2023-08-03 21:44:33
In the most recent fourth quarter, Lightspeed posted a loss of US$74.5 million compared to a loss of US$114.5 million in the same quarter a year earlier. (Photo: The Canadian Press)
There is no sign for sale in front of the Lightspeed Commerce headquarters, assures its CEO, Jean Paul Chauvet. Management is always confident that its strategy is the right one for its shareholders.
“We have a lot of investors, including me, including Dax (Dasilva, the founder), who are not selling investors at the moment”, answers Jean Paul Chauvet in an interview to discuss the results of the first quarter.
Recently, the telemedicine specialist Dialogue accepted a purchase offer from the insurer Sun Life. Laurentian Bank, for its part, is conducting a strategic review process that might lead to its being put up for sale. In the case of the two Quebec companies, their shares were under pressure, but management had a strategic plan to create value for shareholders.
With the stock down nearly 80% since its 2021 peak, Lightspeed looks in a similar situation as it hopes its strategy will see it hit a major profitability metric within months.
The comparison stops there, according to Jean Paul Chauvet. He assures that the main shareholders of the company “know that the action is undervalued” and they would not intend to sell at a discount. “La Caisse de dépôt, Fidélité, Investissement Québec, these are all investors who have great confidence in the company, in the management, in the strategy. It makes a hostile acquisition more difficult.”
Together, the Caisse de depot et placement du Québec, Fidélité and Dax Dasliva control more than 35% of the shares, according to data from the firm Refinitiv.
The board of directors would have no choice but to analyze a serious offer, but the company is not looking to sell itself. “So far, we haven’t had any (offers).”
Results above expectations
In May, Jean Paul Chauvet said achieving earnings before tax, interest, and amortization (EBITDA) in fiscal year 2024 ending March 2024 was “non-negotiable,” even though the company warned that growth would be more modest during the first six months of the financial year (April to October).
With financial results above expectations in the first quarter, Lightspeed remains focused on this objective, says Jean Paul Chauvet. “We thought we would have a growth of 13%, but we did 20%. There is demand, we are happy.”
Although it exceeded forecasts, the company is careful not to improve its forecasts for the rest of the year. “Everyone is talking regarding a recession. We don’t see any of that. We tell ourselves that at some point, it will affect (the rise in interest rates). We prefer to be cautious in an unstable market.”
Consumers still seem to have an appetite for travel and outings, says Jean Paul Chauvet. Hotels, restaurants, items “we put on to go out” such as clothing and accessories continue to show their resilience, despite economic uncertainty.
TD Securities analyst Daniel Chan believes management is “cautious” in its guidance and that it might be raised. “We continue to believe there might be an upward revision if consumer spending holds up and payment adoption is faster than expected.”
The revenues of the Montreal company thus increased by 20% to reach 209 million US dollars (M$). The company posted a net loss of US$48.7 million, compared to a loss of US$100.8 million for the same period last year. The diluted adjusted loss per share is 1 cent.
The loss before tax, interest and amortization (EBITDA), a figure that better reflects the company’s activities according to management, is US$7 million, compared to US$15.6 million last year.
Prior to the earnings release, analysts had expected a diluted adjusted loss per share of 4 cents and revenue of $197.8 million, according to financial data firm Refinitiv.
Lightspeed shares gained $1.59, or 7.35%, at 23.21 on the Toronto Stock Exchange in the followingnoon.
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