Annual Report
Fiscal year ended March 31, 2023
Letter from Jean Paul Chauvet
Change is constant for any business operating in the fast-paced technology sector. Lightspeed is no exception.
Our company has undergone an incredible transformation since it went public on the Toronto Stock Exchange
in 2019. Yet throughout this transformation, our mission remains the same: to become the go-to cloud-based
commerce platform for ambitious small and medium-sized retailers and restaurateurs around the world.
In November, we shared our sharpened focus on
attracting and expanding among sophisticated, higher
GTV merchants, who stand to benefit the most from our
technology. They represent our biggest opportunity, and
our products and go-to-market efforts are designed for
them.
The road to One Lightspeed was challenging but rewarding.
Now that we’re focused on two products instead of nine,
Lightspeed is able to concentrate on more rapid innovation
and a more focused go-to-market output. This simplicity
makes us more efficient.
In FY23, we continued to expand the adoption of our
payments solutions across our global customer base,
with Lightspeed Payments now available in our major
markets around the world. It’s a launchpad for other
financial services like Lightspeed Capital. Still, Lightspeed
Payments is more than just another feature. Payments is
now so deeply embedded into our software that the two
have become indistinguishable. Merchants who currently
use both platforms have shown us the value we can add to
their business—it saves them time and money, eliminates
the need to reconcile separate systems, improves
accuracy, reduces manual tasks and gives them deeper
data insights into their business. For these reasons, we are
now selling our POS solution with Lightspeed Payments as
a single unified offering.
Over the last few years, we’ve built an organization that’s ready to meet the needs of our customers—retailers and
restaurateurs around the world—as they seek out intuitive technology to help simplify and grow their businesses.
We’re still investing in Lightspeed’s capabilities and offerings, like our Lightspeed Supplier Network, but we believe
we also need to show progress towards profitability. Our goal is to put Lightspeed in a strong financial position so
that we can keep investing in our future while demonstrating our business model’s potential to our stakeholders.
Lightspeed is always evolving, but our mission stays the same. We’re here to help entrepreneurs build and scale
their businesses—businesses that are at the heart of the communities they serve. Lightspeed exists to simplify, to
streamline, and to provide financial support where we can. We’re here to level the playing field. Lightspeed brings
the power of technology—once reserved for very large players—to serve the small to medium-sized businesses
that are so crucial to the vitality of our communities.
Jean Paul Chauvet
CEO, Lightspeed
Our mission
Powering the world’s
best businesses.
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 commerce platform
for sophisticated and multilocation SMBs
Strong growth with the majority of our
revenues generated from recurring or
reoccuring subscription and
transaction-based revenues
Growing and diverse customer base
driving $87.1 billion2 of GTV globally
Lightspeed Payments driving growth for
retail and hospitality customers globally
Large total addressable market mainly served
by legacy systems poorly equipped to support
migration to cloud, allowing Lightspeed to
target established, higher GTV merchants
Well capitalized with ~$800 million
in cash and cash equivalents
1All dollar figures are presented in U.S. dollars and as at March 31, 2023 or for the fiscal year 2023. Please refer to the section titled
“Key Performance Indicators” in our management discussion and analysis for the three months ended March 31, 2023 and 2022 and
the years ended March 31, 2023 and 2022 for the definition of GTV.
2Key Performance Indicator.
Lightspeed
Key metrics3
Subscription and transaction-based
revenue growth4
Recurring or reoccuring subscription
and transaction-based revenue
36%
~96%
Gross Transaction Volume (“GTV”)5
GPV as a % of GTV6
$87.1 billion
19%
Gross Payment Volume (“GPV”)5
Gross Payment Volume growth4
$14.7 billion
81%
3Unless otherwise specified, all dollar figures are presented in U.S. dollars and as at March 31, 2023 or for the fiscal year 2023. Please refer to
the section titled “Key Performance Indicators” in our management discussion and analysis for the three months ended March 31, 2023 and
2022 and the years ended March 31, 2023, and 2022 for the definitions of GTV and GPV.
4Fiscal year ended March 31, 2023 vs March 31, 2022.
5Key Performance Indicator.
6For the three months ended March 31, 2023.
Lightspeed
High-quality global customer
base driving growth7
Annual Net Retention
Rate of ~110%8
GTV8 (in $B)
Internationally diversified
with ~49% of Customer
Locations outside of
North America8
Well diversified across a
number of complex verticals
in retail, hospitality and golf
$87.1
R
G
A
7 % C
$74.0
$33.7
Fiscal year
2021
Fiscal year
2022
Fiscal year
2023
$730.5
R
G
A
5 % C
$548.4
5
7
$22.3
$14.5
Fiscal year
2019
Fiscal year
2020
Revenue (in $M)
7All dollar figures are presented in U.S.
dollars and as at March 31, 2023 or for the
fiscal year 2023. Please refer to the section
titled “Key Performance Indicators” in our
management discussion and analysis for
the three months ended March 31, 2023
and 2022 and the years ended March 31,
2023 and 2022 for the definitions of GTV
and Net Retention Rate.
8Key Performance Indicator.
$221.7
$120.6
$77.5
Fiscal year
2019
Fiscal year
2020
Fiscal year
2021
Fiscal year
2022
Fiscal year
2023
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. together with our subsidiaries,
on a consolidated basis as constituted on March 31, 2023.
This MD&A dated May 18, 2023, for the three months ended March 31, 2023 and 2022 and the years ended March 31, 2023
("Fiscal 2023") and 2022 ("Fiscal 2022"), should be read in conjunction with the Company’s audited consolidated financial
statements and the notes related thereto for the years ended March 31, 2023 and 2022, 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 2023 and Fiscal 2022, 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, 2023, 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; macroeconomic conditions such as increasing inflationary pressures, interest rates, instability in the banking
sector and global economic uncertainty; our expectations regarding the costs, timing and impact of our cost reduction initiatives;
events such as the ongoing COVID-19 pandemic (the "COVID-19 Pandemic") and the Russian invasion of Ukraine; and
expectations regarding industry and consumer spending trends, our growth rates, the achievement of advances in and expansion of
our platform, our revenue and the revenue generation potential of our payment-related and other solutions, the impact of our
decision to sell our POS and payments solutions as one unified platform, our gross margins and future profitability, acquisition
outcomes and synergies, the impact of legal proceedings, the impact of foreign currency fluctuations on our results of operations,
our business plans and strategies and our competitive position in our industry is forward-looking information.
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
execute on our cost reduction initiatives; our ability to continue investing in infrastructure and implement scalable controls,
(1)
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 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 sell
our POS and payments solutions as one unified platform to both new and existing customers; 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 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, including changes in consumer spending; goodwill impairments and the possibility of future impairments; 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 18, 2023, 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 profiles 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", "Flame Design", "NuORDER" and other trademarks, which are
protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks 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.
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 track-record of growing revenue per customer over time.
(2)
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, point of sale ("POS"), product and menu management,
employee and inventory management (including ordering), 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 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 flagship solutions include Lightspeed Restaurant, a unified hospitality commerce offering, and Lightspeed Retail, a
groundbreaking retail commerce offering that unites advanced POS, payments, and eCommerce into one cohesive and powerful
solution. In addition, Lightspeed eCommerce allows merchants to enhance omnichannel reach and increase selling flexibility,
including through social media platforms and digital marketplaces. Our new flagship solutions are seeing strong reception from
customers globally. NuORDER by Lightspeed, 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.
Going deep into verticals will also create opportunities for us to monetize our data up and down the supply chain. In Fiscal 2023,
we announced the initial launch of Lightspeed B2B, our B2B offering, to several key North American verticals: fashion, outdoor,
bikes and sporting goods. We believe our continued investment in Lightspeed B2B represents an opportunity for us to distinguish
ourselves from competitors.
Being the commerce platform puts us in a prime position for payment processing and allows us to collect transaction-related data
insights. After excluding Customer Locations attributable to the Ecwid eCommerce standalone product, our payments solutions
are now available to the majority of our Customer Locations. Our transaction-based revenue was $399.6 million for Fiscal 2023,
an increase of 51% from the $264.0 million in transaction-based revenue for Fiscal 2022. This was primarily driven by increased
customer adoption of our payments solutions resulting in an increase of 81% in GPV1 compared to Fiscal 2022. As of the
beginning of the fiscal year ending March 31, 2024 ("Fiscal 2024"), we are now selling our POS and payments solutions together
as one unified offering. We believe embedded payments results in the best experience for customers by improving consistency
and reliability, streamlining support and billing, and enhancing opportunities for them to avail themselves of innovative product
functionality. We are helping our customers by offering free hardware and implementation, helping with contract buy-outs and
offering competitive rates. As a result of this initiative, we will require our eligible new and existing customers to adopt our
payments solutions. We believe processing additional GTV for new and existing customers through our payments solutions will
help advance our growth strategies and enable us to reduce complexity in our business. In addition, this initiative will help reduce
the costs of supporting a variety of third party payment processors.
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.
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,
amongst other things.
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.
1 Refer to the section entitled "Key Performance Indicators".
(3)
Excluding the impact of Customer Locations attributable to the Ecwid eCommerce standalone product, which Customer
Locations carry a lower ARPU1, the monthly ARPU of our Customer Locations was approximately $335 per Customer Location
as at March 31, 2023 as compared to approximately $270 per Customer Location as at March 31, 2022.
As at March 31, 2023, excluding Customer Locations attributable to the Ecwid eCommerce standalone product, we had
approximately 168,000 Customer Locations1 in over 100 countries. While our total number of Customer Locations experienced
more gradual growth in Fiscal 2023 than in prior years, the number of our Customer Locations processing over $500,000/year2
continued to increase. We remain focused on attracting the right customer profile, particularly Customer Locations with a higher
GTV and more complex needs, merchants which we believe are ideally suited for our industry-leading solutions. For Fiscal 2023,
GPV was $14.7 billion compared to $8.1 billion for Fiscal 2022, representing growth of 81%. For Fiscal 2023, our cloud-based
software-as-a-service platform processed GTV of $87.1 billion, which represents growth of 18% relative to $74.0 billion of GTV
processed during Fiscal 2022, despite many retail verticals exhibiting lower average year-over-year GTV. For the three months
ended March 31, 2023 compared to three months ended March 31, 2022, our cloud-based software-as-a-service platform
processed GPV of $3.8 billion compared to $2.2 billion, representing growth of 70% and GTV1 of $20.2 billion compared to
$18.4 billion, representing growth of 10%, which is an indication of our success in penetrating our customer base with our
payments solutions.
For Fiscal 2023 compared to Fiscal 2022, our omni-channel retail GTV growth was 14% and our hospitality GTV growth was
22% (3% and 20%, respectively for the three months ended March 31, 2023 compared to three months ended March 31, 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 GTV growth for Fiscal 2023 compared to Fiscal 2022 was 16%, which growth was driven
by a 9% increase in GTV from omni-channel retail customers and an increase in hospitality GTV of 22% (10%, 3% and 20%,
respectively for the three months ended March 31, 2023 compared to three months ended March 31, 2022). In Fiscal 2023, we
observed many retail verticals exhibiting lower year-over-year GTV, likely owing to challenging economic conditions and
reduction in consumer spending. 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. All growth for the three months ended March 31, 2023 was
organic as no acquisitions had occurred since the end of the prior comparable period.
Excluding Customer Locations attributable to the Ecwid eCommerce standalone product, our approximately 168,000 Customer
Locations as at March 31, 2023 are located approximately 51% in North America and 49% across the rest of the world and the
split of these Customer Locations between retail and hospitality represents approximately 62% and 38% 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, particularly high GTV customers, 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. 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 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.
Our total revenue has increased to $730.5 million for Fiscal 2023 from $548.4 million for Fiscal 2022, representing year-over-
year growth of 33%. For Fiscal 2023, subscription revenue accounted for 41% of our total revenues (45% for Fiscal 2022), and
transaction-based revenue accounted for 55% of our total revenues (48% for Fiscal 2022). Despite the impact of challenges and
uncertainty in the macroeconomic environment, for Fiscal 2023, we had an annual net retention rate1 of approximately 110%.
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 2023 compared to Fiscal
2022 was 31% (28% for the three months ended March 31, 2023 compared to 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
2 Excluding Customer Locations and GTV attributable to the Ecwid eCommerce standalone product, Lightspeed Golf and
NuORDER by Lightspeed product. A Customer Location's GTV per year is calculated by annualizing the GTV for the months in
which the Customer Location is actively processing in the last twelve months.
(4)
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. All growth for the three months ended March 31,
2023 was organic as no acquisitions had occurred since the end of 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 2023, this revenue accounted for 4% of our total revenue (7% for Fiscal 2022).
We plan to continue making deliberate 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 the 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.
During the three months ended March 31, 2023, we announced a reorganization to streamline the Company's operating model
while continuing to focus on disciplined growth. This new structure represents the next deliberate step to integrate all of our
acquired companies and products now that we have successfully launched our flagship products in both retail and hospitality. The
reorganization included the reduction of approximately 300 roles. We plan to continue to hire core go-to-market and development
roles that support disciplined growth.
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. If we are unable to
successfully implement our growth strategies and cost reduction initiatives, we may not be able to achieve profitability. For Fiscal
2023 and Fiscal 2022, we incurred an operating loss of $1,099.0 million and $318.3 million, respectively. The operating loss for
Fiscal 2023 increased primarily due to a non-cash goodwill impairment charge of $748.7 million. Our cash flows used in
operating activities for Fiscal 2023 were $125.3 million, and our Adjusted Cash Flows Used in Operating Activities3 were $96.0
million compared to $87.2 million and $61.3 million, respectively, for Fiscal 2022.
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 help our customers' reduce their carbon footprint. We partner with Sustainably
Run on a Carbon Free Dining program. The partnership gives our customers' diners the ability to offset the carbon emissions
associated with their purchase by planting trees and provides our customers with sustainable credits towards purchasing
Lightspeed products. The program has resulted in the planting of over 1.3 million trees. 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.
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 the 2023 annual DEI engagement survey, 10% of our employees identify as LGBTQ2S+. Our commitment to a diverse
and inclusive workplace can be seen at all levels of our Company, including our Employee-led Networks for women, LGBTQ2S+
community members and BIPOC community members. Furthermore, the board of directors has committed to a target of at least
37.5% of women in its membership and is actively recruiting new members with this goal in mind. We believe in creating value
across our ecosystem, including by ensuring meaningful wealth creation opportunities for all employees. All permanent
employees are granted an equity stake in the Company upon hire, ensuring employees’ interests are aligned with those of our
shareholders.
Macroeconomic Conditions including COVID-19
There continues to be uncertainty in the macroeconomic environment, including with respect to increasing inflationary pressures,
changes in consumer spending, instability in the banking sector, exchange rate fluctuations and increases of interest rates as well
3Refer to the section entitled "Non-IFRS Measures and Ratios and Reconciliation of Non-IFRS Measures and Ratios".
(5)
as with respect to the duration and magnitude of the COVID-19 Pandemic and the ability to control resurgences and new variants
worldwide. This macroeconomic uncertainty makes it difficult to assess the future impact these events and conditions will have 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 these ongoing risks and uncertainties, we continue to believe there is an accelerated need for our solutions in the retail and
hospitality industries as SMBs look to augment traditional in-person selling models with online and digital strategies, operate with
fewer employees to manage labor shortages by automating time-consuming tasks, and find new efficiencies and insights into their
business. A large portion of our market is currently served by legacy on-premise systems that are expensive, complicated,
outdated, and poorly equipped to help SMBs adapt to this immediate need. This represents a significant opportunity for us to
continue to fuel adoption of our solutions. We believe our growth, despite a challenging macroeconomic environment, is an
ongoing indicator of this continued shift to 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 2023 was $87.1
billion up 18% from the $74.0 billion we processed in Fiscal 2022. We expect changes in consumer spending or other
macroeconomic conditions in the various geographies in which we operate to continue to cause variability in our GTV; however,
we believe our diversity in customer verticals and geographies we serve will continue to be a strong asset of the business.
Additionally, the Russian invasion of Ukraine has created and is expected to continue to create further global economic
uncertainty. 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. 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 relocated many outside of Russia to mitigate any reliance on the region. 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. We will continue to monitor the situation closely, but to date we have not
experienced any disruptions in our business operations as a result thereof.
We continue to monitor the impact of macroeconomic events and conditions on our business, financial condition and operations,
as further discussed below. Refer to the section 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.
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. We use this measure as we believe it provides a helpful supplemental indicator of our progress in growing the
revenue that we derive from our customer base. 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
increased by 24% to approximately $335 per Customer Location as at March 31, 2023 compared to approximately $270
per Customer Location as at March 31, 2022. 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 and approximately $181 as at March 31, 2023. For greater clarity, the number of Customer Locations of
the Company in the period is calculated by taking the average number of Customer Locations throughout the period.
(6)
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 use this measure as we believe that our ability to increase the number of
Customer Locations with a high GTV per year served by our platform is an indicator of our success in terms of market
penetration and growth of our business. A Customer Location's GTV per year is calculated by annualizing the GTV for the
months in which the Customer Location was actively processing in the last twelve months. During the three months ended
March 31, 2023, the number of our Customer Locations processing over $500,000/year continued to increase. Excluding
Customer Locations attributable to the Ecwid eCommerce standalone product, our Customer Locations were approximately
168,000 as at March 31, 2023 compared to approximately 163,000 as at March 31, 2022. Customer Locations attributable
to the Ecwid eCommerce standalone product were approximately 158,000 as at March 31, 2023, compared to
approximately 160,000 as at March 31, 2022.
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 use this measure as 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,
particularly those with a high GTV, we will generate more GPV and see higher transaction-based revenue. For the three
months ended March 31, 2023, GPV was $3.8 billion compared to $2.2 billion for the three months ended March 31, 2022,
representing growth of 70%. For Fiscal 2023, GPV was $14.7 billion compared to $8.1 billion for Fiscal 2022, representing
growth of 81%. 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 use this measure
as 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, 2023, GTV was $20.2 billion compared to $18.4 billion for
the three months ended March 31, 2022, representing growth of 10%. In the three months ended March 31, 2023, we
observed lower year-over-year GTV in many retail verticals likely owing to challenging economic conditions and reduction
in customer spending. For Fiscal 2023, GTV was $87.1 billion compared to $74.0 billion for Fiscal 2022, representing
growth of 18%. 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.
Net Retention Rate. "Net Retention Rate" or "NRR". We use this measure as 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 NRR, which is calculated by firstly identifying a
cohort of customers, or the "Base Customers", in a particular month, or the "Base Month". Billings include billings of
subscriptions fees and billings of fees from our payments solutions in respect of which we act as the principal in the
arrangement with the customer. We then divide the Billings for the Base Customers in the same month of the subsequent
year, or the "Comparison Month", by the Billings in the Base Month to derive a monthly NRR. This by definition, does not
include any customers added to our platform between the Base Month and the Comparison Month. We measure the annual
NRR by taking a weighted average of the monthly NRR over the trailing twelve months. NRR excludes customers
attributable to the Ecwid eCommerce standalone product. Despite the impact of challenges and uncertainty in the
macroeconomic environment, for Fiscal 2023, we had an annual NRR of approximately 110%. In previous fiscal years, we
have disclosed a net dollar retention rate which was 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. Net Retention Rate is a different measure than net dollar
retention rate. We believe that Net Retention Rate more clearly demonstrates whether we are successful in retaining and
expanding revenue generated from our existing customers than net dollar retention rate because the longer intervening
period between the months compared in calculating Net Retention Rate is more statistically significant and controls for
factors such as seasonality.
(7)
Non-IFRS Measures and Ratios and Reconciliation of Non-IFRS Measures and Ratios
The information presented within this MD&A includes certain non-IFRS financial measures such as "Adjusted EBITDA",
"Adjusted Income (Loss)", and "Adjusted Cash Flows Used in Operating Activities" and the non-IFRS ratio "Adjusted Income
(Loss) per Share - Basic and Diluted". 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 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, litigation provisions and goodwill impairment. We believe that Adjusted
EBITDA provides a useful supplemental measure of the Company’s operating performance, as it helps illustrate underlying trends
in our business that could otherwise be masked by the effect of the income or expenses that are not indicative of the core
operating performance of our business. 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 (gain)(3)
Net interest income(2)
Acquisition-related compensation(4)
Transaction-related costs(5)
Restructuring(6)
Goodwill impairment(7)
Litigation provisions(8)
Income tax expense (recovery)
Three months ended
March 31,
Fiscal year ended
March 31,
2023
$
2022
$
2023
$
2022
$
(74,468)
15,967
28,380
297
(9,654)
5,746
2,323
25,549
—
229
1,283
(114,517)
41,625
29,972
29
(1,014)
20,433
872
606
—
576
1,679
(1,070,009)
123,667
115,261
(199)
(24,812)
41,792
5,834
28,683
748,712
1,409
(4,219)
(288,433)
109,066
104,548
611
(2,988)
50,491
9,653
803
—
1,655
(26,921)
Adjusted EBITDA
(4,348)
(19,739)
(33,881)
(41,515)
(1)
(2)
(3)
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, and cash 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, 2023, excluding $5,637 of share-based compensation expense acceleration that was classified as restructuring,
share-based compensation expense was $15,685 and $123,530, respectively (March 2022 - expense of $41,934 and $108,916), and
related payroll taxes were an expense of $282 and $137, respectively (March 2022 - recovery of $309 and an expense of $150).
These amounts are included in direct cost of revenues, general and administrative expenses, research and development expenses and
sales and marketing expenses (see note 8 of the audited annual consolidated financial statements for additional details). These
expenses exclude share-based compensation classified as restructuring, which has been included in the restructuring expense.
In connection with the accounting standard IFRS 16 - Leases, for the three months ended March 31, 2023, net loss includes
depreciation of $2,025 related to right-of-use assets, interest expense of $278 on lease liabilities, and excludes an amount of $2,322
relating to rent expense ($2,032, $288, and $2,111, respectively, for the three months ended March 31, 2022). For Fiscal 2023, net
loss includes depreciation of $8,244 related to right-of-use assets, interest expense of $1,075 on lease liabilities, and excludes an
amount of $8,712 relating to rent expense ($7,743, $1,204, and $8,133, respectively, for Fiscal 2022).
These non-cash gains and losses relate to foreign exchange translation.
(8)
(4)
(5)
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.
(6) Certain functions and the associated management structure were reorganized to realize synergies and ensure organizational agility.
During the three months ended March 31, 2023, we announced a reorganization to streamline the Company's operating model while
continuing to focus on disciplined growth. The expenses associated with this reorganization were recorded as a restructuring charge
(see note 24 of the audited annual consolidated financial statements for additional details).
(7)
(8)
This amount represents a non-cash goodwill impairment charge (see note 16 of the audited annual consolidated financial statements
for additional details).
These amounts 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 amounts 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 amounts are included in general and
administrative expenses.
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, deferred income taxes and goodwill impairment. We use this measure as we believe excluding amortization of
intangibles and certain other non-cash or non-operational expenditures provides a helpful supplementary indicator of our business
performance as it allows for more accurate comparability across periods. Adjusted Loss per Share - Basic and Diluted is defined
as Adjusted Loss divided by the weighted average number of common shares (basic and diluted). We use Adjusted Loss per Share
- Basic and Diluted to provide a helpful supplemental indicator of the performance of our business on a per share (basic and
diluted) basis. 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)
Goodwill impairment(5)
Litigation provisions(6)
Deferred income tax expense (recovery)
Adjusted Loss
Three months ended
March 31,
Fiscal year ended
March 31,
2023
$
(74,468)
15,967
24,620
5,746
2,323
25,549
—
229
(368)
2022
$
2023
$
(114,517)
41,625
26,151
20,433
872
606
—
576
1,397
(1,070,009)
123,667
101,546
41,792
5,834
28,683
748,712
1,409
(6,688)
2022
$
(288,433)
109,066
91,812
50,491
9,653
803
—
1,655
(28,024)
(402)
(22,857)
(25,054)
(52,977)
Weighted average number of Common Shares – basic
and diluted(7)
151,774,467
148,473,309
150,404,130
141,580,917
Net loss per share – basic and diluted
Adjusted Loss per Share – Basic and Diluted
(0.49)
(0.00)
(0.77)
(0.15)
(7.11)
(0.17)
(2.04)
(0.37)
(1)
(2)
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, and cash 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, 2023, excluding $5,637 of share-based compensation expense acceleration that was classified as restructuring,
share-based compensation expense was $15,685 and $123,530, respectively (March 2022 - expense of $41,934 and $108,916), and
related payroll taxes were an expense of $282 and $137, respectively (March 2022 - recovery of $309 and an expense of $150).
These amounts are included in direct cost of revenues, general and administrative expenses, research and development expenses and
sales and marketing expenses (see note 8 of the audited annual consolidated financial statements for additional details). These
expenses exclude share-based compensation classified as restructuring, which has been included in the restructuring expense.
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.
(9)
(3)
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.
(4) Certain functions and the associated management structure were reorganized to realize synergies and ensure organizational agility.
During the three months ended March 31, 2023, we announced a reorganization to streamline the Company's operating model while
continuing to focus on disciplined growth. The expenses associated with this reorganization were recorded as a restructuring charge
(see note 24 of the audited annual consolidated financial statements for additional details).
(5)
(6)
(7)
This amount represents a non-cash goodwill impairment charge (see note 16 of the audited annual consolidated financial statements
for additional details).
These amounts 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 amounts 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 amounts are included in general and
administrative expenses.
In periods where we reported an Adjusted Loss, as a result of the Adjusted Losses incurred, all potentially-dilutive securities have
been excluded from the calculation of Adjusted Loss per Share - Diluted because including them would be anti-dilutive. Adjusted
Loss per Share - Diluted is the same as Adjusted Loss per Share - Basic in these periods where we incurred an Adjusted Loss.
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-related costs, the payment of restructuring costs, the payment of amounts related to litigation
provisions net of amounts received as insurance and indemnification proceeds and the payment of amounts related to capitalized
internal development costs. We use this measure as we believe including or excluding certain inflows and outflows provides a
helpful supplemental indicator to investors on our business performance in regard to the Company's ability to generate cash flows.
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)
Transaction-related costs(3)
Restructuring(4)
Litigation provisions(5)
Capitalized internal development costs(6)
Three months ended
March 31,
Fiscal year ended
March 31,
2023
$
(41,587)
820
2,547
(2,621)
15,230
209
(1,519)
2022
$
(11,342)
156
746
431
501
(366)
—
2023
$
(125,284)
1,705
8,590
1,888
17,722
3,306
(3,894)
2022
$
(87,218)
4,953
7,839
12,208
1,590
(654)
—
Adjusted Cash Flows Used in Operating Activities
(26,921)
(9,874)
(95,967)
(61,282)
(1)
(2)
(3)
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 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.
These amounts also include adjustments related 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.
(4) Certain functions and the associated management structure were reorganized to realize synergies and ensure organizational agility.
During the three months ended March 31, 2023, we announced a reorganization to streamline the Company's operating model while
continuing to focus on disciplined growth. The expenses associated with this reorganization were recorded as a restructuring charge
(see note 24 of the audited annual consolidated financial statements for additional details).
(5)
These amounts represent the cash inflow and outflow in respect 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
(10)
outflows do not include cash inflows and outflows in respect of litigation matters of a nature that we consider normal to our
business.
(6)
These amounts represent the cash outflows associated with capitalized internal development costs. These amounts are included
within the cash flows used in investing activities section of the audited annual consolidated statements of cash flows. If these costs
were not capitalized as an intangible asset, they would be part of our cash flows used in operating activities. There were no
capitalized internal development costs in the fiscal year ended March 31, 2022.
Outlook
A discussion of management's expectations as to the Company's outlook for the three months ending June 30, 2023 and fiscal year
ending March 31, 2024 is contained in the Company's press release dated May 18, 2023 under the heading "Financial Outlook".
The press release is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Information contained in, or
otherwise accessed through, such press release is not deemed part of this MD&A and such press release and information is not
incorporated by reference herein.
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, with our focus being on complex high GTV customers. 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 accelerating 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 our solutions to businesses operating in industry verticals that we do not currently serve. We plan
to continue to invest in our platform to drive market adoption, particularly of our payments solutions, and our operating cash
flows may fluctuate and our profitability may be impacted as we make these investments. Our market is large, evolving, highly-
fragmented, competitive and has low barriers to entry in many of the countries in which we operate. 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 or shift their
focus to in-person shopping and services. Our focus will be on selling our flagship products globally, as we believe two core
offerings will reduce complexity, help improve go-to-market momentum and help deliver stronger performance.
Customer Adoption of our Payments Solutions
After excluding Customer Locations attributable to the Ecwid eCommerce standalone product, our payments solutions are now
available to the majority of our Customer Locations. We believe that our payments solutions will continue to be an increasingly
important part of our business as we continue to increase their availability throughout our 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, 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. As of the beginning of Fiscal 2024, we are now
selling our POS and payments solutions together as one unified offering. We believe embedded payments results in the best
experience for customers by improving consistency and reliability, streamlining support and billing, and enhancing opportunities
for them to avail themselves of innovative product functionality. We are helping our customers by offering free hardware and
implementation, helping with contract buy-outs and offering competitive rates. As a result of this initiative, we will require our
eligible new and existing customers to adopt our payments solutions. We believe processing additional GTV for new and existing
(11)
customers through our payments solutions will help advance our growth strategies and enable us to reduce complexity in our
business. In addition, this initiative will help reduce the costs of supporting a variety of third party payment processors.
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 significantly lower
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 Advanced Insights, 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 Lightspeed B2B 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.
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.
Deterioration in general economic conditions, including any rise in unemployment rates, inflation and increases in interest rates,
have adversely affected and may continue to adversely affect consumer spending, consumer debt levels and credit and debit card
usage, and as a result, have adversely affected our financial performance by reducing the number of transactions or average
purchase amount of transactions processed using our payments solutions. Deterioration in general economic conditions may also
cause financial institutions to restrict credit lines to cardholders or limit the issuance of new cards to mitigate cardholder credit
concerns, which could further reduce the number or average purchase amount of transactions processed using our payments
solutions. Many of the customers that use our platform are SMBs and many are also 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 may also be disproportionately affected by other economic conditions, including
labor shortages and global supply chain issues. 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 invasion of
Ukraine may further amplify such risks.
Economic downturns have and may continue to adversely impact retail and hospitality 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 or customers in certain of our retail verticals operate in industries
which are 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.
COVID-19 Pandemic
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.
The COVID-19 Pandemic 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
(12)
timely payments to us. COVID-19 has also caused heightened uncertainty in the global economy. Slowdowns in economic
growth, particularly where they reduce consumer spending, have negatively impacted and may continue to 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 and may require us to
recognize an impairment related to our non-financial assets in our financial statements. See the risk factor in our Annual
Information Form titled "We have in the past suffered losses due to goodwill impairment and may in the future suffer losses due to
impairment charges" for more information.
Uncertainty in the global economy and market volatility has been and may in the future be exacerbated by new variants and
mutations 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 affects 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.
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 lead generation,
particularly in our U.S. markets and for complex merchants and restaurateurs with high annual GTV. In certain instances, we have
supplemented this approach with field sales teams.
Retaining and Motivating Qualified Personnel
Our future success depends, in part, on our ability to continue to attract and retain highly skilled personnel. Our ability to identify,
hire, develop, motivate and retain qualified personnel will directly affect our ability to maintain and grow our business, and such
efforts will require significant time, expense and attention. Our ability to continue to attract and retain highly skilled personnel,
specifically employees with technical and engineering skills and employees with high levels of experience in designing and
developing software and internet-related services, will be critical to our future success and demand and competition for such talent
is high. We are also substantially dependent on our direct sales force to obtain new customers and increase sales to existing
customers. There is significant competition for sales personnel with the skills and technical knowledge that we require. Our ability
to achieve significant revenue growth will depend, in large part, on our success in recruiting, training, and retaining a sufficient
number of sales personnel to support our growth. While we have in the past issued, and intend to continue to issue, options,
restricted share units or other equity awards as key components of our overall compensation, employee attraction and retention
efforts, we are required under IFRS to recognize shared-based compensation expense in our operating results for employee share-
based compensation under our equity grant programs which may increase the pressure to limit share-based compensation. See the
risk factor in our Annual Information Form titled "If we are unable to hire, retain and motivate qualified personnel, our business
will suffer" for more information.
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 opportunistically invest, ahead of this potential demand in personnel and marketing, and to make selective acquisitions
to support our international growth. For each new geography where we expand or seek to expand, we focus on understanding the
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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 customer adoption of our payments solutions, and we expect seasonality of our quarterly results
to continue to increase. We expect our overall revenues to continue to become increasingly correlated with respect to the GTV
processed by our customers through our platform.
Foreign Currency
Exchange rate fluctuations may negatively affect our results of operations. Our presentation and functional currency is the U.S.
dollar. We derive the largest portion of our revenues in U.S. dollars and the largest proportion of our expenses in U.S. dollars.
Exchange rate fluctuations have and may continue to negatively affect our revenue as our software subscriptions are generally
billed in the local currency of the country in which the customer is located, and the underlying GPV (from which we earn
transaction-based revenue) is also expected to be denominated in local currency. To the extent that we have significant revenues
denominated in foreign currencies, any strengthening of the U.S. dollar would reduce our revenues as measured 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. 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 expenses 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 expenses by entering into foreign exchange forward contracts which we have designated as cash flow hedges. Our hedging
program does not mitigate the impact of foreign currency fluctuations on our revenue. 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.
Goodwill Impairment
We have incurred a non-cash impairment charge for goodwill and may incur further impairment charges which would negatively
impact our operating results. We account for goodwill impairment in accordance with IAS 36, Impairment of Assets, which
among other things, requires that goodwill be tested for impairment at least annually. During the three months ended December
31, 2022, there were changes in macroeconomic conditions and our share price and market capitalization decreased. This led to
the carrying amount of our net assets exceeding our market capitalization as at December 31, 2022. This triggered an impairment
test to be performed on the Company's goodwill for our operating segment (the "Segment") which is the level at which
management monitors goodwill. The timing of this test also aligned with our annual impairment test of goodwill. Our test as at
December 31, 2022 resulted in a non-cash impairment charge of $748.7 million related to goodwill during the three months ended
December 31, 2022 as the terminal value multiple was negatively impacted by the macroeconomic conditions and our share price
decrease, and our revenue growth rate was negatively impacted by the macroeconomic impact on our customer's sales.
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If the carrying value of the Segment is below the Segment's recoverable amount in the future, we may have to recognize further
goodwill impairment losses in our results of operations in future periods. This could impair our ability to achieve profitability in
the future. Goodwill is more susceptible to impairment risk if business operating results or economic conditions deteriorate. We
are required to perform our next annual goodwill impairment analysis on December 31, 2023, or earlier should there be a
goodwill impairment trigger before then. For additional information, refer to note 16 of our audited annual consolidated financial
statements for Fiscal 2023.
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, advanced
insights, accounting and inventory management, amongst others. In addition, we generate revenues through revenue sharing
agreements from our partners.
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 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. We have, on multiple occasions, been able to leverage our
increased scale to renegotiate our relationships with our payments partners resulting in better payments economics overall. In
addition, we have contracted with a number of third-party vendors that sell products to the same customers as the Company. We
refer customers to these vendors and earn a referral fee. We also earn revenues from Lightspeed Capital, a merchant cash advance
("MCA") program pursuant to which 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. After
excluding Customer Locations attributable to the Ecwid eCommerce standalone product, our payments solutions are now
available to the majority of our Customer Locations. Offering embedded payments functionality is highly complementary to the
platform we offer our customers today and will allow us to monetize a greater portion of the $87.1 billion in GTV processed in
Fiscal 2023.
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.
(15)
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 certain 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, professional fees 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,
direct costs related to our merchant cash advance program, salaries and other employee related costs, including share-based
compensation and related payroll taxes, for a subset of the support team, and certain 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.
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, information 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 costs related to our acquisitions,
litigation costs, 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, and we continue to have to manage trade-offs between
accepting reduced coverage or incurring higher costs to continue or expand our coverage, although changes to the laws and
regulations governing insurance coverage for companies domiciled in Quebec have had a favorable impact on certain of our
premiums. 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. Although
the Company's e-business tax credits are mostly refundable, a portion of e-business tax credits is non-refundable and is carried
forward to reduce future Quebec income taxes payable and SR&ED tax credits are non-refundable and are carried forward to
reduce future federal income taxes payable. Given the Company’s recent losses in Canada, these non-refundable SR&ED credits
and e-business 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. The Company recognizes internal development costs as intangible assets only when
certain criteria are met (refer to note 3 of the audited annual consolidated financial statements for more details).
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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 and as we sell more of our
technology suite, including our payments solutions, to our existing customer base.
Acquisition-related Compensation
Acquisition-related compensation expenses represent the portion of the consideration paid to acquired businesses which is
contingent upon 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.
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Results of Operations
The following table outlines our consolidated statements of loss for the three months and the fiscal years ended March 31, 2023
and 2022:
(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 (gain)
Acquisition-related compensation
Amortization of intangible assets
Restructuring
Goodwill impairment
Total operating expenses
Operating loss
Net interest income
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,
2023
$
76,215
99,568
8,445
2022
$
70,542
66,729
9,287
2023
$
2022
$
298,763
399,552
32,191
248,430
264,044
35,898
184,228
146,558
730,506
548,372
19,036
66,539
11,692
20,657
43,822
12,426
80,064
271,035
47,446
72,192
159,432
45,575
97,267
76,905
398,545
277,199
86,961
69,653
331,961
271,173
22,139
30,805
56,884
1,735
2,025
297
5,746
24,620
25,549
—
28,240
36,837
67,388
1,789
2,032
29
20,433
26,151
606
—
105,939
140,442
250,371
5,471
8,244
(199)
41,792
101,546
28,683
748,712
95,253
121,150
216,659
4,993
7,743
611
50,491
91,812
803
—
169,800
183,505
1,431,001
589,515
(82,839)
(113,852)
(1,099,040)
(318,342)
9,654
1,014
24,812
2,988
(73,185)
(112,838)
(1,074,228)
(315,354)
1,651
(368)
1,283
282
1,397
1,679
2,469
(6,688)
1,103
(28,024)
(4,219)
(26,921)
(74,468)
(114,517)
(1,070,009)
(288,433)
Net loss per share – basic and diluted
(0.49)
(0.77)
(7.11)
(2.04)
(18)
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, 2023 and 2022:
(In thousands of US dollars)
Direct cost of revenues
General and administrative
Research and development
Sales and marketing
Restructuring
Three months ended
March 31,
Fiscal year ended
March 31,
2023
$
835
3,533
4,491
7,108
5,637
2022
$
2,149
10,736
10,319
18,421
—
2023
$
6,945
33,963
35,504
47,255
5,637
2022
$
6,345
26,377
29,705
46,639
—
Total share-based compensation and related costs
21,604
41,625
129,304
109,066
For the three months and fiscal year ended March 31, 2023, excluding $5,637 of share-based compensation expense acceleration that was
classified as restructuring, the share-based compensation expense was $15,685 and $123,530, respectively (March 2022 - expense of $41,934
and $108,916), and the related payroll taxes were an expense of $282 and $137, respectively (March 2022 - recovery of $309 and expense of
$150).
The increase in share-based compensation and related payroll taxes in Fiscal 2023 was primarily driven by the issuance of stock
options and awards to new and existing employees, including those from our acquisitions, to our Chief Executive Officer
("CEO"), Chief Operating Officer ("COO") and Chief Financial Officer ("CFO") in connection with their respective promotions
to these positions towards the end of Fiscal 2022, and to key personnel and executives as retention incentives in a competitive job
market. The decrease in share-based compensation and related costs in the three months ended March 31, 2023 was primarily due
to the forfeitures of awards of employees who were included in the restructuring during the quarter, and a reduction in the expense
for PSUs issued to the founders of NuORDER in the three months ended March 31, 2022.
Results of Operations for the Three Months and Fiscal Years Ended March 31, 2023 and 2022
Revenues
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
Revenues
Subscription
Transaction-based
Hardware and other
Total revenues
Percentage of total revenues
Subscription
Transaction-based
Hardware and other
Total
Subscription Revenue
76,215
70,542
99,568
66,729
5,673
32,839
8.0
298,763
248,430
50,333
49.2
399,552
264,044
135,508
20.3
51.3
8,445
9,287
(842)
(9.1)
32,191
35,898
(3,707)
(10.3)
184,228
146,558
37,670
25.7
730,506
548,372
182,134
33.2
41.4 %
54.0 %
4.6 %
48.1 %
45.5 %
6.4 %
100 %
100 %
40.9 %
54.7 %
4.4 %
45.3 %
48.2 %
6.5 %
100 %
100 %
Subscription revenue for the three months ended March 31, 2023 increased by $5.7 million or 8% as compared to the three
months ended March 31, 2022. The increase was primarily due to growth in our subscription customer base, including Customer
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Locations processing over $500,000/year, adoption of our new flagship solutions and customers adopting additional modules of
our platform. The increase in revenue was offset by lower exchange rates on currencies other than U.S. dollars in the quarter.
Subscription revenue for Fiscal 2023 increased by $50.3 million or 20% as compared to Fiscal 2022. The increase was primarily
due to growth in our subscription customer base, including Customer Locations processing over $500,000/year and Customer
Locations from the acquisitions of NuORDER and Ecwid, adoption of our new flagship solutions, and customers adopting
additional modules of our platform. The increase in revenue was offset by lower exchange rates on currencies other than U.S.
dollars in the period.
Transaction-based Revenue
Transaction-based revenue for the three months ended March 31, 2023 increased by $32.8 million or 49% as compared to the
three months ended March 31, 2022. The increase was primarily due to continued adoption of our payments solutions which led
to an increase in GPV of 70% from $2.2 billion to $3.8 billion.
Transaction-based revenue for Fiscal 2023 increased by $135.5 million or 51% as compared to Fiscal 2022. The increase was
primarily due to continued adoption of our payments solutions which led to an increase in GPV of 81% from $8.1 billion to
$14.7 billion.
Hardware & Other Revenue
Hardware and other revenue for the three months ended March 31, 2023 decreased by $0.8 million or 9% as compared to the three
months ended March 31, 2022 due to additional discounts and incentives provided during the three months ended March 31, 2023
in order to encourage new business given the competitive nature of our industry. Lower exchange rates on currencies other than
U.S. dollars in the quarter also contributed to the decrease in revenue.
Hardware and other revenue for Fiscal 2023 decreased by $3.7 million or 10% as compared to Fiscal 2022 due to additional
discounts and incentives provided during Fiscal 2023 in order to encourage new business given the competitive nature of our
industry. Lower exchange rates on currencies other than U.S. dollars in the period also contributed to the decrease in revenue.
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,
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
19,036
20,657
66,539
43,822
(1,621)
22,717
(7.8)
80,064
72,192
7,872
51.8
271,035
159,432
111,603
11,692
12,426
(734)
(5.9)
47,446
45,575
1,871
10.9
70.0
4.1
43.8
Total costs of revenues
97,267
76,905
20,362
26.5
398,545
277,199
121,346
Percentage of revenue
Subscription
Transaction-based
Hardware and other
Total
Subscription Cost of Revenue
25.0 %
66.8 %
29.3 %
65.7 %
138.4 % 133.8 %
52.8 %
52.5 %
26.8 %
67.8 %
29.1 %
60.4 %
147.4 % 127.0 %
54.6 %
50.5 %
Subscription cost of revenue for the three months ended March 31, 2023 decreased by $1.6 million or 8% as compared to the
three months ended March 31, 2022. Included in subscription cost of revenue for the three months ended March 31, 2023 was
$0.7 million in share-based compensation and related payroll taxes, compared to $1.7 million in the three months ended
March 31, 2022. The remainder of the decrease of $0.6 million was primarily due to a decrease in salary and other employee-
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related costs of $2.0 million offset by higher hosting costs of $0.9 million associated with supporting a greater number of
Customer Locations utilizing our platform, including Customer Locations processing over $500,000/year, higher royalties of $0.3
million and higher professional fees and other costs of $0.2 million.
Subscription cost of revenue for Fiscal 2023 increased by $7.9 million or 11% as compared to Fiscal 2022. Included in
subscription cost of revenue for Fiscal 2023 was $5.7 million in share-based compensation and related payroll taxes, compared to
$5.0 million in Fiscal 2022. The remainder of the increase of $7.2 million was primarily due to higher salary and other employee-
related costs of $1.0 million, higher hosting costs of $3.7 million associated with supporting a greater number of Customer
Locations utilizing our platform, including Customer Locations processing over $500,000/year and Customer Locations from the
acquisitions of NuORDER and Ecwid, higher royalties of $1.6 million and higher professional fees and other costs of $0.9
million.
Transaction-based Cost of Revenue
Transaction-based cost of revenue for the three months ended March 31, 2023 increased by $22.7 million or 52% as compared to
the three months ended March 31, 2022. The increase was primarily due to direct costs related to higher revenue from our
payments solutions compared to the three months ended March 31, 2022.
Transaction-based cost of revenue for Fiscal 2023 increased by $111.6 million or 70% as compared to Fiscal 2022. The increase
was primarily due to direct costs related to higher revenue from our payments solutions compared to Fiscal 2022.
Hardware and Other Cost of Revenue
Direct cost of hardware and other revenue for the three months ended March 31, 2023 decreased by $0.7 million or 6% as
compared to the three months ended March 31, 2022 mainly due to lower salary and other employee-related costs of $0.2 million
and lower hardware costs of $0.6 million 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 2023 increased by $1.9 million or 4% as compared to Fiscal 2022 mainly due
to higher salary and other employee-related costs of $1.0 million and increased hardware costs of $1.0 million 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.
Gross Profit
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
Gross profit
86,961
69,653
17,308
24.8
331,961
271,173
60,788
22.4
Percentage of total revenues
47.2 %
47.5 %
45.4 %
49.5 %
Gross profit for the three months ended March 31, 2023 increased by $17.3 million or 25% compared to the three months ended
March 31, 2022. The increase was primarily due to growth in our subscription and transaction-based revenue as a result of more
Customer Locations using our platform, including Customer Locations processing over $500,000/year, the adoption of our new
flagship solutions and an increase in the GTV processed by our customers through our platform. A higher proportion of
transaction-based revenue in the three months ended March 31, 2023 as compared to the three months ended March 31, 2022
reduced gross profit as a percentage of revenue. Our gross profit benefited from $0.8 million in savings in salary and other
employee-related costs due to the restructuring we announced during the three months ended March 31, 2023.
Gross profit for Fiscal 2023 increased by $60.8 million or 22% compared to Fiscal 2022. The increase was primarily due to
growth in our subscription and transaction-based revenue as a result of more Customer Locations using our platform, including
Customer Locations processing over $500,000/year, the adoption of our new flagship solutions, an increase in the GTV processed
by our customers through our platform, and the impact of our acquisitions of NuORDER and Ecwid, partially offset by lower
(21)
margins in hardware and other revenue. A higher proportion of transaction-based revenue in Fiscal 2023 as compared to Fiscal
2022 reduced gross profit as a percentage of revenue.
Operating Expenses
General and Administrative
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
General and administrative
22,139
28,240
(6,101)
(21.6)
105,939
95,253
10,686
11.2
Percentage of total revenues
12.0 %
19.3 %
14.5 %
17.4 %
General and administrative expenses for the three months ended March 31, 2023 decreased by $6.1 million or 22% compared to
the three months ended March 31, 2022. Included in general and administrative expenses for the three months ended March 31,
2023 is $3.5 million of share-based compensation expense and related payroll taxes, $2.3 million in transaction-related costs and
$0.2 million related to provisions and other costs incurred in respect of certain litigation matters, net of amounts covered by
insurance and indemnification proceeds, compared to $10.7 million, $0.6 million and $0.6 million, respectively, in the three
months ended March 31, 2022. 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 decreased by $0.3 million driven by a decrease of $0.3 million
from lower salary and other employee-related costs which includes $1.0 million in savings from the restructuring announced
during the three months ended March 31, 2023, a decrease of $0.7 million related to professional fees and other expenses and a
decrease of $0.7 million in D&O insurance, offset by a $1.4 million increase in bad debt expense which is expected as our
revenue continues to increase and as we grow our merchant cash advance business. Our general and administrative expenses as a
percentage of revenue decreased from 19% to 12% from the three months ended March 31, 2022 to the three months ended
March 31, 2023.
General and administrative expenses for Fiscal 2023 increased by $10.7 million or 11% compared to Fiscal 2022. Included in
general and administrative expenses for Fiscal 2023 is $34.0 million of share-based compensation expense and related payroll
taxes, $5.1 million in transaction-related costs and $1.4 million related to provisions and other costs incurred in respect of certain
litigation matters, net of amounts covered by insurance and indemnification proceeds, compared to $26.4 million, $8.4 million
and $1.7 million, respectively, in Fiscal 2022. 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 $6.7 million driven by higher salary and other
employee-related costs of $7.1 million, which includes $0.2 million from the acquisitions of NuORDER and Ecwid, and a $2.6
million increase in bad debt expense, offset by a $2.1 million decrease in D&O insurance and a $0.9 million decrease in
professional fees and other expenses. Our general and administrative expenses as a percentage of revenue decreased from 17% to
15% from Fiscal 2022 to Fiscal 2023.
Research and Development
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
Research and development
30,805
36,837
(6,032)
(16.4)
140,442
121,150
19,292
15.9
Percentage of total revenues
16.7 %
25.1 %
19.2 %
22.1 %
Research and development expenses for the three months ended March 31, 2023 decreased by $6.0 million or 16% compared to
the three months ended March 31, 2022. Included in research and development expenses for the three months ended March 31,
(22)
2023 is $4.5 million of share-based compensation expense and related payroll taxes compared to $10.3 million in the three months
ended March 31, 2022. When excluding share-based compensation and related payroll taxes, research and development expenses
decreased by $0.2 million driven by lower salary and other employee-related costs of $1.1 million which includes $2.2 million in
savings from the restructuring announced during the three months ended March 31, 2023 offset by an increase in salary and other
employee-related costs of employees working on our flagship products, and $0.4 million related to a decrease in hosting costs,
offset by $1.3 million related to an increase in professional fees and other expenses. Our research and development costs as a
percentage of revenue decreased from 25% to 17% from the three months ended March 31, 2022 to the three months ended
March 31, 2023.
Research and development expenses for Fiscal 2023 increased by $19.3 million or 16% compared to Fiscal 2022. Included in
research and development expenses for Fiscal 2023 is $35.5 million of share-based compensation expense and related payroll
taxes compared to $29.7 million in Fiscal 2022. When excluding share-based compensation and related payroll taxes, research
and development expenses increased by $13.5 million driven by higher salary and other employee-related costs of $6.9 million,
which includes $5.1 million from the acquisitions of NuORDER and Ecwid, $0.4 million related to an increase in hosting costs
and $6.2 million related to an increase in professional fees and other expenses. Our research and development costs as a
percentage of revenue decreased from 22% to 19% from Fiscal 2022 to Fiscal 2023.
Sales and Marketing
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
Sales and marketing
56,884
67,388
(10,504)
(15.6)
250,371
216,659
33,712
15.6
Percentage of total revenues
30.9 %
46.0 %
34.3 %
39.5 %
Sales and marketing expenses for the three months ended March 31, 2023 decreased by $10.5 million or 16% as compared to the
three months ended March 31, 2022. Included in sales and marketing expenses for the three months ended March 31, 2023 is $7.1
million of share-based compensation expense and related payroll taxes and nil transaction-related costs compared to $18.4 million
and $0.3 million, respectively, in the three months ended March 31, 2022. When excluding share-based compensation and related
payroll taxes and transaction-related costs, sales and marketing expenses increased by $1.1 million driven by higher salary and
other employee-related costs of $5.3 million which includes $2.0 million in savings from the restructuring announced during the
three months ended March 31, 2023 offset by an increase in salary and other employee-related costs including employees selling
our flagship products, offset by $0.1 million related to a decrease in professional fees and other expenses and a $4.1 million
decrease in other investments in sales and marketing. Our sales and marketing costs as a percentage of revenue decreased from
46% to 31% from the three months ended March 31, 2022 to the three months ended March 31, 2023.
Sales and marketing expenses for Fiscal 2023 increased by $33.7 million or 16% as compared to Fiscal 2022. Included in sales
and marketing expenses for Fiscal 2023 is $47.3 million of share-based compensation expense and related payroll taxes and $0.7
million in transaction-related costs compared to $46.6 million and $1.2 million, respectively, in Fiscal 2022. When excluding
share-based compensation and related payroll taxes and transaction-related costs, sales and marketing expenses increased by
$33.6 million driven by higher salary and other employee-related costs of $22.2 million which includes $5.3 million from the
acquisitions of NuORDER and Ecwid, $7.4 million incurred for other investments in sales and marketing including marketing
acquisition and growth spend and trade shows, $3.3 million related to our annual sales, customer and partner summit which we
had provided in a virtual format in the prior comparable period and brought back to in person during the three months ended June
30, 2022, and $0.7 million related to an increase in professional fees and other expenses. Our sales and marketing costs as a
percentage of revenue decreased from 40% to 34% from Fiscal 2022 to Fiscal 2023.
(23)
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,
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
1,735
2,025
3,760
1,789
2,032
3,821
(54)
(7)
(61)
(3.0)
5,471
4,993
(0.3)
8,244
7,743
(1.6)
13,715
12,736
478
501
979
9.6
6.5
7.7
Percentage of total revenues
2.0 %
2.6 %
1.9 %
2.3 %
Depreciation of property and equipment and right-of-use assets for the three months ended March 31, 2023 decreased by 2% as
compared to the three months ended March 31, 2022. The decrease in the depreciation of property and equipment results mainly
from fully depreciated fixed assets in the last 12 months offset by additions to property and equipment. The consistent
depreciation of right-of-use assets is mainly the result of signing new lease commitments offset by lease terminations in the last
12 months.
Depreciation of property and equipment expenses for Fiscal 2023 increased by $0.5 million or 10% as compared to Fiscal 2022.
The increase in the depreciation of property and equipment results from additions to property and equipment made throughout the
last 12 months. The increase in the depreciation of right-of-use assets of $0.5 million or 6% is mainly the result of leases obtained
through the acquisition of NuORDER and new lease commitments offset by lease terminations in the last 12 months.
Foreign Exchange Loss (Gain)
(In thousands of US dollars, except
percentages)
Foreign exchange loss (gain)
Three months ended
March 31,
2023
$
297
2022
$
29
Fiscal year ended
March 31,
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
268
924.1
(199)
611
(810)
(132.6)
Percentage of total revenues
0.2 %
0.0 %
0.0 %
0.1 %
Foreign exchange loss for the three months ended March 31, 2023 increased as compared to the three months ended March 31,
2022. The foreign exchange difference went from a foreign exchange loss for the fiscal year ended March 31, 2022 to a foreign
exchange gain for the fiscal year ended March 31, 2023. Foreign exchange gains and losses arise 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.
Acquisition-related Compensation
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
Acquisition-related compensation
5,746
20,433
(14,687)
(71.9)
41,792
50,491
(8,699)
(17.2)
Percentage of total revenues
3.1 %
13.9 %
5.7 %
9.2 %
(24)
Acquisition-related compensation expense for the three months ended March 31, 2023 decreased by $14.7 million or 72%
compared to the three months ended March 31, 2022. The decrease is due to lower deferred compensation from our acquisitions
of Ecwid and NuORDER, which have both been partially settled. The majority of this acquisition-related compensation is tied to
ongoing employment obligations in connection with certain of our acquisitions. This acquisition-related compensation 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 2023 decreased by $8.7 million or 17% compared to Fiscal 2022. The
decrease is due to lower deferred compensation from our acquisitions of NuORDER, iKentoo, Kounta and Gastrofix, which have
all been either partially or fully settled, offset by additional deferred compensation from Ecwid. The majority of this acquisition-
related compensation is tied to ongoing employment obligations in connection with certain of our acquisitions. This acquisition-
related compensation 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
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
Amortization of intangible assets
24,620
26,151
(1,531)
(5.9)
101,546
91,812
9,734
10.6
Percentage of total revenues
13.4 %
17.8 %
13.9 %
16.7 %
Amortization of intangible assets for the three months ended March 31, 2023 decreased by $1.5 million or 6% as compared to the
three months ended March 31, 2022. The decrease in amortization relates primarily to the Chronogolf customer relationships and
the Kounta and Gastrofix software technology intangible assets which are fully amortized as at March 31, 2023.
Amortization of intangible assets for Fiscal 2023 increased by $9.7 million or 11% as compared to Fiscal 2022. The increase in
amortization relates primarily to intangibles acquired through the NuORDER and Ecwid acquisitions offset by a decrease in
amortization relating to the Chronogolf customer relationships and the Kounta and Gastrofix software technology intangible
assets.
Restructuring
(In thousands of US dollars, except
percentages)
Restructuring
Three months ended
March 31,
2023
$
25,549
2022
$
606
Fiscal year ended
March 31,
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
24,943
4,116.0
28,683
803
27,880
3,472.0
Percentage of total revenues
13.9 %
0.4 %
3.9 %
0.1 %
During the three months ended March 31, 2023, we announced a reorganization to streamline the Company's operating model
while continuing to focus on disciplined growth. This new structure represents the next deliberate step to integrate all of our
acquired companies and products now that we have successfully launched our flagship products in both retail and hospitality. The
reorganization included the reduction of approximately 300 roles. We plan to continue to hire core go-to-market and development
roles that support disciplined growth. The expenses associated with this plan were recorded as a restructuring charge. The
restructuring expense consists of severance costs, the acceleration of share-based compensation and the acceleration of
acquisition-related compensation (see note 24 of the audited annual consolidated financial statements for additional details).
(25)
Goodwill Impairment
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
Goodwill impairment
2023
$
—
2022
$
—
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
—
0.0
748,712
—
748,712
100.0
Percentage of total revenues
0.0 %
0.0 %
102.5 %
0.0 %
An impairment test of goodwill was completed as at December 31, 2022 using a fair value less costs of disposal model. This test
demonstrated a non-cash impairment charge of $748.7 million related to goodwill during the three months ended December 31,
2022. We reassessed the key assumptions used in the December 31, 2022 test as at March 31, 2023 and found no reduction in the
terminal value multiple, no increase in the discount rate and no decrease in the revenue growth rate. A reduction in the terminal
value multiple, an increase in the discount rate or a decrease in the revenue growth rate could cause additional impairment in the
future (see note 16 of the audited annual consolidated financial statements for additional details).
Other Income
Three months ended
March 31,
Fiscal year ended
March 31,
(In thousands of US dollars, except
percentages)
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
Net interest income
9,654
1,014
8,640
852.1
24,812
2,988
21,824
730.4
Percentage of total revenues
5.2 %
0.7 %
3.4 %
0.5 %
Net interest income relates to interest income earned in the period on cash and cash equivalents of $26.9 million during Fiscal
2023 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
$2.1 million of interest expense for Fiscal 2023. Net interest income for Fiscal 2023 increased by $21.8 million or 730% as
compared to Fiscal 2022 due to an increase in interest income earned on cash and cash equivalents of $21.0 million related to
higher interest rates and a decrease in interest expense of $0.8 million due primarily to the full repayment of the balance of our
stand-by acquisition term loan on July 6, 2022.
Income Taxes
(In thousands of US dollars, except
percentages)
Income tax expense (recovery)
Current
Deferred
Three months ended
March 31,
Fiscal year ended
March 31,
2023
$
2022
$
Change
$
Change
%
2023
$
2022
$
Change
$
Change
%
1,651
282
1,369
485.5
2,469
1,103
(368)
1,397
(1,765)
(126.3)
(6,688)
(28,024)
1,366
21,336
123.8
(76.1)
Total income tax expense (recovery)
1,283
1,679
(396)
(23.6)
(4,219)
(26,921)
22,702
(84.3)
Percentage of total revenues
Current
Deferred
Total
0.9 %
(0.2) %
0.7 %
0.2 %
1.0 %
1.2 %
0.3 %
(0.9) %
0.2 %
(5.1) %
(0.6) %
(4.9) %
(26)
Income tax expense for the three months ended March 31, 2023 decreased by $0.4 million or 24% as compared to the three
months ended March 31, 2022. The decrease is due to lower deferred income taxes of $1.8 million offset by an increase in current
income tax expense of $1.4 million. The current income tax expense for the three months ended March 31, 2023 primarily relates
to additional income taxes related to one of our acquisitions and a taxable income position in certain European subsidiaries. The
deferred income tax recovery for the three months ended March 31, 2023 mainly relates to timing differences on share-based
compensation and other temporary deductible differences while the deferred income tax expense in the three months ended
March 31, 2022 mainly relates to the impact of the recognition of a deferred tax liability related to acquired intangibles.
Income tax recovery for Fiscal 2023 decreased by $22.7 million or 84% as compared to Fiscal 2022. The decrease is mainly due
to a decrease in deferred income tax recovery of $21.3 million in Fiscal 2023 compared to Fiscal 2022. The deferred income tax
recovery in Fiscal 2022 was primarily due to the recognition of a deferred tax asset on loss carry-forwards to offset the net
deferred tax liability of NuORDER and Ecwid as they joined Lightspeed's United States consolidated tax group while the deferred
income tax recovery in Fiscal 2023 is primarily due to the amortization of acquired intangible assets and increases in loss carry-
forwards during the period.
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,
2023
$
2022
$
2021
$
730,506
548,372
221,728
(1,070,009)
(288,433)
(124,278)
(7.11)
(2.04)
(1.18)
2,668,732
3,619,980
2,105,319
20,826
62,839
57,634
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 2023 Compared to Fiscal 2022
Total assets decreased by $951.2 million or 26% from Fiscal 2022 to Fiscal 2023 with cash and cash equivalents accounting for
$153.5 million of the decrease primarily due to the repayment of the balance outstanding under our stand-by acquisition term loan
of $30.0 million and cash spent on operating activities of $125.3 million. Goodwill decreased by $753.7 million due to a non-cash
impairment charge of $748.7 million and a $5.0 million decrease due to foreign currency differences on translation of foreign
operations. The lease right-of-use assets and intangibles accounted for $4.6 million and $98.1 million of the decrease respectively,
primarily due to the depreciation and amortization taken during the period. The decrease in total assets was offset by an increase
in trade and other receivables of $38.6 million which is primarily due to growing trade receivables and merchant cash advances in
addition to higher research and development tax credits receivables and accrued interest. In addition, the decrease in total assets
was offset by an increase in other short term and long term assets of $1.5 million and $10.1 million, respectively, primarily related
to an increase in commission and contract assets and a long-term investment of $1.5 million in an entity supporting local
businesses, an increase in property and equipment of $3.0 million and an increase in inventory of $5.3 million.
Fiscal 2022 Compared to Fiscal 2021
Total assets increased by $1,514.7 million or 72% from the fiscal year ended March 31, 2021 ("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 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 acquisitions and
(27)
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 acquisitions as well as a deposit made in connection with our merchant cash
advance business.
Total Liabilities
Fiscal 2023 Compared to Fiscal 2022
Total liabilities decreased by $49.4 million or 22% from Fiscal 2022 to Fiscal 2023 driven by a decrease in current liabilities of
$7.4 million and a decrease in long-term liabilities of $42.0 million. The main drivers of the decrease in current liabilities were a
decrease in accrued compensation and benefits of $2.7 million, a decrease in lease liabilities of $1.0 million, a decrease in trade
payables of $2.3 million and a decrease in acquisition-related payables of $5.2 million offset by an increase in deferred revenue of
$2.9 million. The main drivers of the decrease in long-term liabilities were the repayment of the balance outstanding under our
stand-by acquisition term loan of $30.0 million, a decrease in lease liabilities of $4.5 million and a decrease of $6.8 million in
deferred tax 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 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.
(28)
Quarterly Results of Operations
The following table sets forth selected quarterly statements of operations data for each of the eight quarters ended March 31, 2023
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 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 (gain)
Acquisition-related compensation
Amortization of intangible assets
Restructuring
Goodwill impairment
Jun. 30,
2021
$
Sept. 30,
2021
$
Three months ended
Jun. 30,
2022
$
Mar. 31,
2022
$
Dec. 31,
2021
$
Sept. 30,
2022
$
Dec. 31,
2022
$
Mar. 31,
2023
$
115,920 133,218 152,676 146,558 173,882 183,699 188,697 184,228
58,347 68,272 73,675 76,905 96,357 102,230 102,691 97,267
57,573 64,946 79,001 69,653 77,525 81,469 86,006 86,961
22,277 23,081 21,655 28,240 30,239 25,132 28,429 22,139
22,216 30,092 32,005 36,837 35,636 36,596 37,405 30,805
42,270 51,693 55,308 67,388 68,645 64,337 60,505 56,884
1,735
2,025
297
5,746
17,013 22,797 25,851 26,151 25,876 25,684 25,366 24,620
1,324 25,549
—
1,188
2,063
29
9,032 19,012 20,433 17,103 12,653
869
1,625
249
2,014
1,327
2,109
(968)
6,290
603
— 748,712
1,020
2,008
6
1,221
2,047
443
1,789
2,032
29
1,315
2,078
327
1,207
—
197
—
606
—
—
—
—
—
Total operating expenses
108,730 139,729 157,551 183,505 182,417 168,285 910,499 169,800
Operating loss
Net interest income
(51,157) (74,783) (78,550) (113,852) (104,892) (86,816) (824,493) (82,839)
9,654
2,007
1,014
1,029
8,300
4,851
226
719
Loss before income taxes
(50,931) (74,064) (77,521) (112,838) (102,885) (81,965) (816,193) (73,185)
Income tax expense (recovery)
Current
Deferred
630
96
(2,224) (15,072) (12,125)
95
282
1,397
264
(2,353)
516
(2,538)
38
(1,429)
1,651
(368)
Total income tax expense (recovery)
(1,594) (14,977) (12,029)
1,679
(2,089)
(2,022)
(1,391)
1,283
Net loss
(49,337) (59,087) (65,492) (114,517) (100,796) (79,943) (814,802) (74,468)
Net loss per share – basic and diluted
(0.38)
(0.43)
(0.44)
(0.77)
(0.68)
(0.53)
(5.39)
(0.49)
Revenues
Our overall revenues continue to grow as we grow our global customer base and increase solution adoption amongst existing
customers, particularly high GTV customers. Our total quarterly revenue increased successively for all periods presented (except
for the three month periods ended March 31, 2022 and March 31, 2023) mainly due to increases in subscription and transaction-
based revenue from existing and new customers, including increased adoption of our payments solutions and other add-ons, as
well as the acquisitions of Vend, NuORDER and Ecwid. The decrease in revenues in the three month periods ended March 31,
2022 and March 31, 2023 were primarily due to the impact of seasonality on our revenues as a result of the increased adoption of
our payments solution, and transaction-based revenues comprising an increasingly larger proportion of our revenue mix. The three
months ended December 31 is historically our seasonally strongest quarter for transaction-based revenue due to the holiday
season, while the three months ended March 31 is historically our weakest GTV quarter which caused a sequential decline in our
revenues for the three months ended March 31, 2022 and the three months ended March 31, 2023 compared to the three months
ended December 31, 2021 and the three months ended December 31, 2022, respectively.
(29)
Direct Cost of Revenues
Our total direct cost of revenues increased successively for all periods presented (except for the three months ended March 31,
2023). The aggregate increase within the periods presented was primarily due to increased costs associated with supporting a
greater number of Customer Locations utilizing our platform, 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. The decrease in direct cost of revenues for the three months ended March 31, 2023
is aligned with the decrease in revenues within the period, and includes a decrease in share-based compensation and $0.8 million
in savings in salary and other employee-related costs due to the restructuring we announced during the three months ended March
31, 2023.
Gross Profit
Our total quarterly gross profit increased successively for all periods presented (except for the three months ended March 31,
2022) as we grow our global customer base and increase solution adoption amongst existing customers, particularly high GTV
customers. 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. We expect this trend to continue in future
periods, and to be partially offset by the increase in our capital business that carries a significantly higher margin.
Operating Expenses
Total operating expenses increased successively for all periods presented (except for the three months ended June 30, 2022,
September 30, 2022, and March 31, 2023) primarily due to higher sales and marketing and other costs to support a larger
customer base, including those from our acquisitions of Vend, NuORDER and Ecwid. The large increase in the three months
ended December 31, 2022 was due to the goodwill impairment charge taken during the period, which resulted in relatively lower
operating expenses for the three months ended March 31, 2023. The decrease in operating expenses in the three months ended
June 30, 2022 was mainly due to a decrease in acquisition-related compensation. The decrease in operating expenses in the three
months ended September 30, 2022 was mainly due to a decrease in general and administrative expenses related to lower share-
based compensation, salary costs and litigation costs, a decrease in sales and marketing expenses related to lower share-based
compensation and the costs related to the sales, customer and partner summit incurred during the three months ended June 30,
2022, and a decrease in acquisition-related compensation. The decrease in operating expenses in the three months ended March
31, 2023 was primarily due to the goodwill impairment charge taken during the previous period, a decrease in share-based
compensation and salary costs, as well as $5.1 million in savings in salary and other employee-related costs due to the
restructuring we announced during the three months ended March 31, 2023.
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 had credit facilities with the Canadian Imperial Bank of Commerce ("CIBC"), which included a $25 million demand
revolving operating credit facility (the "Revolver") and a $50 million stand-by acquisition term loan, $20 million of which was
uncommitted (the "Acquisition Facility", and together with the Revolver, the "Credit Facilities"). The Acquisition Facility was
drawn for $30 million in January 2020 for the acquisition of Lightspeed POS Germany GmbH (formerly Gastrofix GmbH) and
was set to mature 60 months thereafter. On July 6, 2022, we repaid in full the balance outstanding under the Acquisition Facility,
including all accrued and unpaid interest, and the Acquisition Facility was terminated. Prior to the repayment, excluding
unamortized financing costs, the balance drawn on the Acquisition Facility was $30 million.
(30)
On October 28, 2022, we amended the Revolver to, among other things, reduce the size of the Revolver to $5 million and
facilitate greater operating flexibility (the "Amended Revolver"). The Amended Revolver is available for letters of credit or letters
of guarantee for general corporate and working capital purposes. The Amended Revolver is subject to certain general covenants,
including making available audited annual consolidated financial statements, and is secured by the material assets of the
Company. We were in compliance with covenants as at March 31, 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 flows and performing budget-to-actual analysis on a regular basis.
Our principal cash requirements are for working capital and acquisitions we may execute. Working capital surplus as at March 31,
2023 was $783.9 million. Given our existing cash, the Amended Revolver and available financing, we believe there is sufficient
liquidity to meet our current and short-term growth requirements in addition to our long-term strategic objectives.
Base Shelf Prospectus
On May 18, 2023, pursuant to "well-known seasoned issuer" blanket orders of the Canadian Securities Administrators, 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 subordinate voting shares, preferred shares, debt securities, warrants, subscription receipts, units, or
any combination thereof, in amounts, at prices and on terms to be set forth in one or more shelf prospectus supplements during the
25-month period that the Base Prospectus is effective.
Cash Flows
The following table presents cash and cash equivalents as at March 31, 2023 and 2022, and cash flows from or used in operating,
investing, and financing activities for three months and the fiscal years ended March 31, 2023 and 2022:
(In thousands of US dollars)
Three months ended
March 31,
Fiscal year ended
March 31,
2023
$
2022
$
2023
$
2022
$
Cash and cash equivalents
800,154
953,654
800,154
953,654
Cash flows from (used in):
Operating activities
Investing activities
Financing activities
Effect of foreign exchange on cash and cash equivalents
(41,587)
5,953
(2,376)
46
(11,342)
(199)
(1,715)
251
(125,284)
8,817
(35,411)
(1,622)
(87,218)
(563,931)
798,057
(404)
Net increase (decrease) in cash and cash equivalents
(37,964)
(13,005)
(153,500)
146,504
Cash Flows used in Operating Activities
Cash flows used in operating activities for the three months ended March 31, 2023 were $41.6 million compared to $11.3 million
for the three months ended March 31, 2022. For the three months ended March 31, 2023, Adjusted Cash Flows Used in Operating
Activities4 were $26.9 million compared to Adjusted Cash Flows Used in Operating Activities4 of $9.9 million for the three
months ended March 31, 2022. This $17.0 million increase is primarily due to working capital movements including $12.6
million of additional merchant cash advances made, a decrease in tax credits received, and timing differences related to current
receivables and payables.
Cash flows used in operating activities for Fiscal 2023 were $125.3 million compared to $87.2 million for Fiscal 2022. For Fiscal
2023, Adjusted Cash Flows Used in Operating Activities4 were $96.0 million compared to Adjusted Cash Flows Used in
4 Refer to the section entitled "Non-IFRS Measures and Ratios and Reconciliation of Non-IFRS Measures and Ratios"
(31)
Operating Activities4 of $61.3 million for Fiscal 2022. This $34.7 million increase is primarily due to working capital movements
including $19.2 million of additional merchant cash advances made, a decrease in deferred revenue of $2.5 million, a decrease in
tax credits received, timing differences related to current receivables and payables, and an increase in cash used in operating
activities related to our acquisitions of NuORDER and Ecwid, offset by a decrease of $3.8 million in D&O insurance paid related
to being a public company in the U.S. and an outflow of $5.0 million for a deposit made in Fiscal 2021 in connection with our
merchant cash advance business, with the same deposit being returned during Fiscal 2022.
Cash Flows from (used in) Investing Activities
Cash flows from investing activities for the three months ended March 31, 2023 were $6.0 million compared to cash flows used in
investing activities of $0.2 million for the three months ended March 31, 2022. The movement in cash flows relating to investing
activities was primarily due to an increase of $8.1 million in interest income received offset by a decrease of $1.5 million from
cash outflows associated with capitalized internal development costs related to the Lightspeed B2B network.
Cash flows from investing activities for Fiscal 2023 were $8.8 million compared to cash flows used in investing activities of
$563.9 million for Fiscal 2022. The movement in cash flows relating to investing activities was primarily due to the cash paid for
the acquisition of Vend in April 2021, NuORDER in July 2021 and Ecwid in October 2021 and an increase of $17.7 million in
interest income received offset by a decrease of $3.9 million from cash outflows associated with capitalized internal development
costs related to the Lightspeed B2B network.
Cash Flows from (used in) Financing Activities
Cash flows used in financing activities for the three months ended March 31, 2023 were $2.4 million compared to $1.7 million in
the three months ended March 31, 2022. The movement in cash flows relating to financing activities was mainly due to a decrease
of $0.2 million in proceeds from the exercise of stock options under our equity incentive plans and an increase of $0.6 million
from the payment of lease liabilities and movement in restricted lease deposits.
Cash flows used in financing activities for Fiscal 2023 were $35.4 million compared to cash flows from financing activities of
$798.1 million in Fiscal 2022. The movement in cash flows relating to financing activities was mainly due to having raised $789.4
million in funds in our August 2021 public offering, net of share issuance costs, the repayment of the $30.0 million balance
outstanding under the Acquisition Facility in July 2022 and a decrease of $12.8 million in proceeds from the exercise of stock
options under our equity incentive plans.
We believe that our current cash balance, available financing, cash flows from operations and credit available under the Amended
Revolver 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, 2023:
(In thousands of US dollars)
Accounts payable and accrued liabilities
Other long-term liabilities
Lease obligations(1)
Material unconditional purchase obligations(2)
Payments due by period
< 1
Year
68,827
—
9,723
32,077
1 to 3
Years
—
1,026
14,858
54,441
4 to 5
Years
—
—
8,401
31,000
>5
Years
—
—
6,979
Total
68,827
1,026
39,961
—
117,518
Total contractual obligations
110,627
70,325
39,401
6,979
227,332
(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 seven years. See note 13 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.
(32)
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 2023 and Fiscal 2022:
(In thousands of US dollars)
Short-term employee benefits and termination benefits
Share-based payments
Fiscal year ended March 31,
2023
$
3,242
20,331
2022
$
2,914
21,251
Total compensation paid to key management personnel
23,573
24,165
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 and other 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 2023, potential effects from uncertainty in the macroeconomic environment 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 these
effects. We continue to monitor macroeconomic conditions and any resulting impacts on our credit risk.
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 $800.2 million of cash and cash equivalents as well as the Amended Revolver
available as at March 31, 2023, demonstrating our liquidity and ability to pay financial liabilities as they become due. The
Company's business, financial condition and operations were not significantly impacted by the failure of Silicon Valley Bank.
Only de minimis cash and cash equivalent balances were held with Silicon Valley Bank as at March 31, 2023.
Foreign Exchange Risk
We are exposed to foreign exchange risk due to financial instruments denominated in foreign currencies. 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, the Swiss franc and the New Zealand dollar. We have a policy to
(33)
mitigate our exposure to foreign currency exchange risk by entering into derivative instruments. We have entered into multiple
foreign exchange forward contracts, which are generally for a term of less than one-year. 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 $109.2 million CAD as at March 31, 2023 (March 31, 2022 - $26.0 million
CAD).
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:
2023
CAD
$
EUR
$
AUD
$
GBP
$
CHF
$
Other
$
Total
$
Cash and cash equivalents and restricted cash
3,336
5,828
2,078
1,907
1,456
1,537
16,142
Trade and other receivables
3,716
9,004
8,199
1,680
1,074
1,883
25,556
Accounts payable and accrued liabilities
(10,615)
(8,948)
(3,604)
(1,561)
(1,294)
(3,333)
(29,355)
Other long-term liabilities
Lease liabilities
(231)
(267)
(68)
(119)
(48)
(5)
(738)
(11,805)
(3,258)
(1,870)
(4,085)
(866)
(211)
(22,095)
Net financial position exposure
(15,599)
2,359
4,735
(2,178)
322
(129)
(10,490)
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. 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 stock options and share awards
outstanding and exercise price remaining constant.
Inflation Risk
We are subject to inflation risk that could have 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. If inflation
continues to increase, it will likely affect our expenses, including, but not limited to, increased costs to offer our solutions and
employee compensation expenses. Furthermore, our customers are also subject to risks associated with inflationary pressures that
have and may continue to impact their business and financial condition. Such risks include a reduction in consumer spending and
credit or debit card usage, which would negatively impact our financial performance because the number of transactions
processed using our payment solutions would decrease, as would the average purchase amount of each transaction.
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.
(34)
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. 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 rate. These
estimates, including the methodology used, the identification of cash-generating units and allocation of goodwill, 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.
During the three months ended December 31, 2022, there were changes in macroeconomic conditions and our share price and
market capitalization decreased. This led to the carrying amount of our net assets exceeding our market capitalization as at
December 31, 2022. This triggered an impairment test to be performed on the Company's goodwill for our Segment, as defined in
note 3 of the audited annual consolidated financial statements, which is the level at which management monitors goodwill. Our
test as at December 31, 2022 resulted in a non-cash impairment charge of $748.7 million related to goodwill during the three
months ended December 31, 2022 as the terminal value multiple was negatively impacted by the macroeconomic conditions and
our share price decrease, and our revenue growth rate was negatively impacted by the macroeconomic impact on our customer's
sales.
If the carrying value of our Segment is below our recoverable amount in the future, we may have to recognize further goodwill
impairment losses in our results of operations in future periods. This could impair our ability to achieve profitability in the future.
Goodwill is more susceptible to impairment risk if business operating results or economic conditions deteriorate. We reassessed
as at March 31, 2023 the key assumptions used in the December 31, 2022 test and found no reduction in the terminal value
multiple, no increase in the discount rate and no decrease in the revenue growth rate. A reduction in the terminal value multiple,
an increase in the discount rate or a decrease in the revenue growth rate could cause additional impairment in the future. We are
required to perform our next annual goodwill impairment analysis on December 31, 2023, or earlier should there be a goodwill
impairment trigger before then. For additional information, refer to note 16 of our audited annual consolidated financial
statements for Fiscal 2023.
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.
(35)
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, interest rate
and dividend yield.
Provisions
We are involved in litigation and claims from time to time. There can be no assurance that these litigations and claims will be
resolved without costly litigation nor in a manner that does not adversely impact the financial position and operating results of the
Company. 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. In determining the probability of a loss and consequently determining a
reasonable estimate, management is required to use significant judgment. Assumptions applied reflect the most probable set of
economic conditions and planned courses of action by the Company at the time, but these too may differ over time. Given the
uncertainties associated with any litigation, the actual outcome can be different from our estimates and could adversely affect the
financial position and operating results of the Company.
New Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the IASB or other standards-setting bodies, and are adopted as
of the specified effective date.
New and amended standards and interpretations adopted
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. These amendments to IAS 16 and IAS 37 are effective for annual periods beginning on or after January 1, 2022, with
early application permitted. We have adopted these amendments as of April 1, 2022. 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 International Financial Reporting Interpretations Committee (IFRIC) interpretations effective as of April 1, 2022 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 these 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 IFRS 17 Insurance Contracts standardizing how to recognize, measure, present and disclose insurance
contracts, 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, amendments to IAS 1 Presentation of Financial Statements
requiring companies to disclose their material accounting policy information 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 new IFRS 17 standard and these amendments to IAS 8, IAS 1 and IAS 12 are effective
for annual periods beginning on or after January 1, 2023, 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 and they have also issued
ammendments to IFRS 16 Leases to include variable payments when measuring a lease liability arising from a sale-and-leaseback
(36)
transaction. These amendments to IAS 1 and IFRS 16 are effective for annual periods beginning on or after January 1, 2024, with
early application permitted.
We do not expect that the adoption of the standards listed above will have a material impact on the 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
Shares and (ii) an unlimited number of preferred shares, issuable in series, of which 151,368,643 Subordinate Voting Shares and
no preferred shares were issued and outstanding as of May 16, 2023.
As of May 16, 2023, there were 521,474 options outstanding under the Company’s Amended and Restated 2012 Stock Option
Plan, as amended (of which 521,474 were vested as of such date), 8,300,252 options outstanding under the Company’s Third
Amended and Restated Omnibus Incentive Plan, as amended (the "Omnibus Plan") (of which 2,890,962 were vested as of such
date) and 104,167 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 104,167 were vested as of such date). Each such option is or will become exercisable for one Subordinate Voting Share.
As of May 16, 2023, there were 277,433 options outstanding under the ShopKeep Inc. Amended and Restated 2011 Stock Option
and Grant Plan (of which 276,521 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 16, 2023, there were 75,869 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 16, 2023, there were 5,367,041 RSUs outstanding under the Company’s Omnibus Plan (of which 1,030,451 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 16, 2023, there were 524,310 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
Disclosure 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, 2023 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.
(37)
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, 2023.
Attestation Report of the Independent Registered Public Accounting Firm
The effectiveness of the Company's internal control over financial reporting as at March 31, 2023 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, 2023.
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, 2023 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.
(38)
Lightspeed Commerce Inc.
Consolidated Financial Statements
March 31, 2023 and 2022
(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 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 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 Officer, have determined that the Company's internal control over
financial reporting was effective as at March 31, 2023.
The effectiveness of the Company's internal control over financial reporting as at March 31, 2023 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included herein.
May 18, 2023
/s/ Jean Paul Chauvet
Jean Paul Chauvet
Chief Executive Officer
/s/ Asha Bakshani
Asha Bakshani
Chief Financial 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, 2023 and 2022, 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 statements”).
We also have audited the Company’s internal control over financial reporting as of March 31, 2023, 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, 2023 and 2022, 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, 2023, 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
Controls 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 U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
PricewaterhouseCoopers LLP
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, an Ontario limited liability partnership.
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.
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.
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.
Goodwill impairment assessment
As described in Notes 3, 4 and 16 to the consolidated financial statements, the carrying amount of the
Company’s goodwill balance is $1,351 million as of March 31, 2023. Management reviews the carrying
value of goodwill 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. Goodwill impairment is determined by assessing the recoverable amount at the Company’s
operating segment level (Segment) which is the level at which management monitors goodwill.
The Segment’s recoverable amount is the higher of the Segment’s fair value less costs of disposal
and its value in use. Management completed an impairment test of goodwill as of December 31, 2022,
using a fair value less costs of disposal method. This test resulted in a non-cash impairment charge
of $749 million. The recoverable amount of the Company’s Segment was estimated using an income
approach, more specifically, a discounted cash flow model. Key assumptions used by management in the
discounted cash flow model included revenue growth rate, terminal value multiple and discount rate.
The principal considerations for our determination that performing procedures relating to goodwill
impairment assessment is a critical audit matter are (i) the judgment by management when determining
the recoverable amount of the Company’s Segment; (ii) a high degree of auditor judgment, subjectivity,
and effort in performing procedures and evaluating management’s key assumptions related to revenue
growth rate, terminal value multiple, and the discount rate; and (iii) the audit effort involved the use of
professionals with specialized skill 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 management’s goodwill impairment assessment,
including controls over the determination of the recoverable amount of the Company’s Segment.
These procedures also included, among others (i) testing management’s process for determining the
recoverable amount (ii) evaluating the appropriateness of the fair value less costs of disposal method;
(iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model;
and (iv) evaluating the reasonableness of the key assumptions used by management related to the
revenue growth rate, terminal value multiple, and the discount rate. Evaluating management’s key
assumption related to the revenue growth rate involved evaluating whether the assumption used
by management was reasonable considering (i) the current and past performance of the Company’s
Segment; (ii) the consistency with external market and industry data; and (iii) whether this assumption
was consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and
knowledge were used to assist in the evaluation of the Company’s discounted cash flow model and key
assumptions related to the terminal value multiple and the discount rate.
/s/PricewaterhouseCoopers LLP
Montréal, Canada
May 18, 2023
We have served as the Company’s auditor since 2015.
Lightspeed Commerce Inc.
Consolidated Balance Sheets
As at March 31, 2023 and 2022
(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
Other long-term liabilities
Deferred tax liabilities
Total liabilities
Shareholders’ equity
Share capital
Additional paid-in capital
Accumulated other comprehensive income (loss)
Accumulated deficit
Total shareholders’ equity
Total liabilities and shareholders’ equity
Commitments and contingencies
Notes
27
11, 27
6
5, 12
13, 29
14, 29
15, 29
16, 29
5, 17
22
18, 24, 27
13
22
5
5
13
19
22
20
25
21, 27
23, 24
2023
$
800,154
84,334
12,839
37,005
2022
$
953,654
45,766
7,540
35,535
934,332
1,042,495
20,973
19,491
311,450
1,350,645
31,540
301
25,539
16,456
409,568
2,104,368
21,400
154
2,668,732
3,619,980
68,827
6,617
6,919
68,094
78,307
7,633
6,718
65,194
150,457
157,852
1,226
18,574
—
1,026
—
2,121
23,037
29,841
1,007
6,833
171,283
220,691
4,298,683
198,022
(3,057)
(1,996,199)
4,199,025
123,777
2,677
(926,190)
2,497,449
3,399,289
2,668,732
3,619,980
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.
7
Lightspeed Commerce Inc.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended March 31, 2023 and 2022
(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 (gain)
Acquisition-related compensation
Amortization of intangible assets
Restructuring
Goodwill impairment
Total operating expenses
Operating loss
Net interest income
Loss before income taxes
Income tax expense (recovery)
Current
Deferred
Total income tax recovery
Net loss
Notes
5, 29
6, 7, 8
7, 8
7, 8
7, 8
14
13
15
8, 24
16
9
22
Other comprehensive income (loss)
21, 27
Items that may be reclassified to net loss
Foreign currency differences on translation of foreign operations
Change in net unrealized gain (loss) on cash flow hedging instruments
Total other comprehensive loss
Total comprehensive loss
2023
$
730,506
398,545
331,961
105,939
140,442
250,371
5,471
8,244
(199)
41,792
101,546
28,683
748,712
1,431,001
2022
$
548,372
277,199
271,173
95,253
121,150
216,659
4,993
7,743
611
50,491
91,812
803
—
589,515
(1,099,040)
(318,342)
24,812
2,988
(1,074,228)
(315,354)
2,469
(6,688)
(4,219)
1,103
(28,024)
(26,921)
(1,070,009)
(288,433)
(5,586)
(148)
(5,734)
(7,061)
23
(7,038)
(1,075,743)
(295,471)
Net loss per share – basic and diluted
10
(7.11)
(2.04)
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, 2023 and 2022
(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
Unrealized foreign exchange loss
Goodwill impairment
(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
Other long-term liabilities
Net interest income
Total operating activities
Cash flows from (used in) investing activities
Additions to property and equipment
Additions to intangible assets
Acquisition of businesses, net of cash acquired
Purchase of investments
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
Repayment of long-term debt
Payment of lease liabilities net of incentives and movement in restricted lease deposits
Financing costs
Total financing activities
2023
$
2022
$
(1,070,009)
(288,433)
40,219
101,546
13,715
(6,688)
129,167
100
748,712
(35,159)
(5,299)
(9,986)
(9,015)
201
2,005
19
(24,812)
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)
(125,284)
(87,218)
(9,227)
(3,894)
—
(1,519)
—
23,457
(10,653)
—
(559,429)
—
344
5,807
8,817
(563,931)
4,710
—
(193)
(30,000)
(8,870)
(1,058)
17,494
823,515
(34,190)
—
(6,952)
(1,810)
(35,411)
798,057
Effect of foreign exchange rate changes on cash and cash equivalents
(1,622)
(404)
Net increase (decrease) in cash and cash equivalents during the year
(153,500)
146,504
Cash and cash equivalents – Beginning of year
Cash and cash equivalents – End of year
Bank interest paid
Income taxes paid
The accompanying notes are an integral part of these consolidated financial statements.
953,654
807,150
800,154
953,654
375
1,154
937
748
9
Lightspeed Commerce Inc.
Consolidated Statements of Changes in Shareholders' Equity
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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
$
128,528,515
2,526,448
35,877
9,715
(637,757) 1,934,283
20
20
25
25
21, 27
—
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
Net loss
Share issuance costs
Exercise of stock options and settlement of share awards
Share-based compensation
Share-based acquisition-related compensation
Other comprehensive loss
20
25
25
21, 27
—
—
2,224,787
—
284,206
—
—
(193)
59,632
—
40,219
—
—
—
(54,922)
129,167
—
—
—
—
—
—
—
(5,734)
(1,070,009) (1,070,009)
(193)
4,710
129,167
40,219
(5,734)
—
—
—
—
—
Balance as at March 31, 2023
151,170,305
4,298,683
198,022
(3,057)
(1,996,199) 2,497,449
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, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
1. Organization and nature of operations
Lightspeed Commerce 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 18, 2023.
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 year.
Certain comparative figures have been reclassified in order to conform to the current year presentation.
The consolidated financial statements include the accounts of Lightspeed and its wholly-owned subsidiaries including, but
not limited to: Alcmene S.à r.l., Lightspeed Payments USA Inc., Kounta Pty Ltd, Lightspeed Commerce USA Inc.,
Upserve, Inc., Vend Limited, Lightspeed 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.
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;
11
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
•
•
•
•
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 to 30 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, advanced insights, accounting and inventory management, 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.
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
12
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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’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 and hospitality 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.
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.
13
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
Direct cost of revenues
Direct cost of revenues includes subscription cost of revenue, transaction-based cost of revenue and hardware and other
cost of revenue. Subscription cost of revenue consists primarily of employee expenses related to support services provided
by the Company to its customers, and amounts paid to our third-party cloud service providers. Transaction-based cost of
revenue consists primarily of direct costs related to payment processing services and the Company's merchant cash advance
program and employee expenses. 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. Hardware and other cost of revenue consists of costs associated with our hardware
solutions, expenses related to implementation services provided to customers, and employee expenses.
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. 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 and restricted deposits
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
determination of cost of revenues. The amount of any write-down 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 were amortized over the term of the related financing
14
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
arrangement. The long-term debt was 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 tax credits. The Company’s research and development tax
credits consist primarily of tax credits for the development of e-business and tax credits for non-refundable research and
development. The Company recognizes research and development tax credits as a reduction of research and development
and other related expenditures.
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
For internally generated intangible assets, expenditure on research activities is recognized as an expense in the period in
which it is incurred. 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. The amount initially
recognized for internally-generated intangible assets is the sum of the expenditures incurred from the date when the
intangible asset first meets the recognition criteria listed above until the asset is in the condition necessary for it to be
capable of operating in the manner intended by management. Where no internally-generated intangible asset can be
recognized, internal development costs are recognized as research and development expense in the period in which they are
incurred. Subsequent to initial recognition, internally-generated intangible assets are reported at cost, less accumulated
amortization and impairment losses, on the same basis as acquired identifiable intangible assets. Internally generated
intangible assets are amortized using the straight-line method over the estimated useful lives of the internally generated
intangible assets.
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 cash-generating unit ("CGU") may not
be recoverable. An 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.
15
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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 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 tested at
the Company's operating segment level (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. Goodwill 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 16 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.
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 (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
16
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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 income. 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 income 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 income nor the accounting income.
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 income 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. Restructuring expense also includes other expenses that directly arise from the restructuring, are necessarily
entailed by the restructuring and not associated with the ongoing activities of the Company.
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 the 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:
17
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
•
•
•
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 prices.
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
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.
18
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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 generally 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.
If the vesting date of certain stock options or share awards is accelerated as part of a restructuring, the expense directly
related to the acceleration of the stock options or share awards is recognized as a component of restructuring.
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.
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.
19
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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 and restricted deposits, trade and other
receivables, merchant cash advances, foreign exchange forward contracts, investments 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 and restricted deposits, merchant cash advances, foreign exchange forward
contracts and investments 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 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
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.
20
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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
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.
21
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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
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. These amendments to IAS 16 and IAS 37 are effective for annual periods
beginning on or after January 1, 2022, with early application permitted. The Company has adopted these amendments as of
April 1, 2022. 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 International Financial Reporting Interpretations
Committee (IFRIC) interpretations effective as of April 1, 2022 that had a material impact on the Company's accounting
policies or the consolidated financial statements.
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.
22
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
The IASB has issued IFRS 17 Insurance Contracts standardizing how to recognize, measure, present and disclose insurance
contracts, 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, amendments to IAS 1 Presentation of
Financial Statements requiring companies to disclose their material accounting policy information 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 new IFRS 17 standard and these amendments to
IAS 8, IAS 1 and IAS 12 are effective for annual periods beginning on or after January 1, 2023, 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 they have also issued amendments to IFRS
16 Leases to include variable payments when measuring a lease liability arising from a sale-and-leaseback transaction.
These amendments to IAS 1 and IFRS 16 are effective for annual periods beginning on or after January 1, 2024, 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:
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 rate. 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 16 for additional information on the assumptions used.
23
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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.
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, interest rate, and dividend yield. Refer to note 25 for additional information on the assumptions used.
Provisions
The Company is involved in litigation and claims from time to time. There can be no assurance that these litigations and
claims will be resolved without costly litigation nor in a manner that does not adversely impact the financial position and
operating results of the Company. 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. In determining the
probability of a loss and consequently determining a reasonable estimate, management is required to use significant
judgment. Assumptions applied reflect the most probable set of economic conditions and planned courses of action by the
Company at the time, but these too may differ over time. Given the uncertainties associated with any litigation, the actual
outcome can be different from the Company's estimates and could adversely affect the financial position and operating
results of the Company.
24
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
5. Revenues
The disaggregation of the Company’s revenue was as follows:
Subscription revenue
Transaction-based revenue
Hardware and other revenue
Total revenues
2023
$
298,763
399,552
32,191
2022
$
248,430
264,044
35,898
730,506
548,372
Transaction-based revenue includes $8,196 of revenue from merchant cash advances for the fiscal year ended March 31,
2023 (2022 – $2,667). The Company discloses revenue by geographic area in note 29.
Contract assets
The amount of amortization of commission assets recognized as sales and marketing expense in the fiscal year ended
March 31, 2023 is $12,254 (2022 – $8,138).
The Company recorded a contract asset for discounts provided to customers at the inception of a contract of $8,845
included in other current assets and $10,691 included in other long-term assets as at March 31, 2023, with $4,124 being
amortized into subscription revenue and transaction-based revenue for the fiscal year ended March 31, 2023 (2022 –
$4,139 and $5,591 with $3,679 being amortized, respectively).
Contract liabilities
Revenue recognized that was included in the deferred revenue balance at the beginning of the years ended March 31, 2023
and 2022 is $65,194 and $43,116, respectively.
6. Direct cost of revenues
Subscription cost of revenue
Transaction-based cost of revenue
Hardware and other cost of revenue
Total direct cost of revenues
2023
$
80,064
271,035
47,446
2022
$
72,192
159,432
45,575
398,545
277,199
Inventories expensed during the fiscal year ended March 31, 2023 in direct cost of revenues amount to $37,560 (2022 –
$35,832).
25
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
7. Government assistance
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
2023
$
653
681
3,006
142
4,482
2022
$
1,144
545
2,692
358
4,739
Government assistance includes research and development tax credits, grants, and other incentives.
8. Employee compensation
The total employee compensation comprising salaries and benefits, excluding government assistance and acquisition-
related compensation, for the fiscal year ended March 31, 2023, was $396,926 (2022 - $341,851).
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
Restructuring
2023
$
6,945
33,963
35,504
47,255
5,637
2022
$
6,345
26,377
29,705
46,639
—
Total share-based compensation and related costs
129,304
109,066
Total share-based compensation and related costs for the fiscal year ended March 31, 2023 includes a reversal of $6,925 of
share-based compensation expense for forfeited unvested stock options and forfeited unvested RSUs in connection with the
restructuring announced in January 2023.
The amount recognized as an expense for the fiscal year ended March 31, 2023 for our defined contribution plans was
$5,258 (2022 - $4,264).
9. Finance income and costs
Interest income
Interest expense
Net interest income
2023
$
26,866
(2,054)
2022
$
5,855
(2,867)
24,812
2,988
26
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
10. Loss per share
The Company has stock options and share awards as potentially-dilutive shares. 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 shares
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, 2023 and 2022. All outstanding
potentially dilutive shares 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
2023
2022
151,170,305 148,661,312
150,404,130 141,580,917
($7.11)
($2.04)
The weighted average number of potentially dilutive shares that are not included in the diluted net loss per share
calculations because they would be anti-dilutive was 16,270,724 stock options and share awards for the year ended
March 31, 2023 (2022 - 10,515,666).
11. Trade and other receivables
Trade receivables
Allowance for expected credit losses
Trade receivables, net
Research and development tax credits receivable
Sales tax receivable
Merchant cash advances measured at fair value
Indemnification receivables
Accrued interest and other
Total trade and other receivables
2023
$
2022
$
37,167
(4,131)
22,894
(3,043)
33,036
19,851
8,424
4,862
29,492
4,042
4,478
4,195
6,323
6,300
9,097
—
84,334
45,766
The indemnification receivables are for indemnities on certain income tax payables and other liabilities assumed through
our acquisitions.
12. Other current assets
Restricted cash and restricted deposits
Prepaid expenses and deposits
Commission asset
Contract asset and other
Total other current assets
2023
$
1,366
14,149
12,160
9,330
2022
$
1,531
20,478
8,959
4,567
37,005
35,535
27
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
13. Leases
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 seven 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
Net book value
Balance - Beginning of fiscal year
Balance - End of fiscal year
Offices
Vehicles
The maturity analysis of lease liabilities as at March 31, 2023 is as follows:
Fiscal Year
2024
2025
2026
2027
2028
2029 and thereafter
Total minimum payments
2023
$
37,001
1,613
—
(1,992)
(142)
36,480
11,462
8,244
(4,074)
(125)
15,507
25,539
20,973
20,332
641
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
$
6,617
5,672
4,165
2,780
2,139
3,818
25,191
Expenses relating to short-term leases, including those excluded due to the election of the practical expedient allowing the
Company to expense lease payments for short-term leases and leases for which the underlying asset is of low value, as well
as variable lease payments not included in the measurement of lease liabilities, were approximately $2,716 for the fiscal
28
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
year ended March 31, 2023 (2022 - $3,455). The interest expense for the fiscal year ended March 31, 2023 was $1,075
(2022 - $1,204).
14. Property and equipment
2023
Cost
As at March 31, 2022
Additions
Disposals
As at March 31, 2023
Accumulated depreciation
As at March 31, 2022
Depreciation
Disposals
As at March 31, 2023
Net book value as at March 31, 2023
2022
Cost
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
Net book value as at March 31, 2022
Total
$
27,038
8,506
(4,320)
31,224
10,582
5,471
(4,320)
11,733
Total
$
17,847
11,404
1,703
(3,916)
27,038
9,505
4,993
(3,916)
10,582
Furniture
$
Equipment
$
Computer
equipment
$
Leasehold
improvements
$
2,314
1,004
(766)
2,552
1,426
531
(766)
1,191
1,361
1,975
43
(618)
1,400
1,342
193
(618)
917
483
9,197
3,281
(2,724)
9,754
5,214
2,714
(2,724)
5,204
13,552
4,178
(212)
17,518
2,600
2,033
(212)
4,421
4,550
13,097
19,491
Furniture
$
Equipment
$
Computer
equipment
$
Leasehold
improvements
$
2,177
1,759
461
—
(245)
1,975
1,181
406
(245)
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
19
308
(190)
2,314
1,004
612
(190)
1,426
888
633
3,983
10,952
16,456
29
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
15. Intangible assets
2023
Cost
As at March 31, 2022
Additions
Exchange differences
As at March 31, 2023
Accumulated amortization
As at March 31, 2022
Amortization
Exchange differences
As at March 31, 2023
Acquired
software
technologies
$
Customer
relationships
$
Internally
generated
intangibles
$
Total
$
213,581
345,956
—
559,537
—
(739)
—
(1,769)
4,269
—
4,269
(2,508)
212,842
344,187
4,269
561,298
67,275
42,795
(653)
82,694
58,751
(1,014)
109,417
140,431
—
—
—
—
149,969
101,546
(1,667)
249,848
Net book value as at March 31, 2023
103,425
203,756
4,269
311,450
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
Net book value as at March 31, 2022
Acquired
software
technologies
$
Customer
relationships
$
Internally
generated
intangibles
$
72,884
220,090
141,200
127,600
(503)
(1,734)
213,581
345,956
30,640
36,700
(65)
27,841
55,112
(259)
67,275
82,694
146,306
263,262
—
—
—
—
—
—
—
—
—
Total
$
292,974
268,800
(2,237)
559,537
58,481
91,812
(324)
149,969
409,568
30
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
16. Goodwill
Balance - Beginning of fiscal year
Addition through business combinations
Impairment loss
Foreign currency translation
Balance - End of fiscal year
Impairment analysis
2023
$
2022
$
2,104,368
971,939
—
(748,712)
(5,011)
1,137,340
—
(4,911)
1,350,645
2,104,368
During the three months ended December 31, 2022, there were changes in macroeconomic conditions and the Company's
share price and market capitalization decreased. This led to the carrying amount of the Company's net assets exceeding the
Company's market capitalization as at December 31, 2022. This triggered an impairment test to be performed on the
Company's goodwill for the Company's Segment, as defined in note 3, which is the level at which management monitors
goodwill. The timing of this test also aligned with the Company's annual impairment test of goodwill. Impairment, if any,
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.
The Company completed an impairment test of goodwill as at December 31, 2022 using the Company's fair value less costs
of disposal method. This test resulted in a non-cash impairment charge of $748,712 related to goodwill during the three
months ended December 31, 2022 as the terminal value multiple was negatively impacted by the macroeconomic
conditions and the Company's share price decrease, and the Company's revenue growth rate was negatively impacted by
the macroeconomic impact on the Company's customer's sales. Fair value less costs of disposal is a Level 3 measurement
(see note 27).
Fair value less costs of disposal was estimated using an income approach, more specifically, a discounted cash flow model.
The discounted cash flow model takes into consideration a five-year financial forecast, which is based on the Company’s
actual performance and management’s best estimates of future performance, and calculates a terminal value based on
revenues. The cash flows are discounted using a weighted average cost of capital reflecting the market assessment. The
costs to sell were assumed to be 2.5% of the fair value amount. The carrying value of the Segment was compared with the
fair value less costs of disposal to test for impairment.
Sensitivity of assumptions
The following table indicates the impact on the carrying value of a 1% change in the key assumptions as at December 31,
2022:
31
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
Key Assumptions
Discount Rate (%)
Terminal Value Multiple
Revenue Growth Rate (%)
Input used in discounted
cash flow model
Impairment increase if the
key assumption was
changed by 1%, assuming
all other key assumptions
were held constant*
30 %
2.5
27 %
$
21,240
16,063
19,607
*Discount rate multiplied by 1.01, terminal value multiple multiplied by 0.99, revenue growth rate multiplied by 0.99
Goodwill is more susceptible to impairment risk if business operating results or economic conditions deteriorate. The
Company reassessed as at March 31, 2023 the key assumptions used in the December 31, 2022 test and found no reduction
in the terminal value multiple, no increase in the discount rate and no decrease in the revenue growth rate. A reduction in
the terminal value multiple, an increase in the discount rate or a decrease in the revenue growth rate could cause additional
impairment in the future.
The determination of the recoverable amount involves the use of estimates by management and can have a material impact
on the respective value and ultimately the amount of any impairment. The Company is required to perform its next annual
goodwill impairment analysis on December 31, 2023, or earlier should there be a goodwill impairment trigger before then.
No impairment charges were taken on other assets included in Lightspeed's cash generating units.
17. Other long-term assets
Restricted cash
Prepaid expenses and deposits
Commission asset
Contract asset
Investments
Total other-long term assets
2023
$
408
3,775
15,147
10,691
1,519
2022
$
260
5,945
9,604
5,591
—
31,540
21,400
32
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
18. Accounts payable and accrued liabilities
Trade payables
Accrued compensation and benefits
Accrued payroll taxes on share-based compensation
Acquisition-related payables
Sales tax payable
Other
2023
$
36,958
22,543
3,030
331
3,556
2,409
2022
$
39,245
25,238
3,594
5,527
3,861
842
Total accounts payable and accrued liabilities
68,827
78,307
19. Credit facility
The Company had credit facilities with the Canadian Imperial Bank of Commerce ("CIBC"), which included a $25,000
demand revolving operating credit facility (the "Revolver") and a $50,000 stand-by acquisition term loan, $20,000 of
which was uncommitted (the "Acquisition Facility", and together with the Revolver, the "Credit Facilities"). The
Acquisition Facility was drawn for $30,000 in January 2020 for the acquisition of Lightspeed POS Germany GmbH
(formerly Gastrofix GmbH) and was set to mature 60 months thereafter. On July 6, 2022, the Company repaid in full the
balance outstanding under the Acquisition Facility, including all accrued and unpaid interest and the Acquisition Facility
was terminated. Prior to the repayment, excluding unamortized financing costs, the balance drawn on the Acquisition
Facility was $30,000.
On October 28, 2022, the Company amended the Revolver to, among other things, reduce the size of the Revolver to
$5,000 and facilitate greater operating flexibility (the "Amended Revolver"). The Amended Revolver is available for letters
of credit or letters of guarantee for general corporate and working capital purposes. The Amended Revolver is subject to
certain general covenants, including making available annual audited consolidated financial statements, and is secured by
material assets of the Company. The Company was in compliance with covenants as at March 31, 2023.
20. Share capital
As at March 31, 2023, the Company had 151,170,305 Common Shares issued and outstanding, unlimited shares authorized
(2022 – 148,661,312).
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
33
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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.
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.
21. Accumulated other comprehensive income (loss)
Foreign currency
differences on
translation of foreign
operations
2023
$
2022
$
Balance - Beginning of fiscal year
2,654
9,715
Other comprehensive income (loss)
(5,586)
(7,061)
Balance - End of fiscal year
(2,932)
2,654
22. Income taxes
Income tax expense (recovery) includes the following components:
Hedging reserve
2023
2022
$
23
(148)
(125)
$
—
23
23
Total accumulated
other comprehensive
income (loss)
2023
$
2022
$
2,677
9,715
(5,734)
(7,038)
(3,057)
2,677
Current
Related to current year
Related to prior years
Deferred
Related to current year
Related to prior years
Total income tax recovery
2023
$
2,880
(411)
2,469
2022
$
1,214
(111)
1,103
(6,338)
(27,831)
(350)
(193)
(6,688)
(28,024)
(4,219)
(26,921)
34
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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:
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-related costs
Other non-deductible expenses (credits) and non-taxable amounts
Adjustment related to prior years
Goodwill impairment
Changes in unrecognized benefits of deferred tax assets
Impact of foreign exchange and other
Total income tax recovery
2023
$
2022
$
(1,074,228)
(315,354)
26.5 %
26.5 %
(284,671)
(83,589)
9,944
33,771
1,267
728
(761)
198,409
38,673
(1,579)
7,078
20,208
1,480
(192)
(304)
—
27,972
426
(4,219)
(26,921)
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
Other
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 assets (liabilities)
As presented on the consolidated balance sheets:
Deferred tax assets
Deferred tax liabilities
Net deferred tax assets (liabilities)
2023
$
3,179
49,467
6,045
530
3,170
17,760
2022
$
2,402
78,292
6,354
1,217
5,852
6,338
80,151
100,455
(562)
(299)
(67,972)
(97,647)
(5,028)
(6,288)
(5,140)
(4,048)
(79,850)
(107,134)
301
(6,679)
301
—
301
154
(6,833)
(6,679)
35
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
2023
Balance as
at March 31,
2022
$
Charged
(credited) to
consolidated
statement of
loss
$
Business
acquisitions
and other
$
Balance as
at March 31,
2023
$
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
2,103
(97,647)
6,354
(5,140)
78,292
1,217
5,852
2,290
514
29,675
(309)
112
(28,825)
(687)
(2,682)
8,890
Net deferred tax assets (liabilities)
(6,679)
6,688
2022
—
—
—
—
—
—
—
292
292
2,617
(67,972)
6,045
(5,028)
49,467
530
3,170
11,472
301
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 assets (liabilities)
(1,186)
28,024
(33,517)
(6,679)
36
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
The Company has accumulated unrecognized deductible temporary differences, unused tax losses and unused tax credits as
follows:
Deductible temporary differences
Non-capital losses
Research and development expenditures
2023
$
63,695
587,407
21,760
672,862
2022
$
60,237
394,067
15,456
469,760
As at March 31, 2023, the Company and its subsidiaries have non-capital losses of $587,407 (2022 - $394,067) available to
reduce future taxable income for which the benefits have not been recognized. From this amount, $320,344 (2022 -
$226,403) expires from calendar year 2024 to 2043, while $267,063 (2022 - $167,664) has no expiry date.
There was no change in statutory tax rate for the financial year.
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,
2023, the Company recorded a Canadian provision for refundable tax credits of $4,077 (2022 – $3,933). This amount has
been recorded as a reduction of research and development and e-business development expenditures for the year.
As at March 31, 2023, the Company has available Canadian federal non-refundable investment tax credits of $2,598
(2022 – $2,548) related to research and development expenditures which may be used to reduce Canadian federal income
taxes payable in future years. These non-refundable investment tax credits begin to expire in 2033. The Company also has
a non-refundable e-business tax credit of $4,823 (2022 – $3,772) which may reduce Canadian provincial income taxes
payable in future years. These non-refundable credits begin to expire in 2035.
The benefits of these non-refundable investment tax credits have not been recognized in the consolidated financial
statements.
23. Commitments
Refer to note 13 for the maturity analysis of lease liabilities as at March 31, 2023.
In addition to the obligations under lease liabilities, the Company is subject to short-term leases and variable lease
payments, as well as various non-cancelable service agreements with minimum spend commitments. The table below
outlines the maturity analysis as at March 31, 2023 for the Company's short-term leases and variable lease payments, and
for the minimum fixed and determinable portion of the Company's material unconditional purchase obligations:
Short-term leases and variable lease payments
Material unconditional purchase obligations
< 1
Year
$
1 to 5
Years
$
>5
Years
$
Total
$
3,106
32,077
8,503
85,441
3,161
—
14,770
117,518
Total contractual obligations
35,183
93,944
3,161
132,288
37
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
Short-term leases and variable lease payments include short term lease payments and variable lease payments for the
Company's share of tenant operating expenses and taxes. Purchase obligations include material non-cancelable service
agreements with service providers and payment processors subject to minimum spend commitments.
24. 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 the Company's Common Shares, and are based upon allegations that the
defendants made false and/or misleading statements to the public and seek unspecified damages. On June 27, 2022, the
Company filed a motion to dismiss the securities class action brought in the U.S. district court for the Eastern District of
New York. Plaintiffs to the securities class action brought in the U.S. district court for the Eastern District of New York
filed an opposition to the Company's motion to dismiss, and the Company filed a reply. 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.
The Company has not provisioned for the above-mentioned matters as the outcome is not determinable nor is the amount of
loss, if any, reasonably estimable given the present stage of the proceedings in each case.
Provisions
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, 2023, the Company announced and implemented a reorganization to streamline the
Company's operating model while continuing to focus on disciplined growth.
Provision for severance and cash acquisition-related compensation acceleration
Balance - Beginning of fiscal year
Expensed during the year
Paid during the year
Balance - End of fiscal year
2023
$
247
18,581
(17,722)
2022
$
1,034
803
(1,590)
1,106
247
The provision is included in accounts payable and accrued liabilities in the other category in note 18.
38
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
Restructuring expenses
Severance
Share-based compensation expense acceleration
Cash acquisition-related compensation acceleration
Share-based acquisition-related compensation acceleration
Restructuring
2023
$
15,710
5,637
2,871
4,465
28,683
2022
$
803
—
—
—
803
25. 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”). Employee stock option grants under the 2012 Legacy Option Plan 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 2012 Legacy Option Plan was amended such that outstanding options granted thereunder are exercisable for
Common Shares and no further awards can be made under the 2012 Legacy Option Plan.
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 2012 Legacy Option Plan 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, 2023, the maximum number of Common Shares
available under the Omnibus Incentive Plan and the 2012 Legacy Option Plan was 22,675,545. 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
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.
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 Inc. ("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
39
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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 Chief Executive
Officer, Chief Operating Officer and Chief Financial Officer. Such options will vest over an approximately five 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.
The stock option activity and the weighted average exercise price are summarized as follows:
2023
2022
Outstanding – Beginning of year*
Granted**
Exercised
Forfeited/Cancelled
Number
of options
Weighted
average
exercise
price
$
Number
of options
11,823,310
2,817,149
(942,641)
(3,637,522)
36.36
19.93
5.00
47.76
6,796,039
7,920,684
(1,061,359)
(1,832,054)
Outstanding – End of fiscal year
10,060,296
30.58
11,823,310
Exercisable – End of fiscal year
3,771,711
31.24
2,600,818
Weighted
average
exercise
price
$
24.56
49.47
16.48
47.84
38.37
23.05
*The 2023 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 year's weighted average exercise prices.
**Included in the stock options granted in the fiscal year ended March 31, 2022 were 2,500,000 stock options with vesting dependent on market
conditions tied to the Company's future share price performance.
40
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(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, 2023 are summarized as
follows:
2023
2023
2023
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
Settled
Forfeited
3,314,131
4,397,629
(956,837)
(1,214,156)
Outstanding – End of year
5,540,767
46.71
20.77
41.58
37.97
28.92
34,421
47,577
(16,600)
—
37.95
18.72
40.50
—
953,290
—
(333,650)
—
65,398
23.31
619,640
28.73
—
28.73
—
28.73
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
Settled
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
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
2023
2022
52.22 %
3.05 %
3.92 years
0 %
26.55 %
47.25 %
1.04 %
4.07 years
0 %
27.07 %
The fair value of stock options granted in the fiscal year ended March 31, 2022 to certain executives with vesting
dependent on market conditions tied to the Company's future share price performance is measured using the Monte Carlo
41
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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, 2023 amounted to
$117,895 (2022 – $318,233). The initial aggregate fair value of options, RSUs and PSUs forfeited/cancelled in the fiscal
year ended March 31, 2023 amounted to $111,549 (2022 – $55,967). For the fiscal year ended March 31, 2023, share-
based compensation expense of $129,167 (2022 – $108,916) was recorded in the consolidated statements of loss and
comprehensive loss with a corresponding credit to additional paid-in capital.
As at March 31, 2023, the total remaining unrecognized share-based compensation expense amounted to $78,581 (2022 –
$147,052), which will be amortized over the weighted average remaining requisite service period of 1.60 years (2022 –
1.90 years).
The following table summarizes information with respect to stock options outstanding and stock options exercisable as at
March 31, 2023:
Options outstanding
Options exercisable
Exercise
price
$
2.17 to 18.92
18.93 to 22.62
22.63 to 27.73
27.74 to 41.54
41.55 to 93.45
Number
of options
1,930,537
1,886,776
2,268,067
1,896,698
2,078,218
Total
10,060,296
Weighted
average
remaining
contractual
life (years)
5.09
5.61
4.46
5.51
5.42
5.19
Weighted
average
exercise
price
$
12.19
21.49
23.99
31.49
62.27
Number
of options
719,850
384,078
1,409,502
291,923
966,358
30.58
3,771,711
Weighted
average
remaining
contractual
life (years)
2.21
4.24
3.77
3.79
5.38
3.94
Weighted
average
exercise
price
$
5.80
21.79
24.27
31.80
63.92
31.24
The following table summarizes information with respect to stock options outstanding 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
Number
of options
1,017,325
796,323
302,339
286,652
198,179
38.37
2,600,818
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
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
Number
of options
2,735,944
2,137,518
2,238,268
1,855,419
2,856,161
Total
11,823,310
42
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
26. Related party transactions
Key management personnel includes the C-Level executives and other executives. 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 and termination benefits
Share-based payments
Total compensation paid to key management personnel
27. Financial instruments
Fair value
2023
$
3,242
20,331
2022
$
2,914
21,251
23,573
24,165
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 and restricted deposits, trade receivables and trade accounts
payable and accrued liabilities 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, 2023
and 2022.
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.
43
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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. The fair value of investments was determined based on
Level 3 inputs using the prices for financial instruments stemming from private investments that the Company participated
in.
As at March 31, 2023 and 2022, financial instruments measured at fair value in the consolidated balance sheets were as
follows:
March 31, 2023
March 31, 2022
Fair
value
hierarchy
Carrying
amount
$
Fair
value
$
Fair
value
hierarchy
Carrying
amount
$
Fair
value
$
Assets:
Cash and cash equivalents
Level 1
800,154
800,154
Level 1
953,654
953,654
Restricted cash and restricted deposits
Level 1
1,774
1,774
Merchant cash advances
Level 3
29,492
29,492
Foreign exchange forward contracts
Level 2
0
0
Investments
Liabilities:
Level 3
1,519
1,519
Level 1
Level 3
Level 2
—
1,791
6,300
23
—
Foreign exchange forward contracts
Level 2
125
125
Level 2
0
1,791
6,300
23
—
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 and other 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, 2023, potential effects from uncertainty in the macroeconomic environment 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 these effects. The Company continues to monitor macroeconomic
conditions and any resulting impacts on the Company's credit risk.
44
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
The loss allowance as at March 31, 2023 and 2022 was determined as follows:
2023
Expected loss rate
Gross carrying amount
Loss allowance
2022
Expected loss rate
Gross carrying amount
Loss allowance
Not
past due
3 %
28,209
741
Not
past due
3 %
17,279
518
Changes in the loss allowance were as follows:
Balance – Beginning of fiscal year
Increase
Write-offs
Balance – End of fiscal year
Liquidity risk
0–30
15 %
4,649
697
30–60
60–90
90–180
48 %
1,418
681
67 %
521
349
69 %
989
682
180+
71 %
1,381
981
0–30
14 %
2,212
310
30–60
60–90
90–180
46 %
617
284
64 %
213
136
68 %
577
392
2023
$
3,043
3,076
180+
70 %
1,996
1,403
2022
$
3,519
1,603
(1,988)
(2,079)
4,131
3,043
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.
As at March 31, 2023 and 2022, the maturity analysis of financial liabilities represented the following:
2023
Accounts payable and accrued liabilities
Other long-term liabilities
<1
Year
$
1 to 5
Years
$
68,827
—
—
1,026
>5
Years
$
—
—
Total
$
68,827
1,026
45
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
2022
Accounts payable and accrued liabilities
Other long-term liabilities
Long-term debt
<1
Year
$
78,307
—
—
1 to 5
Years
$
—
1,007
30,000
>5
Years
$
—
—
—
Total
$
78,307
1,007
30,000
For the maturity analysis of lease liabilities, see note 13. Details of contractual commitments are included in note 23.
The Company has $800,154 of cash and cash equivalents as at March 31, 2023, demonstrating its liquidity and its ability to
cover upcoming financial liabilities.
The Company's business, financial condition and operations were not significantly impacted by the failure of Silicon
Valley Bank. No material cash and cash equivalent balances were held with Silicon Valley Bank as at March 31, 2023.
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 Australian dollar, the British pound sterling, the Swiss franc 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:
2023
CAD
$
EUR
$
AUD
$
GBP
$
CHF Other
$
$
Total
$
Cash and cash equivalents and restricted cash
3,336 5,828 2,078 1,907 1,456 1,537 16,142
Trade and other receivables
3,716 9,004 8,199 1,680 1,074 1,883 25,556
Accounts payable and accrued liabilities
(10,615) (8,948) (3,604) (1,561) (1,294) (3,333) (29,355)
Other long-term liabilities
Lease liabilities
(231)
(267)
(68)
(119)
(48)
(5)
(738)
(11,805) (3,258) (1,870) (4,085)
(866)
(211) (22,095)
Net financial position exposure
(15,599) 2,359 4,735 (2,178)
322
(129) (10,490)
2022
CAD
$
EUR
$
AUD
$
GBP
$
CHF Other
$
$
Total
$
Cash and cash equivalents and restricted cash
13,885 6,270 2,522 1,338 2,333 4,103 30,451
Trade and other receivables
3,454 4,086 2,675 1,472
628
483 12,798
Accounts payable and accrued liabilities
(18,508) (5,755) (2,834) (1,466) (1,366) (3,172) (33,101)
Other long-term liabilities
Lease liabilities
(287)
(270)
(13,400) (4,447)
(53)
(142)
(477) (4,315)
(37) —
(259)
(789)
(548) (23,446)
Net financial position exposure
(14,856)
(116) 1,833 (3,113) 1,299
866 (14,087)
46
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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, 2023 and 2022. The
sensitivity associated with a 1% weakening of a particular currency would be equal and opposite. This assumes that each
currency moves in isolation.
2023
2022
Foreign exchange forward contracts
CAD
EUR
AUD
GBP
NZD
Other
$
$
$
$
$
(84)
(1,347)
(58)
(1,092)
161
(512)
111
(383)
(152)
(167)
$
15
(166)
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, which are generally for a term of less 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. The
Company's hedging program does not mitigate the impact of foreign currency fluctuations on its revenue.
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 notional principal of the foreign exchange contracts was approximately $109,200 CAD as at March 31, 2023
(March 31, 2022 - $26,000 CAD).
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,
No hedge ineffectiveness was recorded during the fiscal year ended March 31, 2023.
2023
$
23
2022
$
—
(3,386)
(337)
3,238
(125)
360
23
All hedging relationships have been maintained as at March 31, 2023. 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 was related to the Acquisition Facility (see note
19). The Company is not exposed to material interest rate risk.
47
Lightspeed Commerce Inc.
Notes to the Consolidated Financial Statements
For the years ended March 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
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 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 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 stock options and share awards outstanding and exercise price remaining constant.
Based on the outstanding share-based payment awards at March 31, 2023, the impact on the accrual for social costs of an
increase in the Company’s share price of 10% would result in a change of $288 as at March 31, 2023.
28. 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 19 for information on the Company's Amended Revolver.
29. Geographic information
The geographic segmentation of the Company’s assets is as follows:
2023
2022
Property
and
equipment
$
Right-of-
use assets
$
Intangible
assets Goodwill
$
$
Property
and
equipment
$
Right-of-
use assets
$
Intangible
assets Goodwill
$
$
Canada
13,499
8,468
56 1,350,645
10,356
10,062
990 2,104,368
United States
New Zealand
Germany
Other
974
611
298
4,109
3,259 237,641
152
58,948
1,109
7,985
9,227
5,578
—
—
—
—
1,155
6,079 303,393
656
288
517
75,892
1,312
16,594
4,001
7,569
12,699
—
—
—
—
Geographic sales based on customer location are detailed as follows:
United States
Canada
Australia
United Kingdom
Other
2023
$
527,350
47,066
45,321
30,237
80,532
2022
$
395,871
33,423
29,230
15,749
74,099
48
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”.
Transfer Agent and Registrar
1701 - 1190 Avenue des
Canadiens-de-Montréal
PO Box 33
Montréal, QC H3B 0G7
www.tsxtrust.com
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.
American Stock Transfer & Trust
Company, LLC
6201 15th Avenue
Brooklyn, NY 11219,
United States
2023 Annual and Special Meeting
The Annual and Special
Shareholders Meeting will be
held at 11 a.m. (Eastern Time),
Thursday, August 3, 2023.
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 & Committee Composition
Board
Audit Committee
Compensation, Nominating,
& Governance Committee
Risk Committee
Patrick Pichette
Lead Independent Director
Dax Dasilva
Executive Chair
Jean Paul Chauvet
Chief Executive Officer
Paul McFeeters
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