Lightspeed Commerce shares slide 14% on fewer new customers and soft Q3 outlook

what happened

Shares of Lightspeed Commerce dropped more than 14% to 13.84 Canadian dollars ($9.90) on Thursday. According to Dow Jones Newswires, investors reacted to weak customer signups and a cautious outlook for the third quarter, even though quarterly sales still grew.

In the three months ended Sept. 30, revenue rose 1.5% to $323.8 million. That sat within the company's own guidance and above analyst estimates of $321.1 million. Subscription and hardware sales helped, while transaction-based revenue slipped to $213.9 million from $215.8 million after the Upserve divestiture. Lightspeed added roughly 800 net customer locations across North American retail and European hospitality, against analyst forecasts of about 1,300.

Operating cash flow turned to an outflow of $7.5 million from a $25.5 million inflow a year earlier. The company tied part of the swing to a $26 million rise in merchant cash advances as its Lightspeed Capital lending business expanded. For the holiday-heavy third quarter, Lightspeed expects revenue of $310 million to $320 million, or organic growth of 11% to 15%. Consensus sits at $319.3 million, closer to the top of that range. Adjusted EBITDA is projected at $25 million to $30 million.

why it matters

For payment and software platforms like Lightspeed, new location counts are a key growth gauge, so a shortfall there can weigh on the valuation even when revenue beats expectations. Guidance that leaves consensus near the top of the range also leaves little margin for error.

market impact

Lightspeed Commerce shares: missed customer additions and soft Q3 outlook pressure the stock

• ▼Lightspeed Commerce shares pressure down — missed customer additions and a soft third-quarter outlook weigh on sentiment

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