MONTREAL — In February, Lightspeed’s longtime president, JP Chauvet, replaced founder Dax Dasilva as CEO following a difficult period for the company. After a short-seller report in the fall prompted a brutal selloff, its stock has fallen from a high of more than $158 in September to roughly $25, as of May 6. Shares in the Montreal-based point-of-sale maker have continued to suffer, as investors weigh concerns of rising interest rates and surging inflation—especially hurting unprofitable companies like Lightspeed.

Lightspeed is set to report earnings for its last fiscal year on May 19, and investors will be watching for signs that the company can demonstrate a path to profitability. In one of his first interviews since taking on the top job, Chauvet discusses Lightspeed’s plan for navigating economic uncertainty, the company’s leadership changes and its efforts to divest from Russia while maintaining operations in the region. (It brought on employees in the country last year after buying Ecwid, an e-commerce company with a significant presence in Eastern Europe, for about US$500 million.)

This interview has been edited for clarity and length.

Lightspeed merchants are adapting to life with less pandemic lockdowns. But so far this year, concerns around inflation have been top of mind. The U.S. economy also shrank unexpectedly last quarter. What are you seeing and expecting now in terms of demand for your products?

We’re seeing the opposite. One of the big reasons why you would use Lightspeed is automation. And a lot of the automation means [you need] less people to do the work. When you look at the hospitality space, a lot of people are struggling with the workforce, finding people. Lightspeed removes hours every day. We just automate as much as we can. We automate the payments, we automate the workflows, we automate selling across multiple channels. If you’re really in a recession, you need to hire less people. You need much more efficient tools. 

In a recession, normally, you tend to standardize. You tend to have fewer vendors that work on one platform. Most merchants today tend to have five, six or seven merchants with whom they work. We’re a fully integrated platform at a much lower cost that automates. So, I think it’s a world that’s going to play in our favour. 

Companies have been looking to cut costs in recent months. Is that something Lightspeed expects to have to do in the near future?

No. You know, it’s funny. If I were to rewind six or nine months ago, the message from investors was to spend more. And at the time we were like, no, we’re never going to be Toast. We’re never going to be growth at all costs. We’re conservative. For us, the question is finding the right balance between growth and profitability. If I grow too much, it’s actually going to penalize my profitability. No downsizing. I think we have 200 job openings right now, so it’s more of the opposite.

Lightspeed just launched its new Lightspeed Retail product. What’s new about it compared with what you already had in the market?

Before, we had a different product in the U.S. and a different product in Europe, and they were selling the vendor platform in Australia and New Zealand. And so we built one new platform, Lightspeed Retail, which is our flagship now. It’s fully launched in Australia, New Zealand, Europe, and now we just finalized the release in the U.S. There’s going to be more updates in the U.S. because we have a lot of different industries. But it’s released, and we’ve signed a few really interesting names on it.

Can you share who any of those are?

We have our earnings call coming up in the next two weeks, and we’ll be very vocal on those.

This past quarter was your first as CEO. What has that transition been like for you inside the company?

Dax and I, we’ve been at this together for 10 years. So even when I joined, in the early days, when we received US$30 million from Accel, the condition was to have someone who operationally could support Dax. It hasn’t been a groundbreaking change, because we agreed together on the strategy. We built this company together. It’s just a continuation, and I would say an acceleration. The reason why we thought it was the right time is that we have a lot of new board members, and so Dax has been hard at work doing that [as executive chair of the board]. And for me, it’s really around operations that we needed to integrate the products, integrate the company, build new products and ensure they’re released in time.

You also made a number of personnel moves in your top ranks. CFO Brandon Nussey is becoming chief operating officer, replaced by Asha Bakshani, and Rani Hammond was hired as chief people officer. What was the rationale behind those moves?

Brandon has been Asha’s mentor forever. All of this was very careful and well planned. The reason why we wanted to bring Brandon into operations now is because he’s a very operational CFO, just put it that way. Right now, we have this path to profitability—it’s very important to us. We have all these integrations with businesses that need to happen, there’s all these new products we’re launching, and the coordination of these launches. Because when you acquire eight companies in two years, it’s great, but it comes with pain. And so there’s this big project and he was the right guy for this. 

Asha is brilliant. She’s been the one talking to our investors forever. I think she’s the right person to now go out there roaring on our message about a path to profitability and getting the investment community to understand what we’re doing.

Rani is now our chief people officer. At our stage, you need to continue to prioritize your people, and give them a path to growth and becoming leaders of tomorrow. At the same time, we need to double down on getting the right people. That’s core to me. I want us to be the leader in diversity and inclusion in Canada, and I think we are, but I think there’s so much we can do.

Lightspeed has been giving its employees in Russia the option to relocate. Can you provide an update on those efforts? And what other challenges have there been in doing business in Russia given the sanctions in place?

First of all, our IP is not in Russia. For us, that is the most important thing, and over the last six, nine months we’ve transferred a ton of know-how and knowledge on the platform into all the offices of Lightspeed. We are divesting from Russia.

We had employees in Russia, but we also had employees in Ukraine. Our employees in Russia take great pride in working for a North American company. So their view of what’s happening is completely dissociated from the views of the government right now. What we’ve done for them is we are now opening offices close to Russia, who are actually Russian-friendly, where we are now relocating people, so that we can enable them to have a better life. There’s many Russians who actually want to leave their country right now. And we feel that by providing them incredible facilities in, call them, neighbouring countries, we will attract even more talent [among] people who want to relocate with their family.

So there’s a big project we’re taking on there, and we’re fairly confident that it’s going to be a successful one. We now have three countries where we are opening centres, where we’re going to pay our people from there and continue to grow, because we do believe Eastern Europe has a ton of development talent.