Lightspeed to focus on growth in 2024, as stock plummets amid macro uncertainty

Lightspeed Commerce chief executive Jean Paul Chauvet says the company will focus on sales growth in 2024, even as macroeconomic uncertainty weighs on its fiscal outlook. (THE CANADIAN PRESS/Ryan Remiorz) (The Canadian Press)

Lightspeed Commerce (LSPD.TO)(LSPD) chief executive Jean Paul Chauvet says the company will focus on sales growth in 2024, even as macroeconomic uncertainty weighs on its fiscal outlook.

The commerce software company reported a 27 per cent increase in sales in the third quarter of its 2024 fiscal year on Thursday, with sales increasing from US$188.7 million last year to US $239.7 million. The company reports its financial earnings in U.S. dollars.

While the results surpassed analyst expectations, shares of Lightspeed plummeted as much 25 per cent on the Toronto Stock Exchange on Thursday as the company reiterated a conservative guidance, flagging macroeconomic uncertainty. Lightspeed increased the lower end of its 2024 fiscal outlook, but said it "remains cautious on near term prospects due to a still uncertain macroeconomic environment."

Chauvet said the company is forecasting "in a very conservative way" but that it will still have high growth.

"We're obsessing with what we can control, which is payments penetration, which is revenue growth, which is our customer pool expansion," he said in an interview with Yahoo Finance Canada.

"It will just put us in a better position."

Over the last year, Lightspeed has shifted its existing customers to use its payment software. The company previously allowed customers to integrate its point-of-sale technology with any payment terminal brand, but last year it began requiring customers to sign up for both. Chauvet said on a conference call with analysts on Thursday that converting customers to its payments software in Europe and the Asia Pacific region is taking longer than it did in North America, but that "we are confident this is the right strategy and beneficial to our customers."

At the same time, Chauvet said Lightspeed is looking to expand its customer base. As the company balances the priorities of growth and profitability, he said "the scale will tip towards growth."

"It's the right time for us to do this," Chauvet said. Lightspeed, which currently has hundreds of thousands of customers in the hospitality business and retail sector, sees significant opportunity in the market as many companies continue to use dated systems in their business.

"Our direct bullseye is three to five million (customers)," he said.

"We have the most competitive platform out there right now, and the majority of that market is on legacy systems that are under-serving it... We're going to have high growth. That's the story for me."

Lightspeed also reported a net loss in the third quarter of $40.2 million, or 26 cents per share, an improvement from last year when it posted a net loss of $814.8 million, or $5.39 per share, which included a goodwill impairment charge of nearly $750 million. On an adjusted basis, the company reported a profit of $11.8 million, or 8 cents per share.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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