On the heels of laying off 10 per cent of its staff, Lightspeed remains committed to at least breaking even in fiscal 2024. That includes a “deliberate effort to pursue larger, more profitable customers,” CEO JP Chauvet said on an earnings call Thursday morning.

The Montreal-based commerce company first declared the goal in May 2022. On Thursday, Lightspeed offered more detail on its plans to achieve it.

Here’s what you need to know:

By the numbers

Lightspeed saw a net loss of US$814.8 million for its third quarter ended Dec. 31, 2022, or US$5.39 per share. A US$748.7-million non-cash goodwill impairment charge, which the company attributed to its lower share price and the broader downturn in the tech sector, was responsible for most of that difference.

In its last fiscal third quarter, Lightspeed reported a net loss of US$65.5 million and an adjusted loss of US$9.9 million.

Some other key numbers from Lightspeed’s third quarter:

• Overall revenue increased 24 per cent to US$188.7 million from Q3 2021.
• Subscription revenue, which comes from customers paying to use its software, increased nine per cent to US$74.5 million.
• Transaction-based revenue hit US$107.2 million, up nine per cent.
• Adjusted earnings before interest, taxes, depreciation and amortization loss of US$5.4 million, representing 2.9 per cent of revenue, compared to the previous outlook of an adjusted loss of approximately US$9 million. 
• As of Dec. 31, the company had US$838.1 million in unrestricted cash and cash equivalents.
• After it shared its financial results, Lightspeed’s stock dropped 5.87 per cent to $23.42 at 1:46 p.m. the day of the earnings call. 

This quarter’s total growth is organic, since the company hasn’t made an acquisition since the beginning of Q3 in the prior fiscal year, said CFO Asha Bakshani in the earnings call. 

Big-game hunting

In an interview Thursday, Chauvet told The Logic that Lightspeed is facing industry headwinds. It makes money when people buy things at stores and restaurants, but with inflation, and salaries not keeping up, people are watching their spending. 

“Consumer spending has been really tough in the last few quarters, and we think it will continue to be, for still a few quarters,” he said. “But that’s what we cannot control.”

Chauvet said in an interview that the company is focusing instead on what it can control, which is attracting more merchants in segments that matter. The number of customer locations using Lightspeed’s products and services generating more than $1 million in revenue have grown by 19 per cent year over year, he said, while those generating more than $500,000 per year grew by 15 per cent. 

“This is a very large market and there’s a lot of room for growth. We’ve seen really good results on that front.”

He emphasized the sentiment on Thursday’s earnings call, telling analysts Lightspeed is “hyper-focused” on creating value for customers with over $500,000 in annual gross transaction volume. 

Two years ago, it was a different story. The company’s marketing and sales teams were casting a “broader fishing net” at the time for clients, but in the last 12 months, Chauvet told The Logic, it has stopped trying to “be everything for everybody.”

Layoffs haven’t halted hiring

On Jan. 17, Lightspeed announced it would cut 300 staff in an effort to streamline companies and products picked up from acquisitions. 

The news came as a surprise to some, since Chauvet had previously been vocal about avoiding layoffs, despite an economic downturn that has affected numerous tech companies. 

Chauvet said on Thursday’s earnings call that the company is focused on achieving “One Lightspeed” to integrate company acquisitions and create one brand and one product. 

“It was always our intention that this initiative would unlock considerable savings for the company. I believe our new structure gives more accountability and authority to our existing senior management team, while at the same time removing costs and complexity from the organization,” Chauvet said. He added that 50 per cent of the cuts were management roles.

Despite those cuts, the company still has plans to hire. 

“Now that we are in a much leaner organization, we need to double down on hiring more salespeople and hiring more onboarders and more support people in the right division, in the right job,” Chauvet said.

“That’s what we’re doing between now and call it the end of Q1 next year. … We’re building our go-to-market engine.”