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May 19, 2022

After rocky period, Montreal’s Lightspeed says payment-processing growth could push eventual profit

Lightspeed Commerce Inc. LSPD-T +7.46%increase said its loss more than doubled in the latest quarter after a rocky eight months, but said it believes it’s on a path to eventual profitability amid growth in its payment-processing services.

The point-of-sale, payments and e-commerce company is used by 163,000 restaurants, retailers and hospitality providers. Its revenue grew 78 per cent to US$146.6-million in the quarter that ended in March, from US$82.4-million a year earlier, beating analysts’ consensus forecast of US$141-million.

The boost was largely driven by an increased volume of payments that Lightspeed processed as it brought on new merchants and watched the world’s retailers re-open. The average monthly revenue it receives per retailer also grew by 35 per cent, to US$270 from US$200.

But the Montreal-based software business’s loss widened to US$114.5-million in the quarter, or 77 U.S. cents per share, from US$42-million or 34 U.S. cents per share last year. But Lightspeed forecast a brighter next few years than some analysts did, with revenue of between US$740-million and US$-760-million over its next fiscal year, and an adjusted lost of US$35-million to US$40-million, equal to about 5 per cent of its revenue.

Lightspeed’s Toronto-listed shares experienced volatile trading after markets opened Thursday, at times seeing jumps of up to 4 per cent, but shares were down 0.42 per cent to $25.91 shortly before 10 a.m. ET.

“Simply put, the pandemic was not our environment,” chief executive officer Jean Paul Chauvet said on an analyst conference call Thursday morning. “What we’ve seen in the last few months was a strong return to physical everywhere.”

The company has been rocked since last September as its share price collapsed by more than 80 per cent. That month, short-seller Spruce Point Capital Management alleged it had found inconsistencies in Lightspeed’s disclosures about its customer base, its potential market and revenue per customer. The company said Spruce Point’s allegations contained “inaccuracies and mischaracterizations,” but its share price soon began to plummet. The damage was exacerbated by both the broad selloff of tech stocks and the rise of the COVID-19 Omicron variant, which threw many jursidictions’ (and retailers’) planned reopening plans into disarray.

Chief executive officer Dax Dasilva stepped down last February, four months after the short-seller report and 17 years after he first founded the company, becoming executive chairman as its president, Mr. Chauvet, took over the top job.

Investors have sent Lightspeed shares climbing in recent days, with shares up 28 per cent from the company’s year-to-date low of $20.52 on May 11 to $26.02 on the Toronto Stock Exchange at Wednesday’s close.

Following a pile of acquisitions in recent years, Lightspeed has been integrating its services for retailers and restaurants into one-stop-shop platforms since late last year, combining longtime services such as point-of-sale software with e-commerce offerings such as inventory management.

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