Dax Dasilva returns to Lightspeed as interim CEO, JP Chauvet steps down

Hey there, time traveller!
This article was published 15/02/2024 (918 days ago), so information in it may no longer be current.

Lightspeed Commerce Inc. founder Dax Dasilva is back at the helm of the company he started and he has a mission: profitability and boosting the stock price.

“When I took the company public in 2019, our revenue was US$77.5 million and today — this is five years later — we’re approaching almost US$900 million in revenue, but we’re at the same stock price as 2019,” he said in an interview Thursday.

“It’s my job to build confidence with investors, to show them … the model is something that you can believe in.”

Dasilva was named interim CEO Thursday, replacing JP Chauvet, who the Montreal-based tech business says is stepping down immediately.

Asked how long his tenure as CEO might be this time, Dasilva said, “That’s up to the board … I guess we’ll see how I do.”

Chauvet joined Lightspeed as chief revenue officer in October 2012 and replaced Dasilva in the top job in February 2022, when he became executive chairman.

Dasilva said Chauvet is “like a brother.”

“We all agreed, JP, the board, myself, that new leadership is needed for this stage and I’m excited to be back for this stage,” Dasilva said.

Much of Chauvet’s tenure was spent integrating a wave of businesses Lightspeed acquired and working toward achieving profitability.

Last November, it reached positive adjusted earnings before interest, taxes, depreciation and amortization for the first time.

Many companies use adjusted EBITDA and other adjusted metrics to omit one-time items or account for seasonal or volatile changes. However, it is not a metric accepted under international accounting standards because there is no uniform list of items included in the figure.

Dasilva is “proud” of the adjusted EBITDA, but acknowledged there is still more work to be done.

“The priority is profitability,” he said. “We are a growth company, but profitability is the core of our focus.”

As part of that goal, Dasilva plans to put less importance on activities like large mergers and acquisitions and the “growth at all costs” ethos that technology companies often operate around.

Analyst Daniel Chan of TD Securities took Dasilva’s views around mergers and acquisitions to be “a shift in narrative” from the thinking Chauvet had about a week ago, when Lightspeed reported its latest financial results.

Lightspeed shares topped the $158 mark in September 2021 but sat at roughly $18 before Dasilva’s return was announced. The shares rose 7.30 per cent to close at $19.70 on Thursday.

The leadership change would not single-handedly reverse the company’s stock price misfortune, Chan said in a Thursday note to investors.

“While we believe the shake-up could act as a catalyst for the stock, we believe the company needs to demonstrate clear and consistent execution before sentiment could improve,” he said.

With Dasilva’s tenure “open-ended” and the company “in no rush to find a successor,” Chan added Lightspeed faces added uncertainty.

Many tech companies are weathering this period by streamlining operations, cutting costs, laying off workers and reorganizing executive ranks. Lightspeed cut 300 workers in January 2023.

Dasilva said he was aware of the challenges the economic climate poses, but confident Lightspeed could handle them.

“This is also a moment where companies can rise to the occasion of proving to investors that this is where you need to park your money,” he said.

In addition to Dasilva returning, Lightspeed announced chief product and technology officer Ryan Tabone will leave the company in April. John Shapiro, the company’s senior vice-president of retail technology, is being promoted to replace him.

The company also said lead independent director Patrick Pichette will become the interim chair of Lightspeed’s board of directors.

This report by The Canadian Press was first published Feb. 15, 2024.

Companies in this story: (TSX:LSPD)