Mr. J.P. Chauvet reports

LIGHTSPEED ANNOUNCES FIRST QUARTER 2023 FINANCIAL RESULTS

Lightspeed Commerce Inc. has released financial results for the three months ended June 30, 2022.

"Our two flagship offerings, Lightspeed Retail and Lightspeed Restaurant, continued to see excellent market reception this quarter, which helped drive strong revenue growth," said J.P. Chauvet, chief executive officer of Lightspeed. "Consumers are once again shopping in store and dining out, and our customers are turning to Lightspeed to help them deliver compelling omnichannel experiences under one comprehensive commerce platform, helping them grow revenue, reduce complexity and lower operating costs."

Although macroeconomic conditions have become more concerning in recent months, Lightspeed believes its available growth opportunities of increasing the number of customer locations, improving software adoption amongst these customer locations and expanding the amount of GTV (gross transaction volume) that is processed by the company's payments solutions, provide the company with multiple levers to continue to perform. Lightspeed also believes that the return to in-person shopping and dining can help to mitigate negative influences from deteriorating macroeconomic conditions.

"Our diversified business model continued to serve us well this quarter, with hospitality leading GTV growth," said Asha Bakshani, chief financial officer of Lightspeed. "Gross payment volume hit record levels in the quarter and software adoption amongst our customer locations increased, putting the company in a strong position to meet our financial commitments and realize our goal of adjusted EBITDA break-even or better next fiscal year."

First quarter financial highlights

(All comparisons are relative to the three-month period ended June 30, 2021, unless otherwise stated):

• Total revenue of $173.9-million, an increase of 50 per cent;
• Subscription revenue of $73.6-million, an increase of 47 per cent;
• Transaction-based revenue of $91.5-million, an increase of 62 per cent;
• Net loss of ($100.8-million), or (68 cents) per share, as compared with a net loss of ($49.3-million), or (38 cents) per share, representing (58) per cent of revenue versus (42.6) per cent. After adjusting for certain items such as acquisition-related costs and share-based compensation, adjusted loss was ($17.6-million), or (12 cents) per share;
• Adjusted earnings before interest, taxes, depreciation and amortization loss of ($15.6-million), representing (9) per cent of revenue versus its previously established outlook of an adjusted EBITDA loss of ($16-million);
• As at June 30, 2022, Lightspeed had approximately $915-million in unrestricted cash and cash equivalents.

Operational highlights:

• Total revenue of $173.9-million was up 50 per cent year-over-year due primarily to strong organic growth and $16.8-million in revenue from Lightspeed's acquisitions of NuOrder and Ecwid.
• Subscription and transaction-based revenue grew 55 per cent year-over-year to $165.1-million. Organic growth in subscription and transaction-based revenues was 38 per cent year-over-year.
• Subscription revenue increased 47 per cent year-over-year to $73.6-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 $91.5-million grew by 62 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. GPV increased over 96 per cent to $3.3-billion from $1.7-billion in the same period last year.
• Customer locations increased to approximately 166,000 from approximately 163,000 in the previous quarter and the monthly ARPU of these customer locations grew by 39 per cent to approximately $320 compared with just over $230 in the same quarter last year. Subscription ARPU increased to $136 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 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 $15 per customer location.
• Selected customer wins in the quarter include: Panos, one of the leading bakery groups in Belgium with 100 locations using Lightspeed; the Parker Palm Springs, a premier independent luxury hotel in California; Kualoa Ranch in Hawaii where the Jurassic Park movies were filmed; the Holland restaurant group with five locations in Covington, Ky.; and Monterey Plaza Hotel in Menlo Park, Calif. Additionally, long-standing point-of-sale customer The One adopted Lightspeed Payments in its over 40 locations in Australia, and world-renowned luxury brand Michael Kors will be added to Lightspeed B2B (business-to-business).
• For the quarter, Lightspeed's customers processed GTV of $22.1-billion, up 36 per cent year-over-year. Omnichannel retail GTV grew by 32 per cent whereas hospitality GTV grew by 40 per cent. Organic GTV growth was 25 per cent year-over-year, with organic omnichannel retail GTV growing at 15 per cent and organic hospitality GTV growing at 40 per cent. From a geographic perspective, EMEA (Europe, Middle East, Africa) delivered the strongest GTV growth. The Ecwid e-commerce stand-alone product contributed $700-million in GTV. In the quarter, Lightspeed continued to observe similar GTV trends to last quarter with 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, footwear and apparel.
• Adjusted EBITDA in the quarter was ($15.6-million) versus ($6-million) in the same quarter last year. As a percentage of revenue, adjusted EBITDA was (9) per cent versus (5.2) per cent for the same quarter last year. The increased adjusted EBITDA loss as a percentage of revenue was largely due to a recent acquisition with higher adjusted EBITDA losses as a percentage of revenue, costs associated with Lightspeed's annual sales, partner and customer conference which returned to a live, in-person format in the quarter for the first time since the COVID-19 pandemic began, and increased hardware incentives provided to new customers that negatively impacted gross margins.
• During the quarter, Lightspeed announced the initial launch of its B2B network, connecting brands and retailers in three key North American verticals: fashion, outdoor and sporting goods. Lightspeed's B2b network aims to automate the retail supply chain, liberating retailers from time-consuming manual workflows while giving brands sell-through reporting from their SMB (small and medium business) channels. By automating and delivering insights across the entire supply chain, Lightspeed hopes to improve revenue for both brands and retailers and get consumers the products they want into their local retailers.
• As of June 30, 2022, $9.4-million of merchant cash advances were outstanding, up 49 per cent from the previous quarter.
• After the quarter, Lightspeed paid down, in full, the $30-million balance outstanding under its acquisition term loan, which was previously drawn in January, 2020, in connection with the acquisition of Gastrofix.

Financial outlook

Lightspeed's first quarter results were strong, with growing subscription and transaction-based revenue. Although the company continues to monitor the macroeconomic environment, Lightspeed is encouraged by the reception of its new flagship offerings, growing adoption of its payments solutions, and the return to in-person shopping and dining. As a result, 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.

Second quarter 2023:

• Revenue of $178-million to $183-million;
• Adjusted EBITDA loss of approximately ($10-million), or approximately (6) per cent as a percentage of revenue.

In addition, the company remains confident in its expectation that it should reach adjusted EBITDA break-even for the fiscal year ended March 31, 2024.

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, Aug. 4, 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 Aug. 4, 2022, until 11:59 p.m. Eastern Time on Aug. 11, 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 unaudited condensed interim consolidated financial statements and management's discussion and analysis for the three months ended June 30, 2022, are available on Lightspeed's website and will be filed on SEDAR and on EDGAR.

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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