After a year of testing the waters, Montréal-based point-of-sales and e-commerce giant Lightspeed said today that it’s not going private after all. Alongside its fiscal year 2025 Q3 earnings, the company revealed plans to move forward with a “full transformation plan,” including a $400-million USD share buyback following a strategic review.
If the details of the plan sound familiar, that’s because they are: founder Dax Dasilva told BetaKit it’s “not a different plan” from what was outlined last year upon his return as CEO. Instead, it’s a double-down on his profitability promise.
But that promise has shifted from FY 2025 to “positive free cash flow within the next year.” The decision to remain public also triggered a sharp drop in Lightspeed’s stock price despite the impending stock buyback.
BetaKit sat down with Dasilva to explore Lightspeed’s focus on its “two crown jewels,” its stock buyback plan, and why it’s hiring in its home city of Montréal.
This interview has been edited for length and clarity.
Why did you decide to keep Lightspeed public, and were there buyers interested in purchasing the company?
We wanted to navigate what’s the best corporate structure for Lightspeed to embark on this transformation, we had a really great engagement …and we did go into extensive discussions with a number of participants.
So all options were on the table.
We had to weigh alternatives of proposals versus what we can achieve in the public market. And ultimately, management and the board concluded that we can maximize shareholder value by continuing to execute our conservation plan as a public company.
A lot of Canadian tech companies in recent years have returned to private markets. Why did it make more sense to stay public versus pursue a privatization deal?
Ultimately, the decision was, ‘what is going to ensure the best path for success, for the transformation?’ The object of the process was not, you know, ‘let’s sell Lightspeed,’ or ‘let’s take Lightspeed private.’ It’s ‘what is going to create the most value in terms of the transformation?’ ‘What’s the best path to benefit shareholders?’
We’re trying to provide the best outcome for that context.
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Why are you splitting focus into retail in North America and hospitality in Europe?
We have really amazing positions in both of those markets. And I think all of the other parts of our business that are in our efficiency portfolio, these are good businesses. But they don’t have as high of an ROI as those two growth engines for Lightspeed. They have the highest close rate, the best competitive dynamics, the best unit economics, and so to invest equally across all of the different parts of the business doesn’t make sense.
We discovered in the industry review that Lightspeed doesn’t have just one crown jewel. We have two crown jewels. We have a proven right to win. They’re going to receive the bulk of investment in go-to-market and in product and technology. And that’s where a dollar spent is going to net the highest new location count and the highest software subscription revenue.
When do you expect to reach profitability on a net-income basis?
We’ve been adjusted EBITDA positive for, I believe, five quarters. We’re going to speak at Capital Market Day about how free cash flow will evolve in FY26 but we expect positive free cash flow within the next year.
What was the main motivation behind the share repurchase plan?
We have a lot of conviction in our plan. I think buying Lightspeed shares right now makes a ton of sense. It’s a vote for the transformation.
We have more than enough cash on our balance sheet to fund programs like our capital business or to do some opportunistic M&A. We’re not focused on doing large, strategic M&A but we have enough cash to be able to fund any opportunistic tokens that might be the right fit for Lightspeed.
On the earnings call this morning, it was noted that your transformation plan is very similar to what you outlined last year when you rejoined the company as CEO. Can you walk us through what’s different and what you’ve learned since then?
The plan is to grow in these two key markets and to optimize our other markets for profitability. So it’s not a different plan. In addition to that, we’re still optimizing to capture ICP merchants, which is $500,000 and above in terms of annual transaction volume.
And so by focusing our resources on these two growth engines, that’s going to create more growth, it’s going to create more location count, more ARPU. And by optimizing the rest of the business for profitability, we’ll have growing EBITDA and free cash flow. That’s the shift in the financial profile that we want to see, and this is the way to get there. What we’ll be able to do at Capital Markets Day is map out what that looks like over several years.
We’ve had really, really good reception from investors, like: ‘This is where Lightspeed’s strong. We hear lots of great things about the products in these particular areas. It doesn’t make any sense for you to compete head to head with a competitor like Toast in the US for hospitality, but you guys are it for Europe, we see you everywhere. And we see you everywhere in North America, in your focus verticals.’
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Will the transformation plan include further restructuring or layoffs?
We’re actually doing a ton of hiring. We expect a lot of positions to be hired in North American retail, and in European hospitality.
For North American retail, that’s outbound remote, so remote reps in the Montréal HQ calling out to businesses across North America. So hiring for retail, a lot of it will happen here in Montréal.
Would a tariff-related drop in North American retail sales and transaction volume affect Lightspeed, and are you planning for that?
I think anything macro-economic that impacts retail and and even hospitality supply chains can have an impact. But it really depends on what gets tariffed and where individual businesses buy their supply, what their mix is, and whether their suppliers constitute an area that is tariffed or not.
I think the best way that retail can prepare for a future where there are more trade wars is to have real visibility on your suppliers and supply chain. And perhaps have alternatives, you know, ready to go as a part of your technology stack, or have your technology stack be able to manage that for you, which you can do with Lightspeed’s Supplier Network.
More than ever, what we’re offering with Lightspeed Supplier Network is future proofing businesses and giving them optionality and real flexibility when managing inventory and managing the brand suppliers they work with.
With files from Josh Scott. Feature image courtesy Elevate.