Lightspeed sparked excitement on Thursday after presenting its year-end results and an update on its outlook for the coming months.
The stock of the Montreal company specializing in cloud computing (including payment services) gained 10% to close at $28.65 in Toronto. Lightspeed had lost 50% of its market value since 1Ahem January before Thursday’s session and the stock is still a long way from its September high of $165.
Lightspeed exceeded expectations by generating revenue of US$147 million, up 78% from a year earlier in the fourth quarter of its fiscal year.
“The strong performance comes from 48% organic growth in subscription and transaction revenue combined with the contribution from acquisitions,” said analyst Richard Tse of National Bank Financial.
The adjusted operating loss of US$19.7 million also exceeded expectations, it added.
The performance came despite difficult conditions in January and February, offset by a “very strong” March, according to management.
The business was able to benefit from the return of customers to stores and restaurants.
“If such a performance doesn’t finally drown out the buzz around Lightspeed’s title, I don’t know what will,” analyst Andrew Jeffrey of Truist Securities said during a Thursday morning conference call with management.
The only drawback that can be pointed out, according to Richard Tse, is that Lightspeed only expects to generate a balanced adjusted gross profit for the fiscal year ending March 31, 2024, fiscal year 2023 or the end of this fiscal year,” he said. . he says.
Appointed CEO in February, JP Chauvet explained that the inflationary context and even a recession are favorable elements for Lightspeed’s activities.
“We help merchants streamline their operations so they reduce the number of manual actions to perform and can operate with fewer employees. And a recession is nothing compared to what traders have been through during the pandemic. The more merchants that automate their businesses, the better off we are,” he said.
JP Chauvet recalls that the size of the global market reaches 46 million restaurants and retailers and that of this number, 7 million are in Lightspeed’s line of sight. These are the most established, the most sophisticated and the least likely to go out of business, he specifies, adding that the market to conquer is “huge” as Lightspeed now has 163,000 of the 7 million businesses in its customer base at which is headed
“There is a whole revolution that is going to happen. The vast majority of the target market is running on old platforms,” he says.
Press spoke with JP Chauvet on Thursday to discuss various Lightspeed topics. Here is a summary of his statements.
The stock finally appreciated on the stock market. Does it feel good to see that?
“It’s been a long time since I stopped looking at stock prices. I feel very good because we have a very good company. The growth is very strong. We have absolute clarity on profitability. I’m very happy. The value of the stock today is short term. We’re here for the long haul and people will realize at some point that we’re completely undervalued in terms of value. But our focus is not there. We are not seeking to complete a financing round or sell shares. »
Do you think you have finally convinced investors?
” Yes. I have been with Lightspeed for 10 years. We are increasing our revenue prospects every quarter. Each time, we are getting closer to profitability. All is well. People will find that Lightspeed is a reliable and fast growing company with an important market. »
So does inflation and even a recession bode well for Lightspeed?
” Yes. But the very first thing that is very good for Lightspeed is the return to the real world first. This is important because the vast majority of our customers (90%) transact in the real world. When people return to the stores, the turnover increases , there is a higher volume of transactions. Despite the recession, all new restaurants and retailers will use platforms like Lightspeed in the future. In a recession, merchants will want to hire fewer people, they will want automated systems and that is exactly what we offer. We allow our customers to do more with less. »
What is your biggest challenge?
“It is growth. We have between 200 and 300 open positions on our website. As we generate 50% annual organic growth, our biggest challenge is making sure we hire the right people. »
What is the status of your financial situation?
“We have about a billion in the bank. We are extremely well capitalized. For now, we are focused on providing solutions that enable our clients to function well in the context of returning to normal life. We have bought several companies in recent years. Tech companies are very undervalued right now. We have our eyes open. We want to buy to support our growth and not to be bought. That is why it is important to be well capitalized to control your destiny. »
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