{ "docId": "019dd923-622c-750b-8b99-20e88bb14fbb", "docSlug": "f2d2846f5efe", "documentTitle": "Lightspeed Commerce, Inc. (LSPD)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2021-09-29 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 102, "pageCount": 125, "prevPage": 101, "nextPage": 103, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "Uses a red flag icon to signal the contradiction/warning.", "elementsJson": [ "headline_text", "callout_box", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b99-20e88bb14fbb/102", "deckHref": "/decks/019dd923-622c-750b-8b99-20e88bb14fbb", "deckJsonHref": "/decks/019dd923-622c-750b-8b99-20e88bb14fbb.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-20e88bb14fbb#slide-102", "components": [ { "bbox": { "h": 0.12, "w": 0.85, "x": 0.08, "y": 0.00165 }, "kind": "callout", "text": "Spruce Point believes LSPD purposefully avoids talking about quantifying payments margins. Even when asked directly by analysts, management gives long-winded answers and indirect responses suggesting things are fine and will improve. Either way, margins are falling and management hasn't been exactly open with investors about the magnitude.", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a9ab2205-595e-40fb-888b-098d528ac99d", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "Spruce Point believes LSPD purposefully avoids talking about quantifying payments margins. Even when asked directly by analysts, management gives long-winded answers and indirect responses suggesting things are fine and will improve.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-64cf-7128-a321-cb2c7f875db5", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "Okay, great. And finally, your gross margins went up sequentially, which is interesting given that your payments revenue is ramping. Can you comment that dynamic? Is that reflective of the strength within the software business [when you had some higher] ARPU in the quarter? Or are you also seeing some improvement in your payment margins based on your growing scale? — BMO Analyst, Nov 2020. Yes, a little bit of all of the above. I mean, we obviously, given the growth in customers, saw some nice increase in the subscription line churn starting to come back towards normal, again, which helped a lot. Some of the discounting measures that we had in place are going [all start there a little off balance], as you know. We do continue to kind of look for ways to drive incremental margin and payments. And I guess, the other aspect to the overall gross margin is -- as you know, we do have some legacy payment referral revenue streams. And as those volumes are covered in the quarter as well, it would have been incremental to margin? — CEO Dasilva, Nov 2020. You have the very helpful slide that shows the adoption and some of the geos and verticals. Certainly seems to be going in the right direction. I'm just kind of curious once we think about what this is going to look like maybe after we've incorporated ShopKeep and Upserve, which I believe have higher ARPUs in part because they've been successful at payments, if we should be expecting it to kick up? Or just curious on how the incorporation of those companies will impact these dynamics? — Keybanc Analyst, Feb 2021. Yes, for sure, will tick up the Upserve business in particular. The vast majority of their customers were using Upserve payments as kind of they have a really nice elegant solution that embeds Payments right into the product itself. ShopKeep, they were further along as well on the Payments journey from a customer adoption perspective, though as we've talked about, largely through a referral model, but a good percentage of their customers do use a payment solution there. And as we talked about earlier, the teams are working hard to move those or to build the infrastructure to make sure that Lightspeed Payments is available to those customers. So all told, we expect those things to really positively impact our overall penetration at a global level. And of course, that's core to what we're trying to do around here is to make sure that the vast majority of our customers worldwide take Payments. So all these things, I think, are helpful. — CFO Nussey, Feb 2021", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-64cf-7128-a321-cfed54f63489", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.2, "x": 0.75, "y": 0.95 }, "kind": "source-note", "text": "Source: Q2 2021 Conf Call, Nov 2020; Q3 2021 Conf Call, Feb 2021", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ac3c9784-b6f0-4174-8f7a-8fa329c4ae34", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.65, "w": 0.85, "x": 0.08, "y": 0.25 }, "kind": "table", "text": "Comparison of analyst questions and management responses from Nov 2020 and Feb 2021.", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7d64ca55-8be2-4457-b211-84778e78761b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.65, "x": 0.28, "y": 0.05 }, "kind": "title", "text": "Management Often Talks Around Payments Margins When Asked Directly", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5c1d0c05-575f-4fe9-badb-469cf4f11edd", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "6fbd73c3-2a5f-4f79-9e0b-7c5e6ba13731", "evidence": "Contrasting analyst questions with management's evasive responses to expose lack of transparency.", "confidence": 0.95 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }