Payments-and-retail platform Lightspeed Commerce Inc. LSPD-T beat market expectations for revenue and earnings, with chief executive Jean Paul Chauvet saying the latest quarter paves the way for the Montreal-based company to reach its long-standing goal of becoming profitable.
On Thursday, Lightspeed reported total revenue of US$209.1-million for the quarter ended June 30, its first financial results for a new fiscal year. That’s up by nearly 20 per cent compared with last year, when the company posted revenue of US$173.8-million in the same quarter, and exceeded analysts’ average estimate of $197.7-million.
Still, Lightspeed also saw a US$48.7-million net loss in the first quarter, which amounts to about 32 cents per basic and diluted share. But a year ago, that loss was US$100.8-million or nearly 68 cents per share.
“These numbers are a testament to how far we’ve come and where we want to go,” Mr. Chauvet said in an interview. He told investors on Thursday that the company is on track to break even on its earnings before interest, taxes, depreciation and amortization by the end of the fiscal year, likely even turning that measure of financial health positive.
Over the last year, shares of Lightspeed have fallen by more than 25 per cent amid a broader slump for the technology sector, but gradually the stock price has been regaining value. After the company provided quarterly results on Thursday, Lightspeed shares closed at $23.29 on the Toronto Stock Exchange, up 7.72 per cent from the day before.
Lightspeed provides commerce-related software and services for restaurants, retailers and hospitality businesses in more than 100 countries. Unlike its competitors, such as Ottawa-based Shopify Inc. and San Francisco-based Block Inc., however, Mr. Chauvet said Lightspeed will “continue to target the higher end of the market” as a long-term strategy.
“We don’t necessarily want to tap micro-merchants like the others. Because, at the end of the day, those bigger shops like the Michelin-star restaurants will be far less impacted for any recessionary periods or other economic instabilities, compared to the people selling T-shirts from their garage,” Mr. Chauvet said.
He added that Lightspeed is not planning for any layoffs this year and that morale among staff remains high, despite the cuts affecting around 10 per cent of its entire work force at the beginning of 2023.
“If anything, we’ve seen retention numbers for people go up, and we had a much easier hiring process than we have in the past,” Mr. Chauvet said. “I think the slow economy is kind of making people want to stay with good employers.”
In recent months, Lightspeed has kept a tight focus on unifying its point-of-sale and payment initiatives, so that it may reduce complexity by simplifying bookkeeping and becoming a one-stop shop for the businesses it works with. To that end, over the summer, the company has helped migrate many businesses across North America onto its platform by changing their payment processors, offering competitive rates and providing free payment terminals without installation fees involved. Up next for this unification is Europe, Mr. Chauvet said.
In the new quarter, Lightspeed’s customers processed a gross transaction value of US$23.4-billion, which is up by 6 per cent year-over-year. Figures for omnichannel retail and hospitality grew at roughly the same rates. But Lightspeed noted an increasing portion of the revenue in relation to commissions is being processed through the company’s payments solutions, with gross payment volume increasing 56 per cent to US$5.1-billion from US$3.3-billion year-over-year.
The results on Thursday suggest Lightspeed’s push on payments is advancing well, according to National Bank of Canada analyst Richard Tse. “It’s a meaningful opportunity; that said, it’s still early in that process.”
It is “good to see” that Lightspeed is on target with profitability metrics, said Mr. Tse, “as it reflects improving capital deployment discipline.” Eventually, all these recent measures from the company should reflect well on its stock valuation, he added.