What happened

Lightspeed Commerce (LSPD 2.93%) shareholders lost ground to the market on Thursday. The e-commerce platform's stock dropped 14% by 12:30 p.m. ET, compared to a 0.6% increase in the S&P 500. The move pushed returns into negative territory so far in 2023, while the broader market is up 9%.

The slump came as investors processed Lightspeed's latest earnings results and its outlook for the new fiscal year ahead.

So what

Lightspeed's sales rose 27% in the fiscal Q4 period that ended in late March, according to a premarket filing. This result put full-year sales at the low end of management's prior outlook and reflected weakening sales volumes for many of its retail customers.

On the other hand, the company surpassed executives' outlook for non-GAAP (generally accepted accounting principles) earnings. This success is "positioning us to reach our goal of profitability," CFO Asha Bakshani said in a press release.

Still, Lightspeed booked a second consecutive year of losses by that measure, with its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss landing at 5% of sales compared to 8% of sales a year earlier.

Now what

Investors were more concerned with management's conservative outlook for the just-started fiscal 2024 year. Sales and earnings trends will be weak over the next two quarters thanks to slower consumer retail spending in some niches but should improve later in the year, they said. Management also withdrew their ambitious long-term transaction volume growth target, while citing a shift toward payments processing solutions.

The combination of slowing growth and continued net losses understandably has investors concerned about a third consecutive year of weak profits in fiscal 2024. Management suggested that the company's results will start looking better by the end of the fiscal year. Yet it appears that shareholders won't have much clarity around that recovery path for several quarters.