Montreal-based Lightspeed POS has reported that social distancing measures in place due to COVID-19 have impacted merchants’ overall demand for the e-commerce company’s services.
“Despite the present risks and uncertainties, Lightspeed believes it is well-positioned to help SMB retailers and restaurants.”
The point-of-sale company provided a business update Thursday ahead of its fourth fiscal quarter and full-year 2020 financial results, expected to be released on May 21. In the update, Lightspeed noted the pandemic is currently impacting Lightspeed’s retail and hospitality customers, including these merchants’ gross transactional value, their demand for Lightspeed’s services, and churn rates due to business closures.
The startup is currently taking steps to mitigate some of the effects of the business closures, saying it is using customer-focused initiatives such as subscription discounts and deferred payment arrangements. Lightspeed also said it is enacting “cost-containment measures” as part of its mitigation strategy, but did not specify whether this could mean lay-offs or changes to its business.
Lightspeed is giving merchants access to three months of free access to its e-commerce and delivery services. Its e-commerce offering allows retailers to manage inventory, sales reports, shipping, customer data, and marketing, while Lightspeed’s delivery service helps restaurateurs consolidate and deliver meals.
The company is also giving its merchants tips and resources to access financial aid, cut costs and increase profitability during the pandemic.
Lightspeed reported positive momentum through most of the fourth fiscal quarter, but is forecasting that social distancing measures due to COVID-19 will have a negative impact on its financial performance. The company noted it has approximately $220 million USD in cash as of March 31, in addition to $25 million USD available under its secured credit facility.
“Despite the present risks and uncertainties, Lightspeed believes it is well-positioned to help [small- and medium-sized business] retailers and restaurants move away from legacy on-premise systems to cloud-based, omnichannel solutions,” the company said in its update.
This year, Lightspeed acquired German POS systems developer Gastrofix, the fourth acquisition since Lightspeed went public on the Toronto Stock Exchange in early 2019. Last year, Lightspeed acquired three companies: Switzerland POS solutions provider iKentoo, Australia’s Kounta, and Chronogolf, a solution for golf course operators.
Founded by Dax Dasilva in 2005, Lightspeed has developed point-of-sale and e-commerce software for small businesses. Its technology offering is designed to help retailers, restaurants, and e-commerce merchants create and manage their businesses.
The company’s solutions are aimed to centralize inventory, customer management, sales, and analytics for both online and brick-and-mortar merchants. As of early March, Lightspeed operates in more than 100 countries and employs 900 people.
The startup has focused on international growth over the last few months and recently hired a new chief people officer to assist with the expansion. It’s currently unclear how these efforts have been affected by the global pandemic.
Image source TSX via Twitter