As noted, it has effectively used acquisitions to grow before, so we might expect more acquisitions to come.Return to in-person shopping and dining globally helps drive results ahead of previously-established outlookįirst quarter revenue grew 50% YoY to $173.9Mįirst quarter GPV of $3.3 billion increased 96% YoY The company has more cash than it needs even if reaching profitability will take longer. In August 2021, Lightspeed raised $823 million in additional capital through a public offering (perfect timing, isn’t it?). However, what is important is how the company gets there: through improving its cost discipline (cutting costs), or through a bigger scale (having more money in gross profit to cover operating expenses).Īcquisitions. The company has been consistently improving its Adjusted EBITDA margin each year, so the commitment seems achievable. The company’s management made a bold commitment to reach profitability on an Adjusted EBITDA basis in Fiscal 2024 (calendar Q2 2023 - Q1 2024). What I will be looking for is the stabilization of gross profit margins, and if those end up around 40% (think of Square ), or around 20% (think of Toast ). As mentioned in the text, the increasing adoption of Lightspeed Payments (and the consequently increasing share of the transaction-based revenue) results in gross profit margin compression (payments have lower margins than software). Over time we should also hear more about the company’s working capital solutions offered by Lightspeed Capital. Bundling POS software with payments allows for delivering a better experience for the customers, and higher revenue for the company. I would expect that, given the low payment penetration rate, the adoption of Lightspeed Payments solutions will continue to drive the company’s growth for years to come. The company also offers a full suite of POS hardware, such as payment terminals. Payment processing, in particular, has strong potential to drive the company’s revenue growth for years to come, as only 13% of the total payments initiated from Lightspeed POS solutions are processed by the company (and the rest are processed by third parties). Thus, in 2019 the company launched Lightspeed Payments, and in 2021 launched Lightspeed Capital. The company positions itself as a software business however, like many other point-of-sale solution vendors, it realized the potential in offering its clients end-to-end payment processing and working capital financing solutions. Thus, at the end of Fiscal 2022, only 51% of Lightspeed customers were based in North America. Lightspeed was founded in 2005 in Canada (the company has a dual listing, on New York and Toronto Stock Exchanges), but since then has become a truly global business (organically and, as noted earlier, through masterful acquisitions). The company targets primarily “sophisticated” small and medium-sized businesses, and at the end of Fiscal 2022 (end of March 2022), 63% of the customers represented retail merchants, while 37% represented hospitality businesses. For example, Fiscal 2022 means the period from Q2 2021 to Q1 2022. Please note that the company’s fiscal year ends on March 31. I guess, there are many exciting things ahead for Lightspeed, so let’s learn more about this company! Last year, Lightspeed announced acquisitions of Ecwid and NuOrder (spending a total of $925 million), as well as raised $823 million in additional capital through a public offering. it entered the hospitality segment by acquiring a Belgian startup POSIOS, added e-commerce capabilities by acquiring a Dutch startup SEOshop, and grew internationally through the acquisitions of ShopKeep and Vend. Founded in 2005 in Canada, the company masterfully expanded through acquisitions : i.e. Lightspeed Commerce serves more than 300,000 small and medium-sized companies in the hospitality and retail segments and operates in more than 100 countries. Today I would like to profile Lightspeed Commerce (NYSE: LSPD, TSX: LSPD). They might have started as pure software vendors, but, over time, started offering payment processing and working capital solutions. These companies target different customer segments and geographies, but they all have one thing in common: financial services are important drivers of their revenue growth. Last week I profiled five companies offering Point-of-Sale (POS) solutions, including Square, Toast, Lightspeed Commerce, Shift4 Payments, and Shopify (you can read the update by following the link □□ “ Fintech companies powering "in real life" commerce ”).
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