In an interview, Lightspeed’s chief executive officer Jean Paul Chauvet said inflation and the looming threat of a recession are putting pressure on many businesses that his company works withChristinne Muschi/The Globe and Mail
Lightspeed Commerce Inc. posted a quarterly loss of US$79.9-million and warned that annual revenue will be pressured because of volatility in the foreign-exchange market, as the technology sector continues to suffer a worsening outlook.
The Montreal-based e-commerce company provides point-of-sale and payments software for restaurants, retailers and hospitality businesses globally. On Thursday, shares of Lightspeed dropped 18.6 per cent on the Toronto Stock Exchange, closing at $20.04 after it reported financial results for the quarter ended Sept. 30. The company’s stock has collapsed by more than 83 per cent this year.
Lightspeed’s revenue was up by nearly 38 per cent from the same period last year to US$183.7-million, which is slightly higher than the analyst consensus estimate of US$182.9-million.
The company lost 53 US cents a share, compared with a loss of 43 US cents a share last year.
Lightspeed’s subscription revenue rose to US$74.5-million, up from US$59.4-million a year ago, and its transaction-based revenue increased to US$101.3-million from US$65-million. However, hardware and other revenue shrunk to US$7.9-million from last year’s US$8.8-million in the same quarter last year.
In an interview, Lightspeed chief executive officer Jean Paul Chauvet said inflation and the looming threat of a recession are putting pressure on many businesses that his company works with. Lightspeed’s revenue will also likely be reduced by up to US$15-million “due to greater-than-expected changes in foreign-exchange rates,” he said.
“We’ve always been a growth story, we’ve never missed an estimate and we’re still on our way to profitability as we’ve planned,” Mr. Chauvet said. “But right now, there are many macroeconomic challenges that are beyond our control. We simply can’t do much about those problems.”
Lightspeed doesn’t expect to break even on its earnings before interest, taxes, depreciation or amortization (EBITDA) – a metric the company uses for its profitability targets – until the fiscal year ending March 31, 2024.
As of this summer, the company had more than 163,000 customers globally. But that number could shrink because of the continuing slowdown in e-commerce, Lightspeed executives told investors and analysts in a conference call on Thursday.
As consumers cut back on discretionary spending and continue to turn away from online shopping habits that they embraced early in the COVID-19 pandemic, many companies such as Lightspeed have suffered as a result. At the same time, the tech sector in general is facing headwinds and a broad stock sell-off because of economic uncertainty stemming from rising interest rates, inflation and the war in Ukraine.
A core part of Lightspeed’s strategy to navigate this downturn is attracting “the right customers,” rather than targeting a larger pool “just for the sake of it,” Mr. Chauvet said. Lightspeed is “looking at more established businesses” with higher market capitalization that “keep adding value and keep seeking services” from the company’s platform, he said.
“And we aren’t just thinking of online shopping, we’re focused on physical retail a whole lot more by combining long-time services such as point-of-sale software with things like inventory management,” he added.
Lightspeed also plans to monetize the consumer data that it collects, which Mr. Chauvet believes could be used by stores when making financial decisions. “We are in a really strong position to develop many new products,” he told analysts in a conference call.
Temur Durrani