Software Revenue Growth
Q: How will you reaccelerate software revenue growth?
A: Lightspeed plans to accelerate software revenue growth by refocusing the account management team on selling software subscriptions, cross-selling payments, and mitigating churn. They are evolving their approach to land customers in the $500,000+ GTV segment through account-based marketing, enhanced outbound efforts, and stronger partnerships.

Payments Penetration Targets
Q: What is your outlook for Payments penetration?
A: Lightspeed expects Payments penetration to continue climbing, aiming to end fiscal '25 in the 40% to 45% range. By selling their software as one unified platform with Payments, the majority of new GTV will be monetized on Payments immediately.

Transaction Gross Margins
Q: Can transaction gross margins remain stable or improve next year?
A: Yes, transaction gross margins are expected to be stable or even higher. Factors include reduced payment residuals as customers shift to Lightspeed Payments, growth in the Capital business—which has 95% gross margin—and higher margins in international markets due to favorable net take rates.

Cost Optimization and Restructuring
Q: How will cost actions impact profitability this year?
A: The restructuring announced on April 3 will benefit fiscal 2025, with significant cost savings realized throughout the year. Lightspeed will continue finding cost synergies beyond headcount reductions, such as rationalizing office space and optimizing IT licenses.

Macro Environment Impact
Q: How is the macro environment affecting your business?
A: Certain retail verticals, like bike and home & garden, have not returned to pre-COVID levels, with same-store sales flat or slightly down. Despite this, Lightspeed is confident in growing the top line by at least 20%, assuming similar macro conditions as in fiscal 2024.

Transition to Flagship Products
Q: What is the progress on migrating customers to flagship products?
A: About one-third of Lightspeed's overall base is on flagship products. They are creating an easy upgrade path to flagships, offering higher ARPU and enhanced functionality. The upgrade program serves as a retention strategy and will proceed product by product.

Lightspeed Capital Growth
Q: What is your strategy for growing the Capital business?
A: There's significant opportunity in Lightspeed Capital, with potential merchant cash advances up to $1 billion if they reach 1% of GTV. They plan to grow cautiously, leveraging their ability to underwrite customers effectively, and are engaging with partners to fund expansion without over-leveraging their balance sheet.

Pricing and Packaging Opportunities
Q: Are there plans to adjust pricing and packaging?
A: Yes, Lightspeed sees opportunities to rethink pricing and packaging for both new and existing customers. They intend to update how they bundle software modules and may adjust payment rates, approaching changes holistically to reflect their combined software and payments offerings.

Product Strategy Focus
Q: Will you prioritize product depth or breadth?
A: Lightspeed will prioritize depth for their ideal customer profile, focusing on complex merchants with specific needs. They aim to serve these customers better than any competitor by enhancing product capabilities and leveraging AI for recommendations and automation.

B2B Opportunity and Monetization
Q: What is the status of the B2B opportunity and revenue model?
A: Lightspeed is integrating B2B functionality into Retail, enabling customers to browse catalogs and import purchase orders directly, saving significant time. They plan to provide more updates on monetization strategies at the upcoming Capital Markets Day.