Results? What results? Lightspeed Commerce announced its third-quarter 2022 financial results Wednesday evening, which were completely overshadowed by the news that the company founder and CEO Dax Dasilva has stepped down from his position as CEO to become executive chair of the company.
Lightspeed announced that its board of directors appointed current president JP Chauvet to the role of CEO, effective immediately. He will lead Lightspeed’s continued growth, strategic development and execution.
In a LinkedIn post, Dasilva wrote: “As part of our long-term succession planning process, and with the support of our board of directors, JP Chauvet and I will be assuming new responsibilities that allow us to best meet the moment we’re embarking on.”
Lightspeed’s share price has dropped more than 75 percent over the last six months from its peak in September 2021 following short-seller attacks, low revenue guidance, and general tech stock malaise.
As executive chair, Dasilva will work with Chauvet and the board to set the strategic direction of the company, with a focus on furthering Lightspeed’s business advocacy and global sustainability initiatives through stakeholder outreach, customer advocacy, corporate social responsibility and diversity, equity and inclusion initiatives.
At press time, Lightspeed’s stock hovered at $40.76, down $3.19 for the day. The company’s share price has dropped more than 75 percent over the last six months from its peak in September 2021 following short-seller attacks, low revenue guidance, and general tech stock malaise.
As part of the transition, Patrick Pichette, current chair and Inovia partner, will become the board’s lead independent director.
“As a board, we have regularly discussed succession planning over the last several years,” said Pichette. “JP has an outstanding track record in multiple leadership positions at Lightspeed, and the board is confident he is the natural choice to continue the important work underway across the organization and drive sustained value for all customers and shareholders.”
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Pichette added: “Meanwhile, the board also looks forward to supporting Dax in his new role as we advance the board’s corporate and sustainability goals, including maintaining Lightspeed’s position as an employer of choice for top talent, a global driver of positive impact and the leading technology partner for businesses everywhere.”
For Dasilva, who has always been outspoken on social and sustainability-related issues, the role change comes just over three months after he launched Age of Union, a new nonprofit environmental alliance backed by $40 million CAD of his own money.
Chauvet joined Lightspeed in October 2012 as chief revenue officer and became a board member in September 2013. In April 2016, he was named president and throughout his tenure has been integral to advancing Lightspeed’s mission, including leading many of the company’s strategic acquisitions, its listings on the Toronto Stock Exchange and New York Stock Exchange. He also led the launch and growth of the Lightspeed Payments platform.
Lightspeed reported total revenue of $152.7 million, an increase of 165 percent compared to the three-month period ended December 31, 2020.
Comparatively, Lightspeed’s revenue in the third fiscal quarter of last year totalled $57.6 million, which at the time represented a 79 percent year-over-year (YoY) increase.
During the earnings call, Dasilva said Lightspeed delivered results ahead of its outlook. He went on to acknowledge that Chauvet’s “vision and focus” helped transform Lightspeed into a global supplier. “I can think of no one more qualified to lead the company than JP,” Dasilva added.
As yesterday’s CEO, Dasilva was given a short period of time to address investors, while Chauvet took centre stage. The new CEO told investors that Lightspeed is a mission-driven company and would remain so under his lead, and that Lightspeed’s software will remain an absolute priority.
Chauvet told the earnings call he believed the company can grow 35 to 40 percent year over year, and noted Lightspeed’s payments offering is still “very much” in its early stages.
“Our people are highly dedicated because they believe in the mission of this company,” Chauvet said, noting that he wants to maintain a high-performing culture within the company.
Chauvet said Lightspeed is not a consolidator of companies. “Every acquisition is for a very specific purpose and will be integrated,” he said, adding that later this year the company plans to combine its restaurant and retail offerings under one brand.
Chauvet went on to reassure investors that growth remains Lightspeed’s top priority. “I want to ensure investors reaching profitability is our greatest priority,” he said.
Generally, investors expressed concerns about volatility because of the pandemic, and pressed company executives on Lightspeed’s growth in various divisions.
Brandon Nussey, Lightspeed’s CFO and COO, said that despite some headwinds from the Omicron variant in the latest quarter, revenues were up with strong transaction growth. Nussey pointed out that the dollars volume processed through the company’s payments solution increased 300 percent over the same period last year, and customer locations totaled 315,000 at the end of the quarter, an increase of 174 percent year-over-year.
In terms of 2022 guidance, the company is projecting revenue between $685.4 million CAD ($540 million USD) and $690.5 million CAD ($544 million USD), and adjusted EBITDA loss of approximately $57.1 million CAD ($45 million USD).
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Revenues have increased significantly for Lightspeed over the past couple of years (last quarter saw revenues of $133.2 million) as the Montréal company shifted from a POS focus to broad-ranging commerce.
That is very clearly reflected in a corporate name change from Lightspeed POS to Lightspeed Commerce. As part of that journey, Lightspeed recently has added board members with e-commerce experience and pushed through products that are the results of its many acquisitions.
Ahead of its last earnings call, investor attention focused on whether a report from Spruce Point Capital Management would impact Lightspeed’s revenues. In 2021, the American short-seller Spruce Point alleged the e-commerce company had inflated key metrics and wasn’t performing as well as it claimed.
Spruce Point Capital Management is a New York-based investment management firm that focuses on forensic research and short-selling.
Lightspeed dismissed the report and cautioned investors against making decisions based on it.
Dasilva directly addressed the short seller’s report during the earnings call, noting that “Lightspeed has made a consistent and genuine effort to establish a trusted and transparent relationship with the investor community. We are always open to engaging with serious investors in good faith.”
Founded in 2005, the dual-listed company boasts customers in more than 100 countries, and has a notable presence in North America, Europe, and the Asia Pacific.
Through Age of Union, which Dasilva said has “some DNA from Lightspeed,” he aims to apply some of the same lessons he learned scaling Lightspeed into the retail giant it is today to address the world’s climate crisis by supporting conservation efforts. “I always knew that I would start to do meaningful conservation work in my life, [and] contribute to making a difference on the planet,” Dasilva previously told BetaKit in an extended conversation on leadership and social impact last November.
As executive chair, Dasilva will focus in part on diversity initiatives, which have always been important to him and the company he founded. “As a person that comes from the LGBTQ+ community, we’ve always been very socially progressive at Lightspeed in terms of diversity, inclusion, and social issues,” Dasilva added.
Image courtesy Lightspeed.