Montreal software company Lightspeed POS Inc. reported better-than-expected results Thursday its first quarterly earnings report since going public in March.
The company, which provides point-of-sale cloud-based software for restaurants and small retailers, also announced its first acquisition as a public company – and sixth in its history – paying US$10-million for Chronogolf, which provides cloud-based software for managers of about 500 golf courses.
“We’re already off to a good start,” chief financial officer Brandon Nussey said in an interview. “The core underlying fundamentals of the business are performing really well right now."
Lightspeed said it earned revenue of US$21.3-million in its fourth quarter ended March 31, and posted an adjusted operating loss of US$4.1-million. Analysts had been expecting revenue of US$20.4-million and a $4.9-million operating loss. The company reported a net loss of US$96.1-million, which was largely a result of a one-time non-cash accounting adjustment as it restructured its multiple classes of shares prior to its IPO.
The company also said it expects revenue of between US$107-million and US$110-million this year, ahead of analyst expectations of US$103.2-million. Revenue for last year totalled US$77.5-million.
BMO Nesbitt Burns Inc. analyst Thanos Moschopoulos called the results “solid," but noted the company is forecasting a higher-than-expected operating loss this year of US$16-million to US$18-million. He said he expects that Lightspeed “is looking to ramp up their sales and marketing spend in order to accelerate their growth, which probably makes sense given the type of payback we’d expect them to get on their customer acquisition costs.”
Analysts expect the company to dramatically increase revenues and gradually extinguish its operating losses in the coming years as customers begin to adopt the company’s payments offering, which it introduced in January. Mr. Moschopoulos forecasts payments revenue will rise to US$86-million in three years, driving overall revenue for the 2022 fiscal year to $226.8-million.
Analysts are optimistic that Lightspeed can dramatically increase its penetration of the restaurant and small retail market, a business it forecasts is roughly 1,000 times larger than its current size of 49,000 locations using its products.
The company is keen to consolidate the market, and last month entered into a credit facility agreement with Canadian Imperial Bank of Commerce that provides a “stand-by acquisition term loan” facility of US$30-million. On a call with The Globe and Mail, management indicated the company would continue to be an active buyer of other software providers in its space and that it had received a lot of inbound interest from prospective sellers since its IPO.
Lightspeed went public on the Toronto Stock Exchange in a heavily subscribed offering in March, raising gross proceeds of $276-million by selling 17.25 million shares at $16 apiece, including an overallotment for its underwriters. The stock has performed well since then and closed Thursday at $23.81, before earnings were released.
Sean Silcoff