Montréal-based Lightspeed Commerce has upgraded its outlook for the rest of the year after posting $319 million USD in revenue in its last quarter and beating internal forecasts.
The firm reached $1 billion in revenue this year, but its share price struggled to reach its 2021 high.
While growing its revenue 15 percent year-over-year, the e-commerce firm also saw a net loss of $32.7 million in fiscal Q2, which ended Sept. 30. This was slightly higher than $29.7 million it lost during the same period last year. However, the company noted that after adjusting for share-based compensation, adjusted income was $22.2 million, an 11.5-percent increase year over year.
Founded in 2005, Lightspeed sells point-of-sale and commerce software and hardware to restaurants, retailers, and hospitality providers. The company is dual-listed on the Toronto Stock Exchange and the New York Stock Exchange under the symbol ‘LSPD.’ The firm reached $1 billion in revenue this year, but its share price struggled to reach its 2021 high. Its market capitalization is roughly $2.27 billion CAD.
The company’s transaction-based revenue hit $215.8 million this quarter, an increase of 17 percent year-over-year, while subscription revenue grew nine percent to reach $93.5 million. Gross transaction volume (GTV), a measure of all payments processed through Lightspeed’s software platform, was $25.3 billion, up seven percent year-over-year.
Lightspeed CFO Asha Bakshani highlighted the company’s growth in adjusted free cash flow in a news release, saying it “demonstrates our ability to invest for growth while continuing to strengthen profitability.” Adjusted free cash flow grew from $1.8 million in the same quarter last year to $18 million.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $21.3 million for the quarter, up from $14 million. Growing profitability metrics while driving growth is part of a three-year plan that Lightspeed outlined in February, following a strategic review. That plan includes a focus on two areas of growth: retail in North America and hospitality in Europe. GTV grew 15 percent year-over-year in those areas.
“I think the main balancing act for Lightspeed is that the market also wants to see a tremendous amount of growth,” CEO and co-founder Dax Dasilva told BetaKit in August. “We’re optimizing for profitability so we can fund the two growth markets.” He compared it to “building muscle and losing fat at the same time.”
Dasilva added that the market had seen five straight quarters of EBITDA growth, so “it knows we’re serious about getting there as fast as we can.”
Due to “outperformance” this quarter, the company said, it’s raising its outlook for the rest of the fiscal year, to revenue growth of at least 12 percent year-over-year, gross profit growth of at least 15 percent, and adjusted EBITDA between $18 million and $20 million.
This past quarter, Lightspeed added a number of new products, including an artificial intelligence (AI)-powered “showroom” and AI-generated product descriptions for retailers’ online stores. It also rolled out a business intelligence product for its golf division.
The company also added two tech veterans to its board of directors: the president of Google’s Android ecosystem, Sameer Samat, and seasoned FinTech CEO Odilon Almeida.
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Feature image courtesy Lightspeed.