Lightspeed's Stock Tumbles as It Opts to Stay Public, Initiates Share Repurchase

Lightspeed Commerce Inc. (LSPD) shares took a tumble in Thursday's premarket trading, falling 8.6% after the company announced its decision to remain a public entity and initiate a share repurchase program. The move, while signaling confidence in the company's cash-generating abilities and undervalued position, has raised concerns among investors about the potential impact on future profitability.

The company's board authorized a share repurchase program of up to $400 million, representing approximately 18% of the company's market cap. This decision comes on the heels of the company's strategic review and Q3 2025 financial results, which showed positive Adjusted EBITDA of $16.6 million, exceeding the outlook of ~$14 million by $2.6 million. Additionally, subscription revenue grew by 9% year-over-year (YoY), the highest growth rate in nine quarters, and monthly Average Revenue Per User (ARPU) grew by 19% YoY to approximately $533.

However, the company's decision to cut labor costs by 10% as part of its growth strategy has raised concerns among investors. The reorganization, affecting 200 positions, represents about 10% of the company's workforce-related operating expenses. While the move is aimed at improving financial performance and allowing for greater investments in product development and customer experiences, it has sparked uncertainty about the potential impact on long-term growth and profitability.

The market's reaction to Lightspeed's strategic review and Q3 financial results reflects a mix of investor confidence and skepticism regarding the company's transformation plan and future prospects. While the share repurchase program and strong financial results have bolstered investor confidence in the company's transformation plan and future prospects, layoffs and cost-cutting measures have raised concerns about the potential impact on long-term growth and profitability.

As Lightspeed continues to execute its strategic transformation plan, focusing on growth in retail in North America and hospitality in Europe, investors will be closely watching the company's progress and the market's reaction to its strategic decisions. The company's ability to deliver on its financial targets and maintain investor confidence will be crucial in determining the success of its transformation plan and the future prospects of its stock.