Shares of Lightspeed Commerce (TSX:LSPD) after earnings came out last week. Lightspeed stock jumped 16% in a day after posting that total revenue was up 25% year over year, growing to $230.3 million.
But is it enough for investors to get back into Lightspeed stock? Or are they still waiting for more?
Earnings at a glance
While sales and revenue were up, I’d say the best part of earnings from the company was that the net loss continued to see major improvements. Net loss was improved by 47% compared to last year, and Lightspeed stock even managed to post positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Gross payment volume also surged by 59% to $5.9 billion, with gross transaction volume achieving $23.5 billion. What’s more, the company saw subscription revenue grow by 9% as well. All to say, Lightspeed stock looks like a pheonix that could indeed be rising from the ashes. This is in part due to the company’s new Unified Payments initiative, which has been working well, according to management.
“Our Unified Payments initiative is proving to be a resounding success. We on-boarded a record number of payments customers in the quarter and are seeing lower than anticipated churn,” said JP Chauvet, chief executive officer of Lightspeed. “The delivery of industry-leading products on impressive timelines is validation that our M&A strategy of acquiring and quickly integrating best-in-class companies has been a success. We are now in a position of strength and will focus on growing our business, helping our customers, completing our vision and delivering value to our shareholders.”
More to come
While there have already been major improvements, Lightspeed stock believes there is even more to come. This included a number of artificial intelligence (AI) initiatives designed to make it easier for customers and clients alike to use the company and its offerings.
Its Lightspeed Payments initiative has also spanned the globe, now available in Canada, Australia, the United Kingdom, and Australia. With such growth, the company has streamlined its operations to allow for a quicker timeframe for new clients to get up and running.
The company continues to focus on gaining more enterprise-level clients as well. These are clients that would achieve a gross transaction volume of over $500,000 per year. These clients have increased by 8% year over year, with those exceeding $1 million up 9% during that period. Meanwhile, those under $200,000 decreased, which was cause for success as those above the $500,000 mark have seen a lower risk of leaving to go elsewhere.
Guidance update
Based on the strong growth behind it, and more to come, Lightspeed stock adjusted its earnings for the rest of 2024. This was largely due to the “uplift in transaction-based revenues.” Now that the company has an even lower loss at a time when the market has been quite difficult, it looks like it should be smooth sailing — especially as it looks like rate hikes and inflation increases could be at an end.
So, with Black Friday and Cyber Monday soon on the way, the holiday season should provide even more growth for Lightspeed stock. This could certainly impact gross payment volume, which will be a key driver for revenue growth.
For its third quarter, Lightspeed stock, therefore, expected revenue of between $232 and $237 million, with adjusted EBITDA of $2 million. That’s 10 times what was reported this quarter. Further, revenue for the full year should reach between $890 and $905 million, with the tech stock either breaking even with adjusted EBITDA or performing even better. So, while shares may be up, we could see Lightspeed stock reach levels not seen since the depths of the pandemic.
