Market watch: Lightspeed, Nuvei increase revenues but reports lead shares to fluctuate

Lightspeed payments
Lightspeed's share price dropped after the report was tabled.

Lightspeed and Nuvei, a pair of Montréal companies, announced quarterly results today, and while both companies announced increases in revenues, the news wasn’t enough to please investors, causing share price fluctuations in both firms.

Lightspeed and Nuvei’s revenue increases when played against the backdrop of losses appeared to underwhelm investors who, during the current tech downturn, are eager for good news of any kind but are swift to react when it doesn’t meet their expectations.

Lightspeed’s revenues decrease while losses continue

For the fiscal second quarter of 2023, Lightspeed posted total revenues of $183.7 million (all numbers are in USD), an increase of 38 percent year-over-year.

However, while revenues represented an annual increase, as a percentage showing increases year-over-year they actually declined from the last quarter. In the first fiscal quarter of 2023, Lightspeed delivered $173.9 million, a 50 percent increase in revenue from the previous year.

While Lightspeed’s losses lessened considerably in the second quarter, the company still posted a net loss of $79.9 million compared to a net loss of $59.1 million for the same period last year.

Lightspeed warned it is “facing macroeconomic conditions that are negatively impacting the business.”

In its reporting the company made much of its previous forecasting, and how revenues and losses compared to that. Lightspeed noted that it delivered revenues ahead of its previously established outlook “despite headwinds from foreign exchange fluctuations.” The quarter’s revenue sits almost on par with analyst and Lightspeed estimates, which sat between $178 million and $183 million.

Lightspeed also announced an adjusted EBITDA loss of $8.5 million, better than the previously established outlook it had set, forecasting a loss of $10 million.

However, none of this mollified the market, which drove the company’s Toronto Stock Exchange share prices down to $22.13 before it began to rebound upward again, only to sink again. As of presstime, the shares stood at $20.06 up from a 52-week low of $19.58 but a far cry from the 52-week high of $123.62. Lightspeed’s Nasdaq shares went on a similar journey, ending the day at $14.61.

Following the release of the earnings report, company CEO JP Chauvet wrote in a website post that Lightspeed needs to deliver three goals in order to continue to drive value for their business.

The first is combining Lightspeed’s acquisitions into one company with one brand and two core products. The second is to drive payments adoption, and the third is for the company to reach profitability.

“Our platforms help SMBs operate with fewer employees by automating time-consuming and mundane tasks; better managing their inventory; serving customers through in-store or on-line channels; and processing payments from anywhere,” Chauvet wrote.

RELATED: Lightspeed promotes CRO JD St-Martin to president as leadership overhaul continues

During the second fiscal quarter, Lightspeed continued to revamp its executive team, promoting JD St-Martin to president, which the company said was an expansion of his current role as chief revenue officer. Lightspeed also hired Google veteran and former executive Ryan Tabone as chief product and technology officer in October.

In its forecast, Lightspeed declared that it continued to execute in areas it controls, but warned that the company is “facing macroeconomic conditions that are negatively impacting the business and certain assumptions underlying its previous outlook for the fiscal year ended March 31, 2023.”

It anticipated the biggest impact would continue to be changes in foreign exchange rates that will impact Lightspeed by approximately $10 million to $15 million in revenue for the year. The company added that the current uncertain economic environment is reason for increased caution through the second half of the year, and particularly over the busy holiday season.

The company amended its forecast, calling for a slight decrease in revenue outlooks from annual revenues of $740 million to $760 million, down to between $730 million to $740 million. Similarly, revenue for the third fiscal quarter is expected to weigh in at $185 million to $190 million rather than the originally forecasted $189 million to $194 million.

Lightspeed said it remains confident that it will reach adjusted EBITDA break-even for the fiscal year ending March 31, 2024.

Slight increase in revenues, large drop in net income at Nuvei

For the second quarter running, Nuvei reported that changes in foreign currency rates unfavourably impacted its revenues. That said, the company reported a seven percent increase in revenues for the quarter of $197.1 million from $183.9 million last year.

At the same time, Nuvei posted a decrease in net income from $28 million to $13 million, a 54 percent drop. The company blamed the drop primarily on a $22.6 million increase in share-based payments.

The earnings report lent some volatility to the FinTech company’s share price throughout the day, with several fluctuations and drops before climbing back up to $40.65 at presstime. The 52-week low for Nuvei’s shares is $34.47, down from a 52-week high of $153.

Nuvei’s chair and CEO Philip Fayer said the company was pleased with the quarterly results, which exceeded the financial outlook it previously provided.

“Results were driven by higher volumes and wallet share expansion as reflected in our constant currency volume growth of 38 percent, new client wins, our continued investment in technology and product offerings, and our geographic expansion,” Fayer said.

Nuvei added 66 new employees in the third quarter of 2022, bringing it to a total of 1,636 staff as of September 30.

During the quarter, the company launched – among other things – its buy now pay later program in Canada in partnership with Visa. It also expanded its executive team, hiring Vicky Bindra in the newly created position of chief operating and product officer.

Charles Mandel

Charles Mandel

Charles Mandel's reporting and writing on technology has appeared in, Canadian Business, Report on Business Magazine, Canada's National Observer, The Globe and Mail, and the National Post, among many others. He lives off-grid in Nova Scotia.

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