Ladies and gentlemen, thank you for standing by. Welcome to the Lightspeed Business Update Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the conference over to Gus Papageorgiou, Head of Investor Relations. Thank you, operator. Good morning, everyone. Welcome to Lightspeed's conference call to discuss the divestiture of the Upserve U.S. Hospitality product line. Joining me today are Dax Dasilva, our CEO, and Asha Bakshani, our CFO. 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 press release issued earlier today. 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+ and on the SEC's EDGAR system. 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 Dax. Thanks, Gus. Good morning, everyone, and thank you for joining us. Today marks a significant milestone in the evolution of Lightspeed. We are announcing the divestment of our non-core Upserve U.S. Hospitality product line to Skyview Equity, a move that sharpens our focus and aims to expand our gross margins, further strengthens our balance sheet, and accelerates our path towards profitable growth. This transaction is a direct reflection of our focused strategy, doubling down on our core strengths of retail customers in North America and hospitality customers in Europe, where we have a proven right to win. The total value of this deal is structured to deliver immediate and ongoing capital, totaling up to $81 million. Total cash consideration of $44 million not subject to any earn-out and up to an additional $37 million in earn-outs over 24 months as the business hits performance milestones. The transaction closed yesterday at the close of business. It is critical to note that while we are divesting the legacy Upserve merchant base, the sophisticated analytics technology acquired with Upserve, which form the foundation of Lightspeed Insights, will remain a core component of Lightspeed's flagship restaurant solution. This technology remains a primary driver of new customer adoption at Lightspeed, a strong contributor to software revenue and a key competitive advantage for our flagship restaurant platform. We will continue to retain and further develop this technology. I will let Asha take you through the financial impacts of the transaction. Thanks, Dax. As noted earlier, this divestment sharpens our focus on the areas where we are strongest. With Upserve removed, the strength of our core business becomes clearer. A business characterized by faster growth and higher gross margins. From a P&L perspective, for fiscal 2026, we expect to report that removing Upserve will reduce revenue by approximately $140 million, gross profit by approximately $26 million and GPV by roughly $5 billion. As part of this transaction, approximately 3,200 U.S. hospitality customer locations and around 70 dedicated team members will transition. We are grateful for their contributions to Lightspeed and confident they are well-positioned for continued success in their next chapter. With respect to our three-year financial goals established at our Capital Markets Day in March of 2025, the divestiture is expected to impact this outlook by approximately 5% on the absolute value of each of gross profit, Adjusted EBITDA, and free cash flow for fiscal 2028. We expect the compound annual growth rate forecast presented at Capital Markets Day to remain unchanged. Most importantly, as a non-core asset within the company's efficiency portfolio, the divestiture of Upserve is consistent with Lightspeed's strategy and expected to meaningfully improve the company's revenue growth and gross profit growth trajectory. I will provide a more thorough update on these three-year goals when we report our fiscal Q4 on May 21st of this year. The divestment also further fortifies our already stellar balance sheet. Our priorities in terms of capital allocation remain the same. Approximately $200 million remains under our broader board authorization to repurchase up to $400 million in Lightspeed shares, and we continue to be opportunistic in evaluating further share repurchases. As a reminder, our normal course issuer bid program that we have used to buy back shares is limited to 10% of our public float for a 12-month period. We fully utilized our 2026 NCIB program and expect to renew it in May 2026, subject to board and TSX approval and market conditions. Aside from the potential buybacks, we will continue to grow our merchant cash advance business. There were $106 million in MCAs outstanding as at the end of our fiscal Q3, and we intend to continue to grow this high margin business in our upcoming fiscal year and beyond. With respect to M&A, we will continue to be opportunistic in evaluating potential small tuck-in acquisitions to help accelerate product development, but large scale acquisitions are not a strategic priority for us. For the $44 million cash payment, $20 million was paid at closing, with the vast majority of the balance payable within 90 days, fully committed and not subject to any conditions. The earn-out payments of up to $37 million will be paid over two years based on achievement of performance targets. In closing, I want to reiterate that with this transaction, Lightspeed is leaner, more focused, and better positioned than ever to lead in our targeted growth engines of retail in North America and hospitality in Europe. With respect to our fiscal Q4 and full year 2026, we expect to deliver revenue and gross profit ahead of our previously established fiscal Q4 and full year outlook, with adjusted EBITDA in line with our outlook. Lightspeed remains committed to improving our adjusted EBITDA performance. Following the divestiture of Upserve, we expect fiscal 2027 adjusted EBITDA in the range of $75 million-$95 million. Because we remain in quiet period, I would ask that you please keep your questions focused on the transaction we are announcing today, as we will not be able to comment on the quarter. We look forward to discussing our Q4 results with all of you on May 21st. We can now take your questions. Thank you. As a reminder, to ask a question, you will need to press star then the one on your telephone keypad. If you would like to withdraw your question, press star one again. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Thanos Moschopoulos with BMO Capital Markets. Your line is open. Hi. Thanks for taking my question. Can you give us a better triangulation of the EBITDA contribution from Upserve? Hey. Yeah, sure. I'll take that question. Yeah. Upserve did contribute meaningfully to the fiscal 2026 adjusted EBITDA, but this contribution was a diminishing one. As if you remember, Upserve is a non-core asset outside our growth engines, so it was declining year- over- year. Its contribution to fiscal 2027 would have been lower than fiscal 2026. We don't disclose EBITDA by product line, but, just, you know, given the allocations that go into that number and the indirect costs that go into calculating that. With Upserve out of the picture, we expect adjusted EBITDA for the upcoming fiscal year to still improve, and we gave a range of $75 million-$95 million, which is a meaningful step up from fiscal 2026. Great. I do see that you disclosed the transaction-based revenue related to Lightspeed in that $140 million. Is there any other payments revenue that would have been in the $140 million? I'm just trying to get a sense of the software versus payments mix in the business. No, there's the $140 million includes the software payments. It encompasses all the revenue of that Upserve portfolio and the net to gross that you saw in the disclosures. Okay. Okay, that $15 million, that's the gross? Correct. Correct. That $15 million is really just an accounting presentation for a small portfolio of customers for which we're still keeping the net revenue. There's a presentation change. There's no change in gross profit or cash received. Okay. Just final question. Does this reflect all of the customers who are still on the legacy Upserve payments, i.e., it wouldn't include the ones who switched over to the new Lightspeed platform? These include all customers that were previously Upserve customers. There are some of those customers that were on our legacy payment provider and some of those customers that were on one of our new payment providers. All of the 3,200 locations that were tied to that Upserve entity have now been divested. Okay. Sorry. I meant like, I don't know if I misspoke. It's just the Lightspeed software. Like, if they transitioned to the new Lightspeed. Oh, I understand. hospitality platform. Yeah. That's correct. Our Lightspeed flagship platform is not a part of this divestiture. This is just the legacy Upserve portfolio. Okay, gotcha. I'll pass the line. Thanks for taking my questions. Your next question comes from the line of Martin Toner with ATB Capital Markets. Your line is open. Thanks for taking my questions. Further to the EBITDA question, what kind of OpEx savings you think come along with this deal? Hey, Martin. Thanks for the question. The EBITDA contribution, like I mentioned earlier, to fiscal 2027 was meaningful, and fiscal 2026. 2027 is declining from fiscal 2026. As this contribution was a diminishing one. When we think about OpEx, we think about the 70 people that are transitioning over, and then obviously there's some sales, a little bit of marketing, and G&A as well. I think the best way to look at it is really looking at the adjusted EBITDA range that we gave of $75 million - $95 million for the upcoming fiscal year. You'll see that is a meaningful step up from our fiscal 2026 ex- Upserve. Perfect. Thanks so much. That's it for me. Your next question comes from the line of Andrew Bauch with BTIG. Your line is open. Hi, thanks for the question. Just one for me. I guess when you look at the rest of the portfolio, what other non-core assets are there that you could consider a strategic alternative for? Thanks. Yeah, thanks for the question. Yeah, obviously this is all about focus for us. This is all about focusing on our two growth engines where we're investing. You know, we're focused on creating really meaningful value for our customers and improving the operational and financial performance of our business and also returning capital to shareholders. We continue to balance our growth and efficiency engines, and we're gonna continue to evaluate all options through the lens of long-term shareholder value creation and strategic fit. Thanks. Your next question comes from the line of Suthan Sukumar with Stifel. Your line is open. Hey, good morning, guys. This is SA speaking on behalf of Suthan. One question for you is. Suthan, we can't hear you very well. Can you hear me now? Yeah, much better. Okay, perfect. Thank you. This is SA speaking on behalf of Suthan. Just a question on U.S. Hospitality. In earlier quarters, U.S. Hospitality, you know, being in efficiency market looks like to be healthy and performing well. I was curious what are some of the KPIs required to hit that earn out, if available? Sorry, Suthan, do you think you can repeat that? We're having a really hard time hearing you. Yes, I'll try again. This is SA speaking on behalf of Suthan. Can you hear me? Yeah, we can hear you. Yeah, a little bit. It's not very clear. Okay. I'll try another time. Just a question on U.S. Hospitality. In earlier quarters, U.S. Hospitality being in efficiency market looks like to be healthy, performing well. What are some of the KPIs required to hit that earn out, if available? Yes, I heard that. Thanks. Thanks for the question. The earn out is based on performance targets, particularly adjusted EBITDA structured over the next 24 months. The U.S. Hospitality, as you mentioned, was in our efficiency portfolio. Our growth engines are retail North America and hospitality in Europe. That's really where the majority of Lightspeed investments go and where our unit economics are strongest. We have, you know, the strongest right to win in our growth markets. Upserve as a U.S. Hospitality asset was really outside of those growth engines. Thank you. Thank you. Just one last question from me on capital allocation. I know you guys mentioned the NCIB. Just on M&A, is there potential to be more targeted on M&A looking ahead? I know you mentioned about the small tuck-in. Yeah, thanks for the question. From an M&A perspective, small tuck-in acquisitions, you know, we're always on the lookout for those things that can accelerate our product roadmap or, you know, increase our share from our merchants. Large scale M&A is off the table for us, Suthan. For us, the uses of cash outside of these small tuck-in M&As will really, the main uses of cash will be growing our MCA business and returning some of that cash to shareholders if, you know, the market conditions prevail in the form of a buyback. We still have about $200 million outstanding from our board authorization, and we intend to file a new NCIB the earliest that we can, which is in May. Okay, great. Thanks, guys. I'll talk to you later. Again, everyone, if you would like to ask a question, press star then the number one on your telephone keypad. Your next question comes from the line of Todd Coupland with CIBC. Your line is open. Oh, great. Good morning, everyone. Can you hear me okay? Yep, loud and clear. Great. Thanks. I wanted to ask about qualitatively about a more focused go-to-market and how we should think about this divestiture's impact on that. Thank you. Hey, Todd. Thanks for the question. you know, I'll take a step back and just remind everyone that our growth engines for Lightspeed are retail North America and hospitality in Europe. You know, that's where the vast majority of Lightspeed investment's going. That's where our unit economics are strongest, and we absolutely have the strongest or highest right to win in those markets. With this U.S. hospitality asset removed, it really improves the strategic and managerial focus for us in go-to-market in particular as well. It simplifies our operations, it improves our profitability, our growth, and it really allows us to deploy capital, including, you know, in go-to-market towards our faster-growing and more profitable businesses. Yeah. As you saw from this last fiscal year, we really doubled down on all of the outbound sales in European hospitality with a lot of field reps deployed across Europe, as well as outbound remote reps in North America retail. All of which have contributed to, you know, very, very exciting location growth numbers across those growth engines. We continue to want to double down in those areas where we have the right to win. Is there any qualitative color you can provide on sort of a, some background on the adjusted location growth, excluding, you know, this, the declines, I guess, you've been fighting against with the Upserve in the mix? Yeah, I'll take that one, Todd. I think the best way to look at it is, you know, at the end of the day, it was a small merchant base. It was 3,200 locations. You know, you take the 3,200 locations out of our total location. Upserve was declining year-over-year in, you know, the lower double digits, I would say. You can use that for the go-forward trajectory. Great. That's all for me. Thanks. Your next question comes from the line of Dan Perlin with RBC Capital Markets. Your line is open. Thanks. Good morning. I wanted to just drill back down on kind of the contribution so we're clear on the base jumping off point here. The gross margins, it looks like they're just under 19% for the business. Deck math is right. That's like 22% of your gross profit in 2026, roughly. You called out as a meaningful contributor to EBITDA. Gross margins are a lot lower than your corporate average. I'm trying to get a sense of how much lower, if at all, the margin profile, the EBITDA margin profile of this was relative to your corporate average. I mean, I suspect it's lower, but it's hard, you know, hard to reconcile that just with the numbers. Hey, Dan. Thanks for the question. No, you're absolutely right. The gross margins were lower for this business overall. Software margins were lower than the corporate average. Corporate average is about 80%, a little over. The software margins for Upserve were in the 70% range. The main reason gross margins, you know, were lower though was the payments portfolio. Upserve payments revenue was not with one of our main partners for the most part. You know, the payments margins were lower there. If you look all told, the overall gross margin of the Upserve business was lower than the corporate average. Again, because it was a declining asset, the EBITDA margins were declining as well. Got it. They were lower than your corporate average as well, just based on that commentary. Yeah. Okay. for EBITDA, not for gross profit. You know, we didn't disclose, EBITDA, Dan, just because business unit EBITDA has a lot of indirect costs that go into calculating that. Yeah. I think you can triangulate from the lower gross margin. Yep. Yep. Okay. Just a second question. Just any thoughts about how, you know, you arrived at this valuation? You know, it's just like $81 million. It's got $140 million in revenues. You've got a two-year earn-out, you know, potential, so it's got some time before you get the cash in. Again, depending upon the EBITDA, it's hard to know what kind of multiple was actually paid. Can you just help us how you guys arrived at this being like a fair and equitable, you know, price for you guys as well as for the buyer? Thanks. Yeah, absolutely. We valued Upserve on a discounted cash flow basis, among other methods. As a non-core asset outside our two growth engines with a declining growth trajectory, the discounted cash flow reflected what this business was worth to us on a standalone basis going forward, right? The transaction we negotiated really gave us conviction that this was the right time to divest and the right valuation, to be honest, and to redeploy that capital into other areas of the business that you've heard us talk about. I think when you look at the gross profit that we provided for fiscal 2026, we are divesting the asset for a 3x LTM gross profit and an even higher multiple when you're looking at the next 12 months gross profit, right? Given that it was a declining asset within Lightspeed. Again, for us, Dan, the important part was executing in line with our strategic focus as well. It simplifies operations for Lightspeed, it improves our profitability and growth, and it really allows us to deploy capital towards our faster-growing and more profitable businesses. Yep. No, it is great. It looks like it really streamlines the business and it is good to have the funds to push towards capital as well as buyback. Congratulations on the transaction and thanks. I will pop back in queue. Thank you, Dan. Your next question comes from the line of Richard Tse with National Bank Capital Markets. Your line is open. Yes, thank you. Just a really quick one for me. I'm wondering if you can maybe comment on the extent of how competitive of a process this was. Did you have kind of a number of prospective buyers here for this asset? Or maybe just kinda give us a bit of color on that, please. Thanks. Hey, Richard. Thanks for the question. Absolutely. We ran a thorough process. you know, we engaged our Stifel bankers, and we did engage with a number of parties. Skyview did emerge as the best value for us and the right home for the Upserve team and our customers. That was important to Lightspeed as well. When we think about the strategic logic, again, Upserve sits in our efficiency markets, a market that we've made a deliberate decision, as you know, to not invest for growth. That's where our focus goes and the growth markets are where our focus goes and our right to win is strongest, like we said. That's really what today's transaction reinforces. Okay. You know what? If I could just get another one in. You sort of mentioned in the earlier comments about acquisitions still, certainly not big ones. In regards to some of the smaller ones that you may be looking at, is the focus to lean in more heavily on sort of U.S. retail now, or would the preference be to lean in on sort of EMEA Hospitality? I think those are. Um- Yeah. Sorry. Those are both our growth engines. I think we're, you know, if we're doing tuck-in acquisitions, it would be in reference to our two growth engines, NOAM Retail and EMEA Hospitality. These could accelerate roadmap or it could be ways to improve software ARPU, software growth. Okay. All right. Thank you. Your next question comes from the line of Kevin Krishnaratne with Scotiabank. Your line is open. Hey there. Just one for me. I know that you refer to this as being in the efficiency market, but when you look at the average GTV, it looks like it's a little bit over $1.5 million. It looks like on a financial profile it's sooner. I'm just wondering what, like what type of assets and locations these are. I'm assuming it's just that you're facing a lot of competition in the markets where these locations are located. Just trying to get a sense of, you know. They seem like they're on the higher end of your profile. Just curious. Hey, Kevin. I'll take that one. The average GTV, you know, this portfolio of customers, the Upserve U.S. hospitality portfolio, were high GTV customers, so bigger restaurants in U.S. hospitality. If you remember, you know, our focus was really when we split the company into the growth and the efficiency portfolio, our focus was really on the growth portfolio, North America Retail and EMEA Hospitality, as you just heard. The U.S. hospitality, you're right, they were high GTV customers, given the competitive landscape in U.S. hospitality, we decided a couple years ago to, you know, pivot to U.S. retail and EMEA Hospitality, you know, more strongly and to optimize the U.S. hospitality portfolio for efficiency. These are higher GTV customers, they were not in our focus markets. We made the deliberate decision, not to focus on U.S. hospitality a couple years ago, just given the competitive landscape and the fact that our money was invested. The ROI that we would get in NOAM Retail and EMEA Hospitality was much higher than in this efficiency portfolio. It, it made a ton of sense to divest this asset as, at this time. Yeah, makes sense. Thanks. I will pass the line. Thank you. There are no further questions at this time. I will turn it back to Gus Papageorgiou for any closing comments. Great. Okay. Thanks everyone for joining us today, and we look forward to speaking to everybody on May 21st when we report our fiscal Q4 and 2026 results. Have a great day, everyone. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.