Lightspeed’s customer base recovers from the pandemic
The independent retailers and restaurants that use Montreal-based Lightspeed’s point- of- sale technology are gradually getting back to business following pandemic- induced shutdowns. On Thursday, the company said it brought in US$ 36.2 million in revenue between April and June, a 51 per cent year-over-year increase.
Despite that growth, Lightspeed’s shares were down almost four per cent in afternoon trading, as the company’s net losses doubled to US$ 20.1 million, up significantly from US$9.1 million in the same period last year.
Lightspeed reported gross transaction volume ( GTV) — which represents the total value that merchants process through its software — of US$5.4 billion between April and June, up 17 per cent from the same period last year.
While the uptick is significantly smaller than in previous quarters since the company went public, it’s a recovery from the early months of the pandemic — GTV dropped in March and April before rebounding to 53 per cent year-over-year growth in June. Hospitality customers make up about 45 per cent of locations using Lightspeed’s technology, and many were forced to shut their doors due to lockdown measures. “Restaurant volumes were down by 80 per cent or more in the last week of March and into April,” CFO Brandon Nussey said on the company’s Thursday earnings call. “However, by the end of June we saw overall restaurant GTV get back to its pre- COVID levels.” Retail customers have made up the lost ground and more, posting a 13 per cent year- over- year increase in volumes, with e- commerce nearly doubling.
Retail GTV growth was strongest among stores selling outdoor and recreational products, as consumers cope with limited outing opportunities during lockdown. “There’s been an extraordinary period of time for bike shops and home and garden, and some of these verticals that we serve very well,” said Nussey, noting that the company expects that to “wane a little bit” in the fall. Golf has also been popular. “With any luck, offsetting that will be a good holiday season for retailers and restaurants,” he said. Lightspeed’s biggest quarters are traditionally the first three and last three months of the year.
Relatively little of the company’s income is directly tied to merchant transactions, but it’s working to earn more from their sales. The company charges customers a subscription for its technology, and typically signs customers up on year- long contracts. Software and payments brought in 92 per cent of revenue for the quarter.
Operating expenses, meanwhile, totalled US$42.9 million, down slightly from the previous quarter, but up 65.5 per cent compared to the same period in 2019. That’s still slower than cost increases in the previous two quarters, as the fast-growing company has added staff through hiring and acquisitions.