Total revenue of $209.1 million grew 20% YoY, compared to
previously-established outlook of $195 - $200
million
Gross Payment Volume of $5.1 billion increased 56%
YoY on total GTV of $23.4
billion
ARPU1 of
approximately $383 increased
20% from the same quarter last year
Adjusted EBITDA loss
significantly lower than the previously-established
outlook
Lightspeed remains on track for Adjusted
EBITDA break even or better2 in fiscal
2024
Lightspeed reports in US dollars and in accordance with
IFRS.
MONTREAL, Aug. 3, 2023
/PRNewswire/ - Lightspeed Commerce Inc. ("Lightspeed" or the
"Company") (TSX: LSPD) (NYSE: LSPD), the unified POS and payments
platform, today announced financial results for the three months
ended June 30, 2023.
The culmination of One Lightspeed – bringing our flagship
platforms to market – has allowed the Company to hone its focus in
this "year of execution," including targeting high GTV customers,
accelerating product innovation, and growing revenue from financial
services all while pursuing Adjusted EBITDA break even or
better2 for the full fiscal year.
"Although it is still early days for Unified Payments, many
customers who have adopted Lightspeed Payments are thrilled with
the results, which is encouraging as we continue to roll out this
initiative globally," said JP Chauvet, CEO of Lightspeed. "Our
customers are recognizing that, unlike their experience on legacy
systems and outdated terminals, the Lightspeed POS and Payments
platform saves them time and money, allowing them to elevate the
experience they provide to their customers."
"We switched to Lightspeed Payments because with Lightspeed
we're saving a lot of money in fees and it has made the business
much faster, cheaper and easier to operate," explained Melissa Joy Manning, owner and CEO of
Melissa Joy Manning jewelry. "We're
also saving a lot of time in the reconciliation process."
"This quarter saw several promising trends continue, all of
which are worth highlighting," said Asha
Bakshani, CFO of Lightspeed. "Gross Payments Volume showed
substantial growth while customer acquisition costs and churn
remained in-line with previous quarters. Given this strong start to
the fiscal year, I believe we are on course to deliver Adjusted
EBITDA break even or better in fiscal 20242 –
establishing a strong foundation for durable long-term growth."
First Quarter Financial Highlights
(All
comparisons are relative to the three-month period ended
June 30, 2022 unless otherwise stated):
- Total revenue of $209.1 million,
an increase of 20%
- Transaction-based revenue of $121.0
million, an increase of 32%
- Subscription revenue of $78.7
million, an increase of 7%
- Subscription and transaction-based revenue grew 21%
year-over-year to $199.7
million.
- Net loss of ($48.7) million,
representing (23.3)% of revenue or ($0.32) per share, as compared to a net loss of
($100.8) million, (58.0)% or
($0.68) per share. After adjusting
the net loss by $46.5 million for
certain items including share-based compensation, amortization of
intangible assets and acquisition-related compensation, the Company
delivered an Adjusted Loss[3] of ($2.2)
million, or ($0.01) per
share3 versus ($17.6)
million, or ($0.12) per share
in 2022
- Adjusted EBITDA3 loss of ($7.0) million, representing (3.4)% of
revenue3 versus its previously established Adjusted
EBITDA3 loss outlook of ($10.0)
million and Adjusted EBITDA3 loss of ($15.6) million or (9.0)% in 2022
- As at June 30, 2023, Lightspeed
had $780.3 million in cash and cash
equivalents
|
__________________________________
|
1 Excluding
Customer Locations attributable to the Ecwid eCommerce standalone
product.
|
2 Financial
outlook, please see the section entitled "Financial Outlook
Assumptions" in this press release for the assumptions, risks and
uncertainties related to Lightspeed's outlook, and the section
entitled "Forward Looking Statements".
|
3 Non-IFRS
measure or ratio. See the section entitled "None-IFRS Measures and
Ratios" and the reconciliation to the most directly comparable IFRS
measure or ratio included in this press release.
|
Operational Highlights
- Lightspeed delivered several new product features in the
quarter. In Europe, Lightspeed
launched its Advanced Insights module, an analytics tool that
leverages machine learning to provide unique insights for
Lightspeed Restaurant customers while respecting compliance with
the General Data Protection Regulation. Lightspeed Capital expanded
in new regions including Australia
and Quebec, while self-serve
Capital was released for all eligible users in Canada. Within our B2B offering, Lightspeed
released NuORDER Assortments for Brands in North America and Europe, enabling brands to visualize
assortments in the cloud, optimize inventory allocation and
identify merchandising gaps. On the Unified Payments front,
next-day-payouts are now available to many retail customers using
Lightspeed Payments globally.
- Lightspeed's customer base continued to shift towards higher
GTV Customer Locations. This resulted in the number of Customer
Locations4 with GTV of over $500,000/year5 increasing by 10%
year-over-year, and Customer Locations with over $1 million/year5 in GTV increasing by
11% year-over-year. Conversely, the number of Customer Locations
processing under $200,000/year5 in GTV decreased on a
year-over-year basis. Customer Locations with GTV of over
$500,000/year5 have
substantially lower risk of churn and higher lifetime value for
Lightspeed compared to lower GTV/year customers.
- For the quarter, Lightspeed's customers processed
GTV4 of $23.4 billion, up
6% year-over-year. Omni-channel retail and hospitality GTV both
grew at approximately the same rates.
- An increasing portion of GTV is being processed through the
Company's payments solutions. GPV4 increased 56% to
$5.1 billion from $3.3 billion in the same period last year.
- The merchant cash advances balance as of June 30, 2023 increased by $11.1 million, or 37%, from the previous
quarter.
- The Company's global scale and impact was highlighted this
quarter as Lightspeed announced it had served over 1 billion meals
and facilitated over 300 million dining experiences in the twelve
month period ended May 2023.
- Notable customer wins include: The Spice & Tea
Exchange, a US-based fine spice and herb store which selected
Lightspeed's Retail offering for their over 80 franchises; UK-based
luxury fragrance and skin care provider, Bath House, with 6
locations has also signed up for Lightspeed Retail; Chef
Teo Paul's restaurants, Côte de
Boeuf, Hearts Tavern, Le Tambour Tavern and Michelin
recommended Union, have chosen Lightspeed Restaurant to
support their expansion; March First, with 4 brewery and
tasting room locations in Cincinnati is adopting the Lightspeed
Restaurant offering; the six location Kickon Group from
Australia has also joined with
Lightspeed Restaurant; and Cove Cay Golf Course in
Florida has signed up for the
Lightspeed Golf, Retail, and Restaurant trifecta.
- After the quarter, Lightspeed published its second annual
Sustainability Report showcasing how customers leverage Lightspeed
technology to transform the world for the better and build vibrant,
diverse communities. Key highlights include: the planting of 1.4
million trees through Lightspeed's Carbon Free Dining initiative;
working with travel partners to offset over 2 million kilograms of
CO2 emissions from business travel; aligning employee
wealth creation with the interests of shareholders with
approximately 80% of all Fiscal 2023 equity incentive grants being
to non-insiders; fostering an inclusive workplace where 86% of
Lightspeed's employees reported they feel they can be their
authentic self at work; and making strides to increase gender
diversity throughout the Company, including achieving approximately
33% representation of women at the executive leadership level.
_________________________________________
|
4 Key
Performance Indicator. See "Key Performance Indicators".
|
5 Excluding
Customer Locations and GTV attributable to the Ecwid eCommerce
standalone product, Lightspeed Golf and NuORDER by Lightspeed
product. A Customer Location's GTV per year is calculated by
annualizing the GTV for the months in which the Customer Location
is actively processing in the last twelve months.
|
Financial Outlook6
The following outlook supersedes all prior statements made by
the Company and is based on current expectations.
The Company's outlook reflects caution on the near term results
given the economic climate and its impact on the Company's end
markets as well as uncertainty surrounding the impact and timing of
the Unified Payments initiative. The Company chose to exercise
caution in regards to GTV growth assumptions as it anticipates that
many consumers have yet to experience the full impact of rising
interest rates. Additionally, Lightspeed expects that revenue
growth and Adjusted EBITDA performance will be stronger in the
second half of the fiscal year.
_____________________________
|
6 The
financial outlook is fully qualified and based on a number of
assumptions and subject to a number of risks described under the
heading "Forward-Looking Statements" and "Financial Outlook
Assumptions" of this press release.
|
Factoring this into consideration, the Company's outlook for the
full fiscal year and the second quarter is as follows:
Second Quarter 2024
- Revenue of approximately $210
million - $215 million.
- Adjusted EBITDA loss3 of approximately $4 million.
Fiscal 2024
- Revenue of approximately $875
million - $900 million.
- Break even or better Adjusted EBITDA3 inclusive of
the costs incurred for the unified payments initiative.
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 3, 2023. To access the
telephonic version of the conference call, visit
https://conferencingportals.com/event/rPYvDbSx. 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 3, 2023
until 11:59 p.m. Eastern Time on
August 10, 2023, 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, 2023 are
available on Lightspeed's website at
https://investors.lightspeedhq.com and will be filed on SEDAR at
www.sedarplus.ca and on EDGAR at www.sec.gov.
Financial Outlook Assumptions
When calculating the Adjusted EBITDA included in our financial
outlook for the second quarter and full year ended March 31, 2024, we considered IFRS measures
including revenue, direct cost of revenue, 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
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); 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 or above that of our
planned levels; accelerated uptake of our payments solutions as
compared to prior rates and expectations in connection with our
decision to sell our POS and payments solutions as one unified
platform; gross margins reflecting this trend in revenue mix; our
ability to price our payments solutions in line with our
expectations and to achieve suitable margins; our ability to
achieve success in the continued expansion of our payments
solutions, including as part of our initiative to sell our POS and
payments solutions as one unified platform; historical seasonal
trends return to certain of our key verticals and impact our GTV
and transaction-based revenues; continued success in module
adoption expansion throughout our customer base; our ability to
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; our ability to attract and retain key personnel
required to achieve our plans; our expectations regarding the
costs, timing and impact of our cost reduction initiatives; our
ability to manage customer churn; and our ability to manage
customer discount and payment deferral 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 such as the COVID-19
pandemic; the Russian invasion of Ukraine and reactions thereto; our inability
to attract and retain customers; our inability to increase customer
sales; our inability to implement our growth strategy; our
inability to continue the acceleration of the global rollout and
adoption of our payments solutions, including our initiative to
sell our POS and payments solutions as one unified platform; risks
relating to our merchant cash advance program and our ability to
continue offering merchant cash advances 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 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 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 cost
reduction initiatives; 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.
About Lightspeed
Powering the businesses that are the backbone of the global
economy, Lightspeed's one-stop commerce platform helps merchants
innovate to simplify, scale and provide exceptional customer
experiences. Our cloud commerce solution transforms and unifies
online and physical operations, multichannel sales, expansion to
new locations, global payments, financial solutions and connection
to supplier networks.
Founded in Montréal, Canada in
2005, Lightspeed is dual-listed on the New York Stock Exchange
(NYSE: LSPD) and Toronto Stock Exchange (TSX: LSPD). With teams
across North America, Europe and Asia
Pacific, the company serves retail, hospitality and golf
businesses in over 100 countries.
For more information, please visit: www.lightspeedhq.com
On social media: LinkedIn, Facebook, Instagram, YouTube, and
Twitter
Non-IFRS Measures and Ratios
The information presented herein includes certain non-IFRS
financial measures such as "Adjusted EBITDA", "Adjusted Loss",
"Adjusted Cash Flows Used in Operating Activities", "Non-IFRS gross
profit", "Non-IFRS general and administrative expenses", "Non-IFRS
research and development expenses", and "Non-IFRS sales and
marketing expenses" and certain non-IFRS ratios such as "Adjusted
EBITDA as a percentage of revenue", "Adjusted Loss per Share -
Basic and Diluted", "Non-IFRS gross profit as a percentage of
revenue", "Non-IFRS general and administrative expenses as a
percentage of revenue", "Non-IFRS research and development expenses
as a percentage of revenue", and "Non-IFRS sales and marketing
expenses as a percentage of revenue".These measures and ratios are
not recognized measures and ratios under IFRS and do not have a
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures and ratios presented by other
companies. Rather, these measures and ratios are provided as
additional information to complement those IFRS measures and ratios
by providing further understanding of our results of operations
from management's perspective. Accordingly, these measures and
ratios should not be considered in isolation nor as a substitute
for analysis of our financial information reported under IFRS.
These non-IFRS measures and ratios are used to provide investors
with supplemental measures and ratios of our operating performance
and thus highlight trends in our core business that may not
otherwise be apparent when relying solely on IFRS measures and
ratios. We also believe that securities analysts, investors and
other interested parties frequently use non-IFRS measures and
ratios in the evaluation of issuers. Our management also uses
non-IFRS measures and ratios in order to facilitate operating
performance comparisons from period to period, to prepare operating
budgets and forecasts and to determine components of management
compensation.
"Adjusted EBITDA" is defined as net
loss excluding interest, taxes, depreciation and amortization, or
EBITDA, as adjusted for share-based compensation and related
payroll taxes, compensation expenses relating to acquisitions
completed, foreign exchange gains and losses, transaction-related
costs, restructuring, litigation provisions and goodwill
impairment. We believe that Adjusted EBITDA provides a useful
supplemental measure of the Company's operating performance, as it
helps illustrate underlying trends in our business that could
otherwise be masked by the effect of the income or expenses that
are not indicative of the core operating performance of our
business.
"Adjusted EBITDA as a percentage of
revenue" is calculated by dividing our Adjusted EBITDA by
our total revenue. We believe that Adjusted EBITDA as a percentage
of revenue provides a useful supplemental measure of the Company's
operating performance, as it helps illustrate underlying trends in
our business that could otherwise be masked by the effect of the
income or expenses that are not indicative of the core operating
performance of our business.
"Adjusted Loss" is defined as net loss
excluding amortization of intangibles, as adjusted for share-based
compensation and related payroll taxes, compensation expenses
relating to acquisitions completed, transaction-related costs,
restructuring, litigation provisions, deferred income taxes and
goodwill impairment. We use this measure as we believe excluding
amortization of intangibles and certain other non-cash or
non-operational expenditures provides a helpful supplementary
indicator of our business performance as it allows for more
accurate comparability across periods.
"Adjusted Loss per Share - Basic and
Diluted" is defined as Adjusted Loss divided by the weighted
average number of common shares (basic and diluted). We use
Adjusted Loss per Share - Basic and Diluted to provide a helpful
supplemental indicator of the performance of our business on a per
share (basic and diluted) basis.
"Adjusted Cash Flows Used in Operating
Activities" is defined as cash flows used in operating
activities as adjusted for the payment of payroll taxes on
share-based compensation, the payment of compensation expenses
relating to acquisitions completed, the payment of
transaction-related costs, the payment of restructuring costs, the
payment of amounts related to litigation provisions net of amounts
received as insurance and indemnification proceeds and the payment
of amounts related to capitalized internal development costs. We
use this measure as we believe including or excluding certain
inflows and outflows provides a helpful supplemental indicator to
investors on our business performance in regard to the Company's
ability to generate cash flows.
"Non-IFRS gross profit" is defined as
gross profit as adjusted for share-based compensation and related
payroll taxes. We use this measure as we believe excluding
share-based compensation and related payroll taxes provides a
helpful supplemental indicator to investors on our business
performance in regard to the Company's performance and
profitability.
"Non-IFRS gross profit as a percentage of
revenue" is calculated by dividing our Non-IFRS gross profit by
our total revenue. We use this ratio as we believe excluding
share-based compensation and related payroll taxes provides a
helpful supplemental indicator to investors on our business
performance in regard to the Company's performance and
profitability.
"Non-IFRS general and administrative
expenses" is defined as general and administrative expenses as
adjusted for share-based compensation and related payroll taxes,
transaction-related costs and litigation provisions. We use this
measure as we believe excluding certain charges provides a helpful
supplemental indicator to investors on our operating
expenditures.
"Non-IFRS general and administrative expenses
as a percentage of revenue" is calculated by dividing our
Non-IFRS general and administrative expenses by our total revenue.
We use this ratio as we believe excluding certain charges provides
a helpful supplemental indicator to investors on our operating
expenditures.
"Non-IFRS research and development
expenses" is defined as research and development expenses
as adjusted for share-based compensation and related payroll taxes.
We use this measure as we believe excluding share-based
compensation and related payroll taxes provides a helpful
supplemental indicator to investors on our operating
expenditures.
"Non-IFRS research and development expenses
as a percentage of revenue" is calculated by dividing our
Non-IFRS research and development expenses by our total revenue. We
use this ratio as we believe excluding share-based compensation and
related payroll taxes provides a helpful supplemental indicator to
investors on our operating expenditures.
"Non-IFRS sales and marketing
expenses" is defined as sales and marketing expenses as
adjusted for share-based compensation and related payroll taxes and
transaction-related costs. We use this measure as we believe
excluding share-based compensation and related payroll taxes and
transaction-related costs provides a helpful supplemental indicator
to investors on our operating expenditures.
"Non-IFRS sales and marketing expenses as a
percentage of revenue" is calculated by dividing our
Non-IFRS sales and marketing expenses by our total revenue. We use
this ratio as we believe excluding share-based compensation and
related payroll taxes and transaction-related costs provides a
helpful supplemental indicator to investors on our operating
expenditures.
See the financial tables below for a
reconciliation of the non-IFRS financial measures and ratios.
Key Performance Indicators
We monitor the following key performance indicators to help us
evaluate our business, measure our performance, identify trends
affecting our business, formulate business plans and make strategic
decisions. These key performance indicators are also used to
provide investors with supplemental measures of our operating
performance and thus highlight trends in our core business that may
not otherwise be apparent when relying solely on IFRS measures and
ratios. We also believe that securities analysts, investors and
other interested parties frequently use industry metrics in the
evaluation of issuers. Our key performance indicators may be
calculated in a manner different than similar key performance
indicators used by other companies.
Average Revenue Per
User. "Average Revenue Per User" or "ARPU"
represents the total subscription revenue and transaction-based
revenue of the Company in the period divided by the number of
Customer Locations of the Company in the period. We use this
measure as we believe it provides a helpful supplemental indicator
of our progress in growing the revenue that we derive from our
customer base. For greater clarity, the number of Customer
Locations of the Company in the period is calculated by taking the
average number of Customer Locations throughout the period.
Customer Locations. "Customer
Location" means a billing merchant location for which the
term of services have not ended, or with which we are negotiating a
renewal contract, and, in the case of NuORDER, a brand with a
direct or indirect paid subscription for which the terms of
services have not ended or in respect of which we are negotiating a
subscription renewal. A single unique customer can have multiple
Customer Locations including physical and eCommerce sites and in
the case of NuORDER, multiple subscriptions. We use this measure as
we believe that our ability to increase the number of Customer
Locations with a high GTV per year served by our platform is an
indicator of our success in terms of market penetration and growth
of our business. A Customer Location's GTV per year is calculated
by annualizing the GTV for the months in which the Customer
Location was actively processing in the last twelve months.
Gross Payment Volume. "Gross Payment Volume"
or "GPV" means the total dollar value of transactions
processed, excluding amounts processed through the NuORDER
solution, in the period through our payments solutions in respect
of which we act as the principal in the arrangement with the
customer, net of refunds, inclusive of shipping and handling, duty
and value-added taxes. We use this measure as we believe that
growth in our GPV demonstrates the extent to which we have scaled
our payments solutions. As the number of Customer Locations using
our payments solutions grows, particularly those with a high GTV,
we will generate more GPV and see higher transaction-based revenue.
We have excluded amounts processed through the NuORDER solution
from our GPV because they represent business-to-business volume
rather than business-to-consumer volume and we do not currently
have a robust payments solution for business-to-business
volume.
Gross Transaction Volume. "Gross
Transaction Volume" or "GTV" means the total dollar
value of transactions processed through our cloud-based
software-as-a-service platform, excluding amounts processed through
the NuORDER solution, in the period, net of refunds, inclusive of
shipping and handling, duty and value-added taxes. We use this
measure as we believe GTV is an indicator of the success of our
customers and the strength of our platform. GTV does not represent
revenue earned by us. We have excluded amounts processed through
the NuORDER solution from our GTV because they represent
business-to-business volume rather than business-to-consumer volume
and we do not currently have a robust payments solution for
business-to-business volume.
Forward-Looking Statements
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
information") within the meaning of applicable securities laws.
Forward looking information may relate to our financial outlook
(including revenue and Adjusted EBITDA), and anticipated events or
results and may include information regarding our financial
position, business strategy, growth strategies, addressable
markets, budgets, operations, financial results, taxes, dividend
policy, plans and objectives. Particularly, information regarding:
our expectations of future results, performance, achievements,
prospects or opportunities or the markets in which we operate;
macroeconomic conditions such as increasing inflationary pressures,
interest rates, instability in the banking sector and global
economic uncertainty; our expectations regarding the costs, timing
and impact of our cost reduction initiatives; events such as the
Russian Invasion of Ukraine; and
expectations regarding industry and consumer spending trends, our
growth rates, the achievement of advances in and expansion of our
platform, our revenue and the revenue generation potential of our
payment-related and other solutions, the impact of our decision to
sell our POS and payments solutions as one unified platform, our
gross margins and future profitability, acquisition outcomes and
synergies, the impact of pending and threatened litigation, the
impact of foreign currency fluctuations on our results of
operations, our business plans and strategies and our competitive
position in our industry, is forward-looking information.
In some cases, forward-looking information can be identified by
the use of forward-looking terminology such as "plans", "targets",
"expects" or "does not expect", "is expected", "an opportunity
exists", "budget", "scheduled", "estimates", "suggests", "outlook",
"forecasts", "projection", "prospects", "strategy", "intends",
"anticipates" or "does not anticipate", "believes", or variations
of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might", "will", "will
be taken", "occur" or "be achieved", the negative of these terms
and similar terminology. In addition, any statements that refer to
expectations, intentions, projections or other characterizations of
future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not
historical facts but instead represent management's expectations,
estimates and projections regarding future events or
circumstances.
Forward-looking information is necessarily based on a number of
opinions, estimates and assumptions that we considered appropriate
and reasonable as of the date of such forward-looking information.
Forward-looking information is subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause the
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking information, including the risk factors identified
in our most recent Management's Discussion and Analysis of
Financial Condition and Results of Operations, under "Risk Factors"
in our most recent Annual Information Form, and in our other
filings with the Canadian securities regulatory authorities and the
U.S. Securities and Exchange Commission, all of which are available
under our profiles on SEDAR at www.sedarplus.ca and on EDGAR
at www.sec.gov.
Although we have attempted to identify important risk factors
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other risk
factors not presently known to us or that we presently believe are
not material that could also cause actual results or future events
to differ materially from those expressed in such forward-looking
information. You should not place undue reliance on forward-looking
information, which speaks only as of the date made. The
forward-looking information contained in this news release
represents our expectations as of the date of hereof (or as of the
date they are otherwise stated to be made), and are subject to
change after such date. However, we disclaim any intention or
obligation or undertaking to update or revise any forward-looking
information whether as a result of new information, future events
or otherwise, except as required under applicable securities laws.
All of the forward-looking information contained in this news
release is expressly qualified by the foregoing cautionary
statements.
Condensed Interim
Consolidated Statements of Loss and Comprehensive
Loss
(expressed in
thousands of US dollars, except number of shares and per share
amounts, unaudited)
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Three months ended
June 30,
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2023
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2022
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|
|
$
|
$
|
Revenues
|
|
|
|
Subscription
|
|
78,727
|
73,560
|
Transaction-based
|
|
120,970
|
91,524
|
Hardware and
other
|
|
9,389
|
8,798
|
|
|
|
|
Total
revenues
|
|
209,086
|
173,882
|
|
|
|
|
Direct cost of
revenues
|
|
|
|
Subscription
|
|
19,340
|
20,423
|
Transaction-based
|
|
89,019
|
62,901
|
Hardware and
other
|
|
12,822
|
13,033
|
|
|
|
|
Total cost of
revenues
|
|
121,181
|
96,357
|
|
|
|
|
Gross
profit
|
|
87,905
|
77,525
|
|
|
|
|
Operating
expenses
|
|
|
|
General and
administrative
|
|
24,944
|
30,239
|
Research and
development
|
|
34,035
|
35,636
|
Sales and
marketing
|
|
55,288
|
68,645
|
Depreciation of
property and equipment
|
|
1,457
|
1,221
|
Depreciation of
right-of-use assets
|
|
2,230
|
2,047
|
Foreign exchange
loss
|
|
671
|
443
|
Acquisition-related
compensation
|
|
2,545
|
17,103
|
Amortization of
intangible assets
|
|
24,505
|
25,876
|
Restructuring
|
|
472
|
1,207
|
|
|
|
|
Total operating
expenses
|
|
146,147
|
182,417
|
|
|
|
|
Operating
loss
|
|
(58,242)
|
(104,892)
|
|
|
|
|
Net interest
income
|
|
10,362
|
2,007
|
|
|
|
|
Loss before income
taxes
|
|
(47,880)
|
(102,885)
|
|
|
|
|
Income tax expense
(recovery)
|
|
|
|
Current
|
|
1,215
|
264
|
Deferred
|
|
(392)
|
(2,353)
|
|
|
|
|
Total income tax
expense (recovery)
|
|
823
|
(2,089)
|
|
|
|
|
Net
loss
|
|
(48,703)
|
(100,796)
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Items that may be
reclassified to net loss
|
|
|
|
Foreign currency
differences on translation of foreign operations
|
|
(600)
|
(8,833)
|
Change in net
unrealized gain (loss) on cash flow hedging instruments, net of
tax
|
|
978
|
(719)
|
|
|
|
|
Total other
comprehensive income (loss)
|
|
378
|
(9,552)
|
|
|
|
|
Total comprehensive
loss
|
|
(48,325)
|
(110,348)
|
|
|
|
|
Net loss per share –
basic and diluted
|
|
(0.32)
|
(0.68)
|
|
|
|
|
Weighted average
number of Common Shares – basic and diluted
|
|
152,523,457
|
148,973,294
|
Condensed Interim
Consolidated Balance Sheets
(expressed in
thousands of US dollars, unaudited)
|
|
|
|
|
|
|
As at
|
|
June 30,
2023
|
March 31,
2023
|
Assets
|
$
|
$
|
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
780,277
|
800,154
|
Trade and other
receivables
|
81,965
|
84,334
|
Inventories
|
14,649
|
12,839
|
Other current
assets
|
39,306
|
37,005
|
|
|
|
Total current
assets
|
916,197
|
934,332
|
|
|
|
Lease right-of-use
assets, net
|
18,991
|
20,973
|
Property and
equipment, net
|
19,094
|
19,491
|
Intangible assets,
net
|
289,192
|
311,450
|
Goodwill
|
1,350,070
|
1,350,645
|
Other long-term
assets
|
34,824
|
31,540
|
Deferred tax
assets
|
372
|
301
|
|
|
|
Total
assets
|
2,628,740
|
2,668,732
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
Accounts payable and
accrued liabilities
|
60,744
|
68,827
|
Lease
liabilities
|
6,770
|
6,617
|
Income taxes
payable
|
3,102
|
6,919
|
Deferred
revenue
|
67,474
|
68,094
|
|
|
|
Total current
liabilities
|
138,090
|
150,457
|
|
|
|
Deferred
revenue
|
1,283
|
1,226
|
Lease
liabilities
|
17,693
|
18,574
|
Other long-term
liabilities
|
1,170
|
1,026
|
|
|
|
Total
liabilities
|
158,236
|
171,283
|
|
|
|
Shareholders'
equity
|
|
|
Share
capital
|
4,320,976
|
4,298,683
|
Additional paid-in
capital
|
197,109
|
198,022
|
Accumulated other
comprehensive loss
|
(2,679)
|
(3,057)
|
Accumulated
deficit
|
(2,044,902)
|
(1,996,199)
|
|
|
|
Total shareholders'
equity
|
2,470,504
|
2,497,449
|
|
|
|
Total liabilities
and shareholders' equity
|
2,628,740
|
2,668,732
|
|
|
|
Condensed Interim
Consolidated Statements of Cash Flows
(expressed in
thousands of US dollars, unaudited)
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
2023
|
2022
|
Cash flows from
(used in) operating activities
|
$
|
$
|
Net loss
|
(48,703)
|
(100,796)
|
Items not affecting
cash and cash equivalents
|
|
|
Share-based
acquisition-related compensation
|
2,469
|
15,598
|
Amortization of
intangible assets
|
24,505
|
25,876
|
Depreciation of
property and equipment and lease right-of-use assets
|
3,687
|
3,268
|
Deferred income
taxes
|
(392)
|
(2,353)
|
Share-based
compensation expense
|
17,823
|
38,528
|
Unrealized foreign
exchange loss
|
322
|
254
|
(Increase)/decrease in
operating assets and increase/(decrease) in operating
liabilities
|
|
|
Trade and other
receivables
|
2,628
|
(4,921)
|
Inventories
|
(1,810)
|
(1,035)
|
Other
assets
|
(3,940)
|
1,931
|
Accounts payable and
accrued liabilities
|
(8,172)
|
(7,876)
|
Income taxes
payable
|
(3,817)
|
(75)
|
Deferred
revenue
|
(563)
|
220
|
Other long-term
liabilities
|
235
|
(26)
|
Net interest
income
|
(10,362)
|
(2,007)
|
|
|
|
Total operating
activities
|
(26,090)
|
(33,414)
|
|
|
|
Cash flows from
(used in) investing activities
|
|
|
Additions to property
and equipment
|
(1,070)
|
(3,080)
|
Additions to intangible
assets
|
(2,285)
|
(603)
|
Purchase of
investments
|
—
|
(820)
|
Interest
income
|
10,496
|
2,311
|
|
|
|
Total investing
activities
|
7,141
|
(2,192)
|
|
|
|
Cash flows from
(used in) financing activities
|
|
|
Proceeds from exercise
of stock options
|
1,217
|
552
|
Share issuance
costs
|
(76)
|
—
|
Payment of lease
liabilities net of incentives and movement in restricted lease
deposits
|
(2,066)
|
(2,092)
|
Financing
costs
|
—
|
(270)
|
|
|
|
Total financing
activities
|
(925)
|
(1,810)
|
|
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(3)
|
(1,449)
|
|
|
|
Net decrease in cash
and cash equivalents during the period
|
(19,877)
|
(38,865)
|
|
|
|
Cash and cash
equivalents – Beginning of period
|
800,154
|
953,654
|
|
|
|
Cash and cash
equivalents – End of period
|
780,277
|
914,789
|
|
|
|
Interest paid to
financial institutions
|
—
|
270
|
Income taxes
paid
|
5,067
|
11
|
Reconciliation
from IFRS to Non-IFRS Results
Adjusted
EBITDA
(expressed in
thousands of US dollars, except percentages,
unaudited)
|
|
|
|
|
|
Three months
ended
June
30,
|
|
|
|
|
|
2023
|
|
2022
|
|
$
|
|
$
|
|
|
|
|
Net
loss
|
(48,703)
|
|
(100,796)
|
Net loss as a
percentage of revenue
|
(23.3) %
|
|
(58.0) %
|
Share-based
compensation and related payroll taxes(1)
|
18,733
|
|
38,302
|
Depreciation and
amortization(2)
|
28,192
|
|
29,144
|
Foreign exchange
loss(3)
|
671
|
|
443
|
Net interest
income(2)
|
(10,362)
|
|
(2,007)
|
Acquisition-related
compensation(4)
|
2,545
|
|
17,103
|
Transaction-related
costs(5)
|
609
|
|
2,174
|
Restructuring(6)
|
472
|
|
1,207
|
Litigation
provisions(7)
|
9
|
|
918
|
Income tax expense
(recovery)
|
823
|
|
(2,089)
|
|
|
|
|
Adjusted
EBITDA
|
(7,011)
|
|
(15,601)
|
|
|
|
|
Adjusted EBITDA as a
percentage of revenue
|
(3.4) %
|
|
(9.0) %
|
|
|
(1)
|
These expenses
represent non-cash expenditures recognized in connection with
issued stock options and other awards under our equity incentive
plans to our employees and directors, and cash related payroll
taxes given that they are directly attributable to share-based
compensation; they can include estimates and are therefore subject
to change. For the three months ended June 30, 2023, share-based
compensation expense was $17,823 (June 2022 - expense of $38,528),
and related payroll taxes were an expense of $910 (June 2022 -
recovery of $226). These amounts are included in direct cost of
revenues, general and administrative expenses, research and
development expenses and sales and marketing expenses (see note 6
of the unaudited condensed interim consolidated financial
statements for additional details).
|
(2)
|
In connection with the
accounting standard IFRS 16 - Leases, for the three months ended
June 30, 2023, net loss includes depreciation of $2,230 related to
right-of-use assets, interest expense of $287 on lease liabilities,
and excludes an amount of $2,066 relating to rent expense ($2,047,
$271, and $2,092, respectively, for the three months ended June 30,
2022).
|
(3)
|
These non-cash losses
relate to foreign exchange translation.
|
(4)
|
These costs represent a
portion of the consideration paid to acquired businesses that is
contingent upon the ongoing employment obligations for certain key
personnel of such acquired businesses, and/or on certain
performance criteria being achieved.
|
(5)
|
These expenses relate
to professional, legal, consulting, accounting, advisory, and other
fees relating to our public offerings and acquisitions that would
otherwise not have been incurred. These costs are included in
general and administrative expenses and sales and marketing
expenses.
|
(6)
|
During the fiscal year
ended March 31, 2023, certain functions and the associated
management structure were reorganized to realize synergies and
ensure organizational agility. The expenses associated with this
reorganization were recorded as a restructuring charge.
|
(7)
|
These amounts represent
provisions taken and other costs, such as legal fees, incurred in
respect of certain litigation matters, net of amounts covered by
insurance and indemnifications. These amounts do not include
provisions taken and other costs incurred in respect of litigation
matters of a nature that we consider normal to our business. These
amounts are included in general and administrative
expenses.
|
Reconciliation
from IFRS to Non-IFRS Results (continued)
Adjusted Loss and
Adjusted Loss per Share - Basic and Diluted
(expressed in
thousands of US dollars, except number of shares and per share
amounts, unaudited)
|
|
|
|
|
|
Three months
ended
June
30,
|
|
|
|
|
|
2023
|
|
2022
|
|
$
|
|
$
|
|
|
|
|
Net
loss
|
(48,703)
|
|
(100,796)
|
Share-based
compensation and related payroll taxes(1)
|
18,733
|
|
38,302
|
Amortization of
intangible assets
|
24,505
|
|
25,876
|
Acquisition-related
compensation(2)
|
2,545
|
|
17,103
|
Transaction-related
costs(3)
|
609
|
|
2,174
|
Restructuring(4)
|
472
|
|
1,207
|
Litigation
provisions(5)
|
9
|
|
918
|
Deferred income tax
recovery
|
(392)
|
|
(2,353)
|
|
|
|
|
Adjusted
Loss
|
(2,222)
|
|
(17,569)
|
|
|
|
|
Weighted average
number of Common Shares – basic and
diluted(6)
|
152,523,457
|
|
148,973,294
|
|
|
|
|
Net loss per share –
basic and diluted
|
($0.32)
|
|
($0.68)
|
Adjusted Loss per
Share – Basic and Diluted
|
($0.01)
|
|
($0.12)
|
|
|
(1)
|
These expenses
represent non-cash expenditures recognized in connection with
issued stock options and other awards under our equity incentive
plans to our employees and directors, and cash related payroll
taxes given that they are directly attributable to share-based
compensation; they can include estimates and are therefore subject
to change. For the three months ended June 30, 2023, share-based
compensation expense was $17,823 (June 2022 - expense of $38,528),
and related payroll taxes were an expense of $910 (June 2022 -
recovery of $226). These amounts are included in direct cost of
revenues, general and administrative expenses, research and
development expenses and sales and marketing expenses (see note 6
of the unaudited condensed interim consolidated financial
statements for additional details).
|
(2)
|
These costs represent a
portion of the consideration paid to acquired businesses that is
contingent upon the ongoing employment obligations for certain key
personnel of such acquired businesses, and/or on certain
performance criteria being achieved.
|
(3)
|
These expenses relate
to professional, legal, consulting, accounting, advisory, and other
fees relating to our public offerings and acquisitions that would
otherwise not have been incurred. These costs are included in
general and administrative expenses and sales and marketing
expenses.
|
(4)
|
During the fiscal year
ended March 31, 2023, certain functions and the associated
management structure were reorganized to realize synergies and
ensure organizational agility. The expenses associated with this
reorganization were recorded as a restructuring charge.
|
(5)
|
These amounts represent
provisions taken and other costs, such as legal fees, incurred in
respect of certain litigation matters, net of amounts covered by
insurance and indemnifications. These amounts do not include
provisions taken and other costs incurred in respect of litigation
matters of a nature that we consider normal to our business. These
amounts are included in general and administrative
expenses.
|
(6)
|
In periods where we
reported an Adjusted Loss, as a result of the Adjusted Losses
incurred, all potentially-dilutive shares have been excluded from
the calculation of Adjusted Loss per Share - Diluted because
including them would be anti-dilutive. Adjusted Loss per Share -
Diluted is the same as Adjusted Loss per Share - Basic in these
periods where we incurred an Adjusted Loss.
|
Reconciliation
from IFRS to Non-IFRS Results (continued)
Adjusted Cash
Flows Used in Operating Activities
(expressed in
thousands of US dollars, unaudited)
|
|
|
|
|
|
|
|
Three months
ended
June
30,
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
|
$
|
|
$
|
|
|
|
|
|
Cash flows used in
operating activities
|
|
(26,090)
|
|
(33,414)
|
Payroll taxes related
to share-based compensation(1)
|
|
334
|
|
73
|
Transaction-related
costs(2)
|
|
680
|
|
5,044
|
Restructuring(3)
|
|
830
|
|
583
|
Litigation
provisions(4)
|
|
76
|
|
2,159
|
Capitalized internal
development costs(5)
|
|
(2,285)
|
|
(603)
|
|
|
|
|
|
Adjusted Cash Flows
Used in Operating Activities
|
|
(26,455)
|
|
(26,158)
|
|
|
(1)
|
These amounts represent
the cash inflow and outflow of payroll taxes on our issued stock
options and other awards under our equity incentive plans to our
employees and directors.
|
(2)
|
These amounts represent
the cash outflows, and inflows due to timing differences, related
to professional, legal, consulting, accounting, advisory, and other
fees relating to our public offerings and acquisitions that would
otherwise not have been incurred.
|
(3)
|
During the fiscal year
ended March 31, 2023, certain functions and the associated
management structure were reorganized to realize synergies and
ensure organizational agility. The expenses associated with this
reorganization were recorded as a restructuring charge.
|
(4)
|
These amounts represent
the cash inflow and outflow in respect of provisions taken, and
other costs such as legal fees incurred, in respect of certain
litigation matters, net of amounts received as insurance and
indemnification proceeds. These cash inflows and outflows do not
include cash inflows and outflows in respect of litigation matters
of a nature that we consider normal to our business.
|
(5)
|
These amounts represent
the cash outflows associated with capitalized internal development
costs. These amounts are included within the cash flows used in
investing activities section of the unaudited condensed interim
consolidated statements of cash flows. If these costs were not
capitalized as an intangible asset, they would be part of our cash
flows used in operating activities.
|
Reconciliation
from IFRS to Non-IFRS Results (continued)
(In thousands of US
dollars, except percentages, unaudited)
|
|
|
|
|
Three months ended
June 30,
|
|
2023
|
2022
|
|
$
|
$
|
Gross
profit
|
87,905
|
77,525
|
% of revenue
|
42.0 %
|
44.6 %
|
add: Share-based
compensation and related payroll taxes(3)
|
1,853
|
2,246
|
|
|
|
Non-IFRS gross
profit(1)
|
89,758
|
79,771
|
Non-IFRS gross profit
as a percentage of revenue(2)
|
42.9 %
|
45.9 %
|
|
|
|
General and
administrative expenses
|
24,944
|
30,239
|
% of revenue
|
11.9 %
|
17.4 %
|
less: Share-based
compensation and related payroll taxes(3)
|
6,181
|
10,085
|
less:
Transaction-related costs(4)
|
609
|
1,861
|
less: Litigation
provisions(5)
|
9
|
918
|
|
|
|
Non-IFRS general and
administrative expenses(1)
|
18,145
|
17,375
|
Non-IFRS general and
administrative expenses as a percentage of
revenue(2)
|
8.7 %
|
10.0 %
|
|
|
|
Research and
development expenses
|
34,035
|
35,636
|
% of revenue
|
16.3 %
|
20.5 %
|
less: Share-based
compensation and related payroll taxes(3)
|
8,376
|
10,885
|
|
|
|
Non-IFRS research
and development expenses(1)
|
25,659
|
24,751
|
Non-IFRS research and
development expenses as a percentage of
revenue(2)
|
12.3 %
|
14.2 %
|
|
|
|
Sales and marketing
expenses
|
55,288
|
68,645
|
% of revenue
|
26.4 %
|
39.5 %
|
less: Share-based
compensation and related payroll taxes(3)
|
2,323
|
15,086
|
less:
Transaction-related costs(4)
|
—
|
313
|
|
|
|
Non-IFRS sales and
marketing expenses(1)
|
52,965
|
53,246
|
Non-IFRS sales and
marketing expenses as a percentage of
revenue(2)
|
25.3 %
|
30.6 %
|
|
|
(1)
|
This is a Non-IFRS
measure. See "Non-IFRS Measures and Ratios".
|
(2)
|
This is a Non-IFRS
ratio. See "Non-IFRS Measures and Ratios".
|
(3)
|
These expenses
represent non-cash expenditures recognized in connection with
issued stock options and other awards under our equity incentive
plans to our employees and directors, and cash related payroll
taxes given that they are directly attributable to share-based
compensation; they can include estimates and are therefore subject
to change. For the three months ended June 30, 2023, share-based
compensation expense was $17,823 (June 2022 - expense of $38,528),
and related payroll taxes were an expense of $910 (June 2022 -
recovery of $226). These amounts are included in direct cost of
revenues, general and administrative expenses, research and
development expenses and sales and marketing expenses (see note 6
of the unaudited condensed interim consolidated financial
statements for additional details).
|
(4)
|
These expenses relate
to professional, legal, consulting, accounting, advisory, and other
fees relating to our public offerings and acquisitions that would
otherwise not have been incurred. These costs are included in
general and administrative expenses and sales and marketing
expenses.
|
(5)
|
These amounts represent
provisions taken and other costs, such as legal fees, incurred in
respect of certain litigation matters, net of amounts covered by
insurance and indemnifications. These amounts do not include
provisions taken and other costs incurred in respect of litigation
matters of a nature that we consider normal to our business. These
amounts are included in general and administrative
expenses.
|
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SOURCE Lightspeed Commerce Inc.