Lightspeed (NYSE: LSPD) is a Montreal-based point-of-sale (PoS) and e- commerce enabler of purpose-built solutions for select retail and restaurant environments. The company has been successful in penetrating a crowded marketplace with highly functional PoS hardware and underlying software which has led to $1 billion in revenue and over $100 billion gross transaction volume run rate this fiscal year. Equally impressive to us is the 30% subscription revenue contribution which provides visibility and is augmented by 65% transaction-based revenue we categorize as repeat, if the economy holds. Lightspeed divides their business into two segments, Retail (60%) and Hospitality (40%), has invested heavily in on and off-premise capability, and customers seem enthusiastic that those products lead to efficiency gains. For example, the process and time required for a retailer’s inventory-to-PoS transaction is seamless and faster with Lightspeed. The same can be said about managing all aspects of a restaurant. Profitability has not been the company’s lead financial metric, but recent trends imply improvement. We are encouraged Lightspeed has taken the qualitative approach to market segments dominated by volume oriented providers.
