(Bloomberg) — Lightspeed Commerce Inc’s top boss is predicting an almost 40% jump in sales this year, leaving the technology firm well-placed to weather a recession. Investors seem a little less optimistic.
“We’re going to do $760 million this year,” Jean-Paul Chauvet said in an interview with Bloomberg. That revenue figure would be almost 40% higher than the previous fiscal year. “While the rest of the world is lowering their guidance, we’re very confident we’re going to be hitting our guidance.”
Lightspeed shares fell more than 13% Thursday, after posting earnings that were slightly better than analysts expected.
The Montreal-based firm provides cloud-based point-of-sale software, but doesn’t consider itself a pure e-commerce company since 90% of its gross merchandise value comes from physical retailers and restaurants. Its platform offers in-store and online payment processing, accounting and multichannel management solutions. Revenues come from subscriptions, transactions and hardware.
Many e-commerce companies did well during the early part of the pandemic as consumers turned to online shopping. At the same time, Lightspeed’s bricks-and-mortar customers were hit by store closures. Despite this, the company still managed to “show very strong growth,” according to its CEO. He says a 10% decline in the retail and hospitality industry induced by an economic downturn would not compare to the stress caused by Covid.
With a recession potentially looming, Chauvet says Lightspeed offers an opportunity for merchants to do more with less in bad macroeconomic conditions. “The only way you can overcome having less people and still running your business is by adopting technologies like ours. That automates a lot of all the manual processes inside of the stores.”
While tech companies such as Shopify Inc. recently lowered forecasts and announced layoffs, Lightspeed is looking to fill 300 jobs worldwide.
A return to in-person shopping and dining “should serve as a meaningful tailwind going forward,” Raimo Lenschow, a software equity analyst with Barclays wrote in report after the results. “Given this expected growth, shares seem undervalued to us at around four times the current year 2023 sales, and hence we maintain our overweight rating,” he wrote.
Breaking Even
Shares of Lightspeed have never recovered from a short seller report published by Spruce Point Capital Management in September 2021, despite the fact that 16 out of 18 analysts now recommend buying stock. “A report full of inaccuracies,” Chauvet said, repeating comments he has previously made about the report.
For a 14th time since its first initial public offering on the Toronto Stock Exchange in 2019, Lightspeed beat revenue estimates during the first quarter of fiscal 2023, with sales of $173.9 million, up 50% year-over-year and slightly ahead of forecasts. While it posted a $100.8 million net loss, Chauvet insists on “removing the noise” and taking into account recent mergers and acquisition-related costs and share-based compensation.
The company posted an adjusted loss, before interest, taxes, depreciation and amortization, of $15.6 million in the quarter, a little less than analysts expected, and expects to post a full-year adjusted loss of $35 million to $40 million. “That number, we have committed for next fiscal year to not be negative anymore,” he said.
Read more: Lightspeed Founder Dasilva Steps Down; Chauvet Rises to CEO
“Lightspeed guidance is conservative,” National Bank analyst Richard Tse said in a report titled: “Beyond the Headlines. “We continue to believe Lightspeed is an early-stage growth name that’s gaining momentum (market share) through a combination of complementary organic and acquisition measures.”
Business to Business
During the quarter, Lightspeed focused on launching its B2B network, following the acquisition of the wholesale e-commerce platform NuORDER. The goal is to connect brands and retailers in fashion, outdoor and sporting goods.
“When you look at how retailers orders from their suppliers, it’s all broken,” Chauvet said. “It’s Excel sheets, pen and paper, no visibility, distribution networks that are wrong, and that’s what we want to solve.”
Lightspeed intends to invest heavily in automating the retail supply chain this year and next year and expects good results in 2025 with its omni-channel commerce platform, he said.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
