Montreal-based Lightspeed reported year-end results Thursday.Christinne Muschi/The Canadian Press
Lightspeed Commerce Inc. LSPD-T reported a net loss of US$575.9-million in its fiscal fourth quarter as its weak stock price triggered a goodwill writedown.
Montreal-based Lightspeed reported year-end results Thursday and provided a year-ahead forecast that were largely in line with expectations but will likely not be enough to reignite investor interest in the former stock market darling. The stock closed down 8 per cent Thursday.
“This is a transitional quarter for us, so I understand if the market wants to better understand and see execution,” chief executive Dax Dasilva said in an interview.
The company, which sells point-of-sale software to retailers, restaurants and hospitality providers globally, reported revenue in the fourth quarter ended March 31 of US$253.4-million, up 10 per cent over the same period a year earlier. That was in line with analysts’ expectations.
Its quarterly adjusted operating profit (a non-GAAP measure closely watched by analysts) of US$12.9-million was slightly below expectations, though the total for its 2025 fiscal year was US$53.7-million, ahead of its twice-increased forecasts and up from US$1.3-million a year earlier.
A US$556.4-million non-cash goodwill writedown was triggered by Lightspeed’s weak share price, which left the carrying value of net assets higher than its market capitalization at the end of the quarter.
Analysts are more focused on its longer-term outlook after a year in which Mr. Dasilva returned to lead the company he founded 20 years ago, slashed costs, refocused Lightspeed on expanding in its two strongest markets – North American retail and European hospitality – and began ramping up efforts to drive customer location growth, which would increase software revenues.
The company, which has pushed customers to adopt its payments solution in the past few years, abandoned a sale process early this year and embarked on a program to instead buy back US$400-million of shares, about 20 per cent of its float, which is now more than half done.
“With many of the hard decisions behind us, fiscal 2026 will be a year of executing on our plan and delivering on our potential,” Mr. Dasilva said on a conference call with analysts Thursday.
He said the company has hired half of a promised 150 outbound sales representatives, whose job is to sign up new customers in its focus area, with a goal of driving 10-per-cent to 15-per-cent increases in locations on average per year. The company has placed an emphasis on larger customer locations – those that generate US$500,000 or more in transaction volumes – but the undisclosed number of establishments was unchanged year-over-year in the quarter.
Lightspeed’s financial profile is improving. It is targeting annual gross profit increases of 15 per cent to 18 per cent on average over the next three years, alongside a goal of 35-per-cent average annual gains in adjusted operating profits.
But the company, which went public in 2019 and saw its share price soar early in the pandemic before crashing in 2021, is still far from regaining its status as an exciting, growth-oriented tech company as it tries to achieve profitable growth against a backdrop of global economic uncertainty.
Investors typically look for cloud software companies to achieve “rule of 40” results, adding a company’s revenue growth rate to its adjusted operating profit margin; if that totals 40, it is considered a top performer.
Lightspeed is targeting revenue gains of 10 per cent to 12 per cent this coming fiscal year and an adjusted operating profit margin of no more than 6 per cent. That adds up to less than half the rule of 40 target.
Mr. Dasilva told The Globe and Mail he’s more focused on expanding gross profit and adjusted operating profits than “chasing headline revenue growth, because that’s not really how we’re being evaluated.”
ATB Financial analyst Martin Toner said in an interview: “What I see is an inexpensive stock that is trying to get the growth engine humming again. They’re struggling to reaccelerate growth. The fundamental momentum isn’t there” yet. He added that, for technology-oriented investors, “there are better places to look.”
National Bank Financial analyst Richard Tse said in an e-mail: “I think the market wants to see execution on their large merchant count before we get a sustained valuation re-rating of the stock.”