Good morning. My name is Christa and I will be your conference operator today. At this time I would like to welcome everyone to the Lightspeed Third Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, we will have a question-and-answer Session. [Operator Instructions]. Thank you. I would now like to turn the conference over to Gus Papageorgiou, Head of Investor Relations. You may begin.

Thank you, operator. And good morning, everyone. Welcome to Lightspeed’s fiscal Q3 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 third quarter 2024 results presentation available on our website, as well as in our filings with U.S. and Canadian Securities Regulators. Also, our comments 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 Plus, 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. Lightspeed continues to deliver on its key objectives for the year and Q3. Our Unified Payments initiative helped us deliver revenue of 239.7 million up 27% year-over-year and above the high end of our previously established outlook of between 232 million to 237 million. Adjusted EBITDA of 3.6 million also came in stronger than our outlook of 2 million, this is our second consecutive quarter of positive adjusted EBITDA performance. GPV as a percentage of GTV was just under 30% this quarter which is a noteworthy improvement from 25% last quarter and puts us right on track to meet our goal of 30% to 35% by the end of our fiscal year. Given that we are in the final stretches of 2024, I feel very confident that we will meet all our key objectives for the year. As a reminder these objectives worked. One, reaping the benefits of One Lightspeed; two, accelerating revenue growth from financial services including Lightspeed payments and Lightspeed capital; three, continuing to build products that solve our customer’s problems and help them run their businesses particularly with our supplier network; and four, achieving adjusted EBITDA breakeven or better for the full fiscal year. As fiscal 2024 is drawing to a close, we are beginning to turn our attention to next year. I will provide a more detailed outlook of our goals for fiscal 2025 in our next earnings call. However, I want to recap the tremendous achievements our organization has accomplished since completing our initial IPO filed years ago. We consolidated our industry by acquiring and successfully integrating nine companies into two industry leading platforms. We rolled our Lightspeed payments to our global customer base, we grew revenue over 10 fold, and GTV over five fold. And we undertook the…

Thanks, JP. Lightspeed had another great quarter with both revenue and adjusted EBITDA coming in ahead of our previously established outlook. And our Unified Payments efforts continuing to accelerate monetization of our trailing 12-month GTV of $19.2 billion. On today's call, I will provide a recap of the quarter, discuss the progress of our Unified Payments efforts, and then provide an outlook for the remainder of the year. We achieved positive adjusted EBITDA for the second quarter in a row, and our goal is to continue to generate positive adjusted EBITDA. In addition, we are pleased with the progress on our key performance indicators in the quarter. Revenue and gross profit growth remained strong. ARPU hit record highs this quarter with 28% growth year-over-year. GPV grew 69% thanks in large part to our Unified Payments efforts, monetizing 29% of our GTV. Our overall cash burn continues to decline, excluding cash flow tied to our merchant cash advance business, cash used in the quarter was under $5 million. On customer locations, we continue to shift our customer base towards high GTV customers. Although we are seeing positive initial traction with respect to this initiative, we are focused on accelerating this shift in fiscal 2025 through initiatives such as investments in outbound. In the quarter, revenue came in at $239.7 million, an increase of 27% year-over-year and ahead of our previously established outlook. Subscription revenue increased 9% year-over-year to $80.9 million. Gross margins on subscription revenue came in at 76%, an increase from 73% in the same quarter last year. When removing the impact of share-based compensation expense, gross margin on subscription revenue was 77%, consistent with last quarter, thanks to a dedicated effort to consolidating cloud vendors and improved overall efficiencies. I want to reiterate that for this entire fiscal year,…

Thanks, Asha. At this stage, I'm highly confident that we will accomplish the goals we set ourselves at the beginning of the year, and particularly in the area of Unified Payments and profitability. Our attention is now turning to next year. As I stand back and look at our prospects, a few things stand out for me. One, our time is very large numbering in the millions and we maintain only a few hundred thousand customer locations. Two, our products are industry leading, especially for the more complex IGTV customers. Three, global reach for complex retailers and restaurateurs is unmatched. And four, our scale allows us to invest in our business without sacrificing profitability. It is very clear to myself and the Senior Management Team that the metrics we must focus on in fiscal 2025 are GTV growth and increasing the number of high GTV locations. We will approach this challenge with the same level of commitment and execution as with Unified Payments, and I'm confident that we will deliver similar levels of success. With that, I will turn it over to the operator to take your questions.

Thank you. [Operator Instructions]. Your first question comes from the line of Dan Perlin from RBC. Please go ahead.

Thanks. Good morning. I wanted to spend a second just back on Unified Payments for a second. You've mentioned several times as you have in prior quarters that the international market needs a lot more education. It's been slower to adopt. I guess I have two questions there. One is, does the pace of payment adoption in the international market in any way, shape or form act as a gating kind of mechanism to slow your software growth or were you willing to sell software first and then come back and get payments later? So that's kind of the first question I have.

Yeah, so good morning. I'll take this one. I think when we think about Unified Payments in Europe, there are two sequences. The first sequence is new customers, so new customers buying our software and on that front, we bundle both. So, you could not buy software without payments. And on that front we're seeing close rates that are strong adoption, that's strong. So there's -- I think that's the first good news is we are seeing on the new customer front that they are buying payments. Then the second big block here is existing customers and upselling existing customers to payments. And here as you know, we have planned for a slower adoption because it just simply puts more conservative markets. So, -- but again, I just want to point out one data point here that's very interesting is, planned slower growth, but still if -- Lightspeed it's up about 250% year-over-year when you look at European GPV. So there is strong adoption and it is very much in line with what we have planned.

Okay. No, that's super helpful to kind of I guess bifurcate those two pieces to it. The second just quick follow-up question is the idea around expanding outbound sales to go after higher GTV locations. And it sounded like it was pretty clear investments are going to outpace revenue growth. And so the question I have there is, is there, I know you're not giving guidance for 2025, but is there a risk -- and maybe not a risk, is there just a cadence that we should be mindful of that EBITDA could be negative in the first half and maybe as that gets expounded and then it re-accelerates materially in the back half or should we be expecting a more kind of a positive cadence throughout the next year? Thank you.

Thanks, Daniel. I'll take that. You're absolutely right. We did talk about outbound. We are planning to make some significant investments in our field outbound. We found, because we have field reps today, and we found that the unit economics on a field reps customer that they signed are much better because they're much more efficient in going after our ideal customer profile. So, while we do expect that the investment will proceed revenue growth, we're very confident that we're still going to be adjusted EBITDA. We're generating adjusted EBITDA profitability next year. And we do expect to pivot a little bit more towards growth than profitability, as you heard from our prepared remarks, but still very confident that we'll be generating EBITDA margins next year.

That's great. Thank you so much.

Your next question comes from the line of Andrew Bauch from Wells Fargo Securities. Please go ahead. Andrew, your line is open.

Sorry about that. Thanks for taking the question. Just want to dig into the GTV trends in the quarter and what you've seen thus far in the first couple of months here. I know you called out some weakness relative to macro, but maybe I could clarify your comments, Asha, I think you said that the trends haven't improved into this quarter. Does that mean that there's further deterioration that you've seen, but any additional color there would be helpful?

Yeah, absolutely. Thanks for the question, Andrew. So GTV was really a mixed bag. I will talk about the performance in Q3 and then I'll talk about January in a minute. The overall GTV as you heard from us was up 3% and that was largely driven by the macro in retail North America. Even though the holiday season was better than we had forecasted for last year it was still year-over-year growth was lower than we've seen historically at Lightspeed for the busy holiday season. We did have strong GTV growth all across Europe, and we had double digit GTV growth in APAC hospitality as well, but that again was muted by the declines we saw in several retail verticals such as bike and home in North America. In January we actually saw similar levels in the retail side, but we saw larger declines when it comes to our U.S. hospitality portfolio. I don't think that's a Lightspeed specific stat, but at Lightspeed we did see in U.S. hospitality declines year-over-year. And so, when we -- when all told we put that together and we look towards -- forward to our Q4 guide, we want to remain prudent and conservative to make sure that we put out a commitment that we're confident that we can meet.

Yeah, and I'm sure the weather probably had something to do with that?

Yes, in our retail North -- sorry, our hospitality North American portfolio remained very much impacted by the weather in January.

Got it. I guess my follow-up is the disclosure that you guys give around the customer locations by GTV tier, isolating the smaller merchants, the sub 200,000, remind me have we gotten that data point on a percentage of volume of overall GTV meaning and if we have, can you remind us what that was and if it's changed over the last year or so?

Yeah, absolutely. The under 200k annual GTV customer cohorts represent about 5% of the overall company GTV. And that it hovers between 5%, it goes down to 4%, but it's always in that range. So again from a customer location standpoint, it's a larger percent for sure. It's about 30%, but overall it represents 5% of our GTV and as you've heard from us, this is a cohort of customers that we expect will turn over time. They don't represent a large monetization opportunity for us. So these are again customers that we acquired through the nine acquisitions that we did over the past few years.

Yeah, it's good to hear that if they do churn, it's not a major GTV headwind. Alright, I'll jump back in the queue. Thank you.

Your next question comes from the line of Andrew Jeffrey from Truist Securities. Please go ahead.

Hi, good morning. Appreciate you taking the questions. I just I want to try to dimensionalize long-term or just reconfirm maybe the Unified Payments aspirations. JP and Asha, do you think that that GPV can be a 50% attach, is that still a reasonable long-term goal, what would be the timing for achieving that, and what's the geo mix look like, maybe you could help us by talking about where GPV attaches in North America versus Europe today and where you think that could go?

Yes, absolutely. As we always said, our next step and our ambition is to get to 50%. As we said, this year we'll get to 30%, from 30% to 35% and we're fairly confident we're going to get that number. And what we said is the following year we could go between 40% and 45%. So we are very much on track for that and we believe that there's no -- there's nothing stopping us. And even going back to the question we had on Europe earlier on, we had planned for a slower adoption in Europe, but the adoption is happening and just when you look at the attach rates on new customers, which is almost a 100 -- very close to a 100%, that just over time when you look at the churn and how it works will bring us to 50%. So there's no doubt in our mind. I think maybe just answering the second question, of course, we're way more advanced in the U.S. We started Unified Payments before. I think it's a less conservative market. And there now we are actually working hard at Lightspeed to actually unleash all the verticals that we couldn't unleash, like high risk. And so we're really working hard now at expanding the TAM in the U.S. so we can continue having very strong penetration.

Okay. That's helpful. Thank you. And then -- and I appreciate the emphasis on revenue growth, especially given your size and the TAM and also the outbound sales efforts. But -- and again, I recognize you're not guiding 25, but as we think out over the next several quarters, did we expect kind of a hockey stick at some point in software revenue growth, because pre your subscription revenue, it is pre your Unified Payments efforts, you were growing really fast. So I wonder if you could just maybe qualitatively talk about whether or not we see a real kind of hockey stick kind of inflection in your subscription revenue growth when you get everything sort of pointed in the right direction?

Yeah, so again, just setting the table here is, we said that this year we would focus on Unified Payments. And so when we say that that means that all the account managers that traditionally are upselling customers on software, that are traditionally expanding the capabilities of our customers with software, they have been almost a 100% focused just on selling payments. So that's why what happened this year is penetration rates on payments went up, revenue on payments as I said even in Europe up 250% year-over-year. But that means that the software growth is not as strong as it would traditionally be because people are just focusing on software -- sorry, on payments. As we exit this year, and we start now, especially in North America because it's getting close to job done, we are now going to have our account managers that are going to go back into, hey, here are all the modules in software that our customers are not using and expanding that. And I think maybe the last piece that I think is very interesting is Lightspeed Capital, where we are -- which commands a very strong growth margin. That's also going to be kind of one of the focus points for next year. So there is a, what you will see is as we go into next year, you'll start seeing software growth go up again and go back to historical levels.

Great. Appreciate that. Thank you.

Your next question comes from the line of Thanos Moschopoulos from BMO Capital Markets. Please go ahead.

Hi, good morning. Can you provide some color on your churn experience in Europe as you're ramping up Unified Payments, is that consistent with what you've seen in North America, or are there any regional nuances there?

Yeah, I mean, churn has been consistent. So it is under what we expected and we haven't seen much movement in churn from after Unified Payments versus before. And the same thing is happening in Europe. We are again, at the end want to keep the customers so we are going to sequence it to ensure that we lose as few customers as possible. And I think maybe just going back to one of the comments Asha said, where we're seeing a more emotional decision is in the low GMV bucket, and those are the ones that could potentially churn, but they're not really important to us given it's only 5% of our GMV. So not seeing any movement, not seeing any changes, and we are actually kind of putting the motion in place to ensure that we don't lose our good customers.

Great. And then on the supplier network, can you update us on which verticals you now have critical mass and which is proving to be a strong differentiator, I mean, so clearly I would assume that's the case for bikes and for high end apparel, but are some of the other verticals ramping up in that regard?

Yeah, you're right. Apparel and bikes, the strong ones, we now are going out to sporting outdoors. But I think for me again it's, just if you look at the number of customers on retail, the largest segment for Lightspeed in retail is apparel. So we're actually working really hard to make that experience even better for all the customers on apparel. As you know, we hired John Shapiro who came from Wayfair, who's now really focused on driving a better experience for our customers. So -- and then as you know, we historically had bikes, but now we're expanding. And the next one is outdoors and sports.

Great, its excellent. Thanks.

Your next question comes from the line of Josh Baer from Morgan Stanley. Please go ahead.

Great, thank you. And congrats on hitting the high 20s payments attached, setting up for 30, 35 next quarter. Question is on subscription. There were -- the prior three quarters we saw really nice sequential subscription growth, and this quarter was pretty much flat, very slightly down. I'm just wondering if there's any commentary for around that change in trajectory this quarter?

Hey, Josh thanks for your question. The subscription revenue being flat to last quarter is very much again driven by the account management team and the Unified Payments motion. As you've heard from us, Europe and APAC were in the third quarter at the peak of the Unified Payments launch because we launched Europe and APAC at the end of the and early Q3. And so in that quarter, more than in previous quarters, we had the international account management teams now also fully focused on Unified Payments. And that's really all you're seeing in the quarter-to-quarter flatness in subscription revenue. As JP mentioned, the Unified Payments launch behind us at the end of this fiscal year we do expect our account management teams for the most part to go back to selling software, with all of them going back to selling software by mid fiscal 2025. And we are absolutely expecting subscription revenue to accelerate.

Okay, got it. So even in like North America retail where you had payments, the Unified Payment strategy I guess for a while, they're still focused on Unified Payments versus like shifting back to software at this point in time?

Yes, absolutely, because Unified Payments launched in North America in May, but we launched in May in retail, and then we launched a bit later in hospitality. And as you heard from us on our last call, depending on the size of the customer, we're giving some customers two, three, four months to get live and transactional. And so the account management team in North America are still in large part focused on Unified Payments, and that's what you're seeing impacting software revenue.

Okay, perfect. And then the small customers only 5% of GTV, I'm just wondering what percent of the software subscription does that cohort represent? Thank you.

No, thanks Josh. That's not something that we have disclosed. But what we have said in the past is at the end of the day, GTV for us represents the monetization opportunity ultimately that we get from these customers. And so I think, 5% of the GTV, although that's not representative of the overall revenue, it is representative of the potential of this cohort of customers.

Yeah, maybe I'll just add that the smaller customers have normally one terminal instead of three, four, five. They have fewer users. So, even on the software front, the subscription is much lower with the smaller customers than it is on the larger ones.

Great. That's helpful. Thanks.

Your next question comes from the line of Dominic Ball from Redburn. Please go ahead.

Hello guys. Hello, Asha, Gus, JP. On software ARPU, so obviously the higher the better makes your merchants a lot more sticky. What sort of level can we expect as you transition merchants more onto the flagship products, are any numbers that you could help us with, especially as you onboard much larger merchants as well? Thank you.

Yeah, maybe I'll start. I mean, of course the larger merchants have a much stronger ARPU, they buy more modules. And really when you look at it there's a lot of Greenfield, there's a ton of room for growth inside of our customer base. I don't know, Asha, if you want to comment on this or…

Yeah, we have been growing software double digits, and that's really the result of software attached new modules that we've been building. But to answer your question very simply, there is a large opportunity for software to increase between 4x to 5x from where it is today. When we -- that is the reality. We've got customers that can pay us 400 plus in just software ARPU. And as we continue to innovate and build more software modules, there's lots of opportunities for growth. When I think about the flagships in particular, ARPU uplift can even be up to the high 30% when we're migrating customers from a legacy to a flagship. And so there's lots of ARPU uplift opportunity for us just from migrating customers to flagships. And then on top of that is all the other software modules that we continue to build.

That's great. That's really good. Thank you. And just one more quick one, is there any difference you see in software ARPU between your retail merchants and your hospitality merchants?

There's today because we have several products in our portfolio, there's quite a difference depending on how many modules -- have to offer. But when we think about our flagship product, ARPU is quite significant with retail and hospitality.

Cool. Thanks guys.

Your next question comes from the line of Tien-Tsin Huang from J.P. Morgan. Please go ahead.

Thanks for the question here. Just wanted to ask on the gross margin outlook. Asha, maybe you could get some help on the outlook there given some of the puts and takes. I know transaction based gross margins have been on the decline given the lower referral fees. Should we see that stabilize with the focus shifting back towards growing GTV and locations ahead?

Hey, Tien-Tsin thanks for the question. Yes, absolutely. We expect, and you've heard this from us before, that overall gross margins will remain in the 40% plus range despite transaction based revenue or payments revenue in particular becoming a bigger and bigger part of the revenue portfolio. And there are a couple of competing forces in there versus on the negative side, there's the declining residuals that come in at a 100% margin. But on the flip side, what we have is increasing international payments penetration. And even though international take rates are lower than North American, the gross margins are higher, they're about 36%. And that's what we're seeing in the gross margins from APAC and Europe. So as we increase international penetration, we expect payments gross margin to improve. And then last but not least is the growth of our capital business. Our capital business has, it's grown -- it's doubled for over a year ago, and we expect that trajectory to continue, and capital revenue comes in at a 95% gross margin. And so all told we expect transaction based gross margin to pretty stabilize. So the declining residuals will be offset, more than offset by increasing capital revenue and better margins internationally. And what that means is that overall margin should remain over 40%.

Perfect. No, that's what I was looking for. And just my quick follow-up, just with the focus again back on GDP growth and high GDP unit growth, can you maybe be a little more specific on the type of locations, whether it be geography or the vertical, just curious on that? Thank you.

So what we've said on -- from a high GTV growth perspective or customer perspective, our ideal customer at Lightspeed are retailers and restaurateurs that process half a million and more in annual GTV. And those are complex merchants, complex retailers that need inventory management, kitchen display, ingredient management, the full suite of technology that Lightspeed has to offer. And so we consider those merchants are ideal customer profile. So when we think about investing in outbound, what we found is our outbound field reps are most efficient in signing these high GTV customers cause it's much easier for them to target the ideal customer of Lightspeed. And so the focus for Lightspeed in fiscal 2025, as you heard from JP, is to double down on growing software revenue through increase in our high GTV merchant base, through software attached. And the best way to do that is through heavy investments in our outbound, which is our absolute focus for next year.

Got it. So no geographic bias, it's just going after the larger retailer restaurants. Understood.

Absolutely, absolutely.

Your next question comes from the line of Richard Tse from National Bank Financial Markets. Please go ahead.

Yes. thank you. Obviously you've gained a lot of efficiencies over the course of the past year. Do you have a sense of the order of magnitude of how your LTV to CAC has kind of changed on a year-over-year basis?

So the LTV to CAC is not a set that we have disclosed publicly in this past year. However, what you have heard from us, and then the reality is that with the increase in payments penetration, our unit economics is -- has increased significantly. And what we've seen is for a customer that takes only software versus a customer that takes software payments and maybe even capital, the LTV to CAC is more than double. And so this was a part of why we went down this Unified Payment strategy. Obviously the unit economics are much better for Lightspeed. And then from a customer perspective, there's a ton of benefits that our customers are unlocking from having a fully integrated payment solution and our customers are seeing that as well. And that is the result of why churn hasn't ticked up, like we had forecasted because the customers are really seeing the benefit of having a full integrated payment solution.

Okay, thanks. And JP in your opening remarks, you talked a little bit about acquisitions and your success in terms of the integrations. So, I'm not sure if I'm reading that right, but it seems like you're positioning that you may be restarting acquisitions again, like if that's the case, what are your thoughts from an acquisitions standpoint in terms of what you need verticals or geographies that you would pursue? Thanks.

Yeah, thanks for the question. I think that the statement we wanted to make clearly is that these acquisitions have been very good for Lightspeed. And I know, because we did a lot, we had a lot of questions around, hey, how are these doing. And so for me, I'm very pleased that it's been many quarters now of true organic growth with easy to read organic growth. And so I just wanted to make this statement that we are really good at doing M&A and they've helped us tremendously over the years, and we now have really strong platforms that we couldn't have had without the M&A. So now this being said, I think a lot of the question is actually around this call were around how do we grow software, how do we expand ARPU. And when we look at our portfolio, there's still a number of functionalities and big blocks that we do not offer. And I think I've been very transparent over the years, but there are categories that our customers want to buy from us that we do not have. And I think as we go through these with our product teams, we always have the same question, do we want to build, do we want to buy. And in some -- in most cases we build and we've launched so many products this year and a few examples, kitchen display or even our advanced insights on retails, we've built all of those. But there are categories that I don't think we should be building, and that are a much better fit for an acquisition. Now the question always remains, we have to be very prudent when we do these because we need to be sure, that of course we buy them at very reasonable multiples, and we need to be sure that as we acquire them, that they're really going to create a good hockey stick inside of Lightspeed. So that's really my commentary on this.

Your next question comes from the line of Timothy Chiodo from UBS. Please go ahead.

Great. Thank you for taking question. I know we hit on this a little bit earlier and in some of the questions around the expanding of the direct salesforce, but you started doing this, I believe in the fall of 2021, and I was just hoping you could give an update on the number of salespeople that you have today in the U.S. and then in terms of the expanded efforts this year, a rough number on how many that might ramp to? And then I have a brief follow-up.

Yeah, so look, maybe just going back in time, we really only did that primarily in the U.S. until now and really around hospitality, where we had a competitor that had a lot of foot on the ground, so we had to ensure that within the categories that worked for us and the high GMV that we had people also with foot on the ground. Now this being said, at the time it wasn't a significant number. And even today, you're talking about maybe 30 people. But now we have enough kind of -- enough kind of time under our belt to know that these are really very good for Lightspeed and the unit economics are very good. And I think maybe the last comment I want to make is there is nobody in the retail space that has foot on the ground, and there is nobody in the retail space that has the depth of our solution for a high GMV merchant. So I think there also, when we look at foot on the ground, we are going to heavily invest in retail in the U.S. where you will start seeing people with foot on the ground pretty much in every big metropolitan area in the U.S. And then the other piece for us is outside of the U.S. for hospitality. If you go across Europe now, we're starting to have a lot of concentration and it's very frequent to go into restaurants where you see Lightspeed and I think there we now want to double down in Canada, in Australia, and New Zealand and in Europe, double down on the hospitality space also, and ensure that we can accelerate our growth.

JP, thank you so much. Really appreciate that. My follow-up is kind of related. So, one way to go at it is to build a direct sales force, hire people, have feet on the street, but another is to work with third party ISOs, agents, retail ISOs, wholesale ISOs, bank partners, etcetera. So more of a strategy that Clover has taken sort of a multi-pronged distribution approach. Have you given any thought or how do you think about the pros and cons of using a third party distribution that might give you a more immediate result in terms of that coverage that you were talking about nationwide?

I think the high end answer is we do have a partner network and we do use both. And about 25% of our deals are touched by a partner. So it's always been something we really important to us and you mentioned a few categories. I just want to make a comment with regards to Clover. Clover is micro merchant. It's a very simple coffee shop. When we deal with restaurants and we cited quite a few here, these are very well established restaurants, Michelin stars, and they're very complex in essence on how to adopt the platforms because there's so many workflows. So, I think it's going to be a very different strategy from the Clover strategy just being very clear. But we do believe in the partner ecosystem and partner networks and installation partners and all kinds of referral deals that we could have with banks and real estate agents. So, I think to answer your question very clearly, we believe that the blend of both is the most important, is having people with foot on the ground to go, and really convince a more traditional customer base that we are the right platform in parallel to having a lot of referral customers, a referral partners that are bringing us the deals.

Excellent. Thank you, JP.

Your next question comes from the line of Raimo Lenschow from Barclays. Please go ahead.

Great, thank you. This is Jeremy on for Raimo. I just wanted to ask, in terms of, verticals that are eligible for Lightspeed payments, is there still more work to be done there and if so, like could you talk to what percent of overall GTV would be in some of these verticals that can adopt payments at the moment? Thank you.

Yeah, so I think first of all you need to -- when you look at GTV, there's a portion of cash, so let's start there. So just a portion of cash brings you to roughly 80%. So that's then the monetizable. And then I think within the 18%, I would say probably 15% to 20% are still in industries that we can underwrite or where industries where we don't yet have a presence or even countries where we don't yet have payments for Lightspeed. So for us, it's always the same thing. It's like the 80:20 rule. You start by going after the low hanging fruit, and then after that you compensate for all the rest. So just being clear, we are looking at solutions right now for high risk, which is a big category, roughly 10%. And that we are hoping to make some announcements in the foreseeable future on that. And then I think it's all around expanding. So as an example, I'll just give you -- in Singapore we have a lot of Michelin star and fine dine restaurants that are on Lightspeed. Yet today we don't, Lightspeed payments is not supported in Singapore or in Malaysia or Indonesia. And these are all markets that are strong for us, but we don't have a presence or Dubai, where we're only selling software. So that's why when you look at next year, it's going to be a mix of we're going to compound now all the industries with new underwriting players, to go into those. And then the second thing is we're just going to expand Lightspeed Payments into new countries.

Got it. Thank you.

That's all the time we have for questions today. I will now turn the call back over to Gus Papageorgiou for closing remarks.

Thanks. Thanks everybody for joining us today and we look forward to speaking to you on our next conference call for our Q4 results. And we will be around if anybody has any follow up questions. Have a great day everyone.

This concludes today's conference call. Thank you for your participation and you may now disconnect.