MONTREAL — Lightspeed Commerce continued to struggle in the markets Thursday after the Montreal-based point-of-sale company announced that founder Dax Dasilva was stepping down as CEO, after a period of poor performance for the stock.

Lightspeed’s president since 2016, JP Chauvet, took over as CEO, effective immediately. The company announced the leadership change along with its fiscal third-quarter earnings report, which showed a wider net loss, but also, as Chauvet pointed out on Thursday morning’s earnings call, beat analysts’ expectations on revenue and adjusted EBITDA. 

Here’s what you need to know:

Setting the agenda: Chauvet used Thursday’s call to outline his four priorities as Lightspeed’s new CEO.

1. Growth: Chauvet said he believes Lightspeed can grow between 35 per cent to 40 per cent per year without factoring in the impact of acquisitions, and highlighted the company’s payments business and upcoming supplier network as two key areas for growth. The company’s organic growth has been a closely watched metric since a September report from short seller Spruce Point claimed it was using acquisitions to cover up slowing growth. 

2. People: One staffing change on the horizon for Lightspeed is the addition of more salespeople in key markets, with the goal of increasing the total amount of revenue it generates from each customer. Lightspeed faced criticism from Spruce Point for not disclosing key metrics about how much it spends to acquire each customer, among other numbers. The addition of a larger, on-the-ground salesforce will increase those costs, but Chauvet said they will be offset by greater revenue per user from Lightspeed Payments.

3. Product: In the last few months Lightspeed has been integrating its acquisitions—in 2021, the company spent more than US$1.2 billion acquiring Vend, NuOrder and Ecwid—into two main products, Lightspeed Restaurants and Lightspeed Retail. The idea is to have a more simplified set of offerings in the marketplace. On the earnings call, Chauvet said the company wasn’t interested in simply consolidating other businesses under its umbrella. “Every acquisition we’ve undertaken is for a specific purpose,” he said.

4. Profitability: Chauvet said getting the company to turn a profit is a priority, but when an analyst asked when Lightspeed expects to break even, CFO Brandon Nussey said there still isn’t a specific timeline. Profitability has become a more important factor for tech investors as central banks signal their willingness to raise interest rates significantly this year in an effort to curb inflation.

A back seat for Dax: Dasilva will become executive chair of Lightspeed’s board, focused mainly on corporate responsibility and diversity and inclusion initiatives. He has recently increased his philanthropic efforts, founding a non-profit called Age of Union that will fund conservation projects. Patrick Pichette, the board’s current chair, becomes its lead independent director. Pichette is also a general partner at VC firm Inovia Capital, and independent board chair at Twitter. In the last month, Lightspeed also added two new board directors, tech executives Nathalie Gaveau and Dale Murray.

The market responds: “While this change hadn’t been telegraphed, we don’t view it as surprising,” BMO analyst Thanos Moschopoulos wrote in a research note. “Mr. Chauvet is well known to investors and has served as president since 2016.”

The quarter in numbers: 

• Total revenue increased 165 per cent to US$152.7 million, including US$68.6 million in subscription revenue and transaction-based revenue of US$75.8 million.
• Net loss increased to US$65.5 million from US$42.7 million.
• Adjusted EBITDA loss was US$7.1 million, representing 4.7 per cent of revenue compared with 11.4 per cent year over year.
• As of Dec. 31, Lightspeed had around US$1 billion in cash and equivalents.

Cloudy forecast: As with last quarter, Lightspeed’s forward guidance missed estimates: while its fourth-quarter guidance met targets for revenue, it fell short of EBITDA expectations, according to BMO. It beat expectations for the most recent quarter after significantly reducing its outlook for the holiday season in light of the Omicron variant and supply-chain shortages. On the call, Chauvet noted the company felt the Omicron variant’s impact late in the calendar year, raising the possibility that its effects could have spilled over into the current quarter. The new variant prompted increased lockdown measures in economies around the world, with implications for the retailers that make up Lightspeed’s customer base.

Lightspeed’s stock opened more than 16 per cent lower on Thursday, before recovering to trade roughly four per cent below yesterday’s close as of 11:20 a.m. ET. Since reaching all-time highs in September, the stock has lost more than 75 per cent of its value, after Spruce Point’s report and weak forward guidance in November sent its shares plunging.