Lightspeed results released

I was expecting them after closing so I expect others may have been too. Briefly:

Total revenue of $82.4 million, up 127%
Recurring subscription and transaction-based revenue of $75.3 million, up 137%

For the full release and presentation see their website

Saul

23 Likes

Important to note: organic growth of 41% in Q4, most of the growth was due to the acquisitions of Upserve and ShopKeep

7 Likes

We grew revenue 127% year-over-year with organic software and transaction-based revenue growth of 48%

They refer to that segment of revenue growing 48% organically as their “Recurring Revenue.” It makes up 91% of total revenue.

Saul

5 Likes

Trying to remove the acquisition noise.

Guidance for Q1 was for $90-94M in revenue, which would be 14% sequential growth against Q4 at the top of guidance (70% annualized).

They beat their own Q1 guidance by 17.7%. A similar beat in Q2 would make sequential Apples-to-apples growth into Q2 of 34% ($94m x 1.177 / $82.4m), annualized is something stratospheric.

Both shopkeep and upserve closed in Nov/Dec, so no partial quarter effects. What am I missing? Seasonality? Or is reopening just that much if a tailwind?

Eric, CPA

5 Likes

No time to write what I would like so just going to drop a few points I was thinking about instead…

  • Not just organic growth - This is one case where I don’t think it is right to completely try and remove the effect of acquisitions. They have been incredibly good at finding acquisitions that add significantly to their offerings or customer count. They are still small and these have a big impact and really power multiple channels of growth; existing customer product expansion, more attractive as a platform for new customers, add new streams of revenue (e.g. payments), etc. They also have a lot of cash to do it some more.

  • Interesting comparable YoY AND QoQ color the numbers a bit - Remember, they are impacted by COVID-affected industries, so… 1) YoY is comparing to Q ending March’20, so only a small portion during COVID, which means it was mostly a normal quarter with some bad to bring it down at the end. Then, QoQ on this end, they had 2 months that were pretty bad and the last month or so starting to go really well. In other words, nothing about the compatibles is smooth or easy to project in to next quarter. It will take some thought.

  • Post-Q acquisition and continued reopening momentum. The new acquisition takes them from around ~110k customer locations to ~140k. This, as well as the continued improvement in customers’ industries as things reopen should be great for next quarter.

7 Likes

Lspd has a number of different positives all coming together at the same time.

  1. switch to payments. So they take a small percentage of a business GTV(gross transaction volume) they have rolled payments out to just about 10% of GTV. Lots to go.

  2. acquisitions. Expect to see more. This is a highly fragmented market. Lspds scale is starting to pay off. See google partnership, supplier market and renogtionations of contracts.

  3. reopening. Australia based comapnies gtv grew 75%. This calendar q1 result was with the backdrop of europe being locked down, the US starting to open halfway through the quarter and canada totally locked down. I think calendar q2 will have even more tailwinds and calendar q3 will have all their major markets mostly open.

I think strong growth is almost a given at this point…now I want to see better operational leverage. I think the best is yet to come.

14 Likes

I have to say I’m cautious about these results and prospects from a number of standpoints.

  1. Given their Q4 2020 would have been the second easiest compare for Lightspeed to lap (the coming quarter Q1 will be lapping the easiest compare) I would have expected organic growth to have been higher. They may make great acquisitions that provide sources of cross selling and strategic fit better than others however it still has to come at a price that isn’t like for like

  2. Sure they are acquiring and assembling a portfolio of retail/supply chain functions into their suite of offerings but they are in a race against the platform players such as Shopify, SquareSpace etc building out equivalent solution suites. The more and more I see of restaurants and shops digital management tools, (leaving aside point of sale systems in retail and Macros table management systems in restaurants), the more I see them using the aggregated platforms like Wix, SquareSpace, Shopify etc. I see this as a real potential limiter for them.

  3. I also would like to see more evidence of leverage - not just decreasing % loss margin but actual decreases in losses.

Maintaining my holding but considering re-allocating to Fiverr and/or Upstart or even UI Path.

Ant

10 Likes

I don’t see Shopify (or other web platforms) as direct competitors at this moment, and I don’t think that will change soon or rapidly. I posted my thoughts here:
https://discussion.fool.com/talking-lightspeed-pos-lspd-some-sho…
…
Lightspeed POS, based out of Montreal, QC, Canada, offers a one-stop-shop POS-first approach while still offering easy to add on modules that cover most of what you can get at SHOP but with more simplicity and less learning curve. If you consider that the kind of business that is attracted to LSPD’s products are the ones that need a POS, which means brick-and-mortar-first, this approach is very very attractive. Compared to SHOP which tends to favor the online-first business that inherently comes from a more technologically-advanced starting point. So even though there is a lot of overlap between the offerings of these two companies, they are appealing to two opposing ends of the spectrum of company types. That said, Shopify does offer POS integrations (both their own and 3rd party), so there IS still some direct competition, but also plenty of room.

…I think the difference in go-to-market approach is key as it means they don’t need to really compare apples-to-apples and so a side-by-side price comparison isn’t important in my mind.

I have helped a couple of startups setup in Shopify so I’ve seen this first hand. You really can’t just look at the list of features. There is quite a different feel to the approach.

Note: I currently own Shopify and Lightspeed in equal amounts (until this week as Lightspeed pulls ahead). Combined they make up 16% of my portfolio. I may be selling Shopify at some point this year due to market cap size alone. Hopefully I don’t have to purchase more Lightspeed shares for it to grow to be a larger part of my portfolio.

8 Likes