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How does Lightspeed POS make money?


One company from the fintech space that has caught everyone’s attention and is quite a buzz among investors is Lightspeed POS.

Lightspeed POS is a cloud-based tech firm that empowers small and medium-sized business owners. Montreal-based Lightspeed’s CEO and founder, Dax DaSilva founded the company in 2005. The aim was to provide the ‘Apple Store Experience’ to retailers by creating an inventory-centric POS System. The company has grown at a tremendous rate in the past years and has widened its customer base worldwide. It got listed on the Toronto Stock Exchange in 2019 under the symbol LSPD.

POS or Point of Sale is a place where you pay for the goods or services that you bought. At departmental stores, POS is usually at the exit near the cash register. POS Systems includes the actual hardware and software that manages different aspects of businesses. Typically these include inventory, employee records, transaction details, etc. Traditionally, POS Systems were used locally by face-to-face businesses on a short-scale. However, with the innovations of cloud-based solutions, POS Systems got an upgrade which helped people grow their businesses tremendously.

Sources of Revenue

Lightspeed POS offers a robust cloud-solution that can help retailers in managing sales, customers, inventory and employees at various stores. Along with a rich feature set, the software is also fast. Lightspeed POS has customers from various retail sectors, medium-sized businesses. Recently, it expanded its business to the hospitality industry.

It offers two simple monthly plans, a $99 Lightspeed Retail and $69 Lightspeed Restaurant with a 14 day free-trial period. In 2020, it added golf course management software to their model with Lightspeed Golf. These packages include basic hardware, reporting, support, cloud backup and access for 5 employees. It also sells supplementary hardware and enhanced levels of service for additional fees. These are the major sources of revenue of Lightspeed.

A techcrunch publication says that Lightspeed will focus more on payments and other financial services. It is targeting a larger percentage from transaction processing and may an ecosystem with deeper analytics and services.

Lightspeed tackled the pandemic -related setbacks by introducing new programs to help businesses adapt and thrive. Like, introducing Lightspeed Delivery that helped on-location diners and other restaurants continue their operations. The company also expanded its payment facility app to Canada and introduced Lightspeed Mobile Tap and Digital Wallet to provide a faster and hands-free payment experience.

Lightspeed: Financial Metrics

In Q2 2021, Lightspeed has performed exceptionally well with 62% YOY growth and total revenue of $45.5 million. According to Q2 financial report, Lightspeed’s customer base grew to over 80,000 locations. A gross new customer location addition continues to be an encouraging metric and suggests a strong long-term outlook. Gross new customer location additions were 68% higher than a year ago, and 26% higher than the first quarter of fiscal 2021.

MotleyFool says that every company should strive to be profitable in the early growth stages but the priority should be to grab market share and secure customers that you can build long-term relationships with over time. Lightspeed’s growth has always been attractive to investors.

Though it witnessed a net loss of $19.5 million in this quarter, as long as Lightspeed continues to focus on growth, profits will take care of themselves. Lightspeed delivered results for the quarter ahead of previously established guidance, characterized by a growing customer base, increased adoption of software modules, strong growth, and increased payments penetration as small and medium-sized businesses continue to abandon inadequate legacy point-of-sale systems for Lightspeed’s modern cloud-based omnichannel solutions.

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