Dominic Ball

Dominic Ball asked Dax Dasilva to elaborate on Lightspeed's structurally differentiated software capabilities, specifically those built on proprietary Lightspeed payment data, in the context of broader concerns about AI disruption in the software industry.

Answer

CEO Dax Dasilva highlighted Lightspeed's unique competitive moat, emphasizing the payments relationship and the proprietary wholesale ecosystem, including the NuORDER platform. He explained that these unique data sets drive agentic AI workflows, analytics, and insights tools, such as benchmarking and trends, which differentiate Lightspeed from other cloud POS providers.

Dominic Ball asked Dax Dasilva to elaborate on Lightspeed's structurally differentiated software capabilities, particularly those built on proprietary payment data, in the context of AI disruption.

Answer

CEO Dax Dasilva highlighted Lightspeed's unique competitive moat stemming from its payments relationship and the Lightspeed Wholesale ecosystem, which includes the New Order platform. He emphasized building agentic AI workflows around proprietary payments and wholesale data, creating an unparalleled supply-to-consumer workflow that differentiates Lightspeed from other cloud POS providers. Products like Marketplace and Lightspeed AI leverage this unique data.

Dominic Ball from Rothschild & Co Redburn noted the strong GTV growth and asked for a breakdown of the contributing factors, seeking to understand the balance between improved same-store sales, outbound and inbound sales efforts, and potential cross-selling.

Answer

Founder and CEO Dax Dasilva stated that GTV growth is fundamentally driven by location growth, pointing to the 12% GTV increase in the company's core growth engines. CFO Asha Bakshani added that EMEA Hospitality showed particularly strong same-store sales growth, and certain retail verticals like bikes and toys also performed well, contributing to the overall result.

Dominic Ball inquired about the Lightspeed Capital program, asking how it is funded, how much capital is deployed, and whether the company would consider off-balance sheet arrangements. He also asked about Lightspeed Payments adoption in Europe and if the adoption curve differs from the U.S.

Answer

CFO Asha Bakshani confirmed that Lightspeed Capital is funded on-balance sheet, with approximately $69 million outstanding, citing favorable economics and a low default rate. She noted the company may consider off-balance sheet options as the program scales. Founder and CEO Dax Dasilva stated that the payments attach rate in Europe is as strong as in North America when sold as an integrated solution.

Dominic Ball inquired about how Lightspeed helps merchants navigate the complex, multi-channel U.S. retail environment and whether the transformation plan includes divesting non-core assets.

Answer

Founder and CEO Dax Dasilva explained that Lightspeed targets medium-to-high complexity SMBs needing a 'light ERP' to manage inventory across multiple channels, which creates a strong competitive moat. CFO Asha Bakshani stated that while there are no immediate plans for divestitures, the company continuously assesses all opportunities to maximize value and capital efficiency.

Dominic Ball questioned the low 1% GTV growth, asking why market share gains aren't more apparent and when a reacceleration could be expected, particularly in Europe.

Answer

CFO Asha Bakshani contrasted the low overall GTV growth, affected by non-flagship churn, with the 24% GTV growth on flagship products. She stated that go-to-market initiatives are already underway in all regions, including Europe, and are expected to drive acceleration in ICP locations and GTV in the second half of the year.

Dominic Ball from Rothschild & Co Redburn asked about the early performance and case studies of digital chits within Toast IQ, specifically how this product helps full-service restaurant owners understand their customers better and personalize the guest experience.

Answer

CEO Aman Narang confirmed strong value perception for Toast IQ, including digital chits, which enhance the guest experience by connecting menu data to personalized service on handhelds. He highlighted high adoption of the natural language interface for backend operations, insights into profitability, and sales performance, emphasizing the product's ability to drive value for customers.

Dominic Ball commented on Toast IQ's digital chits as a standout product and asked for case studies or early data points on its performance, particularly regarding its ability to help restaurants understand their customers better despite high waitress churn.

Answer

CEO Aman Narang confirmed that Toast IQ is showing significant value, with digital chits enhancing the guest experience by connecting it to menu items and enabling personalized interactions. He highlighted the high adoption of Toast IQ's backend, where customers use a natural language interface to manage operations, get insights on profitability, and track sales, indicating broad utility beyond just digital chits.

Dominic Ball asked how Toast views partners like DoorDash becoming more direct competitors and whether this trend prompts increased investment in Toast's own local guest acquisition and delivery capabilities.

Answer

CEO Aman Narang reiterated that Toast's core strategy is to build the best vertical platform for restaurants, a strategy that continues to work well. He stated that the company will continue to invest in differentiating its platform through R&D and AI, and that its local strategy is independent of competitors, focusing on what Toast can uniquely do to bring guests in-store.

Dominic Ball of Redburn Atlantic questioned the drivers behind the sharp quarter-on-quarter acceleration in software ARPU and its future trajectory as the business mix shifts. He also requested specific location win numbers for international and retail.

Answer

CFO Elena Gomez explained the SaaS revenue step-up was due to a focused effort to improve ARR-to-revenue conversion via billing infrastructure and quote-to-cash process enhancements, noting a one-time benefit in Q3. CEO Aman Narang added that while new segments have different ARPU profiles (higher in retail, lower in international), the company maintains a strict focus on unit economics and contribution margins for all new ventures.

Dominic Ball asked about the integration strategy for the large and geographically distant Global Blue acquisition and requested a breakdown of the non-Global Blue portion of the company's $1 trillion cross-sell opportunity.

Answer

CEO Taylor Lauber stated the top priority is not disrupting Global Blue's momentum, leading to a more deliberate integration of its core business. He detailed that the remaining $500 billion of the cross-sell opportunity comes from prior acquisitions like Givex and Aiken, emphasizing the strategy of keeping this funnel full with a mix of large and small merchants.

Dominic Ball of Redburn Atlantic asked about take rate differences in international markets, challenges in educating local sales partners, and the competitive positioning of the new SkyTab device.

Answer

Taylor Lauber, President and incoming CEO, noted that international take rates vary, but the focus is on the total value of the bundled software and payments offering. He acknowledged an education component but pointed to the 1,000+ monthly international sign-ups as proof of success. He positioned the new SkyTab as the next evolution of their restaurant tech, expecting it to be particularly popular in handheld-favoring international markets.

Dominic Ball from Redburn Atlantic asked whether Shopify views the emergence of AI agents as an opportunity or a threat, and if they could reduce the value proposition of Shop Pay.

Answer

President Harley Finkelstein unequivocally framed AI agents as a 'great opportunity.' He argued that new channels increase complexity for merchants, which enhances Shopify's value as the central commerce platform. He confirmed Shopify is actively working with AI companies to ensure its merchants' products are surfaced, viewing it as a new, valuable sales channel rather than a threat.

Dominic Ball of Redburn Atlantic requested more color on the Shopify-YouTube integration, specifically regarding merchant uptake and the potential scale of the partnership.

Answer

President Harley Finkelstein explained that the partnership evolved from live selling to an affiliate program, allowing YouTube creators to monetize by featuring products from Shopify merchants. He positioned it as another channel for merchants to find new audiences. While still early, he expects some merchants will find significant success, reinforcing Shopify's strategy to enable commerce on every consumer surface area.