Lightspeed Announces First Quarter 2025 Financial Results and Raises Adjusted EBITDA Outlook for Fiscal 2025

Total revenue of $266.1 million grew 27% year-over-year and exceeded outlook

Net loss improved to ($35.0) million and positive Adjusted EBITDA¹ of $10.2 million exceeded the $7 million outlook

GPV as a percentage of GTV was 36% in the quarter, up from 22% in the prior year

Quarterly ARPU² grew 31% year-over-year to a record ~$502 

Lightspeed repurchased ~2.7 million shares during the quarter for ~$40 million

Lightspeed reports in US dollars and in accordance with IFRS.

Lightspeed Commerce Inc., today announced financial results for the three months ended June 30, 2024. Lightspeed is the unified POS and payments platform for ambitious entrepreneurs to accelerate growth, provide the best customer experiences and become a go-to destination in their space.

“This was my first full quarter returning as Lightspeed’s CEO and I am thrilled to see the volume of capabilities we are releasing for our customers,” said Dax Dasilva, Founder and CEO. “Lightspeed continues to distinguish itself with advanced inventory management and B2B functionality that we believe no other retail platform can match and in hospitality we are preparing to deliver never-before-seen levels of productivity improvement to streamline restaurant operations.”

“Fiscal 2025 is off to a great start with first quarter revenues and Adjusted EBITDA exceeding outlook,” said Asha Bakshani, CFO. “We have spent the last year expanding payments adoption and right-sizing our cost structure and that is reflected in our results today. We are now turning our focus to accelerating growth in our software business so that we can continue to pursue our goal of profitable growth.”

First Quarter Financial Highlights

(All comparisons are relative to the three-month period ended June 30, 2023 unless otherwise stated):

• Total revenue of $266.1 million, an increase of 27% year-over-year.
• Transaction-based revenue of $174.1 million, an increase of 44% year-over-year.
• Subscription revenue of $83.3 million, an increase of 6% year-over-year.
• Net loss of ($35.0) million, or ($0.23) per share, as compared to a net loss of ($48.7) million, or ($0.32) per share and an Adjusted Income¹ of $16.1 million, or $0.10 per share¹ as compared to an Adjusted Loss¹ of ($2.2) million, or ($0.01) per share¹.
• Adjusted EBITDA¹ of $10.2 million versus Adjusted EBITDA¹ loss of ($7.0) million.
• Under its Normal Course Issuer Bid, Lightspeed repurchased and cancelled 2,673,926 of its own shares for a total consideration, including transaction costs, of $39.9 million.
• As at June 30, 2024, Lightspeed had $673.9 million in cash and cash equivalents.

First Quarter Operational Highlights

• Lightspeed delivered several new product releases in the quarter including:
  • Omnichannel Loyalty Program for Lightspeed merchants allows consumers to earn and redeem loyalty credits both in-store and online, all managed from the merchant’s POS.
  • Landed Costs incorporates the full cost of an item including shipping and duties, allowing merchants to better price their offerings and making accounting reconciliation easier.
  • Product Bin Locations allows merchants to identify where products are stored within their warehouses or storage areas right from the POS, allowing employees to quickly find, pack, ship and sell orders.
  • Improvements to inventory management and auditing on both mobile and desktop devices allow retailers to streamline their inventory management approach by recording stock adjustments where and when they find them.
  • A new product reviews feature allows merchants to automatically collect, manage, and promote customer reviews.
  • AI powered photo enhancements greatly improve product photos for Lightspeed e-commerce sites which can help boost product sales.
  • Over 12,000 pet products added to the Supplier Network — from brands such as YETI and Farmina, our pet merchants can now scan in or type a product name and automatically upload descriptions and images into their POS.
  • Enhancements to NuORDER Assortments including new B2B capabilities, version histories, and roles for sharing assortments with brand partners.
  • Tableside with Tap to Pay launched for Lightspeed Restaurants in the UK and Canada and Tap to Pay on iPhone launched in France and Australia.
  • Delivery partnership with Uber Direct and Uber Eats, making it easier for merchants to reach more customers.

• ARPU^2,[3] increased to ~$502 from ~$383 in the same quarter last year representing an increase of 31% driven by our focus on our unified POS and payments offering and high GTV customer adoption.
  
  
• Gross profit of $108.2 million an increase of 23% year over year. Overall gross margin was 41%, compared to 42% in the same quarter last year, reflecting a higher portion of customers adopting Lightspeed Payments. Subscription gross margins grew to 79% in the quarter from 75% in the same quarter last year driven by a dedicated effort to controlling costs and improved overall efficiencies. Transaction-based gross margins were 26%, consistent with last year with Lightspeed Capital helping to offset the declines in referral fees.
  
  
• GTV generated by Lightspeed’s flagship platforms increased by 24% compared to the same period last year, demonstrating that for its ideal customer profile and with its flagship products, Lightspeed continues to gain traction. Total GTV³ was $23.6 billion, up 1% year-over-year.
  
  
• An increasing portion of GTV is being processed through the Company’s payments solutions. GPV³ increased 64% to $8.4 billion in the quarter from $5.1 billion in the same period last year, largely due to the Company’s unified POS and payments initiatives during Fiscal 2024.
  
  
• Customer Locations with GTV exceeding $500,000/year[4] and $1 million/year⁴ both increased 4% year-over-year.
  
  
• Lightspeed Capital showed strong growth with revenue increasing 388% year-over-year.

• Notable customer wins include:
  
  • Google’s GBike, with three locations across Google’s California campus, signed onto Lightspeed Retail to power their bike shops;
  • Horkans in Ireland with 17 locations across three brands recently adopted Lightspeed Retail;
  • Karavel Shoes in Texas joined Lightspeed Retail to experience the value of a unified software and payment solution for their inventory tracking needs;
  • Northgate Resorts with over 20 locations across the U.S. signed up for Lightspeed Restaurant to manage their sophisticated multi-location needs;
  • Foodmaker, the health food restaurant group with over 20 locations in Europe chose Lightspeed Restaurant to handle their complex multi-location operations;
  • Dineen Coffee, a boutique coffeehouse in Toronto with five locations has chosen Lightspeed Restaurant; and
  • Tommy Hilfiger, Calvin Klein and luxury Swiss footwear brand Bally were part of dozens of new brands that were added to our Supplier Network.
    
    
• After the quarter, Lightspeed published its third annual Sustainability Report. Key highlights include: planting more than 1.8 million trees through Lightspeed’s Carbon Friendly Dining initiative; rolling out Lightspeed Capital to more countries including France, the Netherlands, Germany and Belgium to open up more ways for independent merchants to access capital; and improving representation of women in Lightspeed’s leadership where 50% of Lightspeed’s executive officer positions are held by women.

Financial Outlook⁵

The following outlook supersedes all prior statements made by the Company and is based on current expectations.

Lightspeed continues to remain confident that total revenue growth for the full fiscal year will be at least 20%. The Company expects its initiatives aimed at increasing subscription revenue growth, such as outbound sales, price increases, and account managers transitioning back to selling software, to gain momentum and benefit the second half of Fiscal 2025. Additionally, for the full year, Lightspeed is increasing its outlook for Adjusted EBITDA profitability given better than expected results from various cost saving initiatives.

For the second quarter, we will likely see similar trends to Lightspeed’s first quarter, with sales growth coming predominately from transaction-based revenue as we continue to expand adoption of the Company’s payments and capital offerings. For the second quarter’s year-over-year growth, the Company is lapping a significant revenue uplift due to the surge of Unified Payments customers becoming live last year. Furthermore, our initiatives aimed at growing software sales will only partially impact the upcoming quarter. As a result, the Company’s outlook is as follows:

Second Quarter 2025

• Revenue of approximately $270 million to $275 million.
  
  
• Adjusted EBITDA¹ of approximately $12 million.

Fiscal 2025

• Revenue growth of at least 20%.
  
  
• Adjusted EBITDA¹ of a minimum of $45 million.

Conference Call and Webcast Information

Lightspeed will host a conference call and webcast to discuss the Company’s financial results at 8:00 am ET on Thursday, August 1, 2024. To access the telephonic version of the conference call, visit https://registrations.events/direct/Q4I74316633. After registering, instructions will be shared on how to join the call including dial-in information as well as a unique passcode and registrant ID. At the time of the call, registered participants will dial in using the numbers from the confirmation email, and upon entering their unique passcode and ID, will be entered directly into the conference. Alternatively, the webcast will be available live on the Investors section of the Company’s website at https://investors.lightspeedhq.com.

Among other things, Lightspeed will discuss quarterly results, financial outlook and trends in its customer base on the conference call and webcast, and related materials will be made available on the Company’s website at https://investors.lightspeedhq.com. Investors should carefully review the factors, assumptions and uncertainties included in such related materials.

An audio replay of the call will also be available to investors beginning at approximately 11:00 a.m. Eastern Time on August 1, 2024 until 11:59 p.m. Eastern Time on August 8, 2024, by dialing 800.770.2030 for the U.S. or Canada, or 647.362.9199 for international callers and providing conference ID 74316. In addition, an archived webcast will be available on the Investors section of the Company’s website at https://investors.lightspeedhq.com.

Lightspeed’s unaudited condensed interim consolidated financial statements and management’s discussion and analysis for the three months ended June 30, 2024 are available on Lightspeed’s website at https://investors.lightspeedhq.com and will be filed on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov.

Financial Outlook Assumptions

When calculating the Adjusted EBITDA included in our financial outlook for the quarter ending September 30, 2024 and full year ending March 31, 2025, we considered IFRS measures including revenues, direct cost of revenues, and operating expenses. Our financial outlook is based on a number of assumptions, including assumptions related to inflation, changes in interest rates, consumer spending, foreign exchange rates and other macroeconomic conditions; that the jurisdictions in which Lightspeed has significant operations do not impose strict measures like those put in place in response to pandemics like the COVID-19 pandemic; requests for subscription pauses and churn rates owing to business failures remain in line with planned levels; our Customer Location count remaining in line with our planned levels (particularly in higher GTV cohorts); quarterly subscription revenue growth gradually ramping up throughout the year to 10-15% growth; revenue streams resulting from certain partner referrals remaining in line with our expectations (particularly in light of our decision to unify our POS and payments solutions, which payments solutions have in the past and may in the future, in some instances, be perceived by certain referral partners to be competing with their own solutions); customers adopting our payments solutions having an average GTV at our planned levels; continued uptake of our payments solutions in line with our expectations in connection with our ongoing efforts to sell our POS and payments solutions as one unified platform; gross margins reflecting a trend towards more transaction-based revenue in our revenue mix; our ability to price our payments solutions in line with our expectations and to achieve suitable margins and to execute on more optimized pricing structures; our ability to manage default risks of our merchant cash advances in line with our expectations; seasonal trends of our key verticals being in line with our expectations and the resulting impact on our GTV and transaction-based revenues; continued success in module adoption expansion throughout our customer base; our ability to selectively pursue strategic opportunities and derive the benefits we expect from the acquisitions we have completed including expected synergies resulting from the prioritization of our flagship Lightspeed Retail and Lightspeed Restaurant offerings; market acceptance and adoption of our flagship offerings, including migration of existing customers to our flagship offerings; our ability to attract and retain key personnel required to achieve our plans; our ability to execute our succession planning; our expectations regarding the costs, timing and impact of our reorganization and other cost reduction initiatives; our ability to manage customer churn; and our ability to manage customer discount requests. Our financial outlook does not give effect to the potential impact of acquisitions that may be announced or closed after the date hereof. Our financial outlook, including the various underlying assumptions, constitutes forward-looking information and should be read in conjunction with the cautionary statement on forward-looking information below. Many factors may cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by such forward-looking information, including the risks and uncertainties related to: macroeconomic factors affecting small and medium-sized businesses, including inflation, changes in interest rates and consumer spending trends; instability in the banking sector; exchange rate fluctuations; any pandemic or global health crisis; the Russian invasion of Ukraine and reactions thereto; the Israel-Hamas war and reactions thereto; uncertainty and changes as a result of elections in the U.S. and Europe; our inability to attract and retain customers, including among high GTV customers; our inability to increase customer sales; our inability to implement our growth strategy; our inability to continue to increase adoption of our payments solutions, including our initiative to sell our POS and payments solutions as one unified platform; our ability to successfully execute our pricing and packaging initiatives; risks relating to our merchant cash advance program; our ability to continue offering merchant cash advances and scaling our merchant cash advance program in line with our expectations; our reliance on a small number of cloud service suppliers and suppliers for parts of the technology in our payments solutions; our ability to manage and maintain integrations between our platform and certain third-party platforms; our ability to maintain sufficient levels of hardware inventory; our inability to improve and enhance the functionality, performance, reliability, design, security and scalability of our platform; our ability to prevent and manage information security breaches or other cyber-security threats; our ability to compete against competitors; strategic relations with third parties; our reliance on integration of third-party payment processing solutions; compatibility of our solutions with third-party applications and systems; changes to technologies on which our platform is reliant; our ability to effectively incorporate artificial intelligence solutions into our business and operations; our ability to obtain, maintain and protect our intellectual property; risks relating to international operations, sales and use of our platform in various countries; our liquidity and capital resources; pending and threatened litigation and regulatory compliance; changes in tax laws and their application; our ability to expand our sales, marketing and support capability and capacity; our ability to execute on our reorganization and cost reduction initiatives; our ability to successfully make future investments in our business through capital expenditures; our ability to successfully execute our capital allocation strategies; and maintaining our customer service levels and reputation. The purpose of the forward-looking information is to provide the reader with a description of management’s expectations regarding our financial performance and may not be appropriate for other purposes.