Montréal firm reveals it cut three percent of workforce amid AI and productivity push.
Lightspeed Commerce’s stock sank by 15 percent on Thursday on an earnings miss in its fiscal first quarter, though it also narrowed its net loss and beat revenue estimates.
Martin Toner, a managing director of institutional research at ATB Financial, told BetaKit that he believed today’s market response was an “overreaction.”
The Montréal-based e-commerce and point-of-sale tech firm posted a net loss of $0.02 USD per share for the quarter, missing analyst expectations of a $0.13 profit per share. However, Lightspeed posted revenue of $322 million USD ($453 million CAD) for the quarter, exceeding internal projections and growing six percent year over year, even counting its divestiture of US hospitality product line, Upserve, in late April. Excluding the impact of the divestiture, the company’s revenue grew by 17 percent compared to the same period last year.
In a quarter where the company shipped AI integrations across its retail and hospitality products, Lightspeed also cut headcount by three percent, affecting roughly 100 jobs, CEO Dax Dasilva told BetaKit in an interview.
Despite the revenue beat, investors reacted negatively, and Lightspeed’s share price on the Toronto Stock Exchange dropped by 15 percent when markets opened, then climbed by roughly three percentage points to close at $13.49 CAD. Before then, Lightspeed faced headwinds as public software stocks lost value in 2026, with its stock dipping as much as 20 percent before climbing again in recent weeks.
Martin Toner, a managing director of institutional research at ATB Financial, told BetaKit that he believed today’s market response was an “overreaction,” most likely due to “a good top line not translating into a good bottom line,” tied to the Upserve divestiture.
Founded in 2005, Lightspeed sells point-of-sale and commerce software and hardware to restaurants, retailers, and hospitality providers. Since last year, the company has been executing a transformation plan to focus on two key markets—North American retail and European hospitality—while chasing both growth and profitability.
Lightspeed’s $2.4-million USD net loss this quarter, compared to a net loss of $49.6 million USD last year, was due to improved gross profit and the full amortization of a prior acquisition, CFO Asha Bakshani said on an earnings call.
Lightspeed’s revenue in its growth markets grew by 20 percent year-over-year this quarter, and it added 1,300 new customers—a lower customer count than its past two quarters, partially due to seasonal trends, the company said. “The location growth is really important for this company—it drives all the other revenue drivers,” Toner said.
More broadly, its overall gross margin fell to 43 percent compared to 45 percent in the same period last year, which the company attributed to negative hardware margins. The company acknowledged last quarter that it must improve those margins, given its strategy of offering discounts and incentives on its point-of-sale hardware to win new customers, and Bakshani also noted temporary supply-chain constraints. Hardware is roughly four percent of the company’s revenue, she said. In an interview, Dasilva said the company has put new guardrails in place around discounting and hardware shipping.
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This quarter also saw Gabriel Benavides fully take over as chief revenue officer after president JD Saint-Martin transitioned out at the end of March. In an interview, CEO Dax Dasilva said Benavides’ approach is helping elevate Lightspeed “from a growth company to a scale company,” with a focus on partnerships and productivity.
Bakshani also revealed that the company had cut 10 percent of jobs on its product and tech teams. Dasilva added in an interview that the cuts, which hit about 100 people across the roughly 2,000-person company, were to “find efficiencies in the business,” and that Lightspeed was continuing to hire.
This quarter, the firm released a suite of AI integrations into its retail and hospitality management software. On the payments side, the company said it added features like saved payment methods, pre-authorization, automated payment reconciliation, and hardware upgrades. It also launched an integration with email manager Klaviyo and a partnership with Meta to measure conversion from social media ads, as well as multiple tools to generate blog and marketing content with generative AI.
Dasilva claimed that its AI products in hospitality have seen the “fastest uptake of any module” in Lightspeed’s history, and that Lightspeed is being judicious about AI-related costs and token spend by weighing its use of expensive frontier AI models.
“Our team has always been dialled into the use of the right model for the right type of task,” Dasilva told BetaKit. “Anthropic and OpenAI may not want to hear that, as they’d love for us to be using frontier models for everything, but it’s absolutely unnecessary.” He added that open-weight models, which can be downloaded and tweaked for free, are a big part of Lightspeed’s AI strategy.
Lightspeed ended the quarter with $372.1 million USD in cash and equivalents on its balance sheet. It maintained the same outlook for the rest of fiscal year 2027, where it expects to make over $1.2 billion USD in revenue.
Feature image courtesy Lightspeed.
