EX-99.1 2 financialstatementsfy25q3.htm EX-99.1 Document



Lightspeed Commerce Inc.
Condensed Interim Consolidated Financial Statements
(Unaudited)
For the three and nine months ended December 31, 2024
(expressed in thousands of US dollars)


Lightspeed Commerce Inc.
Condensed Interim Consolidated Balance Sheets
(Unaudited)
As at December 31 and March 31, 2024
(expressed in thousands of US dollars)
Notes
December 31,
2024		March 31,
2024
Assets
$
$
Current assets
Cash and cash equivalents661,568 722,102 
Trade and other receivables943,655 62,284 
Merchant cash advances18101,316 74,236 
Inventories15,871 16,492 
Other current assets1055,896 42,786 
Total current assets878,306 917,900 
Lease right-of-use assets, net
14,496 17,075 
Property and equipment, net
17,538 20,496 
Intangible assets, net
174,303 227,031 
Goodwill111,351,489 1,349,235 
Other long-term assets1241,218 42,865 
Deferred tax assets513 552 
Total assets2,477,863 2,575,154 
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities1377,204 68,679 
Lease liabilities6,192 6,942 
Income taxes payable754 1,709 
Deferred revenue59,908 67,336 
Total current liabilities144,058 144,666 
Deferred revenue786 851 
Lease liabilities12,968 16,269 
Other long-term liabilities1,136 967 
Deferred tax liabilities330 — 
Total liabilities159,278 162,753 
Shareholders’ equity
Share capital154,349,947 4,362,691 
Additional paid-in capital195,501 213,918 
Accumulated other comprehensive loss
16(11,474)(4,045)
Accumulated deficit(2,215,389)(2,160,163)
Total shareholders’ equity2,318,585 2,412,401 
Total liabilities and shareholders’ equity2,477,863 2,575,154 
Commitments and contingencies14


The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
2

Lightspeed Commerce Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(Unaudited)
For the three and nine months ended December 31, 2024 and 2023
(expressed in thousands of US dollars, except per share amounts)
Three months ended December 31,Nine months ended December 31,
Notes
2024202320242023
$
$$$
Revenues4280,134 239,695 823,407 679,054 
Direct cost of revenues5, 6164,260 138,218 485,042 393,504 
Gross profit115,874 101,477 338,365 285,550 
Operating expenses
General and administrative629,459 29,934 92,562 81,202 
Research and development632,148 34,675 90,139 101,791 
Sales and marketing654,012 60,908 176,763 176,486 
Depreciation of property and equipment1,891 1,894 5,717 4,844 
Depreciation of right-of-use assets1,218 1,651 3,981 5,528 
Foreign exchange loss (gain)2,514 (979)1,262 381 
Acquisition-related compensation157 — 209 3,105 
Amortization of intangible assets22,105 23,671 67,612 72,166 
Restructuring146,368 1,232 16,073 1,784 
Total operating expenses149,872 152,986 454,318 447,287 
Operating loss(33,998)(51,509)(115,953)(161,737)
Net interest income78,388 10,899 28,097 32,007 
Loss before income taxes(25,610)(40,610)(87,856)(129,730)
Income tax expense (recovery)
Current867 149 3,360 2,119 
Deferred109 (530)37 (425)
Total income tax expense (recovery)976 (381)3,397 1,694 
Net loss(26,586)(40,229)(91,253)(131,424)
Other comprehensive income (loss)
Items that may be reclassified to net loss
Foreign currency differences on translation of foreign operations(8,511)5,379 (3,662)1,862 
Change in net unrealized gain (loss) on cash flow hedging instruments, net of tax(3,837)897 (3,767)858 
Total other comprehensive income (loss)16(12,348)6,276 (7,429)2,720 
Total comprehensive loss(38,934)(33,953)(98,682)(128,704)
Net loss per share – basic and diluted8(0.17)(0.26)(0.59)(0.86)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
3

Lightspeed Commerce Inc.
Condensed Interim Consolidated Statement of Cash Flows
(Unaudited)
For the nine months ended December 31, 2024 and 2023
(expressed in thousands of US dollars)
Nine months ended December 31,
20242023
Cash flows from (used in) operating activities
$
$
Net loss(91,253)(131,424)
Items not affecting cash and cash equivalents
Share-based acquisition-related compensation— 2,953 
Amortization of intangible assets67,612 72,166 
Depreciation of property and equipment and lease right-of-use assets9,698 10,372 
Deferred income tax expense (recovery)
37 (425)
Share-based compensation expense42,983 62,503 
Unrealized foreign exchange loss
100 156 
(Increase)/decrease in operating assets and increase/(decrease) in operating liabilities
Trade and other receivables18,915 (3,506)
Merchant cash advances(27,080)(26,057)
Inventories621 (5,755)
Other assets(11,516)(16,622)
Accounts payable and accrued liabilities3,546 8,453 
Income taxes payable(955)(5,672)
Deferred revenue(7,605)(5,305)
Other long-term liabilities170 1,039 
Net interest income(28,097)(32,007)
Total operating activities(22,824)(69,131)
Cash flows from (used in) investing activities
Additions to property and equipment(2,840)(4,191)
Additions to intangible assets(13,284)(7,720)
Acquisition of business, net of cash acquired
(6,813)— 
Interest income 30,534 33,757 
Total investing activities7,597 21,846 
Cash flows from (used in) financing activities
Proceeds from exercise of stock options1,829 2,127 
Share issuance costs— (106)
Shares repurchased and cancelled(39,946)— 
Payment of lease liabilities and movement in restricted lease deposits(6,333)(5,863)
Financing costs
(45)(37)
Total financing activities(44,495)(3,879)
Effect of foreign exchange rate changes on cash and cash equivalents
(812)417 
Net decrease in cash and cash equivalents during the period(60,534)(50,747)

Cash and cash equivalents – Beginning of period722,102 800,154 
Cash and cash equivalents – End of period661,568 749,407 
Income taxes paid4,242 6,547 
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
4

Lightspeed Commerce Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
For the nine months ended December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares)
Issued and
Outstanding Shares
Notes
Number
of shares
Amount
Additional
paid-in
capital		Accumulated other comprehensive income (loss)Accumulated
deficit		Total
$$$$$
Balance as at March 31, 2024153,547,616 4,362,691 213,918 (4,045)(2,160,163)2,412,401 
Net loss— — — — (91,253)(91,253)
Exercise of stock options and settlement of share awards
2,095,915 63,229 (61,400)— — 1,829 
Share-based compensation— — 42,983 — — 42,983 
Shares repurchased and cancelled15(2,673,926)(75,973)— — 36,027 (39,946)
Other comprehensive loss
16— — — (7,429)— (7,429)
Balance as at December 31, 2024152,969,605 4,349,947 195,501 (11,474)(2,215,389)2,318,585 
Balance as at March 31, 2023151,170,305 4,298,683 198,022 (3,057)(1,996,199)2,497,449 
Net loss— — — — (131,424)(131,424)
Share issuance costs— (106)— — — (106)
Exercise of stock options and settlement of share awards1,841,975 53,483 (51,356)— — 2,127 
Share-based compensation— — 62,503 — — 62,503 
Share-based acquisition-related compensation225,939 2,953 — — — 2,953 
Other comprehensive income16— — — 2,720 — 2,720 
Balance as at December 31, 2023153,238,219 4,355,013 209,169 (337)(2,127,623)2,436,222 




The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
5
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)

    1. Organization and nature of operations
Lightspeed Commerce Inc. ("Lightspeed" or the "Company") was incorporated on March 21, 2005 under the Canada Business Corporations Act. Its head office is located at Gare Viger, 700 Saint-Antoine St. East, Suite 300, Montréal, Quebec, Canada. Lightspeed’s one-stop commerce platform provides its customers with the critical functionalities they need to engage with consumers, manage their operations, accept payments, and grow their business. Lightspeed has customers globally in over 100 countries, empowering single- and multi-location small and medium-sized businesses to compete in an omni-channel market environment by engaging with consumers across online, mobile, social, and physical channels.
The Company’s shares are listed on both the Toronto Stock Exchange ("TSX") and the New York Stock Exchange ("NYSE") under the stock symbol "LSPD".
    2. Basis of presentation and consolidation
These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB"). Certain information and disclosures have been omitted or condensed. These unaudited condensed interim consolidated financial statements should be read together with the Company’s audited annual consolidated financial statements and notes thereto for the fiscal year ended March 31, 2024.
These unaudited condensed interim consolidated financial statements were approved for issue by the Board of Directors of the Company on February 5, 2025.
Seasonality of interim operations
The operations of the Company are seasonal, and the results of operations for any interim period are not necessarily indicative of operations for the full fiscal year or any future period.
Estimates, judgments and assumptions
The preparation of the unaudited condensed interim consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses during the period. These estimates and assumptions are based on historical experience, expectations of the future, and other relevant factors and are reviewed regularly. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future period affected. Actual results may differ from these estimates.
In preparing these unaudited condensed interim consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of uncertainty are the same as those applied and described in the Company’s audited annual consolidated financial statements for the fiscal year ended March 31, 2024.
    3. Material accounting policies
The same accounting policies and methods of computation were followed in the preparation of these unaudited condensed interim consolidated financial statements as were followed in the preparation of the most recent audited annual consolidated financial statements.
6
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
New and amended material accounting policies issued but not yet effective
In May 2024, the IASB issued amendments to IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures to clarify the date of recognition and derecognition of some financial assets and liabilities including introducing a new exception for certain financial liabilities settled using an electronic payment system before the settlement date. The amendments also clarify the classification of certain financial assets and introduces disclosure requirements for financial instruments with contingent features and equity instruments classified at fair value through other comprehensive income. This amendment is effective for annual periods beginning on or after January 1, 2026. The Company is currently evaluating the impact of this amendment on its consolidated financial statements. The Company also continues to evaluate the impact of IFRS 18, Presentation and Disclosure in Financial Statements on its consolidated financial statements. For all other new and amended material accounting policies issued but not yet effective which have been identified in the most recent audited annual consolidated financial statements, the Company does not expect that the adoption of these standards will have a material impact on the financial statements of the Company in future periods.
    4. Revenues
Three months ended December 31,Nine months ended December 31,
20242023

20242023
$
$

$$

Subscription revenue88,064 80,882 256,914 240,652 
Transaction-based revenue181,659 147,834 539,464 406,476 
Hardware and other revenue10,411 10,979 27,029 31,926 
Total revenues280,134 239,695 823,407 679,054 
Transaction-based revenue includes $10,246 and $27,293 of revenue from the Company's merchant cash advance program for the three and nine months ended December 31, 2024 (December 31, 2023 – $5,235 and $11,016).
    5. Direct cost of revenues

Three months ended December 31,

Nine months ended December 31,
2024202320242023
$
$

$$
Subscription cost of revenue18,385 19,774 53,901 59,077 
Transaction-based cost of revenue131,439 103,785 392,888 292,229 
Hardware and other cost of revenue14,436 14,659 38,253 42,198 
Total direct cost of revenues164,260 138,218 485,042 393,504 
    6. Employee compensation
The total employee compensation comprising salaries and benefits, including share-based compensation and related payroll taxes and restructuring, excluding government assistance and acquisition-related compensation, for the three and nine months ended December 31, 2024, was $86,831 and $256,786 (December 31, 2023 – $92,281 and $265,560).
7
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
The following table outlines share-based compensation and related payroll taxes included in the following expenses:
Three months ended December 31,Nine months ended December 31,
2024202320242023
$$$$
Direct cost of revenues840 1,772 2,653 5,212 
General and administrative4,579 6,527 14,413 19,171 
Research and development5,267 6,993 14,189 22,332 
Sales and marketing2,879 8,344 13,511 18,958 
Total share-based compensation and related payroll taxes
13,565 23,636 44,766 65,673 
As at December 31, 2024, the Company had 10,341,253 options (1,014,999 of which have vesting dependent on market conditions tied to the Company's future share price performance), 6,098,900 restricted share units and 152,158 deferred share units outstanding (December 31, 2023 - 11,289,461 options, 6,277,224 restricted share units and 110,343 deferred share units outstanding).
    7. Finance income and costs
Three months ended December 31,Nine months ended December 31,
20242023

20242023
$
$

$$

Interest income8,704 11,220 29,163 33,118 
Interest expense(316)(321)(1,066)(1,111)
Net interest income8,388 10,899 28,097 32,007 
    8. Loss per share
The Company has stock options and share awards as potentially dilutive shares. Diluted net loss per share excludes all potentially-dilutive shares if their effect is anti-dilutive. As a result of net losses incurred, all potentially-dilutive shares have been excluded from the calculation of diluted net loss per share because including them would be anti-dilutive; therefore, basic and diluted number of shares is the same for the three and nine months ended December 31, 2024 and 2023. All outstanding potentially dilutive shares could potentially dilute loss per share in the future.

Three months ended December 31,

Nine months ended December 31,
2024202320242023
Issued Common Shares
152,969,605 153,238,219 152,969,605 153,238,219 
Weighted average number of Common Shares (basic and diluted)154,283,524 154,194,745 154,190,673 153,401,512 
Net loss per share – basic and diluted($0.17)($0.26)($0.59)($0.86)
The weighted average number of potentially dilutive shares that are not included in the diluted per share calculations because they would be anti-dilutive was 15,461,898 and 15,942,449 stock options and share awards for the three and nine
8
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
months ended December 31, 2024 (December 31, 2023 - 16,642,128 and 17,095,219). This weighted average number includes all of the Company's issued and outstanding potentially dilutive shares notwithstanding exercise prices, as applicable.
    9. Trade and other receivables
December 31,
2024		March 31,
2024
$
$
Trade receivables31,012 48,132 
Allowance for expected credit losses(6,168)(5,056)

Trade receivables, net24,844 43,076 
Research and development tax credits receivable7,352 8,276 
Sales tax receivable8,715 7,106 
Accrued interest and other2,744 3,826 
Total trade and other receivables43,655 62,284 
    10. Other current assets
December 31,
2024		March 31,
2024
$
$
Restricted cash and restricted deposits1,349 1,582 
Prepaid expenses and deposits21,557 14,097 
Commission asset16,194 14,806 
Contract asset and other16,796 12,301 
Total other current assets55,896 42,786 
    11. Goodwill
Impairment analysis
During the three months ended December 31, 2024, the Company's annual impairment test of goodwill was performed for the Company's operating segment (the "Segment") which is the level at which management monitors goodwill. Impairment, if any, is determined by assessing the recoverable amount of the Segment and comparing it to the carrying value of the Segment. The Segment's recoverable amount is the higher of the Segment's fair value less costs of disposal and its value in use.
The Company completed its annual impairment test of goodwill as at December 31, 2024 using the Company's fair value less costs of disposal method. This test demonstrated no impairment of goodwill as at December 31, 2024. Fair value less costs of disposal is a Level 3 measurement (see note 18). Fair value less costs of disposal was estimated using an income approach, more specifically, a discounted cash flow model. The discounted cash flow model takes into consideration a five-year financial forecast, which is based on the Company’s actual performance and management’s best estimates of future performance, and calculates a terminal value based on revenues. The cash flows are discounted using a weighted average
9
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
cost of capital reflecting the market assessment. The costs to sell were estimated to be 2.5% of the fair value amount. The carrying value of the Segment was compared with the fair value less costs of disposal to test for impairment.
The following table presents the key assumptions used in the annual impairment test of goodwill as at December 31, 2024, and the key assumption that would have been required to recover the carrying amount.
Key AssumptionsValue used in impairment model
Breakeven value assuming all other key assumptions were held constant
Discount Rate (%)30 %37 %
Terminal Value Multiple2.01.5
Revenue Growth Rate (%)25 %19 %


Goodwill is more susceptible to impairment risk if business operating results or economic conditions deteriorate. A reduction in the terminal value multiple, an increase in the discount rate or a decrease in the revenue growth rate could cause impairment in the future. The determination of the recoverable amount involves the use of estimates by management and can have a material impact on the respective value and ultimately the amount of any impairment. The Company is required to perform its next annual goodwill impairment analysis on December 31, 2025, or earlier should there be a goodwill impairment trigger before then.
    12. Other long-term assets
December 31,
2024		March 31,
2024
$
$

Restricted cash499 368 
Prepaid expenses and deposits6,116 3,229 
Commission asset17,915 18,164 
Contract asset16,688 21,104 
Total other long-term assets41,218 42,865 
    13. Accounts payable and accrued liabilities
December 31,
2024		March 31,
2024
$$

Trade payables33,773 33,499 
Accrued compensation and benefits24,423 23,595 
Accrued payroll taxes on share-based compensation3,630 3,566 
Sales tax payable4,761 4,893 
Provisions and other
10,617 3,126 
Total accounts payable and accrued liabilities77,204 68,679 
10
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
    14. Contingencies and Provisions
Beginning in October 2021, the Company and certain of the Company's officers and directors were named as defendants to an application for authorization to bring a securities class action filed before the Superior Court of Quebec, and the Company and certain of the Company's officers and directors were named as defendants in a securities class action brought in the U.S. district court for the Eastern District of New York (a separate action brought in the Southern District of New York was voluntarily dismissed after a lead plaintiff was appointed in the Eastern District of New York action). The application and action are sought on behalf of purchasers of the Company's Common Shares, and are based upon allegations that the defendants made false and/or misleading statements to the public and seek unspecified damages. On June 27, 2022, the Company filed a motion to dismiss the securities class action brought in the U.S. district court for the Eastern District of New York. Plaintiffs to the securities class action brought in the U.S. district court for the Eastern District of New York filed an opposition to the Company's motion to dismiss, and the Company filed a reply. The Company and management intend to vigorously defend against each of these proceedings.
During the nine months ended December 31, 2024, the Company, without admitting liability or wrongdoing, made a general damages payment in settlement of allegations by a residual payments partner that the Company had breached covenants in two agreements with the partner. During the fiscal year ended March 31, 2024, the residual payments partner had purported to terminate the two agreements and ceased to make ongoing payments owed to the Company thereunder. Separately, in October 2024, the residual payments partner paid the Company unpaid amounts of over $9,525 owed to it under the agreements through the quarter ended March 31, 2024. The two agreements terminated and neither the Company nor the residual payments partner have ongoing obligations thereunder.
On October 22, 2021, CloudofChange, LLC, a non-practising entity, filed a patent infringement lawsuit against the Company in the Western District of Texas. The patents at issue in the suit were U.S. Patents Nos. 9,400,640, 10,083,012 and 11,226,793. These patents are generally related to web-based point of sale builder systems. Separately, the Company applied for inter partes review of all three patents by the U.S. Patent Trial and Appeal Board (the "PTAB"). The PTAB issued final written decisions finding all asserted claims of all three patents unpatentable. The lawsuit has now been stayed pending final resolutions of the inter partes reviews. The plaintiff is in the process of appealing the PTAB's final written decisions and the Company and management intend to vigorously defend the PTAB's invalidity findings.
Except as indicated, the Company has not provisioned for the above-referenced matters.
The Company is involved in other litigation and claims in the normal course of business. Management is of the opinion that any resulting provisions and ultimate settlements would not materially affect the financial position and operating results of the Company.
Restructuring
During the nine months ended December 31, 2024, the Company announced and implemented reorganizations to streamline the Company's operating model and align the organization with its profitable growth strategy. The restructuring
11
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
expense consisted primarily of cash severance costs. The majority of the expected charges associated with these reorganizations were incurred during the nine months ended December 31, 2024.
Provision for severance
Nine months ended December 31,
20242023
$$
Balance - Beginning of period2,591 1,106 
Expensed during the period16,073 1,784 
Paid during the period(15,188)(2,288)
Balance - End of period3,476 602 
The provision is included in accounts payable and accrued liabilities in the provisions and other category in note 13.
    15. Share capital

The Company’s authorized share capital consists of (i) an unlimited number of Subordinate Voting Shares and (ii) an unlimited number of preferred shares, issuable in series. All references to "Common Shares" refer to Subordinate Voting Shares in the capital of Lightspeed.
Normal Course Issuer Bid
The Board and the TSX approved a normal course issuer bid ("NCIB") for the Company to purchase at its discretion for cancellation up to 9,722,677 Subordinate Voting Shares of the Company, representing approximately 10% of the Company's "public float" (as defined in the TSX Company Manual) of Subordinate Voting Shares issued and outstanding as at March 22, 2024, over the twelve-month period commencing on April 5, 2024 and ending no later than April 4, 2025. Any Subordinate Voting Share purchased under the NCIB will be cancelled.
Under the NCIB, other than purchases made under block purchase exemptions, the Company is allowed, subject to applicable securities laws, to purchase daily, through the facilities of the TSX, a maximum of 165,177 Subordinate Voting Shares representing 25% of the average daily trading volume of 660,709 Subordinate Voting Shares, as calculated per the TSX rules for the six-month period ended on February 29, 2024.
In connection with the NCIB, the Company also entered into an automatic share purchase plan (“ASPP”) under which a designated broker may purchase Subordinate Voting Shares at times when the Company would ordinarily not be permitted to purchase its Subordinate Voting Shares due to regulatory restrictions and customary self-imposed blackout periods. Any repurchases made under the ASPP will be made in accordance with certain purchasing parameters.
During the nine months ended December 31, 2024, the Company repurchased and cancelled 2,673,926 Subordinate Voting Shares for a total consideration, including transaction costs, of $39,946. The Company did not repurchase any of its Subordinate Voting Shares under an NCIB in the nine months ended December 31, 2023.
12
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
    16. Accumulated other comprehensive income (loss)
Foreign currency differences on translation of foreign operations
Hedging reserve
Total accumulated other comprehensive income (loss)
202420232024202320242023
$$$$$$
Balance as at March 31,(4,234)(2,932)189 (125)(4,045)(3,057)
Foreign currency differences on translation of foreign operations(3,662)1,862 — — (3,662)1,862 
Change in net unrealized gain (loss) on cash flow hedging instruments
— — (3,835)858 (3,835)858 
Deferred income tax recovery
— — 68 — 68 — 
Balance as at December 31,(7,896)(1,070)(3,578)733 (11,474)(337)
Foreign exchange forward contracts
The Company designates certain foreign exchange forward contracts as cash flow hedges when all the requirements in IFRS 9, Financial Instruments are met. The Company's currency pair used for cash flow hedges is US dollar / Canadian dollar. The notional principal of the foreign exchange contracts was $143,450 CAD as at December 31, 2024 (March 31, 2024 - $95,550 CAD).
    17. Related party transactions
Key management personnel includes executive officers. Other related parties include close family members of the key management personnel and entities controlled by the key management personnel.
The executive compensation expense to the top five key management personnel is as follows:
Three months ended December 31,Nine months ended
December 31,
2024202320242023
$$$$

Short-term employee benefits and termination benefits547 846 1,854 2,444 
Share-based payments2,954 3,432 9,469 10,959 
Total compensation paid to key management personnel3,501 4,278 11,323 13,403 
    18. Financial instruments
Fair value
The Company measures the fair value of its financial assets and financial liabilities using a fair value hierarchy. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value. The different levels of the fair value hierarchy are defined as follows:
13
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Other techniques for which inputs are based on quoted prices for identical or similar instruments in markets that are not active, quoted prices for similar instruments in active markets, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the asset or liability;
Level 3: Techniques which use inputs that have a significant effect on the recognized fair value that require the Company to use its own assumptions about market participant assumptions.
The Company estimated the fair value of its financial instruments as described below.
The fair value of cash and cash equivalents, restricted cash and restricted deposits, trade receivables and trade accounts payable and accrued liabilities is considered to be equal to their respective carrying values due to their short-term maturities.
Recurring fair value measurements
The fair value of foreign exchange forward contracts was determined based on Level 2 inputs, which included period-end mid-market quotations for each underlying contract as calculated by the financial institution with which the Company has transacted. The quotations represent the discounted future settlement amounts based on current market rates.
The fair value of merchant cash advances was determined based on Level 3 inputs by calculating the present value of the future estimated cash flows based on the terms of the agreements. Key assumptions for the nine months ended December 31, 2024 include an average repayment period of 8 months, an average discount rate, over the repayment period, of 14% and amounts deemed uncollectible, which includes write offs, of $9,722. No reasonably possible change in the key assumptions would lead to a significant change in the fair value of merchant cash advances due to their expected short-term repayment periods.
The movement in the merchant cash advances is as follows:
Nine months ended
December 31,
20242023
$
$
Balance - Beginning of period74,236 29,492 
Principal issued
207,061 110,001 
Amounts collected(197,552)(90,788)
Transaction-based revenues from fees collected incorporating fair value movement
27,293 11,016 
General & administrative expenses from amounts deemed uncollectible
(9,722)(4,172)
Balance - End of period101,316 55,549 
14
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2024 and 2023
(expressed in thousands of US dollars, except number of shares and per share amounts)
As at December 31 and March 31, 2024, financial instruments measured at fair value in the unaudited condensed interim consolidated balance sheets were as follows:
December 31, 2024March 31, 2024
Fair
value
hierarchy
Carrying
amount
Fair
value
Fair
value
hierarchy
Carrying
amount
Fair
value
$
$

$$

Assets:
Cash and cash equivalents
Level 1661,568 661,568 Level 1722,102 722,102 
Restricted cash and restricted depositsLevel 11,848 1,848 Level 11,950 1,950 
Merchant cash advancesLevel 3101,316 101,316 Level 374,236 74,236 
Foreign exchange forward contractsLevel 20 0 Level 2257257
Liabilities:
Foreign exchange forward contractsLevel 23,578 3,578 Level 200

15