Revenue grew 24% YoY to $188.7M (26% growth in constant
currency1) at the higher end of
previously-established outlook
Gross Payments Volume grew 75% YoY to $3.9 billion
Customer Locations processing more than $500,000/year in GTV grew by 15%
YoY2
Adjusted EBITDA loss significantly ahead of previously-established
outlook
Lightspeed remains committed to profitable growth with Adjusted
EBITDA break even or better3 in fiscal 2024
Lightspeed reports in US dollars and in accordance with
IFRS.
MONTREAL, Feb. 2, 2023
/CNW Telbec/ - Lightspeed Commerce Inc. ("Lightspeed" or the
"Company") (TSX: LSPD) (NYSE: LSPD), the one-stop commerce platform
for merchants around the world to simplify, scale and create
exceptional customer experiences, today announced financial results
for the three and nine months ended December
31, 2022.
"We have spent the last two years building the most compelling
commerce platform to help complex SMBs improve productivity,
reduce costs, automate operations and use data driven insights to
scale their business. We continue to be pleased with the growth we
are seeing in this targeted customer base," said JP Chauvet, CEO of
Lightspeed. "Our deliberate focus on this group can be seen in our
results this quarter, with Customer Locations with annual
GTV6 in excess of $500,000
growing 15% and those over $1 million
growing by 19% year-over-year2."
Lightspeed's market opportunity remains large as complex SMBs
require technology solutions to run their business and navigate
challenging times brought on by weaker consumer spending.
Lightspeed is focused on attracting the right customers and
ensuring that operating expenses are optimized to best serve this
market and achieve its goal of profitable growth.
"Having successfully integrated multiple acquisitions,
Lightspeed was able to deliver an Adjusted EBITDA loss that was
better than the previously-established outlook and the lowest in
the past nine quarters." said Asha
Bakshani, Chief Financial Officer of Lightspeed. "Lightspeed
remains committed to our goal of Adjusted EBITDA break even or
better in our next fiscal year3, and our leaner
organizational structure will enable us to be more nimble as we
look to capitalize on the sizable long-term opportunity ahead."
Third Quarter Financial Highlights
(All
comparisons are relative to the three-month period ended
December 31, 2021 unless otherwise stated):
- Total revenue of $188.7 million,
an increase of 24%, or 26% in constant
currency1
- Subscription revenue of $74.5
million, an increase of 9%
- Transaction-based revenue of $107.2
million, an increase of 41%
- Net loss of ($814.8) million,
representing (431.8)% of revenue or ($5.39) per share. Net loss includes a non-cash
goodwill impairment charge of ($748.7)
million. After adjusting for certain items such as
acquisition-related costs, goodwill impairment and share-based
compensation, the Company delivered an Adjusted Income1
of $0.4 million, or $0.00 per share1
- Adjusted EBITDA1 loss of ($5.4) million, representing (2.9)% of
revenue1 versus previously-established outlook of an
Adjusted EBITDA1 loss of approximately ($9) million
- As at December 31, 2022,
Lightspeed had $838.1 million in
unrestricted cash and cash equivalents
__________________________________________________
|
1 Non-IFRS
measure or ratio. See "Non-IFRS Measures and Ratios" and the
reconciliation to the most directly comparable IFRS measure or
ratio included in this press release.
|
2 Excluding
Customer Locations and GTV attributable to the Ecwid eCommerce
standalone product, Lightspeed Golf and NuORDER by Lightspeed
product.
|
3 Financial
outlook, please see the section entitled "Long-Term Financial
Outlook" in this press release for the assumptions, risks and
uncertainties related to Lightspeed's Adjusted EBITDA break even,
and the section entitled "Forward Looking Statements".
|
Fluctuations in foreign exchange rates acted as a headwind in
the quarter. The table below highlights the impact of foreign
exchange on revenue and GTV for the three and nine months ended
December 31, 2022.4
Constant
Currency
(Expressed in
millions of US dollars for revenue and billions of
US dollars for GTV)
|
Three months
ended
December 31, 2022
|
Nine months
ended
December 31, 2022
|
Revenue
|
GTV
|
Revenue
|
GTV
|
|
|
|
|
|
Total revenue as
reported and total GTV4 as reported
|
$
188.7
|
$
22.4
|
$
546.3
|
$
66.8
|
Foreign currency
exchange impact on revenue and GTV
|
$
3.8
|
$
1.4
|
$
10.3
|
$
4.2
|
Revenue at constant
currency1 and GTV at constant
currency4
|
$
192.5
|
$
23.8
|
$
556.6
|
$
71.0
|
|
|
|
|
|
Revenue growth rate and
GTV growth rate
|
24 %
|
10 %
|
36 %
|
20 %
|
Revenue growth rate at
constant currency1 and GTV growth rate at
constant currency
|
26 %
|
17 %
|
39 %
|
28 %
|
|
|
|
|
|
|
|
|
|
|
Prior Year
Comparables =
|
Three months
ended
December 31, 2021
|
Nine months
ended
December 31, 2021
|
Total revenue as
reported and total GTV as reported
|
$
152.7
|
$
20.4
|
$
401.8
|
$
55.6
|
Operational Highlights
- Total revenue of $188.7 million
was up 24% year-over-year due to organic5 growth driven
by higher ARPU, growing GTV, broader payments adoption and an
expanded Customer Location count among high GTV customers. On a
constant currency basis1 revenue grew
26%.
- Subscription and transaction-based revenue grew 26%
year-over-year to $181.7 million, all
of which was organic growth. On a constant currency basis,
subscription and transaction-based revenue1 grew
28%.
- Subscription revenue increased 9% year-over-year to
$74.5 million. Subscription revenue
was positively impacted by a growing Customer Location base among
high GTV customers and expanding ARPU. On a constant currency
basis, subscription revenue1 grew 13%.
- Transaction-based revenue of $107.2
million grew by 41% year-over-year. This performance was a
result of continued growth in GTV and an increasing portion of that
GTV being processed through the Company's payments solutions.
GPV4 increased 75% to $3.9
billion from $2.2 billion in
the same period last year.
- In the quarter, Lightspeed remained focused on attracting the
right customer profile, those with higher GTV and more complex
needs - customers for which Lightspeed's industry-leading solutions
are ideally suited. As a result, monthly ARPU4 for
Customer Locations grew by 20% to approximately $348 compared to approximately $290 in the same quarter last year. Subscription
ARPU increased to $136 from
$131 a year earlier. Lightspeed's
customer base continued to shift towards higher GTV Customer
Locations with the number of Customer Locations with GTV of over
$500,000/year6 increasing
by 15% year-over-year2, and Customer Locations with over
$1 million/year in GTV increasing by
19% year-over-year2. Conversely, the number of Customer
Locations processing under $200,000/year in GTV shrank on a year-over-year
basis2. Customer Locations with GTV of over $500,000/year have a substantially lower risk of
churn and higher lifetime value for Lightspeed compared to lower
GTV/year customers. Total Customer Locations4 remained
at approximately 167,000, flat to the previous
quarter.7
- Selected customer wins include: CASETiFY, a leading global
technology accessory brand that reaches one in seven millennials,
which selected Lightspeed Retail with Payments for its first
Australian flagship store; Soletrader, the well-known British shoe
retailer that operates 28 locations across the UK adopted
Lightspeed Retail with Payments; Le Petit
Nice, the three Michelin star restaurant in Provence that
chose Lightspeed Restaurant with Payments; the Sky-Line Club, a
Chicago fine dining institution
since 1926 that chose Lightspeed Restaurant with Payments and
Analytics; and joining the Lightspeed B2B network will be Santoni,
the luxury hand-made Italian shoe brand, and Gerber
Childrenswear.
- For the quarter, Lightspeed's customers processed GTV of
$22.4 billion, up 10% year-over-year,
and processed $23.8 billion, up 17%
year-over-year on a constant currency basis. Omni-channel retail
GTV grew by 6% whereas hospitality GTV grew by 16%. The Company saw
the impact of the weaker consumer spending conditions on its
customers, with several retail verticals experiencing declining GTV
per location year-over-year. Hospitality GTV was stronger
year-over-year, given the impact of COVID-19 resurgences in the
three-month period ended December 31,
2021, but also showed signs of weakness from the previous
quarter.
- Net loss in the quarter was ($814.8)
million versus ($65.5) million
in the same quarter last year. As a percentage of revenue, net loss
was (431.8)% versus (42.9)% for the same quarter last year. Net
loss includes a non-cash goodwill impairment charge of ($748.7) million.
- Adjusted EBITDA1 loss in the quarter was
($5.4) million versus ($7.1) million in the same quarter last year. As
a percentage of revenue1, Adjusted EBITDA loss was
(2.9)% versus (4.7)% for the same quarter last year. Adjusted
EBITDA loss came in better than Lightspeed's previously-established
outlook due to ongoing financial discipline and revenue that came
in at the high end of the previously-established outlook
range.
- The Company conducts its annual goodwill impairment test every
December 31. Given the decline in the
valuations of technology companies broadly and Lightspeed's share
price, the Company's net assets exceeded its market capitalization
as at December 31, 2022 which was an
impairment trigger for the Company. The goodwill impairment test
resulted in a non-cash impairment charge of ($748.7) million.
- In the quarter, the Company announced the addition of
Kady Srinivasan to its executive
leadership team in the role of Chief Marketing Officer. Ms.
Srinivasan is a tenured executive with over 15 years of experience
leading, building, and scaling marketing efforts at retail, gaming,
consumer products, and technology companies. She comes to
Lightspeed from Klaviyo where she served as SVP, Global Head of
Marketing. Previously, Srinivasan was the Chief Marketing Officer
at Owlet Baby Care and held various roles at Dropbox and Electronic
Arts.
- On January 17, 2023, the Company
announced a streamlining and reorganization of operations with a
10% workforce reduction, eliminating approximately 300 roles. This
resulted in an estimated incremental restructuring cash charge of
$12 million to $14 million, primarily consisting of severance
payments, employee benefits and related costs. The Company expects
to incur these charges primarily in the Company's fourth quarter.
The estimated salary and related benefits from the eliminated roles
amount to approximately $25 million
annually.
- Lightspeed Capital revenue increased by 221% during the quarter
from a year ago. As of December 31,
2022, $15.8 million of
merchant cash advances were outstanding, up 25% from the previous
quarter.
________________________________________________
|
4 Key
Performance Indicator. See "Key Performance Indicators".
|
5 References
herein to "organic" growth exclude the impact of any acquisitions
that occurred since the end of the prior comparable period so as to
provide a consistent basis of comparison. For greater clarity,
where an acquisition occurred part way through the prior comparable
period, such acquisition's contributions in the current period are
included for purposes of calculating organic growth only to the
extent of the same months they were included in the prior
comparable period.
|
6 A Customer
Location's GTV per year is calculated by annualizing the GTV for
the months in which the Customer Location is actively processing in
the last twelve months.
|
7 The
Customer Location and ARPU numbers in the paragraph exclude
approximately 154,000 Customer Locations as at December 31,
2022 attributable to the Ecwid eCommerce standalone product and
approximately 156,000 as at December 31, 2021.
|
Financial Outlook8
The following outlook supersedes all prior statements made by
the Company and is based on current expectations.
Lightspeed expects consumer spending to remain under pressure in
the near term and, given that transaction-based revenues are now
over half of total revenues, this presents a headwind in the months
ahead. Lightspeed will continue to prudently manage the business
while macro uncertainty continues and will prioritize profitable
growth.
For the full year of fiscal 2023, Lightspeed now expects an
Adjusted EBITDA loss1 of approximately ($37) million, improved from
previously-established outlook of approximately ($40) million. The Company now expects annual
revenue to come in at the low end of the previously established
outlook of $730 - $740 million (or approximately $740 million - $750
million on a constant currency basis1).
The Company remains committed to its goal of Adjusted EBITDA
break even or better3 in fiscal 2024.
________________________________________________
|
8 The
financial outlook is fully qualified and based on a number of
assumptions and subject to a number of risks described under the
heading "Forward-Looking Statements" and "Financial Outlook
Assumptions" of this press release.
|
Conference Call and Webcast Information
Lightspeed will host a conference call and webcast to discuss
the Company's financial results at 8:00 am ET on Thursday, February 2, 2023. To access the
telephonic version of the conference call, visit
https://conferencingportals.com/event/rPYvDbSx. 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 email, 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 at
https://investors.lightspeedhq.com.
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 at https://investors.lightspeedhq.com.
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 11:00 a.m.
Eastern Time on February 2,
2023 until 11:59 p.m. Eastern
Time on February 9, 2023, by
dialing 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 at https://investors.lightspeedhq.com.
Lightspeed's unaudited condensed interim consolidated financial
statements and management's discussion and analysis for the three
and nine months ended December 31,
2022 are available on Lightspeed's website at
https://investors.lightspeedhq.com and will be filed on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Financial Outlook Assumptions
When calculating the Adjusted EBITDA and revenue at constant
currency included in our financial outlook for the fourth
quarter and full year ended March 31,
2023, we considered IFRS measures including revenue, direct
cost of revenue, and operating expenses. Our financial outlook is
based on a number of assumptions, including that the jurisdictions
in which Lightspeed has significant operations do not drastically
strengthen or re-strengthen strict measures put in place to help
slow the transmission of COVID-19 or put in place new or additional
measures in response to a resurgence of the virus or the
proliferation of a new variant thereof; requests for subscription
pauses and churn rates owing to business failures remain in line
with planned levels; our ability to grow our Customer Locations in
line with our planned levels (particularly in higher GTV cohorts);
revenue streams resulting from partner referrals remaining in line
with historical rates (particularly in light of the continued
expansion of our payments solutions, which compete with the
solutions offered by some of these referral partners); customers
adopting our payments solutions having an average GTV at or above
that of our planned levels; future uptake of our payments solutions
remaining in line with past rates and expectations, including that
transaction-based revenue growth will be more than twice the rate
of subscription revenue growth year-over-year; gross margins
reflecting this trend in revenue mix; our ability to price our
payments solutions in line with our expectations and to achieve
suitable margins; our ability to achieve success in the continued
expansion of our payments solutions; historical seasonal trends
return to certain of our key verticals and impact our GTV and
transaction-based revenues; continued success in module adoption
expansion throughout our customer base; our ability to derive the
benefits we expect from the acquisitions we have completed
including expected synergies resulting from the prioritization of
our flagship Lightspeed Retail and Lightspeed Restaurant offerings;
market acceptance and adoption of our flagship offerings; our
ability to attract and retain key personnel required to achieve our
plans; our expectations regarding the costs, timing and impact of
our cost reduction initiatives; our ability to manage customer
churn; our ability to manage customer discount and payment deferral
requests; and assumptions as to inflation, changes in interest
rates, consumer spending, foreign exchange rates and other
macroeconomic conditions. Our financial outlook does not give
effect to the potential impact of acquisitions that may be
announced or closed after the date hereof. Our financial outlook,
including the various underlying assumptions, constitutes
forward-looking information and should be read in conjunction with
the cautionary statement on forward-looking information below. Many
factors may cause our actual results, level of activity,
performance or achievements to differ materially from those
expressed or implied by such forward-looking information, including
but not limited to the risks and uncertainties related to: any
pandemic such as the COVID-19 pandemic, the risk of any new or
continued resurgence of the COVID-19 virus or any variants or
mutations in our core geographies and the resulting impact on SMBs,
including heightened levels of churn owing to business failures,
requests for subscription pauses and delayed purchase decisions;
the Russian invasion of Ukraine
and reactions thereto; our inability to attract and retain
customers; our inability to increase customer sales; our inability
to implement our growth strategy; our inability to continue the
acceleration of the global rollout and adoption of our payments
solutions; our reliance on a small number of cloud service
suppliers and suppliers for parts of the technology in our payments
solutions; our ability to maintain sufficient levels of hardware
inventory; our inability to improve and enhance the functionality,
performance, reliability, design, security and scalability of our
platform; our ability to prevent and manage information security
breaches or other cyber-security threats; our ability to compete
against competitors; strategic relations with third parties; our
reliance on integration of third-party payment processing
solutions; compatibility of our solutions with third-party
applications and systems; changes to technologies on which our
platform is reliant; our ability to obtain, maintain and protect
our intellectual property; risks relating to international
operations, sales and use of our platform in various countries; our
liquidity and capital resources; litigation and regulatory
compliance; changes in tax laws and their application; our ability
to expand our sales, marketing and support capability and capacity;
our ability to execute on our cost reduction initiatives;
maintaining our customer service levels and reputation;
macroeconomic factors affecting small and medium-sized businesses,
including inflation, changes in interest rates, consumer spending
trends; and exchange rate fluctuations. The purpose of the
forward-looking information is to provide the reader with a
description of management's expectations regarding our financial
performance and may not be appropriate for other purposes.
Long-Term Financial Outlook
Our long-term targets reflect the current trend of customer
adoption of our payments solutions resulting in an increased
proportion of transaction-based revenue relative to higher margin
subscription-based revenue. Our long-term targets also reflect a
gradual increase in operating leverage, including as a result of
increased ARPU and the benefits of increased scale in our primary
operating expense lines. Our long-term targets constitute financial
outlook and forward-looking information within the meaning of
applicable securities laws. The purpose of communicating long-term
targets is to provide a description of management's expectations
regarding our intended operating model, financial performance and
growth prospects at a further stage of business maturity. Such
information may not be appropriate for other purposes.
A number of assumptions were made by the Company in preparing
our long-term targets, including:
- Economic conditions in our core geographies and verticals,
including consumer confidence, disposable income, consumer spending
and employment, remaining at close to current levels.
- The COVID-19 pandemic, including any variants, having durably
subsided with broad immunity achieved in our core geographies and
verticals, including the elimination of social distancing measures
and other restrictions generally in such markets.
- Customer adoption of our payments solutions in line with past
rates and expectations, with new customers having an average GTV at
or above planned levels.
- Gross margin continuing to decrease as a percentage of revenue
as more customers adopt our payments solutions.
- Our ability to price our payment processing solutions in line
with our expectations.
- Our ability to achieve success in the continued expansion of
our payments solutions.
- Revenue streams resulting from partner referrals remaining in
line with historical rates (particularly in light of the continued
expansion of our payments solutions, which compete with the
solutions offered by some of these referral partners).
- Long-term growth in ARPU of 10% or more per year, including
growth in subscription ARPU, in line with past rates and
expectations, driven by customer adoption of additional solutions
and modules and the introduction of new solutions, modules and
functionalities, including our flagship Lightspeed Retail and
Lightspeed Restaurant offerings.
- Our ability to price solutions and modules in line with our
expectations.
- Our ability to recognize synergies and reinvest those synergies
in core areas of the business as we prioritize our flagship
Lightspeed Retail and Lightspeed Restaurant offerings.
- Growth in and composition of Customer Locations in line with
our strategy of focusing our attention on higher GTV
customers.
- Our ability to successfully integrate acquired companies and to
derive expected benefits from such acquisitions.
- Our ability to attract, develop and retain key personnel.
- Our ability to execute on our cost reduction initiatives.
- The ability to effectively develop and expand our labour force,
including our sales, marketing, support and product and technology
operations, in each case both domestically and
internationally.
- Our ability to manage customer churn.
- Our ability to manage requests for subscription pauses,
customer discounts and payment deferral requests.
- Assumptions as to foreign exchange rates and interest rates,
including inflation.
- Our ability to successfully sell our Lightspeed Capital
offering to our customers.
Our financial outlook does not give effect to the potential
impact of acquisitions that may be announced or closed after the
date hereof. Many factors may cause actual results, level of
activity, performance or achievements to differ materially from
those expressed or implied by such targets, including risk factors
identified in our most recent Management's Discussion and Analysis
of Financial Condition and Results of Operation and under "Risk
Factors" in our most recent Annual Information Form. In particular,
our long-term targets are subject to risks and uncertainties
related to:
- The COVID-19 pandemic, including the risk of any new or
continued resurgence in our core geographies and the resulting
impact on SMBs, including heightened levels of churn owing to
business failures, requests for subscription pauses, payment
deferrals and delayed purchase decisions.
- The Russian invasion of Ukraine and reactions thereto.
- Supply chain risk and the impact of shortages in the supply
chain on our merchants.
- Other macroeconomic factors affecting SMBs, including
inflation, changes in interest rates and consumer spending
trends.
- Our ability to manage the impact of foreign currency
fluctuations on our revenues and results of operations.
- Our ability to implement our growth strategy and the impact of
competition.
- The substantial investments and expenditures required in the
foreseeable future to expand our business.
- Our liquidity and capital resources, including our ability to
secure debt or equity financing on satisfactory terms.
- Our ability to increase scale and operating leverage.
- Our ability to continue the acceleration of the global rollout
and adoption of our payments solutions.
- Our reliance on a small number of cloud service providers and
suppliers for parts of the technology in our payments
solutions.
- Our ability to improve and enhance the functionality,
performance, reliability, design, security and scalability of our
platform.
- Our ability to prevent and manage information security breaches
or other cyber-security threats.
- Our ability to compete and satisfactorily price our solutions
in a highly fragmented and competitive market.
- Strategic relations with third parties, including our reliance
on integration of third-party payment processing solutions.
- Our ability to maintain sufficient levels of hardware
inventory.
- Compatibility of our solutions with third-party applications
and systems.
- Changes to technologies on which our platform is reliant.
- Our ability to obtain, maintain and protect our intellectual
property.
- Risks relating to our international operations, sales and use
of our platform in various countries.
- Seasonality in our business and in the business of our
customers.
- Litigation and regulatory compliance.
- Our ability to expand our sales capability and maintain our
customer service levels and reputation.
- Our ability to execute on our cost reduction initiatives.
- Gross profit and operating expenses being measures determined
in accordance with IFRS, and the fact that such measures may be
affected by unusual, extraordinary, or non-recurring items, or by
items which do not otherwise reflect operating performance or which
hinder period-to-period comparisons.
- Any potential acquisitions or other strategic opportunities,
some of which may be material in size or result in significant
integration difficulties or expenditures, or otherwise impact our
ability to achieve profitability on our intended timeline or at
all.
See also the section entitled "Forward-Looking Statements" in
this press release.
About Lightspeed
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. The cloud solution transforms and unifies online and
physical operations, multichannel sales, expansion to new
locations, global payments, financing and connection to supplier
networks.
Founded in Montreal, Canada,
Lightspeed is dual listed on the New York Stock Exchange and
Toronto Stock Exchange (NYSE: LSPD) (TSX: LSPD). With teams across
North America, Europe and Asia
Pacific, the Company serves retail, hospitality and golf
businesses in over 100 countries.
For more information, please visit: www.lightspeedhq.com
On social media: LinkedIn, Facebook, Instagram, YouTube, and
Twitter
Non-IFRS Measures and Ratios
The information presented herein includes certain non-IFRS
financial measures such as "Adjusted EBITDA", "Adjusted Income
(Loss)", "Adjusted Cash Flows Used in Operating Activities",
"Non-IFRS gross profit", "Non-IFRS general and administrative
expenses", "Non-IFRS research and development expenses", "Non-IFRS
sales and marketing expenses", "Revenue at constant currency",
"Subscription revenue at constant currency" and "Subscription and
transaction-based revenue at constant currency" and certain
non-IFRS ratios such as "Adjusted EBITDA as a percentage of
revenue", "Adjusted Income (Loss) per Share - Basic and Diluted",
"Non-IFRS gross profit as a percentage of revenue", "Non-IFRS
general and administrative expenses as a percentage of revenue",
"Non-IFRS research and development expenses as a percentage of
revenue", "Non-IFRS sales and marketing expenses as a percentage of
revenue", "Revenue growth at constant currency", "Subscription
revenue growth at constant currency" and "Subscription and
transaction-based revenue growth at constant currency". These
measures and ratios are not recognized measures and ratios under
IFRS and do not have a standardized meaning prescribed by IFRS and
are therefore unlikely to be comparable to similar measures and
ratios presented by other companies. Rather, these measures and
ratios are provided as additional information to complement those
IFRS measures and ratios by providing further understanding of our
results of operations from management's perspective. Accordingly,
these measures and ratios should not be considered in isolation nor
as a substitute for analysis of our financial information reported
under IFRS. These non-IFRS measures and ratios are used to provide
investors with supplemental measures and ratios of our operating
performance and thus may highlight trends in our core business that
may not otherwise be apparent when relying solely on IFRS measures
and ratios. We also believe that securities analysts, investors and
other interested parties frequently use non-IFRS measures and
ratios in the evaluation of issuers. Our management also uses
non-IFRS measures and ratios in order to facilitate operating
performance comparisons from period to period, to prepare operating
budgets and forecasts and to determine components of management
compensation. During the nine months ended December 31, 2022,
the Company introduced the new non-IFRS measures: "Revenue at
constant currency", "Subscription revenue at constant currency" and
"Subscription and transaction-based revenue at constant currency",
and the new non-IFRS ratios: "Revenue growth at constant currency",
"Subscription revenue growth at constant currency" and
"Subscription and transaction-based revenue growth at constant
currency".
"Adjusted EBITDA" is defined as net
loss excluding interest, taxes, depreciation and amortization, or
EBITDA, as adjusted for share-based compensation and related
payroll taxes, compensation expenses relating to acquisitions
completed, foreign exchange gains and losses, transaction-related
costs, restructuring, litigation provisions and goodwill
impairment. We believe that Adjusted EBITDA provides a useful
supplemental measure of the Company's operating performance, as it
helps illustrate underlying trends in our business that could
otherwise be masked by the effect of the income or expenses that
are not indicative of the core operating performance of our
business.
"Adjusted EBITDA as a percentage of
revenue" is calculated by dividing our Adjusted EBITDA by
our total revenue. We believe that Adjusted EBITDA as a percentage
of revenue provides a useful supplemental measure of the Company's
operating performance, as it helps illustrate underlying trends in
our business that could otherwise be masked by the effect of the
income or expenses that are not indicative of the core operating
performance of our business.
"Adjusted Income (Loss)" is defined as
net loss excluding amortization of intangibles, as adjusted for
share-based compensation and related payroll taxes, compensation
expenses relating to acquisitions completed, transaction-related
costs, restructuring, litigation provisions, deferred income tax
recovery and goodwill impairment. We use this measure as we believe
excluding amortization of intangibles and certain other non-cash or
non-operational expenditures provides a helpful supplementary
indicator of our business performance as it allows for more
accurate comparability across periods.
"Adjusted Income (Loss) per Share - Basic and
Diluted" is defined as Adjusted Income (Loss) divided by the
weighted average number of common shares (basic and diluted). We
use Adjusted Income (Loss) per Share - Basic and Diluted to provide
a helpful supplemental indicator of the performance and
profitability of our business on a per share (basic and diluted)
basis.
"Adjusted Cash Flows Used in Operating
Activities" is defined as cash flows used in operating
activities as adjusted for the payment of payroll taxes on
share-based compensation, the payment of compensation expenses
relating to acquisitions completed, the payment of
transaction-related costs, the payment of restructuring costs, the
payment of amounts related to litigation provisions net of amounts
received as insurance and indemnification proceeds and the payment
of amounts related to capitalized internal development costs. We
use this measure as we believe excluding certain inflows and
outflows provides a helpful supplemental indicator to investors on
our business performance in regard to the Company's ability to
generate cash flow.
"Non-IFRS gross profit" is defined as
gross profit as adjusted for share-based compensation and related
payroll taxes. We use this measure as we believe excluding
share-based compensation and related payroll taxes provides a
helpful supplemental indicator to investors on our business
performance in regard to the Company's performance and
profitability.
"Non-IFRS gross profit as a percentage of
revenue" is calculated by dividing our Non-IFRS gross profit by
our total revenue. We use this ratio as we believe excluding
share-based compensation and related payroll taxes provides a
helpful supplemental indicator to investors on our business
performance in regard to the Company's performance and
profitability.
"Non-IFRS general and administrative
expenses" is defined as general and administrative expenses as
adjusted for share-based compensation and related payroll taxes,
transaction-related costs and litigation provisions. We use this
measure as we believe excluding certain charges provides a helpful
supplemental indicator to investors on our operating
expenditures.
"Non-IFRS general and administrative expenses
as a percentage of revenue" is calculated by dividing our
Non-IFRS general and administrative expenses by our total revenue.
We use this ratio as we believe excluding certain charges provides
a helpful supplemental indicator to investors on our operating
expenditures.
"Non-IFRS research and development
expenses" is defined as research and development expenses
as adjusted for share-based compensation and related payroll taxes.
We use this measure as we believe excluding share-based
compensation and related payroll taxes provides a helpful
supplemental indicator to investors on our operating
expenditures.
"Non-IFRS research and development expenses
as a percentage of revenue" is calculated by dividing our
Non-IFRS research and development expenses by our total revenue. We
use this ratio as we believe excluding share-based compensation and
related payroll taxes provides a helpful supplemental indicator to
investors on our operating expenditures.
"Non-IFRS sales and marketing
expenses" is defined as sales and marketing expenses as
adjusted for share-based compensation and related payroll taxes and
transaction-related costs. We use this measure as we believe
excluding share-based compensation and related payroll taxes and
transaction-related costs provides a helpful supplemental indicator
to investors on our operating expenditures.
"Non-IFRS sales and marketing expenses as a
percentage of revenue" is calculated by dividing our
Non-IFRS sales and marketing expenses by our total revenue. We use
this ratio as we believe excluding share-based compensation and
related payroll taxes and transaction-related costs provides a
helpful supplemental indicator to investors on our operating
expenditures.
"Revenue at constant currency" means
revenue adjusted for the impact of foreign currency exchange
fluctuations. Current revenue in currencies other than US dollars
is converted into US dollars using the average monthly exchange
rates from the corresponding months in the prior fiscal year rather
than the actual exchange rates in effect during the current period.
We believe this measure provides a helpful supplemental indicator
on comparable revenue growth by removing the effect of changes in
foreign currency exchange rates year-over-year to aid investors to
better understand our performance.
"Revenue growth at constant currency"
means the year-over-year change in revenue at constant currency
divided by reported revenue in the prior period. We believe this
ratio provides a helpful supplemental indicator on comparable
revenue growth by removing the effect of changes in foreign
currency exchange rates year-over-year to aid investors to better
understand our performance.
"Subscription revenue at constant
currency" means subscription revenue adjusted for the impact of
foreign currency exchange fluctuations. Current subscription
revenue in currencies other than US dollars is converted into US
dollars using the average monthly exchange rates from the
corresponding months in the prior fiscal year rather than the
actual exchange rates in effect during the current period. We
believe this measure provides a helpful supplemental indicator on
comparable subscription revenue growth by removing the effect of
changes in foreign currency exchange rates year-over-year to aid
investors to better understand our performance.
"Subscription revenue growth at constant
currency" means the year-over-year change in subscription
revenue at constant currency divided by reported revenue in the
prior period. We believe this ratio provides a helpful supplemental
indicator on comparable subscription revenue growth by removing the
effect of changes in foreign currency exchange rates year-over-year
to aid investors to better understand our performance.
"Subscription and transaction-based revenue
at constant currency" means subscription and transaction-based
revenue adjusted for the impact of foreign currency exchange
fluctuations. Current subscription and transaction-based revenue in
currencies other than US dollars is converted into US dollars using
the average monthly exchange rates from the corresponding months in
the prior fiscal year rather than the actual exchange rates in
effect during the current period. We believe this measure provides
a helpful supplemental indicator on comparable subscription and
transaction-based revenue growth by removing the effect of changes
in foreign currency exchange rates year-over-year to aid investors
to better understand our performance.
"Subscription and transaction-based revenue
growth at constant currency" means the year-over-year change in
subscription and transaction-based revenue at constant currency
divided by reported revenue in the prior period. We believe this
ratio provides a helpful supplemental indicator on comparable
subscription and transaction-based revenue growth by removing the
effect of changes in foreign currency exchange rates year-over-year
to aid investors to better understand our performance.
See the financial tables below for a reconciliation of the
non-IFRS financial measures and ratios.
Key Performance Indicators
We monitor the following key performance indicators to help us
evaluate our business, measure our performance, identify trends
affecting our business, formulate business plans and make strategic
decisions. These key performance indicators are also used to
provide investors with supplemental measures of our operating
performance and thus highlight trends in our core business that may
not otherwise be apparent when relying solely on IFRS measures and
ratios. We also believe that securities analysts, investors and
other interested parties frequently use industry metrics in the
evaluation of issuers. Our key performance indicators may be
calculated in a manner different than similar key performance
indicators used by other companies.
ARPU. "Average Revenue Per
User" or "ARPU" represents the total subscription
revenue and transaction-based revenue of the Company in the period
divided by the number of Customer Locations of the Company in the
period. We use this measure as we believe it provides a helpful
supplemental indicator of our progress in growing the revenue that
we derive from our customer base. For greater clarity, the
number of Customer Locations of the Company in the period is
calculated by taking the average number of Customer Locations
throughout the period.
Customer Locations. "Customer
Location" means a billing merchant location for which the term
of services have not ended, or with which we are negotiating a
renewal contract, and, in the case of NuORDER, a brand with a
direct or indirect paid subscription for which the terms of
services have not ended or in respect of which we are negotiating a
subscription renewal. A single unique customer can have multiple
Customer Locations including physical and eCommerce sites and in
the case of NuORDER, multiple subscriptions. We use this measure as
we believe that our ability to increase the number of Customer
Locations with a high GTV per year served by our platform is an
indicator of our success in terms of market penetration and growth
of our business.
Gross Payment Volume. "Gross Payment
Volume" or "GPV" means the total dollar value of
transactions processed, excluding amounts processed through the
NuORDER solution, in the period through our payments solutions in
respect of which we act as the principal in the arrangement with
the customer, net of refunds, inclusive of shipping and handling,
duty and value-added taxes. We use this measure as we believe that
growth in our GPV demonstrates the extent to which we have scaled
our payments solutions. As the number of Customer Locations using
our payments solutions grows, particularly those with a high GTV,
we will generate more GPV and see higher transaction-based revenue.
We have excluded amounts processed through the NuORDER solution
from our GPV because they represent business-to-business volume
rather than business-to-consumer volume and we do not currently
have a robust payments solution for business-to-business
volume.
Gross Transaction Volume. "Gross
Transaction Volume" or "GTV" means the total dollar
value of transactions processed through our cloud-based
software-as-a-service platform, excluding amounts processed through
the NuORDER solution, in the period, net of refunds, inclusive of
shipping and handling, duty and value-added taxes. We use this
measure as we believe GTV is an indicator of the success of our
customers and the strength of our platform. GTV does not represent
revenue earned by us. We have excluded amounts processed through
the NuORDER solution from our GTV because they represent
business-to-business volume rather than business-to-consumer volume
and we do not currently have a robust payments solution for
business-to-business volume.
Gross Transaction Volume at constant
currency. "Gross Transaction Volume at constant
currency" or "GTV at constant currency" means GTV
adjusted for the impact of foreign currency exchange fluctuations.
Current GTV for currencies other than US dollars is converted into
US dollars using the average monthly exchange rates from the
corresponding months in the prior fiscal year rather than the
actual exchange rates in effect during the current period. We use
this measure as we believe GTV at constant currency provides a
helpful supplemental indicator of the success of our customers and
strength of our platform, without the effect of changes in foreign
currency exchange rates year-over-year.
Forward-Looking Statements
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
information") within the meaning of applicable securities laws.
Forward looking information may relate to our financial outlook
(including revenue, revenue at constant currency, Adjusted EBITDA
and Adjusted EBITDA as a percentage of revenue), and anticipated
events or results and may include information regarding our
financial position, business strategy, growth strategies,
addressable markets, budgets, operations, financial results, taxes,
dividend policy, plans and objectives. Particularly, information
regarding: our expectations of future results, performance,
achievements, prospects or opportunities or the markets in which we
operate; macroeconomic conditions such as increasing inflationary
pressures, interest rates, and global economic uncertainty; our
expectations regarding the costs, timing and impact of our cost
reduction initiatives; events such as the ongoing COVID-19 pandemic
and the Russian Invasion of Ukraine; and expectations regarding industry
and consumer spending trends, our growth rates, the achievement of
advances in and expansion of our platform, our revenue and the
revenue generation potential of our payment-related and other
solutions, our gross margins and future profitability, acquisition
outcomes and synergies, the impact of legal proceedings, the impact
of foreign currency fluctuations on our results of operations, our
business plans and strategies and our competitive position in our
industry, is forward-looking information.
In some cases, forward-looking information can be identified by
the use of forward-looking terminology such as "plans", "targets",
"expects" or "does not expect", "is expected", "an opportunity
exists", "budget", "scheduled", "estimates", "suggests", "outlook",
"forecasts", "projection", "prospects", "strategy", "intends",
"anticipates" or "does not anticipate", "believes", or variations
of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might", "will", "will
be taken", "occur" or "be achieved", the negative of these terms
and similar terminology. In addition, any statements that refer to
expectations, intentions, projections or other characterizations of
future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not
historical facts but instead represent management's expectations,
estimates and projections regarding future events or
circumstances.
Forward-looking information is necessarily based on a number of
opinions, estimates and assumptions that we considered appropriate
and reasonable as of the date of such forward-looking information.
Forward-looking information is subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause the
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking information, including but not limited to the risk
factors identified in our most recent Management's Discussion and
Analysis of Financial Condition and Results of Operations, under
"Risk Factors" in our most recent Annual Information Form, and in
our other filings with the Canadian securities regulatory
authorities and the U.S. Securities and Exchange Commission, all of
which are available under our profile on SEDAR at www.sedar.com and
on EDGAR at www.sec.gov.
Although we have attempted to identify important risk factors
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other risk
factors not presently known to us or that we presently believe are
not material that could also cause actual results or future events
to differ materially from those expressed in such forward-looking
information. You should not place undue reliance on forward-looking
information, which speaks only as of the date made. The
forward-looking information contained in this news release
represents our expectations as of the date of hereof (or as of the
date they are otherwise stated to be made), and are subject to
change after such date. However, we disclaim any intention or
obligation or undertaking to update or revise any forward-looking
information whether as a result of new information, future events
or otherwise, except as required under applicable securities laws.
All of the forward-looking information contained in this news
release is expressly qualified by the foregoing cautionary
statements.
Condensed Interim
Consolidated Statements of Loss and Comprehensive
Loss
(expressed in
thousands of US dollars, except number of shares and per share
amounts, unaudited)
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Nine months
ended
December 31,
|
|
2022
|
2021
|
|
2022
|
2021
|
|
$
|
$
|
|
$
|
$
|
Revenues
|
|
|
|
|
|
Subscription
|
74,494
|
68,589
|
|
222,548
|
177,888
|
Transaction-based
|
107,156
|
75,839
|
|
299,984
|
197,315
|
Hardware and
other
|
7,047
|
8,248
|
|
23,746
|
26,611
|
|
|
|
|
|
|
Total
revenues
|
188,697
|
152,676
|
|
546,278
|
401,814
|
|
|
|
|
|
|
Direct cost of
revenues
|
|
|
|
|
|
Subscription
|
19,948
|
19,164
|
|
61,028
|
51,535
|
Transaction-based
|
71,584
|
43,949
|
|
204,496
|
115,610
|
Hardware and
other
|
11,159
|
10,562
|
|
35,754
|
33,149
|
|
|
|
|
|
|
Total cost of
revenues
|
102,691
|
73,675
|
|
301,278
|
200,294
|
|
|
|
|
|
|
Gross
profit
|
86,006
|
79,001
|
|
245,000
|
201,520
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
General and
administrative
|
28,429
|
21,655
|
|
83,800
|
67,013
|
Research and
development
|
37,405
|
32,005
|
|
109,637
|
84,313
|
Sales and
marketing
|
60,505
|
55,308
|
|
193,487
|
149,271
|
Depreciation of
property and equipment
|
1,327
|
1,315
|
|
3,736
|
3,204
|
Depreciation of
right-of-use assets
|
2,109
|
2,078
|
|
6,219
|
5,711
|
Foreign exchange loss
(gain)
|
(968)
|
327
|
|
(496)
|
582
|
Acquisition-related
compensation
|
6,290
|
19,012
|
|
36,046
|
30,058
|
Amortization of
intangible assets
|
25,366
|
25,851
|
|
76,926
|
65,661
|
Restructuring
|
1,324
|
—
|
|
3,134
|
197
|
Goodwill
impairment
|
748,712
|
—
|
|
748,712
|
—
|
|
|
|
|
|
|
Total operating
expenses
|
910,499
|
157,551
|
|
1,261,201
|
406,010
|
|
|
|
|
|
|
Operating
loss
|
(824,493)
|
(78,550)
|
|
(1,016,201)
|
(204,490)
|
|
|
|
|
|
|
Net interest
income
|
8,300
|
1,029
|
|
15,158
|
1,974
|
|
|
|
|
|
|
Loss before income
taxes
|
(816,193)
|
(77,521)
|
|
(1,001,043)
|
(202,516)
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
|
|
|
|
|
Current
|
38
|
96
|
|
818
|
821
|
Deferred
|
(1,429)
|
(12,125)
|
|
(6,320)
|
(29,421)
|
|
|
|
|
|
|
Total income tax
recovery
|
(1,391)
|
(12,029)
|
|
(5,502)
|
(28,600)
|
|
|
|
|
|
|
Net
loss
|
(814,802)
|
(65,492)
|
|
(995,541)
|
(173,916)
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified to net loss
|
|
|
|
|
|
Foreign currency
differences on translation of foreign operations
|
9,197
|
(2,251)
|
|
(6,325)
|
(6,376)
|
Change in net
unrealized gain (loss) on cash flow hedging instruments
|
1,407
|
415
|
|
(1,371)
|
(530)
|
|
|
|
|
|
|
Total other
comprehensive income (loss)
|
10,604
|
(1,836)
|
|
(7,696)
|
(6,906)
|
|
|
|
|
|
|
Total comprehensive
loss
|
(804,198)
|
(67,328)
|
|
(1,003,237)
|
(180,822)
|
|
|
|
|
|
|
Net loss per share –
basic and diluted
|
(5.39)
|
(0.44)
|
|
(6.64)
|
(1.25)
|
|
|
|
|
|
|
Weighted average
number of Common Shares – basic and diluted
|
151,187,993
|
148,171,635
|
|
149,952,650
|
139,283,453
|
Condensed Interim
Consolidated Balance Sheets
(expressed in
thousands of US dollars, unaudited)
|
|
|
|
|
|
|
As at
|
|
December 31,
2022
|
March 31,
2022
|
Assets
|
$
|
$
|
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
838,118
|
953,654
|
Trade and other
receivables
|
68,575
|
45,766
|
Inventories
|
10,143
|
7,540
|
Other current
assets
|
33,934
|
35,535
|
|
|
|
Total current
assets
|
950,770
|
1,042,495
|
|
|
|
Lease right-of-use
assets, net
|
22,305
|
25,539
|
Property and
equipment, net
|
19,587
|
16,456
|
Intangible assets,
net
|
334,600
|
409,568
|
Goodwill
|
1,350,009
|
2,104,368
|
Other long-term
assets
|
29,233
|
21,400
|
Deferred tax
assets
|
144
|
154
|
|
|
|
Total
assets
|
2,706,648
|
3,619,980
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
Accounts payable and
accrued liabilities
|
69,748
|
78,307
|
Lease
liabilities
|
6,924
|
7,633
|
Income taxes
payable
|
6,627
|
6,718
|
Deferred
revenue
|
61,636
|
65,194
|
|
|
|
Total current
liabilities
|
144,935
|
157,852
|
|
|
|
Deferred
revenue
|
1,640
|
2,121
|
Lease
liabilities
|
19,479
|
23,037
|
Long-term
debt
|
—
|
29,841
|
Accrued payroll
taxes on share-based compensation
|
851
|
1,007
|
Deferred tax
liabilities
|
222
|
6,833
|
|
|
|
Total
liabilities
|
167,127
|
220,691
|
|
|
|
Shareholders'
equity
|
|
|
Share
capital
|
4,274,008
|
4,199,025
|
Additional paid-in
capital
|
192,263
|
123,777
|
Accumulated other
comprehensive income (loss)
|
(5,019)
|
2,677
|
Accumulated
deficit
|
(1,921,731)
|
(926,190)
|
|
|
|
Total shareholders'
equity
|
2,539,521
|
3,399,289
|
|
|
|
Total liabilities
and shareholders' equity
|
2,706,648
|
3,619,980
|
Condensed Interim
Consolidated Statements of Cash Flows
(expressed in
thousands of US dollars, unaudited)
|
|
|
|
|
|
|
Nine months ended
December 31,
|
|
2022
|
2021
|
Cash flows from
(used in) operating activities
|
$
|
$
|
Net loss
|
(995,541)
|
(173,916)
|
Items not affecting
cash and cash equivalents
|
|
|
Share-based
acquisition-related compensation
|
31,520
|
26,133
|
Amortization of
intangible assets
|
76,926
|
65,661
|
Depreciation of
property and equipment and lease right-of-use assets
|
9,955
|
8,915
|
Deferred income
taxes
|
(6,320)
|
(29,421)
|
Share-based
compensation expense
|
107,845
|
66,982
|
Unrealized foreign
exchange loss
|
50
|
272
|
Goodwill
impairment
|
748,712
|
—
|
(Increase)/decrease in
operating assets and increase/(decrease) in operating
liabilities
|
|
|
Trade and other
receivables
|
(19,689)
|
(11,095)
|
Inventories
|
(2,603)
|
(2,884)
|
Other
assets
|
(4,746)
|
(22,590)
|
Accounts payable and
accrued liabilities
|
(10,362)
|
(2,001)
|
Income taxes
payable
|
(91)
|
451
|
Deferred
revenue
|
(4,039)
|
1,727
|
Accrued payroll taxes
on share-based compensation
|
(156)
|
(2,136)
|
Net interest
income
|
(15,158)
|
(1,974)
|
|
|
|
Total operating
activities
|
(83,697)
|
(75,876)
|
|
|
|
Cash flows from
(used in) investing activities
|
|
|
Additions to property
and equipment
|
(7,211)
|
(8,748)
|
Additions to intangible
assets
|
(2,375)
|
—
|
Acquisition of
businesses, net of cash acquired
|
—
|
(559,450)
|
Purchase of
investments
|
(1,256)
|
—
|
Movement in restricted
term deposits
|
—
|
344
|
Interest
income
|
13,706
|
4,122
|
|
|
|
Total investing
activities
|
2,864
|
(563,732)
|
|
|
|
Cash flows from
(used in) financing activities
|
|
|
Proceeds from exercise
of stock options
|
4,297
|
16,925
|
Proceeds from issuance
of share capital
|
—
|
823,515
|
Share issuance
costs
|
(193)
|
(34,135)
|
Repayment of long-term
debt
|
(30,000)
|
—
|
Payment of lease
liabilities net of incentives and movement in restricted lease
deposits
|
(6,405)
|
(5,088)
|
Financing
costs
|
(734)
|
(1,445)
|
|
|
|
Total financing
activities
|
(33,035)
|
799,772
|
|
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(1,668)
|
(655)
|
|
|
|
Net increase
(decrease) in cash and cash equivalents during
the period
|
(115,536)
|
159,509
|
|
|
|
Cash and cash
equivalents – Beginning of period
|
953,654
|
807,150
|
|
|
|
Cash and cash
equivalents – End of period
|
838,118
|
966,659
|
|
|
|
Interest
paid
|
374
|
704
|
Income taxes
paid
|
979
|
687
|
Reconciliation
from IFRS to Non-IFRS Results
Adjusted
EBITDA
(expressed in
thousands of US dollars, except percentages,
unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
December
31,
|
|
Nine months
ended
December
31,
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
Net
loss
|
(814,802)
|
|
(65,492)
|
|
(995,541)
|
|
(173,916)
|
Net loss as a
percentage of revenue
|
(431.8) %
|
|
(42.9) %
|
|
(182.2) %
|
|
(43.3) %
|
Share-based
compensation and related payroll taxes(1)
|
34,470
|
|
21,968
|
|
107,700
|
|
67,441
|
Depreciation and
amortization(2)
|
28,802
|
|
29,244
|
|
86,881
|
|
74,576
|
Foreign exchange loss
(gain)(3)
|
(968)
|
|
327
|
|
(496)
|
|
582
|
Net interest
income(2)
|
(8,300)
|
|
(1,029)
|
|
(15,158)
|
|
(1,974)
|
Acquisition-related
compensation(4)
|
6,290
|
|
19,012
|
|
36,046
|
|
30,058
|
Transaction-related
costs(5)
|
390
|
|
1,017
|
|
3,511
|
|
8,781
|
Restructuring(6)
|
1,324
|
|
—
|
|
3,134
|
|
197
|
Goodwill
impairment(7)
|
748,712
|
|
—
|
|
748,712
|
|
—
|
Litigation
provisions(8)
|
64
|
|
(126)
|
|
1,180
|
|
1,079
|
Income tax
recovery
|
(1,391)
|
|
(12,029)
|
|
(5,502)
|
|
(28,600)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
(5,409)
|
|
(7,108)
|
|
(29,533)
|
|
(21,776)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a
percentage of revenue
|
(2.9) %
|
|
(4.7) %
|
|
(5.4) %
|
|
(5.4) %
|
(1)
|
These expenses
represent non-cash expenditures recognized in connection with
issued stock options and other awards under our equity incentive
plans to our employees and directors as well as related payroll
taxes given that they are directly attributable to share-based
compensation; they can include estimates and are therefore subject
to change. For the three and nine months ended December 31, 2022,
share-based compensation expense was $34,256 and $107,845,
respectively (December 2021 - expense of $29,939 and $66,982), and
related payroll taxes were an expense of $214 and a recovery of
$145, respectively (December 2021 - recovery of $7,971 and an
expense of $459). These amounts are included in direct cost of
revenues, general and administrative expenses, research and
development expenses and sales and marketing expenses (see note 6
of the unaudited condensed interim consolidated financial
statements for additional details).
|
(2)
|
In connection with the
accounting standard IFRS 16 - Leases, for the three months ended
December 31, 2022, net loss includes depreciation of $2,109 related
to right-of-use assets, interest expense of $275 on lease
liabilities, and excludes an amount of $2,197 relating to rent
expense ($2,078, $305, and $2,039, respectively, for the three
months ended December 31, 2021). For the nine months ended December
31, 2022, net loss includes depreciation of $6,219 related to
right-of-use assets, interest expense of $797 on lease liabilities,
and excludes an amount of $6,390 relating to rent expense ($5,711,
$916, and $6,022, respectively, for the nine months ended December
31, 2021).
|
(3)
|
These non-cash gains
and losses relate to foreign exchange translation.
|
(4)
|
These costs represent a
portion of the consideration paid to acquired businesses that is
contingent upon the ongoing employment obligations for certain key
personnel of such acquired businesses, and/or on certain
performance criteria being achieved.
|
(5)
|
These expenses relate
to professional, legal, consulting, accounting, advisory, and other
fees relating to our public offerings and acquisitions that would
otherwise not have been incurred. These costs are included in
general and administrative expenses and sales and marketing
expenses.
|
(6)
|
Certain functions and
the associated management structure were reorganized and will
continue to be reorganized to realize synergies and ensure
organizational agility. The expenses associated with this
reorganization were recorded as a restructuring charge.
|
(7)
|
This amount represents
a non-cash goodwill impairment charge (see note 11 of the unaudited
condensed interim consolidated financial statements for additional
details).
|
(8)
|
These amounts represent
provisions taken and other costs, such as legal fees, incurred in
respect of certain litigation matters, net of amounts covered by
insurance and indemnifications. These amounts do not include
provisions taken and other costs incurred in respect of litigation
matters of a nature that we consider normal to our business. These
amounts are included in general and administrative
expenses.
|
Reconciliation
from IFRS to Non-IFRS Results (continued)
Adjusted Income
(Loss) and Adjusted Income (Loss) per Share - Basic and
Diluted
(expressed in
thousands of US dollars, except number of shares and per share
amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
December
31,
|
|
Nine months
ended
December
31,
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
Net
loss
|
(814,802)
|
|
(65,492)
|
|
(995,541)
|
|
(173,916)
|
Share-based
compensation and related payroll taxes(1)
|
34,470
|
|
21,968
|
|
107,700
|
|
67,441
|
Amortization of
intangible assets
|
25,366
|
|
25,851
|
|
76,926
|
|
65,661
|
Acquisition-related
compensation(2)
|
6,290
|
|
19,012
|
|
36,046
|
|
30,058
|
Transaction-related
costs(3)
|
390
|
|
1,017
|
|
3,511
|
|
8,781
|
Restructuring(4)
|
1,324
|
|
—
|
|
3,134
|
|
197
|
Goodwill
impairment(5)
|
748,712
|
|
—
|
|
748,712
|
|
—
|
Litigation
provisions(6)
|
64
|
|
(126)
|
|
1,180
|
|
1,079
|
Deferred income tax
recovery
|
(1,429)
|
|
(12,125)
|
|
(6,320)
|
|
(29,421)
|
|
|
|
|
|
|
|
|
Adjusted Income
(Loss)
|
385
|
|
(9,895)
|
|
(24,652)
|
|
(30,120)
|
|
|
|
|
|
|
|
|
Weighted average
number of Common Shares –
basic and diluted(7)
|
151,187,993
|
|
148,171,635
|
|
149,952,650
|
|
139,283,453
|
|
|
|
|
|
|
|
|
Net loss per share –
basic and diluted
|
(5.39)
|
|
(0.44)
|
|
(6.64)
|
|
(1.25)
|
Adjusted Income
(Loss) per Share –
Basic and Diluted
|
0.00
|
|
(0.07)
|
|
(0.16)
|
|
(0.22)
|
(1)
|
These expenses
represent non-cash expenditures recognized in connection with
issued stock options and other awards under our equity incentive
plans to our employees and directors as well as related payroll
taxes given that they are directly attributable to share-based
compensation; they can include estimates and are therefore subject
to change. For the three and nine months ended December 31, 2022,
share-based compensation expense was $34,256 and $107,845,
respectively (December 2021 - expense of $29,939 and $66,982), and
related payroll taxes were an expense of $214 and a recovery of
$145, respectively (December 2021 - recovery of $7,971 and an
expense of $459). These amounts are included in direct cost of
revenues, general and administrative expenses, research and
development expenses and sales and marketing expenses (see note 6
of the unaudited condensed interim consolidated financial
statements for additional details).
|
(2)
|
These costs represent a
portion of the consideration paid to acquired businesses that is
contingent upon the ongoing employment obligations for certain key
personnel of such acquired businesses, and/or on certain
performance criteria being achieved.
|
(3)
|
These expenses relate
to professional, legal, consulting, accounting, advisory, and other
fees relating to our public offerings and acquisitions that would
otherwise not have been incurred. These costs are included in
general and administrative expenses and sales and marketing
expenses.
|
(4)
|
Certain functions and
the associated management structure were reorganized and will
continue to be reorganized to realize synergies and ensure
organizational agility. The expenses associated with this
reorganization were recorded as a restructuring charge.
|
(5)
|
This amount represents
a non-cash goodwill impairment charge (see note 11 of the unaudited
condensed interim consolidated financial statements for additional
details).
|
(6)
|
These amounts represent
provisions taken and other costs, such as legal fees, incurred in
respect of certain litigation matters, net of amounts covered by
insurance and indemnifications. These amounts do not include
provisions taken and other costs incurred in respect of litigation
matters of a nature that we consider normal to our business. These
amounts are included in general and administrative
expenses.
|
(7)
|
In periods where we
reported an Adjusted Loss, as a result of the Adjusted Losses
incurred, all potentially-dilutive securities have been excluded
from the calculation of Adjusted Loss per Share - Diluted because
including them would be anti-dilutive. Adjusted Loss per Share -
Diluted is the same as Adjusted Loss per Share - Basic in these
periods where we incurred an Adjusted Loss. In the three months
ended December 31, 2022, an Adjusted Income was reported. The
weighted average number of common shares was not adjusted for the
dilutive effect of all potentially dilutive securities for the
three months ended December 31, 2022 as Adjusted Income per Share -
Basic and Diluted would be the same amount with or without the
dilutive effect of all potentially dilutive securities given that
the Adjusted Income per Share - Basic was already 0.00.
|
Reconciliation
from IFRS to Non-IFRS Results (continued)
Adjusted Cash
Flows Used in Operating Activities
(expressed in
thousands of US dollars, unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
December
31,
|
|
Nine months
ended
December
31,
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
Cash flows used in
operating activities
|
(26,424)
|
|
(48,236)
|
|
(83,697)
|
|
(75,876)
|
Payroll taxes related
to share-based compensation(1)
|
618
|
|
1,751
|
|
885
|
|
4,797
|
Acquisition-related
compensation (2)
|
6,043
|
|
3,673
|
|
6,043
|
|
7,093
|
Transaction-related
costs(3)
|
(315)
|
|
3,910
|
|
4,509
|
|
11,777
|
Restructuring(4)
|
679
|
|
—
|
|
2,492
|
|
1,089
|
Litigation provisions
(5)
|
228
|
|
1,487
|
|
3,097
|
|
(288)
|
Capitalized internal
development costs(6)
|
(877)
|
|
—
|
|
(2,375)
|
|
—
|
|
|
|
|
|
|
|
|
Adjusted Cash Flows
Used in Operating Activities
|
(20,048)
|
|
(37,415)
|
|
(69,046)
|
|
(51,408)
|
(1)
|
These amounts represent
the cash inflow and outflow of payroll taxes on our issued stock
options and other awards under our equity incentive plans to our
employees and directors.
|
(2)
|
These amounts represent
the cash outflow of a portion of the consideration paid to acquired
businesses that is associated with the ongoing employment
obligations for certain key personnel of such acquired businesses,
and/or on certain performance criteria being achieved.
|
(3)
|
These amounts represent
the cash outflows, and inflows due to timing differences, related
to professional, legal, consulting, accounting, advisory, and other
fees relating to our public offerings and acquisitions that would
otherwise not have been incurred. These amounts also include
adjustments related to the settlement of transaction-related costs
of the targets that were outside the regular course of business for
our acquisitions and which were assumed as liabilities on the
relevant acquisition dates.
|
(4)
|
Certain functions and
the associated management structure were reorganized and will
continue to be reorganized to realize synergies and ensure
organizational agility. The expenses associated with this
reorganization were recorded as a restructuring charge.
|
(5)
|
These amounts represent
the cash inflow and outflow in respect of provisions taken, and
other costs such as legal fees incurred, in respect of certain
litigation matters, net of amounts received as insurance and
indemnification proceeds. These cash inflows and outflows do not
include cash inflows and outflows in respect of litigation matters
of a nature that we consider normal to our business.
|
(6)
|
These amounts represent
the cash outflows associated with capitalized internal development
costs related to the Lightspeed B2B network. These amounts are
included within the cash flows used in investing activities section
of the unaudited condensed interim consolidated statements of cash
flows. If these costs were not capitalized as an intangible asset,
they would be part of our cash flows used in operating activities.
There were no capitalized internal development costs in the fiscal
year ended March 31, 2022.
|
Reconciliation
from IFRS to Non-IFRS Results (continued)
(In thousands of US
dollars, except percentages, unaudited)
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Nine months
ended
December 31,
|
|
2022
|
2021
|
|
2022
|
2021
|
|
$
|
$
|
|
$
|
$
|
Gross
profit
|
86,006
|
79,001
|
|
245,000
|
201,520
|
% of revenue
|
45.6 %
|
51.7 %
|
|
44.8 %
|
50.2 %
|
add: Share-based
compensation and related payroll taxes(3)
|
1,652
|
1,202
|
|
6,110
|
4,196
|
|
|
|
|
|
|
Non-IFRS gross
profit(1)
|
87,658
|
80,203
|
|
251,110
|
205,716
|
Non-IFRS gross profit
as a percentage of revenue(2)
|
46.5 %
|
52.5 %
|
|
46.0 %
|
51.2 %
|
|
|
|
|
|
|
General and
administrative expenses
|
28,429
|
21,655
|
|
83,800
|
67,013
|
% of revenue
|
15.1 %
|
14.2 %
|
|
15.3 %
|
16.7 %
|
less: Share-based
compensation and related payroll taxes(3)
|
11,719
|
5,467
|
|
30,430
|
15,641
|
less:
Transaction-related costs(4)
|
285
|
708
|
|
2,780
|
7,877
|
less: Litigation
provisions(5)
|
64
|
(126)
|
|
1,180
|
1,079
|
|
|
|
|
|
|
Non-IFRS general and
administrative expenses(1)
|
16,361
|
15,606
|
|
49,410
|
42,416
|
Non-IFRS general and
administrative expenses as a percentage of
revenue(2)
|
8.7 %
|
10.2 %
|
|
9.0 %
|
10.6 %
|
|
|
|
|
|
|
Research and
development expenses
|
37,405
|
32,005
|
|
109,637
|
84,313
|
% of revenue
|
19.8 %
|
21.0 %
|
|
20.1 %
|
21.0 %
|
less: Share-based
compensation and related payroll taxes(3)
|
10,144
|
7,226
|
|
31,013
|
19,386
|
|
|
|
|
|
|
Non-IFRS research
and development expenses(1)
|
27,261
|
24,779
|
|
78,624
|
64,927
|
Non-IFRS research and
development expenses as a percentage of
revenue(2)
|
14.4 %
|
16.2 %
|
|
14.4 %
|
16.2 %
|
|
|
|
|
|
|
Sales and marketing
expenses
|
60,505
|
55,308
|
|
193,487
|
149,271
|
% of revenue
|
32.1 %
|
36.2 %
|
|
35.4 %
|
37.1 %
|
less: Share-based
compensation and related payroll taxes(3)
|
10,955
|
8,073
|
|
40,147
|
28,218
|
less:
Transaction-related costs(4)
|
105
|
309
|
|
731
|
904
|
|
|
|
|
|
|
Non-IFRS sales and
marketing expenses(1)
|
49,445
|
46,926
|
|
152,609
|
120,149
|
Non-IFRS sales and
marketing expenses as a percentage of
revenue(2)
|
26.2 %
|
30.7 %
|
|
27.9 %
|
29.9 %
|
(1)
|
This is a Non-IFRS
measure. See "Non-IFRS Measures and Ratios".
|
(2)
|
This is a Non-IFRS
ratio. See "Non-IFRS Measures and Ratios".
|
(3)
|
These expenses
represent non-cash expenditures recognized in connection with
issued stock options and other awards under our equity incentive
plans to our employees and directors as well as related payroll
taxes given that they are directly attributable to share-based
compensation; they can include estimates and are therefore subject
to change.
|
(4)
|
These expenses relate
to professional, legal, consulting, accounting, advisory, and other
fees relating to our public offerings and acquisitions that would
otherwise not have been incurred. These costs are included in
general and administrative expenses and sales and marketing
expenses.
|
(5)
|
These amounts represent
provisions taken and other costs, such as legal fees, incurred in
respect of certain litigation matters, net of amounts covered by
insurance and indemnifications. These amounts do not include
provisions taken and other costs incurred in respect of litigation
matters of a nature that we consider normal to our business. These
amounts are included in general and administrative
expenses.
|
Reconciliation
from IFRS to Non-IFRS Results (continued)
Revenue and
revenue growth rate at constant currency
(expressed in
thousands of US dollars, except percentages,
unaudited)
|
|
|
|
|
|
Three months
ended
December 31, 2022
|
|
Nine months
ended
December 31, 2022
|
|
|
|
|
|
$
|
|
$
|
Subscription revenue as
reported
|
74,494
|
|
222,548
|
Subscription revenue
growth rate
|
9 %
|
|
25 %
|
Foreign currency
exchange impact on subscription revenue(1)
|
2,788
|
|
7,418
|
|
|
|
|
Subscription revenue at
constant currency
|
77,282
|
|
229,966
|
Subscription revenue
growth rate at constant currency
|
13 %
|
|
29 %
|
|
|
|
|
Subscription and
transaction-based revenue as reported
|
181,650
|
|
522,532
|
Subscription and
transaction-based revenue growth rate
|
26 %
|
|
39 %
|
Foreign currency
exchange impact on subscription and transaction-based
revenue(1)
|
3,411
|
|
8,912
|
|
|
|
|
Subscription and
transaction-based revenue at constant currency
|
185,061
|
|
531,444
|
Subscription and
transaction-based revenue growth rate at constant
currency
|
28 %
|
|
42 %
|
|
|
|
|
Total revenue as
reported
|
188,697
|
|
546,278
|
Total revenue growth
rate
|
24 %
|
|
36 %
|
Foreign currency
exchange impact on total revenue(1)
|
3,846
|
|
10,273
|
|
|
|
|
Total revenue at
constant currency
|
192,543
|
|
556,551
|
Total revenue growth
rate at constant currency
|
26 %
|
|
39 %
|
|
|
|
|
|
Three months
ended
December 31, 2021
|
|
Nine months
ended
December 31, 2021
|
|
$
|
|
$
|
Subscription revenue as
reported
|
68,589
|
|
177,888
|
Subscription and
transaction-based revenue as reported
|
144,428
|
|
375,203
|
Total revenue as
reported
|
152,676
|
|
401,814
|
(1)
|
Current revenue in
currencies other than US dollars is converted into US dollars using
the average monthly exchange rates from the corresponding months in
the prior fiscal year rather than the actual exchange rates in
effect during the current period. We believe this measure provides
a helpful supplemental indicator on comparable revenue growth by
removing the effect of changes in foreign currency exchange rates
year-over-year to aid investors to better understand our
performance.
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multimedia:https://www.prnewswire.com/news-releases/lightspeed-announces-third-quarter-2023-financial-results-301737104.html
SOURCE Lightspeed Commerce Inc.