TD Have a US$25.00 target. GLTA
Lightspeed Commerce Inc.
(LSPD-N, LSPD-T) US$19.57 | C$26.39
Q3/F24 First Take: Continued PPR Expansion
Event
Q3/F24 results.
Conference Call: 8:00 a.m. ET;
Impact: MIXED
Better-than-expected EBITDA. EBITDA of $3.6mm was above expectations of
$2.2mm (TD)/$2.4mm (consensus) helped by strong payments revenue growth and
cost discipline. We believe profitability will continue to improve as payments mix
increases.
Mixed top-line results. Revenue of $239.7mm slightly beat expectations of
$237.5mm (TD)/$236.8mm (consensus) and represented 27% y/y growth, although
the beat was driven by better-than-expected hardware revenue. Revenue also came
in slightly above prior guidance of $232mm-$237mm. Subscription and transaction-
based revenue of $228.7mm grew by 26% y/y. GTV of $23.1bln was only up 3% y/
y, below expectations of $23.7bln (TD)/$23.6mm (consensus).
Low end of F2024 guidance raised. Full-year guidance was raised to $895mm-
$905mm from $890mm-$905mm, helped by continued payments momentum with
lower-than-anticipated churn, as management still expects to end F2024 with a
30%-35% payments penetration rate (PPR). F2024 EBITDA is still expected to be
breakeven or better. The company remains cautious given the macro uncertainty
and pace of payments adoption in international markets.
Payments push showing continued progress. Transaction-based revenue grew
to $147.8mm, up 38% y/y. Strong performance was driven by a growing proportion
of GTV being processed through Lightspeed Payments, with GPV up 69% y/y.
Payments penetration rate (PPR) increased to 28.6%, up from 25.1% in Q2/F24 and
17.4% in Q3/F23. Accordingly, Lightspeed's ARPU rose 28% to ~$447 from ~$348 y/
y, helped by its unified POS and payments offering and high GTV customer adoption.
Continued focus on high value customers. The company increased the number
of customers with over $1mm GTV/year by 7% y/y and the number of customers with
over $500k GTV/year increased 7% y/y, whereas the number of customers with less
than $200k GTV/year decreased. Lightspeed continues its push upmarket given the
lower churn and higher lifetime value compared to its lower GTV customers2