Lightspeed Shares Drop 14% on Customer Shortfall, Holiday Outlook

Shares fell to 13.84 Canadian dollars ($9.90). Revenue for the three months ended Sept. 30 rose 1.5% to $323.8 million, within Lightspeed’s guidance and above analysts’ $321.1 million forecast. Higher subscription and hardware sales supported revenue, while transaction-based revenue declined to $213.9 million from $215.8 million after the divestiture of Upserve earlier this year.

Lightspeed added about 800 net customer locations across its core North American retail and European hospitality businesses, short of analysts’ estimate of about 1,300. Cash flow from operating activities shifted to an outflow of $7.5 million from an inflow of $25.5 million in the year-earlier period. The company said outstanding merchant cash advances increased by $26 million as it expanded its Lightspeed Capital lending business.

For the third quarter, which includes the holiday selling period, Lightspeed expects revenue of $310 million to $320 million, or organic growth of 11% to 15%. The analyst consensus is $319.3 million, near the top of that range. The company forecast adjusted earnings before interest, taxes, depreciation and amortization of $25 million to $30 million.