Yahoo Finance Lightspeed Commerce stock falls to session lows despite quarterly earnings beat
Lightspeed Commerce (LSPD.TO)(LSPD) reported first-quarter results that surpassed analyst expectations on Thursday, prompting the company to raise its earnings guidance as it shifts to focus on accelerating software growth.
The commerce software company, which reports its financial earnings in U.S. dollars, reported a net loss on Thursday of $35 million in its first quarter of the year, or 23 cents per share, narrower than a loss of $48.7 million, or 32 cents per share it reported during the same time last year. Total sales surged in the quarter, increasing 27 per cent annually to $266.1 million. Analysts had expected sales to hit $258 million.
Lightspeed also hiked its full-year earnings outlook. It now expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be at least $45 million (up from $40 million), and it reiterated that overall sales growth will be at least 20 per cent.
Lightspeed shares jumped as much as seven per cent on Thursday after the results were released, but lost those gains by the afternoon. The stock was trading down around 1.5 per cent on Thursday afternoon on the Toronto Stock Exchange.
"The markets wanted to see a few things. They wanted to see a focus on profitable growth and operational efficiency. We've been very serious and committed to that and we've been showing progress," Lightspeed CEO Dax Dasilva said in an interview with Yahoo Finance Canada on Thursday.
"We are excited to be shifting focus to the software growth side. That's the next big area of execution."
The quarter marks the first full one with Dasilva back at the helm of the company. Lightspeed reappointed its founder as permanent CEO in May. Dasilva had previously served as CEO from 2005 until February 2022. Since coming back as CEO, Dasilva has cited a focus on driving profitable growth by accelerating software sales growth and market share, increasing adoption in its financial services products, and finding operational efficiencies.
For the first half of the year, Dasilva says Lightspeed has been focused on continuing to shift existing customers to using its payment software, a strategy that the company has been working on since last year. Account managers that had been focused on bringing those customers to the payments platform are now shifting back to upselling software, as the company focuses more on accelerating software growth in the back half of 2024.
At the same time, the first quarter saw the company reduce its headcount operating expenses by 10 per cent, cutting about 280 jobs as well as shift its sales summit from in-person to virtual, among other cost-cutting initiatives.
"We're just going through all of our software tools, all of our contracts and finding efficiency. There's still more to do," Dasilva said.
As it continues to try to find cost savings, Lightspeed has also started rolling out price hikes for its existing customers. Dasilva says the company has been working with external consultants to benchmark its prices against competitors, and "we're really confident that the increases are not going to lead to too much disruption."
"We're being very thoughtful with how we roll out the increases. Lightspeed hasn't really executed on any increases for a very long time... we think the increases won't cause too much disruption," Dasilva said.
While Lightspeed shares rose on Thursday, the company's stock is still down about 25 per cent this year. In an interview with La Presse in March, Dasilva said payment firm Nuvei Corp's decision to be taken private had him thinking about whether his company should do the same.
On Thursday, Dasilva did not say whether the company is having discussions about going private.
"Our board always had the fiduciary duty to explore strategic alternatives," he said.
"My focus is to make this a great public company... I think that we can make real progress on the public market. It's a great opportunity for investment, in my opinion."
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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