Lightspeed shows strong growth YoY, but revenues flat after COVID-19 quarter


Lightspeed POS has reported strong year-over-year growth as revenue and customer growth stayed flat due to the COVID-19 pandemic. On Thursday, the Montreal-based company released its financial results for its fiscal first-quarter 2021, which ended June 30, 2020. All figures reported are in US dollars.

“We delivered another positive quarter in the face of a challenging macro environment.”
– Brandon Nussey

At the height of the COVID-19 pandemic’s initial shockwave, Lightspeed’s total revenue grew to $36.2 million in Q1 2021, a 51 percent increase year-over-year, and a slight decrease from last quarter’s $36.3 million in revenue. Lightspeed attributed the year-over-year revenue growth to small and medium-sized businesses finding success with Lightspeed’s omnichannel solutions as consumers increasingly move online amid the COVID-19 pandemic.

Lightspeed incurred a net loss of $20.1 million in Q1 2021, more than double than Q1 2020’s net loss of $9.1 million. The net loss can be attributed to increased costs to research and development, as well as compensation related to recent acquisitions (no acquisitions were made during Q1 2021). As of June 30, 2020, Lightspeed had $203.5 million in unrestricted cash and cash equivalents.

Total transaction volume grew by 17 percent year-over-year to over $5.4 billion in Q1 2021, and to more than $23 billion for the prior twelve months. This represents a significantly slower growth rate than what Lightspeed achieved in the previous quarter, which saw a 70 percent increase in gross transaction volume, although transaction volume rebounded after a rough start in April.

In April, transaction volume for Lightspeed’s restaurant customers plummeted by over 80 percent, likely due to enforced closures of restaurants around the world. By the end of June, overall restaurant volumes were back to pre-COVID levels, Lightspeed reported, and overall transaction growth accelerated during each successive month throughout the quarter, culminating with a growth of 53 percent year-over-year in June.

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“The geographic diversity of Lightspeed restaurant customers, which are largely outside of North America, continues to be an asset for the business as countries around the world emerge from COVID-19 at differing rates,” Lightspeed noted.

Lightspeed’s retail division saw total transaction volume grow by over 30 percent in Q1 2021 compared to the same period last year. Lightspeed reported retail transaction volume rebounded due to strong performance by the bike, home and garden, sporting goods, and golf segments. Retail e-commerce activity saw close to a 100 percent increase in e-commerce volumes processed by Lightspeed retailers in the first quarter compared to the prior year.

“Our customer base has been resilient, especially those businesses leveraging our omni solutions.”

Recurring software and payments revenue totalled $33.4 million in Q1 2021, a year-over-year increase of 57 percent. Revenue for Lightspeed Payments also trended upwards year-over-year throughout Q1 2021, resulting in a record month in June, which the startup said was led by increased online sales, new customer adoption, and strong performance across several verticals.

Lightspeed grew its customer locations to over 77,000 by the end of June, a 34 percent year-over-year, but up a paltry two percent from the end of April. The startup’s customer churn was also higher than the average levels experienced throughout the fiscal year, however, Lightspeed said this loss was offset by the growth of new customer locations.

Since the end of Q1 2021, Lightspeed has launched a Mobile Tap feature for curbside pick-up and contactless payments, a Digital Wallet for e-commerce checkouts, and an Analytics Core, which provides a lower-cost entry point to Lightspeed’s existing analytics suite.

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This week, Lightspeed launched its first-ever loan offering for small and medium-sized businesses, in partnership with payment processing software giant Stripe. That launch represents the first time Lightspeed has offered financing small- to medium-sized businesses to help buy inventory, invest in marketing, or manage cash flows.

In its Q1 2020 financial results, Lightspeed forecasted revenues between $38 and $40 million for the quarter ending September 30, and did not provide a financial outlook for the full fiscal year 2021, citing uncertainty regarding the duration and magnitude of the pandemic.

“We delivered another positive quarter in the face of a challenging macro environment. Most encouraging was the pace of new business as we witnessed accelerated customer adds through the quarter,” said Lightspeed CFO Brandon Nussey. “Our retail customers are growing, and our restaurants are recovering. All told, our customer base has been resilient, especially those businesses leveraging our omni solutions.”

Image courtesy Lightspeed.

Isabelle Kirkwood

Isabelle Kirkwood

Isabelle is a Vancouver-based writer with 5+ years of experience in communications and journalism and a lifelong passion for telling stories. For over two years, she has reported on all sides of the Canadian startup ecosystem, from landmark venture deals to public policy, telling the stories of the founders putting Canadian tech on the map.

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