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Lightspeed Announces Fourth Quarter and Full Year 2021 Financial Results and Provides Outlook for Fiscal 2022

05/20/2021

Fourth quarter revenue grew 127% YoY to $82.4M

Fourth quarter GTV grew 76% YoY to $10.8B

Lightspeed now maintains over 140,000 customer locations

Lightspeed Payments achieved another record quarter

Lightspeed reports in US dollars and in accordance with IFRS.

MONTREAL, May 20, 2021 /CNW Telbec/ - Lightspeed POS Inc. ("Lightspeed" or the "Company") (TSX: LSPD) (NYSE: LSPD), a leading provider of cloud-based, omnichannel commerce platforms, today announced financial results for the three-month period and fiscal year ended March 31, 2021.

Fourth Quarter Financial Highlights
(All comparisons are relative to the three-month period ended March 31, 2020 unless otherwise stated):

  • Total revenue of $82.4 million, an increase of 127%
  • Recurring subscription and transaction-based revenue of $75.3 million, an increase of 137%
  • Adjusted EBITDA[1] loss of ($9.6) million, which improved to (11.7)% of revenue[1] from (17.0)%
  • Net Loss of ($42.0) million as compared to a net loss of ($18.6) million. After adjusting for certain non-cash and non-recurring items such as acquisition-related costs and stock based compensation, Adjusted Net Loss[1] was ($11.2) million, or ($0.09) per share[1].
  • At March 31, 2021, Lightspeed had $807.2 million in unrestricted cash and cash equivalents

Full Fiscal Year Financial Highlights
(All comparisons are relative to the full fiscal year ended March 31, 2020 unless otherwise stated):

  • Total revenue of $221.7 million, an increase of 84%
  • Recurring subscription and transaction-based revenue of $202.3 million, an increase of 89%
  • Adjusted EBITDA loss of ($21.2) million, which improved to (9.6)% of revenue from (18.0)%
  • Net Loss of ($124.3) million as compared to a net loss of ($53.5) million. After adjusting for certain non-cash and non-recurring items such as acquisition-related costs and stock based compensation Adjusted Net Loss was ($24.2) million or ($0.23) per share. Adjusted Net Loss for fiscal 2021 was (10.9)% of revenue versus (17.1)%) in fiscal 2020.

Fiscal 2021 ended up as one of the most transformative years yet for Lightspeed, with the Company announcing three landmark acquisitions, launching a series of new offerings such as Lightspeed Capital, eCommerce for Restaurants and Order Ahead, listing on the New York Stock Exchange and delivering innovative strategic initiatives such as Supplier Network and the recently announced integration of Google tools directly into the platform. In addition to these key strategic accomplishments and despite the ongoing challenges presented by the global COVID-19 pandemic, Lightspeed delivered strong results in the quarter and the year with small and medium-sized businesses increasingly adopting the Company's cloud-based commerce platform to enable their omnichannel strategies.

[1]

Non-IFRS measure. See "Non-IFRS Measures" and the reconciliation to the most directly comparable IFRS measure included in this press release

As of March 31, 2021, Lightspeed saw GTV[2] grow to $10.8 billion while achieving record revenues of $82.4 million and customer locations[2] ended at over 140,000 after giving effect to the acquisition of Vend Limited ("Vend"). The Company saw excellent performance from Lightspeed Payments, with revenue from Payments reaching another all time high. Software revenue also pushed higher thanks to existing customers adopting a greater number of software modules and a growing customer base. GTV continued to grow despite challenges in the hospitality sector, with omnichannel retail and the Australia region showing particular strength.

"Our mission to arm entrepreneurs with the technology they need to run and scale their businesses has never felt more relevant," said Dax Dasilva, Founder and CEO of Lightspeed. "We believe our customers will look back on the past year as the time when an omnichannel presence moved to becoming an absolute necessity and on Lightspeed as the partner that helped them get there. While helping our customers meet the challenges of the past year, Lightspeed grew its scale, established itself as a leader in the key U.S. market, launched a series of new product offerings, and continued to deliver strong results."

"Lightspeed had another record quarter with strong software growth and outstanding results from our payments offering," said Chief Financial Officer Brandon Nussey. "Although we entered the quarter under challenging conditions as lockdown measures increased globally, we saw strength in March and are encouraged by the reopenings we are seeing around the world."

Operational Highlights

  • Total revenues of $82.4 million were up 127% year-over-year thanks to a combination of strong organic[3] growth and the recent acquisitions of Upserve and ShopKeep, which added $31.2 million in revenue. Also, due to renegotiated terms with the payments partner of our recent acquisitions, Lightspeed has gained greater control of the underlying customer relationship and, as a result, is seeing superior economics. Due to this modified relationship, Lightspeed realized increased revenue of approximately $7.4 million in the quarter, along with improved gross profit.

  • In the quarter, subscription and transaction-based revenue was $75.3 million, representing 91% of all revenue and growing 137% year-over-year. Organic growth of 48% year-over-year and the recent acquisitions of Upserve and ShopKeep, which added $28.3 million in subscription and transaction-based revenue, accounted for the strong growth.

  • For the fiscal year, Lightspeed has segregated subscription revenue from transaction-based revenue, which includes Lightspeed Payments. For the year, subscription revenue grew to $119.3 million, an increase of 51%, largely due to strong organic growth but also assisted by the recent acquisitions of Upserve and ShopKeep. Transaction-based revenues were $83.0 million, up 195% largely due to the success of Lightspeed Payments and to a lesser degree the addition of the recent acquisitions. For Fiscal 2021, Lightspeed had Net Dollar Retention Rates[2] in excess of 100%.

  • Lightspeed's customer locations grew to approximately 119,000, an increase of 56% year-over-year. Gross location additions reached a record level in the quarter despite difficult macro-economic conditions. Giving effect to the acquisition of Vend, Lightspeed's customer locations would count over 140,000.

  • ARPU[2] increased year-over-year by 48% to $215. The bulk of this ARPU improvement came from transaction-based revenues largely due to the success of Lightspeed Payments. Software also contributed to year-over-year ARPU increases partially due to an increasing portion of customers taking on multiple modules.

  • For the quarter, Lightspeed delivered GTV of $10.8 billion up 76% year-over-year. Excluding our recent acquisitions, the Company continued to see strong growth in Retail with eCommerce growth of approximately 100% year-over-year and total omnichannel retail GTV growth of 65% year-over-year. Organic[3]GTV growth was 25% year-over-year as hospitality continued to be challenged in the quarter. However, as markets re-open, the Company is seeing encouraging signs. For example, Australian merchants, which are predominantly hospitality merchants, saw strong year-over-year GTV growth of over 75% in the quarter.

  • The Company is seeing strong momentum recently as March Hospitality GTV grew 10% from February and April grew a further 14% from March.

  • Lightspeed Payments volumes continued to grow both year-over-year and from the previous quarter. Payments revenue grew from the third quarter despite the seasonal dip in retail GTV normally associated with fourth quarter trends. Excluding the recent acquisitions of Upserve and ShopKeep, the proportion of GTV processed through Lightspeed Payments continued to increase and was approaching 10% of GTV in the last month of the quarter.

  • After the quarter, Lightspeed closed the acquisition of Vend. The acquisition solidifies Lightspeed as a leading global cloud-based commerce platform. Vend was acquired for $204.7 million in cash and the issuance of 2,692,277 of Lightspeed's subordinate voting shares. On a pro-forma basis, when including customer locations from Vend, Lightspeed maintained over 140,000 customer locations globally as at the end of the quarter.

  • After the quarter, Lightspeed announced it would integrate Google tools including, Google Local Inventory Ads, Google Smart Shopping Campaigns and Google My Business, directly into its platform. This effort is aimed at improving the discoverability of local merchants on Google's popular search engine as more and more consumers prioritize shopping locally.

[2] 

Key Performance Indicator. See "Key Performance Indicators".

[3] 

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.

Financial Outlook

Lightspeed's fourth quarter results were strong and characterized by challenging conditions in January and February with March showing robust growth. Given the trends the Company is seeing in markets that are reopening, the ongoing benefits of increased scale and a strong product offering, there is reason for optimism. Including the contribution of the recent acquisition of Vend, Lightspeed anticipates revenue and adjusted EBITDA to be in the following ranges:

Fiscal 2022

  • Revenues of $430 - $450 million.
  • Adjusted EBITDA loss of approximately ($30) million, or approximately (7)% as a percentage of revenue.

First Quarter 2022

  • Revenues of $90 - $94 million.
  • Adjusted EBITDA loss of approximately ($10) million, or approximately (11)% as a percentage of revenue.

When calculating the Adjusted EBITDA included in our financial outlook for the first quarter of FY2022, we considered IFRS measures including revenues, direct cost of revenues, 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 the resurgence of the virus; 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; our continued receipt of partner referrals in line with planned referral rates (particularly in light of the continued expansion of Lightspeed Payments which competes with the solutions offered by some of these referral partners); customers adopting Lightspeed Payments having an average GTV at or above that of our planned levels; future uptake of Lightspeed Payments remaining in line with past rates and expectations; our ability to price Lightspeed Payments in line with our expectations and to achieve suitable margins; our ability to achieve success in the continued expansion of Lightspeed Payments beyond North American customers; 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; 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 foreign exchange rates. 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 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; 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 of Lightspeed Payments; our reliance on a small number of suppliers for parts of the technology in Lightspeed Payments; our inability to improve and enhance the functionality, performance, reliability, design, security and scalability of our platform; 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 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 inability to expand our sales capability; maintaining our customer service levels and reputation; macroeconomic factors affecting small and medium-sized businesses; 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.

Shelf Registration

Today, Lightspeed announced the filing of a preliminary short form base shelf prospectus (the "Shelf Prospectus") with the securities regulatory authorities in each of the provinces and territories of Canada, subject to issuance of a receipt therefor by the Autorité des marchés financiers, to allow Lightspeed to offer up to an aggregate of C$4,000,000,000 of subordinate voting shares, preferred shares, debt securities, warrants, subscription receipts, units, or any combination thereof, during the 25-month period during which the Shelf Prospectus is effective.

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, May 20, 2021. To access the telephonic version of the conference call, visit http://www.directeventreg.com/registration/event/3863847. 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.

An audio replay of the call will also be available to investors beginning at approximately 11:00 a.m. Eastern Time on May 20, 2021, until 11:59 p.m. Eastern Time on May 27, 2021, by dialing 855.589.2056 for the U.S. or Canada, or 404.537.3406 for international callers and providing conference ID 3863847. In addition, an archived webcast will be available on the Investors section of the Company's website at https://investors.lightspeedhq.com.

About Lightspeed

Lightspeed (NYSE and TSX: LSPD) powers complex small and medium-sized businesses with its cloud-based, omnichannel commerce platforms in over 100 countries. With smart, scalable, and dependable point of sale systems, Lightspeed provides all-in-one solutions that drive innovation and digital transformation within the retail, hospitality, and golf industries. Its product suite enables SMBs to sell across channels, manage operations, engage with consumers, accept payments, and ultimately grow their business.

Headquartered in Montreal, Canada, Lightspeed is trusted by favorite local businesses worldwide, where their communities go to shop and dine. Lightspeed has staff located in North America, Europe, and Australia.

For more information, please visit: www.lightspeedhq.com.

On social media: LinkedIn, Facebook, Instagram, YouTube, and Twitter

Non-IFRS Measures

The information presented herein includes certain financial measures such as "Adjusted EBITDA", "Adjusted EBITDA as a percentage of revenue", "Adjusted Net Loss", "Adjusted Net Loss per Share (EPS)", "Adjusted Cash Flows Used in Operating Activities", "non-IFRS Gross Profit", "non-IFRS general and administrative expenses", "non-IFRS research and development expenses", and "non-IFRS sales and marketing expenses". These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. These non-IFRS measures are used to provide investors with supplemental measures 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. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare operating budgets and forecasts and to determine components of management compensation.

"Non-IFRS gross profit", "non-IFRS general and administrative expenses", "non-IFRS research and development expenses", and "non-IFRS sales and marketing expenses" are non-IFRS financial measures that exclude the effect of stock-based compensation expense and related payroll taxes, and in the case of non-IFRS general and administrative expenses and non-IFRS sales and marketing expenses, transaction-related costs.

"Adjusted EBITDA" is calculated as net loss excluding interest, taxes, depreciation and amortization, or EBITDA, as adjusted for stock-based compensation and related payroll taxes, compensation expenses relating to acquisitions completed, foreign exchange gains and losses, transaction-related costs and restructuring.

"Adjusted EBITDA as a percentage of revenue" is calculated by dividing our Adjusted EBITDA by our revenues.

"Adjusted Net Loss" is defined as net loss excluding amortization of intangibles, as adjusted for stock-based compensation and related payroll taxes, compensation expenses relating to acquisitions completed, transaction-related costs and restructuring.

"Adjusted Net Loss per Share (EPS)" is defined as net loss excluding amortization of intangibles, as adjusted for stock-based compensation and related payroll taxes, compensation expenses relating to acquisitions completed, transaction-related costs and restructuring, 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 stock-based compensation, the payment of compensation expenses relating to acquisitions completed, the payment of transaction costs assumed through recent acquisitions, the payment of transaction-related costs and the payment of restructuring costs.

See the financial tables below for a reconciliation of the non-IFRS financial measures.

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. 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 revenues of the Company in the period divided by the number of Customer Locations of the Company in the period.

Customer Locations. "Customer Location" means a billing customer location for which the term of services have not ended, or with which we are negotiating a renewal contract. A single unique customer can have multiple Customer Locations including physical and eCommerce sites. We believe that our ability to increase the number of Customer Locations served by our platforms is an indicator of our success in terms of market penetration and growth of our business.

Gross Transaction Volume. "Gross Transaction Volume" or "GTV" means the total dollar value of transactions processed through our cloud-based SaaS platform 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 platforms. GTV does not represent revenue earned by us.

Net Dollar Retention Rate. We believe that our ability to retain and expand the revenues generated from our existing customers is an indicator of the long-term value of our customer relationships. We track our performance in this area by measuring our "Net Dollar Retention Rate", which is calculated as of the end of each month by considering the cohort of customers on our commerce platforms as of the beginning of the month and dividing our subscription and transaction-based revenues attributable to this cohort in the then-current month by total subscription and transaction-based revenue attributable to this cohort in the immediately preceding month.

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 revenues and Adjusted EBITDA), 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, our expected acquisition outcomes and synergies, and the impact of the COVID-19 pandemic declared by the World Health Organization on March 11, 2020 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", "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 such statements are made, are 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 profiles on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information.

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. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, 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 Consolidated Statements of Loss and Comprehensive Loss



(expressed in thousands of US dollars, except share and per share amounts)

Three months ended
March 31,


Fiscal year ended
March 31,


2021

2020


2021

2020


$

$


$

$

Revenues






Subscription and transaction-based

75,268

31,784


202,274

106,871

Hardware and other

7,127

4,487


19,454

13,766








82,395

36,271


221,728

120,637







Direct cost of revenues






Subscription and transaction-based

30,663

8,941


75,521

28,451

Hardware and other

7,775

3,627


18,906

11,217








38,438

12,568


94,427

39,668







Gross profit

43,957

23,703


127,301

80,969







Operating expenses






General and administrative

17,241

6,596


53,035

21,345

Research and development

16,859

10,310


54,787

32,750

Sales and marketing

33,081

16,810


97,048

61,122

Depreciation of property and equipment

870

550


2,479

1,749

Depreciation of right-of-use assets

1,221

821


3,876

2,492

Foreign exchange loss (gain)

550

(300)


2,098

(395)

Acquisition-related compensation

2,144

5,138


11,807

11,087

Amortization of intangible assets

13,359

4,260


30,128

9,226

Restructuring

1,760


1,760







Total operating expenses

87,085

44,185


257,018

139,376







Operating loss

(43,128)

(20,482)


(129,717)

(58,407)







Net interest income (expense)

147

(226)


(353)

1,766







Loss before income taxes

(42,981)

(20,708)


(130,070)

(56,641)







Income tax expense (recovery)






Current

48

(46)


166

49

Deferred

(984)

(2,065)


(5,958)

(3,159)







Total income tax recovery

(936)

(2,111)


(5,792)

(3,110)







Net loss

(42,045)

(18,597)


(124,278)

(53,531)







Other comprehensive income (loss)












Items that may be reclassified to net loss






Foreign currency differences on translation of foreign operations

(5,053)

(6,271)


15,986

(6,271)







Total comprehensive loss

(47,098)

(24,868)


(108,292)

(59,802)







Net loss per share – basic and diluted

(0.34)

(0.21)


(1.18)

(0.62)







Weighted average number of Common Shares (basic and diluted)

123,865,361

89,085,336


105,221,907

85,890,314

 

Condensed Consolidated Balance Sheets


(expressed in thousands of US dollars)

As at


March 31,
2021

March 31,
2020

Assets

$

$




Current assets



Cash and cash equivalents

807,150

210,969

Trade and other receivables

24,771

10,879

Inventories

1,573

932

Other current assets

24,171

10,427




Total current assets

857,665

233,207




Lease right-of-use assets, net

21,206

15,957

Property and equipment, net

8,342

7,989

Intangible assets, net

234,493

62,819

Goodwill

971,939

146,598

Restricted cash and other long-term assets

11,504

11,749

Deferred tax assets

170

109




Total assets

2,105,319

478,428




Liabilities and Shareholders' Equity






Current liabilities



Accounts payable and accrued liabilities

65,052

30,810

Lease liabilities

5,120

3,301

Income taxes payable

114

76

Current portion of deferred revenue

43,116

36,622




Total current liabilities

113,402

70,809




Deferred revenue

2,796

5,472

Lease liabilities

20,558

13,546

Long-term debt

29,770

29,687

Other long-term liabilities

3,154

8,198

Deferred tax liabilities

1,356

6,578




Total liabilities

171,036

134,290




Shareholders' equity



Share capital

2,526,448

852,115

Additional paid-in capital

35,877

11,773

Accumulated other comprehensive income (loss)

9,715

(6,271)

Accumulated deficit

(637,757)

(513,479)




Total shareholders' equity

1,934,283

344,138




Total liabilities and shareholders' equity

2,105,319

478,428


 

Condensed Consolidated Statements of Cash Flows

(expressed in thousands of US dollars)

Fiscal year ended March 31,


2021

2020

Cash flows from (used in) operating activities

$

$

Net loss

(124,278)

(53,531)

Items not affecting cash and cash equivalents



Acquisition-related compensation

4,518

4,876

Amortization of intangible assets

30,128

9,226

Depreciation of property and equipment and lease right-of-use assets

6,355

4,241

Deferred income taxes

(5,958)

(3,159)

Stock-based compensation expense

32,739

8,870

Stock-based compensation impact from replacement awards issued

1,120

Unrealized foreign exchange gain

320

475

(Increase)/decrease in operating assets and increase/(decrease) in operating liabilities



Trade and other receivables

(9,177)

2,071

Inventories

(256)

(401)

Other assets

(11,963)

(3,440)

Accounts payable and accrued liabilities

(15,333)

4,180

Income taxes payable

38

(59)

Deferred revenue

(3,991)

(433)

Other long-term liabilities

2,321

300

Net interest (income) expense

353

(1,766)




Total operating activities

(93,064)

(28,550)




Cash flows from (used in) investing activities



Additions to property and equipment

(1,794)

(3,609)

Acquisition of business, net of cash acquired

(235,576)

(120,164)

Interest income

2,322

3,480




Total investing activities

(235,048)

(120,293)




Cash flows from (used in) financing activities



Proceeds from exercise of stock options

21,008

3,546

Proceeds from issuance of share capital

952,534

130,933

Proceeds from draw-down of long-term debt

30,000

Share issuance costs

(45,319)

(6,893)

Payment of lease liabilities net of incentives and movements in restricted lease deposits

(4,351)

(3,401)

Financing costs

(1,557)

(653)




Total financing activities

922,315

153,532




Effect of foreign exchange rate changes on cash and cash equivalents

1,978

(1,423)




Net increase in cash and cash equivalents during the period

596,181

3,266




Cash and cash equivalents – Beginning of period

210,969

207,703




Cash and cash equivalents – End of period

807,150

210,969




Interest paid

1,025

320

Income taxes paid

147

113


 

Reconciliation from IFRS to Non-IFRS Results

(expressed in thousands of US dollars)


Three months ended
March 31,


Fiscal year ended
March 31,








2021

2020


2021

2020


$

$


$

$







Net loss

(42,045)

(18,597)


(124,278)

(53,531)

Stock-based compensation and related payroll taxes(1)

11,144

2,676


44,755

9,930

Depreciation and amortization(2)

15,450

5,631


36,483

13,467

Foreign exchange loss (gain)(3)

550

(300)


2,098

(395)

Net interest (income) expense(2)

(147)

226


353

(1,766)

Acquisition-related compensation(4)

2,144

5,138


11,807

11,087

Transaction-related costs(5)

2,459

1,159


11,615

2,658

Restructuring(6)

1,760


1,760

Income tax expense (recovery)

(936)

(2,111)


(5,792)

(3,110)







Adjusted EBITDA

(9,621)

(6,178)


(21,199)

(21,660)



(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 stock-based compensation, are estimates and therefore subject to change. For the three months and fiscal year ended March 31, 2021, the stock-based compensation expense was $11,782 and $33,859 respectively (March 2020 - $4,060 and $8,870) and the related payroll taxes were a recovery of $638 and an expense of $10,896 respectively (March 2020 - recovery of $1,384 and expense of $1,060).

(2)      

In connection with the accounting standard IFRS 16 - Leases, for the three months ended March 31, 2021, net loss includes depreciation of $1,221 related to right-of-use assets, interest expense of $303 on lease liabilities, and excludes an amount of $1,588 relating to rent expense while net loss for the fiscal year ended March 31, 2021 includes $3,876, $1,048, and excludes $4,436 respectively ($821, $247, and $954 respectively for the three months ended March 31, 2020 and $2,492, $852, and $2,894 respectively for the fiscal year ended March 31, 2020).

(3)      

These non-cash losses (gains) 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 employees of such acquired businesses, 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.

(6)      

In connection with the Company's recent acquisitions of ShopKeep and Upserve, certain functions and the associated management structure were reorganized to realize certain synergies and ensure organizational agility. The one time expenses associated with this plan were recorded as a restructuring charge in the quarter.

 

Reconciliation from IFRS to Non-IFRS Results (continued)

(expressed in thousands of US dollars)


Three months ended
March 31,


Fiscal year ended
March 31,








2021

2020


2021

2020


$

$


$

$







Net loss

(42,045)

(18,597)


(124,278)

(53,531)

Stock-based compensation and related payroll taxes(1)

11,144

2,676


44,755

9,930

Amortization of intangible assets

13,359

4,260


30,128

9,226

Acquisition-related compensation (2)

2,144

5,138


11,807

11,087

Transaction-related costs(3)

2,459

1,159


11,615

2,658

Restructuring(4)

1,760


1,760







Adjusted Net Loss

(11,179)

(5,364)


(24,213)

(20,630)


See footnotes below the next table

 

Reconciliation from IFRS to Non-IFRS Results (continued)


Three months ended
March 31,


Fiscal year ended
March 31,








2021

2020


2021

2020


$

$


$

$







Net loss per Common Share - basic and diluted

(0.34)

(0.21)


(1.18)

(0.62)

Stock-based compensation and related payroll taxes(1)

0.09

0.03


0.43

0.12

Amortization of intangible assets

0.11

0.05


0.29

0.11

Acquisition-related compensation (2)

0.02

0.06


0.11

0.13

Transaction-related costs(3)

0.02

0.01


0.11

0.03

Restructuring(4)

0.01

0.00


0.02

0.00







Adjusted Net Loss per share - basic and diluted

(0.09)

(0.06)


(0.23)

(0.24)







Weighted average number of Common Shares (basic and diluted)

123,865,361

89,085,336


105,221,907

85,890,314



(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 stock-based compensation, are estimates and therefore subject to change. For the three months and fiscal year ended March 31, 2021, the stock-based compensation expense was $11,782 and $33,859 respectively (March 2020 - $4,060 and $8,870) and the related payroll taxes were a recovery of $638 and an expense of $10,896 respectively (March 2020 - recovery of $1,384 and expense of $1,060).

(2)      

These costs represent a portion of the consideration paid to acquired businesses that is associated with the ongoing employment obligations for certain key employees of such acquired businesses, 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.

(4)      

In connection with the Company's recent acquisitions of ShopKeep and Upserve, certain functions and the associated management structure were reorganized to realize certain synergies and ensure organizational agility. The one time expenses associated with this plan were recorded as a restructuring charge in the quarter.

 

Reconciliation from IFRS to Non-IFRS Results (continued)

(expressed in thousands of US dollars)


Three months ended
March 31,


Fiscal year ended
March 31,








2021

2020


2021

2020


$

$


$

$







Cash flows used in operating activities

(24,131)

(8,885)


(93,064)

(28,550)

Payroll taxes related to stock-based compensation(1)

1,905

445


3,721

1,405

Acquisition-related compensation (2)

803

1,504


8,066

1,662

Payment of assumed transaction costs from recent acquisitions(3)

90


31,456

Transaction-related costs(4)

8,862

2,408


11,778

4,741

Restructuring(5)

726


726







Adjusted Cash Flows Used in Operating Activities

(11,745)

(4,528)


(37,317)

(20,742)


Our Adjusted Cash Flows used in Operating Activities for Fiscal 2021 of $37.3 million includes a payment for D&O insurance of $9.4 million which is a new annual expense in Fiscal 2021.

(1)      

These amounts represent the cash 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 employees of such acquired businesses, or on certain performance criteria being achieved.

(3)      

These adjustments relate to the settlement of transaction-related costs of the targets that were outside the regular course of business for our recent acquisitions of ShopKeep and Upserve and which were assumed as liabilities on the relevant acquisition dates. Lightspeed retained amounts in respect of these liabilities on the closing of each transaction that would otherwise have been paid to the sellers in the transactions. These amounts were not reflected in the net loss of Lightspeed given that they were already taken as expenses by the acquired companies prior to the closing of each transaction.

(4)      

These amounts represent the cash outflows related to professional, legal, consulting, accounting, advisory, and other fees relating to our public offerings and acquisitions that would otherwise not have been incurred. 

(5)      

In connection with the Company's recent acquisitions of ShopKeep and Upserve, certain functions and the associated management structure were reorganized to realize certain synergies and ensure organizational agility. The one time expenses associated with this plan were recorded as a restructuring charge in the quarter.

 

Reconciliation from IFRS to Non-IFRS Results (continued)

The following table outlines stock-based compensation and the related payroll taxes as well as transaction-related costs associated with the company's acquisitions and capital raises included with these expenses in the results of operations.

(In thousands of US dollars, except percentages)

Three months ended
March 31,


Fiscal year ended
March 31,


2021

2020


2021

2020


$

$


$

$







Gross profit

43,957


23,703



127,301


80,969


% of revenue

53.3

%

65.3

%


57.4

%

67.1

%

add: Stock-based compensation and related payroll taxes

864


146



3,231


591








Non-IFRS gross profit

44,821


23,849



130,532


81,560


% of revenue

54.4

%

65.8

%


58.9

%

67.6

%







General and administrative expenses

17,241


6,596



53,035


21,345


% of revenue

20.9

%

18.2

%


23.9

%

17.7

%

less: Stock-based compensation and related payroll taxes

3,072


606



11,123


3,196


less: Transaction-related costs

2,159


829



10,438


2,328








Non-IFRS general and administrative expenses

12,010


5,161



31,474


15,821


% of revenue

14.6

%

14.2

%


14.2

%

13.1

%







Research and development expenses

16,859


10,310



54,787


32,750


% of revenue

20.5

%

28.4

%


24.7

%

27.1

%

less: Stock-based compensation and related payroll taxes

1,043


1,400



10,941


3,101








Non-IFRS research and development expenses

15,816


8,910



43,846


29,649


% of revenue

19.2

%

24.6

%


19.8

%

24.6

%







Sales and marketing expenses

33,081


16,810



97,048


61,122


% of revenue

40.1

%

46.3

%


43.8

%

50.7

%

less: Stock-based compensation and related payroll taxes

6,165


524



19,460


3,042


less: Transaction-related costs

300


330



1,177


330








Non-IFRS sales and marketing expenses

26,616


15,956



76,411


57,750


% of revenue

32.3

%

44.0

%


34.5

%

47.9

%

 

SOURCE Lightspeed POS Inc.

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