Lightspeed to remain public despite ‘high level of interest’ during strategic review

A Lightspeed logo is shown at the company's offices in Montreal, Tuesday, May 16, 2023.THE CANADIAN PRESS/Ryan Remiorz

Lightspeed Commerce Inc.‘s share price fell almost 18 per cent after the company concluded a strategic review that did not result in a go-private deal.

Instead, the company revealed it would remain public after it said the review revealed a “high level of interest” in the tech firm.

The outcome and a decision from the Montreal-based payments software company to stick with its focus on growing its North American retail and European hospitality businesses left its share price sitting at $17.10 by mid-afternoon Thursday.

Announcing the choices earlier in the day, board chair Patrick Pichette said staying public was a “unanimous” decision that offers “the best available path to maximize value for the company and its shareholders.”

Lightspeed launched the review last year, prompting speculation of a possible sale of the firm, after founder Dax Dasilva returned to lead the company with a promise to return it to profitability.

Dasilva wouldn’t say much Thursday about any offers Lightspeed may have garnered.

“We’re not going into the details of the process, unfortunately, but yes, we had strong engagement and we did have extensive discussions with several participants in the process,” he told analysts.

“Ultimately we determined and concluded that the best way to drive maximum shareholder value is to continue as a public company and execute our transformation plan in that context.”

The end of the review came as Dasilva nears the one-year anniversary of his return to the company. The Lightspeed founder handed off the top job to JP Chauvet in February 2022 but returned to the CEO role on an interim basis in February 2024.

Dasilva was reappointed on a permanent basis in May.

Much of his work since then has been focused on finding cost efficiencies and appeasing shareholders.

He announced Thursday that the company would use a buyback program to return up to $400 million in cash to shareholders.

The move comes after Lightspeed cut about 200 jobs in December and about 280 jobs in April, when it shifted its sales summit from an in-person format to a virtual event and decreased the number of days staff work from the office to reduce bills associated with feeding employees.

However, the company, which keeps its books in U.S. dollars, said Thursday that it experienced a loss of US$26.6 million or 17 cents US per share for the quarter ended Dec. 31. The result compared with a loss of US$40.2 million or 26 cents US per share a year earlier.

Revenue for what was the company’s third quarter totalled US$280.1 million, up from US$239.7 million a year ago.

On an adjusted basis, Lightspeed says it earned 12 cents US per share in its latest quarter compared with an adjusted profit of eight cents US per share a year earlier.

The quarter covers a period when the company was deep into its five-month strategic review.

The process looked at the company’s portfolio but also its market attractiveness and competitive dynamics, Dasilva said.

He added the review had no “presupposed outcome.”

“We wanted to know what were the options available (and) what were the different alternatives, but the object is how can we best execute the transformation plan and drive the most value?” he told analysts.

“After assessing multiple options, we concluded with our board that continuing as a public company offers the best path to maximizing value.”

National Bank of Canada analyst Richard Tse said the conclusion of the review was “by far the most notable” part of Lightspeed’s announcements Thursday.

“No doubt, the outcome of the strategic review likely raises questions as to why it did not conclude in a sale — most notable and obvious are a price (valuation) and product disconnect from the vantage point of prospects,” he wrote in a note to investors.

This report by The Canadian Press was first published Feb. 6, 2025.