EX-99.1 2 financialstatementsfy24q1.htm EX-99.1 Document



Lightspeed Commerce Inc.
Condensed Interim Consolidated Financial Statements
(Unaudited)
For the three months ended June 30, 2023
(expressed in thousands of US dollars)


Lightspeed Commerce Inc.
Condensed Interim Consolidated Balance Sheets
(Unaudited)
As at June 30 and March 31, 2023
(expressed in thousands of US dollars)
Notes
June 30,
2023		March 31,
2023
Assets
$
$
Current assets
Cash and cash equivalents780,277 800,154 
Trade and other receivables981,965 84,334 
Inventories14,649 12,839 
Other current assets1039,306 37,005 
Total current assets916,197 934,332 
Lease right-of-use assets, net
18,991 20,973 
Property and equipment, net
19,094 19,491 
Intangible assets, net
289,192 311,450 
Goodwill1,350,070 1,350,645 
Other long-term assets1134,824 31,540 
Deferred tax assets372 301 
Total assets2,628,740 2,668,732 
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities1260,744 68,827 
Lease liabilities6,770 6,617 
Income taxes payable3,102 6,919 
Deferred revenue67,474 68,094 
Total current liabilities138,090 150,457 
Deferred revenue1,283 1,226 
Lease liabilities17,693 18,574 
Other long-term liabilities1,170 1,026 
Total liabilities158,236 171,283 
Shareholders’ equity
Share capital144,320,976 4,298,683 
Additional paid-in capital197,109 198,022 
Accumulated other comprehensive loss15(2,679)(3,057)
Accumulated deficit(2,044,902)(1,996,199)
Total shareholders’ equity2,470,504 2,497,449 
Total liabilities and shareholders’ equity2,628,740 2,668,732 
Commitments and contingencies13


The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
2

Lightspeed Commerce Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
For the three months ended June 30, 2023 and 2022
(expressed in thousands of US dollars, except per share amounts)
Three months ended June 30,
Notes
20232022
$$
Revenues4209,086 173,882 
Direct cost of revenues5, 6121,181 96,357 
Gross profit87,905 77,525 
Operating expenses
General and administrative624,944 30,239 
Research and development634,035 35,636 
Sales and marketing655,288 68,645 
Depreciation of property and equipment1,457 1,221 
Depreciation of right-of-use assets2,230 2,047 
Foreign exchange loss671 443 
Acquisition-related compensation2,545 17,103 
Amortization of intangible assets24,505 25,876 
Restructuring472 1,207 
Total operating expenses146,147 182,417 
Operating loss(58,242)(104,892)
Net interest income710,362 2,007 
Loss before income taxes(47,880)(102,885)
Income tax expense (recovery)
Current1,215 264 
Deferred(392)(2,353)
Total income tax expense (recovery)823 (2,089)
Net loss(48,703)(100,796)
Other comprehensive income (loss)
Items that may be reclassified to net loss
Foreign currency differences on translation of foreign operations(600)(8,833)
Change in net unrealized gain (loss) on cash flow hedging instruments, net of tax978 (719)
Total other comprehensive income (loss)15378 (9,552)
Total comprehensive loss(48,325)(110,348)
Net loss per share – basic and diluted8(0.32)(0.68)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
3

Lightspeed Commerce Inc.
Condensed Interim Consolidated Statement of Cash Flows
(Unaudited)
For the three months ended June 30, 2023 and 2022
(expressed in thousands of US dollars)
Three months ended June 30,
20232022
Cash flows from (used in) operating activities
$
$
Net loss(48,703)(100,796)
Items not affecting cash and cash equivalents
Share-based acquisition-related compensation2,469 15,598 
Amortization of intangible assets24,505 25,876 
Depreciation of property and equipment and lease right-of-use assets3,687 3,268 
Deferred income taxes(392)(2,353)
Share-based compensation expense17,823 38,528 
Unrealized foreign exchange loss322 254 
(Increase)/decrease in operating assets and increase/(decrease) in operating liabilities
Trade and other receivables2,628 (4,921)
Inventories(1,810)(1,035)
Other assets(3,940)1,931 
Accounts payable and accrued liabilities(8,172)(7,876)
Income taxes payable(3,817)(75)
Deferred revenue(563)220 
Other long-term liabilities235 (26)
Net interest income(10,362)(2,007)
Total operating activities(26,090)(33,414)
Cash flows from (used in) investing activities
Additions to property and equipment(1,070)(3,080)
Additions to intangible assets(2,285)(603)
Purchase of investments— (820)
Interest income 10,496 2,311 
Total investing activities7,141 (2,192)
Cash flows from (used in) financing activities
Proceeds from exercise of stock options1,217 552 
Share issuance costs(76)— 
Payment of lease liabilities net of incentives and movement in restricted lease deposits(2,066)(2,092)
Financing costs— (270)
Total financing activities(925)(1,810)
Effect of foreign exchange rate changes on cash and cash equivalents
(3)(1,449)
Net decrease in cash and cash equivalents during the period(19,877)(38,865)

Cash and cash equivalents – Beginning of period800,154 953,654 
Cash and cash equivalents – End of period780,277 914,789 
Interest paid to financial institutions— 270 
Income taxes paid5,067 11 
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
4

Lightspeed Commerce Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
For the three months ended June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares)
Issued and
Outstanding Shares
Notes
Number
of shares
Amount
Additional
paid-in
capital		Accumulated other comprehensive income (loss)Accumulated
deficit		Total
$$$$$
Balance as at March 31, 2023151,170,305 4,298,683 198,022 (3,057)(1,996,199)2,497,449 
Net loss— — — — (48,703)(48,703)
Share issuance costs— (129)— — — (129)
Exercise of stock options and settlement of share awards703,223 19,953 (18,736)— — 1,217 
Share-based compensation— — 17,823 — — 17,823 
Share-based acquisition-related compensation
873 2,469 — — — 2,469 
Other comprehensive income15— — — 378 — 378 
Balance as at June 30, 2023151,874,401 4,320,976 197,109 (2,679)(2,044,902)2,470,504 
Balance as at March 31, 2022148,661,312 4,199,025 123,777 2,677 (926,190)3,399,289 
Net loss— — — — (100,796)(100,796)
Share issuance costs— (193)— — — (193)
Exercise of stock options and settlement of share awards488,856 15,326 (14,774)— — 552 
Share-based compensation— — 38,528 — — 38,528 
Share-based acquisition-related compensation222,715 15,598 — — — 15,598 
Other comprehensive loss15— — — (9,552)— (9,552)
Balance as at June 30, 2022149,372,883 4,229,756 147,531 (6,875)(1,026,986)3,343,426 




The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
5
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)

    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 unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). Certain information and disclosures have been omitted or condensed. These unaudited condensed interim consolidated financial statements should be read together with the Company’s audited annual consolidated financial statements and notes thereto for the fiscal year ended March 31, 2023.
These unaudited condensed interim consolidated financial statements were approved for issue by the Board of Directors of the Company on August 2, 2023.
Seasonality of interim operations
The operations of the Company are seasonal, and the results of operations for any interim period are not necessarily indicative of operations for the full fiscal year or any future period.
Estimates, judgments and assumptions
The preparation of the unaudited condensed interim consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses during the period. These estimates and assumptions are based on historical experience, expectations of the future, and other relevant factors and are reviewed regularly. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future period affected. Actual results may differ from these estimates.
In preparing these unaudited condensed interim consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of uncertainty are the same as those applied and described in the Company’s audited annual consolidated financial statements for the fiscal year ended March 31, 2023.
    3. Significant accounting policies
The same accounting policies and methods of computation were followed in the preparation of these unaudited condensed interim consolidated financial statements as were followed in the preparation of the most recent audited annual consolidated financial statements.
6
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
New and amended standards effective within the three months ended June 30, 2023
In May 2023, the IASB issued International Tax Reform—Pillar Two Model Rules, which amended IAS 12, Income Taxes, to introduce a temporary exception to the requirements to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes, and targeted disclosure requirements for affected entities. The relief is effective immediately upon issuance of the amendments and should be applied retrospectively in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, while the targeted disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2023, but not for any interim periods ending on or before December 31, 2023. The Company is currently assessing the impact of these amendments on the consolidated financial statements.
    4. Revenues
Three months ended June 30,
20232022
$$
Subscription revenue78,727 73,560 
Transaction-based revenue120,970 91,524 
Hardware and other revenue9,389 8,798 
Total revenues209,086 173,882 
Transaction-based revenue includes $1,593 of revenue from merchant cash advances for the three months ended June 30, 2023 (June 30, 2022 – $1,278).
    5. Direct cost of revenues

Three months ended June 30,
20232022
$$
Subscription cost of revenue19,340 20,423 
Transaction-based cost of revenue89,019 62,901 
Hardware and other cost of revenue12,822 13,033 
Total direct cost of revenues121,181 96,357 
    6. Employee compensation
The total employee compensation comprising salaries and benefits, including share-based compensation and related costs, excluding government assistance and acquisition-related compensation, for the three months ended June 30, 2023, was $82,712 (June 30, 2022 – $102,211).
7
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
The following table outlines share-based compensation and related costs included in the following expenses:
Three months ended June 30,
20232022
$$
Direct cost of revenues1,853 2,246 
General and administrative6,181 10,085 
Research and development8,376 10,885 
Sales and marketing2,323 15,086 
Total share-based compensation and related costs18,733 38,302 
As at June 30, 2023, the Company had 11,950,520 options, 6,601,787 restricted share units, 75,869 deferred share units, and 476,644 performance share units which include non-market performance conditions outstanding (June 30, 2022 - 12,669,907 options, 4,748,468 restricted share units, 40,067 deferred share units and 619,640 performance share units which include non-market performance conditions outstanding).
    7. Finance income and costs
Three months ended June 30,
20232022
$$
Interest income10,755 2,716 
Interest expense(393)(709)
Net interest income10,362 2,007 
    8. 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 three months ended June 30, 2023 and 2022. All outstanding potentially dilutive shares could potentially dilute loss per share in the future.

Three months ended June 30,
20232022
Issued Common Shares
151,874,401 149,372,883 
Weighted average number of Common Shares (basic and diluted)152,523,457 148,973,294 
Net loss per share – basic and diluted($0.32)($0.68)
8
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
The weighted average number of potentially dilutive shares that are not included in the diluted per share calculations because they would be anti-dilutive was 17,123,532 stock options and share awards for the three months ended June 30, 2023 (June 30, 2022 - 17,399,850).
    9. Trade and other receivables
June 30,
2023		March 31,
2023
$
$
Trade receivables30,049 37,167 
Allowance for expected credit losses(4,659)(4,131)

Trade receivables, net25,390 33,036 
Research and development tax credits receivable5,791 8,424 
Sales tax receivable4,944 4,862 
Merchant cash advances measured at fair value40,546 29,492 
Indemnification receivables708 4,042 
Accrued interest and other4,586 4,478 
Total trade and other receivables81,965 84,334 
The indemnification receivables are for indemnities on certain liabilities assumed through our acquisitions.
    10. Other current assets
June 30,
2023		March 31,
2023
$
$
Restricted cash and restricted deposits1,315 1,366 
Prepaid expenses and deposits13,991 14,149 
Commission asset12,904 12,160 
Contract asset and other11,096 9,330 
Total other current assets39,306 37,005 
    11. Other long-term assets
June 30,
2023		March 31,
2023
$
$

Restricted cash405 408 
Prepaid expenses and deposits3,958 3,775 
Commission asset15,984 15,147 
Contract asset12,958 10,691 
Investments1,519 1,519 
Total other long-term assets34,824 31,540 
9
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
    12. Accounts payable and accrued liabilities
June 30,
2023		March 31,
2023
$$

Trade payables34,920 36,958 
Accrued compensation and benefits17,012 22,543 
Accrued payroll taxes on share-based compensation3,537 3,030 
Acquisition-related payables496 331 
Sales tax payable3,417 3,556 
Other1,362 2,409 
Total accounts payable and accrued liabilities60,744 68,827 
    13. Contingencies, Provisions and Commitments
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 matter is expected to proceed to trial in September 2023. The Company has separately, applied for, and had instituted its applications for, inter partes review of all three patents by the U.S. Patent Trial and Appeal Board, which is expected to issue final written decisions in respect of all three patents by mid-November 2023. The Company and management intend to vigorously defend against the action.
The Company is presently engaged in a dispute with one of its residual payments partners that has resulted in that partner purporting to terminate two agreements it has with the Company and ceasing to pay the Company amounts owed pursuant to those agreements, approximately $3,600 in the quarter, beginning in April 2023. Although the Company is not yet aware of a formal claim having been filed by the partner, the partner alleges that the Company has breached certain covenants in each of the two agreements and has made a demand for damages under each agreement. The Company intends to vigorously defend against any claims resulting from the dispute.
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.
10
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
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.
Commitments
The Company increased its commitments from those disclosed in its audited annual consolidated financial statements for the fiscal year ended March 31, 2023. The Company renegotiated certain contracts with payments processors which include commitments of $12,435 over the next five fiscal years.
    14. Share capital

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. All references to Common Shares refer to Subordinate Voting Shares in the Capital of Lightspeed.
    15. Accumulated other comprehensive income (loss)
Foreign currency differences on translation of foreign operations
Hedging reserve
Total accumulated other comprehensive income (loss)
202320222023202220232022
$$$$$$
Balance as at March 31,(2,932)2,654 (125)23 (3,057)2,677 
Foreign currency differences on translation of foreign operations(600)(8,833)— — (600)(8,833)
Change in net unrealized gain (loss) on cash flow hedging instruments— — 1,285 (719)1,285 (719)
Deferred income tax expense— — (307)— (307)— 
Balance as at June 30,(3,532)(6,179)853 (696)(2,679)(6,875)
Foreign exchange forward contracts
The Company designates certain foreign exchange forward contracts as cash flow hedges when all the requirements in IFRS 9, Financial Instruments are met. The Company's currency pair used for cash flow hedges is US dollar / Canadian dollar. The notional principal of the foreign exchange contracts was $79,800 CAD as at June 30, 2023 (March 31, 2023 - $109,200 CAD).
    16. Related party transactions
Key management personnel includes executive officers. Other related parties include close family members of the key management personnel and entities controlled by the key management personnel.
11
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
The executive compensation expense to the top five key management personnel is as follows:
Three months ended
June 30,
20232022
$$

Short-term employee benefits and termination benefits814 729 
Share-based payments3,364 7,011 
Total compensation paid to key management personnel4,178 7,740 
    17. Financial instruments
Fair value
The Company measures the fair value 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 June 30 and March 31, 2023.
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 represent the discounted future settlement amounts based on current market rates.
The fair value of merchant cash advances was determined based on Level 3 inputs by calculating the present value of the future estimated cash flows based on the terms of the agreements. 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.
12
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
June 30, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
As at June 30 and March 31, 2023, financial instruments measured at fair value in the unaudited condensed interim consolidated balance sheets were as follows:
June 30, 2023March 31, 2023
Fair
value
hierarchy
Carrying
amount
Fair
value
Fair
value
hierarchy
Carrying
amount
Fair
value
$
$

$$

Assets:
Cash and cash equivalents
Level 1780,277 780,277 Level 1800,154 800,154 
Restricted cash and restricted depositsLevel 11,720 1,720 Level 11,774 1,774 
Merchant cash advancesLevel 340,546 40,546 Level 329,492 29,492 
Foreign exchange forward contractsLevel 21,160 1,160 Level 200
InvestmentsLevel 31,519 1,519 Level 31,519 1,519 
Liabilities:
Foreign exchange forward contractsLevel 20 0 Level 2125125

13