Lightspeed Announces Third Quarter 2024 Financial Results

Lightspeed, the POS and payments platform, reported its financial results (in U.S. dollars and in accordance with IFRS) for the three and nine months ended December 31, 2023. 

The company expects to meet its key objectives for the year and achieve its previously established revenue and Adjusted EBITDA outlook. The company’s flagship products are available in most of its primary global markets, with complete coverage expected in the months ahead. Lightspeed’s Unified Payments initiative increased GPV2 as a percentage of GTV2 to 29 percent. The company also had its second consecutive quarter of positive Adjusted EBITDA, placing Lightspeed in a strong position to meet its goal of Adjusted EBITDA break even or better performance for fiscal 2024.

“Overall, I was very pleased with the quarter. We were able to grow the top line by 27 percent, and our disciplined approach on costs helped us deliver positive Adjusted EBITDA performance,” said Asha Bakshani, company CFO. “As we begin to turn our attention to fiscal 2025, we will focus on growing our top line without sacrificing the progress we have made on Adjusted EBITDA profitability.”

“At this stage, I believe our Unified Payments initiative can only be seen as a resounding success; customers adopted Lightspeed Payments without the heightened churn that we were expecting,” said JP Chauvet, CEO of Lightspeed. “With our growing ARPU, industry-leading platforms, and sound financial foundation, we are excited for the future at Lightspeed.”

Third Quarter Financial Highlights
(comparisons are relative to the three-month period ended December 31, 2022, unless otherwise stated):

• Total revenue of $239.7 million, an increase of 27 percent year-over-year and ahead of the previously established outlook of $232 million to $237 million;
• Transaction-based revenue of $147.8 million, an increase of 38 percent year-over-year;
• Subscription revenue of $80.9 million, an increase of 9 percent year-over-year;
• Net loss of ($40.2) million, or ($0.26) per share, as compared to a net loss of ($814.8) million, or ($5.39) per share. After adjusting the net loss by $52.1 million for certain items, including share-based compensation and amortization of intangible assets, the company delivered an Adjusted Income of $11.8 million, or $0.08 per share as compared to an Adjusted Income of $0.4 million, or $0.00 per share in the quarter ended December 31, 2022. Net loss for the quarter ended December 31, 2022, includes a non-cash goodwill impairment charge of ($748.7) million;
• Adjusted EBITDA of $3.6 million, ahead of the previously-established outlook of $2 million, versus Adjusted EBITDA loss of ($5.4) million in the quarter ended December 31, 2022; and
• As at December 31, 2023, Lightspeed had $749.4 million in cash and cash equivalents.

Operational Highlights

• Lightspeed delivered several new product releases:
  • Instant Payouts for Lightspeed Retail were available to U.S. merchants, allowing immediate access to funds;
  • For Lightspeed Restaurant, Lightspeed Tableside, a compact, portable and flexible POS and payment processing device, is available in the U.S;
  • Lightspeed Retail and NuOorder Integration is available on the company’s flagship offering, allowing retail customers to order directly from brands through the NuOrder by Lightspeed platform, recently only available to its enterprise customers. The integration also lets retailers import purchase orders placed into Lightspeed Retail.
  • Lightspeed Capital expanded into France, the Netherlands and Belgium in the quarter, with Germany launching after the quarter ended.
  • Tap to Pay on iPhone was expanded to the UK and the Netherlands.
  • Advanced Insights enhancements launched globally for Lightspeed Retail, enabling retailers to save money by reducing inventory waste and creating efficiencies through improved inventory and sales reporting.
• ARPU2,4 increased 28 percent to approximately $447 from approximately $348 in the same quarter last year, assisted by the company’s focus on its unified POS and payments offering and GTV customer adoption.
• Overall gross margin came in at 42 percent essentially flat to the prior quarter. Subscription gross margins grew to 76 percent in the quarter from 73 percent in the same quarter last year due to a dedicated effort to consolidate cloud vendor arrangements and improve overall efficiencies.
• Transaction-based gross margins fell to 30 percent from 33 percent last year, primarily due to reduced referral fees as more customers adopted Lightspeed Payments, partially offset by increased Lightspeed Capital revenue as well as increasing GPV as a percentage of GTV in international markets where Lightspeed Payments carries a higher gross margin.
• For the quarter, Lightspeed’s customers processed GTV of $23.1 billion, up 3 percent year-over-year.
• An increasing portion of GTV is processed through the company’s payment solutions. GPV increased 69 percent to $6.6 billion from $3.9 billion in the same period last year.
• Lightspeed’s customer base continued to shift towards higher GTV Customer Locations. Customer Locations with GTV exceeding $500,000/year increased 7 percent year-over-year, and the number of customers with GTV exceeding $1 million/year increased 7 percent year-over-year. The number of customer locations processing GTV under $200,000/year decreased during the same period. Customer locations with GTV exceeding $500,000/year have a substantially lower churn risk and higher lifetime value for Lightspeed than customers with lower GTV/year.
• Lightspeed Capital showed strong growth, with revenue increasing 118 percent year-over-year.

Notable customer wins include:

• Several Michelin-star restaurants selected Lightspeed Restaurant in the quarter, including The River Café (UK), Hæbel (Hamburg), Prism (Berlin), The Swillhouse Group (Sydney) to power its entire operation,Attica (Melbourne) to power the fine dining restaurant
• Lolë Clothing, athletic apparel designer and retailer with locations in North America, adopted Lightspeed Retail;
• High Country Outfitters, with multiple locations across the U.S., chose Lightspeed Retail to power its locally-owned and operated outdoor gear and clothing stores;
• Pinarello, the bike brand, signed onto Lightspeed Retail for its two UK locations;
• Fit My Feet, a six-location footwear and orthotic retailer in the U.S., joined Lightspeed Retail; and
• Tommy Bahama, Baffin and UNTUCKit were added to the Lightspeeds supplier network. 

Financial Outlook
(supersedes prior statements made by the company and is based on current expectations)

Lightspeed is increasing the lower end of its Fiscal 2024 revenue outlook to reflect the company’s performance. The company remains cautious on near-term prospects due to a still uncertain macroeconomic environment and the pace of adopting unified payments in international markets. In addition, the fourth fiscal quarter has historically been the company’s weakest quarter for GTV performance. The success of the company’s unified payments initiative to date has Lightspeed on track to achieve its expected 30 percent to 35 percent GPV as a percentage of GTV by the end of fiscal 2024. Given the seasonal weakness, uncertainties surrounding the general economy and the pace of Lightspeed 

Payments adoption in international markets, Lightspeed’s Fiscal 2024 outlook is as follows:

• Revenue of approximately $895 million to $905 million; and
• Break-even or better Adjusted EBITDA.

Image courtesy Lightspeed