Annual Report
Fiscal Year Ended March 31, 2022
Letter from Jean Paul Chauvet
When I joined Lightspeed in 2012 as its Chief Revenue Officer, I became part of a small, but incredible team with
big goals. As President, I saw the Company grow while maintaining its collaborative, pioneering spirit. And today,
as the Company’s Chief Executive Officer, it is an honor to guide Lightspeed on the next phase of its journey.
In my time here I have worked alongside a talented and passionate team to help transform Lightspeed from a
regional provider of POS solutions to a global Commerce Platform. It has been a thrilling experience.
The Company has changed drastically over the years but what has not changed is the mission that motivates me
and the thousands of employees at Lightspeed. We are here to help entrepreneurs, creators, chefs and artists
build their small but meaningful businesses. Businesses that are the fabric of the communities they serve. We are
here to make the complex simple, to remove the tedious tasks that tax our customers’ time and energy, to provide
financial support where we can and to bring the power of technology, once reserved for only very large players, to
serve the small businesses that are so crucial to the vitality of our cities, towns and neighborhoods.
In our fiscal 2022 year, Lightspeed continued to advance its mission to ignite businesses everywhere. Our time
was spent integrating our recent acquisitions into one, comprehensive, industry-leading offering; on expanding our
payments solutions to all of our major markets; and on boosting our eCommerce and Supplier Network initiatives
through the acquisitions of Ecwid and NuORDER.
As I look into the future, I have great
expectations for the Company we are
building. Of course, there are challenges that
we must navigate. A reprehensible war is
waging in parts of Europe, inflation threatens
economic stability and supply chain issues
still persist. There will always be challenges.
However, as crowds once again gather to
shop, dine, and engage in the world around
them, I believe we are in an environment
where Lightspeed can truly thrive. We helped
our customers survive the pandemic by
accelerating their evolution to e-commerce/
omnichannel, and now we are poised to help
them thrive as the world re-opens.
The last two years have tested Lightspeed
and its customers in ways we could never
have imagined. We have emerged stronger,
larger and more capable than we have ever
been. And ready to take on the future!
Jean Paul Chauvet
CEO, Lightspeed
Lightspeed Mission
Building communities
through commerce.
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 online and
physical operations, multichannel sales, expansion
to new locations, global payments, financing
and connection to supplier networks.
Lightspeed
At-a-glance1
Leading global cloud-based omni-channel
commerce platform powering SMBs in the
new digital economy
Large total addressable market mainly
served by legacy systems poorly equipped
to support migration to cloud
Strong and consistent growth
with vast majority of our revenues
generated from recurring subscription
and transaction-based revenues
Growing and diverse customer base
driving $74.0B2 of commerce globally
Lightspeed payments now driving
significant growth for retail and
hospitality customers globally
Well capitalized with ~$954 million
in unrestricted cash
1All dollar figures are presented in U.S. dollars and as at March 31, 2022 or for the fiscal year 2022. Please refer to the section titled “Key
Performance Indicators” in our management discussion and analysis for the three months ended March 31, 2022 and 2021 and the years ended
March 31, 2022 and 2021 for the definitions of GTV.
2Key Performance Indicator. Includes a $1.5 billion GTV contribution from the Ecwid eCommerce standalone product.
Lightspeed
Value and growth1
Gross Transactional Volume (“GTV”)2
Revenue
$74B
~$548M
Customer Locations3
Revenue Growth
~163,000
~147%
Countries
>100
Recurring Subscription and
Transaction-based Revenue
~93%
1All dollar figures are presented in U.S. dollars and as at March 31, 2022, for the fiscal year 2022 or for the fiscal year 2022 compared to the
fiscal year 2021. Please refer to the section titled “Key Performance Indicators” in our management discussion and analysis for the three
months ended March 31, 2022 and 2021 and the years ended March 31, 2022 and 2021 for the definitions of GTV and Customer Locations.
2Key Performance Indicator. Includes a $1.5 billion GTV contribution from the Ecwid eCommerce standalone product.
3Key Performance Indicator. Excludes the approximately 160,000 Customer Locations attributable to the Ecwid eCommerce standalone product.
Lightspeed
High-quality diverse global customer
base leading to consistent growth1
Positive Net Dollar
Retention Rate2
Internationally diversified
with ~49% of locations
outside of North America
~$270 monthly ARPU3
per customer location
with consistent growth
Well diversified across
a number of complex
verticals in golf,
hospitality and retail
GTV (in $B)
R
G
A
2 % C
7
$74.0
$33.7
$22.3
$14.5
Fiscal year
2019
Fiscal year
2020
Fiscal year
2021
Fiscal year
2022
Revenue (in $M)
$548.4
R
G
A
2 % C
9
1All dollar figures are presented in U.S. dollars and as at
March 31, 2022 or for the fiscal year 2022. Please refer
to the section titled “Key Performance Indicators” of our
management discussion and analysis for the three months
ended March 31, 2022 and 2021 and the years ended
March 31, 2022 and 2021 for the definitions of GTV and
Customer Locations.
2Key Performance Indicator
3Key Performance Indicator. Excludes Customer Locations
attributable to our Ecwid eCommerce standalone product.
When including Customer Locations attributable to our
Ecwid eCommerce standalone product, monthly ARPU
was approximately $145 per Customer Location
$221.7
$120.6
$77.5
Fiscal year
2019
Fiscal year
2020
Fiscal year
2021
Fiscal year
2022
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
As used in this management’s discussion and analysis (“MD&A”), unless the context indicates or requires otherwise, all
references to the “Company”, “Lightspeed”, “we”, “us” or “our” refer to Lightspeed Commerce Inc. (formerly known as
Lightspeed POS Inc.) together with our subsidiaries, on a consolidated basis as constituted on March 31, 2022.
This MD&A dated May 19, 2022, for the three months ended March 31, 2022 and 2021 and the years ended March 31, 2022
(“Fiscal 2022”) and 2021 (“Fiscal 2021”), should be read in conjunction with the Company’s audited consolidated financial
statements and the notes related thereto for the years ended March 31, 2022 and 2021, included elsewhere in this annual report.
The financial information presented in this MD&A is derived from the Company’s audited annual consolidated financial
statements for Fiscal 2022 and Fiscal 2021, which have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All amounts are in U.S. dollars except
where otherwise indicated.
We have prepared this MD&A with reference to National Instrument 51-102 "Continuous Disclosure Obligations" of the
Canadian Securities Administrators. Under the U.S./Canada Multijurisdictional Disclosure System, we are permitted to prepare
this MD&A in accordance with Canadian disclosure requirements, which requirements are different than those of the United
States.
Additional information relating to Lightspeed, including our most recently completed Annual Information Form and our Annual
Report on Form 40-F for the fiscal year ended March 31, 2022, is available on our website at investors.lightspeedhq.com and can
be found on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
Forward-looking Information
This MD&A 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
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 and the impact thereon of the ongoing COVID-19 pandemic (the "COVID-19 Pandemic") as well as statements
relating to expectations regarding industry trends, our growth rates, the achievement of advances in and expansion of our
platform, expectations regarding our revenue and the revenue generation potential of our payment-related and other solutions,
expectations regarding our gross margins and future profitability, expected acquisition outcomes and synergies, expected impact
of legal proceedings, our business plans and strategies and our competitive position in our industry is forward-looking
information. The Russian invasion of Ukraine, including reactions thereto and the potential impacts of sanctions, may also
heighten the impact of certain factors described herein.
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”, “outlook”,
“forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates” or “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.
This forward-looking information and other forward-looking information are based on our opinions, estimates and assumptions in
light of our experience and perception of historical trends, current conditions and expected future developments, as well as other
factors that we currently believe are appropriate and reasonable in the circumstances as at the date of the forward-looking
information. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the
underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions made in respect of our ability to
build our market share and enter new markets and industry verticals; our ability to attract, develop and retain key personnel; our
ability to manage hardware component shortages and supply chain risk and the impact of shortages in the supply chain on our
customers; our ability to maintain and expand geographic scope; our ability to execute on our expansion plans; our ability to
continue investing in infrastructure and implement scalable controls, systems and processes to support our growth; our ability to
prevent and manage information security breaches or other cyber-security threats; our ability to protect our intellectual property
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rights and the risk of claims by third parties of intellectual property infringement; the impact of class actions and other litigation
claims; the pricing of our offerings; our ability to successfully integrate the companies we have acquired and to derive the benefits
we expect from the acquisition thereof; our ability to obtain and maintain existing financing on acceptable terms; currency
exchange and interest rates, including potential inflation; seasonality in our business and in the business of our customers; the
impact of competition; the changes and trends in our industry or the global economy; and the changes in laws, rules, regulations,
and global standards are material factors in preparing forward-looking information and management’s expectations.
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, is 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 factors described
in the “Summary of Factors Affecting our Performance” section of this MD&A, in the “Risk Factors” section of our Annual
Information Form dated May 19, 2022, 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 profile 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. The opinions, estimates or assumptions referred to above and described in greater detail in this MD&A should be
considered carefully by prospective investors.
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 information 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 MD&A represents our expectations as of the date hereof or as of the date it is
otherwise stated to be made, as applicable, and is 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 MD&A is expressly qualified by the foregoing
cautionary statements.
This MD&A includes certain trademarks, including “Lightspeed”, "NuORDER" and other trademarks, which are protected under
applicable intellectual property laws and are our property. Solely for convenience, our trademarks and trade names referred to in
this MD&A may appear without the ® or ™ symbol, but such references are not intended to indicate, in any way, that we will not
assert, to the fullest extent under applicable law, our rights to these trademarks and trade names.
Additional information relating to Lightspeed, including our most recently completed Annual Information Form, can be found on
SEDAR at www.sedar.com and EDGAR at www.sec.gov.
Overview
Lightspeed offers a cloud-based commerce platform that connects suppliers, merchants and consumers while enabling omni-
channel experiences. Our software platform provides our customers with the critical functionality they need to engage with
consumers, manage their operations, accept payments, and grow their businesses. We serve customers globally, empowering
single- and multi-location retailers, restaurants, golf course operators and other companies to compete successfully in an omni-
channel market environment by engaging with consumers across online, mobile, social, and physical channels. We primarily
target small and medium-sized businesses (“SMBs”) with our easy to use and cost efficient solutions. The majority of our revenue
is recurring or reoccurring and we have a strong track-record of growing revenue per customer over time.
Our cloud platform is designed around three interrelated elements: omni-channel consumer experience, a comprehensive back-
office operations management suite to improve our customers’ efficiency and insight, and the facilitation of payments. Key
functionalities of our platform include full omni-channel capabilities, POS, product and menu management, employee and
inventory management, analytics and reporting, multi-location connectivity, order-ahead and curbside pickup functionality,
loyalty, customer management and tailored financial solutions such as Lightspeed Payments and Lightspeed Capital. By
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delivering our solutions through the cloud, we enable merchants to reduce dependency on the brick and mortar channel and
interact with customers anywhere (in store, online, mobile and social), gain a deeper understanding of their customers and
operations by tracking activity and key metrics across all channels, and update inventory, run analytics, change menus, send
promotions and otherwise manage their business operations from any location.
Our position at the point of commerce puts us in a strong and advantaged position for payment processing and allows us to collect
transaction-related data insights. Our payments solutions are becoming increasingly available to a larger portion of our customer
base as we added availability in several new countries during Fiscal 2022 in addition to our core base of retail and hospitality
customers in the United States and Canada. Our transaction-based revenue was $264.0 million in Fiscal 2022, an increase of
218% from the $83.0 million in transaction-based revenue for Fiscal 2021. This was primarily driven by increased customer
adoption of our payments solutions and an increase of 261% in GPV1 compared to Fiscal 2021.
Our Payments Penetration Rate1 was approximately 13% in March 2022 demonstrating the extent of the opportunity before us. As
our customer GTV1 grows, so does our payments opportunity, which opportunity also continues to be bolstered by our expansion
of our payments solutions to more of our core markets.
Our platform is built to scale with our customers, supporting them as they open new locations, and offering increasingly
sophisticated solutions as their business requirements become more complex. Our platform helps SMBs avoid having to piece
together multiple, and often disjointed, applications from various providers to leverage the technology they need to run and grow
their businesses. Our ecosystem of development, channel and installation partners further reinforces the scalability of our
solutions, making them customizable and extensible. We work alongside our customers through their business journey by
providing industry-leading onboarding and support services, and fundamentally believe that our success is directly connected to
their success.
On April 16, 2021, we completed the acquisition of Vend Limited ("Vend"), a cloud-based retail management software company,
based in New Zealand, thereby expanding our international presence. On July 1, 2021, we completed the acquisition of Los
Angeles-based NuORDER, Inc. (“NuORDER”), a transformative digital platform connecting businesses and suppliers in
numerous countries. In addition to accelerating our own ambitions to engage suppliers, the acquisition of NuORDER provides us
with a business-to-business financial services opportunity. On October 1, 2021, we completed the acquisition of the Ecwid
corporate group ("Ecwid"), a California-based global eCommerce platform provider. The acquisition of Ecwid has enhanced our
omni-channel offering with easy-to-use tools to quickly sell online allowing merchants to better combine digital and physical
operations. These acquisitions coupled with our organic growth have also created opportunities for us to leverage our increased
scale to derive better economics from our payment partners and other vendors that we utilize to deliver our solutions, as well as
broaden our brand awareness.
During Fiscal 2022, we launched our all-new Lightspeed Restaurant, a unified hospitality commerce and point-of-sale platform,
and we announced our new eCommerce product Lightspeed eCommerce, built on the integration of our acquisition of Ecwid.
Subsequent to the end of Fiscal 2022, we launched Lightspeed Retail, a groundbreaking new retail commerce platform that unites
advanced POS, payments, and eCommerce into one cohesive and powerful solution.
To further complement our core cloud solutions, we offer a merchant cash advance program called Lightspeed Capital. This
program provides cash advances to eligible merchants and is designed to help them with overall business growth and cash
management. Merchants use these cash advances to manage their cash flows, to buy inventory, and to invest in marketing.
We sell our solutions primarily through our direct sales force in North America, Europe, the UK, Australia and New Zealand,
supplemented by indirect channels in other countries around the world. Our platform is well-suited for various types of SMBs,
particularly single- and multi-location retailers with complex operations, such as those with a high product count, diverse
inventory needs or a service component, golf course operators and hospitality customers ranging from quick service and festivals
to hotels and fine dining establishments.
Excluding the impact of Customer Locations1 attributable to the Ecwid eCommerce standalone product, which Customer
Locations carry a lower ARPU1, the monthly ARPU of our Customer Locations was approximately $270 per Customer Location
as at March 31, 2022 as compared to just over $200 per Customer Location as at March 31, 2021. Including the Customer
Locations attributable to the Ecwid eCommerce standalone product, our customers generated monthly ARPU of approximately
$145 per Customer Location as at March 31, 2022.
1 Refer to the section entitled "Key Performance Indicators"
(3)
As at March 31, 2022, we had approximately 323,000 Customer Locations in over 100 countries, which includes approximately
160,000 Customer Locations attributable to the Ecwid eCommerce standalone product. For Fiscal 2022, our cloud-based
software-as-a-service platform processed GTV of $74.0 billion (excluding amounts processed through the NuORDER solution
from our GTV because they represent business-to-business volume rather than business-to-consumer volume and we do not
currently have a robust payments solution for business-to-business volume), which represents growth of 119% relative to
$33.7 billion of GTV processed during Fiscal 2021. Our GTV processed during Fiscal 2022 includes a $1.5 billion GTV
contribution from Customer Locations attributable to the Ecwid eCommerce standalone product since we acquired Ecwid on
October 1, 2021. For the three months ended March 31, 2022 compared to the March 31, 2021, our omni-channel retail GTV
growth was 74% and our hospitality GTV growth was 67%.
After excluding the impact of any acquisitions that occurred since the end of the prior comparable period so as to provide a
consistent basis of comparison, organic GTV growth for Fiscal 2022 was 51% which growth was driven by a 36% increase in
GTV from omni-channel retail customers, and an increase in hospitality GTV of 73% despite on-and-off lockdowns in certain
geographies (39%, 17% and 67%, respectively for the three months ended March 31, 2022). For greater clarity, where an
acquisition occurred part way through the prior comparable period, such acquisition's contributions in the current period are
included for purposes of calculating organic GTV only to the extent of the same months they were included in the prior
comparable period.
Our approximately 323,000 Customer Locations as at March 31, 2022 are located 51% in North America and 49% across the rest
of the world. Excluding the approximately 160,000 Customer Locations attributable to the Ecwid eCommerce standalone product,
the split of the Customer Locations between retail and hospitality represents approximately 63% and 37% of our total Customer
Locations, respectively. When including the Customer Locations attributable to the Ecwid eCommerce standalone product, the
split between retail and hospitality represents approximately 81% and 19% of our total Customer Locations, respectively. Despite
the Ecwid acquisition adding a significant number of lower ARPU Customer Locations to our overall customer base, our attention
continues to be focused on serving the complex SMBs to which our solutions are particularly well-suited and we believe that
leveraging Ecwid's platform as our flagship eCommerce offering will enable these businesses to enhance their omnichannel reach
and increase their selling flexibility.
We believe we have a distinct leadership position in SMB commerce given our scale, breadth of capabilities, and diversity of
customers. As a result, our business has grown significantly. We generate revenue primarily from the sale of cloud-based software
subscriptions and our payments solutions. We offer pricing plans designed to meet the needs of our current and prospective
customers that enable Lightspeed solutions to scale with SMBs as they grow. Our subscription plans vary from monthly plans to
one-year and multi-year terms. We have become more accommodating of monthly payment plans for our customers aimed in part
to encourage adoption of our payments solutions. We have also integrated our software with various third party payment
processors who pay us a revenue share of the payment processing revenue for customers we refer to them. These arrangements
generally predate the availability of our payments solutions in the various markets we serve. Revenue from these arrangements is
included in our transaction-based revenue.
Our total revenue has increased to $548.4 million for Fiscal 2022 from $221.7 million for Fiscal 2021, representing year-over-
year growth of 147%, with Vend, NuORDER and Ecwid representing a combined $76.1 million of the total revenue for Fiscal
2022. For Fiscal 2022, subscription revenue accounted for 45% of our total revenues (54% for Fiscal 2021), and transaction-based
revenue accounted for 48% of our total revenues (37% for Fiscal 2021). We achieved a positive Net Dollar Retention Rate2 in
Fiscal 2022.
After excluding the impact of any acquisitions that occurred since the end of the prior comparable period so as to provide a
consistent basis of comparison, organic subscription and transaction-based revenue growth for Fiscal 2022 compared to Fiscal
2021 was 62% (48% for the three months ended March 31, 2022). For greater clarity, where an acquisition occurred part way
through the prior comparable period, such acquisition's contributions in the current period are included for purposes of calculating
organic subscription and transaction-based revenue growth only to the extent of the same months they were included in the prior
comparable period.
In addition, we offer a variety of hardware and other services to provide value-added support to our merchants and supplement
our subscription and transaction-based revenue solutions. These revenues are generally one-time revenues associated with the sale
of hardware with which our solutions integrate and the sale of professional services in support of the installation and
implementation of our solutions. For Fiscal 2022, this revenue accounted for 7% of our total revenue (9% for Fiscal 2021).
2 Refer to the section entitled "Key Performance Indicators"
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We plan to continue making investments to drive future growth. We believe that our future success depends on a number of
factors, including our ability to expand our market share, build on successes of our payments and tailored financial solutions, add
more solutions to our platform, expand our presence within verticals, and our ability to selectively pursue and to integrate value-
enhancing acquisitions. We are pleased with the performance of our acquired businesses and the progress made on their
integration.
Our Lightspeed Supplier Network, and the acquisition of NuORDER, once fully integrated, will provide customers with greater
supplier access and inventory visibility, automate manual ordering, consolidate supplier portals into the POS, streamline omni-
channel operations by making it easy to import product details and photos into the POS, and ensure use of supplier-approved
brand names and images. Meanwhile, suppliers will benefit from greater access to real time data on goods sold by customers and
enhanced brand presence with customers. Going deep into verticals also creates opportunities for us to monetize our data up and
down the supply chain.
The acquisition of Ecwid allows merchants to enhance omnichannel reach and increase selling flexibility, including through social
media platforms and digital market places.
We believe that we have significant opportunity to continue to expand ARPU given the number of customers adopting more
Lightspeed products over time and that our continued investments will increase our revenue base, improve the retention of this
base and strengthen our ability to increase sales to our customers. We have not been profitable to date and the acquisition strategy
that we have executed to date has increased our cost structure significantly. If we are unable to successfully implement our growth
strategies, we may not be able to achieve profitability. For Fiscal 2022 and Fiscal 2021, we incurred an operating loss of $318.3
million and $129.7 million, respectively. Our cash flows used in operating activities for Fiscal 2022 were $87.2 million, and our
Adjusted Cash Flows Used in Operating Activities3 were $61.3 million compared to $93.1 million and $41.4 million, respectively,
for Fiscal 2021.
Sustainability
Sustainability is embedded in our guiding principles, and we are working towards a sustainable future and a greener economy. As
part of this commitment, we have taken steps to reduce our carbon footprint and our customers’ carbon footprint. We partner with
Sustainably Run on a Carbon Free Dining program in the UK. We give our customers the ability to offset the carbon emissions
associated with their diners by planting GiftTrees and we provide them sustainable credits. After the successful implementation of
the program in the UK which has seen the planting of approximately 1 million trees, we plan to expand this program to other
regions. In addition to offsetting carbon emissions, these trees provide food, income and education for the communities sponsored
to plant the trees. We also partner with TravelPerk to offset carbon emissions for our business travel by airplane, automobile, and
train. We choose to partner with companies that are also environmentally conscientious. Most of our solutions are powered by
Amazon Web Services ("AWS") and Google Cloud platforms. Google Cloud is 100% powered by renewable energy and AWS
has committed to powering its operations with 100% renewable energy by 2025. Additionally, a small portion of our solutions are
hosted in data centers, which primarily run on renewable energy.
Lightspeed is also a place of diversity, equity and inclusion, and it has been since our Executive Chair Dax Dasilva founded the
Company in Montreal’s Gay Village in 2005. The first four Lightspeed employees were all from the LGBTQ2S+ community and,
based on our most recent annual DEI engagement survey, 11% of our employees identify as LGBTQ2S+. Our commitment to a
diverse and inclusive workplace can be seen at all levels of our Company from our Employee-led Networks for women,
LGBTQ2S+ community members and BIPOC community members to our board of directors, 44% of the members of which
identify as women (57% of the independent members of which identify as women). We believe in creating value across our
ecosystem, including by ensuring meaningful wealth creation opportunities for all employees. All employees are granted an
equity stake in the Company upon hire, ensuring employees’ interests are aligned with those of our shareholders.
COVID-19
There continues to be uncertainty regarding the duration and magnitude of the COVID-19 Pandemic and the ability to control
resurgences and new variants worldwide, making it difficult to assess the future impact on our customer base, the end markets we
serve and the resulting effect on our business and operations, both in the short term and in the long term.
Despite the ongoing risks and uncertainties, however, we continue to believe the impact of the COVID-19 Pandemic on the retail
and hospitality industries has accelerated the need for our solutions as SMBs look to augment traditional in-person selling models
3Refer to the section entitled "Non-IFRS Measures and Ratios and Reconciliation of Non-IFRS Measures and Ratios".
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with online and digital strategies. A large portion of our market is currently served by legacy on-premise systems that are
expensive, complicated and poorly equipped to help SMBs adapt to this immediate need. This represents a significant opportunity
for us to grow our customer base. We believe our growth, despite a challenging macro-economic environment is an ongoing
indicator of this accelerated shift to our cloud-based solutions. Lightspeed believes it is well-positioned to capitalize on this
opportunity and will continue to leverage its privileged position at the point of sale to also seize our payments opportunity.
Seizing our payments opportunity means monetizing a larger portion of our customers’ GTV, which for Fiscal 2022 was $74.0
billion up 119% from the $33.7 billion we processed in Fiscal 2021. We expect GTV variability as measures around the world to
manage the impact of the COVID-19 Pandemic are eased or intensified; however, we believe our diversity in customer verticals
and geographies we serve will continue to be a strong asset of the business.
We are continuing to monitor the impact of the COVID-19 Pandemic on our business, financial condition and operations, as
further discussed below. Refer to the sections of this MD&A entitled "Summary of Factors Affecting Our Performance", to the
“Risk Factors” section of our most recent Annual Information Form, and to our other filings with Canadian securities regulatory
authorities and the U.S. Securities and Exchange Commission, all of which can be found on SEDAR at www.sedar.com and on
EDGAR at www.sec.gov, for a discussion about the risks with which we are faced.
Russian Invasion of Ukraine
We do not have any significant operations, customers or supplier relationships in Russia, Belarus or Ukraine, and have ceased our
selling activities to new customers in Russia and Belarus. Our revenues and our operating expenses in Russia, Belarus and
Ukraine were less than 0.1% of total revenues and less than 1% of total operating expenses, respectively, for Fiscal 2022. All of
our intellectual property and customer data is located outside of the region. We do have personnel in Russia who were brought on
via our acquisition of Ecwid, and as part of our business continuity plans have been relocating some personnel outside of Russia
to mitigate any reliance on the region. We plan to relocate as many of our personnel as possible and transition business operations
from the region in order to ensure the safety of our personnel and to continue to conduct business operations uninterrupted. We
will continue to monitor the situation closely, and to date we have not experienced any disruptions in our business operations.
The United States State Department has issued a warning that one of the potential escalations that may result in connection with
the war in Ukraine and in response to the increased sanctions announced by many countries against Russia, could be an increased
risk of cyber-security attacks to the networks and operations of companies operating from countries that have participated in
sanctions against Russia. We take that concern very seriously and have increased our own efforts to monitor our networks and
information technology infrastructure for any signs of such attacks.
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 and ratios. 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.
Average Revenue Per User. “Average Revenue Per User” or “ARPU” represents the total subscription revenue and
transaction-based revenue of the Company in the period divided by the number of Customer Locations of the Company in
the period. When excluding Customer Locations attributable to the Ecwid eCommerce standalone product, which Customer
Locations carry a lower ARPU, the monthly ARPU of our Customer Locations grew to approximately $270 per Customer
Location as at March 31, 2022 compared to just over $200 per Customer Location as at March 31, 2021. When including
Customer Locations attributable to the Ecwid eCommerce standalone product, our customers generated monthly ARPU of
approximately $145 per Customer Location as at March 31, 2022. For greater clarity and consistent with how we have
historically calculated ARPU, the number of Customer Locations of the Company in the period is calculated by taking the
average number of Customer Locations throughout the period.
Customer Locations. “Customer Location” means a billing merchant location for which the term of services have not
ended, or with which we are negotiating a renewal contract, and, in the case of NuORDER, a brand with a direct or indirect
paid subscription for which the terms of services have not ended or in respect of which we are negotiating a subscription
renewal. A single unique customer can have multiple Customer Locations including physical and eCommerce sites and in
the case of NuORDER, multiple subscriptions. We believe that our ability to increase the number of Customer Locations
(6)
served by our platform is an indicator of our success in terms of market penetration and growth of our business. We have
successfully demonstrated a history of growing the number of our Customer Locations. As of March 31, 2022 and
March 31, 2021, approximately 323,000 and approximately 119,000 Customer Locations, respectively, were utilizing our
platform. Our Customer Locations as of March 31, 2022 include approximately 160,000 Customer Locations attributable to
the Ecwid eCommerce standalone product. In light of the acquisition of NuORDER, the definition of Customer Locations
was adjusted during the three months ended September 30, 2021 to include brands with direct or indirect paid
subscriptions.
Gross Payment Volume. “Gross Payment Volume” or “GPV” means the total dollar value of transactions processed,
excluding amounts processed through the NuORDER solution, in the period through our payments solutions in respect of
which we act as the principal in the arrangement with the customer, net of refunds, inclusive of shipping and handling, duty
and value-added taxes. We believe that growth in our GPV demonstrates the extent to which we have scaled our payments
solutions. As the number of Customer Locations using our payments solutions grows, we will generate more GPV and see
higher transaction-based revenue. For the three months ended March 31, 2022, GPV was $2.2 billion compared to $1.0
billion for the three months ended March 31, 2021, representing growth of 132%. For Fiscal 2022, GPV was $8.1 billion
compared to $2.3 billion during Fiscal 2021, representing growth of 261%. We have excluded amounts processed through
the NuORDER solution from our GPV because they represent business-to-business volume rather than business-to-
consumer volume and we do not currently have a robust payments solution for business-to-business volume.
Gross Transaction Volume. “Gross Transaction Volume” or “GTV” means the total dollar value of transactions
processed through our cloud-based software-as-a-service platform, excluding amounts processed through the NuORDER
solution, 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 platform. GTV does not represent revenue earned by
us. For the three months ended March 31, 2022, GTV was $18.4 billion compared to $10.8 billion for the three months
ended March 31, 2021, representing growth of 71%. Our GTV processed during the three months ended March 31, 2022
includes a $0.8 billion GTV contribution from Ecwid. For Fiscal 2022, GTV was $74.0 billion compared to $33.7 billion
for Fiscal 2021, representing growth of 119%. Our GTV processed during Fiscal 2022 includes a $1.5 billion GTV
contribution from Ecwid. We have excluded amounts processed through the NuORDER solution from our GTV because
they represent business-to-business volume rather than business-to-consumer volume and we do not currently have a robust
payments solution for business-to-business volume.
Payments Penetration Rate. “Payments Penetration Rate” means GPV divided by GTV. We believe that our Payments
Penetration Rate demonstrates the extent to which we have capitalized on the payments opportunity within our customer
base. The Payments Penetration Rate grew to approximately 13% in March 2022 compared to approximately 10% in
March 2021.
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. Despite the impact of the COVID-19 Pandemic and the
spread of variants of the COVID-19 virus, for Fiscal 2022, we had Net Dollar Retention Rates in excess of 100% as
calculated using an average of the monthly Net Dollar Retention Rates for those periods.
Non-IFRS Measures and Ratios and Reconciliation of Non-IFRS Measures and Ratios
The information presented within this MD&A includes certain financial measures and ratios such as “Adjusted EBITDA”,
"Adjusted Loss", "Adjusted Loss per Share - Basic and Diluted", and "Adjusted Cash Flows Used in Operating Activities". These
measures and ratios are not recognized measures and ratios under IFRS and do not have a standardized meaning prescribed by
IFRS and are therefore unlikely to be comparable to similar measures and ratios presented by other companies. Rather, these
measures and ratios are provided as additional information to complement those IFRS measures and ratios by providing further
understanding of our results of operations from management’s perspective. Accordingly, these measures and ratios should not be
considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. These non-IFRS
measures and ratios are used to provide investors with supplemental measures and ratios of our operating performance and thus
highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures and ratios. We
also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures and ratios in the
evaluation of issuers. Our management also uses non-IFRS measures and ratios in order to facilitate operating performance
(7)
comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of
management compensation.
Adjusted EBITDA
Adjusted EBITDA is defined as net loss excluding interest, taxes, depreciation and amortization, or EBITDA, as adjusted for
share-based compensation and related payroll taxes, compensation expenses relating to acquisitions completed, foreign exchange
gains and losses, transaction-related costs, restructuring and litigation provisions. The following table reconciles net loss to
Adjusted EBITDA for the periods indicated:
(In thousands of US dollars)
Net loss
Share-based compensation and related payroll taxes(1)
Depreciation and amortization(2)
Foreign exchange loss(3)
Net interest (income) expense(2)
Acquisition-related compensation(4)
Transaction-related costs(5)
Restructuring(6)
Litigation provisions(7)
Income tax expense (recovery)
Three months ended
March 31,
2022
$
2021
$
Fiscal year ended
March 31,
2022
$
2021
$
(114,517)
41,625
29,972
29
(1,014)
20,433
872
606
576
1,679
(42,045)
11,144
15,450
550
(147)
2,144
2,459
1,760
—
(936)
(288,433)
109,066
104,548
611
(2,988)
50,491
9,653
803
1,655
(26,921)
(124,278)
44,755
36,483
2,098
353
11,807
11,615
1,760
—
(5,792)
Adjusted EBITDA
(19,739)
(9,621)
(41,515)
(21,199)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
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 share-based compensation; they can
include estimates and are therefore subject to change. For the three months and fiscal year ended March 31, 2022, share-based compensation
expense was $41,934 and $108,916, respectively (March 2021 - $11,782 and $33,859), and related payroll taxes were a recovery of $309 and an
expense of $150, respectively (March 2021 - recovery of $638 and expense of $10,896). These costs are included in direct cost of revenues, general
and administrative expenses, research and development expenses and sales and marketing expenses (see note 9 to the audited annual consolidated
financial statements for the details).
In connection with the accounting standard IFRS 16 - Leases, for the three months ended March 31, 2022, net loss includes depreciation of $2,032
related to right-of-use assets, interest expense of $288 on lease liabilities, and excludes an amount of $2,111 relating to rent expense ($1,221, $303,
and $1,588, respectively, for the three months ended March 31, 2021). For Fiscal 2022, net loss includes depreciation of $7,743 related to right-of-
use assets, interest expense of $1,204 on lease liabilities, and excludes an amount of $8,133 relating to rent expense ($3,876, $1,048, and $4,436,
respectively, for Fiscal 2021).
These non-cash losses relate to foreign exchange translation.
These costs represent a portion of the consideration paid to acquired businesses that is contingent upon the ongoing employment obligations for
certain key personnel of such acquired businesses, and/or on certain performance criteria being achieved.
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. These costs are included in general and administrative expenses and sales and marketing expenses.
Certain functions and the associated management structure were reorganized and will continue to be reorganized to realize synergies and ensure
organizational agility. The expenses associated with this reorganization were recorded as a restructuring charge.
These costs represent provisions taken and other costs, such as legal fees, incurred in respect of certain litigation matters, net of amounts covered by
insurance and indemnifications. These costs do not include provisions taken and other costs incurred in respect of litigation matters of a nature that
we consider normal to our business. These costs were not included in Fiscal 2021 as we did not incur costs for these litigation matters in Fiscal
2021. These costs are included in general and administrative expenses.
(8)
Adjusted Loss and Adjusted Loss per Share - Basic and Diluted
Adjusted Loss is defined as net loss excluding amortization of intangibles, as adjusted for share-based compensation and related
payroll taxes, compensation expenses relating to acquisitions completed, transaction-related costs, restructuring, litigation
provisions and deferred income tax expense (recovery). Adjusted Loss per Share - Basic and Diluted is defined as Adjusted Loss
divided by the weighted average number of common shares (basic and diluted). The following table reconciles net loss to
Adjusted Loss for the periods indicated:
(In thousands of US dollars, except number of shares and per
share amounts)
Net loss
Share-based compensation and related payroll taxes(1)
Amortization of intangible assets
Acquisition-related compensation(2)
Transaction-related costs(3)
Restructuring(4)
Litigation provisions(5)
Deferred income tax expense (recovery)(6)
Adjusted Loss
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
(114,517)
41,625
26,151
20,433
872
606
576
1,397
(22,857)
2021
$
(42,045)
11,144
13,359
2,144
2,459
1,760
—
(984)
(12,163)
2022
$
(288,433)
109,066
91,812
50,491
9,653
803
1,655
(28,024)
2021
$
(124,278)
44,755
30,128
11,807
11,615
1,760
—
(5,958)
(52,977)
(30,171)
Weighted average number of Common Shares (basic and diluted)
148,473,309
123,865,361
141,580,917
105,221,907
Adjusted Loss per Share - Basic and Diluted(6)
(0.15)
(0.10)
(0.37)
(0.29)
(1)
(2)
(3)
(4)
(5)
(6)
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 share-based compensation, they can
include estimates and therefore subject to change. For the three months and fiscal year ended March 31, 2022, share-based compensation expense
was $41,934 and $108,916, respectively (March 2021 - $11,782 and $33,859), and related payroll taxes were a recovery of $309 and an expense of
$150, respectively (March 2021 - recovery of $638 and expense of $10,896). These costs are included in direct cost of revenues, general and
administrative expenses, research and development expenses and sales and marketing expenses (see note 9 to the consolidated financial statements
for the details).
These costs represent a portion of the consideration paid to acquired businesses that is associated with the ongoing employment obligations for
certain key personnel of such acquired businesses, and/or on certain performance criteria being achieved.
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. These costs are included in general and administrative expenses and sales and marketing expenses.
Certain functions and the associated management structure were reorganized and will continue to be reorganized to realize synergies and ensure
organizational agility. The expenses associated with this reorganization were recorded as a restructuring charge.
These costs represent provisions taken and other costs, such as legal fees, incurred in respect of certain litigation matters, net of amounts covered by
insurance and indemnifications. These costs do not include provisions taken and other costs incurred in respect of litigation matters of a nature that
we consider normal to our business. These costs were not included in Fiscal 2021 as we did not incur costs for these litigation matters in Fiscal
2021. These costs are included in general and administrative expenses.
Unlike Adjusted Net Loss and Adjusted Net Loss per Share which we presented for quarters up until and including the three months ended June 30,
2021, Adjusted Loss and Adjusted Loss per Share - Basic and Diluted adjusts Net Loss for deferred income tax expense (recovery). We believe this
adjustment provides a more useful metric to our stakeholders than Adjusted Net Loss and Adjusted Net Loss per Share given that the majority of our
deferred income tax expense (recovery) arises due to our acquisitions and not ordinary course operations.
(9)
Adjusted Cash Flows Used in Operating Activities
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 share-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, the payment of
restructuring costs and payments related to litigation provisions net of amounts received as insurance and indemnification
proceeds. An explanation of the Adjusted Cash Flows Used in Operating Activities can be found in the Liquidity and Capital
Resources section of this MD&A. The following table reconciles cash flows used in operating activities to Adjusted Cash Flows
Used in Operating Activities for the periods indicated:
(In thousands of US dollars)
Cash flows used in operating activities
Payroll taxes related to share-based compensation(1)
Acquisition-related compensation(2)
Payment of assumed transaction costs from recent acquisitions(3)
Transaction-related costs(4)
Restructuring(5)
Litigation provisions(6)
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
(11,342)
156
746
—
431
501
(366)
2021
$
(24,131)
(1,070)
803
90
8,862
726
—
2022
$
(87,218)
4,953
7,839
540
11,668
1,590
(654)
2021
$
(93,064)
(335)
8,066
31,456
11,778
726
—
Adjusted Cash Flows Used in Operating Activities
(9,874)
(14,720)
(61,282)
(41,373)
(1)
(2)
(3)
(4)
(5)
(6)
These amounts represent the cash inflow and outflow of payroll taxes on our issued stock options and other awards under our equity incentive plans
to our employees and directors.
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 personnel of such acquired businesses, and/or on certain performance criteria being achieved.
These adjustments relate to the settlement of transaction-related costs of the targets that were outside the regular course of business for our
acquisitions and which were assumed as liabilities on the relevant acquisition dates. We 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 our net loss given that
they were already taken as expenses by the acquired companies prior to the closing of each transaction.
These amounts represent the cash outflows, and inflows due to timing differences, related to professional, legal, consulting, accounting, advisory,
and other fees relating to our public offerings and acquisitions that would otherwise not have been incurred.
Certain functions and the associated management structure were reorganized and will continue to be reorganized to realize synergies and ensure
organizational agility. The expenses associated with this reorganization were recorded as a restructuring charge.
These amounts represent the cash inflow and outflow of provisions taken, and other costs such as legal fees incurred, in respect of certain litigation
matters, net of amounts received as insurance and indemnification proceeds. These cash inflows and outflows do not include cash inflows and
outflows in respect of litigation matters of a nature that we consider normal to our business. These cash inflows and outflows were not included in
Fiscal 2021 as we did not incur cash inflows and outflows for these litigation matters in Fiscal 2021.
Summary of Factors Affecting our Performance
We believe that the growth and future success of our business depends on many factors, including those described below. While
each of these factors presents significant opportunities for our business, they also pose important challenges, some of which are
discussed below, in the “Risk Factors” section of 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 can be found on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Market Adoption of our Platform
We intend to continue to drive adoption of our advanced commerce platform by scaling our solutions to meet the needs of both
new and existing customers of all types and sizes. We believe that there is significant potential to increase penetration of our total
addressable market and attract new customers and that this potential has become even greater due to the COVID-19 Pandemic
accelerating the need for SMBs to move away from legacy on-premise systems towards cloud-based omni-channel solutions. We
plan to do this by further developing our products and services, embedding ourselves up and down the supply chain within the
ecosystem of verticals as well as continuing to invest in marketing strategies tailored to attract new businesses to our platform,
both in our existing geographies and new markets around the world. We also intend to selectively evaluate opportunities to offer
(10)
our solutions to businesses operating in industry verticals that we do not currently serve. We plan to continue to invest in our
platform to expand our Customer Location footprint and drive market adoption, particularly of our payments solutions, and our
operating cash flows may fluctuate as we make these investments. Our market is large, evolving, highly-fragmented, competitive
and has low barriers to entry. Our competitors range from large, well-established vendors to smaller, earlier-stage ones. We
expect competition to intensify in the future, particularly as industry consolidation occurs and as large, well-established vendors
increasingly service more complex customers.
Customer Adoption of our Payments Solutions
Our payments solutions are becoming increasingly available to a larger portion of our customer base as we added availability in
several new countries during Fiscal 2022 in addition to our core base of retail and hospitality customers in the United States and
Canada. We believe that our payments solutions will continue to be an increasingly important part of our business as we make
them available to our broader customer base and across our core geographies. Our payments solutions are designed to be
transparent and easy to understand, and we have priced our solutions at market competitive rates based on a percentage of GTV
electronically processed through our platform. We continue to see increased adoption of our payment processing solutions, which
are the largest driver of revenue growth for the Company. As an increasing proportion of our revenue is generated from our
payments solutions, we believe that while our total revenues may grow significantly, our gross margins will decrease over time
due to the lower gross margin profile of our transaction-based revenue stream relative to the higher gross margin profile of our
subscription revenue stream.
Cross-selling and Up-selling with Existing Customers
Our existing customers represent a significant opportunity to cross-sell and up-sell products and services with limited incremental
sales and marketing expense. We use a “land and expand” approach, with many of our customers initially deploying our platform
for a specific use case. Once they realize the benefits and wide functionality of our platform, they can expand the number of use
cases including services such as Lightspeed Analytics, Lightspeed Payments and Lightspeed Capital. We plan to continually
invest in product development, and in sales and marketing, to add more solutions to our platform and to increase the usage and
awareness of our solutions. Such investments include integrating the NuORDER platform to enable inventory ordering straight
from our merchants’ POS, and to provide brands with data insights on consumers and trends to optimize manufacturing and
distribution. Our future revenue growth and our ability to achieve and maintain profitability is dependent upon our ability to
maintain existing customer relationships and to continue to expand our customers’ use of our comprehensive suite of solutions.
Scaling our Sales and Marketing Team
Our ability to achieve significant growth in future revenue will largely depend upon the effectiveness of our sales and marketing
efforts, both domestically and internationally. The majority of our sales and marketing efforts are accomplished in-house, and we
believe the strength of our sales and marketing team is critical to our success. We have invested and intend to continue to invest
meaningfully in terms of expanding our sales force, and consequently, we anticipate that our headcount will continue to increase
as a result of these investments. To complement this strategy, we have begun to invest in outbound-led and partner-led lead
generation, particularly in our U.S. markets. In certain instances, we may supplement this approach with field sales teams.
International Sales
We believe that global demand for our platform will continue to increase as SMBs seek out end-to-end solutions with omni-
channel capabilities to enable their businesses to thrive and succeed in an increasingly complex operating environment.
Accordingly, we believe there is a significant opportunity to grow our international business. We have invested, and plan to
continue to invest, ahead of this potential demand in personnel and marketing, and to make selective acquisitions to support our
international growth. We completed the acquisition of Vend in April 2021 and the acquisition of Ecwid in October 2021, further
expanding our presence internationally. For each new geography where we expand or seek to expand, we focus on understanding
the needs of the local market and invest to develop relationships and our products, as well as understanding and complying with
applicable local regulatory and compliance frameworks.
Seasonality
We believe our transaction-based revenues will continue to represent an increasing proportion of our overall revenue mix over
time as a result of the continued global rollout of our payments solutions, and we expect seasonality of our quarterly results to
(11)
continue to increase. We expect our overall revenues will continue to become increasingly correlated with respect to the GTV
processed by our customers through our platform.
Foreign Currency
Our presentation and functional currency is the U.S. dollar. We derive the largest portion of our revenues in U.S. dollars and a
large proportion of our expenses in U.S. dollars. Our head office and a significant portion of our employees are located in Canada,
along with additional presence in Europe, Australia and New Zealand, and as such, a large amount of our expenses are incurred in
Canadian dollars and Euros with a smaller proportion of expenses incurred in other foreign currencies. As a result, our results of
operations may be adversely impacted by a decrease in the value of the U.S. dollar relative to these currencies but primarily the
Canadian dollar and the Euro. During Fiscal 2022, we adopted a hedging program to mitigate the impact of foreign currency
fluctuations on future cash flows and earnings by entering into foreign exchange forward contracts which we have designated as
cash flow hedges. We do not have foreign exchange forward contracts in place with respect to all currencies in which we
currently do business but may, from time to time, enter into additional foreign exchange forward contracts in respect of other
foreign currencies. Currency hedging entails a risk of illiquidity and, to the extent the applicable foreign currency fluctuates in
value against the U.S. dollar, the use of hedges could result in losses greater than if the hedging had not been used. There can be
no assurance that our hedging strategies, if any, will be effective in the future or that we will be able to enter into foreign
exchange forward contracts on satisfactory terms. See the “Risk Factors” section of our most recent Annual Information Form,
which can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov, for a discussion on exchange rate
fluctuations.
Selective Pursuit of Acquisitions
We have complemented our organic growth strategies by taking a targeted and opportunistic approach to acquisitions, identifying
acquisition targets with a view to accelerating our product roadmap, increasing our market penetration, going deep into verticals
and creating value for our shareholders. Throughout our history, we have accrued significant sales and marketing expertise, which
we leverage to facilitate our continued global expansion both organically and in integrating the companies we acquire.
We believe that we remain well-positioned to continue to grow organically around the globe and to selectively pursue new
acquisitions given our experience and scale. However, such acquisitions and investments could divert management’s attention,
result in operating difficulties due to a lack of timely and proper completion or integration, or otherwise disrupt our operations and
adversely affect our business, operating results or financial position, regardless of whether such acquisitions and investments are
ultimately completed.
Economic conditions and resulting consumer spending trends
Our performance is subject to worldwide economic conditions and global events, including political, economic, social and
environmental risks that may impact our operations or our customers’ operations. Such conditions and events may adversely
affect consumer confidence, consumer spending, consumer discretionary income or changes in consumer purchasing habits. The
current deterioration in general economic conditions, including the rise in unemployment rates, inflation and increases in interest
rates, may adversely affect consumer spending, consumer debt levels and credit and debit card usage, and as a result, adversely
affect our financial performance by reducing the number or average purchase amount of transactions processed using our
payments solutions. A significant majority of the customers that use our platform are SMBs and many of our customers are in the
entrepreneurial stage of their development. SMBs may be disproportionately affected by the aforementioned economic conditions
or economic downturns, especially if they sell discretionary goods. SMBs frequently have limited budgets and may choose to
allocate their spending to items other than our platform, especially in times of economic uncertainty or recessions. Economic and
geopolitical uncertainties, including those related to the COVID-19 Pandemic, variants of the COVID-19 virus, and Russia's
recent invasion of Ukraine may further amplify such risks.
Economic downturns may adversely impact retail and restaurant sales, which could result in us processing lower payments
volumes and customers who use our platform going out of business or deciding to stop using our services in order to conserve
cash. Moreover, our customers that run restaurants operate in an industry which is intensely competitive and subject to heightened
exposure to economic conditions affecting consumer discretionary spending, resulting in overall risk and a rate of failure that are
typically greater than for businesses generally.
Weakening economic conditions may also adversely affect third parties, including suppliers and partners, with whom we have
entered into relationships and upon whom we depend in order to operate and grow our business. Uncertain and adverse economic
conditions may also lead to increased write-offs of our trade receivables, and refunds and chargebacks or potential losses to our
merchant cash advance program, any of which could adversely affect our business.
(12)
COVID-19 Pandemic
Although the Company has sustained strong growth in spite of challenging macro-economic conditions, partially aided by
acquisitions, the future impact of the COVID-19 Pandemic on our business, financial condition and results of operations remains
uncertain. Measures attempting to contain and mitigate the effects of the virus such as travel restrictions, self-isolation measures,
mandatory closures of non-essential services and businesses, physical distancing practices, and the resulting effect on the
operations of and spending by merchants, brands and consumers including supply chain issues have disrupted and may in the
future disrupt our normal operations and impact our employees, vendors, partners, and our customers and their consumers. The
degree to which COVID-19 will continue to affect our business, operating results and financial condition will depend on highly
uncertain and unpredictable future developments including the duration and magnitude of the COVID-19 Pandemic, the spread of
variants of the COVID-19 virus, the availability, distribution and efficacy of vaccines, the impact of the COVID-19 Pandemic and
related restrictions on economic activity and domestic and international trade, and the extent and the impact of these and other
factors on our employees, partners, vendors, customers and their consumers.
The current global crisis has impacted and may in the future impact our customers, including their GTV, overall demand for our
services, and anticipated subscription pauses and churn rates due to business closures and temporary business shutdowns. It has
also limited, and may in the future limit, their ability to obtain inventory or ingredients and supplies, to generate sales, or to make
timely payments to us. Since the beginning of the COVID-19 Pandemic, we have at various times and in various geographies
engaged in customer-focused initiatives aimed at supporting our customers during the COVID-19 Pandemic. These initiatives had
a negative impact on revenue and cash flows. We may continue such customer-focused initiatives or implement new ones in the
verticals and geographies that are or continue to be impacted by the COVID-19 Pandemic.
COVID-19 has also caused heightened uncertainty in the global economy. Slowdowns in economic growth, particularly if they
reduce consumer spending, may negatively impact our customers and our results of operations. Uncertain and adverse economic
conditions may also lead to increased write-offs of our trade receivables, and refunds and chargebacks or potential losses for our
merchant cash advance program which may require us to recognize an impairment related to our assets in our financial
statements. No such impairment has been recognized as at March 31, 2022.
Uncertainty in the global economy and market volatility has been and may continue to be exacerbated by new variants and
mutation of the COVID-19 virus. Continued capital markets volatility may cause further declines in the price of our Subordinate
Voting Shares, increasing the risk that further securities class action lawsuits may be instituted against us.
The COVID-19 Pandemic and related restrictions may also disrupt or delay the ability of employees to work, cause delays or
disruptions in services provided by our vendors, increase our vulnerability and that of our partners and service providers to
security breaches, denial of service attacks or other hacking or phishing attacks, or cause other unpredictable events. The duration,
severity and ongoing impacts of the COVID-19 Pandemic may also have the effect of heightening many of the other risks
described herein, in our most recent Annual Information Form and in our filings with Canadian securities regulatory authorities
and the U.S. Securities and Exchange Commission. Additionally, although we have attempted to identify the COVID-19-related
risks faced by our business, the uncertainty and lack of predictability around the COVID-19 Pandemic means there may be other
risks not presently known to us or that we presently believe are not material that could also affect our business, financial condition
and results of operations.
While it remains difficult to estimate the overall severity, extent or duration of the COVID-19 Pandemic, to the extent it
materially adversely effects our employees, customers, vendors, partners and/or other stakeholders, it may also have a material
adverse effect on our business, financial condition or results of operations.
Key Components of Results of Operations
Revenues
Subscription Revenue
We principally generate subscription-based revenue through the sale of subscriptions to our software solutions. We offer pricing
plans designed to meet the needs of our current and prospective customers that enable our solutions to scale with customers as
they grow. Our subscription plans are sold as monthly, one-year or multi-year plans. Subscription plans for our cloud-based
solutions include maintenance and support. Customers purchase subscription plans directly from us or through our channel
partners. In addition to the core subscriptions outlined above, customers can purchase add-on services such as delivery, order
anywhere, advanced reporting, accounting and analytics, amongst others.
(13)
In addition, we generate revenues through referral fees and revenue sharing agreements from our partners to whom we direct
business.
Transaction-based Revenue
We generate transaction-based revenues by providing our customers with the functionality to accept payments from consumers.
Such revenues come in the form of transaction fees and represent a percentage of GTV processed by our customers through our
offered solutions. We generate transaction-based revenues from our payments solutions as well as our revenue sharing agreements
with our integrated payment partners. The revenue sharing arrangements mainly predate the availability of Lightspeed Payments
and are also the result of inherited revenue streams from some of our recent acquisitions. Since we do not act as the principal in
these arrangements, we recognize revenue from these streams at the net amount retained by us in accordance with IFRS. It also
means we generally earn inferior economics as a result when compared to payments solutions in respect of which we act as
principal given that we have less control of the underlying customer relationship. During Fiscal 2022, we began to offer payments
solutions in respect of which we act as principal to customers acquired through the acquisition of ShopKeep. This provides us
more control over the customer relationship, and increases transaction volumes with our payment processing partners, which in
turn provides us better payment economics overall. As a consequence of acting as the principal in the relationship, we also
recognize the payment processing fees at the gross amount of consideration paid by the customer, instead of the net amount of
consideration we retain. The incremental revenue of this activity was approximately $4.5 million in Fiscal 2022. We also earn
revenues from Lightspeed Capital, a merchant cash advance ("MCA") program pursuant to which the we purchase a designated
amount of future receivables at a discount, and the customer remits a fixed percentage of their daily sales to us, until the
outstanding balance has been fully remitted.
Our payments solutions allow our customers to accept electronic payments in-store, through connected terminals and online. Our
payments solutions are becoming increasingly available to a larger portion of our customer base as we added availability in
several new countries during Fiscal 2022 in addition to our core base of retail and hospitality customers in the United States and
Canada. Offering a fully integrated payment functionality is highly complementary to the platform we offer our customers today
and will allow us to monetize a greater portion of the $74.0 billion in GTV processed in Fiscal 2022.
Hardware and Other Revenue
These revenues are generally one-time revenues associated with the sale of hardware with which our solutions integrate and the
sale of professional services in support of the installation and implementation of our solutions. We generate revenues through the
sale of POS peripheral hardware such as our tablets, customer facing display, receipt printers, networking hardware, cash drawers,
payment terminals, servers, stands, bar-code scanners, and an assortment of accessories.
Although our software solutions are intended to be turnkey solutions that can be used by the customer as delivered, we provide
professional services to our customers in some circumstances in the form of on-site installations and implementations. These
implementation services are typically delivered through our internal integrations team or through a network of certified partners.
Additionally, from time to time we earn one-time fees for integration work performed pursuant to certain strategic partnerships.
Direct Cost of Revenues
Subscription Cost of Revenue
Cost of subscription revenue primarily includes salaries and other employee related costs for a subset of the support team, costs
associated with hosting infrastructure for our services and other corporate overhead allocations. Significant expenses include costs
of our support including total salaries and benefits, share-based compensation and related payroll taxes, data center capacity costs,
and other third-party direct costs such as customer support and royalties and amounts paid to third-party cloud service providers.
Transaction-based Cost of Revenue
Transaction-based cost of revenue primarily includes direct costs when transactions are processed using our payments solutions,
salaries and other employee related costs, including share-based compensation and related payroll taxes, for a subset of the
support team, and other corporate overhead allocations. The direct costs include costs of interchange and network assessment
fees, processing fees, and bank settlement fees to third-party payment processors and financial institutions involved in settlement.
(14)
Hardware and Other Cost of Revenue
Cost of these revenues primarily includes costs associated with our hardware solutions, such as the cost of acquiring the hardware
inventory, including hardware purchase price, expenses associated with third-party fulfillment companies, shipping and handling
and inventory adjustments, expenses related to costs of professional services provided to customers, salaries and other employee
related costs, including share-based compensation and related payroll taxes, and other corporate overhead allocations.
Operating Expenses
General and Administrative
General and administrative expenses consist of salaries and other employee related costs, including share-based compensation and
related payroll taxes, for finance, accounting, legal, administrative, human resources, as well as financial services. These expenses
also consist of expenses related to information technology, information systems, security, and corporate data employees which
expenses are partially allocated to research and development, sales and marketing, and direct cost of revenues. General and
administrative expenses also include other professional fees, transaction-related fees related to our acquisitions, costs associated
with internal systems and general corporate expenses. As a public company in the United States, it is expensive for us to obtain
director and officer liability insurance with the current cost being approximately $9 million annually, and we continue to have to
manage trade-offs between accepting reduced coverage or incurring substantially higher costs to continue our coverage. In the
longer term, we expect general and administrative expenses to decrease as a percentage of total revenues as we focus on
processes, systems and controls to enable our internal support functions to scale with the growth of our business.
Research and Development
Research and development expenses consist primarily of salaries and other employee related costs, including share-based
compensation and related taxes, for product-related functions including product management, core development, data, product
design and development and other corporate overhead allocations. We continue to invest our research and development efforts on
developing added features and solutions, as well as increasing the functionality and enhancing the ease of use of our platform.
These expenses give rise to tax credits primarily from the Canadian Federal Scientific Research and Experimental Development
Program and the Tax Credit for the Development of e-business, or "SR&ED" and "e-business" tax credits, respectively. The
Company's e-business tax credits are refundable, while the SR&ED tax credits are non-refundable and are carried forward to
reduce future income taxes payable. Given the Company’s recent losses in Canada, these SR&ED credits have not been
recognized in the financial statements. Upon recognition, they will reduce research and development expenses. Although not
immediately, given that we are still scaling our technology group in line with anticipated growth, we expect research and
development expenses to decline in proportion to total revenue as we achieve additional economies of scale from our expansion.
Sales and Marketing
Sales and marketing expenses consist primarily of selling and marketing costs and salaries and other employee related costs,
including share-based compensation and related payroll taxes, for sales and business development and marketing. Other costs
within sales and marketing include costs of acquisition of new customers, travel-related expenses and corporate overhead
allocations. We plan to continue to expand sales and marketing efforts to attract new customers, retain existing customers and
increase revenues from both new and existing customers. Over time, we expect sales and marketing expenses will decline as a
percentage of total revenues as we achieve additional economies of scale from our expansion.
Acquisition-related Compensation
Acquisition-related compensation expenses represent the portion of the consideration paid to acquired businesses which is payable
contingent on the ongoing employment or service obligations for certain key personnel of such acquired businesses, and/or on
certain performance criteria being achieved. This portion of the purchase price is amortized over the related service period for
those key personnel.
(15)
Results of Operations
The following table outlines our consolidated statements of loss for the three months and the fiscal years ended March 31, 2022
and 2021:
(In thousands of US dollars, except per share amounts)
Revenues
Subscription
Transaction-based
Hardware and other
Total revenues
Direct cost of revenues
Subscription
Transaction-based
Hardware and other
Total cost of revenues
Gross profit
Operating expenses
General and administrative
Research and development
Sales and marketing
Depreciation of property and equipment
Depreciation of right-of-use assets
Foreign exchange loss
Acquisition-related compensation
Amortization of intangible assets
Restructuring
Total operating expenses
Operating loss
Net interest income (expense)
Loss before income taxes
Income tax expense (recovery)
Current
Deferred
Total income tax expense (recovery)
Net loss
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
70,542
66,729
9,287
2021
$
39,747
35,521
7,127
2022
$
2021
$
248,430
264,044
35,898
119,323
82,951
19,454
146,558
82,395
548,372
221,728
20,657
43,822
12,426
11,238
18,776
8,316
72,192
159,432
45,575
31,756
42,626
19,677
76,905
38,330
277,199
94,059
69,653
44,065
271,173
127,669
28,240
36,837
67,388
1,789
2,032
29
20,433
26,151
606
17,241
17,041
33,007
870
1,221
550
2,144
13,359
1,760
95,253
121,150
216,659
4,993
7,743
611
50,491
91,812
803
53,035
55,303
96,900
2,479
3,876
2,098
11,807
30,128
1,760
183,505
87,193
589,515
257,386
(113,852)
(43,128)
(318,342)
(129,717)
1,014
147
2,988
(353)
(112,838)
(42,981)
(315,354)
(130,070)
282
1,397
1,679
48
(984)
(936)
1,103
166
(28,024)
(5,958)
(26,921)
(5,792)
(114,517)
(42,045)
(288,433)
(124,278)
Net loss per share – basic and diluted
(0.77)
(0.34)
(2.04)
(1.18)
(16)
The following table outlines share-based compensation and the related payroll taxes associated with these expenses included in
the results of operations for the three months and the fiscal years ended March 31, 2022 and 2021:
(In thousands of US dollars)
Direct cost of revenues
General and administrative
Research and development
Sales and marketing
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2,149
10,736
10,319
18,421
2021
$
864
3,072
1,043
6,165
2022
$
6,345
26,377
29,705
46,639
2021
$
3,231
11,123
10,941
19,460
Total share-based compensation and related costs
41,625
11,144
109,066
44,755
For the three months and fiscal year ended March 31, 2022, the share-based compensation expense was $41,934 and $108,916, respectively (March 2021 -
$11,782 and $33,859), and the related payroll taxes were a recovery of $309 and an expense of $150, respectively (March 2021 - recovery of $638 and expense of
$10,896).
The increase in share-based compensation and related payroll taxes in the three months and fiscal year ended March 31, 2022 was
primarily driven by the issuance of stock options and awards to new and existing employees, including those from our recent
acquisitions, to our Chief Executive Officer ("CEO"), Chief Operating Officer ("COO") and Chief Financial Officer ("CFO") in
connection with their promotion to these positions, and to key personnel and executives as retention incentives in a competitive
job market. In the three months ended December 31, 2021, we granted equity awards to certain existing employees pursuant to a
special one-time retention grant. In the three months ended March 31, 2022, we granted long-term, multi-year performance-based
options to Mr. Chauvet in connection with his appointment to CEO, and to Mr. Nussey and Ms. Hotchandani Bakshani in
connection with their promotions to COO and CFO, respectively. The share-based compensation and related costs in the sales and
marketing expense for the three months and fiscal year ended March 31, 2022 includes PSUs issued to the founders of
NuORDER, with each tranche being tied to the continuing employment of the founders and, for applicable tranches, certain
performance criteria being achieved. The aforementioned special retention and promotion grants and performance-based stock
options were extraordinary grants that we do not expect to reoccur in Fiscal 2023.
Results of Operations for the Three Months and the Fiscal Years Ended March 31, 2022 and 2021
Revenues
(In thousands of US dollars,
except percentages)
Revenues
Subscription
Transaction-based
Hardware and other
Total revenues
Percentage of total revenues
Subscription
Transaction-based
Hardware and other
Total
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
70,542
39,747
66,729
35,521
9,287
7,127
30,795
31,208
2,160
77.5
248,430
119,323
129,107
87.9
264,044
82,951
181,093
30.3
35,898
19,454
16,444
146,558
82,395
64,163
77.9
548,372
221,728
326,644
108.2
218.3
84.5
147.3
48.1 %
45.5 %
6.4 %
48.2 %
43.1 %
8.7 %
100 %
100 %
45.3 %
48.2 %
6.5 %
53.8 %
37.4 %
8.8 %
100 %
100 %
(17)
Subscription Revenue
Subscription revenue for the three months ended March 31, 2022 increased by $30.8 million or 77% as compared to the three
months ended March 31, 2021. The increase was primarily due to growth in our subscription customer base including customers
from the acquisitions of Vend, NuORDER and Ecwid. Customers adopting additional modules of our platform also contributed to
the increase in subscription revenue in the period.
Subscription revenue for Fiscal 2022 increased by $129.1 million or 108% as compared to Fiscal 2021. The increase was
primarily due to growth in our subscription customer base including customers from the acquisitions of ShopKeep, Upserve,
Vend, NuORDER and Ecwid. Customers adopting additional modules of our platform also contributed to the increase in
subscription revenue.
Transaction-based Revenue
Transaction-based revenue for the three months ended March 31, 2022 increased by $31.2 million or 88% as compared to the
three months ended March 31, 2021. The increase was primarily due to continued adoption of our payments solutions, an increase
from $1.0 billion for the three months ended March 31, 2021 to $2.2 billion for the three months ended March 31, 2022 in GPV
representing 132% growth, as well as additional revenue from the acquisitions of Vend and Ecwid. Our transaction-based revenue
also benefited from an amendment to a revenue-sharing contract with one of our payment processing partners during the three
months ended December 31, 2021 pursuant to which improved rates were negotiated for future processing volumes.
Transaction-based revenue for Fiscal 2022 increased by $181.1 million or 218% as compared to Fiscal 2021. The increase was
primarily due to continued adoption of our payments solutions, an increase in GPV of 261% from $2.3 billion to $8.1 billion, as
well as additional revenue from the acquisitions of ShopKeep, Upserve, Vend and Ecwid. Our transaction-based revenue also
benefited from an amendment to a revenue-sharing contract with one of payment processing partners during Fiscal 2022 pursuant
to which improved rates were negotiated for future processing volumes. In addition, the new rates were negotiated to be
applicable retroactively to a portion of past volumes as well, leading to approximately $5.5 million of transaction-based revenue
being recognized in Fiscal 2022.
Hardware & Other Revenue
Hardware and other revenue for the three months ended March 31, 2022 increased by $2.2 million or 30% as compared to the
three months ended March 31, 2021 due to the increase in sales of our hardware and implementation services as well as to the
revenue contributions of NuORDER and Ecwid, offset by additional discounts and incentives provided during the three months
ended March 31, 2022 in order to encourage new business given the competitive nature of our industry.
Hardware and other revenue for Fiscal 2022 increased by $16.4 million or 85% as compared to Fiscal 2021 due to the increase in
sales of our hardware and implementation services as well as to the revenue contributions of ShopKeep, Upserve, NuORDER and
Ecwid, offset by additional discounts and incentives provided during Fiscal 2022 in order to encourage new business given the
competitive nature of our industry.
(18)
Direct Cost of Revenues
(In thousands of US dollars,
except percentages)
Direct cost of revenues
Subscription
Transaction-based
Hardware and other
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
20,657
11,238
43,822
18,776
12,426
8,316
9,419
25,046
4,110
83.8
72,192
31,756
40,436
133.4
159,432
42,626
116,806
49.4
45,575
19,677
25,898
127.3
274.0
131.6
194.7
Total costs of revenues
76,905
38,330
38,575
100.6
277,199
94,059
183,140
Percentage of revenue
Subscription
Transaction-based
Hardware and other
Total
Subscription Cost of Revenue
29.3 %
65.7 %
28.3 %
52.9 %
133.8 % 116.7 %
52.5 %
46.5 %
29.1 %
60.4 %
26.6 %
51.4 %
127.0 % 101.1 %
50.5 %
42.4 %
Subscription cost of revenue for the three months ended March 31, 2022 increased by $9.4 million or 84% as compared to the
three months ended March 31, 2021. Included in subscription cost of revenue for the three months ended March 31, 2022 was
$1.7 million in share-based compensation expense and related payroll taxes, compared to $0.8 million in the three months ended
March 31, 2021. Excluding share-based compensation expense and related payroll taxes, the increase of $8.5 million was
primarily due to higher employee-related costs of $5.9 million, higher hosting costs of $1.8 million associated with supporting a
greater number of Customer Locations utilizing our platform, including from the acquisitions of Vend, NuORDER and Ecwid, a
$0.5 million increase in royalties, and a $0.3 million increase in professional fees and other costs.
Subscription cost of revenue for Fiscal 2022 increased by $40.4 million or 127% as compared to Fiscal 2021. Included in
subscription cost of revenue for Fiscal 2022 was $5.0 million in share-based compensation, compared to $3.2 million in Fiscal
2021. The remainder of the increase of $38.5 million was primarily due to higher employee-related costs of $24.7 million, higher
hosting costs of $8.7 million associated with supporting a greater number of Customer Locations utilizing our platform, including
from the acquisitions of ShopKeep, Upserve, Vend, NuORDER and Ecwid, higher royalties of $3.4 million, higher professional
fees and other costs of $0.7 million, and $1.0 million received in respect of government-sponsored COVID-19 wage subsidy
programs in Fiscal 2021.
Transaction-based Cost of Revenue
Transaction-based cost of revenue for the three months ended March 31, 2022 increased by $25.0 million or 133% as compared to
the three months ended March 31, 2021. The increase was due to direct costs related to higher revenue from our payments
solutions compared to the three months ended March 31, 2021.
Transaction-based cost of revenue for Fiscal 2022 increased by $116.8 million or 274% as compared to Fiscal 2021. The increase
was due to direct costs related to higher revenue from our payments solutions, including higher transaction-based revenue from
the acquisitions of ShopKeep and Upserve compared to Fiscal 2021.
Hardware and Other Cost of Revenue
Direct cost of hardware and other revenue for the three months ended March 31, 2022 increased by $4.1 million or 49% as
compared to the three months ended March 31, 2021 due to the increase in revenue for the period. The negative margins were due
to discounts and incentives provided in order to encourage new business given the competitive nature of our industry.
Direct cost of hardware and other revenue for Fiscal 2022 increased by $25.9 million or 132% as compared to Fiscal 2021 due to
the increase in revenue for the period. The negative margins were due to discounts and incentives provided in order to encourage
new business given the competitive nature of our industry.
(19)
Gross Profit
(In thousands of US dollars,
except percentages)
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
Gross profit
69,653
44,065
25,588
58.1
271,173
127,669
143,504
112.4
Percentage of total revenues
47.5 %
53.5 %
49.5 %
57.6 %
Gross profit for the three months ended March 31, 2022 increased by $25.6 million or 58% compared to the three months ended
March 31, 2021. The increase was primarily due to growth in our subscription and transaction-based revenue as a result of more
Customer Locations using our platform, increased GPV, and the impact of our acquisitions of Vend, NuORDER and Ecwid. A
higher proportion of transaction-based revenue in the three months ended March 31, 2022 as compared to the three months ended
March 31, 2021 reduced gross profit as a percentage of revenue.
Gross profit for Fiscal 2022 increased by $143.5 million or 112% compared to Fiscal 2021. The increase was primarily due to
growth in our subscription and transaction-based revenue as a result of more Customer Locations using our platform, increased
GPV, and the impact of our acquisitions of ShopKeep, Upserve, Vend, NuORDER and Ecwid. A higher proportion of
transaction-based revenue in Fiscal 2022 as compared to Fiscal 2021 reduced gross profit as a percentage of revenue.
Operating Expenses
General and Administrative
(In thousands of US dollars,
except percentages)
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
General and administrative
28,240
17,241
10,999
63.8
95,253
53,035
42,218
79.6
Percentage of total revenues
19.3 %
20.9 %
17.4 %
23.9 %
General and administrative expenses for the three months ended March 31, 2022 increased by $11.0 million or 64% compared to
the three months ended March 31, 2021. Included in general and administrative expenses for the three months ended March 31,
2022 is $10.7 million of share-based compensation expense and related payroll taxes, $0.6 million in transaction-related costs and
$0.6 million in respect of provisions and other costs incurred in respect of certain litigation matters, net of amounts covered by
insurance and indemnification proceeds, compared to $3.1 million, $2.2 million and nil, respectively, in the three months ended
March 31, 2021. When excluding share-based compensation and related payroll taxes, transaction-related costs and provisions
and other costs incurred in respect of certain litigation matters, net of amounts covered by insurance and indemnification
proceeds, general and administrative expenses increased by $4.4 million driven by growth in our headcount and higher salary
costs of $3.0 million which includes $1.4 million from the acquisitions of Vend, NuORDER and Ecwid, $2.2 million related to an
increase in professional fees and other expenses, offset by a $0.2 million decrease in D&O insurance and a $0.6 million decrease
in bad debt expense. Our general and administrative expenses as a percentage of revenue decreased from 21% to 19% from the
three months ended March 31, 2021 to the three months ended March 31, 2022.
General and administrative expenses for Fiscal 2022 increased by $42.2 million or 80% compared to Fiscal 2021. Included in
general and administrative expenses for Fiscal 2022 is $26.4 million of share-based compensation expense and related payroll
taxes, $8.4 million in transaction-related costs and $1.7 million in respect of provisions and other costs incurred in respect of
certain litigation matters, net of amounts covered by insurance and indemnification proceeds, compared to $11.1 million, $10.4
million and nil, respectively, in Fiscal 2021. When excluding share-based compensation and related payroll taxes, transaction-
related costs and provisions and other costs incurred in respect of certain litigation matters, net of amounts covered by insurance
and indemnification proceeds, general and administrative expenses increased by $27.3 million driven by growth in our headcount
and higher salary costs of $15.7 million which includes $6.9 million from the acquisitions of ShopKeep, Upserve, Vend,
NuORDER, and Ecwid, $8.0 million related to an increase in professional fees and other expenses, a $3.8 million increase in
D&O insurance as a result of going public in the U.S. in September 2020, and $1.5 million received in respect of government-
(20)
sponsored COVID-19 wage subsidy programs in Fiscal 2021, offset by $1.7 million from lower bad debt expense. Our general
and administrative expenses as a percentage of revenue decreased from 24% to 17% from Fiscal 2021 to Fiscal 2022.
Research and Development
(In thousands of US dollars,
except percentages)
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
Research and development
36,837
17,041
19,796
116.2
121,150
55,303
65,847
119.1
Percentage of total revenues
25.1 %
20.7 %
22.1 %
24.9 %
Research and development expenses for the three months ended March 31, 2022 increased by $19.8 million or 116% compared to
the three months ended March 31, 2021. Included in research and development expenses for the three months ended March 31,
2022 is $10.3 million of share-based compensation expense and related payroll taxes compared to $1.0 million in the three months
ended March 31, 2021. When excluding share-based compensation and related payroll taxes, research and development expenses
increased by $10.5 million driven by growth in our headcount and higher salary costs of $8.9 million which includes $5.0 million
from the acquisitions of Vend, NuORDER and Ecwid, $0.7 million related to an increase in hosting costs and $0.9 million related
to an increase in professional fees and other expenses. As we continue to make meaningful investments in getting our solutions
such as our flagship retail and hospitality platforms and Lightspeed Supplier Network rolled out to the market, our research and
development costs as a percentage of revenue increased from 21% to 25% from the three months ended March 31, 2021 to the
three months ended March 31, 2022. As our transaction-based revenues continue to represent an increasing proportion of our
overall revenue mix, seasonality impacted this increase in percentage given that the three months ended March 31, 2022 is
generally a seasonally slow period for our customers' GTV.
Research and development expenses for Fiscal 2022 increased by $65.8 million or 119% compared to Fiscal 2021. Included in
research and development expenses for Fiscal 2022 is $29.7 million of share-based compensation expense and related payroll
taxes compared to $10.9 million in Fiscal 2021. When excluding share-based compensation and related payroll taxes, research
and development expenses increased by $47.1 million driven by growth in our headcount and higher salary costs of $39.5 million
which includes $27.4 million from the acquisitions of ShopKeep, Upserve, Vend, NuORDER and Ecwid, $1.7 million related to
an increase in hosting costs, $3.3 million related to an increase in professional fees and other expenses, and $2.6 million received
in respect of government-sponsored COVID-19 wage subsidy programs in Fiscal 2021. Our research and development costs as a
percentage of revenue decreased from 25% to 22% from Fiscal 2021 to Fiscal 2022.
Sales and Marketing
(In thousands of US dollars,
except percentages)
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
Sales and marketing
67,388
33,007
34,381
104.2
216,659
96,900
119,759
123.6
Percentage of total revenues
46.0 %
40.1 %
39.5 %
43.7 %
Sales and marketing expenses for the three months ended March 31, 2022 increased by $34.4 million or 104% as compared to the
three months ended March 31, 2021. Included in sales and marketing expenses for the three months ended March 31, 2022 is
$18.4 million of share-based compensation expense and related payroll taxes and $0.3 million in transaction-related costs
compared to $6.2 million and $0.3 million, respectively, in the three months ended March 31, 2021. When excluding share-based
compensation and related payroll taxes and transaction-related costs, sales and marketing expenses increased by $22.1 million
driven by growth in our headcount and higher salary costs of $11.5 million which includes $3.2 million from the acquisitions of
Vend, NuORDER and Ecwid, $10.3 million incurred for other growth-focused investments in sales and marketing and $0.3
million related to an increase in professional fees and other expenses. Our sales and marketing costs as a percentage of revenue
increased from 40% to 46% from the three months ended March 31, 2021 to the three months ended March 31, 2022. As our
transaction-based revenues continue to represent an increasing proportion of our overall revenue mix, seasonality impacted this
(21)
increase in percentage of revenue given that the three months ended March 31, 2022 is generally a seasonally slow period for our
customers' GTV.
Sales and marketing expenses for Fiscal 2022 increased by $119.8 million or 124% as compared to Fiscal 2021. Included in sales
and marketing expenses for Fiscal 2022 is $46.6 million of share-based compensation expense and related payroll taxes and $1.2
million in transaction-related costs compared to $19.5 million and $1.2 million, respectively, in Fiscal 2021. When excluding
share-based compensation and related payroll taxes and transaction-related costs, sales and marketing expenses increased by
$92.5 million driven by growth in our headcount and higher salary costs of $51.6 million which includes $22.3 million from the
acquisitions of ShopKeep, Upserve, Vend, NuORDER and Ecwid, $37.1 million incurred for other growth-focused investments in
sales and marketing, $0.8 million related to an increase in professional fees and other expenses, and $3.0 million received in
respect of government-sponsored COVID-19 wage subsidy programs in Fiscal 2021. Our sales and marketing costs as a
percentage of revenue decreased from 44% to 40% from Fiscal 2021 to Fiscal 2022.
Depreciation
(In thousands of US dollars,
except percentages)
Depreciation of property and
equipment
Depreciation of right-of-use assets
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change Change
%
$
2022
$
2021
$
Change
$
Change
%
1,789
2,032
3,821
870
1,221
2,091
919
811
105.6
4,993
2,479
66.4
7,743
3,876
1,730
82.7
12,736
6,355
2,514
3,867
6,381
101.4
99.8
100.4
Percentage of total revenues
2.6 %
2.5 %
2.3 %
2.9 %
Depreciation of property and equipment expenses for the three months ended March 31, 2022 increased by $0.9 million or 106%
as compared to the three months ended March 31, 2021. The increase in the depreciation expense results from additions to
property and equipment made throughout the last 12 months and the property and equipment obtained through our recent
acquisitions. The increase in the depreciation of right-of-use assets of $0.8 million or 66% is mainly the result of leases obtained
through our acquisitions of Vend and NuORDER.
Depreciation of property and equipment expenses for Fiscal 2022 increased by $2.5 million or 101% as compared to Fiscal 2021.
The increase in the depreciation expense results from additions to property and equipment made throughout the last 12 months
and the property and equipment obtained through our recent acquisitions. The increase in the depreciation of right-of-use assets of
$3.9 million or 100% is mainly the result of leases obtained through our acquisitions of ShopKeep, Upserve, Vend and
NuORDER.
Foreign Exchange Loss (Gain)
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars,
except percentages)
Foreign exchange loss
2022
$
29
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
550
(521)
(94.7)
611
2,098
(1,487)
(70.9)
Percentage of total revenues
0.0 %
0.7 %
0.1 %
0.9 %
Foreign exchange loss for the three months and fiscal year ended March 31, 2022 decreased as compared to the three months and
fiscal year ended March 31, 2021. Foreign exchange loss arises as we have financial assets and liabilities outstanding in
currencies other than the U.S. dollar, our functional currency. Items included in our results are measured in U.S. dollars and
foreign currency transactions are translated into U.S. dollars using the exchange rates prevailing at the date of the transactions or
when items are re-measured with resulting gains and losses subsequently recognized.
(22)
Acquisition-related Compensation
(In thousands of US dollars,
except percentages)
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
Acquisition-related compensation
20,433
2,144
18,289
853.0
50,491
11,807
38,684
327.6
Percentage of total revenues
13.9 %
2.6 %
9.2 %
5.3 %
Acquisition-related compensation expense for the three months ended March 31, 2022 increased by $18.3 million or 853%
compared to the three months ended March 31, 2021. The increase is due to the addition of deferred compensation from the
acquisitions of NuORDER and Ecwid offset by a decrease in deferred compensation from our acquisitions of iKentoo in July
2019, Kounta in November 2019 and Gastrofix in January 2020, all of which have been fully settled. The majority of this
contingent consideration is tied to ongoing employment obligations in connection with certain of our acquisitions. This contingent
consideration was not included in the total purchase consideration, but rather was treated as an acquisition-related compensation
expense for post-combination services.
Acquisition-related compensation expense for Fiscal 2022 increased by $38.7 million or 328% compared to Fiscal 2021. The
increase is due to the addition of deferred compensation from the acquisitions of NuORDER and Ecwid offset by a decrease in
deferred compensation from our acquisitions of iKentoo in July 2019, Kounta in November 2019 and Gastrofix in January 2020,
all of which have been fully settled. The majority of this contingent consideration is tied to ongoing employment obligations in
connection with certain of our acquisitions. This contingent consideration was not included in the total purchase consideration, but
rather was treated as an acquisition-related compensation expense for post-combination services.
Amortization of Intangible Assets
(In thousands of US dollars,
except percentages)
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
Amortization of intangible assets
26,151
13,359
12,792
95.8
91,812
30,128
61,684
204.7
Percentage of total revenues
17.8 %
16.2 %
16.7 %
13.6 %
Amortization of intangible assets for the three months ended March 31, 2022 increased by $12.8 million or 96% as compared to
the three months ended March 31, 2021. The increase in amortization relates to intangibles acquired through the Vend,
NuORDER and Ecwid acquisitions.
Amortization of intangible assets for Fiscal 2022 increased by $61.7 million or 205% as compared to Fiscal 2021. The increase in
amortization relates to intangibles acquired through the ShopKeep, Upserve, Vend, NuORDER and Ecwid acquisitions.
Restructuring
(In thousands of US dollars,
except percentages)
Restructuring
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
606
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
1,760
(1,154)
(65.6)
803
1,760
(957)
(54.4)
Percentage of total revenues
0.4 %
2.1 %
0.1 %
0.8 %
During the fiscal year ended March 31, 2022, certain functions and the associated management structure were reorganized to
realize synergies and ensure organizational agility. The expenses associated with this plan were recorded as a restructuring charge.
The restructuring expense consists entirely of severance costs. We expect additional restructuring charges throughout Fiscal 2023
as we continue to integrate and realize synergies from our recent acquisitions.
(23)
Other
Other Income (Expenses)
(In thousands of US dollars,
except percentages)
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
Net interest income (expense)
1,014
147
867
589.8
2,988
(353)
3,341
(946.5)
Percentage of total revenues
0.7 %
0.2 %
0.5 %
(0.2) %
Net interest income (expense) relates to interest income earned in the period on cash and cash equivalents of $5.9 million during
Fiscal 2022 offset by the interest arising from the loan drawdown made in connection with the acquisition of Gastrofix in January
2020, as well as interest expense on both the lease liabilities and acquisition-related compensation which expenses combined
totaled $2.9 million of interest expense for Fiscal 2022.
Income Taxes
(In thousands of US dollars,
except percentages)
Income tax expense (recovery)
Current
Deferred
Total income tax expense (recovery)
Percentage of total revenues
Current
Deferred
Total
Three months ended
March 31,
Fiscal year ended
March 31,
2022
$
2021
$
Change
$
Change
%
2022
$
2021
$
Change
$
Change
%
282
1,397
1,679
0.2 %
1.0 %
1.2 %
48
(984)
(936)
0.1 %
(1.2) %
(1.1) %
234
487.5
1,103
166
937
2,381
(242.0)
(28,024)
(5,958)
(22,066)
564.5
370.4
2,615
(279.4)
(26,921)
(5,792)
(21,129)
364.8
0.2 %
(5.1) %
0.1 %
(2.7) %
(4.9) %
(2.6) %
Deferred income tax went from a recovery of $1.0 million for the three months ended March 31, 2021 to an expense of $1.4
million for the three months ended March 31, 2022. The deferred income tax expense relates mainly to the impact of the
recognition of a deferred tax liability related to acquired intangibles.
Deferred income tax recovery for Fiscal 2022 increased by $22.1 million or 370% as compared to Fiscal 2021. The increase in the
recovery was primarily due to the recognition of a deferred tax asset on loss carry-forwards. The recognition occurred to offset the
net deferred tax liability of both NuORDER and Ecwid as they joined the consolidated tax group.
Selected Annual Information
(In thousands of US dollars, except per share data)
Total revenues
Net loss
Loss per share – basic and diluted
Total assets
Total long-term liabilities
Fiscal year ended March 31,
2022
$
2021
$
2020
$
548,372
221,728
120,637
(288,433)
(124,278)
(53,531)
(2.04)
(1.18)
(0.62)
3,619,980
2,105,319
478,428
62,839
57,634
63,481
(24)
See “Results of Operations” in this MD&A for a more detailed discussion of the year-over-year changes in revenues and net loss.
Total Assets
Fiscal 2022 Compared to Fiscal 2021
Total assets increased by $1,514.7 million or 72% from Fiscal 2021 to Fiscal 2022 with cash accounting for $146.5 million of the
increase primarily due to our August 2021 public offering, offset by cash spent in the Vend, NuORDER and Ecwid acquisitions.
Goodwill increased by $1,132.4 million and intangibles by $175.1 million, net of amortization and exchange differences, related
primarily to the acquisitions of Vend, NuORDER and Ecwid. Trade and other receivables accounted for $21.0 million of the
increase which is primarily due to receivables assumed in our recent acquisitions, an increase in acquisition-related receivables
from the sellers of our recent acquisitions which includes indemnification assets and working capital adjustments, and growing
trade receivables and merchant cash advances given the growth of our business. The lease right-of-use assets accounted for $4.3
million of the increase mainly due to the leases assumed through our recent acquisitions and other new leases entered into in the
period, property and equipment accounted for $8.1 million of the increase mainly due to an increase in leasehold improvements,
other long term assets accounted for $9.9 million of the increase, and inventory accounted for $6.0 million of the increase. In
addition, other current assets accounted for $11.4 million of the increase due to a D&O insurance prepayment, other assets
obtained through our recent acquisitions as well as a deposit made in connection with our merchant cash advance business.
Fiscal 2021 Compared to Fiscal 2020
Total assets increased by $1,626.9 million or 340% from Fiscal 2020 to Fiscal 2021 with cash accounting for $596.2 million of
the increase due to public offerings offset by cash spent for our recent acquisitions, goodwill of $825.3 million and intangibles of
$171.7 million net of amortization and exchange differences from the acquisitions of ShopKeep and Upserve accounting for
$997.0 million of the increase, trade and other receivables accounting for $13.9 million of the increase, inventory and other
current assets accounting for $14.4 million of the increase, lease right-of-use assets accounting for $5.2 million of the increase,
property and equipment accounting for $0.4 million of the increase, offset by restricted cash and other long term assets in the
amount of $0.2 million.
Total Liabilities
Fiscal 2022 Compared to Fiscal 2021
Total current liabilities increased by $44.5 million from Fiscal 2021 to Fiscal 2022. The main drivers of this amount were an
increase in the deferred revenue of $22.1 million, an increase in accounts payable and accrued liabilities of $13.3 million, an
increase in lease liabilities of $2.5 million and an increase in income taxes payable of $6.6 million. The variance in the current
liabilities was partially due to the recent acquisitions of Vend, NuORDER and Ecwid as well as the growth of the Company.
Total long-term liabilities increased by $5.2 million from Fiscal 2021 to Fiscal 2022. The main drivers of this amount were an
increase of $5.5 million in deferred tax liabilities and an increase in lease liabilities of $2.5 million, offset by a decrease in
deferred revenue of $0.7 million and a decrease in accrued payroll taxes on share-based compensation of $2.1 million.
Fiscal 2021 Compared to Fiscal 2020
Total current liabilities increased by $42.6 million from Fiscal 2020 to Fiscal 2021. The main drivers of this amount were an
increase in the deferred revenue of $6.5 million, an increase in accounts payable and accrued liabilities of $34.2 million and an
increase in lease liabilities of $1.8 million.
Total long-term liabilities decreased by $5.8 million from Fiscal 2020 to Fiscal 2021. The main drivers of this amount were a
decrease of $2.7 million in deferred revenue due to shorter contract durations, a decrease of $5.2 million in deferred tax liabilities
primarily due to the amortization of acquired intangible assets during the period and a decrease in other long-term liabilities of
$5.0 million primarily due to a decrease in long-term acquisition related payables, offset by an increase in lease liabilities of $7.0
million primarily due to the leases obtained during our acquisitions.
(25)
Quarterly Results of Operations
The following table sets forth selected unaudited quarterly statements of operations data for each of the eight quarters ended
March 31, 2022 in accordance with IFRS. This data should be read in conjunction with our audited annual consolidated financial
statements and the notes related thereto. These quarterly operating results are not necessarily indicative of our operating results for
a full year or any future period.
(In thousands of US dollars,
except per share data)
Jun. 30,
2020
Sept. 30,
2020
Dec. 31,
2020
Mar. 31,
2021
Jun. 30,
2021
Sept. 30,
2021
Dec. 31,
2021
Mar. 31,
2022
Three months ended
Revenues
Direct cost of revenues
Gross profit
Operating expenses
General and administrative
Research and development
Sales and marketing
Depreciation of property and equipment
Depreciation of right-of-use assets
Foreign exchange loss
Acquisition-related compensation
Amortization of intangible assets
Restructuring
$
$
$
$
$
$
$
$
36,229
13,515
45,493
17,907
57,611
24,307
82,395
115,920
133,218
152,676
146,558
38,330
58,347
68,272
73,675
76,905
22,714
27,586
33,304
44,065
57,573
64,946
79,001
69,653
6,799
9,739
16,257
412
827
480
5,129
4,405
—
8,230
12,141
19,580
439
872
290
2,276
4,404
—
20,765
16,382
28,056
758
956
778
2,258
7,960
—
17,241
17,041
33,007
870
1,221
550
2,144
22,277
22,216
42,270
869
1,625
249
2,014
23,081
30,092
51,693
1,020
2,008
6
9,032
13,359
17,013
22,797
1,760
197
—
21,655
32,005
55,308
1,315
2,078
327
19,012
25,851
—
28,240
36,837
67,388
1,789
2,032
29
20,433
26,151
606
Total operating expenses
44,048
48,232
77,913
87,193
108,730
139,729
157,551
183,505
Operating loss
(21,334)
(20,646)
(44,609)
(43,128)
(51,157)
(74,783)
(78,550) (113,852)
Net interest income (expense)
(301)
(132)
(67)
147
226
719
1,029
1,014
Loss before income taxes
(21,635)
(20,778)
(44,676)
(42,981)
(50,931)
(74,064)
(77,521) (112,838)
Income tax expense (recovery)
Current
Deferred
55
43
20
48
630
95
96
282
(1,574)
(1,355)
(2,045)
(984)
(2,224)
(15,072)
(12,125)
1,397
Total income tax expense (recovery)
(1,519)
(1,312)
(2,025)
(936)
(1,594)
(14,977)
(12,029)
1,679
Net loss
(20,116)
(19,466)
(42,651)
(42,045)
(49,337)
(59,087)
(65,492) (114,517)
Net loss per share – basic and diluted
(0.22)
(0.20)
(0.39)
(0.34)
(0.38)
(0.43)
(0.44)
(0.77)
Revenues
Our overall revenues continue to grow as we grow our global customer base and increase solution adoption amongst existing
customers. Our revenues declined in the three months ended March 31, 2022 as compared to the three months ended December
31, 2021. Given the increase in the adoption of our payments solutions globally, transaction-based revenues are now
approximately 46% of our total revenues for the three months ended March 31, 2022 and as a result, our overall revenues are
significantly impacted by seasonality. The three months ended December 31 is our seasonally strongest quarter due to the
holidays, while the three months ended March 31 is our slowest GTV quarter which causes a sequential decline in our revenues
for the three months ended March 31, 2022 compared to the three months ended December 31, 2021.
Direct Cost of Revenues
Our total direct cost of revenues increased successively for all periods presented. The aggregate increase was primarily due to
increased costs associated with supporting a greater number of Customer Locations utilizing our platform, as well as an increase
in the number of customers on our payments solutions given the higher direct costs associated with transaction-based revenues, as
well as the corresponding increase resulting from the acquisitions of Vend, NuORDER and Ecwid. There is an increase in direct
cost of revenues for the three months ended March 31, 2022 despite a decrease in revenues in the same period given that we
benefited from an amendment to a revenue-sharing contract with one of our payment processing partners during the three months
(26)
ended December 31, 2021, which led to approximately $5.5 million of transaction-based revenue being recognized during that
period with no corresponding direct costs of revenues.
Gross Profit
Our total quarterly gross profit increased successively for all periods presented except for the three month period ended March 31,
2022 due to the decrease in transaction-based revenue and the increase in the cost of revenue discussed above. Our gross profit
has declined as a percentage of revenue due to the success of our payments solutions as customers using these solutions carry
higher direct costs compared to our subscription business.
Operating Expenses
Total operating expenses increased successively for all periods presented primarily due to higher sales and marketing and other
costs to support a larger customer base. The increase in the three months ended March 31, 2022 was primarily due to higher sales
and marketing and other costs to support a larger customer base and $10.8 million in share-based compensation and related costs
included in the sales and marketing expense for PSUs issued to the founders of NuORDER.
See “Results of Operations” in this MD&A for a more detailed discussion of the year-over-year changes in revenues and net loss.
Liquidity and Capital Resources
Overview
The general objectives of our capital management strategy reside in the preservation of our capacity to continue operating, in
providing benefits to our stakeholders and in providing an adequate return on investment to our shareholders by selling our
services at a price commensurate with the level of operating risk assumed by us.
We thus determine the total amount of capital required consistent with risk levels. This capital structure is adjusted on a timely
basis depending on changes in the economic environment and risks of the underlying assets. We are not subject to any externally
imposed capital requirements.
Credit Facility
We have credit facilities with the Canadian Imperial Bank of Commerce, which include a $25 million demand revolving operating
credit facility (the “Revolver”) and a $50 million stand-by acquisition term loan, $20 million of which is uncommitted (the
“Acquisition Facility”, and together with the Revolver, the “Credit Facilities”). The Revolver is available for draw at any time
during the term of the Credit Facilities. The Acquisition Facility was drawn for $30 million in January 2020 for the acquisition of
Gastrofix. The Credit Facilities are secured by all material assets of the Company. We are in compliance with covenants as at
March 31, 2022.
Financial regulatory authorities have announced a transition away from IBORs towards alternative risk-free rates. Since the
Acquisition Facility is based on LIBOR + 3% and the IBOR transition will result in the end of the oversight of this benchmark
interest rate, the contractual terms of the Acquisition Facility are expected to be amended with an alternative benchmark. While
no replacement rate has been agreed to as of yet, the Company is currently exploring its options regarding alternative benchmarks.
The LIBOR benchmark used for the Acquisition Facility is expected to come to an end as of June 30, 2023.
Working Capital
Our primary source of cash flow has been from raising capital totaling $2,193 million since the fiscal year ended March 31, 2016.
Our approach to managing liquidity is to ensure, to the extent possible, that we always have sufficient liquidity to meet our
liabilities as they become due. We do so by monitoring cash flow and performing budget-to-actual analysis on a regular basis. In
addition to the cash balances, we have a $25 million Revolver available to be drawn to meet ongoing working capital
requirements and $20 million (uncommitted) remaining on the Acquisition Facility for acquisitions. Our principal cash
requirements are for working capital and acquisitions we may execute. Working capital surplus as at March 31, 2022 was $884.6
million. Given our existing cash and credit facilities, along with proceeds obtained from our August 2021 public offering, we
believe there is sufficient liquidity to meet our current and short-term growth requirements in addition to our long-term strategic
objectives.
(27)
Base Shelf Prospectus
In May 2021, due to the depleted amount available under our prior short form base shelf prospectus, we filed a new short form
base shelf prospectus (the “Base Prospectus”) with the securities commissions in each of the provinces and territories of Canada
and a corresponding shelf registration statement on Form F-10 with the U.S. Securities and Exchange Commission (the
“Registration Statement”). The Base Prospectus and the Registration Statement allows Lightspeed and certain of its security
holders to offer up to C$4 billion of Subordinate Voting Shares, preferred shares, debt securities, warrants, subscription receipts,
units, or any combination thereof, during the 25-month period that the Base Prospectus is effective.
New Issue Offering
On August 11, 2021, we completed a public offering of Subordinate Voting Shares in the United States and Canada through the
issuance of new shares. The public offering consisted of an aggregate of 8,855,000 Subordinate Voting Shares, including the
exercise in full by the underwriters of their over-allotment option on August 13, 2021, to purchase 1,155,000 additional
Subordinate Voting Shares. The Subordinate Voting Shares were issued from treasury for gross proceeds of $823.5 million, with
share issuance costs (including the underwriters' fee and other expenses related to the offering) amounting to approximately $33.0
million.
Cash Flows
The following table presents cash and cash equivalents as at March 31, 2022 and 2021, and cash flows from or used in operating,
investing, and financing activities for three months and the fiscal years ended March 31, 2022 and 2021:
(In thousands of US dollars)
Three months ended
March 31,
2022
$
2021
$
Fiscal year ended
March 31,
2022
$
2021
$
Cash and cash equivalents
953,654
807,150
953,654
807,150
Net cash provided by (used in)
Operating activities
Investing activities
Financing activities
Effect of foreign exchange on cash and cash equivalents
(11,342)
(199)
(1,715)
251
(24,131)
(910)
599,541
4
(87,218)
(563,931)
798,057
(404)
(93,064)
(235,048)
922,315
1,978
Net increase (decrease) in cash and cash equivalents
(13,005)
574,504
146,504
596,181
Cash Flows used in Operating Activities
Cash flows used in operating activities for the three months ended March 31, 2022 were $11.3 million compared to $24.1 million
for the three months ended March 31, 2021. For the three months ended March 31, 2022, Adjusted Cash Flows Used in Operating
Activities4 were $9.9 million when excluding transaction related costs of $0.4 million, acquisition-related compensation paid in
the period of $0.7 million, $0.5 million for restructuring costs and payroll taxes related to share-based compensation of $0.2
million, partially offset by insurance proceeds received, net of cash outflows, in respect of certain litigation matters of $0.4
million. When adjusting cash flows used in operating activities on a similar basis for the three months ended March 31, 2021,
Adjusted Cash Flows Used in Operating Activities4 were $14.7 million. This $4.8 million decrease in Adjusted Cash Flows Used
in Operating Activities4 was primarily due to working capital movements.
Cash flows used in operating activities for Fiscal 2022 were $87.2 million compared to $93.1 million for Fiscal 2021. For Fiscal
2022, Adjusted Cash Flows Used in Operating Activities4 were $61.3 million when excluding transaction related costs of $11.7
million, $0.5 million for the payment of transaction-related liabilities that were assumed through our recent acquisitions,
acquisition-related compensation paid in the period of $7.8 million, restructuring costs of $1.6 million and payroll taxes related to
share-based compensation of $5.0 million, partially offset by insurance proceeds received, net of cash outflows, in respect of
certain litigation matters of $0.7 million, compared to Adjusted Cash Flows Used in Operating Activities4 of $41.4 million for
Fiscal 2021. This $19.9 million increase is primarily due to cash received in respect of government-sponsored COVID-19 wage
subsidy programs of $8.1 million and the cost containment measures undertaken by the Company in response to the onset of the
COVID-19 Pandemic during Fiscal 2021, as well as working capital movements which include an outflow of $5.0 million for a
4 Refer to the section entitled "Non-IFRS Measures and Ratios and Reconciliation of Non-IFRS Measures and Ratios".
(28)
deposit paid in connection with our merchant capital advance business and an increase of $5.7 million in inventory given the
recent increase in lead times for securing hardware.
Cash Flows used in Investing Activities
Cash flows used in investing activities for the three months ended March 31, 2022 were $0.2 million compared to $0.9 million for
the three months ended March 31, 2021. The decrease in cash used in investing activities was primarily due to an increase in
interest income received and the receipt of amounts relating post-close working capital adjustments during the three months ended
March 31, 2022 compared to the payment of amounts for post-close working capital adjustments during the three months ended
March 31, 2021, partially offset by an increase in purchases of property and equipment.
Cash flows used in investing activities for Fiscal 2022 were $563.9 million compared to $235.0 million for Fiscal 2021. The
increase in cash used in investing activities was primarily due to the difference in cash paid for the acquisitions of Vend in April
2021, NuORDER in July 2021 and Ecwid in October 2021 compared to cash paid for the acquisitions of ShopKeep in November
2020 and Upserve in December 2020.
Cash Flows from (used in) Financing Activities
Cash flows used in financing activities for the three months ended March 31, 2022 were $1.7 million compared to cash flows
from financing activities of $599.5 million in the three months ended March 31, 2021. The movement in cash flows relating to
financing activities was mainly due to having raised $593.8 million as part of our February 2021 public offering, net of share
issuance costs, a decrease of $7.1 million in proceeds from the exercise of stock options under our equity incentive plans, an
increase in financing costs of $0.1 million and a combined increase in the payment of lease liabilities and movement in restricted
lease deposits of $0.3 million.
Cash flows from financing activities for Fiscal 2022 decreased by $124.3 million compared to Fiscal 2021. The decrease in cash
flows from financing activities was mainly due to having raised $789.3 million in funds in our August 2021 public offering, net of
share issuance costs during the period compared to the $907.2 million raised as part of our initial public offering on the New York
Stock Exchange in September 2020 and our February 2021 public offering, net of share issuance costs. In addition, there was a
decrease of $3.5 million in proceeds from the exercise of stock options under our equity incentive plans, an increase in financing
costs of $0.3 million and a combined increase in the payment of lease liabilities and movement in restricted lease deposits of $2.6
million.
We believe that our current cash balance, available financing, cash flows from operations and credit available under the credit
facility are adequate for the Company’s future operating cash needs.
Contractual Obligations
We have contractual obligations with a variety of expiration dates. The table below outlines our contractual obligations as at
March 31, 2022:
(In thousands of US dollars)
Accounts payable and accrued liabilities
Accrued payroll taxes on share-based compensation
Long-term debt
Lease obligations(1)
Purchase obligations(2)
Payments due by period
< 1
Year
78,307
—
—
9,787
35,366
1 to 3
Years
—
1,007
30,000
14,407
56,162
4 to 5
Years
—
—
—
8,614
1,781
>5
Years
—
—
—
8,143
—
Total
78,307
1,007
30,000
40,951
93,309
Total contractual obligations
123,460
101,576
10,395
8,143
243,574
(1)
Included in the lease obligations are short term leases and variable lease payments for our share of tenant operating expenses and taxes.
Lease obligations relate primarily to our office space. The lease terms are between one and eight years. See note 14 to the audited annual
consolidated financial statements for further details regarding leases.
(2) We are subject to non-cancelable service agreements with service providers and payment processors subject to minimum spend
commitments.
(29)
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements, other than low value and short-term leases, and other purchase obligations
as disclosed under "Contractual Obligations". From time to time, we may be contingently liable with respect to litigation and
claims that arise in the normal course of operations.
Related Party Transactions
We have no material related party transactions, other than those noted in our audited annual consolidated financial statements.
The executive compensation expense for the top five key management personnel is as follows for Fiscal 2022 and Fiscal 2021:
(In thousands of US dollars)
Short-term employee benefits
Share-based payments
Total compensation paid to key management personnel
Fiscal year ended March 31,
2022
$
2,914
21,251
24,165
2021
$
1,732
4,200
5,932
Included in the $21.3 million of share based payments above is a $7.7 million expense in connection with the assumption of the
ShopKeep Inc. Amended and Restated 2011 Stock Option and Grant Plan as part of the acquisition of ShopKeep in November
2020.
Financial Instruments and Other Instruments
Credit and Concentration Risk
Generally, the carrying amount of our financial assets in our consolidated balance sheet exposed to credit risk, net of any
applicable provisions for losses, represents the maximum amount exposed to credit risk.
Our credit risk is primarily attributable to our cash and cash equivalents and trade receivables. We do not require guarantees from
our customers. Credit risk with respect to cash and cash equivalents is managed by maintaining balances only with high credit
quality financial institutions. We do not hold any collateral as security.
Due to our diverse customer base, there is no particular concentration of credit risk related to our trade receivables. Moreover,
balances for trade receivables are managed and analyzed on an ongoing basis to ensure our loss allowance is established and
maintained at an appropriate amount.
We maintain a loss allowance for a portion of trade receivables when collection becomes doubtful on the basis described in note 3
of our audited annual consolidated financial statements. Our allowance for expected credit losses ("ECL") includes forward-
looking factors specific to the debtors and the economic environment.
In Fiscal 2022, potential effects from the COVID-19 pandemic and spread or resurgences of variants of the COVID-19 virus on
our credit risk have been considered and have resulted in an increase to our allowance for ECLs from what the allowance would
have been without factoring in the effects of the COVID-19 pandemic. We continue our assessment given the uncertainty of
COVID-19's global impact.
Liquidity Risk
We are exposed to the risk of being unable to honor our financial commitments by the deadlines set, under the terms of such
commitments and at a reasonable price. We manage our liquidity risk by forecasting cash flows from operations and anticipated
investing and financing activities.
We have $953.7 million of cash and cash equivalents as well as $25.0 million available under the Revolver as at March 31, 2022,
demonstrating our liquidity and our ability to cover upcoming financial liabilities.
(30)
Foreign Exchange Risk
We are exposed to foreign exchange risk due to financial instruments denominated in foreign currencies. We have a policy to
mitigate our exposure to foreign currency exchange risk by entering into derivative instruments. We have entered into multiple
foreign exchange forward contracts, none of which are for greater than a one-year term. Our currency pair used for cash flow
hedges is U.S. dollar / Canadian dollar. We do not use derivative instruments for speculative purposes.
The notional principal of our foreign exchange contracts was approximately $26.0 million Canadian dollars as at March 31, 2022
(March 31, 2021 - nil). We designate certain foreign exchange forward contracts as cash flow hedges when all the requirements in
IFRS 9 Financial Instruments are met. We recognize these foreign exchange forward contracts as either assets or liabilities on the
audited annual consolidated balance sheets and these contracts are measured at fair value at each reporting period. The asset and
liability positions of the foreign exchange forward contracts are included in other current assets and accounts payable and accrued
liabilities on the audited annual consolidated balance sheets, respectively. We reflect the gain or loss on the effective portion of a
cash flow hedge in other comprehensive income (loss) and subsequently reclassify cumulative gains and losses to direct cost of
revenues, general and administrative, research and development, or sales and marketing expenses, depending on the risk hedged,
when the hedged transactions impact our audited annual consolidated statements of loss and comprehensive loss. If the hedged
transactions become probable of not occurring, the corresponding amounts in accumulated other comprehensive income (loss) are
immediately reclassified to finance income or costs.
The main currencies which expose us to foreign exchange risk due to financial instruments denominated in foreign currencies are
the Canadian dollar, the Euro, the British pound sterling, the Australian dollar and the New Zealand dollar. The following table
provides a summary of our foreign exchange exposures, after taking into account relevant foreign exchange forward contracts,
expressed in thousands of U.S. dollars:
2022
CAD
$
EUR
$
GBP
$
AUD
$
NZD
$
Other
$
Total
$
Cash and cash equivalents and restricted cash
13,885
6,270
1,338
2,522
2,651
3,785
30,451
Trade and other receivables
3,454
4,086
1,472
2,675
49
1,062
12,798
Accounts payable and accrued liabilities
(18,508)
(5,755)
(1,466)
(2,834)
(2,407)
(2,131)
(33,101)
Accrued payroll taxes on share-based compensation
(287)
(270)
(142)
(53)
—
(37)
(789)
Lease liabilities
(13,400)
(4,447)
(4,315)
(477)
(548)
(259)
(23,446)
Net financial position exposure
(14,856)
(116)
(3,113)
1,833
(255)
2,420
(14,087)
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will negatively impact earnings and cash flows. Certain of our cash earns
interest. Our trade and other receivables, accounts payable and accrued liabilities, and lease liabilities do not bear interest. Our
exposure to interest rate risk is related to our acquisition facility. We are not exposed to material interest rate risk.
Share Price Risk
Accrued payroll taxes on share-based compensation (social costs) are payroll taxes associated with share-based compensation that
we are subject to in various countries in which we operate. Social costs are accrued at each reporting period based on inputs
including, but not limited to, the number of stock options and share awards outstanding, the vesting of the stock options and share
awards, the exercise price, and our share price. Changes in the accrual are recognized in direct cost of revenues and operating
expenses. An increase in share price will increase the accrual for social costs, and a decrease in share price will result in a
decrease in the accrual for social costs, all other things being equal, including the number of vested stock options and exercise
price remaining constant.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs
were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price
increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
(31)
Critical Accounting Policies and Estimates
The preparation of our audited annual consolidated financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the amounts reported in the audited annual consolidated financial statements
and accompanying notes. We review these estimates on an ongoing basis based on management’s best knowledge of current
events and actions that we may undertake in the future. Actual results could differ from these estimates. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods. Key estimates and assumptions are outlined below. Management has determined that we
operate in a single operating and reportable segment.
COVID-19 Pandemic
Concerns related to the spread of COVID-19 and variants of the COVID-19 virus and the related containment measures intended
to mitigate its impact have created substantial disruption in the global economy. The uncertainties around the COVID-19
pandemic, continuing resurgences of COVID-19 and variants of the COVID-19 virus, and related restrictions to contain its spread
required the use of judgments and estimates which resulted in no material accounting impacts for Fiscal 2022, other than the
impact on ECLs driven by the changes in the macro-economic environment due to COVID-19.
Revenue Recognition
The identification of revenue-generating contracts with customers, the identification of performance obligations, the
determination of the transaction price and allocations between identified performance obligations, the use of appropriate revenue
recognition method for each performance obligation and the measure of progress for performance obligations satisfied over time
are the main aspects of the revenue recognition process, all of which require the exercise of judgment and use of assumptions.
We follow the guidance provided in IFRS 15 – Appendix B, Principal versus Agent Considerations for determining whether
revenue should be recognized based on the gross amount of consideration paid by the customer or the net amount of consideration
retained by us. This determination is a matter of judgment that depends on the facts and circumstances of each arrangement.
Impairment of Non-financial Assets
Our impairment test for goodwill is based on internal estimates of fair value less costs of disposal calculations and uses valuation
models such as the discounted cash flow model. Key assumptions on which management has based its determination of fair value
less costs of disposal include an estimated discount rate, terminal value multiple, and estimated revenue growth rates. These
estimates, including the methodology used, the assessment of cash-generating units and how goodwill is allocated, can have a
material impact on the respective values and ultimately the amount of any goodwill impairment.
Whenever property and equipment, lease right-of-use assets, and intangible assets are tested for impairment, the determination of
the assets’ recoverable amount involves the use of estimates by management and can have a material impact on the respective
values and ultimately the amount of any impairment.
Business Combinations
We follow the acquisition method to account for business combinations. The acquisition method of accounting requires that assets
acquired and liabilities assumed be recorded at their estimated fair values on the date of a business acquisition. The excess of the
purchase price over the estimated fair value is recorded as goodwill. Such valuations require management to make significant
estimates, assumptions, and judgments, especially with respect to intangible assets and contingent consideration. For intangible
assets, we develop the fair value by using appropriate valuation techniques which are generally based on a forecast of the total
expected future net discounted cash flows, and key assumptions generally consist of the future performance of the related assets,
the discount rate, the attrition rate, the royalty rates, and the payments attach rate. Contingent consideration is measured at fair
value using a discounted cash flow model.
Recoverability of Deferred Tax Assets and Current and Deferred Income Taxes and Tax Credits
Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable
income. We establish provisions based on reasonable estimates for possible consequences of audits by the tax authorities. The
amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of
tax regulations by the taxable entity and the responsible tax authority.
(32)
Deferred income tax assets are recognized for unused tax losses and deductible temporary differences to the extent it is probable
that taxable income will be available against which the losses and deductible temporary differences can be utilized.
Management’s judgment is required to determine the amount of deferred income tax assets that can be recognized, based upon the
likely timing and the level of future taxable income together with future tax planning strategies.
Share-Based Compensation
We measure the cost of equity-settled transactions with employees by reference to the fair value of the related instruments at the
date at which they are granted. Estimating fair value for share-based payments requires determining the most appropriate
valuation model for a grant, which depends on the terms and conditions of the grant. This also requires making assumptions and
determining the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend
yield.
New Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the IASB or other standards-setting bodies, and are adopted as
at the specified effective date.
New and amended standards and interpretations adopted
In August 2020, the IASB issued Interest Rate Benchmark Reform-Phase 2, which amends IFRS 9 Financial Instruments, IAS 39
Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures and IFRS 16 Leases. The
amendments focus on the effects on financial statements when a company replaces the old interest rate benchmark with an
alternative benchmark rate as a result of the reform. The amendments are effective for annual periods beginning on or after
January 1, 2021, with early application permitted. We have adopted these amendments as of April 1, 2021. There was no impact
on our accounting policies or the audited annual consolidated financial statements as a result of adopting such amendments. There
were no other IFRS or IFRIC interpretations effective as of April 1, 2021 that had a material impact on our accounting policies or
the audited annual consolidated financial statements.
New and amended standards and interpretations issued not yet effective
At the date of authorization of our financial statements, we have not yet applied the following new and revised IFRS Standards
that have been issued but are not yet effective.
The IASB has issued amendments to IAS 16 Property, Plant and Equipment to prohibit deducting from the cost of an item of
property, plant and equipment any proceeds from selling items produced before that asset is available for use. The amendments
also clarify the meaning of "testing whether an asset is functioning properly". The IASB also issued an amendment to IAS 37
Provisions, Contingent Liabilities and Contingent Assets to clarify the cost of fulfilling a contract in assessing whether a contract
is onerous. The amendments to IAS 16 and IAS 37 are effective for annual periods beginning on or after January 1, 2022, with
early application permitted. The IASB has also issued amendments to IAS 1 Presentation of Financial Statements affecting the
presentation of liabilities as current or non-current in the statement of financial position and requiring companies to disclose their
material accounting policy information. It has also issued amendments to IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors clarifying how to distinguish changes in accounting policies from changes in accounting estimates and
amendments to IAS 12 Income Taxes requiring companies to recognize deferred tax on particular transactions that, on initial
recognition, give rise to equal amounts of taxable and deductible temporary differences. The amendments to IAS 1, IAS 8 and
IAS 12 are effective for annual periods beginning on or after January 1, 2023, with early application permitted.
We do not expect that the adoption of the standards listed above will have a material impact on our financial statements in future
periods.
Outstanding Share Information
Lightspeed is a publicly traded company listed under the symbol "LSPD" on both the Toronto Stock Exchange ("TSX") and the
New York Stock Exchange ("NYSE"). Our authorized share capital consists of (i) an unlimited number of Subordinate Voting
(33)
Shares and (ii) an unlimited number of preferred shares, issuable in series, of which 148,909,925 Subordinate Voting Shares and
no preferred shares were issued and outstanding as of May 17, 2022.
As of May 17, 2022, there were 1,360,278 options outstanding under the Company’s Amended and Restated 2012 Stock Option
Plan, as amended (of which 1,248,488 were vested as of such date), 9,698,036 options outstanding under the Company’s Third
Amended and Restated Omnibus Incentive Plan, as amended (the "Omnibus Plan") (of which 1,606,875 were vested as of such
date) and 150,000 options outstanding which were issued in compliance with an allowance under the rules of the TSX as
inducements for executive officers to enter into contracts of full-time employment with the Company (“Inducement Grants”) (of
which 77,778 were vested as of such date). Each such option is or will become exercisable for one Subordinate Voting Share.
As of May 17, 2022, there were 351,605 options outstanding under the ShopKeep Inc. Amended and Restated 2011 Stock Option
and Grant Plan (of which 233,595 were vested as of such date), which plan the Company assumed on closing of its acquisition of
ShopKeep on November 25, 2020. Each option is or will become exercisable for one Subordinate Voting Share.
As of May 17, 2022, there were 40,067 DSUs outstanding under the Company’s Omnibus Plan. Each such DSU will, upon the
holder thereof ceasing to be a director, executive officer, employee or consultant of the Company in accordance with the Omnibus
Plan, be settled at the discretion of the board through (a) the delivery of shares issued from treasury or purchased on the open
market, (b) cash, or (c) a combination of cash and shares.
As of May 17, 2022, there were 3,227,430 RSUs outstanding under the Company’s Omnibus Plan (of which 352,185 were vested
as of such date) and 273 RSUs outstanding which were Inducement Grants (of which 273 were vested as of such date). Each such
RSU, upon vesting, may be settled at the discretion of the board through (a) the delivery of shares issued from treasury or
purchased on the open market, (b) cash, or (c) a combination of cash and shares.
As of May 17, 2022, there were 714,968 PSUs outstanding under the Company’s Omnibus Plan (of which none were vested as of
such date). Each such PSU, upon vesting, may be settled at the discretion of the board through (a) the delivery of shares issued
from treasury or purchased on the open market, (b) cash, or (c) a combination of cash and shares.
Disclosure Controls and Procedures and Internal Control Over Financial Reporting
Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as
amended, "DC&P") are designed to provide reasonable assurance that information required to be disclosed in reports filed with
the Securities and Exchange Commission are recorded, processed, summarized and reported in a timely fashion. The disclosure
controls and procedures are designed to ensure that information required to be disclosed by the Company in such reports is then
accumulated and communicated to the Company’s management to ensure timely decisions regarding required disclosure.
Management regularly reviews disclosure controls and procedures; however, they cannot provide an absolute level of assurance
because of the inherent limitations in control systems to prevent or detect all misstatements due to error or fraud. The CEO and
the CFO, along with management, have evaluated and concluded that the Company’s disclosure controls and procedures as at
March 31, 2022 were effective.
Management's Annual Report on Internal Control over Financial Reporting
Management of the Company, under the supervision of the CEO and the CFO, is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with IFRS as issued by the IASB.
Management, including the CEO and CFO, have assessed the effectiveness of the Company's internal control over financial
reporting in accordance with Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO"). Based on this assessment, management, including the CEO and CFO,
have determined that the Company's internal control over financial reporting was effective as at March 31, 2022.
(34)
Attestation Report of the Independent Registered Public Accounting Firm
The effectiveness of the Company's internal control over financial reporting as at March 31, 2022 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their opinion on the audited annual
consolidated financial statements for March 31, 2022.
Changes in Internal Control over Financial Reporting
The CEO and the CFO have evaluated, or caused to be evaluated under their supervision, whether or not there were changes to its
internal controls over financial reporting during the period ended March 31, 2022 that have materially affected, or are reasonably
likely to materially affect the Company’s internal controls over financial reporting. No such changes were identified through their
evaluation.
Limitations of Controls and Procedures
Management, including the CEO and CFO, believes that any disclosure controls and procedures or internal controls over financial
reporting, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of
the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they
cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented
or detected. These inherent limitations include that judgments in decision-making can be faulty, and that breakdowns can occur
because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by unauthorized override of the control. The design of any system of controls is also based in
part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost-effective
control system, misstatements due to error or fraud may occur and not be detected.
Limitation on Scope of Design
The scope of design of internal controls over financial reporting and disclosure controls and procedures excluded the controls,
policies, and procedures of Vend, which was acquired on April 16, 2021, NuORDER, which was acquired on July 1, 2021, and
Ecwid, which was acquired on October 1, 2021.
Vend's contribution to our Consolidated Statements of Loss and Comprehensive Loss for the fiscal year ended March 31, 2022
was less than 10% of total revenues and less than 5% of total net loss, excluding the amortization of intangible assets.
Additionally, as at March 31, 2022, Vend's current assets were below 5% of consolidated current assets and current liabilities
were below 10% of consolidated current liabilities, and its non-current assets and non-current liabilities were below 5% of
consolidated non-current assets and non-current liabilities, respectively.
NuORDER's contribution to our Consolidated Statements of Loss and Comprehensive Loss for the fiscal year ended March 31,
2022 was less than 5% of total revenues and less than 5% of total net loss, excluding the amortization of intangible assets.
Additionally, as at March 31, 2022, NuORDER's current assets were below 5% of consolidated current assets and current
liabilities were below 15% of consolidated current liabilities, and its non-current assets and non-current liabilities were below 5%
of consolidated non-current assets and non-current liabilities, respectively.
Ecwid's contribution to our Consolidated Statements of Loss and Comprehensive Loss for the fiscal year ended March 31, 2022
was less than 5% of total revenues and less than 5% of total net loss, excluding the amortization of intangible assets. Additionally,
as at March 31, 2022, Ecwid's current assets were below 5% of consolidated current assets and current liabilities were below 10%
of consolidated current liabilities, and its non-current assets and non-current liabilities were below 5% of consolidated non-current
assets and non-current liabilities, respectively.
The amounts recognized for the assets acquired and liabilities assumed at the date of acquisition for Vend, NuORDER and Ecwid
are described in note 5 of the audited annual consolidated financial statements for the years ended March 31, 2022 and 2021.
(35)
Lightspeed Commerce Inc.
(formerly known as Lightspeed POS Inc.)
Consolidated Financial Statements
March 31, 2022 and 2021
(expressed in thousands of US dollars)
Management's Annual Report on Internal Control Over Financial Reporting
Management of the Company, under the supervision of the Chief Executive Officer and the Chief Financial and Operations
Officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over
financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
Management, including the Chief Executive Officer and Chief Financial and Operations Officer, have assessed the effectiveness
of the Company's internal control over financial reporting in accordance with Internal Control - Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment,
management, including the Chief Executive Officer and Chief Financial and Operations Officer, have determined that the
Company's internal control over financial reporting was effective as at March 31, 2022.
The effectiveness of the Company's internal control over financial reporting as at March 31, 2022 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included herein.
The scope of design of internal controls over financial reporting and disclosure controls and procedures excluded the controls,
policies, and procedures of Vend, which was acquired on April 16, 2021, NuORDER, which was acquired on July 1, 2021, and
Ecwid, which was acquired on October 1, 2021.
Vend's contribution to our Consolidated Statements of Loss and Comprehensive Loss for the fiscal year ended March 31, 2022
was less than 10% of total revenues and less than 5% of total net loss, excluding the amortization of intangible assets.
Additionally, as at March 31, 2022, Vend's current assets were below 5% of consolidated current assets and current liabilities
were below 10% of consolidated current liabilities, and its non-current assets and non-current liabilities were below 5% of
consolidated non-current assets and non-current liabilities, respectively.
NuORDER's contribution to our Consolidated Statements of Loss and Comprehensive Loss for the fiscal year ended March 31,
2022 was less than 5% of total revenues and less than 5% of total net loss, excluding the amortization of intangible assets.
Additionally, as at March 31, 2022, NuORDER's current assets were below 5% of consolidated current assets and current
liabilities were below 15% of consolidated current liabilities, and its non-current assets and non-current liabilities were below 5%
of consolidated non-current assets and non-current liabilities, respectively.
Ecwid's contribution to our Consolidated Statements of Loss and Comprehensive Loss for the fiscal year ended March 31, 2022
was less than 5% of total revenues and less than 5% of total net loss, excluding the amortization of intangible assets. Additionally,
as at March 31, 2022, Ecwid's current assets were below 5% of consolidated current assets and current liabilities were below 10%
of consolidated current liabilities, and its non-current assets and non-current liabilities were below 5% of consolidated non-current
assets and non-current liabilities, respectively.
The amounts recognized for the assets acquired and liabilities assumed at the date of acquisition for Vend, NuORDER and Ecwid
are described in note 5 herein.
May 19, 2022
/s/ Jean Paul Chauvet
Jean Paul Chauvet
Chief Executive Officer
/s/ Brandon Nussey
Brandon Nussey
Chief Financial and Operations Officer
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Lightspeed Commerce Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Lightspeed Commerce Inc. and its
subsidiaries (together, the Company) as of March 31, 2022 and 2021, and the related consolidated
statements of loss and comprehensive loss, changes in shareholders’ equity and cash flows for the years
then ended, including the related notes (collectively referred to as the “consolidated financial statementsˮ).
We also have audited the Company’s internal control over financial reporting as of March 31, 2022, based
on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of the Company as of March 31, 2022 and 2021, and its financial
performance and its cash flows for the years then ended in conformity with International Financial
Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of
March 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by
the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Annual Report on Internal
Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated
financial statements and on the Company’s internal control over financial reporting based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the US federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement, whether due to error or fraud, and whether effective internal
control over financial reporting was maintained in all material respects.
PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l.
1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1
T: +1 514 205 5000, F: +1 514 876 1502
“PwC” refers to PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l., an Ontario limited liability partnership.
Our audits of the consolidated financial statements included performing procedures to assess the risks of
material misstatement of the consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing
such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.
As described in Management’s Annual Report on Internal Control Over Financial Reporting, management
has excluded Vend Limited (Vend), NuORDER Inc. (NuORDER) and Ecwid Inc. (Ecwid) from its
assessment of internal control over financial reporting as of March 31, 2022 because they were acquired
by the Company in purchase business combinations during fiscal year 2022. We have also excluded
Vend, NuORDER and Ecwid from our audit of internal control over financial reporting. Vend, NuORDER
and Ecwid are wholly owned subsidiaries whose total assets and total revenues excluded from
management’s assessment and our audit of internal control over financial reporting represent 1% and
14%, respectively, of the related consolidated financial statement amounts as of and for the year ended
March 31, 2022.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit
committee and that (i) relates to accounts or disclosures that are material to the consolidated financial
statements; and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing
a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Intangible Assets in Business Acquisitions of Vend, NuORDER and Ecwid
As described in Notes 4 and 5 to the consolidated financial statements, the Company completed the
acquisitions of (i) Vend for net consideration of $372 million in April of 2021, which resulted in $92 million
of intangible assets related to customer relationships and software technology and $294 million of goodwill
being recorded; (ii) NuORDER for net consideration of $384 million in July of 2021, which resulted in
$105 million of intangible assets related to customer relationships and software technology and
$300 million of goodwill being recorded; and (iii) Ecwid for net consideration of $595 million in October of
2021, which resulted in $72 million of intangible assets related to customer relationships and software
technology and $543 million of goodwill being recorded. Management applied significant judgment in
estimating the fair value of intangible assets acquired, which involved the use of key estimates and
assumptions with respect to the expected future net discounted cash flows including the future
performance of the related intangible assets, the attrition rates, the payments attach rates, the royalty
rates and the discount rates.
The principal considerations for our determination that performing procedures relating to the valuation of
intangible assets in business acquisitions of Vend, NuORDER and Ecwid is a critical audit matter are
(i) the high degree of auditor judgment and subjectivity in performing procedures relating to the fair value
measurement of intangible assets acquired due to the significant judgment by management when
developing the estimates; (ii) significant audit effort in evaluating the key assumptions with respect to the
expected future net discounted cash flows including the future performance of the related intangible
assets, the attrition rates, the payments attach rates, the royalty rates and the discount rates; and (iii) the
audit effort involved the use of professionals with specialized skills and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. These procedures included testing
the effectiveness of controls relating to the valuation of intangible assets, including controls over the
development of the assumptions used in the valuation of the intangible assets. These procedures also
included, among others, (i) reading the purchase agreements; and (ii) testing management’s process for
estimating the fair value of intangible assets. Testing management’s process included evaluating the
appropriateness of the valuation methods, testing the completeness and accuracy of data provided by
management, and evaluating the reasonableness of key assumptions with respect to the expected future
net discounted cash flows including the future performance of the related intangible assets, the attrition
rates, the payment attach rates, the royalty rates and the discount rates for the intangible assets.
Evaluating the reasonableness of the expected future net discounted cash flows including the future
performance of the related intangible assets, the royalty rates, the attrition rates and the payment attach
rates involved considering the past performance of the acquired businesses and the Company, as well as
economic and industry forecasts, and considering whether they were consistent with evidence obtained in
other areas of the audit. Professionals with specialized skills and knowledge were used to assist in
evaluating the appropriateness of the valuation methods and in evaluating key assumptions, including the
discount rates.
/s/PricewaterhouseCoopers LLP1
Montréal, Quebec, Canada
May 19, 2022
We have served as the Company’s auditor since 2015.
1 CPA auditor, public accountancy permit No. TA145383
Lightspeed Commerce Inc.
Consolidated Balance Sheets
As at March 31, 2022 and 2021
(expressed in thousands of US dollars)
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Lease right-of-use assets, net
Property and equipment, net
Intangible assets, net
Goodwill
Other long-term assets
Deferred tax assets
Total assets
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities
Lease liabilities
Income taxes payable
Deferred revenue
Total current liabilities
Deferred revenue
Lease liabilities
Long-term debt
Accrued payroll taxes on share-based compensation
Deferred tax liabilities
Total liabilities
Shareholders’ equity
Share capital
Additional paid-in capital
Accumulated other comprehensive income
Accumulated deficit
Total shareholders’ equity
Total liabilities and shareholders’ equity
Commitments and contingencies
Notes
13
7
6, 12
14
15
16
17
6, 18
23
19, 25
14
23
6
6
14
20
23
21
26
22, 28
24, 25
Approved by the Board of Directors
/s/ Paul McFeeters Director /s/ Jean Paul Chauvet Director
The accompanying notes are an integral part of these consolidated financial statements.
2022
$
953,654
45,766
7,540
35,535
1,042,495
25,539
16,456
409,568
2,104,368
21,400
154
2021
$
807,150
24,771
1,573
24,171
857,665
21,206
8,342
234,493
971,939
11,504
170
3,619,980
2,105,319
78,307
7,633
6,718
65,194
65,052
5,120
114
43,116
157,852
113,402
2,121
23,037
29,841
1,007
6,833
2,796
20,558
29,770
3,154
1,356
220,691
171,036
4,199,025
123,777
2,677
(926,190)
2,526,448
35,877
9,715
(637,757)
3,399,289
1,934,283
3,619,980
2,105,319
7
Lightspeed Commerce Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except per share amounts)
Revenues
Direct cost of revenues
Gross profit
Operating expenses
General and administrative
Research and development
Sales and marketing
Depreciation of property and equipment
Depreciation of right-of-use assets
Foreign exchange loss
Acquisition-related compensation
Amortization of intangible assets
Restructuring
Total operating expenses
Operating loss
Net interest income (expense)
Loss before income taxes
Income tax expense (recovery)
Current
Deferred
Total income tax recovery
Net loss
Notes
6
7, 8, 9
8, 9
8, 9
8, 9
15
14
16
25
10
23
Other comprehensive income (loss)
22, 28
Items that may be reclassified to net loss
Foreign currency differences on translation of foreign operations
Change in net unrealized gain on cash flow hedging instruments
Total other comprehensive income (loss)
Total comprehensive loss
2022
$
2021
$
548,372
221,728
277,199
94,059
271,173
127,669
95,253
121,150
216,659
4,993
7,743
611
50,491
91,812
803
53,035
55,303
96,900
2,479
3,876
2,098
11,807
30,128
1,760
589,515
257,386
(318,342)
(129,717)
2,988
(353)
(315,354)
(130,070)
1,103
(28,024)
(26,921)
166
(5,958)
(5,792)
(288,433)
(124,278)
(7,061)
23
(7,038)
15,986
—
15,986
(295,471)
(108,292)
Net loss per share – basic and diluted
11
(2.04)
(1.18)
The accompanying notes are an integral part of these consolidated financial statements.
8
Lightspeed Commerce Inc.
Consolidated Statements of Cash Flows
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars)
Cash flows from (used in) operating activities
Net loss
Items not affecting cash and cash equivalents
Share-based acquisition-related compensation
Amortization of intangible assets
Depreciation of property and equipment and lease right-of-use assets
Deferred income taxes
Share-based compensation expense
Share-based compensation impact from replacement awards issued
Unrealized foreign exchange loss
(Increase)/decrease in operating assets and increase/(decrease) in operating liabilities
Trade and other receivables
Inventories
Other assets
Accounts payable and accrued liabilities
Income taxes payable
Deferred revenue
Accrued payroll taxes on share-based compensation
Net interest (income) expense
Total operating activities
Cash flows from (used in) investing activities
Additions to property and equipment
Acquisition of businesses, net of cash acquired
Movement in restricted term deposits
Interest income
Total investing activities
Cash flows from (used in) financing activities
Proceeds from exercise of stock options
Proceeds from issuance of share capital
Share issuance costs
Payment of lease liabilities net of incentives and movement in restricted lease deposits
Financing costs
Total financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents during the year
Cash and cash equivalents – Beginning of year
Cash and cash equivalents – End of year
Interest paid
Income taxes paid
The accompanying notes are an integral part of these consolidated financial statements.
2022
$
2021
$
(288,433)
(124,278)
45,042
91,812
12,736
(28,024)
108,916
—
5
(5,384)
(5,967)
(25,008)
6,842
1,077
4,552
(2,396)
(2,988)
4,518
30,128
6,355
(5,958)
32,739
1,120
320
(9,177)
(256)
(11,963)
(15,333)
38
(3,991)
2,321
353
(87,218)
(93,064)
(10,653)
(559,429)
344
5,807
(1,794)
(235,576)
—
2,322
(563,931)
(235,048)
17,494
823,515
(34,190)
(6,952)
(1,810)
21,008
952,534
(45,319)
(4,351)
(1,557)
798,057
922,315
(404)
1,978
146,504
596,181
807,150
210,969
953,654
807,150
937
748
1,025
147
9
Lightspeed Commerce Inc.
Consolidated Statements of Changes in Shareholders' Equity
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Balance as at March 31, 2020
Net loss
Issuance of shares upon public offerings
Share issuance costs
Exercise of stock options and settlement of share awards
Share-based compensation
Share-based acquisition-related compensation
Shares issued in connection with business combination
Replacement awards issued in connection with business combination
Share-based compensation impact from replacement awards issued
in connection with business combination
Other comprehensive income
Balance as at March 31, 2021
Net loss
Issuance of shares upon public offerings
Share issuance costs
Exercise of stock options and settlement of share awards
Share-based compensation
Share-based acquisition-related compensation
Shares issued in connection with business combination
Other comprehensive loss
Issued and
Outstanding Shares
Notes
Number
of shares
Additional
paid-in
capital
$
Accumulated
other
comprehensive
income (loss)
Accumulated
deficit
$
$
Amount
$
Total
$
21
21
26
26
92,206,817
852,115
—
19,756,196
—
3,038,643
—
194,042
13,332,817
—
—
952,534
(44,702)
29,643
—
4,518
690,788
40,432
11,773
—
—
—
(8,635)
32,739
—
—
—
(6,271)
(513,479)
344,138
—
—
—
—
—
—
—
—
(124,278)
—
—
—
—
—
—
—
(124,278)
952,534
(44,702)
21,008
32,739
4,518
690,788
40,432
22, 28
—
—
1,120
—
—
—
—
15,986
—
—
1,120
15,986
128,528,515
2,526,448
35,877
9,715
(637,757) 1,934,283
21
21
26
26
5
22, 28
—
8,855,000
—
1,332,218
—
638,323
9,307,256
—
—
823,515
(33,984)
38,510
—
45,042
799,494
—
—
—
—
(21,016)
108,916
—
—
—
—
—
—
—
—
—
—
(7,038)
(288,433)
—
—
—
—
—
—
—
(288,433)
823,515
(33,984)
17,494
108,916
45,042
799,494
(7,038)
Balance as at March 31, 2022
148,661,312
4,199,025
123,777
2,677
(926,190) 3,399,289
The accompanying notes are an integral part of these consolidated financial statements.
10
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
1. Organization and nature of operations
Lightspeed Commerce Inc., formerly known as Lightspeed POS Inc., ("Lightspeed" or the "Company") was incorporated
on March 21, 2005 under the Canada Business Corporations Act. Its head office is located at Gare Viger, 700 Saint-
Antoine St. East, Suite 300, Montréal, Quebec, Canada. Lightspeed’s one-stop commerce platform provides its customers
with the critical functionalities they need to engage with consumers, manage their operations, accept payments, and grow
their business. Lightspeed has customers globally in over 100 countries, empowering single- and multi-location small and
medium-sized businesses to compete in an omni-channel market environment by engaging with consumers across online,
mobile, social, and physical channels.
The Company’s shares are listed on both the Toronto Stock Exchange ("TSX") and the New York Stock Exchange
("NYSE") under the stock symbol "LSPD".
2. Basis of presentation and consolidation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB) and were approved for issue by the Board of
Directors (the "Board") of the Company on May 19, 2022.
The consolidated financial statements have been prepared on a historical cost basis, except for our lease liabilities which
are measured at present value and certain financial assets and liabilities, which have been measured at fair value as
described below. The consolidated financial statements provide comparative information in respect of the previous period.
Certain comparative figures have been reclassified in order to conform to the current period presentation.
The consolidated financial statements include the accounts of Lightspeed and its wholly-owned subsidiaries including, but
not limited to: Lightspeed Netherlands B.V, Lightspeed Payments USA Inc., Kounta Pty Ltd, Lightspeed POS Germany
GmbH (formerly known as Gastrofix GmbH) ("Gastrofix"), Lightspeed Commerce USA Inc. (the successor to ShopKeep
Inc.), Upserve, Inc., Vend Limited, Lightspeed NuORDER Inc. (the successor to NuORDER, Inc.) and Ecwid, Inc.
(collectively, the "subsidiaries"). All significant intercompany balances and transactions have been eliminated on
consolidation.
Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company is
exposed, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of all subsidiaries, including those of new subsidiaries of
Lightspeed from the reporting period starting on their acquisition or incorporation date, are prepared for the same reporting
period as Lightspeed using Lightspeed’s accounting policies. All subsidiaries are fully consolidated until the date that
Lightspeed’s control ceases.
3. Significant accounting policies
Revenue recognition
The Company’s main sources of revenue are subscriptions for its platforms and revenue from its payment processing
services. In addition, the Company generates revenue from payment residuals, merchant cash advances, professional
services and sales of hardware as described below.
11
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The Company recognizes revenue to depict the transfer of promised services to its customers in an amount that reflects the
consideration to which the Company expects to be entitled in exchange for those services by applying the following steps:
•
•
•
•
•
Identifying the contract with a customer;
Identifying the performance obligations in the contract;
Determining the transaction price;
Allocating the transaction price; and
Recognizing revenue when, or as, the Company satisfies a performance obligation.
The Company follows the guidance provided in IFRS 15, Appendix B, Principal versus Agent Considerations, for
determining whether the revenue should be recognized based on the gross amount billed to a customer or the net amount
retained. This determination is a matter of judgment that depends on the facts and circumstances of each arrangement.
Sales taxes collected from customers and remitted to government authorities are excluded from revenue.
The Company’s arrangements with customers can include multiple performance obligations. When contracts involve
multiple performance obligations, the Company evaluates whether each performance obligation is distinct and should be
accounted for as a separate unit of accounting. In the case of software subscriptions and hardware and other, the Company
has determined that customers can benefit from each service on its own, and that each service being provided to the
customer is separately identifiable from other promises in the contract. Specifically, the Company considers the distinct
performance obligations to be the software subscriptions and the hardware and implementation services. Payment
processing services, payment residuals and merchant cash advances were also considered to be distinct performance
obligations.
The total transaction price is determined at the inception of the contract and allocated to each performance obligation based
on their relative standalone selling prices. The Company determines the standalone selling price by considering internal
evidence such as normal or consistently applied standalone selling prices. The determination of standalone selling prices is
made through consultation with and approval by management, taking into consideration the Company’s go-to-market
strategy. The Company may modify its pricing practices in the future as its go-to-market strategies evolve, which could
result in changes in relative standalone selling prices. Discounts are allocated to each performance obligation to which they
relate based on their relative standalone selling price.
The Company generally receives payment from its customers on the invoice due date. In all other cases, payment terms and
conditions vary by contract type, although terms generally include a requirement for payment within 14 days of the invoice
date. In instances where the timing of revenue recognition differs from the timing of invoicing and subsequent payment, we
have determined the Company’s contracts generally do not include a significant financing component.
Subscription revenue
Software subscriptions include subscriptions to cloud-based solutions for both retail and hospitality platforms and for the
Company's eCommerce offering. In addition to the core subscriptions outlined above, customers can purchase add-on
services such as loyalty, delivery, order anywhere, advanced reporting, accounting and analytics, amongst others.
Subscriptions include maintenance and support, which includes access to unspecified upgrades. The Company recognizes
revenue for its software subscriptions ratably over the term of the contract commencing on the date the services are made
available to customers.
12
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Transaction-based revenue
The Company offers to its customers payment processing services, through connected terminals and online, that facilitate
payment for goods and services sold by the customer to its consumers, for which the customers are charged a transaction
fee. The Company recognizes revenue from payment processing services at the time of the transaction at the gross amount
of consideration paid by the customer, as the Company is the principal in the arrangement with the customer. The
Company is the principal as the Company controls the payment processing service before the customer receives it as the
Company performs additional services which are integrated with the payment processing service prior to delivering the
service to the customer. The Company also bears the risk for chargebacks and other financial losses if such amounts cannot
be recovered from the customer and the Company has full discretion in establishing prices for the promised service. The
Company incurs costs of interchange and network assessment fees, processing fees, and bank settlement fees to third-party
payment processors and financial institutions involved in settlement, which are recorded as direct costs of revenue.
The Company’s software also interfaces with third parties that enable credit card processing. These third parties generate
revenue from charging transaction fees that are generally a fixed amount per transaction, or a fixed percentage of the
transaction processed. As part of integrating with the solutions of these third parties, the Company negotiates a revenue
share with them whereby the Company receives a portion of the revenues generated by the third parties. In addition, the
Company has contracted with a number of third-party vendors that sell products to the same customers as the Company.
The Company refers its customers to these vendors and earns a referral fee. The Company recognizes the revenues it
receives from third-party vendors at the point in time when they are due from third-party vendors. These revenues are
recognized at the net amount retained by the Company, whereby only the portion of revenues that the Company receives
(or which is due) from the third-party vendor is recognized.
The Company also earns revenue from eligible customers through its merchant cash advance ("MCA") program,
Lightspeed Capital. Under this program, the Company purchases a designated amount of future receivables at a discount,
and the customer remits a fixed percentage of their daily sales to the Company, until the outstanding balance has been fully
remitted. The Company evaluates identified underwriting criteria including, but not limited to, the number of years in
business, the nature of the business, and historical sales data, prior to purchasing the eligible customer's future receivables
to help assess collectibility. As each MCA agreement does not have contractual terms that give rise on specified dates to
cash flows that are solely payments of principal and interest on the MCA balance outstanding, each MCA is recorded at
fair value through profit or loss. The initial fair value is generally equal to the transaction price, being the fair value of the
consideration provided to the customer, reduced by any amounts that are not expected to be collected. The fair value of
each MCA is reassessed at the end of each fiscal quarter. The amount of transaction-based revenue recognized from MCAs
in the period is calculated as the gross amounts remitted by the customer in the period, reduced by the difference in value
between the initial fair value and the reassessed fair value at the end of the period, excluding movements in the fair value
that relate to amounts that are deemed uncollectible which are recognized within general and administrative expenses in the
consolidated statements of loss and comprehensive loss. The Company is responsible for purchasing the designated amount
of future receivables, bears the risk of financial losses if the receivables cannot be recovered from the customer, and the
Company has full discretion in establishing the fees charged. The Company incurs processing and other fees with third-
party platforms involved in the Company's MCA program, which are recorded as direct costs of revenue.
Hardware and other revenue
For retail, hospitality and eCommerce customers, the Company’s software integrates with various hardware solutions
required to operate a location. As part of the sale process to both new and existing customers, the Company acts as a
reseller of the hardware. Such sales consist primarily of hardware peripherals. In addition, in some cases where customers
would like assistance deploying the Company’s software or integrating the Company’s software with other systems or
setting up their eCommerce store, the Company provides professional services customized to the customer.
13
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Hardware equipment revenues are recognized at a point in time, namely when ownership passes to the customer, in
accordance with the shipping terms, at the gross amount of consideration paid by the customer, as the Company is the
principal in the arrangement with the customer. The Company is the principal as the Company controls the hardware
equipment before the customer receives it.
Most professional services are sold on a time-and-materials basis. Consulting engagements can last anywhere from one day
to several weeks and are based strictly on the customer’s requirements. The Company’s software can typically be used as
delivered to the customer. The Company’s professional services are generally not essential to the functionality of the
software. For services performed on a time-and-materials basis, revenues are recognized as the services are delivered at the
gross amount of consideration paid by the customer, as the Company is the principal in the arrangement with the customer.
The Company is the principal as the Company controls the professional services before they are transferred to the
customer.
Contract assets
The Company records contract assets ("commission assets") for selling commissions paid at the inception of a contract that
are incremental costs of obtaining the contract if the Company expects to recover those costs. Commission assets are
subsequently amortized on a systematic basis consistent with the pattern of the transfer of the good or service to which the
commission asset relates. The Company applies the practical expedient that allows it to determine the pattern of the transfer
of the good or service for a portfolio of contracts that have similar characteristics. For contracts where the amortization
period of the commission assets would have been one year or less, the Company uses the practical expedient that allows it
to recognize the incremental costs of obtaining those contracts as an expense when incurred.
The Company records contract assets for discounts provided to customers at the inception of a contract. Contract assets are
subsequently amortized against revenue on a systematic basis consistent with the term to which the contract asset relates.
Deferred revenue
Deferred revenue mainly comprises fees collected or contractually due for services in which the applicable revenue
recognition criteria have not been met. This balance will be recognized as revenue as the services are performed.
Cash and cash equivalents
Cash comprises cash on deposit at banks and on hand. The Company considers all short term highly liquid investments that
are readily convertible into known amounts of cash, with original maturities at their acquisition date of three months or less
to be cash equivalents.
Restricted cash
The Company can be required to hold a defined amount of cash as collateral under the terms of certain business
combination arrangements and lease agreements. Cash deposits held by the Company that have restrictions governing their
use are classified as restricted cash, current or long-term, based on the remaining length of the restriction.
Inventories
Inventories, consisting of hardware equipment only, are recorded at the lower of cost and net realizable value with cost
determined using the weighted average cost method. The Company provides an allowance for obsolescence based on
estimated product life cycles, usage levels and technology changes. Changes in these estimates are reflected in the
14
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
determination of cost of revenues. The amount of any impairment of inventories to net realizable value, and all losses on
inventories, are recognized as an expense in the year during which the impairment or loss occurs.
Deferred financing costs
The Company records deferred financing costs related to its credit facilities when it is probable that some or all of the
facilities will be drawn down. The deferred financing costs are amortized over the term of the related financing
arrangement. The long-term debt is recorded at amortized cost using the effective interest method, net of deferred financing
costs.
Research and development tax credits
Research and development costs are expensed as incurred, net of refundable investment tax credits. The Company’s
research and development costs consist primarily of salaries and other related personnel expenses. The Company
recognizes the benefit of refundable research and development investment tax credits as a reduction of research and
development and support costs, while non-refundable investment tax credits that can only be claimed against income taxes
otherwise payable are recognized as a reduction of income taxes when there is reasonable assurance that the claim will be
recovered.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is
calculated using the straight-line method over the estimated useful lives of the related assets. Furniture and equipment are
depreciated over five years, and computer equipment is depreciated over three years. Leasehold improvements are
depreciated on a straight-line basis over the shorter of their estimated useful lives or the term of their associated leases.
Leasehold improvements in progress are not depreciated until the related asset is ready for use.
Intangible assets
Acquired identifiable intangible assets
Intangible assets are stated at cost, less accumulated amortization and impairment losses, if any. Amortization is calculated
using the straight-line method over the estimated useful lives of the related assets. Software technologies that are acquired
through business combinations are amortized over three to five years, customer relationships acquired through business
combinations are amortized over three to six years and purchased software licenses are amortized over the term of the
license.
Internally generated intangible assets
The Company recognizes internal development costs as intangible assets only when the following criteria are met: the
technical feasibility of completing the intangible asset exists, there is an intent to complete and an ability to use or sell the
intangible asset, the intangible asset will generate probable future economic benefits, there are adequate resources available
to complete the development and to use or sell the intangible asset, and there is the ability to reliably measure the
expenditure attributable to the intangible asset during its development.
Impairment of long-lived assets
The Company evaluates its property and equipment and intangible assets with finite useful lives for impairment when
events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An
15
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other assets or groups of assets (cash-generating units or "CGUs").
Goodwill and impairment of goodwill
Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable assets of a
business acquired in a business combination. After initial recognition, goodwill is measured at cost less any accumulated
impairment losses, if any. For the purpose of impairment testing, goodwill acquired in a business combination is allocated
to the Company's operating segment (the "Segment"), which is the level at which management monitors goodwill.
The Company reviews the carrying value of goodwill in accordance with International Accounting Standard (IAS) 36,
Impairment of Assets, on an annual basis on December 31 or more frequently if events or a change in circumstances
indicate that it is more likely than not that the fair value of the goodwill is below its carrying amount. Impairment is
determined by assessing the recoverable amount of the Segment. The Segment's recoverable amount is the higher of the
Segment's fair value less costs of disposal and its value in use. A quantitative analysis was performed to determine the fair
value less costs of disposal. Note 17 discusses the method and assumptions used for impairment testing.
Business combinations
The Company follows the acquisition method to account for business combinations in accordance with IFRS 3, Business
Combinations. The acquisition method of accounting requires that assets acquired and liabilities assumed be recorded at
their estimated fair values on the date of a business acquisition. The excess of the purchase price over the estimated fair
value is recorded as goodwill.
The amounts included in the consolidated statements of loss and comprehensive loss under acquisition-related
compensation arise from business combinations made by the Company. Acquisition costs that are tied to continuing
employment of pre-existing shareholders are required to be recognized as acquisition-related compensation and recognized
in accordance with the vesting terms in the acquisition agreement. Consequently, those costs are not included in the total
purchase consideration of the business combination. Our share-based acquisition-related compensation follows the
guidance in IFRS 2, Share Based Payment. All other costs that are not eligible for capitalization related to the acquisition
are expensed as incurred.
New information obtained during the measurement period, up to 12 months following the acquisition date, about facts and
circumstances existing at the acquisition date affect the acquisition accounting. Upon the conclusion of the measurement
period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent
adjustments are recorded in the consolidated statements of loss and comprehensive loss.
Government assistance
Government assistance is recognized when there is reasonable assurance that it will be received and all related conditions
will be complied with. When the government assistance relates to an expense item, it is recognized as a reduction of
expense over the period necessary to match the government assistance on a systematic basis to the costs that it is intended
to subsidize.
16
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Income taxes
Current tax
The current tax payable is based on taxable income for the year. Taxable income differs from income as reported in the
consolidated statements of loss and comprehensive loss because of items of income or expense that are taxable or
deductible in other periods and items that are never taxable or deductible. The Company’s liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible
temporary differences to the extent that it is probable that taxable profits against which those deductible temporary
differences can be utilized will be available. Such deferred tax assets and liabilities are not recognized if the temporary
difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability
is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end
of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends
to settle its current tax assets and liabilities on a net basis.
Current and deferred tax
Current and deferred tax are recognized as an expense or income in net loss, except when they relate to items that are
recognized outside of net loss (whether in other comprehensive income (loss) or directly in deficit), in which case the tax is
also recognized outside of net loss.
Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.
Restructuring provisions are recognized when the Company has put in place a detailed restructuring plan which has been
communicated in sufficient detail to create a constructive obligation. Restructuring provisions include only costs directly
related to the restructuring plan, and are measured at the best estimate of the amount required to settle the Company's
obligations.
17
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
If the known expected settlement date exceeds 12 months from the date of recognition, provisions are discounted using a
current pre-tax interest rate that reflects the risks specific to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognized as a finance cost. Provisions are reviewed at the end of each reporting
period and adjusted as appropriate.
Leases
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company
assesses whether:
•
•
•
The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be
physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a
substantive substitution right, then the asset is not identified.
The Company has the right to obtain substantially all the economic benefits from the use of the asset throughout
the period of use; and
The Company has the right to direct the use of the asset. The Company has this right when it has the decision-
making rights that are most relevant to changing how and for what purpose the asset is used.
At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in
the contract to each lease component on the basis of their relative standalone price.
As a lessee
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received
prior to the commencement date.
The lease term is determined based on the non-cancellable period for which the Company has the right to use an underlying
asset. The lease term is adjusted, if applicable, for periods covered by extension and termination options to the extent that
the Company is reasonably certain to exercise them.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, which is considered the appropriate useful life of any such asset. In addition, the right-of-use asset is
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability, to the extent necessary.
The lease liability is initially measured at the present value of the lease payments, net of lease incentives receivables, that
are not paid at the commencement date, discounted using an incremental borrowing rate if the rate implicit in the lease
arrangement is not readily determinable.
Lease payments included in the measurement of the lease liability comprise fixed payments, including in-substance fixed
payments and variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date.
The lease liability is subsequently measured at amortized cost using the effective interest method. It is remeasured when
there is a change in future lease payments arising from a change in an index or rate, lease term, or if the Company changes
18
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
its assessment of whether it will exercise an extension or termination option. When the lease liability is remeasured in this
way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if
the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease
term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with
these leases as an expense on a straight-line basis over the lease term.
On the consolidated statement of cash flows, lease payments related to short-term leases, low value assets and variable
lease payments not included in lease liabilities are classified as cash flows used in operating activities, whereas the
remaining lease payments are classified as cash flows used in financing activities.
Equity incentive plans
The Company has multiple equity incentive plans and records all share-based payments at their respective fair values. The
Company recognizes share-based compensation expense over the vesting period of the tranche of awards being considered.
The fair value of stock options granted to employees is estimated at the date of grant using the Black-Scholes option
pricing model. The Company also estimates forfeitures at the time of grant and revises its estimate, if necessary, in
subsequent periods if actual forfeitures differ from these estimates. Any consideration paid by employees on exercising
stock options and the corresponding portion previously credited to additional paid-in capital are credited to share capital.
The Black-Scholes option pricing model used by the Company to calculate option values was developed to estimate the fair
value. This model also requires assumptions, including expected option life, volatility, risk-free interest rate and dividend
yield, which greatly affect the calculated values. Expected option life is determined using the time-to-vest-plus-historical-
calculation-from-vest-date method that derives the expected life based on a combination of each tranche’s time to vest plus
the actual or expected life of an award based on the past activity or remaining time to expiry on outstanding awards.
Expected volatility is determined using comparable companies for which the information is publicly available. The risk-
free interest rate is determined based on the rate at the time of grant and cancellation for zero-coupon Canadian government
securities with a remaining term equal to the expected life of the option. Dividend yield is based on the expected annual
dividend rate at the time of grant. Expected forfeiture is derived from historical forfeiture rates.
The fair value of options that contain market performance conditions is measured using the Monte Carlo pricing model to
estimate the Company's potential future share price. Market conditions are considered in the fair value estimate on the grant
date and this fair value is not revised subsequently.
The fair value of restricted share units ("RSUs"), deferred share units ("DSUs") and performance share units which include
non-market performance conditions ("PSUs") is measured using the fair value of the Company's shares as if the units were
vested and issued on the grant date. An estimate of forfeitures is applied when determining share-based compensation
expense as well as estimating the probability of meeting related performance conditions where applicable.
Employee benefits
The Company maintains defined contribution plans for which it pays fixed contributions to administered pension insurance
plans on a mandatory or contractual basis. The Company has no further payment obligations once the contributions have
been paid. Obligations for contributions to defined contribution pension plans are recognized as employee compensation as
the services are provided.
19
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Segment information
The Company’s Chief Operating Decision-Maker ("CODM") is the Chief Executive Officer. The CODM is the highest
level of management responsible for assessing Lightspeed’s overall performance and making operational decisions such as
resource allocations related to operations, product prioritization, and delegation of authority. Management has determined
that the Company operates in a single operating and reportable segment.
Loss per share
Basic loss per share is calculated by dividing net loss attributable to holders of the Company's Common Shares by the
weighted average number of Common Shares outstanding during the year. Diluted loss per share is calculated by dividing
net loss attributable to holders of the Company's Common Shares by the weighted average number of Common Shares
outstanding during the year, plus the effect of potentially-dilutive securities outstanding during the year. The Company
uses the treasury stock method to the extent that the effect is dilutive. As a result of net losses incurred, all potentially-
dilutive securities have been excluded from the calculation of diluted net loss per share because including them would be
anti-dilutive.
Financial instruments
Financial assets
Initial recognition and measurement
The Company’s financial assets comprise cash and cash equivalents, restricted cash, trade and other receivables, merchant
cash advances, foreign exchange forward contracts and other assets. All financial assets are recognized initially at fair
value, plus, in the case of financial assets that are not measured at fair value through profit and loss, transaction costs that
are attributable to the acquisition of the financial asset. Purchases and sales of financial assets are recognized on the
settlement date being the date that the Company receives or delivers the asset. Receivables are non-derivative financial
assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets
except for those with maturities greater than 12 months after the reporting period.
Subsequent measurement
Cash and cash equivalents, restricted cash, merchant cash advances and foreign exchange forward contracts are carried at
fair value with gains and losses recognized in the consolidated statements of loss and comprehensive loss.
Trade receivables are carried at amortized cost using the effective interest rate method. For information on impairment
losses on trade and other receivables, refer to the Impairment of financial assets section below.
Derecognition
Financial assets are derecognized when the rights to receive cash flows from the asset have expired or when the financial
assets are written off.
Impairment of financial assets
The Company assesses at each reporting date whether there is any evidence that its trade receivables are impaired. The
Company uses the simplified approach for measuring impairment for its trade receivables as these financial assets do not
have a significant financing component as defined under IFRS 15, Revenue from Contracts with Customers. Therefore, the
20
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Company does not determine if the credit risk for these instruments has increased significantly since initial recognition.
Instead, a loss allowance is recognized based on lifetime expected credit losses (“ECL”) at each reporting date. Impairment
losses and subsequent reversals are recognized in profit or loss and are the amounts required to adjust the loss allowance at
the reporting date to the amount that is required to be recognized based on the aforementioned policy. The Company has
established a provision matrix that is based on its historical credit loss experiences, adjusted for forward-looking factors
specific to the debtors and the economic environment. The carrying amount of the asset is reduced through the use of an
allowance account and the amount of the loss is recognized in the consolidated statements of loss and comprehensive loss.
Trade receivables are written off when there is no reasonable expectation of recovery.
Financial liabilities
Initial recognition and measurement
The Company’s financial liabilities comprise accounts payable and accrued liabilities, lease liabilities, other liabilities,
long-term debt and foreign exchange forward contracts. All financial liabilities except lease liabilities are recognized
initially at fair value. The Company assesses whether embedded derivative financial instruments are required to be
separated from host contracts when the Company first becomes party to the contract.
Subsequent measurements
After initial recognition, financial liabilities, excluding contingent consideration and foreign exchange forward contracts,
are subsequently measured at amortized cost using the effective interest method. The effective interest method amortization
is included as a finance cost in the consolidated statements of loss and comprehensive loss.
Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting date.
The Company accounts for contingent consideration as a financial liability measured at fair value through profit or loss and
subsequently re-measures fair value at the end of each reporting period. The fair value of the contingent consideration, if
above nil, is presented as a component of accounts payable and accrued liabilities as well as other long-term liabilities on
the consolidated balance sheets. The change in the fair value of the contingent consideration, if any, is recognized within
general and administrative expenses in the consolidated statements of loss and comprehensive loss.
Derecognition
Financial liabilities are derecognized when the obligation under the liability is discharged, cancelled, or expires. Gains and
losses are recognized in the consolidated statements of loss and comprehensive loss when the liabilities are derecognized.
Foreign exchange forward contracts
The Company designates certain foreign exchange forward contracts as cash flow hedges when all the requirements in
IFRS 9, Financial Instruments are met. The Company recognizes these foreign exchange forward contracts as either assets
or liabilities on the consolidated balance sheets and these contracts are measured at fair value at each reporting period. The
asset and liability positions of the foreign exchange forward contracts are included in other current assets and accounts
payable and accrued liabilities on the consolidated balance sheets, respectively. The Company reflects the gain or loss on
the effective portion of a cash flow hedge in other comprehensive income (loss) and subsequently reclassifies cumulative
gains and losses to direct cost of revenues, general and administrative, research and development, or sales and marketing
expenses, depending on the risk hedged, when the hedged transactions impact the consolidated statements of loss and
comprehensive loss. If the hedged transactions become probable of not occurring, the corresponding amounts in
21
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
accumulated other comprehensive income (loss) are immediately reclassified to finance income or costs. Foreign exchange
forward contracts that do not meet the requirements in IFRS 9, Financial Instruments to be designated as a cash flow
hedge, are classified as derivative instruments not designated for hedging. The Company measures these instruments at fair
value with changes in fair value recognized in finance income or costs. To date, the Company has not had any foreign
exchange forward contracts that do not meet the requirements in IFRS 9, Financial Instruments to be designated as a cash
flow hedge.
Foreign currency translation
Functional and presentation currency
The functional as well as the presentation currency of Lightspeed is the US dollar. Items included in the consolidated
financial statements of the Company are measured in the functional currency, which is the currency of the primary
economic environment in which the entity operates.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of
the transactions or when items are remeasured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the changes at period-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognized in the consolidated statements of loss and comprehensive loss.
Foreign operations
The results and financial position of all the Company entities that have a functional currency different from the presentation
currency are translated into US dollars as follows: assets and liabilities are translated at the closing rate at the reporting
date; income and expenses for each statement of operation are translated at average exchange rates; and all resulting
exchange differences are recognized in other comprehensive income (loss).
For foreign currency translation purposes, goodwill and fair value adjustments arising on the acquisition of a foreign
operation are treated as assets and liabilities of the operation and translated at the closing rate at each reporting date.
New accounting pronouncements
New accounting pronouncements are issued by the IASB or other standard-setting bodies, and they are adopted by the
Company as at the specified effective date.
New and amended standards and interpretations adopted by the Company
In August 2020, the IASB issued Interest Rate Benchmark Reform-Phase 2, which amends IFRS 9 Financial Instruments,
IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures and IFRS 16
Leases. The amendments focus on the effects on financial statements when a company replaces the old interest rate
benchmark with an alternative benchmark rate as a result of the reform. The amendments are effective for annual periods
beginning on or after January 1, 2021, with early application permitted. The Company has adopted these amendments as of
April 1, 2021. There was no impact on the Company's accounting policies or the consolidated financial statements as a
result of adopting such amendments. There were no other IFRS or IFRIC interpretations effective as of April 1, 2021 that
had a material impact on the Company's accounting policies or the consolidated financial statements.
22
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
New and amended standards and interpretations issued not yet effective
At the date of authorization of these financial statements, the Company has not yet applied the following new and revised
IFRS Standards that have been issued but are not yet effective.
The IASB has issued amendments to IAS 16 Property, Plant and Equipment to prohibit deducting from the cost of an item
of property, plant and equipment any proceeds from selling items produced before that asset is available for use. The
amendments also clarify the meaning of "testing whether an asset is functioning properly". The IASB also issued an
amendment to IAS 37 Provisions, Contingent Liabilities and Contingent Assets to clarify the cost of fulfilling a contract in
assessing whether a contract is onerous. The amendments to IAS 16 and IAS 37 are effective for annual periods beginning
on or after January 1, 2022, with early application permitted. The IASB has also issued amendments to IAS 1 Presentation
of Financial Statements affecting the presentation of liabilities as current or non-current in the statement of financial
position and requiring companies to disclose their material accounting policy information. It has also issued amendments to
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors clarifying how to distinguish changes in
accounting policies from changes in accounting estimates and amendments to IAS 12 Income Taxes requiring companies to
recognize deferred tax on particular transactions that, on initial recognition, give rise to equal amounts of taxable and
deductible temporary differences. The amendments to IAS 1, IAS 8 and IAS 12 are effective for annual periods beginning
on or after January 1, 2023, with early application permitted.
The Company does not expect that the adoption of the standards listed above will have a material impact on the financial
statements of the Company in future periods.
4. Significant accounting estimates and assumptions
Use of estimates
The preparation of the consolidated financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the amounts reported in the consolidated financial statements and
accompanying notes. Management reviews its estimates on an ongoing basis based on management’s best knowledge of
current events and actions that the Company may undertake in the future. Actual results could differ from those estimates.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future periods.
Key estimates and assumptions are as follows:
COVID-19
Concerns related to the spread of COVID-19 and variants of the COVID-19 virus and the related containment measures
intended to mitigate its impact have created substantial disruption in the global economy. The uncertainties around the
COVID-19 pandemic, continuing resurgences of COVID-19 and variants of the COVID-19 virus, and related restrictions to
contain its spread required the use of judgments and estimates which resulted in no material accounting impacts for the
fiscal year ended March 31, 2022, other than the impact on expected credit losses driven by the changes in the macro-
economic environment due to COVID-19. For information on the Company's loss allowance, refer to note 28. For the fiscal
year ended March 31, 2021, the Company received $8,121 with respect to renumeration of eligible employees pursuant to
government-sponsored COVID-19 wage subsidy programs globally (note 8).
23
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Revenue recognition
The identification of revenue-generating contracts with customers, the identification of performance obligations, the
determination of the transaction price and allocations between identified performance obligations, the use of the
appropriate revenue recognition method for each performance obligation and the measure of progress for performance
obligations satisfied over time are the main aspects of the revenue recognition process, all of which require the exercise of
judgment and use of assumptions.
The Company follows the guidance provided in IFRS 15, Appendix B, Principal versus Agent Considerations for
determining whether revenue should be recognized at the gross amount of consideration paid by the customer or the net
amount of consideration retained by the Company. This determination is a matter of judgment that depends on the facts and
circumstances of each arrangement.
Impairment of non-financial assets
The Company’s impairment test for goodwill is based on internal estimates of fair value less costs of disposal calculations
and uses valuation models such as the discounted cash flow model. Key assumptions on which management has based its
determination of fair value less costs of disposal include an estimated discount rate, terminal value multiple, and estimated
revenue growth rates. These estimates, including the methodology used, the assessment of CGUs and how goodwill is
allocated, can have a material impact on the respective values and ultimately the amount of any goodwill impairment. Refer
to note 17 for additional information on the assumptions used.
Whenever property and equipment, lease right-of-use assets, and intangible assets are tested for impairment, the
determination of the assets’ recoverable amount involves the use of estimates by management and can have a material
impact on the respective values and ultimately the amount of any impairment.
Business combinations
The Company follows the acquisition method to account for business combinations. The acquisition method of accounting
requires that assets acquired and liabilities assumed be recorded at their estimated fair values on the date of a business
acquisition. The excess of the purchase price over the estimated fair value is recorded as goodwill. Such valuations require
management to make significant estimates, assumptions, and judgments, especially with respect to intangible assets and
contingent consideration. For intangible assets, the Company develops the fair value by using appropriate valuation
techniques which are generally based on a forecast of the total expected future net discounted cash flows, and key
assumptions generally consist of the future performance of the related assets, the discount rate, the attrition rate, the royalty
rates, and the payments attach rate. Contingent consideration is measured at fair value using a discounted cash flow model.
Recoverability of deferred tax assets and current and deferred income taxes and tax credits
Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable
income. The Company establishes provisions based on reasonable estimates for possible consequences of audits by the tax
authorities. The amount of such provisions is based on various factors, such as experience of previous tax audits and
differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
Deferred income tax assets are recognized for unused tax losses and deductible temporary differences to the extent it is
probable that taxable income will be available against which the losses and deductible temporary differences can be
utilized. Management’s judgment is required to determine the amount of deferred income tax assets that can be recognized,
based upon the likely timing and the level of future taxable income together with future tax planning strategies.
24
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Share-based compensation
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the related
instruments at the date at which they are granted. Estimating fair value for share-based payments requires determining the
most appropriate valuation model for a grant, which depends on the terms and conditions of the grant. This also requires
making assumptions and determining the most appropriate inputs to the valuation model including the expected life of the
option, volatility and dividend yield. Refer to note 26 for additional information on the assumptions used.
5. Business combinations
Vend
On April 16, 2021, the Company acquired all of the outstanding shares of Vend, a cloud-based retail management software
company based in Auckland, New Zealand. The fair value of consideration of $371,869 consisted of $192,020 cash paid on
the closing date, net of cash acquired, and 2,692,277 Common Shares, at a fair value of $66.89 per share, which is based on
the quoted price of the Common Shares on the NYSE on the closing date.
Transaction costs relating to due diligence fees, legal costs, accounting fees, advisory fees and other professional fees for
the fiscal year ended March 31, 2021 amounting to $1,151 were incurred in relation to the acquisition, and $319 were
incurred for the fiscal year ended March 31, 2022. These amounts have been included in general and administrative
expenses in the Company's consolidated statements of loss and comprehensive loss.
The results of operations of Vend have been consolidated with those of the Company as at April 16, 2021. The acquisition
has been accounted for as a business combination in accordance with IFRS 3, Business Combinations, using the acquisition
method whereby the net assets acquired and the liabilities assumed are recorded at fair value. The purchase price allocation
was based on management’s best estimates of the fair values of Vend’s assets and liabilities as at April 16, 2021.
25
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The following table summarizes the allocations of the consideration paid and the amounts of estimated fair value of the
assets acquired and liabilities assumed at the acquisition date:
Current assets
Cash and cash equivalents
Trade receivables and other assets
Total current assets
Property and equipment
Goodwill
Customer relationships
Software technology
Other long-term assets
Total assets
Current liabilities
Accounts payable and accrued liabilities
Deferred revenue
Total current liabilities
Deferred tax liability
Total liabilities
Fair value of net assets acquired
Less: Cash acquired
Fair value of net assets acquired, less cash acquired
Paid in Common Shares of the Company
Paid in cash
Receivable from Vend (already received)
Fair value of consideration transferred
$
12,753
3,878
16,631
868
293,664
48,300
43,700
437
403,600
4,241
5,961
10,202
8,776
18,978
384,622
12,753
371,869
180,086
192,020
(237)
371,869
The goodwill related to the acquisition of Vend is composed of the benefits of increasing our strategic position by
expanding our market presence, expected synergies in utilizing Vend technology in the Company’s product offerings, and
integrating an assembled workforce that does not qualify for separate recognition. The goodwill is not deductible for tax
purposes.
The customer relationships of Vend and the software technology acquired are amortized on a straight-line basis over their
estimated useful life of 6 years and 5 years, respectively.
Right-of-use assets and lease liabilities of $2,761 were recorded by Lightspeed on the acquisition date of Vend.
NuORDER
On July 1, 2021, the Company acquired all of the outstanding shares of NuORDER, the provider of a digital platform that
connects businesses and suppliers. The fair value of consideration transferred of $384,053 consisted of $207,118 cash paid
on the closing date, net of cash acquired, and 2,143,393 Common Shares, at a fair value of $84.16 per share at the closing
date, which is based on the quoted price of the Common Shares on the NYSE on the closing date. The issuance of an
additional 500,629 Common Shares, at a fair value of $84.16 per share, is payable through July 2024 to certain employees
contingent on continued employment of those employees and is accounted for as acquisition-related compensation expense.
26
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Transaction costs relating to due diligence fees, legal costs, accounting fees and other professional fees for the fiscal year
ended March 31, 2022 amounting to $1,662 were incurred in relation to the acquisition. These amounts have been included
in general and administrative expenses in the Company's consolidated statements of loss and comprehensive loss.
The results of operations of NuORDER have been consolidated with those of the Company as at July 1, 2021. The
acquisition has been accounted for as a business combination in accordance with IFRS 3, Business Combinations, using the
acquisition method whereby the net assets acquired and the liabilities assumed are recorded at fair value. The preliminary
purchase price allocation was based on management’s best estimates of the fair values of NuORDER's assets and liabilities
as at the acquisition date.
The following table summarizes the preliminary allocations of the consideration paid and the amounts of estimated fair
value of the assets acquired and liabilities assumed at the acquisition date:
Current assets
Cash and cash equivalents
Accounts receivable and other assets
Total current assets
Property and equipment
Goodwill
Customer relationships
Software technology
Other long-term assets
Total assets
Current liabilities
Accounts payable and accrued liabilities
Deferred revenue
Total current liabilities
Deferred revenue
Other long-term liabilities
Deferred tax liability
Total liabilities
Fair value of net assets acquired
Less: Cash acquired
Fair value of net assets acquired, less cash acquired
Paid in Common Shares of the Company
Paid in cash
Receivable from NuORDER (already partially received)
Fair value of consideration transferred
$
32,698
3,379
36,077
310
300,516
56,500
48,200
598
442,201
5,080
6,737
11,817
379
249
13,005
25,450
416,751
32,698
384,053
180,388
207,118
(3,453)
384,053
The goodwill related to the acquisition of NuORDER is composed of the expected synergies in utilizing NuORDER
technology in the Company’s product offerings, the benefits of increasing our strategic position by expanding our market
presence, and integrating an assembled workforce that does not qualify for separate recognition. The goodwill is not
deductible for tax purposes.
27
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The customer relationships of NuORDER and the software technology acquired are amortized on a straight-line basis over
their estimated useful life of 6 years and 5 years, respectively.
Right-of-use assets and lease liabilities of $2,399 were recorded by Lightspeed on the acquisition date of NuORDER.
The allocation of the purchase price to assets acquired and liabilities assumed was based upon a preliminary valuation for
all items and may be subject to adjustment during the 12-month measurement period following the acquisition date given
that the assessment of the fair value of the intangible assets, goodwill, acquired assets, and assumed liabilities is still
ongoing.
Ecwid
On October 1, 2021, the Company acquired all of the outstanding shares of Ecwid, a California-based global eCommerce
platform provider. The fair value of consideration transferred that was not contingent on the continued services of certain
Ecwid personnel of $595,260 consisted of $161,922 cash paid on the closing date, net of cash acquired, and the issuance at
closing of 4,471,586 Common Shares, at a fair value of $98.18 per share at the closing date, which is based on the quoted
price of the Common Shares on the NYSE on the closing date.
The Company also issued 371,088 Common Shares at closing, at a fair value of $98.18 per share, to certain Ecwid
personnel, which Common Shares are subject to a right of buyback for nominal consideration in favour of the Company
contingent on the continued services of such personnel over the next two years and are accounted for as acquisition-related
compensation expense. An additional $12,805 in deferred cash consideration is payable, along with the future issuance of
41,410 Common Shares, at a fair value of $98.18 per share, to certain Ecwid personnel, which deferred cash consideration
and Common Shares are also contingent on the continued services of such personnel over the next two years and are
accounted for as acquisition-related compensation expense. In addition, a total of 49,875 restricted share units, at a fair
value of $98.18 per restricted share unit, were granted to certain Ecwid personnel as acquisition consideration contingent
on the continued services of such personnel over the next two years and were also accounted for as acquisition-related
compensation expense.
Transaction costs relating to due diligence fees, legal costs, accounting fees and other professional fees for the fiscal year
ended March 31, 2022 amounting to $3,278 were incurred in relation to the acquisition. These amounts have been included
in general and administrative expenses in the Company's consolidated statements of loss and comprehensive loss.
The results of operations of Ecwid have been consolidated with those of the Company as at October 1, 2021. The
acquisition has been accounted for as a business combination in accordance with IFRS 3, Business Combinations, using the
acquisition method whereby the net assets acquired and the liabilities assumed are recorded at fair value. The preliminary
purchase price allocation was based on management’s best estimates of the fair values of Ecwid's assets and liabilities as at
October 1, 2021.
28
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The following table summarizes the preliminary allocations of the consideration paid and the amounts of estimated fair
value of the assets acquired and liabilities assumed at the acquisition date:
Current assets
Cash and cash equivalents
Trade receivables and other assets
Total current assets
Property and equipment
Goodwill
Customer relationships
Software technology
Other long-term assets
Total assets
Current liabilities
Accounts payable and accrued liabilities
Income tax payables
Deferred revenue
Total current liabilities
Deferred tax liability
Total liabilities
Fair value of net assets acquired
Less: Cash acquired
Fair value of net assets acquired, less cash acquired
Paid in Common Shares of the Company
Paid in cash
Receivable from Ecwid (already partially received)
Fair value of consideration transferred
$
9,261
4,092
13,353
525
543,160
22,800
49,300
168
629,306
3,715
5,527
3,774
13,016
11,769
24,785
604,521
9,261
595,260
439,020
161,922
(5,682)
595,260
The goodwill related to the acquisition of Ecwid is composed of the expected synergies in utilizing Ecwid technology in
the Company’s product offerings, the benefits of increasing our strategic position by expanding our market presence, and
integrating an assembled workforce that does not qualify for separate recognition. The goodwill is not deductible for tax
purposes.
The customer relationships of Ecwid and the software technology acquired are amortized on a straight-line basis over their
estimated useful life of 5 years.
As part of the acquisition, the Company negotiated indemnifications for the income tax payables and certain other
liabilities assumed on acquisition totaling $5,660. The indemnification asset for these amounts are included in the
receivable from Ecwid.
The allocation of the purchase price to assets acquired and liabilities assumed was based upon a preliminary valuation for
all items and may be subject to adjustment during the 12-month measurement period following the acquisition date given
that the assessment of the fair value of the intangible assets, goodwill, acquired assets, and assumed liabilities is still
ongoing.
29
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The amounts of revenues contributed by Vend, NuORDER and Ecwid from the dates of acquisition and included in the
Company's consolidated statements of loss and comprehensive loss for the fiscal year ended March 31, 2022 is $76,107.
The purchase price allocations of ShopKeep and Upserve were finalized during the fiscal year ended March 31, 2022.
6. Revenues
The disaggregation of the Company’s revenue was as follows:
Subscription revenue
Transaction-based revenue
Hardware and other revenue
Total revenues
The Company discloses revenue by geographic area in note 30.
Contract assets
2022
$
2021
$
248,430
119,323
264,044
35,898
82,951
19,454
548,372
221,728
The amount of amortization of commission assets recognized as sales and marketing expense in the fiscal year ended
March 31, 2022 is $8,138 (2021 – $6,183).
The Company recorded a contract asset for discounts provided to customers at the inception of a contract of $4,139
included in other current assets and $5,591 included in other long-term assets as at March 31, 2022, with $3,679 being
amortized into subscription revenue and transaction-based revenue for the fiscal year ended March 31, 2022 (2021 –
$1,631 and $2,238 with $736 being amortized, respectively).
Contract liabilities
Revenue recognized that was included in the deferred revenue balance at the beginning of the years ended March 31, 2022
and 2021 is $43,116 and $36,622, respectively.
7. Direct cost of revenues
Subscription cost of revenue
Transaction-based cost of revenue
Hardware and other cost of revenue
Total direct cost of revenues
2022
$
72,192
159,432
45,575
2021
$
31,756
42,626
19,677
277,199
94,059
Subscription cost of revenue consists of support services provided by the Company to its customers and mostly consists of
employee expenses and amounts paid to our third-party cloud service providers. Transaction-based cost of revenue consists
of direct costs related to payment processing services, and employee expenses. Hardware and other cost of revenue consists
30
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
of costs associated with our hardware solutions, expenses related to implementation services provided to customers, and
employee expenses.
Inventories expensed during fiscal the year ended March 31, 2022 in direct cost of revenues amount to $35,832 (2021 –
$17,234).
8. Government grants and subsidies
Government assistance recognized as a reduction of expenses is as follows:
Direct cost of revenues
General and administrative
Research and development
Sales and marketing
Total government assistance
2022
$
1,144
545
2,692
358
2021
$
1,651
2,055
5,871
3,851
4,739
13,428
Government assistance includes research and development tax credits, grants, government subsidies due to COVID-19 and
other incentives.
9. Employee compensation
The total employee compensation comprising salaries and benefits, excluding government assistance, for the fiscal year
ended March 31, 2022, was $341,851 (2021 - $169,809).
Share-based compensation and related costs were included in the following expenses:
Direct cost of revenues
General and administrative
Research and development
Sales and marketing
2022
$
6,345
26,377
29,705
46,639
2021
$
3,231
11,123
10,941
19,460
Total share-based compensation and related costs
109,066
44,755
Included in the share-based compensation and related costs in the sales and marketing expense for the fiscal year ended
March 31, 2022 was $10,801 for PSUs issued to the founders of NuORDER, with each tranche being tied to the continuing
employment of the founders and, for applicable tranches, certain performance criteria being achieved.
The amount recognized as an expense for the fiscal year ended March 31, 2022 for our defined contribution plans was
$4,264 (2021 - $1,436).
31
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
10. Finance income and costs
Interest income
Interest expense
Net interest income (expense)
11. Loss per share
2022
$
5,855
(2,867)
2021
$
2,544
(2,897)
2,988
(353)
The Company has stock options and share awards as potentially-dilutive securities. Diluted net loss per share excludes all
potentially-dilutive shares if their effect is anti-dilutive. As a result of net losses incurred, all potentially-dilutive securities
have been excluded from the calculation of diluted net loss per share because including them would be anti-dilutive;
therefore, basic and diluted number of shares is the same for the years ended March 31, 2022 and 2021. All outstanding
potentially dilutive securities could potentially dilute loss per share in the future.
Issued Common Shares
Weighted average number of Common Shares (basic and diluted)
Net loss per share – basic and diluted
2022
2021
148,661,312 128,528,515
141,580,917 105,221,907
($2.04)
($1.18)
The weighted average number of potential dilutive securities that are not included in the diluted per share calculations
because they would be anti-dilutive was 10,515,666 stock options and share awards for the year ended March 31, 2022
(2021 - 7,934,988).
12. Other current assets
Restricted cash and restricted deposits
Prepaid expenses and deposits
Commission asset
Other
Total other current assets
2022
$
1,531
20,478
8,959
4,567
2021
$
7,749
10,458
4,000
1,964
35,535
24,171
32
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
13. Trade and other receivables
Trade
Loss allowance
Total trade receivables
Research and development tax credits receivable
Sales tax receivable
Merchant cash advances
Acquisition-related receivables
Total trade and other receivables
14. Leases
2022
$
2021
$
22,894
(3,043)
15,477
(3,519)
19,851
11,958
4,195
6,323
6,300
9,097
6,605
2,827
2,309
1,072
45,766
24,771
The Company leases certain properties under non-cancellable lease agreements that relate to office spaces and vehicles.
The remaining lease terms are between one and eight years.
The roll-forward of lease right-of-use assets is as follows:
Cost
Balance - Beginning of fiscal year
Additions
Acquired in business combinations
Modifications to and disposals of lease contracts
Exchange differences
Balance - End of fiscal year
Accumulated depreciation
Balance - Beginning of fiscal year
Depreciation charge
Modifications to and disposals of lease contracts
Exchange differences
Balance - End of fiscal year
Cost, net accumulated depreciation
Balance - Beginning of fiscal year
Balance - End of fiscal year
Offices
Vehicles
2022
$
27,054
6,934
5,160
(1,863)
(284)
37,001
5,848
7,743
(2,071)
(58)
11,462
21,206
25,539
24,655
884
2021
$
18,403
5,255
7,439
(4,373)
330
27,054
2,446
3,876
(544)
70
5,848
15,957
21,206
20,355
851
33
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The maturity analysis of lease liabilities as at March 31, 2022 is as follows:
Fiscal Year
2023
2024
2025
2026
2027
2028 and thereafter
Total minimum payments
$
7,633
6,032
5,165
3,583
2,395
5,862
30,670
Expenses relating to short-term leases, including those excluded due to the election of the practical expedient, as well as
variable lease payments not included in the measurement of lease liabilities, were approximately $3,455 for the fiscal year
ended March 31, 2022 (2021 - $2,000). The interest expense for the fiscal year ended March 31, 2022 was $1,204 (2021 -
$1,048).
15. Property and equipment
2022
Cost
Furniture Equipment
$
$
Computer
equipment
$
Leasehold
improvements
$
As at March 31, 2021
Additions
Acquired through business combinations
Disposals
As at March 31, 2022
Accumulated depreciation
As at March 31, 2021
Depreciation
Disposals
As at March 31, 2022
2,177
1,759
19
308
(190)
2,314
461
—
(245)
1,975
1,004
1,181
612
(190)
406
(245)
1,426
1,342
6,460
3,564
1,122
(1,949)
9,197
4,441
2,722
(1,949)
5,214
7,451
7,360
273
(1,532)
13,552
2,879
1,253
(1,532)
2,600
Total
$
17,847
11,404
1,703
(3,916)
27,038
9,505
4,993
(3,916)
10,582
Net book value as at March 31, 2022
888
633
3,983
10,952
16,456
34
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
2021
Cost
Furniture Equipment
$
$
Computer
equipment
$
Leasehold
improvements
$
Total
$
As at March 31, 2020
Additions
Acquired through business combinations
As at March 31, 2021
Accumulated depreciation
As at March 31, 2020
Depreciation
As at March 31, 2021
1,848
1,754
15
314
5
—
2,177
1,759
763
241
1,031
150
1,004
1,181
Net book value as at March 31, 2021
1,173
578
4,620
1,259
581
6,460
3,355
1,086
4,441
2,019
6,793
15,015
412
246
1,691
1,141
7,451
17,847
1,877
1,002
2,879
4,572
7,026
2,479
9,505
8,342
16. Intangible assets
2022
Cost
As at March 31, 2021
Acquired through business combinations
Exchange differences
As at March 31, 2022
Accumulated amortization
As at March 31, 2021
Amortization
Exchange differences
As at March 31, 2022
Acquired
software
technologies
$
Customer
relationships
$
Total
$
72,884
220,090
292,974
141,200
127,600
268,800
(503)
(1,734)
(2,237)
213,581
345,956
559,537
30,640
36,700
(65)
27,841
55,112
(259)
58,481
91,812
(324)
67,275
82,694
149,969
Net book value as at March 31, 2022
146,306
263,262
409,568
35
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
2021
Cost
As at March 31, 2020
Acquired through business combinations
Exchange differences
As at March 31, 2021
Accumulated amortization
As at March 31, 2020
Amortization
Exchange differences
As at March 31, 2021
Net book value as at March 31, 2021
17. Goodwill
Acquired
software
technologies
$
Customer
relationships
$
Total
$
39,591
31,700
1,593
50,470
90,061
165,499
197,199
4,121
5,714
72,884
220,090
292,974
19,974
10,242
424
7,268
19,886
687
27,242
30,128
1,111
30,640
27,841
58,481
42,244
192,249
234,493
As at March 31, 2021, the goodwill balance was $971,939 and increased to $2,104,368 as at March 31, 2022 due to an
increase of $293,664 arising from the Vend acquisition, $300,516 from the NuORDER acquisition and $543,160 from the
Ecwid acquisition, and an exchange difference of $4,911.
Impairment analysis
The Company completed its annual impairment test of goodwill as of December 31, 2021 using a fair value less costs of
disposal model. There were no indicators of impairment between December 31, 2021, the date on which the Company
completed its annual impairment test of goodwill, and March 31, 2022. Tests performed on the Segment, as defined in note
3, demonstrated no impairment of goodwill for the years ended March 31, 2022 and 2021.
The following key assumptions were used to determine recoverable amount for the impairment test performed during the
year ended March 31, 2022:
Assumptions
Pre-Tax
Discount Rate
Terminal
Value Multiple
Revenue
Growth Rate
30 %
8
32 %
Fair value is based on a discounted cash flow model involving several key assumptions that were used in the test for
goodwill impairment. Adjusted EBITDA was determined as a valuation basis, measuring a five-year projection based on
actual year-end amounts and management’s best estimates. A terminal value was calculated based on revenues, with a
weighted average cost of capital reflecting the current market assessment being used. The costs to sell were assumed to be
36
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
2.5% of the fair value amount. The carrying value of the Segment was compared with the fair value less cost of sale to test
for impairment.
No reasonably possible change in the key assumptions used in determining the recoverable amount would result in any
impairment of goodwill.
The Company reassessed its key assumptions as at March 31, 2022. The Terminal Value Multiple would have been
reduced from 8 to 5 which would not result in a change to the conclusion that there is no impairment of goodwill.
18. Other long-term assets
Restricted cash
Prepaid expenses and deposits
Commission asset
Contract asset
Total other-long term assets
19. Accounts payable and accrued liabilities
Trade
Accrued compensation and benefits
Accrued payroll taxes on share-based compensation
Acquisition-related payables
Other
2022
$
260
5,945
9,604
5,591
2021
$
1,325
2,707
5,234
2,238
21,400
11,504
2022
$
39,245
25,238
3,594
5,527
4,703
2021
$
22,085
20,409
5,689
13,792
3,077
Total accounts payable and accrued liabilities
78,307
65,052
20. Credit facility
The Company has credit facilities with the Canadian Imperial Bank of Commerce (“CIBC”), which include a $25,000
demand revolving operating credit facility (the “Revolver”) and a $50,000 stand-by acquisition term loan, $20,000 of
which is uncommitted (the “Acquisition Facility”, and together with the Revolver, the “Credit Facilities”). The Revolver is
available for draw at any time during the term of the Credit Facilities. The Acquisition Facility was drawn for $30,000 in
January 2020 for the acquisition of Gastrofix and will mature 60 months thereafter. The interest rate on the current
Acquisition Facility is equal to LIBOR +3%.
37
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Financial regulatory authorities have announced a transition away from IBORs towards alternative risk-free rates. Since the
Acquisition Facility is based on LIBOR + 3% and the IBOR transition will result in the end of the oversight of this
benchmark interest rate, the contractual terms of the Acquisition Facility are expected to be amended with an alternative
benchmark. While no replacement rate has been agreed to as of yet, the Company is currently exploring its options
regarding alternative benchmarks. The LIBOR benchmark used for the Acquisition Facility is expected to come to an end
as of June 30, 2023.
The financing costs related to the Credit Facilities are netted against the principal and are being amortized over the 60-
month term. The Credit Facilities are subject to certain general and financial covenants, including the delivery of annual
audited consolidated financial statements to the holders. The Credit Facilities are secured by all material assets of the
Company. The Company was in compliance with covenants as at March 31, 2022.
21. Share capital
As at March 31, 2022, the Company had 148,661,312 Common Shares issued and outstanding, unlimited shares authorized
(2021 – 128,528,515).
The Company’s authorized share capital consists of (i) an unlimited number of Subordinate Voting Shares and (ii) an
unlimited number of preferred shares, issuable in series.
Common Shares
The Common Shares consist of Subordinate Voting Shares with no par value. The holders of outstanding Common Shares
are entitled to one vote per share and are entitled to receive dividends at such times and in such amounts and form as the
Board may from time to time determine, but subject to the rights of the holders of any preferred shares.
Preferred Shares
The preferred shares are issuable at any time and from time to time in one or more series. The Board is authorized to fix
before issue the number of, the consideration per share of, the designation of, and the provisions attaching to, the preferred
shares of each series, which may include voting rights, the whole subject to the issue of a certificate of amendment setting
forth the designation and provisions attaching to the preferred shares or shares of the series.
Fiscal 2022
New Issue Offering
On August 11, 2021, the Company completed a public offering of Subordinate Voting Shares in the United States and
Canada through the issuance of new shares. The public offering consisted of an aggregate of 8,855,000 Subordinate Voting
Shares, including the exercise in full by the underwriters of their over-allotment option on August 13, 2021, to purchase
1,155,000 additional Subordinate Voting Shares. The Subordinate Voting Shares were issued from treasury for gross
proceeds of $823,515 for the Company, with share issuance costs (including the underwriters' fee and other expenses
related to the offering) for the Company amounting to $33,042.
38
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Fiscal 2021
Initial Public Offering on the New York Stock Exchange
On September 15, 2020, the Company completed an initial public offering on the NYSE and issued 10,896,196
Subordinate Voting Shares for a total gross consideration of $332,334, including 896,196 Subordinate Voting Shares
issued upon the partial exercise of the underwriters’ over-allotment option which accounted for total gross consideration of
$27,334. Share issuance costs amounted to $18,044. A secondary sale of 2,142,808 Subordinate Voting Shares by certain
shareholders was also made on the same day for gross consideration of $65,356, with the underwriting fees relating to their
shares being paid by the selling shareholders. This secondary sale included the conversion of 238,456 Multiple Voting
Shares into Subordinate Voting Shares.
Automatic Conversion of Multiple Voting Shares
The Company previously had Multiple Voting Shares issued and outstanding, but all such Multiple Voting Shares were
automatically converted into Subordinate Voting Shares on a one-for-one basis on December 1, 2020 as a result of reaching
the automatic conversion ownership threshold attached to the Multiple Voting Shares, all in accordance with their terms.
As a result of such automatic conversion, the Subordinate Voting Shares are the Company’s only class of shares issued and
outstanding, and they continue to carry one vote per share. Pursuant to the terms of the Company’s restated articles of
incorporation, upon the automatic conversion of all of its issued and outstanding Multiple Voting Shares, the authorized
and unissued Multiple Voting Shares as a class were automatically deleted entirely from the Company’s authorized capital,
together with the rights, privileges, restrictions and conditions attaching thereto, such that as at March 31, 2021, the
Company has only two classes of shares authorized for issuance, being the Subordinate Voting Shares and the preferred
shares.
New Issue and Secondary Offering
On February 12, 2021, the Company completed a marketed public offering of Subordinate Voting Shares in the United
States and Canada through the issuance of new shares and a sale of shares held by certain shareholders, including
DHIDasilva Holdings Inc. (a company controlled by our founder and Executive Chair) and certain members of
management. The marketed public offering consisted of an aggregate of 9,660,000 Subordinate Voting Shares, including
the exercise in full by the underwriters of their over-allotment option to purchase 1,260,000 additional Subordinate Voting
Shares. A total of 8,860,000 Subordinate Voting Shares were issued from treasury for gross proceeds of $620,200 for the
Company, with share issuance costs (including the underwriters' fee and other expenses related to the offering) for the
Company amounting to $26,202. A sale of 800,000 Subordinate Voting Shares by DHIDasilva Holdings Inc. and certain
members of management was also made on the same day for gross proceeds of $56,000, with the underwriting fees relating
to their shares being paid by the selling shareholders.
39
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
22. Accumulated other comprehensive income
Foreign currency
differences on
translation of foreign
operations
2022
$
2021
$
Balance - Beginning of fiscal year
9,715
(6,271)
Other comprehensive income (loss)
(7,061)
15,986
Balance - End of fiscal year
2,654
9,715
23. Income taxes
Income tax expense (recovery) includes the following components:
Current
United States
Europe
Other
Deferred
Canada
United States
Europe
New Zealand
Other
Hedging reserve
2022
2021
$
—
23
23
$
—
—
—
Total accumulated
other comprehensive
income (loss)
2022
$
2021
$
9,715
(6,271)
(7,038)
15,986
2,677
9,715
2022
$
2021
$
1,225
(138)
16
1,103
(11)
(22,038)
(1,229)
(4,746)
—
(28,024)
33
140
(7)
166
(55)
(61)
(3,883)
—
(1,959)
(5,958)
Total income tax recovery
(26,921)
(5,792)
The income tax expense (recovery) reported, which includes foreign taxes, differs from the amount of the income tax
expense (recovery) computed by applying Canadian statutory rates as follows:
40
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Loss before income taxes
Statutory tax rate
Income tax recovery at the statutory tax rate
Impact of rate differential of foreign jurisdiction
Non-deductible share-based compensation and related costs
Acquisition-related compensation and transaction costs
Other non-deductible expenses (credits) and non-taxable amounts
Changes in unrecognized benefits of deferred tax assets
Impact of foreign exchange and other
Total income tax recovery
2022
$
2021
$
(315,354)
(130,070)
26.5 %
26.5 %
(83,589)
(34,486)
7,078
20,208
1,480
(496)
27,972
426
1,570
9,257
5,080
590
11,403
794
(26,921)
(5,792)
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s
deferred tax assets and liabilities are as follows:
Deferred tax assets
Property and equipment
Non-capital losses carried forward
Lease liabilities
Deferred revenue
Interest expenses carried forward
Others
Total deferred tax assets
Deferred tax liabilities
Property and equipment
Intangible assets
Lease right-of-use assets
Other
Total deferred tax liabilities
Net deferred tax liabilities
As presented on the consolidated balance sheets:
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
2022
$
2,402
78,292
6,354
1,217
5,852
6,338
2021
$
2,115
41,308
6,073
1,011
5,188
2,288
100,455
57,983
(299)
(97,647)
(5,140)
(4,048)
(54)
(50,476)
(5,000)
(3,639)
(107,134)
(59,169)
(6,679)
(1,186)
154
170
(6,833)
(1,356)
(6,679)
(1,186)
41
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
2022
Deferred tax assets (liabilities) continuity
Property and equipment
Intangible assets
Lease liabilities
Lease right-of-use assets
Non-capital losses carried forward
Deferred revenue
Interest expenses carried forward
Other
Balance as
at March 31,
2021
$
Charged
(credited) to
consolidated
statement of
loss
$
Business
acquisitions
and other
$
Balance as
at March 31,
2022
$
2,061
(50,476)
6,073
(5,000)
41,308
1,011
5,188
(1,351)
75
22,042
5
86
3,439
206
664
1,507
(33)
(69,213)
276
(226)
33,545
—
—
2,134
2,103
(97,647)
6,354
(5,140)
78,292
1,217
5,852
2,290
Net deferred tax liabilities
(1,186)
28,024
(33,517)
(6,679)
2021
Deferred tax assets (liabilities) continuity
Property and equipment
Intangible assets
Lease liabilities
Lease right-of-use assets
Non-capital losses carried forward
Deferred revenue
Interest expenses carried forward
Other
Balance as
at March 31,
2020
$
Charged
(credited) to
consolidated
statement of
loss
$
Business
acquisitions
and other
$
Balance as
at March 31,
2021
$
1,696
(15,403)
3,557
(3,226)
8,159
—
—
(1,252)
321
7,191
2,516
(1,774)
(1,290)
—
2,649
(3,655)
44
(42,264)
—
—
34,439
1,011
2,539
3,556
2,061
(50,476)
6,073
(5,000)
41,308
1,011
5,188
(1,351)
Net deferred tax liabilities
(6,469)
5,958
(675)
(1,186)
The Company has accumulated other deductible temporary differences of $60,237 (2021 – $46,412) for Canadian tax
purposes for which no deferred tax asset is recognized.
The Company has accumulated research and development expenditures of $15,456 (2021 – $13,508) for Canadian federal
income tax purposes. These expenditures are available to reduce future taxable income and have an unlimited carryforward
period.
42
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Non-capital loss carryforwards
Canada
Belgium
Netherlands
United States
Germany
Switzerland
New Zealand
United Kingdom
Australia
Calendar
year in
which the
losses begin
to expire
2022
$
2021
$
151,096
41,928
38,213
366,680
21,289
36,139
57,366
9
8,569
73,737
40,383
31,105
236,149
21,219
13,042
—
—
5,367
2034
No expiry
2024
2035
No expiry
2023
No expiry
No expiry
No expiry
Total non-capital loss carryforwards
721,289
421,002
As at March 31, 2022, the Company and its subsidiaries have non-capital losses of $394,067 (2021 - $253,813) available to
reduce future taxable income for which the benefits have not been recognized. From this amount, $226,403 (2021 -
$185,666) expires from calendar year 2023 to 2041, while $167,664 (2021 - $68,147) has no expiry date.
We have identified additional financing costs related to Fiscal 2021 that are deductible for tax purposes and were not
previously disclosed. As a result, we have revised amounts previously disclosed in the income tax note for accumulated
deductible temporary differences for Canadian tax purposes from $13,272 to $46,412, and Canadian non-capital loss
carryforwards from $65,452 to $73,737.
In addition, we have identified additional share-based payments related to Fiscal 2021 that are deductible for tax purposes
and were not previously disclosed. As a result, we have revised amounts previously disclosed in the income tax note for
United States non-capital loss carryforwards from $209,422 to $236,149.
The cumulative impact of the additional financing costs and deductible share-based payments impacted the non-capital
losses available to reduce future taxable income for which the benefits have not been recognized from $218,801 to
$253,813. In addition, we have updated the amount of non-capital losses with an expiration period from $177,381 to
$185,666 and the amount of non-capital losses without expiration from $41,420 to $68,147.
Government assistance
The Company incurred research and development expenditures and e-business development expenses which are eligible for
tax credits. The tax credits recorded are based on management’s estimate of amounts expected to be recovered and are
subject to audit by the taxation authorities and, accordingly, these amounts may vary. For the fiscal year ended March 31,
2022, the Company recorded a Canadian provision for refundable tax credits of $3,933 (2021 – $3,146). This amount has
been recorded as a reduction of research and development and e-business development expenditures for the year.
As at March 31, 2022, the Company has available Canadian federal non-refundable investment tax credits of $2,548
(2021 – $2,230) related to research and development expenditures which may be used to reduce Canadian federal and
provincial income taxes payable in future years. These non-refundable investment tax credits begin to expire in calendar
43
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
year 2033. The Company also has a non-refundable e-business tax credit of $3,772 (2021 – $2,857) expiring on various
dates starting in calendar year 2035.
The benefits of these non-refundable investment tax credits have not been recognized.
24. Commitments
Obligations under leases
Refer to note 14 for the maturity analysis of lease liabilities as at March 31, 2022.
In addition to the obligations under lease liabilities, the Company is subject to short-term leases and variable lease
payments. The total amount of these payments over the next five years, as at March 31, 2022, is $8,000.
Commitments
In addition to the obligations under leases, the Company is subject to various non-cancelable service agreements with
minimum spend commitments.
The amount of the minimum fixed and determinable portion of the material unconditional purchase obligations over the
next five years, as at March 31, 2022, is $32,730 with payment processors and $60,579 with service providers.
25. Contingencies and Provisions
Contingencies
Beginning in October 2021, the Company and certain of the Company's officers and directors were named as defendants to
an application for authorization to bring a securities class action filed before the Superior Court of Quebec, and the
Company and certain of the Company's officers and directors were named as defendants in a securities class action brought
in U.S. district court for the Eastern District of New York (a separate action brought in the Southern District of New York
was voluntarily dismissed after a lead plaintiff was appointed in the Eastern District of New York action). The application
and action are sought on behalf of purchasers of our Common Shares, and are based upon allegations that the defendants
made false and/or misleading statements to the public and seek unspecified damages. The Company and management
intend to vigorously defend against each of these proceedings.
On October 22, 2021, CloudofChange, LLC, a non-practising entity, filed a patent infringement lawsuit against the
Company in the Western District of Texas. The patents at issue in the suit include U.S. Patents Nos. 9,400,640, 10,083,012
and 11,226,793. These patents generally relate to web-based point of sale builder systems. The Company and management
intend to vigorously defend against the action.
Based on the preliminary nature of the proceedings in the above mentioned matters, the outcomes remain uncertain and
have not been provisioned for.
44
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
Provisions
A provision of $1,775 is included in accounts payable and accrued liabilities as disclosed in note 19 in respect of the
settlement of a threatened litigation against one of the Company’s subsidiaries. Lightspeed was indemnified against the
potential liability resulting therefrom as part of the acquisition of the subsidiary and the full potential amount of such
liability was recovered as part of an indemnification payment received by the Company during the fiscal year ended
March 31, 2022.
The Company settled a provision of $1,487 during the fiscal year ended March 31, 2022 in respect of a litigation matter
settled without any admission of wrongdoing by the Company. The Company was partially insured against potential
liability in the matter and received an insurance payment of $516 during the fiscal year ended March 31, 2022. The
settlement amount paid, net of the insurance payment received, was recognized within general and administrative expenses
in the consolidated statements of loss and comprehensive loss.
The Company is involved in other litigation and claims in the normal course of business. Management is of the opinion that
any resulting provisions and ultimate settlements would not materially affect the financial position and operating results of
the Company.
Restructuring
During the fiscal year ended March 31, 2022, the Company announced a restructuring plan for its operations. The
restructuring expense consists entirely of costs related to terminations of employment for a total of $803 as at March 31,
2022 (2021 - $1,760).
26. Share-based compensation (numbers of shares and awards are presented in per share and per award amounts)
In 2012, the Company established the 2012 option plan (which was amended in 2015, 2019 and 2021) (the “2012 Legacy
Option Plan”). In 2016, in connection with the grant of options to two senior executives of the Company, the Company
established the 2016 option plan (which was amended in 2019) (the “2016 Legacy Option Plan” and, together with the
2012 Legacy Option Plan, the “Legacy Option Plans”). Employee stock option grants under the Legacy Option Plans
generally vest as to 25% a year annually over four years and have a term of seven years. In connection with the Company's
initial public offering in Canada (the "IPO"), the Legacy Option Plans were amended such that outstanding options granted
thereunder are exercisable for Common Shares and no further awards can be made under the Legacy Option Plans.
In connection with the IPO, an omnibus incentive plan (as amended and restated, the “Omnibus Incentive Plan”) was
adopted. The Omnibus Incentive Plan was amended and restated in November 2019 to give effect to certain housekeeping
amendments. The Omnibus Incentive Plan was amended and restated in September 2020 to convert such plan from a "fixed
plan" to a "rolling plan", whereby the maximum number of Common Shares of the Company which may be reserved and
set aside for issuance under such plan and the Legacy Option Plans were changed from a fixed number of Common Shares
to a maximum aggregate number of Common Shares equal to 15% of all Common Shares issued and outstanding from time
to time on a non-diluted basis. On that basis, as at March 31, 2022, the maximum number of Common Shares available
under the Omnibus Incentive Plan and the Legacy Option Plans was 22,299,196. In February 2021, the Omnibus Incentive
Plan was updated to amend certain definitions.
The Omnibus Incentive Plan allows the Board to grant long-term equity-based awards to eligible participants in the form of
stock options, RSUs, DSUs, and PSUs. All options granted under the Omnibus Incentive Plan have an exercise price
determined and approved by the Board at the time of grant, which cannot be less than the market price of a Common Share
on the date of the grant. Employee stock options under the Omnibus Incentive Plan generally vest as to 25% on the first
anniversary of the grant date and then monthly thereafter for 36 months until fully vested or monthly for 48 months until
45
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
fully vested, are granted with a term of seven years and settled via the issuance of new Common Shares upon exercise. In
some instances, the Company has granted stock options with other non-standard vesting schedules. A portion of stock
option grants under the Omnibus Incentive Plan vest as to 20% on the first anniversary, 25% on the second and third
anniversaries and 30% on the fourth anniversary of the grant date.
Each RSU, DSU and PSU evidences the right to receive one Common Share (issued from treasury or purchased on the
open market), cash based on the value of a Common Share or a combination thereof at some future time. RSUs under the
Omnibus Incentive Plan generally vest as to 30% either on the first anniversary of the grant date or spread over each of the
first four quarterly anniversaries of the grant date, followed in either case by eight equal quarterly tranches until fully
vested. In some instances, the Company has granted RSUs with other non-standard vesting schedules. PSU vesting is
conditional on the attainment of specified performance metrics determined by the Board. RSUs and PSUs must be settled
before the date that is three years after the last day of the calendar year in which the performance of services for which the
RSUs or PSUs were granted, occurred. DSUs generally vest on the grant date and must be settled after the termination date
of the holder, but prior to the last day of the calendar year following such termination date. Each of RSUs, DSUs and PSUs
may be settled via the issuance of shares, cash or a combination thereof at the discretion of the Board.
In connection with the acquisition of ShopKeep, the Company assumed the ShopKeep Plan. The assumed options were
converted based on the option exchange ratio calculated in accordance with the definitive merger agreement into options to
purchase the Company's Common Shares with corresponding adjustments made to (i) the number of shares issuable upon
exercise of each assumed option and (ii) the exercise price of each such assumed option. A total of 1,226,214 Common
Shares were reserved under the ShopKeep Plan. Immediately prior to the acquisition of ShopKeep, the ShopKeep Plan was
amended such that outstanding options granted thereunder are exercisable for Common Shares and no further awards can
be made under the ShopKeep Plan.
The Company has also made grants of stock options and RSUs without shareholder approval in compliance with an
allowance under the rules of the TSX as inducements for executive officers to enter into contracts of full-time employment
with the Company. The terms of such grants generally align with the terms governing grants of comparable awards under
the Omnibus Incentive Plan, though a separate share reserve is maintained for issuance in connection with the exercise or
settlement of such awards.
The Company has also made grants of long-term, multi-year performance-based stock options to its newly appointed Chief
Executive Officer, and its newly promoted Chief Operating Officer and Chief Financial Officer. Such options will vest
over an approximately 5-year time period and only upon achievement of predetermined performance criteria. The options
were granted in accordance with the Omnibus Incentive Plan, with the exercise price determined and approved by the
Board at the time of grant, which exercise prices were not less than the fair market price of a Common Share on the date of
grant. The options have a term of seven years and are settled via the issuance of Common Shares upon exercise.
46
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The stock option activity and the weighted average exercise price are summarized as follows:
2022
2021
Number
of options
6,796,039
7,920,684
—
(1,061,359)
(1,832,054)
11,823,310
2,600,818
Weighted
average
exercise
price
$
24.56
49.47
—
16.48
47.84
38.37
23.05
Number
of options
7,557,574
2,183,108
1,226,214
(2,951,034)
(1,219,823)
6,796,039
1,523,685
Weighted
average
exercise
price
$
15.38
41.55
6.40
7.12
22.48
24.48
17.40
Outstanding – Beginning of year*
Granted**
Assumed through business combination
Exercised
Forfeited
Outstanding – End of fiscal year
Exercisable – End of fiscal year
*the 2022 beginning of year weighted average exercise price was adjusted from the prior year closing weighted average exercise price to account for the
CAD to USD foreign exchange rate used when calculating the current fiscal years weighted average exercise prices.
**Included in the stock options granted in the year were 2,500,000 stock options with vesting dependent on market conditions tied to the Company's
future share price performance.
The RSU, DSU and PSU activity and the weighted average grant date fair values as at March 31, 2022 are summarized as
follows:
2022
2022
2022
RSU
DSU
PSU
Number
of awards
Weighted
average
grant date
fair value
$
Number
of awards
Weighted
average
grant date
fair value
$
Number
of awards
Weighted
average
grant date
fair value
$
Outstanding – Beginning of year
Granted
Released
Forfeited
939,833
3,016,792
(219,208)
(423,286)
Outstanding – End of year
3,314,131
44.93
48.89
52.19
55.50
46.71
14,751
20,227
(557)
—
26.68
47.14
73.39
—
75,182
953,290
(51,094)
(24,088)
34,421
37.95
953,290
24.90
28.73
24.97
24.75
28.73
47
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The RSU, DSU and PSU activity and the weighted average grant date fair values as at March 31, 2021 are summarized as
follows:
2021
2021
2021
RSU
DSU
PSU
Number
of awards
Weighted
average
grant date
fair value
$
Number
of awards
Weighted
average
grant date
fair value
$
Number
of awards
Weighted
average
grant date
fair value
$
Outstanding – Beginning of year
Granted
Released
Forfeited
117,769
989,384
(36,515)
(130,805)
Outstanding – End of year
939,833
24.67
45.73
32.17
36.30
44.93
7,109
7,642
—
—
14,751
25.66
27.64
—
—
26.68
84,326
66,038
(51,094)
(24,088)
75,182
24.75
25.09
24.97
24.75
24.90
The fair value of stock options granted to employees, excluding stock options that contain market conditions, was
estimated at the dates of grant using the Black-Scholes option-pricing model with the following weighted average
assumptions:
Expected volatility
Risk-free interest rate
Expected option life
Expected dividend yield
Forfeiture rate
2022
2021
47.25 %
1.04 %
4.07 years
0 %
27.07 %
45.55 %
0.38 %
4.27 years
0 %
28.51 %
The fair value of stock options granted to employees with vesting dependent on market conditions tied to the Company's
future share price performance is measured using the Monte Carlo pricing model to estimate the Company's potential future
share price. This model leverages assumptions that the expected volatility of the share price is 41% and the expected option
life is 7 years.
The fair value of stock options, RSUs, DSUs and PSUs granted in the fiscal year ended March 31, 2022 amounted to
$318,233 (2021 – $79,581). The initial aggregate fair value of options, RSUs and PSUs forfeited in the fiscal year ended
March 31, 2022 amounted to $55,967 (2021 – $13,053). For the fiscal year ended March 31, 2022, share-based
compensation expense of $108,916 (2021 – $32,739) was recorded in the consolidated statements of loss and
comprehensive loss with a corresponding credit to additional paid-in capital.
As at March 31, 2022, the total remaining unrecognized share-based compensation expense amounted to $147,052 (2021 –
$45,365), which will be amortized over the weighted average remaining requisite service period of 1.90 years (2021 – 1.44
years).
48
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The following table summarizes information with respect to stock options outstanding and stock options exercisable as at
March 31, 2022:
Options outstanding
Options exercisable
Weighted
average
remaining
contractual
life (years)
4.82
5.67
6.34
6.25
6.22
5.82
Weighted
average
exercise
price
$
11.60
24.29
30.75
45.76
75.73
38.37
Number
of options
2,735,944
2,137,518
2,238,268
1,855,419
2,856,161
11,823,310
Weighted
average
remaining
contractual
life (years)
3.28
5.12
4.94
5.07
6.14
4.45
Weighted
average
exercise
price
$
5.02
24.90
28.71
38.86
76.67
23.05
Number
of options
1,017,325
796,323
302,339
286,652
198,179
2,600,818
Exercise
price
$
0.30 to 21.90
21.91 to 27.52
27.53 to 33.19
33.20 to 65.89
65.90 to 94.03
Total
The following table summarizes information with respect to stock options outstanding stock options exercisable as at
March 31, 2021:
Exercise
price
$
0.30 to 4.86
4.87 to 24.52
24.53 to 26.73
26.74 to 33.52
33.53 to 72.94
Total
Options outstanding
Options exercisable
Weighted
average
remaining
contractual
life (years)
Weighted
average
exercise
price
4.51
5.35
5.92
5.95
6.30
5.56
$
3.95
14.22
25.82
29.54
55.88
24.48
Number
of options
1,551,131
1,334,262
1,424,350
1,308,231
1,178,065
6,796,039
Weighted
average
remaining
contractual
life (years)
Weighted
average
exercise
price
3.94
5.36
5.83
5.87
5.47
5.13
$
3.09
14.77
25.53
28.73
35.96
17.40
Number
of options
419,063
472,154
308,005
179,099
145,364
1,523,685
27. Related party transactions
Key management personnel includes the C-Level executives, and other Executive Vice-Presidents. Other related parties
include close family members of the key management personnel and entities controlled by the key management personnel.
The executive compensation expense to the top five key management personnel is as follows:
Short-term employee benefits
Share-based payments
Total compensation paid to key management personnel
2022
$
2,914
21,251
24,165
2021
$
1,732
4,200
5,932
49
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
28. Financial instruments
Fair value
The Company measures the fair value of certain of its financial assets and financial liabilities using a fair value hierarchy.
A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is
significant to the fair value measurement. Three levels of inputs may be used to measure fair value. The different levels of
the fair value hierarchy are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Other techniques for which inputs are based on quoted prices for identical or similar instruments in markets
that are not active, quoted prices for similar instruments in active markets, and model-based valuation techniques for
which all significant assumptions are observable in the market or can be corroborated by observable market data for
substantially the full term of the asset or liability;
Level 3: Techniques which use inputs that have a significant effect on the recognized fair value that require the
Company to use its own assumptions about market participant assumptions.
The Company estimated the fair value of its financial instruments as described below.
The fair value of cash and cash equivalents, restricted cash, trade receivables, trade accounts payable, accrued
compensation and benefits, and other accruals is considered to be equal to their respective carrying values due to their
short-term maturities.
The fair value of accrued payroll taxes on share-based compensation approximates its carrying value as at March 31, 2022
and 2021.
Recurring fair value measurements
The fair value of foreign exchange forward contracts was determined based on Level 2 inputs, which included period-end
mid-market quotations for each underlying contract as calculated by the financial institution with which the Company has
transacted. The quotations are based on bid/ask quotations and represent the discounted future settlement amounts based on
current market rates.
The fair value of merchant cash advances was determined based on Level 3 inputs by calculating the present value of the
future estimated cash flows based on the terms of the agreements.
Contingent consideration
On January 7, 2020, the Company acquired Gastrofix, a cloud-based POS hospitality software provider in Germany. The
amount included in the purchase price related to the estimated fair value of contingent consideration was nil. The
contingent consideration was valued by the Company using a discounted cash flow model under the income approach, and
is calculated based on estimates of future revenue performance. The maximum potential contingent consideration payout
was $10,030 over the two years following the acquisition. The fair value of the contingent consideration, if above nil, is
presented as a component of accounts payable and accrued liabilities on the consolidated balance sheets. The change in the
fair value of the contingent consideration, if any, is recognized within general and administrative expenses in the
consolidated statements of loss and comprehensive loss. The conditions surrounding the contingent consideration were not
satisfied and no contingent consideration was paid by the Company.
50
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
As at March 31, 2022 and 2021 , financial instruments measured at fair value in the consolidated balance sheets were as
follows:
March 31, 2022
March 31, 2021
Fair
value
hierarchy
Carrying
amount
$
Fair
value
$
Fair
value
hierarchy
Carrying
amount
$
Fair
value
$
Assets:
Cash and cash equivalents
Level 1
953,654
953,654
Level 1
807,150
807,150
Restricted cash and restricted deposits
Merchant cash advances
Foreign exchange forward contracts
Level 1
Level 3
Level 2
1,791
6,300
23
Liabilities:
Contingent consideration
—
—
1,791
6,300
23
—
Level 1
Level 3
—
9,074
2,309
—
9,074
2,309
—
Level 3
0
0
Credit and concentration risk
Generally, the carrying amount on the consolidated balance sheet of the Company’s financial assets exposed to credit risk,
net of any applicable provisions for losses, represents the maximum amount exposed to credit risk.
The Company’s credit risk is primarily attributable to its cash and cash equivalents and trade receivables. The Company
does not require a guarantee from its customers. Credit risk with respect to cash and cash equivalents is managed by
maintaining balances only with high credit quality financial institutions. The Company does not hold any collateral as
security.
Due to the Company’s diverse customer base, there is no particular concentration of credit risk related to the Company’s
trade receivables. Moreover, trade receivable balances are managed and analyzed on an ongoing basis to ensure the loss
allowance is established and maintained at an appropriate amount.
The Company maintains a loss allowance for a portion of trade receivables when collection becomes doubtful on the basis
described in note 3. As described in that note, the ECL includes forward-looking factors specific to the debtors and the
economic environment.
In the fiscal year ended March 31, 2022, potential effects from the COVID-19 pandemic and spread or resurgences of
variants of the COVID-19 virus on the Company's credit risk have been considered and have resulted in an increase to its
allowance for ECLs from what the allowance would have been without factoring in the effects of the COVID-19 pandemic.
The Company continues its assessment given the uncertainty of COVID-19's global impact.
51
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
The loss allowance as at March 31, 2022 and 2021 was determined as follows:
2022
Expected loss rate
Gross carrying amount
Loss allowance
2021
Expected loss rate
Gross carrying amount
Loss allowance
Not
past due
3 %
17,279
518
Not
past due
3 %
9,328
280
0–30
14 %
2,212
310
0–30
14 %
1,087
152
Changes in the loss allowance were as follows:
Balance – Beginning of fiscal year
Increase
Write-offs
Balance – End of fiscal year
Liquidity risk
30–60
60–90
90–180
46 %
617
284
64 %
213
136
68 %
577
392
180+
70 %
1,996
1,403
30–60
60–90
90–180
41 %
917
376
55 %
231
127
63 %
1,156
728
2022
$
3,519
1,603
180+
67 %
2,758
1,856
2021
$
2,878
2,777
(2,079)
(2,136)
3,043
3,519
The Company is exposed to the risk of being unable to honour its financial commitments by the deadlines set, under the
terms of such commitments and at a reasonable price. The Company manages its liquidity risk by forecasting cash flows
from operations and anticipated investing and financing activities.
52
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
As at March 31, 2022 and 2021, the maturity analysis of financial liabilities represented the following:
2022
<1
Year
$
1 to 3
Years
$
4 to 5
Years
$
>5
Years
$
Accounts payable and accrued liabilities
78,307
—
Accrued payroll taxes on share-based compensation
Long-term debt
2021
—
—
1,007
30,000
Accounts payable and accrued liabilities
Accrued payroll taxes on share-based compensation
Long-term debt
<1
Year
$
65,052
—
—
1 to 3
Years
$
—
3,154
—
30,000
Total
$
78,307
1,007
30,000
Total
$
65,052
3,154
30,000
—
—
—
—
—
—
4 to 5
Years
$
>5
Years
$
—
—
—
—
—
For the maturity analysis of lease liabilities, see note 14. Details of contractual commitments are included in note 24.
The Company has $953,654 of cash and cash equivalents as well as $25,000 available under the Revolver as at March 31,
2022, demonstrating its liquidity and its ability to cover upcoming financial liabilities.
Foreign exchange risk
The main currencies which expose the Company to foreign exchange risk due to financial instruments denominated in
foreign currencies are the Canadian dollar, the Euro, the British pound sterling, the Australian dollar and the New Zealand
dollar. The following table provides a summary of the Company's foreign exchange exposures, after taking into account
relevant foreign exchange forward contracts, expressed in thousands of US dollars:
2022
CAD
$
EUR
$
GBP
$
AUD
$
NZD Other
$
$
Total
$
Cash and cash equivalents and restricted cash
13,885 6,270 1,338 2,522 2,651 3,785 30,451
Trade and other receivables
3,454 4,086 1,472 2,675
49 1,062 12,798
Accounts payable and accrued liabilities
Accrued payroll taxes on share-based
compensation
Lease liabilities
(18,508) (5,755) (1,466) (2,834) (2,407) (2,131) (33,101)
(287)
(270)
(142)
(53) —
(37)
(789)
(13,400) (4,447) (4,315)
(477)
(548)
(259) (23,446)
Net financial position exposure
(14,856)
(116) (3,113) 1,833
(255) 2,420 (14,087)
53
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
2021
CAD
$
EUR
$
GBP
$
AUD
$
NZD Other
$
$
Total
$
Cash and cash equivalents and restricted cash
3,141 15,913
Trade and other receivables
5,122 2,740
470
469
958 — 1,649 22,131
793 — 1,030 10,154
Accounts payable and accrued liabilities
Accrued payroll taxes on share-based
compensation
Lease liabilities
(13,729) (18,898) (2,154) (4,529)
(484)
(826) (40,620)
(1,816)
(622)
(309)
(239)
(42)
(36) (3,064)
(14,102) (3,214)
(842)
(646) —
(517) (19,321)
Net financial position exposure
(21,384) (4,081) (2,366) (3,663)
(526) 1,300 (30,720)
The table below shows the immediate increase/(decrease) in net loss before tax of a 1% strengthening in the average
exchange rate of significant currencies to which the Company has transaction exposure as at March 31, 2022 and 2021. The
sensitivity associated with a 1% weakening of a particular currency would be equal and opposite. This assumes that each
currency moves in isolation.
2022
2021
Foreign exchange forward contracts
CAD
EUR
GBP
AUD
NZD Other
$
$
$
$
$
$
(1,347) (1,092)
(84)
(590)
(383)
20
(512)
(20)
(167)
(6)
(166)
(12)
The Company's policy is to mitigate its exposure to foreign exchange risk by entering into derivative instruments. The
Company has hedged some of its foreign currency exchange risk. The Company has entered into multiple foreign exchange
forward contracts, none of which are for a period greater than one year. The Company's currency pair used for cash flow
hedges is US dollar / Canadian dollar. The Company does not use derivative instruments for speculative purposes.
Cash flow hedges
The Company has a hedging program to mitigate the impact of foreign currency fluctuations on future cash flows and
earnings. Under this program the Company has entered into foreign exchange forward contracts and designated those
hedges as cash flow hedges. The program was adopted during the fiscal year ended March 31, 2022.
The notional principal of the foreign exchange contracts was approximately $26,000 CAD as at March 31, 2022 (March 31,
2021 - nil).
Hedging reserve
Balance as at March 31,
Unrealized losses on fair value that may be subsequently reclassified to consolidated
statements of loss
Losses reclassified to direct cost of revenues, general and administrative expenses, research
and development expenses, and sales and marketing expenses.
Balance as at March 31,
2022
$
—
(337)
360
23
2021
$
—
—
—
—
54
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
No hedge ineffectiveness was recorded during the fiscal year ended March 31, 2022.
All hedging relationships have been maintained as at March 31, 2022. No balance in the hedging reserve relates to hedging
relationships for which hedged accounting is no longer applied.
Interest rate risk
Interest rate risk is the risk that changes in interest rates will have a negative impact on earnings and cash flows. Certain of
the Company’s cash earns interest. The Company’s trade and other receivables, accounts payable and accrued liabilities
and lease liabilities do not bear interest. Our exposure to interest rate risk is related to the Acquisition Facility. The
Company is not exposed to material interest rate risk.
Share price risk
Accrued payroll taxes on share-based compensation (social costs) are payroll taxes associated with share-based
compensation that the Company is subject to in various countries in which it operates. Social costs are accrued at each
reporting period based inputs including, but not limited to, the number of stock options and share awards outstanding, the
vesting of the stock options and share awards, the exercise price, and the Company’s share price. Changes in the accrual
are recognized in direct cost of revenues and operating expenses. An increase in share price will increase the accrual for
social costs, and a decrease in share price will result in a decrease in the accrual for social costs, all other things being
equal, including the number of vested stock options and exercise price remaining constant. Based on the outstanding share-
based payment awards at March 31, 2022, the impact on the accrual for social costs of an increase or decrease in the
Company’s share price of 10% would result in a change of $527 as at March 31, 2022.
29. Capital risk management
The general objectives of the Company to manage its capital reside in the preservation of the Company’s ability to continue
operating, in providing benefits to its stakeholders and in providing an adequate return on investment to its shareholders by
selling its services at a price commensurate with the level of operating risk assumed by the Company.
The Company thus determines the total amount of capital required consistent with risk levels. This capital structure is
adjusted on a timely basis depending on changes in the economic environment and in the risks of the underlying assets.
Refer to note 20 for information on the Company's Credit Facilities.
55
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2022 and 2021
(expressed in thousands of US dollars, except number of shares)
30. Geographic information
The geographic segmentation of the Company’s assets is as follows:
2022
2021
Property
and
equipment
$
Right-of-
use assets
$
Intangible
assets Goodwill
$
$
Property
and
equipment
$
Right-of-
use assets
$
Intangible
assets Goodwill
$
$
Canada
10,356
10,062
990 2,104,368
5,536
10,266
3,563 971,939
United States
1,155
6,079 303,393
New Zealand
Germany
Other
656
288
517
75,892
1,312
16,594
4,001
7,569
12,699
—
—
—
—
1,083
6,225 184,797
—
312
—
—
1,624
25,711
1,411
3,091
20,422
—
—
—
—
Geographic sales based on customer location are detailed as follows:
United States
Canada
Australia
Netherlands
Other
2022
$
2021
$
395,871
140,856
33,423
29,230
19,658
70,190
17,636
13,627
15,080
34,529
56
Investor Information
Lightspeed Shares
Lightspeed’s subordinate voting
shares are traded on the Toronto
Stock Exchange (TSX) and the
New York Stock Exchange (NYSE)
under the symbol “LSPD”.
Investor Relations
Quarterly and annual reports
and other corporate documents
are available at:
investors.lightspeedhq.com,
under our profiles on SEDAR at
www.sedar.com and on EDGAR at
www.sec.gov.
Version française
Pour obtenir la version française
du rapport financier, s’adresser à
gouvernance@lightspeedhq.com.
Transfer Agent and Registrar
TSX Trust Company
1600-2001 Robert-Bourassa
Montréal, QC, H3A 2A6
www.tsxtrust.com
American Stock Transfer & Trust
Company, LLC
6201 15th Avenue
Brooklyn, NY 11219,
United States
2022 Annual and Special Meeting
The Annual and Special
Shareholders Meeting will be
held at 11 a.m. (Eastern Time),
Thursday, August 4, 2022
Legal Counsel
Stikeman Elliott LLP
Montréal, QC
Corporate Governance
The following documents
pertaining to Lightspeed’s
corporate governance practices
may be accessed either from
Lightspeed’s website
(investors.lightspeedhq.com) or
by request from the Corporate
Secretary:
- Board and Board Committee
Charters
- Position descriptions for the
Board Chair, Lead Independent
Director, the Committee Chairs
and the Chief Executive Officer
- Code of Conduct and Ethics
- Whistleblowing Policy
Auditors
PricewaterhouseCoopers LLP,
Chartered Professional
Accountants
Montreal, Québec
Board
Audit Committee
Compensation, Nominating,
& Governance Committee
Risk Committee
Board & Committee Composition
Patrick Pichette
Lead Independent Director
General Partner at iNovia Capital
Dax Dasilva
Executive Chair
Jean Paul Chauvet
Chief Executive Officer
Marie-Josée Lamothe
Director
Founder and President of Tandem
International
Paul McFeeters
Director
Merline Saintil
Director
Rob Williams
Director
Nathalie Gaveau
Director
Dale Murray
Director
Board/Committee Chair
Board/Committee Member
investors.lightspeedhq.com
NYSE: LSPD | TSX: LSPD
700 St-Antoine East, Suite 300 Montreal, Quebec, Canada H2Y1A6