Mr. J.P. Chauvet reports

LIGHTSPEED ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL RESULTS AND PROVIDES OUTLOOK FOR FISCAL 2023

Lightspeed Commerce Inc. has released financial results for the three months and fiscal year ended March 31, 2022. Lightspeed reports in U.S. dollars and in accordance with international financial reporting standards.

"Consumers are once again dining out and shopping in person, filling up restaurants and stores in cities and neighbourhoods all around the world," said J.P. Chauvet, chief executive officer of Lightspeed. "With the fear of further lockdowns currently abating, merchants and restaurateurs are operating in a more favourable environment where they can create new concepts, invest in technology and open new locations. This is an environment where Lightspeed will truly shine."

The shift back to in-person shopping and dining helped drive another strong quarter of operating performance. Lightspeed's merchants' GTV (gross transaction volume) for the quarter grew 71 per cent year-over-year to $18.4-billion, led by strong performance in hospitality.

The company continued to deliver innovation in its two flagship offerings: Lightspeed Retail and Lightspeed Restaurant. Earlier this month, Lightspeed announced the availability of Lightspeed Retail, a groundbreaking retail commerce platform that unites advanced point of sale, payments and e-commerce into one cohesive and powerful solution. This follows the launch of the new flagship Lightspeed Restaurant offering earlier in the fiscal year which is gaining strong momentum. These flagship offerings come at a time when consumers are returning to their communities to shop and dine, providing the necessary technology to SMBs (small and medium-sized businesses) around the world to meet this growing demand.

"With easing pandemic restrictions in most markets around the world, we saw strong operating performance in March. This allowed us to deliver results ahead of our previously established outlook, achieve organic growth in subscription and transaction-based revenue of 48 per cent," said chief financial and operations officer Brandon Nussey. "As we look ahead, we are committed to our path to profitability and have the growth levers to get us there."

Fourth quarter financial highlights

(All comparisons are relative to the three-month period ended March 31, 2021, unless otherwise stated):

• Total revenue of $146.6-million, an increase of 78 per cent;
• Subscription revenue of $70.5-million, an increase of 77 per cent;
• Transaction-based revenue of $66.7-million, an increase of 88 per cent;
• Net loss of ($114.5-million), or (77 cents) per share, as compared with a net loss of ($42-million), or (34 cents) per share, representing (78.1) per cent of revenue versus (51) per cent. After adjusting for certain items such as acquisition-related costs and share-based compensation, adjusted loss was ($22.9-million), or (15 cents) per share;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of ($19.7-million), representing (13.5) per cent of revenue versus (11.7) per cent;
• As at March 31, 2022, Lightspeed had approximately $954-million in unrestricted cash and cash equivalents.

In its third fiscal quarter of 2022, Lightspeed completed the acquisition of Ecwid Inc.

Full fiscal year financial highlights

(All comparisons are relative to the full fiscal year ended March 31, 2021, unless otherwise stated):

• Total revenue of $548.4-million, an increase of 147 per cent;
• Subscription revenue of $248.4-million, an increase of 108 per cent;
• Transaction-based revenue of $264-million, an increase of 218 per cent;
• Net loss of ($288.4-million), or ($2.04) per share, as compared with a net loss of ($124.3-million), or ($1.18) per share, representing (52.6) per cent of revenue versus (56) per cent. After adjusting for certain items such as acquisition-related costs and share-based compensation, adjusted loss was ($53-million), or (37 cents) per share;
• Adjusted EBITDA loss of ($41.5-million), representing (7.6) per cent of revenue versus (9.6) per cent.

Operational highlights:

• Total revenue of $146.6-million was up 78 per cent year-over-year due in part to a combination of strong organic growth and $26.3-million in revenue from acquisitions completed in the last fiscal year.
• Subscription and transaction-based revenue grew 82 per cent year-over-year to $137.3-million. Organic growth in subscription and transaction-based revenues was 48 per cent year-over-year.
• Subscription revenue increased 77 per cent year-over-year to $70.5-million. Subscription revenue was positively impacted by recent acquisitions, along with a growing customer location base and an expanding ARPU (average revenue per user).
• Transaction-based revenue of $66.7-million grew by a total of 88 per cent year-over-year. The strong performance was a result of continued growth in GTV and an increasing portion of that GTV being processed through the company's payments solutions. Gross payment volume (GPV) increased over 132 per cent to $2.2-billion from $1-billion in the same period last year.
• Customer locations increased to 163,000 from 159,000 in the previous quarter and the monthly ARPU of these locations grew by 35 per cent to approximately $270 compared with just over $200 in the same quarter last year. Subscription ARPU increased to $132 from $113 a year earlier. The growing ARPU and customer locations reflects the company's continuing focus on attracting a customer profile that provides strong underlying unit economics, high GTV and a long-term strategic value. The above customer location and ARPU numbers exclude 160,000 customer locations attributable to the Ecwid e-commerce stand-alone product, which customer locations carry a monthly ARPU of approximately $16 per customer location.
• Selected customer wins in the quarter include: Goldy's Locker Room, with 21 locations in Wisconsin and Minnesota; Simply 10, an Alabama-based fashion and apparel retailer with 46 locations; Table, a two-star Michelin restaurant in Paris voted by Forbes magazine as one of the 10 coolest restaurants for 2021; and 1858 Caesar Bar, with three locations in Toronto. Orange, France's largest mobile carrier, agreed to act as a distributor of the Lightspeed e-commerce solution to its SMB customers. And the company's supplier network, Lightspeed B2B, added Reebok and Eddie Bauer as customer locations.
• For the quarter, Lightspeed's customers processed GTV of $18.4-billion, up 71 per cent year-over-year. Omnichannel retail GTV grew by 74 per cent whereas hospitality GTV grew by 67 per cent. Organic GTV growth was 39 per cent year-over-year, with organic omnichannel retail GTV growing at 17 per cent and organic hospitality GTV growing at 67 per cent. The Ecwid e-commerce stand-alone product contributed $800-million in GTV in the quarter. In the quarter, Lightspeed observed a shift in consumer spending resulting in a slowdown in certain retail categories, such as bike and garden supplies, and a resurgence in other categories, such as hospitality, fashion and apparel. Overall GTV growth still remained strong given Lightspeed's diversification, growing customer location base, and a return to in-person shopping and dining by consumers.
• Adjusted EBITDA in the quarter was ($19.7-million) versus ($9.6-million) in the same quarter last year. As a percentage of revenue, adjusted EBITDA was (13.5) per cent versus (11.7) per cent for the same quarter last year. The increased adjusted EBITDA loss as a percentage of revenue was largely due to the acquisitions of NuOrder and Ecwid that had higher adjusted EBITDA losses as a percentage of revenue and increased hardware incentives provided to new customers that negatively impacted gross margins.
• After the quarter, the company announced the availability of its latest flagship retail offering, Lightspeed Retail -- the culmination of strategically combining Lightspeed's leading technology and talented teams with those of its acquisitions, creating a powerful solution for the modern retailer. This new offering extends Lightspeed's availability to the Android platform, offers a truly headless commerce experience, introduces advanced APIs (application programming interfaces), completely reimagines the user interface and maintains industry-leading multistore inventory management.
• As of March 31, 2022, $6.3-million of merchant cash advances were outstanding, up 20 per cent from the previous quarter.

Financial outlook

Lightspeed's fourth quarter results were strong, despite challenging conditions in January and February offset by a very strong March. Given the trends the company is seeing in the business, the success of new product launches, the expanded availability of its payments solutions and a disciplined approach toward its cost structure, Lightspeed expects revenue and adjusted EBITDA to be in the following ranges:

Fiscal 2023:

• Revenue of $740-million to $760-million, in line with the company's target organic subscription and transaction-based revenue growth rate of 35 to 40 per cent;
• Adjusted EBITDA loss of approximately ($35-million) to ($40-million), or approximately (5) per cent as a percentage of revenue.

First quarter 2023:

• Revenue of $165-million to $170-million;
• Adjusted EBITDA loss of approximately ($16-million), or approximately (10) per cent as a percentage of revenue.

Finally, based on the strong growth the company is experiencing, the continuing integration of the various acquisitions, the trends back toward in-person shopping and dining, and a disciplined approach to investing in the business, the company believes it is on a natural path toward profitability. Lightspeed expects to reach adjusted EBITDA break-even for the fiscal year ended March 31, 2024, while still achieving its targeted organic subscription and transaction-based revenue growth rate of 35 to 40 per cent.

Long-term financial outlook

Lightspeed's long-term targets reflect the current trend of customer adoption of its payments solutions resulting in an increased proportion of transaction-based revenue relative to higher-margin subscription-based revenue. Its long-term targets also reflect a gradual increase in operating leverage, including as a result of increased average revenue per customer location and the benefits of increased scale in its primary operating expense lines. The long-term targets constitute financial outlook and forward-looking information within the meaning of applicable securities laws. The purpose of communicating long-term targets is to provide a description of management's expectations regarding the company's intended operating model, financial performance and growth prospects at a further stage of business maturity. Such information may not be appropriate for other purposes.

A number of assumptions were made by the company in preparing its long-term targets, including:

• Continuation of favourable economic conditions in its core geographies and verticals, including relatively elevated consumer confidence, disposable income, consumer spending and employment;
• The COVID-19 pandemic, including any variants, having durably subsided with broad immunity achieved in the company's core geographies and verticals, including the elimination of social distancing measures and other restrictions generally in such markets;
• Customer adoption of the company's payments solutions in line with past rates and expectations, with new customers having an average GTV at or above planned levels;
• Gross margin continuing to decrease as a percentage of revenue as more customers adopt Lightspeed's payments solutions;
• The ability to price the company's payment processing solutions in line with its expectations;
• The ability to achieve success in the continued expansion of the company's payments solutions;
• Revenue streams resulting from partner referrals remaining in line with historical rates (particularly in light of the continued expansion of Lightspeed Payments, which competes with the solutions offered by some of these referral partners);
• Long-term growth in ARPU of 10 per cent or more per year, including growth in subscription ARPU, in line with past rates and expectations, driven by customer adoption of additional solutions and modules and the introduction of new solutions, modules and functionalities, including Lightspeed's flagship Lightspeed Retail and Lightspeed Restaurant offerings;
• The ability to price solutions and modules in line with the company's expectations;
• The ability to recognize synergies and reinvest those synergies in core areas of the business as Lightspeed advances its rollout of its flagship Lightspeed Retail and Lightspeed Restaurant offerings;
• Growth in customer locations in line with past rates and expectations, including continued organic growth in customer locations;
• The ability to successfully integrate acquired companies and to derive expected benefits from such acquisitions;
• The ability to attract, develop and retain key personnel;
• The ability to effectively develop and expand Lightspeed's labour force, including its sales, marketing, support, and product and technology operations, in each case both domestically and internationally;
• The ability to manage customer churn;
• The ability to manage requests for subscription pauses, customer discount and payment deferral requests;
• Assumptions as to foreign exchange rates and interest rates, including inflation;
• The ability to successfully sell the company's Lightspeed Capital offering to its customers.

The financial outlook does not give effect to the potential impact of acquisitions that may be announced or closed after the date hereof. Many factors may cause actual results, level of activity, performance or achievements to differ materially from those expressed or implied by such targets, including risk factors identified in Lightspeed's most recent management's discussion and analysis of financial condition and results of operation and under "risk factors" in its most recent annual information form. In particular, the company's long-term targets are subject to risks and uncertainties related to:

• The COVID-19 pandemic, including the risk of any new or continued resurgence in the company's core geographies and the resulting impact on SMBs, including heightened levels of churn owing to business failures, requests for subscription pauses, payment deferrals and delayed purchase decisions;
• The Russian invasion of Ukraine, including reactions thereto and the potential impacts of sanctions;
• Supply chain risk and the impact of shortages in the supply chain on the company's merchants;
• Other macroeconomic factors affecting SMBs, including inflation, changes in interest rates and consumer spending trends;
• The ability to implement the company's growth strategy and the impact of competition;
• The substantial investments and expenditures required in the foreseeable future to expand Lightspeed's business;
• The liquidity and capital resources, including the company's ability to secure debt or equity financing on satisfactory terms;
• The ability to increase scale and operating leverage;
• The ability to continue the acceleration of the global rollout of the company's payments solutions;
• The reliance on a small number of cloud service providers and suppliers for parts of the technology in Lightspeed's payments solutions;
• The ability to improve and enhance the functionality, performance, reliability, design, security and scalability of Lightspeed's platform;
• The ability to prevent and manage information security breaches or other cybersecurity threats;
• The ability to compete and satisfactorily price our solutions in a highly fragmented and competitive market;
• Strategic relations with third parties, including Lightspeed's reliance on integration of third party payment processing solutions;
• The ability to maintain sufficient levels of hardware inventory;
• Compatibility of the company's solutions with third party applications and systems;
• Changes to technologies on which the company's platform is reliant;
• The ability to obtain, maintain and protect the company's intellectual property;
• Risks relating to the company's international operations, sales and use of its platform in various countries;
• Seasonality in the company's business and in the business of its customers;
• Litigation and regulatory compliance;
• The ability to expand Lightspeed's sales capability and maintain its customer service levels and reputation;
• Gross profit and operating expenses being measures determined in accordance with IFRS, and the fact that such measures may be affected by unusual, extraordinary or non-recurring items, or by items which do not otherwise reflect operating performance or which hinder period-to-period comparisons;
• Any potential acquisitions or other strategic opportunities, some of which may be material in size or result in significant integration difficulties or expenditures, or otherwise impact the company's ability to achieve profitability on its intended timeline or at all.

Conference call and webcast information

Lightspeed will host a conference call and webcast to discuss the company's financial results at 8 a.m. ET on Thursday, May 19, 2022. 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 e-mail, 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.

An audio replay of the call will also be available to investors beginning at approximately 11 a.m. Eastern Time on May 19, 2022, until 11:59 p.m. Eastern Time on May 26, 2022, by dialling 800-770-2030 for the United States or Canada, or 647-362-9199 for international callers, and providing conference ID 74316. In addition, an archived webcast will be available on the investors section of the company's website.

Lightspeed's audited consolidated financial statements, management's discussion and analysis, and annual information form for the fiscal year ended March 31, 2022, are available on Lightspeed's website and will be filed on SEDAR and on EDGAR. Shareholders may, upon request, receive a hard copy of the complete audited financial statements free of charge.

About Lightspeed Commerce Inc.

Powering the businesses that are the backbone of the global economy, Lightspeed's one-stop commerce platform helps merchants innovate to simplify, scale and provide exceptional customer experiences. The cloud solution transforms and unifies on-line and physical operations, multichannel sales, expansion to new locations, global payments, financing, and connection to supplier networks.

Founded in Montreal, Canada, Lightspeed is dual-listed on the New York Stock Exchange and Toronto Stock Exchange. With teams across North America, Europe and Asia Pacific, the company serves retail, hospitality and golf businesses in over 100 countries.

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