Operating discipline helped Lightspeed deliver
Adjusted EBITDA ahead of outlook
Revenue ahead of outlook, grew 38% YoY to $183.7M (41% growth in constant
currency1)
Customer Locations processing more than $500,000/year in GTV grew by ~25%
YoY
Strong upsell of Lightspeed Payments drove
ARPU2 growth of 25%
Gross Payments Volume of $3.7 billion grew 86% YoY
Lightspeed reports in US dollars and in accordance with
IFRS.
MONTREAL, Nov. 3, 2022
/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 six months ended September
30, 2022.
"This is a critical moment in time for our customers in retail
and hospitality." said JP Chauvet, CEO of Lightspeed. "They are
recognizing that technology is the key to evolving their
businesses. Lightspeed's omni-channel commerce platform helps SMBs
automate mundane tasks, better connect with consumers and act on
compelling data insights, which is why we continue to see strong
demand for our technology solutions."
In the quarter, Lightspeed delivered revenue ahead of previously
established outlook despite headwinds from foreign exchange
fluctuations. Strong GTV and ARPU performance were a result of the
Company's purposeful pursuit of the right customers whose higher
GTV and more complex needs make them an ideal fit for Lightspeed's
industry leading solutions. In addition to strong financial
performance, the Company also moved to strengthen its senior
management team with the hiring of former Google executive
Ryan Tabone as Chief Product and
Technology Officer and the promotion of JD Saint-Martin to
President.
"Lightspeed was able to continue to deliver strong revenue
growth of 41% on a constant currency basis in the quarter while
delivering Adjusted EBITDA performance that was better than our
outlook given our focus on operating discipline across the
business." said Asha Bakshani, Chief
Financial Officer of Lightspeed. "The Company has been focused on
attracting the right profile of customer, and on expanding
Lightspeed Payments adoption. These efforts were evident in our
strong Gross Payment Volume and ARPU performance, and significantly
improved Adjusted EBITDA margins, striking a balance between growth
and the pursuit of profitability."
Second Quarter
Financial Highlights
(All comparisons are relative to the three-month period
ended September 30, 2021 unless otherwise stated):
- Total revenue of $183.7 million,
an increase of 38%, or 41% in constant currency1
- Subscription revenue of $74.5
million, an increase of 25%
- Transaction-based revenue of $101.3
million, an increase of 56%
- Net loss of ($79.9) million, or
($0.53) per share, as compared to a
net loss of ($59.1) million, or
($0.43) per share, representing
(43.5)% of revenue versus (44.4)%. After adjusting for certain
items such as acquisition-related costs and share-based
compensation, Adjusted Loss1 was ($7.5) million, or ($0.05) per share1
- Adjusted EBITDA1 loss of ($8.5) million, representing (4.6)% of
revenue1 versus previously-established outlook of an
Adjusted EBITDA1 loss of ($10.0)
million
- As at September 30, 2022,
Lightspeed had ~$863 million in
unrestricted cash and cash equivalents
_____________________________________
|
1
|
Non-IFRS measure or
ratio. See "Non-IFRS Measures and Ratios" and the reconciliation to
the most directly comparable IFRS measure or ratio included in this
press release.
|
2
|
Excluding Customer
Locations attributable to the Ecwid eCommerce standalone
product.
|
In its third fiscal quarter of 2022, Lightspeed completed the
acquisition of Ecwid, Inc. The table below distinguishes certain
quarterly financial measures and key performance indicators between
Lightspeed's operations without Ecwid and those of the acquired
company for the quarter ended September 30,
2022.3
Q2
Summary
|
Lightspeed
|
Ecwid
|
Consolidated
|
|
|
|
|
Total revenue
($M)
|
$
176.2
|
$
7.5
|
$
183.7
|
GTV
($B)3
|
$
21.7
|
$
0.6
|
$
22.3
|
Customer
Locations3
|
~167,000
|
~153,000
|
~320,000
|
ARPU3
|
$
337
|
$
15
|
$
182
|
Additionally, 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 six months
ended September 30, 2022.
Constant
Currency Expressed in
millions of US dollars for revenue and billions of
US dollars for GTV
|
Three months
ended
September 30, 2022
|
Six months ended
September 30, 2022
|
Revenue
|
GTV
|
Revenue
|
GTV
|
|
|
|
|
|
Total revenue as
reported and total GTV as reported
|
$
183.7
|
$
22.3
|
$
357.6
|
$
44.4
|
Foreign currency
exchange impact on revenue and GTV
|
$
3.5
|
$
1.5
|
$
6.4
|
$
2.8
|
Revenue at constant
currency1 and GTV at constant
currency3
|
$
187.2
|
$
23.8
|
$
364.0
|
$
47.2
|
|
|
|
|
|
Revenue growth rate and
GTV growth rate
|
38 %
|
18 %
|
44 %
|
26 %
|
Revenue growth rate at
constant currency1 and GTV growth rate at
constant currency
|
41 %
|
26 %
|
46 %
|
34 %
|
|
Three months
ended
September 30, 2021
|
Six months ended
September 30, 2021
|
Total revenue as
reported and total GTV as reported
|
$
133.2
|
$
18.8
|
$
249.1
|
$
35.2
|
Operational Highlights
- Total revenue of $183.7 million
was up 38% year-over-year due primarily to strong organic growth
and $7.5 million in revenue from our
acquisition of Ecwid. On a constant currency basis1
revenue grew 41%.
- Subscription and transaction-based revenue grew 41%
year-over-year to $175.8 million.
Organic4 growth in subscription and transaction-based
revenues was 35% year-over-year.
- Subscription revenue increased 25% year-over-year to
$74.5 million. Subscription revenue
was positively impacted by the acquisition of Ecwid along with a
growing Customer Location base and expanding ARPU.
- Transaction-based revenue of $101.3
million grew by 56% year-over-year. The strong performance
was a result of continued growth in GTV and an increasing portion
of that GTV being processed through the Company's payments
solutions. GPV3 increased approximately 86% to
$3.7 billion from $2.0 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 we believe the Company's
industry-leading solutions are ideally suited. As a result, monthly
ARPU for Customer Locations grew by 25% to approximately
$337 compared to approximately
$270 in the same quarter last year.
Subscription ARPU increased to $136
from $128 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/year[5] increasing
by approximately 25% year-over-year, and Customer Locations with
over $1 million/year in GTV
increasing by approximately 30%. Conversely, the number of Customer
Locations processing under $200,000/year in GTV shrank on a year-over-year
basis. Customer Locations with GTV of over $500,000/year have a substantially lower churn
rate and higher lifetime value for Lightspeed compared to lower
GTV/year customers. Total Customer Locations increased to
approximately 167,000 from approximately 166,000 in the previous
quarter. The above Customer Location and ARPU numbers exclude
~153,000 Customer Locations attributable to the Ecwid eCommerce
standalone product, which Customer Locations carry a monthly ARPU
of approximately $15 per Customer
Location.
- Selected customer wins include: L'Osteria, with over 130
locations in Germany and expanding
throughout Europe, has signed up
for Lightspeed Restaurant and Lightspeed Payments; Spa L'Occitane,
a five star resort and spa in France, is also adopting Lightspeed Restaurant
and Lightspeed Payments; The Consulate in Manhattan's Upper West side, a French casual
dining restaurant, chose Lightspeed for its strong analytics
functionality; Everytable, with 53 locations serving grab and go
delivery meals will be adopting Lightspeed Retail and Payments and
Anheuser-Busch InBev has chosen Lightspeed's e-commerce solution
for their headless commerce initiatives in South America.
- For the quarter, Lightspeed's customers processed GTV of
$22.3 billion, up 18% year-over-year
(15% on an organic basis). On a constant currency basis GTV grew by
26%. GTV growth outpaced location growth partially due to the
Company adding higher GTV locations. Omni-channel retail GTV grew
by 21% whereas hospitality GTV grew by 16%. The addition of higher
GTV customers within retail helped offset declining consumer
spending in certain verticals. Within hospitality, GTV growth was
impacted by deteriorating foreign exchange rates in the
quarter.
- Adjusted EBITDA1 loss in the quarter was
$(8.5) million versus $(8.7) million in the same quarter last year. As
a percentage of revenue1, Adjusted EBITDA1
loss was (4.6)% versus (6.5)% for the same quarter last year.
Adjusted EBITDA loss came in better than Lightspeed's
previously-established outlook due to ongoing financial discipline
and slightly-better-than-expected revenue.
- In the quarter, the Company announced the addition of
Ryan Tabone to its executive
leadership team in the role of Chief Product and Technology
Officer. Mr. Tabone comes to Lightspeed from Google where he was
involved in building Google's Chromebook and more recently acted as
the Vice President & General Manager of Google Pay and Google
Finance. In addition, after the quarter, Lightspeed promoted JD
Saint-Martin to the role of President. Mr. Saint-Martin will be directly accountable for
the strategic direction and overall performance of all of
Lightspeed's verticals.
- As of September 30, 2022,
$12.6 million of merchant cash
advances were outstanding, up 35% from the previous quarter.
|
_____________________________________________
|
3
|
Key Performance
Indicator. See "Key Performance Indicators"
|
4
|
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.
|
5
|
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.
|
Financial
Outlook6
The following outlook supersedes all prior statements made by
the Company and is based on current expectations. Lightspeed's
second quarter results were strong with growing subscription and
transaction-based revenue. The Company continues to execute in
areas it controls but is facing macroeconomic conditions that are
negatively impacting the business and certain assumptions
underlying its previous outlook for the fiscal year ended
March 31, 2023. Chief among these are
greater-than-expected changes in foreign exchange rates that
Lightspeed expects will impact the Company by approximately
$10-$15
million in revenue for the full year. In addition, the
Company believes that the uncertain macroeconomic environment is
reason for increased caution through the second half of the year
and particularly for the busy holiday season. As a result,
Lightspeed has amended its financial outlook and expects revenue
and Adjusted EBITDA1 to be in the following ranges and
estimates:
The Company now expects annual revenue at constant
currency1 of $740 to
$750 million, as compared to its
previously issued outlook of revenue of $740 to $760
million. After incorporating the impact of new foreign
exchange rate assumptions and a more cautious view of the
macroeconomic environment, the Company expects revenue to be
$730 to $740
million.
For the third quarter, the Company expects revenue at constant
currency1 of $189 to
$194 million, and $185 to $190
million in revenue after incorporating the impact of new
foreign exchange rate assumptions and a more cautious view of the
macroeconomic environment.
Despite the updated revenue outlook, the Company expects to
achieve Adjusted EBITDA1 loss of approximately
($40) million, or approximately (5)%
as a percentage of revenue, within the previous outlook for
Adjusted EBITDA1 loss of ($35) to ($40)
million. For the third quarter, Adjusted EBITDA1
loss is expected to be approximately ($9)
million, or approximately (5)% as a percentage of
revenue.
In addition, the Company remains confident in its expectation
that it should reach Adjusted EBITDA1 break
even7 for the fiscal year ended March 31, 2024.
|
_______________________________________________
|
6
|
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.
|
7
|
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".
|
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, November 3, 2022. 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 November 3,
2022, until 11:59 p.m. Eastern
Time on November 10, 2022, 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 six months ended September 30,
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 third
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; 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 successfully integrate the companies
we have acquired and to derive the benefits we expect from the
acquisition thereof 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 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 inability 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 inability 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;
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 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.
- 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.
- 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 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" and "Revenue at constant currency" and certain non-IFRS
ratios such as "Adjusted EBITDA as a percentage of revenue",
"Adjusted 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"
and "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 three months ended September 30,
2022, the Company introduced the new non-IFRS measure "Revenue at
constant currency" and the new non-IFRS ratio "Revenue growth at
constant currency". This measure and ratio provides insight 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.
"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 and litigation provisions.
"Adjusted EBITDA as a percentage of
revenue" is calculated by dividing our Adjusted EBITDA by
our total revenue.
"Adjusted 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 and deferred income tax
recovery.
"Adjusted Loss per Share - Basic and
Diluted" is defined as Adjusted Loss divided by the weighted
average number of common shares (basic and diluted).
"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.
"Non-IFRS gross profit" is defined as
gross profit as adjusted for share-based compensation and related
payroll taxes.
"Non-IFRS gross profit as a percentage of
revenue" is calculated by dividing our Non-IFRS gross profit by
our total revenue.
"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.
"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.
"Non-IFRS research and development
expenses" is defined as research and development expenses
as adjusted for share-based compensation and related payroll
taxes.
"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.
"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.
"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.
"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.
"Revenue growth at constant currency"
means the year-over-year change in revenue at constant currency
divided by reported revenue in the prior period.
See the financial tables below for a
reconciliation of the non-IFRS financial measure 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. 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 believe that our
ability to increase the number of Customer Locations served by our
platform, particularly those with a high GTV, 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 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, 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 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.
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; 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
September 30,
|
|
Six months ended
September 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
|
$
|
$
|
|
$
|
$
|
Revenues
|
|
|
|
|
|
Subscription
|
74,494
|
59,374
|
|
148,054
|
109,299
|
Transaction-based
|
101,304
|
65,023
|
|
192,828
|
121,476
|
Hardware and
other
|
7,901
|
8,821
|
|
16,699
|
18,363
|
|
|
|
|
|
|
Total
revenues
|
183,699
|
133,218
|
|
357,581
|
249,138
|
|
|
|
|
|
|
Direct cost of
revenues
|
|
|
|
|
|
Subscription
|
20,657
|
17,754
|
|
41,080
|
32,371
|
Transaction-based
|
70,011
|
39,472
|
|
132,912
|
71,661
|
Hardware and
other
|
11,562
|
11,046
|
|
24,595
|
22,587
|
|
|
|
|
|
|
Total cost of
revenues
|
102,230
|
68,272
|
|
198,587
|
126,619
|
|
|
|
|
|
|
Gross
profit
|
81,469
|
64,946
|
|
158,994
|
122,519
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
General and
administrative
|
25,132
|
23,081
|
|
55,371
|
45,358
|
Research and
development
|
36,596
|
30,092
|
|
72,232
|
52,308
|
Sales and
marketing
|
64,337
|
51,693
|
|
132,982
|
93,963
|
Depreciation of
property and equipment
|
1,188
|
1,020
|
|
2,409
|
1,889
|
Depreciation of
right-of-use assets
|
2,063
|
2,008
|
|
4,110
|
3,633
|
Foreign exchange
loss
|
29
|
6
|
|
472
|
255
|
Acquisition-related
compensation
|
12,653
|
9,032
|
|
29,756
|
11,046
|
Amortization of
intangible assets
|
25,684
|
22,797
|
|
51,560
|
39,810
|
Restructuring
|
603
|
—
|
|
1,810
|
197
|
|
|
|
|
|
|
Total operating
expenses
|
168,285
|
139,729
|
|
350,702
|
248,459
|
|
|
|
|
|
|
Operating
loss
|
(86,816)
|
(74,783)
|
|
(191,708)
|
(125,940)
|
|
|
|
|
|
|
Net interest
income
|
4,851
|
719
|
|
6,858
|
945
|
|
|
|
|
|
|
Loss before income
taxes
|
(81,965)
|
(74,064)
|
|
(184,850)
|
(124,995)
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
|
|
|
|
|
Current
|
516
|
95
|
|
780
|
725
|
Deferred
|
(2,538)
|
(15,072)
|
|
(4,891)
|
(17,296)
|
|
|
|
|
|
|
Total income tax
recovery
|
(2,022)
|
(14,977)
|
|
(4,111)
|
(16,571)
|
|
|
|
|
|
|
Net
loss
|
(79,943)
|
(59,087)
|
|
(180,739)
|
(108,424)
|
|
|
|
|
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified to net loss
|
|
|
|
|
|
Foreign currency
differences on translation of foreign operations
|
(6,689)
|
(4,429)
|
|
(15,522)
|
(4,125)
|
Change in net
unrealized loss on cash flow hedging instruments
|
(2,059)
|
(945)
|
|
(2,778)
|
(945)
|
|
|
|
|
|
|
Total other
comprehensive loss
|
(8,748)
|
(5,374)
|
|
(18,300)
|
(5,070)
|
|
|
|
|
|
|
Total comprehensive
loss
|
(88,691)
|
(64,461)
|
|
(199,039)
|
(113,494)
|
|
|
|
|
|
|
Net loss per share –
basic and diluted
|
(0.53)
|
(0.43)
|
|
(1.21)
|
(0.80)
|
|
|
|
|
|
|
Weighted average
number of Common Shares – basic and diluted
|
149,688,692
|
138,796,551
|
|
149,332,947
|
134,839,363
|
Condensed Interim
Consolidated Balance Sheets (expressed in thousands of US dollars,
unaudited)
|
|
|
|
|
|
|
As at
|
|
September
30,
2022
|
March 31,
2022
|
Assets
|
$
|
$
|
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
862,576
|
953,654
|
Trade and other
receivables
|
57,119
|
45,766
|
Inventories
|
10,013
|
7,540
|
Other current
assets
|
31,527
|
35,535
|
|
|
|
Total current
assets
|
961,235
|
1,042,495
|
|
|
|
Lease right-of-use
assets, net
|
22,937
|
25,539
|
Property and
equipment, net
|
18,769
|
16,456
|
Intangible assets,
net
|
357,180
|
409,568
|
Goodwill
|
2,091,056
|
2,104,368
|
Other long-term
assets
|
26,452
|
21,400
|
Deferred tax
assets
|
140
|
154
|
|
|
|
Total
assets
|
3,477,769
|
3,619,980
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
Accounts payable and
accrued liabilities
|
73,462
|
78,307
|
Lease
liabilities
|
6,809
|
7,633
|
Income taxes
payable
|
6,672
|
6,718
|
Deferred
revenue
|
62,931
|
65,194
|
|
|
|
Total current
liabilities
|
149,874
|
157,852
|
|
|
|
Deferred
revenue
|
1,598
|
2,121
|
Lease
liabilities
|
19,346
|
23,037
|
Long-term
debt
|
—
|
29,841
|
Accrued payroll
taxes on share-based compensation
|
924
|
1,007
|
Deferred tax
liabilities
|
1,608
|
6,833
|
|
|
|
Total
liabilities
|
173,350
|
220,691
|
|
|
|
Shareholders'
equity
|
|
|
Share
capital
|
4,255,533
|
4,199,025
|
Additional paid-in
capital
|
171,438
|
123,777
|
Accumulated other
comprehensive income (loss)
|
(15,623)
|
2,677
|
Accumulated
deficit
|
(1,106,929)
|
(926,190)
|
|
|
|
Total shareholders'
equity
|
3,304,419
|
3,399,289
|
|
|
|
Total liabilities
and shareholders' equity
|
3,477,769
|
3,619,980
|
|
|
|
Condensed Interim
Consolidated Statements of Cash Flows
(expressed in
thousands of US dollars, unaudited)
|
|
|
|
|
|
|
Six months ended
September 30,
|
|
2022
|
2021
|
Cash flows from
(used in) operating activities
|
$
|
$
|
Net loss
|
(180,739)
|
(108,424)
|
Items not affecting
cash and cash equivalents
|
|
|
Share-based
acquisition-related compensation
|
26,740
|
8,972
|
Amortization of
intangible assets
|
51,560
|
39,810
|
Depreciation of
property and equipment and lease right-of-use assets
|
6,519
|
5,522
|
Deferred income
taxes
|
(4,891)
|
(17,296)
|
Share-based
compensation expense
|
73,589
|
37,043
|
Unrealized foreign
exchange loss
|
290
|
429
|
(Increase)/decrease in
operating assets and increase/(decrease) in operating
liabilities
|
|
|
Trade and other
receivables
|
(10,434)
|
(321)
|
Inventories
|
(2,473)
|
(1,353)
|
Other
assets
|
368
|
(3,858)
|
Accounts payable and
accrued liabilities
|
(8,029)
|
9,286
|
Income taxes
payable
|
(46)
|
283
|
Deferred
revenue
|
(2,786)
|
1,841
|
Accrued payroll taxes
on share-based compensation
|
(83)
|
1,371
|
Net interest
income
|
(6,858)
|
(945)
|
|
|
|
Total operating
activities
|
(57,273)
|
(27,640)
|
|
|
|
Cash flows from
(used in) investing activities
|
|
|
Additions to property
and equipment
|
(5,206)
|
(3,532)
|
Additions to intangible
assets
|
(1,498)
|
—
|
Acquisition of
businesses, net of cash acquired
|
—
|
(398,567)
|
Purchase of
investments
|
(820)
|
—
|
Movement in restricted
term deposits
|
—
|
344
|
Interest
income
|
7,185
|
2,281
|
|
|
|
Total investing
activities
|
(339)
|
(399,474)
|
|
|
|
Cash flows from
(used in) financing activities
|
|
|
Proceeds from exercise
of stock options
|
4,033
|
14,823
|
Proceeds from issuance
of share capital
|
—
|
823,515
|
Share issuance
costs
|
(193)
|
(33,659)
|
Repayment of long-term
debt
|
(30,000)
|
—
|
Payment of lease
liabilities net of incentives and movement in restricted lease
deposits
|
(4,106)
|
(3,049)
|
Financing
costs
|
(373)
|
(788)
|
|
|
|
Total financing
activities
|
(30,639)
|
800,842
|
|
|
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(2,827)
|
(704)
|
|
|
|
Net increase
(decrease) in cash and cash equivalents during
the period
|
(91,078)
|
373,024
|
|
|
|
Cash and cash
equivalents – Beginning of period
|
953,654
|
807,150
|
|
|
|
Cash and cash
equivalents – End of period
|
862,576
|
1,180,174
|
|
|
|
Interest
paid
|
373
|
480
|
Income taxes
paid
|
768
|
635
|
Reconciliation
from IFRS to Non-IFRS Results
Adjusted
EBITDA
(expressed in
thousands of US dollars, except percentages,
unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
September
30,
|
|
Six months
ended
September
30,
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
Net
loss
|
(79,943)
|
|
(59,087)
|
|
(180,739)
|
|
(108,424)
|
Net loss as a
percentage of revenue
|
(43.5) %
|
|
(44.4) %
|
|
(50.5) %
|
|
(43.5) %
|
Share-based
compensation and related payroll taxes(1)
|
34,928
|
|
28,798
|
|
73,230
|
|
45,473
|
Depreciation and
amortization(2)
|
28,935
|
|
25,825
|
|
58,079
|
|
45,332
|
Foreign exchange
loss(3)
|
29
|
|
6
|
|
472
|
|
255
|
Net interest
income(2)
|
(4,851)
|
|
(719)
|
|
(6,858)
|
|
(945)
|
Acquisition-related
compensation(4)
|
12,653
|
|
9,032
|
|
29,756
|
|
11,046
|
Transaction-related
costs(5)
|
947
|
|
2,468
|
|
3,121
|
|
7,764
|
Restructuring(6)
|
603
|
|
—
|
|
1,810
|
|
197
|
Litigation
provisions(7)
|
198
|
|
—
|
|
1,116
|
|
1,205
|
Income tax
recovery
|
(2,022)
|
|
(14,977)
|
|
(4,111)
|
|
(16,571)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
(8,523)
|
|
(8,654)
|
|
(24,124)
|
|
(14,668)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a
percentage of revenue
|
(4.6) %
|
|
(6.5) %
|
|
(6.7) %
|
|
(5.9) %
|
(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 six months ended September 30, 2022,
share-based compensation expense was $35,061 and $73,589,
respectively (September 2021 - expense of $24,656 and $37,043), and
related payroll taxes was a recovery of $133 and $359, respectively
(September 2021 - expense of $4,142 and $8,430). These costs 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
September 30, 2022, net loss includes depreciation of $2,063
related to right-of-use assets, interest expense of $251 on lease
liabilities, and excludes an amount of $2,101 relating to rent
expense ($2,008, $301, and $2,227, respectively, for the three
months ended September 30, 2021). For the six months ended
September 30, 2022, net loss includes depreciation of $4,110
related to right-of-use assets, interest expense of $522 on lease
liabilities, and excludes an amount of $4,193 relating to rent
expense ($3,633, $611, and $3,983, respectively, for the six months
ended September 30, 2021).
|
(3)
|
These non-cash 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)
|
These costs 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 costs 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
costs are included in general and administrative
expenses.
|
Reconciliation
from IFRS to Non-IFRS Results (continued)
Adjusted Loss and
Adjusted Loss per Share - Basic and Diluted
(expressed in
thousands of US dollars, except number of shares and per share
amounts, unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
September
30,
|
|
Six months
ended
September
30,
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
Net
loss
|
(79,943)
|
|
(59,087)
|
|
(180,739)
|
|
(108,424)
|
Share-based
compensation and related payroll taxes(1)
|
34,928
|
|
28,798
|
|
73,230
|
|
45,473
|
Amortization of
intangible assets
|
25,684
|
|
22,797
|
|
51,560
|
|
39,810
|
Acquisition-related
compensation(2)
|
12,653
|
|
9,032
|
|
29,756
|
|
11,046
|
Transaction-related
costs(3)
|
947
|
|
2,468
|
|
3,121
|
|
7,764
|
Restructuring(4)
|
603
|
|
—
|
|
1,810
|
|
197
|
Litigation
provisions(5)
|
198
|
|
—
|
|
1,116
|
|
1,205
|
Deferred income tax
recovery
|
(2,538)
|
|
(15,072)
|
|
(4,891)
|
|
(17,296)
|
|
|
|
|
|
|
|
|
Adjusted
Loss
|
(7,468)
|
|
(11,064)
|
|
(25,037)
|
|
(20,225)
|
|
|
|
|
|
|
|
|
Weighted average
number of Common Shares
(basic and diluted)
|
149,688,692
|
|
138,796,551
|
|
149,332,947
|
|
134,839,363
|
|
|
|
|
|
|
|
|
Net loss per share –
basic and diluted
|
(0.53)
|
|
(0.43)
|
|
(1.21)
|
|
(0.80)
|
Adjusted Loss per
Share - Basic and Diluted
|
(0.05)
|
|
(0.08)
|
|
(0.17)
|
|
(0.15)
|
(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 six months ended September 30, 2022,
share-based compensation expense was $35,061 and $73,589,
respectively (September 2021 - expense of $24,656 and $37,043), and
related payroll taxes was a recovery of $133 and $359, respectively
(September 2021 - expense of $4,142 and $8,430). These costs 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)
|
These costs 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 costs 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
costs are included in general and administrative
expenses.
|
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
September
30,
|
|
Six months
ended
September
30,
|
|
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
Cash flows used in
operating activities
|
(23,859)
|
|
(13,030)
|
|
(57,273)
|
|
(27,640)
|
Payroll taxes related
to share-based compensation(1)
|
194
|
|
412
|
|
267
|
|
3,046
|
Acquisition-related
compensation (2)
|
—
|
|
2,899
|
|
—
|
|
3,420
|
Transaction-related
costs(3)
|
(220)
|
|
3,945
|
|
4,824
|
|
7,867
|
Restructuring(4)
|
1,230
|
|
279
|
|
1,813
|
|
1,089
|
Litigation provisions
(5)
|
710
|
|
(1,775)
|
|
2,869
|
|
(1,775)
|
Capitalized internal
development costs(6)
|
(895)
|
|
—
|
|
(1,498)
|
|
—
|
|
|
|
|
|
|
|
|
Adjusted Cash Flows
Used in Operating Activities
|
(22,840)
|
|
(7,270)
|
|
(48,998)
|
|
(13,993)
|
(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
September 30,
|
|
Six months ended
September 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
|
$
|
$
|
|
$
|
$
|
Gross
profit
|
81,469
|
64,946
|
|
158,994
|
122,519
|
% of revenue
|
44.3 %
|
48.8 %
|
|
44.5 %
|
49.2 %
|
add: Share-based
compensation and related payroll taxes(3)
|
2,212
|
1,799
|
|
4,458
|
2,994
|
|
|
|
|
|
|
Non-IFRS gross
profit(1)
|
83,681
|
66,745
|
|
163,452
|
125,513
|
Non-IFRS gross profit
as a percentage of revenue(2)
|
45.6 %
|
50.1 %
|
|
45.7 %
|
50.4 %
|
|
|
|
|
|
|
General and
administrative expenses
|
25,132
|
23,081
|
|
55,371
|
45,358
|
% of revenue
|
13.7 %
|
17.3 %
|
|
15.5 %
|
18.2 %
|
less: Share-based
compensation and related payroll taxes(3)
|
8,626
|
6,805
|
|
18,711
|
10,174
|
less:
Transaction-related costs(4)
|
634
|
2,171
|
|
2,495
|
7,169
|
less: Litigation
provisions(5)
|
198
|
—
|
|
1,116
|
1,205
|
|
|
|
|
|
|
Non-IFRS general and
administrative expenses(1)
|
15,674
|
14,105
|
|
33,049
|
26,810
|
Non-IFRS general and
administrative expenses as a percentage of
revenue(2)
|
8.5 %
|
10.6 %
|
|
9.2 %
|
10.8 %
|
|
|
|
|
|
|
Research and
development expenses
|
36,596
|
30,092
|
|
72,232
|
52,308
|
% of revenue
|
19.9 %
|
22.6 %
|
|
20.2 %
|
21.0 %
|
less: Share-based
compensation and related payroll taxes(3)
|
9,984
|
7,956
|
|
20,869
|
12,160
|
|
|
|
|
|
|
Non-IFRS research
and development expenses(1)
|
26,612
|
22,136
|
|
51,363
|
40,148
|
Non-IFRS research and
development expenses as a percentage of
revenue(2)
|
14.5 %
|
16.6 %
|
|
14.4 %
|
16.1 %
|
|
|
|
|
|
|
Sales and marketing
expenses
|
64,337
|
51,693
|
|
132,982
|
93,963
|
% of revenue
|
35.0 %
|
38.8 %
|
|
37.2 %
|
37.7 %
|
less: Share-based
compensation and related payroll taxes(3)
|
14,106
|
12,238
|
|
29,192
|
20,145
|
less:
Transaction-related costs(4)
|
313
|
297
|
|
626
|
595
|
|
|
|
|
|
|
Non-IFRS sales and
marketing expenses(1)
|
49,918
|
39,158
|
|
103,164
|
73,223
|
Non-IFRS sales and
marketing expenses as a percentage of
revenue(2)
|
27.2 %
|
29.4 %
|
|
28.9 %
|
29.4 %
|
(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 costs 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 costs do not include
provisions taken and other costs incurred in respect of litigation
matters of a nature that we consider normal to our
business.
|
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
September
30,
|
|
Six months
ended
September
30,
|
|
|
|
|
|
2022
|
|
2022
|
|
$
|
|
$
|
|
|
|
|
Total revenue as
reported
|
183,699
|
|
357,581
|
Foreign currency
exchange impact on revenue(1)
|
3,520
|
|
6,428
|
|
|
|
|
Revenue at constant
currency
|
187,219
|
|
364,009
|
Revenue growth
rate
|
38 %
|
|
44 %
|
|
|
|
|
Revenue growth rate
at constant currency
|
41 %
|
|
46 %
|
|
|
|
|
|
2021
|
|
2021
|
Total revenue as
reported
|
133,218
|
|
249,138
|
(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.
|
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SOURCE Lightspeed Commerce Inc.