Lightspeed Posts Wider Loss in Q2; Shares Plunge

Shares of Lightspeed POS (LSPD) fell 30% in early trading Thursday after the provider of cloud-based omnichannel commerce reported a wider loss in the second quarter than a year ago, despite a strong increase in revenues.

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Acquisitions Contribute to Revenue Growth

Total revenue came in at $133.2 million in the three months ended September 30, an increase of 193% from $45.5 million in the prior-year quarter.

Growth was driven by a combination of strong organic growth and the recent acquisitions of NuORDER, Vend, Upserve, and ShopKeep, which added $62.5 million in revenue. Subscription revenue was $59.4 million, up 132%, while transaction-based revenue was $65 million, up 320%. GTV (gross transaction volume) grew 123% year-over-year to $18.8 billion.

Net loss amounted to $59.1 million in Q2 2022, compared to a net loss of $19.5 million in Q2 2021. After adjusting for certain items such as acquisition costs and stock-based compensation, adjusted loss was $11.1 million (-$0.08 per share) in the quarter, compared to an adjusted net loss of $4.6 million or (-$0.05 per share) a year ago.

Lightspeed chief financial and operations officer Brandon Nussey said, “Lightspeed achieved solid results this quarter on the back of strong GTV growth, an increased Payments Penetration Rate and growing software adoption. While the rate of global economic recovery is expected to be uneven, overall our core business drivers remain strong.”

For the third quarter, the company expects revenue of $140 million to $145 million and adjusted EBITDA loss of approximately $10 million to $12 million. (See Insiders’ Hot Stocks on TipRanks)

Wall Street’s Take

On November 1, CIBC analyst Todd Coupland maintained a Buy rating on LSPD while lowering its price target to C$190 (from C$195). This implies 121.4% upside potential.

Overall, the consensus is that LSPD is a Moderate Buy, based on 10 Buys, three Holds, and one Sell. The average Lightspeed price target of C$148.22 implies 72.4% upside potential to current levels.