Mr. J.P. Chauvet reports

LIGHTSPEED ANNOUNCES THIRD QUARTER 2024 FINANCIAL RESULTS

Lightspeed Commerce Inc. has released financial results for the three and nine months ended Dec. 31, 2023. Amounts are expressed in U.S. dollars and in accordance with IFRS (international financial reporting standards).

With the company in the final stretch of fiscal 2024, Lightspeed expects to meet its key objectives for the year and achieve its previously established revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) outlook. The company's flagship products are now available in virtually all of its primary global markets with complete coverage expected in the months ahead. Lightspeed's unified payments initiative increased GPV (gross payment value) as a percentage of GTV (gross transaction volume) to 29 per cent. Additionally, the company experienced its second consecutive quarter of positive adjusted EBITDA, placing Lightspeed in a strong position to meet its goal of adjusted EBITDA break-even or better performance for fiscal 2024.

"Over all, I was very pleased with the quarter. We were able to grow the top line by 27 per cent and our disciplined approach on costs helped us deliver positive adjusted EBITDA performance," said Asha Bakshani, chief financial officer. "As we begin to turn our attention to fiscal 2025, we will focus on growing our top line without sacrificing the progress we have made on adjusted EBITDA profitability."

"At this stage, I believe our unified payments initiative can only be seen as a resounding success; customers adopted Lightspeed Payments without the heightened churn that we were expecting," said J.P. Chauvet, chief executive officer of Lightspeed. "With our growing ARPU [average revenue per user], industry-leading platforms and sound financial foundation, we are excited for the future at Lightspeed."

Third quarter financial highlights (all comparisons are relative to the three-month period ended Dec. 31, 2022, unless otherwise stated):

• Total revenue of $239.7-million, an increase of 27 per cent year-over-year and ahead of previously established outlook of $232-million to $237-million.
• Transaction-based revenue of $147.8-million, an increase of 38 per cent year-over-year.
• Subscription revenue of $80.9-million, an increase of 9 per cent year-over-year.
• Net loss of ($40.2-million), or (26 cents) per share, as compared with a net loss of ($814.8-million), or ($5.39) per share. After adjusting the net loss by $52.1-million for certain items, including share-based compensation and amortization of intangible assets, the company delivered an adjusted income of $11.8-million, or eight cents per share, as compared with an adjusted income of $4000,000, or nil per share, in the quarter ended Dec. 31, 2022. Net loss for the quarter ended Dec. 31, 2022, includes a non-cash goodwill impairment charge of ($748.7-million).
• Adjusted EBITDA of $3.6-million, ahead of previously established outlook of $2-million, versus adjusted EBITDA loss of ($5.4-million) in the quarter ended Dec. 31, 2022.
• As at Dec. 31, 2023, Lightspeed had $749.4-million in cash and cash equivalents.

Operational highlights:

• Lightspeed delivered several new product releases:
  • Instant payouts for Lightspeed Retail was made available to U.S. merchants, allowing for immediate access to funds;
  • For Lightspeed Restaurant, Lightspeed Tableside, a compact, portable and flexible point-of-sale (POS) and payment processing device, is now available in the United States;
  • Lightspeed Retail and Nuorder integration is now available on the company's flagship offering, allowing its retail customers to order directly from thousands of brands through the Nuorder by Lightspeed platform, giving the company's retail customers the power of an advanced technology platform that was recently only available to enterprise customers. The integration also lets retailers import purchase orders placed into Lightspeed Retail, saving hours in product creation and inventory management;
  • Lightspeed Capital expanded into France, the Netherlands and Belgium in the quarter, with Germany launching just after the quarter ended;
  • Tap to pay on iPhone was expanded to the United Kingdom and the Netherlands;
  • For Lightspeed Retail, advanced insights enhancements launched globally, enabling retailers to save money by reducing inventory waste and creating efficiencies through improved inventory and sales reporting.
• ARPU increased 28 per cent to approximately $447 from approximately $348 in the same quarter last year, assisted by Lightspeed's focus on its unified POS and payments offering and high GTV customer adoption.
• Overall gross margin came in at 42 per cent, essentially flat to the prior quarter. Subscription gross margins grew to 76 per cent in the quarter from 73 per cent in the same quarter last year thanks to a dedicated effort to consolidate cloud vendor arrangements and improved overall efficiencies. Transaction-based gross margins fell to 30 per cent from 33 per cent last year due predominately to a reduction of referral fees as more customers adopted Lightspeed Payments. This was partially offset by increased Lightspeed Capital revenue as well as increasing GPV as a percentage of GTV in international markets where Lightspeed Payments carries a higher gross margin.
• For the quarter, Lightspeed's customers processed GTV of $23.1-billion, up 3 per cent year-over-year.
• An increasing portion of GTV is being processed through the company's payments solutions. GPV increased 69 per cent to $6.6-billion from $3.9-billion in the same period last year.
• Lightspeed's customer base continued to shift toward higher GTV customer locations. Customer locations with GTV exceeding $500,000/year increased 7 per cent year-over-year, and the number of customer locations with GTV exceeding $1-million/year increased 7 per cent year-over-year. The number of customer locations processing GTV under $200,000/year decreased during the same period. Customer locations with GTV exceeding $500,000/year have substantially lower risk of churn and higher lifetime value for Lightspeed compared with lower GTV/year customers.
• Lightspeed Capital showed strong growth with revenue increasing 118 per cent year-over-year.
• Notable customer wins include:
  • Several Michelin-star restaurants have selected Lightspeed Restaurant in the quarter, including:
    • The River Cafe, iconic U.K. restaurant overlooking the River Thames featuring Italian cuisine with one Michelin star;
    • Habel, fine dining experience in Hamburg with one Michelin star as well as a Michelin Green star for gastronomy and sustainability;
    • prism, the one-Michelin-star restaurant in Berlin with elevated cuisine and an award-winning wine list;
  • The Swillhouse Group, with a number of world-class venues across Sydney, has chosen Lightspeed Restaurant to power its entire operations;
  • Attica, a regular on the World's 50 Best Restaurants list, has selected Lightspeed to operate its fine dining restaurant in Melbourne;
  • Lole Clothing, athletic apparel designer and retailer with a number of locations across North America, adopted Lightspeed Retail;
  • High Country Outfitters, with multiple locations across the U.S., has chosen Lightspeed Retail to power its locally owned and operated outdoor gear and clothing stores;
  • Pinarello, the high-performance bike brand, signed onto Lightspeed Retail for its two U.K. locations;
  • Fit My Feet, a six-location footwear and orthotic retailer in the U.S., joined with Lightspeed Retail;
  • Dozens of new brands were added to Lightspeed's supplier network, including Tommy Bahama, Baffin and UNTUCKit.

Financial outlook

The following outlook supersedes all prior statements made by the company and is based on current expectations.

To reflect the company's performance to date, Lightspeed is increasing the lower end of its fiscal 2024 revenue outlook. The company remains cautious on near-term prospects due to a still uncertain macroeconomic environment and the pace of unified payments adoption in international markets. In addition, the fiscal fourth quarter is historically the company's weakest quarter for GTV performance. The success of the company's unified payments initiative to date has Lightspeed on track to achieve its expected 30-to-35-per-cent GPV as a percentage of GTV by the end of fiscal 2024. Given the seasonal weakness, uncertainties surrounding the general economy and the pace of Lightspeed Payments adoption in international markets, Lightspeed's fiscal 2024 outlook is as follows:

• Revenue of approximately $895-million to $905-million;
• Break-even or better adjusted EBITDA.

Conference call and webcast information

Lightspeed will host a conference call and webcast to discuss the company's financial results at 8 a.m. ET on Thursday, Feb. 8, 2024. To access the telephonic version of the conference call, register on-line. After registering, instructions will be shared on how to join the call, including dial-in information as well as a unique passcode and registrant ID. At the time of the call, registered participants will dial in using the numbers from the confirmation e-mail, and upon entering their unique passcode and ID, will be entered directly into the conference. Alternatively, the webcast will be available live on the investors section of the company's website.

Among other things, Lightspeed will discuss quarterly results, financial outlook and trends in its customer base on the conference call and webcast, and related materials will be made available on the company's website. Investors should carefully review the factors, assumptions and uncertainties included in such related materials.

An audio replay of the call will also be available to investors beginning at approximately 11 a.m. Eastern Time on Feb. 8, 2024, until 11:59 p.m. Eastern Time on Feb. 15, 2024, by dialling 800-770-2030 for the U.S. or Canada, or 647-362-9199 for international callers and providing conference ID 74316. In addition, an archived webcast will be available on the investors section of the company's website.

Lightspeed's unaudited condensed interim consolidated financial statements and management's discussion and analysis for the three and nine months ended Dec. 31, 2023, are available on Lightspeed's website and will be filed on SEDAR+ and on EDGAR.

About Lightspeed Commerce Inc.

Powering the businesses that are the backbone of the global economy, Lightspeed's one-stop commerce platform helps merchants innovate to simplify, scale and provide exceptional customer experiences. Its cloud commerce solution transforms and unifies on-line and physical operations, multichannel sales, expansion to new locations, global payments, financial solutions, and connection to supplier networks.

Founded in Montreal, Canada, in 2005, Lightspeed is dual-listed on the New York Stock Exchange and Toronto Stock Exchange. With teams across North America, Europe and Asia Pacific, the company serves retail, hospitality and golf businesses in over 100 countries.

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