Lightspeed Commerce lowered its outlook and reported a wider quarterly loss of US$79.9 million in its fiscal second quarter compared to the same period a year ago, as the Montreal-based commerce company warned of tough times ahead. Its stock plunged, closing down 18.6 per cent Thursday on the Toronto Stock Exchange. 

“There are these vectors we can’t control that are making us be conservative on the forecast for the second half of the year,” chief executive JP Chauvet told The Logic in an interview. 

Yet Chauvet said he still sees reason for optimism, and plans to keep Lightspeed on its path to profitability by the 2024 fiscal year without having to resort to layoffs and cost-cutting like his competitors. Here’s what else you need to know: 

The quarter in numbers: The company, which provides a point-of-sale and payments platform for small- and medium-sized retail and hospitality businesses, said revenue rose 38 per cent compared to the same period last year to US$183.7 million. On an adjusted EBITDA basis, which excludes items such as costs related to acquisitions, Lightspeed reported a loss of US$8.5 million, better than the company’s previous prediction of US$10 million. 

Chauvet highlighted Lightspeed’s growth in high-value customers in the quarter, which he said have the most to gain from the benefits of automation. The company added about 25 per cent more customers with annual gross transaction volume over US$500,000, and about 30 per cent more clients with annual gross transaction volume over US$1 million, compared to the same period last year.

The headwinds: Chauvet named two major factors causing the company to revise its annual revenue outlook from US$740 million to US$760 million, down to US$730 million to US$740 million. It anticipates reduced consumer spending in the second half of its fiscal year because of inflation and higher energy costs. “Normally the big buying moment of the year, for us, is Christmas. And we think that Christmas is probably not going to be as strong in terms of growth as the previous year,” he said. The second factor is exchange rates, which Chauvet estimated will reduce the company’s revenue by roughly US$13 million because it reports in US dollars but does 40 per cent of its business in other countries. 

Moving forward: It’s been a little over a year since New York-based short-seller Spruce Point released a report alleging Lightspeed overstated key metrics. The company’s stock price still hasn’t recovered, trading at about US$20 when markets closed Thursday compared to a high of about US$159 about two weeks before the release of the Sept. 29, 2021 report. Chauvet restated that “all the allegations in there were wrong and false,” calling the saga “hurtful.” 

“That’s the ransom of success. You’ll always have people who want to destroy success,” he said.

Why Chauvet thinks things are looking up: Despite the challenges, Lightspeed has managed to avoid the layoffs and cost-cutting measures some of its competitors have undertaken, including Stripe, which announced plans Thursday to reduce its headcount by 14 per cent. “We are hiring a lot of salespeople right now,” Chauvet said. He added that Lightspeed benefits from the fact most of its clients are physical stores and restaurants, a segment that’s currently experiencing growth as people return to the real world as pandemic restrictions lift. “I’m a strong believer in Lightspeed. I think the company is doing extremely well. And we’re very much in control of our destiny.”