Lightspeed Commerce Inc. company logo is shown in a handout. THE CANADIAN PRESS/HO
MONTREAL – Lightspeed Commerce Inc. will double down on its quest for profitability and larger clients after reporting a loss of US$814.8-million in its latest quarter.
“We are going after the more sophisticated segment, we are going after the more established segment…so we will not be going after the entire market,” said JP Chauvet, the Montreal e-commerce technology company’s chief executive, in a Thursday call with analysts.
While Lightspeed would have cast a “broader fishing net” two years ago when marketing itself to clients, Chauvet said he wants to target businesses that deliver high gross merchandise value – a metric measuring a company’s total value of sales over a certain period of time.
“Quick serve is not what we are going to be focusing on,” he said.
“We are going to be focusing on fine dining, table service and Michelin stars.”
The increased focus on this segment stems from Lightspeed’s goal of reaching profitability based on adjusted earnings before interest, taxes, depreciation and amortization by the end of 2024.
But the profitability outlook is becoming much more gloomy for tech companies, which have watched investor exuberance fade, valuations be slashed and even the most prominent businesses in the sector complete layoffs.
In recent months, Shopify Inc., Alphabet Inc., Amazon.com Inc. and Microsoft have all reduced their workforces as they see customers readjust to pre-pandemic shopping and business habits.
Lightspeed joined the pack with a 300-worker cut last month. About 50 per cent of those who departed were in management positions.
The decision has unlocked “considerable” savings and helped the company streamline the organization to use “leaner” working models and focus on key projects and customers, Chauvet said.
“Deciding to reduce head count is never an easy decision…but it was a necessary decision that strengthens our foundations for future growth.”
His comments came as Lightspeed, which keeps its books in U.S. dollars, said its most recent quarter saw a loss of US$5.39 per diluted share compared with a net loss of US$65.5 million or 44 cents per diluted share a year earlier.
Weighing on what was the third quarter was a non-cash goodwill impairment charge of US$748.7 million that Lightspeed took.
The charge stemmed from accounting rules, which require annual testing of goodwill. When Lightspeed ran this testing in late December, it said certain assumptions in the test were impacted by the tech downturn and Lightspeed’s lower share price.
Its share price was up almost two per cent or 47 cents to $25.35 in morning trading.
Revenue for the quarter ended Dec. 31 totalled US$188.7 million, up from US$152.7 million in the same quarter a year earlier.
Lightspeed’s adjusted diluted earnings per share broke even for the quarter compared with an adjusted loss of seven cents per share a year earlier.
The company now expects an adjusted earnings before interest, taxes, depreciation and amortization loss of about US$37 million compared with its earlier forecast for a loss of about US$40 million.
It also foresees its annual revenue to come in at the low end of its forecast for between US$730 million and US$740 million.
This report by The Canadian Press was first published Feb. 2, 2023.
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