Lightspeed’s stock rises as firm exceeds outlook for fiscal Q2, achieves positive EBITDA

Lightspeed CEO Jean Paul Chauvet.
Company takes a step towards profitability, boosts revenue guidance.

Montréal-based Lightspeed Commerce beat its prior revenue forecast and made progress towards profitability during the second quarter of fiscal 2024.

According to Lightspeed’s latest earnings report, the commerce software company saw its total revenue climb 25 percent year-over-year in fiscal Q2 as it pulled in more than $230 million USD, surpassing its previous outlook of $210 million to $215 million. While Lightspeed also posted a net loss of $42.5 million during Q2, this marks its lowest loss in 10 quarters, and a big improvement compared to the nearly $80 million the firm lost in the same period last year.

Lightspeed CEO JP Chauvet hailed reaching positive EBITDA as “a significant achievement” for the commerce software firm.

Lightspeed also recorded its first period of positive adjusted earnings before interest, taxes, depreciation, and amortization (EBIDTA) as a public company in Q2, posting a slim, $200,000 profit by this metric, beating its prior forecast of negative $4 million. In a statement, Lightspeed CEO Jean Paul Chauvet hailed reaching positive EBITDA as “a significant achievement” for the firm.

So far, investors have responded well to these results. At time of publication, the price of Lightspeed’s shares on the TSX and the NYSE are up about 15 percent on the day.

“At the beginning of this year, I promised that fiscal year 2024 will be the year of execution,” said Chauvet during the company’s latest earnings call. “The results from this quarter firmly show that we are delivering on that promise.”

For Lightspeed, which provides commerce and point-of-sale software to restaurants, retailers, and hospitality providers, positive EBITDA marks a key target on its path toward profitability as the company looks to win back investors and recover some of its stock value since plummeting from COVID-19 pandemic highs. That drop, which began in fall 2021 as a broader tech downturn set in, was fuelled in part by a report from a short seller criticizing the firm’s metrics.

In early 2022, Chauvet replaced Lightspeed founding CEO Dax Dasilva. Since then, the company has continued to overhaul its C-suite, and focused its efforts on converting its slew of acquisitions into new flagship products for its retail and hospitality customers.

Earlier this calendar year, Lightspeed cut 10 percent of its team as the company set its sights on profitability and acquiring larger customers. Lightspeed views Lightspeed Payments as an important pillar of that objective. Chauvet noted that Lightspeed made some progress on the payments front during Q2, onboarding a record number of customers and seeing “lower than anticipated churn.”

RELATED: Lightspeed Commerce makes gains in fiscal 2023, Q4

“Our strategy of focusing on two flagship products and rolling out unified payments is working and translating into strong performance,” Lightspeed CFO Asha Bakshani said in a statement. “In the quarter, we were able to accelerate both revenue and gross profit growth while maintaining operating discipline to drive the company’s first-ever positive adjusted EBITDA.”

During the company’s Q2 earnings call, Bakshani attributed Lightspeed’s positive adjusted EBITDA to the firm’s “continued focus on prudent spend across our organization,” including its January layoffs, its relatively flat research and development, sales and marketing, and general expenses, and efforts to increase its sales productivity.

As of September 30, Lightspeed had $761.5 million in cash and cash equivalents. According to Chauvet, Lightspeed is “now in a position of strength.”

Looking forward, Lightspeed raised its total annual revenue guidance from between $875 million and $900 million to between $890 million and $905 million. According to the company, it also “remains on track for break even or better performance for the fiscal year.”

Feature image courtesy Lightspeed Commerce.

Josh Scott

Josh Scott

Josh Scott is a BetaKit reporter focused on telling in-depth Canadian tech stories and breaking news. His coverage is more complete than his moustache.

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