LSPD: post earnings thoughts

LSPD (8.8% allocation; Q1FY22 5Aug earnings date)

The thesis for holding LSPD remains strong with growth ahead from the reopening of commerce (particularly in sectors affected by the pandemic), rollout of Lightspeed Payments, and consolidation of a fragmented market. During the last quarter, we saw strong evidence that LSPD is executing well on all three fronts.

Lightspeed Payments penetration exceeded 10%, and the Payments attach rate for new customers was in the 60-70% range. LSPD announced the launch of Payments in five European countries (Germany, France, Switzerland, Belgium, and the Netherlands) with further plans to launch in some Asia-Pacific countries. The Company maintains that they will be able to achieve 50% Payments penetration. Assuming annual GTV is about $80B (and growing), a 50% Payments penetration translates to about $1B in revenue! And that’s only from Payments; LSPD will, of course, also get increasing revenue from software subscriptions. Progress toward that 50% penetration goal is continuing.

Customers in the retail, restaurant, and hospitality businesses showed incredible strength in Q2. These LSPD customers are coming back in a big way. Specifically, hospitality GTV was up 380% and omnichannel retail GTV was up 139%. Whether this strength continues into the 30Sep quarter we don’t yet know. The coronavirus is resurging which could once again affect businesses that are dependent on human-to-human interactions. If LSPD’s customers do need to take precautions, then we know that they’re better equipped with tools (provided by LSPD) that facilitate contactless purchasing. Furthermore, any shutdowns, if they do occur, will be temporary and business would rebound strongly eventually. Personally, I tend to think that the worst impacts (on retail, hospitality, and restaurants) of the pandemic are behind us.

LSPD also continued to make progress on its consolidation strategy. Having now acquired customers in most geographies, LSPD has continued to acquire companies for their technology: NuORDER and Ecwid most recently. As LSPD integrates these companies into the fold, the Company expands its product offering to all relevant customers in its target markets. Thus, we have growth from cross-selling of the acquired technologies. NuORDER is particularly interesting because it will likely create a nice differentiator through the rollout of B2B supply chain tools and a network.

In summary, there’s continuing evidence that LSPD is executing where it needs to in order for the investment thesis to play out.


Thanks for your post! I’m wondering whether you’ve done any research on LightSpeed’s competing position with Square. Here in California, I see no LightSpeed POS, but a lot of SMBs are using Square. I’d appreciate your thoughts.



Thank you Gaucho - I am also long $LSPD, and prefer over $SHOP. I thought that both of them will thrive but the former is at an earlier entry point.

However, the other day, I saw a tweet from Jean-Michel Lemieux, ex-CIO at Shopify, complaining about Lightspeed’s fees. The Tweet said: “This is what a non-developer friendly platform does. Charges you for API access. To YOUR data on YOUR biz. Just to automate a few reporting features that they are missing. $60/month on top of regular subscription fees.”

(link here:

Do you have any strong insights about the competitive landscape? The tweet and some replies from LSPD got me worried…

Many thanks,


Hey monkey Duffy,

I do not have a position in LSPD, but responding based on what I know about the industry (not a SME but work in fintech). Square is an integrated service provider (they provide the software and hardware). Initially they focused on the hardware (remember the dongles that attached to the phone) - over the years they expanded into software to support the business on their payments platform. The approach square took was to gain payments marketshare and then start providing software to support the businesses.

LSPD on the other instance initially started as a software to support retail Point of sale (and other industries) and over time has added integrated payments into their application. Now, they don’t own the payments ecosystem rather integrate with a 3rd party payment processor or payfac and is white labeled as Lightspeed payments. The terms of service will indicate who they use but in my 5 minutes of google search, I wasn’t able to determine who their payment provider was. Whitelabeled payments by software vendors is a particular area of focus for payment processors and payment facilitators (referred to payfacs). In term of the physical hardware where you swipe your card is often by another 3rd party company that has integrated with the payment processor or payfac. Most common hardware vendors are verifone and ingenico.

Long SQ (1% holding)