Yahoo Finance Lightspeed Commerce stock surges as Dax Dasilva reappointed CEO
Lightspeed Commerce (LSPD.TO)(LSPD) shares were up around 16 per cent on Thursday afternoon, as the company reappointed its founder Dax Dasilva as permanent CEO and reported a 25 per cent increase in sales.
Dasilva, who stepped into the role of interim chief executive officer in February, now has dropped the interim part of the title and says he is focused on driving profitable growth at the payments technology company.
"We're in a new phase for Lightspeed – the profitable growth phase," Dasilva said in an interview with Yahoo Finance Canada on Thursday.
"What this phase entails is really aligned with shareholders. It's about balancing growth... and as we reach a billion dollars in revenue, which we will in fiscal 2025, that we are balanced with profitability."
Lightspeed's stock surged as much as 18 per cent on Thursday following the release of its fourth-quarter results. Shares of the company were up around 16 per cent in mid-day trading on the Toronto Stock Exchange on Thursday.
Still, Lightspeed shares are down around 33 per cent on the year. Its stock plummeted 25 per cent in February, after the company issued a conservative forward guidance that flagged macroeconomic uncertainty. The following week, the company announced the return of Dasilva as its interim chief executive officer.
The job is not new for Dasilva, who served as CEO of Lightspeed from its founding in 2005 until February 2022, when he stepped into the role of executive chair and was replaced by Jean Paul Chauvet. Chauvet has since left the company. But this time around, the company is being more strategic when its comes to its pursuit of growth. Dasilva says he plans to make Lightspeed a more focused and profitable company, by zeroing in on three priorities. These are accelerating software sales growth and market share, increasing adoption of its financial services products, and finding further operational efficiencies.
Last year, Lightspeed was focused on shifting its existing customers to using its payment software. While the company succeeded in hitting its target of reaching at least 30 per cent penetration for its payment platform, Dasilva notes that software growth has slowed, as account managers were focused more on payments.
"We need to show us growing market share, we need to show us capturing software sales... that's a big difference of focus," Dasilva said, adding that the company will go deeper on its existing products and leverage AI tools to improve its current offering.
"It's going to be very aligned with what shareholders want to see."
The company has now set the target of ramping up software growth to between 10 and 15 per cent in the next year, up from eight per cent. It is also aiming for payments penetration of between 40 and 45 per cent.
"The returning CEO is delivering on his promise of profitable growth," RBC Capital Markets analysts Daniel Perlin and Paul Treiber wrote in a research note. They maintained an "outperform" rating for Lightspeed.
"We are encouraged by the focus on profitable growth and the guidance that aligns with this strategy."
Cost cutting will also be a key priority. Last month, the company announced a "reorganization of operation" that resulted in 280 layoffs and a reduction in headcount-related expenses of approximately 10 per cent. Dasilva says, going forward, "there are lots of things we can do outside of headcount to bring more efficiency." He says the company has reduced travel costs and can still rationalize its office footprint.
"We did buy nine companies, and there are a lot of efficiencies that can still be found at the company," Dasilva said.
Lightspeed, which reports financial results in U.S. dollars, says total sales in the fourth quarter ended March 31 were $230.2 million, a 25 per cent increase from the same period last year. The company reported a net loss of $32.5 million, or 21 cents per share, an improvement from last year's net loss of $74.5 million, or 49 cents per share. Lightspeed says it expects sales to grow by at least 20 per cent next year, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reaching at least $40 million. Its adjusted EBITDA was $1.3 million this year.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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