Third trimester | Lightspeed Fuels Speculation About Its Potential Sale

The Montreal provider of technological solutions for merchants Lightspeed further fueled speculation about its future Thursday during the presentation of its most recent results by announcing the postponement of an event planned in two weeks.

“The postponement of the investor day reinforces speculation surrounding the potential sale of the company,” comments analyst Daniel Chan of TD.

Lightspeed management indicated in late September that a strategic review had been initiated and that the company participated in discussions surrounding “strategic alternatives.”

In light of the ongoing strategic review, management has decided to postpone its investor presentation day which was scheduled to take place in New York on November 20.

Initially notifying investors of the event after the company confirmed it was conducting a strategic review could suggest that the abrupt postponement announced Thursday means Lightspeed is further along than expected, according to analyst Richard Tse , from National Bank Financial.

“This could mean that the company is getting closer to a potential transaction,” said this expert in a note sent to his clients on Thursday.

The company maintains that no guarantees can be given at this time as to the outcome of its strategic review.

“Discussions are still ongoing and we cannot offer details,” says Lightspeed founder and CEO Dax Dasilva.

“There is no predetermined outcome,” he adds in an interview, which means that all options remain on the table.

Lightspeed shares rose 7% on Thursday to close at $23.50 on the Toronto Stock Exchange.

Alongside the presentation of a summer financial performance above expectations, Dax Dasilva also communicated a new operating model on Thursday.

“We decided to focus our efforts on the markets where we are strongest and where we can win. These are retail in North America and hospitality in Europe. These markets represent the majority of our revenues and are growing faster than our entire business, says Dax Dasilva.

“It makes more sense to invest in our marketing and our people rather than trying to develop our products for all markets. We will have a much better financial profile if we are more efficient in our growth spending. »

To help the company achieve its goal of generating profitable growth, several recent initiatives have just been launched, including the expansion of the sales team, the launch of new software modules, and the implementation of price increases. price.

However, the profile of the target customer does not change. Lightspeed continues to focus its energies on SMEs with at least 10 employees generating gross transaction volume greater than $200,000 per year, with a preference for those where it is greater than $500,000 per year.

Financial performance

Lightspeed generated revenues up 20% year-over-year to US$277 million during the months of July, August and September. Experts anticipated 274 million US dollars.

Adjusted operating profit for the quarter reached US$14 million, compared to analysts’ forecasts of US$13 million.

The net loss narrowed to 29.7 million. It stood at US$42.5 million a year ago.

Management improves prospects of its operating profit and now estimates it at at least 50 million US dollars for the financial year ending at the end of March. This is 11% more than previous forecasts.

The 48-year-old tech entrepreneur returned to being CEO of Lightspeed earlier this year, replacing JP Chauvet.

After listing on the Toronto Stock Exchange at an initial price of $16 five years ago, Lightspeed’s stock appreciated as high as $165 in 2021 before falling back to its current level of $23.50.

Lightspeed’s current stock price on the Toronto Stock Exchange gives the company a market value in excess of $3.5 billion.

The Caisse de dépôt et placement du Québec is Lightspeed’s largest shareholder with a 16% stake.