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Lightspeed’s revenue over the final three months of 2020 was US$57.6 million, an increase of almost 80 per cent from a year earlier. That figure includes sales by ShopKeep Inc. and Upserve Inc., former rivals that Lightspeed purchased in the fall. Excluding those acquisitions, revenue was 53 per cent higher.
The company said it expects revenue of around US$70 million this quarter, which exceeded the Bay Street average of about US$65 million.
To be sure, Lightspeed remains unprofitable, but profit isn’t the goal at this stage of the company’s evolution. Executives on a conference call with analysts reiterated that they are “working hard to build a category leader,” which requires an emphasis on growth over a perfect balance sheet. The company has about US$240 million in cash on hand, even after spending around $1 billion on ShopKeep and Upserve, so it has room to manoeuvre.
Thanos Moschopoulos, a Bank of Montreal analyst, called the latest earnings report “very strong,” especially considering the second wave of COVID-19 infections was sweeping through all of Lightspeed’s most important markets.
“The results reaffirm our view that (Lightspeed) is very well positioned with respect to capturing its market opportunity, and that it can continue to achieve strong organic growth even in the current climate,” Moschopoulos said in a note to clients.
There’s evidence in Canada of an upsurge in business formation, which also bodes well for Lightspeed. Canada Revenue Agency issued more business and tax numbers during the final few months of 2020 than in the same period a year ago. Many of those new companies will fail, but it’s possible failure rates will be lower than in the past, because those companies will be geared for the digital economy.
“We have previewed that we may see more churn, that we may see more business failure in the coming quarter and beyond, but for now it’s fairly stable on the retail side,” Dasilva said. “Hospitality churn may be up a little bit year over year, but it’s below levels from the first lockdown. That’s because our customers are better prepared. They are leveraging digital and online strategies.”
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