There are some stocks you love and some you don’t. Even when they might look dirt cheap, you avoid buying them, as you can’t trust the numbers. For me, that stock is Lightspeed Commerce (TSX: LSPD), the poster child of the 2020 tech bubble that came crashing down as investors lost confidence in September 2021 after the Spruce Point report uncovered layers of inflated hopes. While the stock has not recovered from the five-year blip, it has had its fair share of seasonal range-bound rallies. However, those bumps in share price are largely from traders and not backed by fundamentals.
Because when I looked at the trend, revenue and profit numbers were disappointing.
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Lightspeed Commerce management reshuffle weakens investor confidence
Lightspeed Commerce founder, Dax Dasilva, stepped down in February 2022 to pursue another project, when the company was falling apart. He left then chief financial officer, JP Chauvet, to clean up the books. Chauvet made the hard decisions of layoffs and acquisition write-downs until he resigned in 2024. Now, Dasilva is back and selling the very companies he bought at crazy valuations in 2021 at a loss.
Counting the impairments and depreciation one at a time
On April 28, 2026, Lightspeed Commerce sold Upserve, a U.S. hospitality product line, for $44,000 in cash consideration and up to $37,000 in contingent consideration. It acquired Upserve in 2020 for $430 million – $123 million in net cash and the remainder in shares. These impairments have been inflating net losses since fiscal 2023 ended March 31, 2023.
| Fiscal Year ending Mar 31 | Revenue (millions) | YoY Growth | Net Profit (millions) | Adjusted EBITDA (millions) | Interest Income (millions) |
| 2021 | $221.70 | 84% | -$124.30 | -$21.20 | -$0.35 |
| 2022 | $548.40 | 147% | -$288.43 | -$41.50 | $2.98 |
| 2023 | $730.50 | 33% | -$1,070.00 | -$33.90 | $24.80 |
| 2024 | $909.30 | 24% | -$163.96 | $1.27 | $42.53 |
| 2025 | $1,076.80 | 18% | -$667.20 | $53.69 | $36.49 |
| 2026 | $1,227.00 | 14% | -$144.40 | $72.50 | $8.20 |
| 2027* | $1,265.00 | 3% |
Lightspeed Commerce is an omnichannel commerce platform for restaurants and retailers, serving North America and Europe. It has a capital-light model and no debt. In fact, whatever profit it is earning is from interest income. JP Chauvet managed to turn the operations profitable, with Lightspeed reporting positive adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) in fiscal 2024. However, higher depreciation of the 2020 acquisitions and goodwill impairments have kept the gap between Adjusted EBITDA and net profit wide.
The revenue growth: Is it enough?
Lightspeed Commerce revenue growth is slowing and expected to be just 3% if it achieves the higher end of its fiscal 2027 guidance of $1.22 billion–$1.26 billion. With revenue growth slowing, a 1.26 times price-to-sales ratio looks overvalued. The management is trying a new sales strategy of combining Lightspeed Retail and Lightspeed Restaurant, refreshing partner and channel strategies.
The company has realigned its growth. In North America, it will focus on retail and golf and on restaurants and hospitality in Europe. The two make up 75% of its revenue. It remains to be seen if the company can execute its go-to-market strategy. It has also introduced artificial intelligence (AI) to analyze data, grow revenue, cut costs, and manage inventory. It is too early to capture actual costs and revenue from AI.
At least fiscal 2027 will see tepid revenue growth. Investors should avoid basing their decision on metrics like Gross Payments Volume and monthly average revenue per user (ARPU), as they do not show at what point Lightspeed will turn profitable. This uncertainty keeps its share price grounded and revenue growth unexciting.
Buy this stock instead of Lightspeed Commerce
In the world of big tech and AI, if you want exposure to small business owners, consider Constellation Software (TSX: CSU). It acquires several traditional software companies that largely cater to mission-critical applications. Their clients are slightly reluctant to adopt new technology easily, given the comfortable setup, low maintenance cost, and legacy systems that have been customized to their workflow.
Constellation’s cash flows are real, compounding is real, and the share price is down mainly due to AI concerns. Can AI disrupt the legacy software market? The stock will move as the company and the world find an answer.
