Two years after handing over the reins of Lightspeed, its founder, Dax Dasilva, is officially back as president and CEO. The Montreal company specializing in technological solutions for merchants is entering a “new phase,” says its founder. A phase of “profitable growth”. Interview.
In February 2022, after more than fifteen years at the head of Lightspeed, Dax Dasilva took a step back. As chairman of the board, he continued to exert “strategic” influence, he says. Driven by the desire to once again play a “more active” role, the businessman took over management of the company, initially on an interim basis. On Thursday, when it released its fourth quarter financial statements, its permanent return was made official.
The board of directors judged that he was the right person to support the company in its new phase of growth, he said. “This is a phase where we have to balance strong growth with profitability,” explains Duty the original Vancouverite established in Montreal.
“Lightspeed has always been known as a very high-growth company. After our IPO, that is to say after 2019, this is what the market rewarded: companies that captured market share, that were growing, and sometimes growing at all costs. It was the only important thing,” argues the manager.
However, the tide has turned. “With the rise in interest rates, the tone has changed in the markets. Investors prioritize profitability, but reward companies that can also maintain strong growth. It is with this more balanced approach that we want to develop,” says Mr. Dasilva.
The billion mark
By 2025, Lightspeed plans to surpass the $1 billion revenue milestone. She’s not very far from it. “We ended the last financial year with revenues of approximately US$900 million. That equates to revenues 12 times greater than what they were when the company went public in 2019,” says Mr. Dasilva.
“So, we are getting closer to a billion dollars in turnover. But when a business becomes large-scale, it has to show that it can be profitable,” he adds.
To achieve this profitability objective, the company has three objectives: improve the efficiency of its operating costs, advance the adoption of its financial services products and accelerate the growth of revenues from sales. of software.
In terms of cost control, the work has already started, notes Mr. Dasilva, in particular by reducing the surface area of its office spaces and carrying out workforce restructuring. The company laid off nearly 300 employees in January, then about 280 employees last April.
“By November, we will unveil a more detailed plan on how we can further reduce costs over the next three years. Because there are still savings that can be made. In particular, we have grown very quickly, acquiring nine companies since our IPO, and therefore, there are redundancies,” explains Mr. Dasilva.
Lightspeed’s customer base is largely comprised of small and mid-sized merchants in the retail and service industries. But the company wants to target more established businesses. “Our ideal client is one with an annual turnover of $500,000 or more,” says Mr. Dasilva.
And for good reason, small businesses “tend to experience more business failures”, while “more established traders resist better”, even when the economy shows signs of weakness.
“We have a very diversified portfolio of services, very adapted to this ideal clientele, in particular solutions based on artificial intelligence which can help to make them more efficient, for administrative tasks, but not only,” argues the manager from Lightspeed.
“For example, for our clients in the catering sector, we already allow them to generate menus with artificial intelligence based on what is most ordered by customers,” he illustrates.
This focus on customers who tend to adopt more software will allow the company to improve software revenue growth, it is hoped. “During this new financial year, and I have shared this with the market, what I would like to see is a 10 to 15% growth in software-related revenues,” confides Mr. Dasilva.