Source: Lightspeed Commerce.
  • Lightspeed Commerce (TSX:LSPD) has instituted substantial layoffs and a share repurchase program to expedite its path to profitable growth
  • The layoffs affect 280 employees, while the buyback can cover up to US$140 million, or 10 per cent of the fintech stock’s public float
  • Lightspeed’s one-stop commerce platform serves retail, hospitality and golf businesses in more than 100 countries
  • Lightspeed stock is up by 5.09 per cent trading at C$19.82 per share as of 11:11 am ET

Lightspeed Commerce (TSX:LSPD) has instituted substantial layoffs and a share repurchase program to expedite its path to profitable growth.

The point-of-sale and payments platform has cut 280 employees from its books, representing about 10 per cent of headcount-related operating expenditures. The company expects to incur most of the restructuring charges and substantially complete its right-sizing plan by the end of Q1 fiscal 2025. The plan also includes “several other cost reduction initiatives in facilities and operations,” according to Wednesday’s news release.

Lightspeed will also execute a share repurchase program for up to 10 per cent of its public float, representing approximately US$140 million, to capitalize on periods of undervaluation and reduce dilution from employee equity grants. It is authorized to purchase up to 9,722,677 subordinate voting shares for cancellation between April 5, 2024, and April 4, 2025. As per applicable securities laws, it may purchase a daily maximum of 165,177 shares through the TSX, or 25 per cent of the company’s average daily trading volume for the six-month period ending Feb. 29, 2024.

The cost-reduction initiatives allow Lightspeed to maintain its guidance for fiscal 2024 revenue and adjusted EBITDA, which stands at US$895 million-US$905 million and break even or better, respectively.

Shareholders can expect an update in May on Q4 and fiscal 2024 performance and the company’s outlook for fiscal 2025.

Rewriting a history of poor financial performance

Wednesday’s news underscores Lightspeed’s intention to reroute its track record of mounting losses, which have grown by more than 5x from -US$183.53 million in 2019 to -US$1.07 billion in 2023.

Despite the sea of red across its income statement, the company has managed to grow revenue by almost 10x from US$77.45 million in 2019 to US$730.51 million in 2023, granting it a leadership position in global payments, which should provide it with enough scale to continue claiming market share while getting its operating expenses under control.

Management insights

“After successfully integrating our many acquisitions into our two flagship products and expanding adoption of our payments offering, Lightspeed is now entering a new phase, one focused on profitable growth to capture the opportunity in front of us,” Dax Dasilva, Lightspeed’s founder and chief executive officer, said in a statement. “This means making some hard decisions, like reducing spending in specific areas such as headcount, to allow for investments in others. As we navigate through this transition, we acknowledge the invaluable efforts of every team member who has played a role in our journey.”

About Lightspeed Commerce

Lightspeed Commerce offers a one-stop commerce platform designed to simplify, scale and enhance the customer experience. The company serves retail, hospitality and golf businesses in more than100 countries.

Lightspeed stock (TSX:LSPD) is up by 5.09 per cent, trading at C$19.82 per share as of 11:11 am ET. The stock has given back 2.67 per cent year-over-year and 7.63 per cent since 2019.

Join the discussion: Learn what other investors are saying about this fintech stock’s layoffs and buyback program on the Lightspeed Commerce Bullboard, and check out Stockhouse’s stock forums and message boards.

The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.

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