have a payment platform and if you ask, you need to consolidate those Excel sheets and figure out where the funds are going, whereas we give you a simple report at the end of the day. So time saving everywhere you look, productivity gain, wherever you look. So I think that's really what's driving our customers to this. And the last piece is access to funds. So we have a number of derivatives products that are using Lightspeed payments. The first one is capital, once you're on Lightspeed payments, we underwrite you for capital so you can have access to capital. That is a big win for them and our customers. And I think the last one that comes to my mind that is really important is our insights engine. Our advanced analytics or insights platform. That uses payments to give insights that they've never seen before. And by the way, we just launched it now in Europe, insights with GDPR or helping our customers comply with GDPR, sorry. So all of the products that are really good and are really helping our customers with productivity and understand how to run a better business. And we are deriving a lot of products that are using payments at the core.

Excellent. Thank you. And for my second question, just on the customers who have immediately opted for the 50 basis point transaction fee. And do you see an opportunity in the future to re-engage those customers to kind of keep the conversation going? Or is it more of kind of like a one and done and then you guys kind of leave it alone?

No, no, no. It's an on-going. And I think that's really, when you look at our, when you look at Unified Payments. Every customer that goes under -- we don't have time, we're paying transactional look at this later etcetera. Those are the customers we really want to bring on space. A lot of our customers are just using the transactions because they don't have time right now. They think it's the wrong time of the -- if I'm a restaurant that I'm in France and you're all my money in summer at the beach. Well, I'm not going to use likely payments, I’m going to pay transaction fee. So what we're trying to do at the end of the day, we do not want any customer to pay transaction fee. We think that is not the right way to run the business. So we're doing everything we can to bring them on to Lightspeed payment. So as soon as they take it, you have a whole set of people that are calling them and trying to work out time for them to bring them on to Lightspeed payments.

Thanks so much.

Your next question comes from Kevin [Indiscernible] Bank. Your line is open.

Hey, hey there. Good morning. I had a question. Couple questions on software. You mentioned that the cohorts under 200,000 are 5% of GTV. Any sense of how much of your software revenue they account for?

Hey Kevin, thanks for the question. We haven't typically disclosed the percentage of software revenue from that cohort. The way we look at our customer cohorts are total, the total net revenue that we get from the customer. And when we look at it from that perspective, the ratios are quite similar from the GTV, right? Because obviously the larger GTV customers with payments and payments is embedded now into our platforms, the larger GTV customers with payments obviously is very representative of the split. So that's typically how we look at it. In a typical customer, if I just gave you an example of a very small customer, we have customers that are paying us 50, $50 in ARPU a months on software. We also have very high GTV customers that are paying us $500 a month in software. So really, it's really difficult for us to just cohort those customers, because even in the over 200,000 bucket, there's quite a large range.

Okay, no, I appreciate that. That kind of leads to my second question. It's on the larger merchants, over 500 or over a million. You mentioned, $500 is an example, but maybe bigger picture, even medium to longer-term. How much do you think you can extract out of, out of your best merchant in terms of ARPU like, where do you think it can go?

Yes, I think we're early days, frankly. So I think just look at a customer to the 10 million of GMV and add payments in there and you'll see that basically the software becomes a small fraction of whatever they're paying. And I think that's why, we're doing Unified Payments. But I think that's, that's where we are tested. If you look at the basket, we look at all the tax [Ph] that these customers are buying. And we think there's room to go well above a thousand bucks a month, just for software for those higher output customers. So and that's per location. So there's a lot of room to grow. One thing is certain is we are, and I said that a number of quarters, but we are doubling down the high GMV merchants all the way from marketing to onboarding, to supporting to how we position ourselves. We are going up markets, and that is really good for Lightspeed because ARPU is much higher, and we're seeing it actually. The new customers that are drawn like we have a much higher ARPU than in every quarter the ARPU seems to be growing. The new platform command the much higher ARPU. So we are doing what's right. We know that we could, we could get some much higher levels than we have today. And the first step for us is, as we said, is Unified Payments, because that really moves the needle quite significantly, especially for the high GMV merchants.

Got it. Aappreciate the color, JP thanks.

Your next question comes from Suthan Sukumar with Stifel.

Good morning. I just had a question here on, and merchant growth, you saw -- felt the solid double digit growth in larger merchants this quarter, just curious, has that been changed from a selling motion here for you guys, and also what are you seeing from the competitive intensity perspective as you know, as you continue to focus on larger merchants.

Yes, so I think the good news is the more, the larger the merchants the less the competition. Okay, that's very good. If you, if you look at the larger merchants, none of the other cloud base competitors can offer what we do. So I think that's why we're really focused on that, because it has lower churn and higher ARPU and lower competition. We have adjusted our sales motion where now we’re working very tightly with the Google and the Facebooks of the world. So actually feedback GMV so that we can do a better job as if targeting them. And then what we’re doing now is we are creating cohorts of sales people based on the types of customers. So a more experienced sales people now are coming to higher GMV merchants, and if you just saw it likely you are probably going to start below a GMV merchant. So we are equipping the organization in a way to just optimize throughputs of large customers and we’re very happy because it’s working. Anyway we look at it, we’re seeing, we’re seeing that we paid out slowdown, so get paid in a shorter amount of time listening close rate the range are strong and we are seeing ARPU really strong for new customers. So very happy with what are doing and I think again its – and it’s a dream that started what I think six quarters ago I think and it’s going to just continue improving as we go forward.

Okay, great.

I think we’ll take one last question.

Absolutely. And our final question will come from [Indiscernible] with Barclays.

Great, thank you. This is Jeremy on for Rymel [Ph]. I just wanted to ask on the Lightspeed supplier network, so understand that it’s not being monetized now. But has it sort of been like rolled out customers as a test used cased and if so could you share a little bit on what the feedback has been there? Thank you.

Yes, so when we look at the supplier network, the piece that is monetized is we work with the brand made by our software and then we become these fast forward to distribute their goods to anybody who wants to place an order. And including our competitors, including Big Box retails and SMB. So that piece has been in motion, it’s going well. The piece that is still under test is really the – I’m taking the brands and I’m connecting those brands to Lightspeed stores and I’m enabling the source to be way more efficient in how they operate. So it’s better going outright as a platform as they would now and IPOs and then receive half the goods because they don’t have anything in stock. What we are helping them to do is – we’re helping them first of all identify how much they should be ordering through an analysis of their self-through. And then what we're doing is we're connecting that order directly to the brand. And then we're enabling them to place an order from the brand looking at the inventory levels at the brand. And then finally what we're helping them do is when they receive the goods, they have no work. They just scan the goods and the descriptions are there, the video, and that is really important for our merchants right now because, if you want to sell online and you want to sell across multiple channels, you need to have rich packages that describe the goods with videos and images and etcetera. And I know this sounds obvious, but the reality is, for this industry, nobody's out there. And so, why am I saying this is that the test case we've done, we have a couple of hundred customers are using the full integration and the feedback we have from them is outstanding. They believe this is the, this is better than sliced bread. And this is saving them hours and hours every day. And again, going back to my previous comment, anytime you can help today, retailers, save hours of work. They love you because they don't have the bandwidth anymore, they don't have the manpower. And it's all around doing just optimizing and doing more than that. So, that's why we're very excited about this, but we need to start the networks and all the verticals where we operate. And that's going to take time. But we know that once they're on it, the NPS score and the set of the, it's just really good. People are really happy.

Got it. Thank you.

And with that, I will hand the call back over to Gus for closing remarks.

Okay thanks everyone for joining us today. If there are any follow-up questions, we are around all day. Look forward to speaking to you again next quarter. Have a great day, everyone.

This does conclude today's conference call. You may now disconnect.