Lightspeed Commerce Inc. (LSPD) Cash Flow Statement

The gap between net income and operating cash flow is stark: in 2026Q3, OCF of $66.8M against a net loss of $33.6M implies a swing of over $100M, driven largely by $113.1M in D&A and a $29.1M working capital benefit. However, in 2027Q1, OCF of $4.9M on a near-breakeven net loss shows the relationship is unstable, with working capital changes swinging from positive to negative. This inconsistency suggests that earnings quality is heavily influenced by non-cash items and timing, not operational efficiency.

The FCF margin has improved from -15.1% in 2024Q4 to 1.0% in 2027Q1, but the improvement is not linear; 2026Q4 saw a -2.7% margin. The positive quarters were aided by unusually low capex (under $2M) and working capital releases, which may not be sustainable. Compared to net income, FCF has been consistently higher, but the company still burns cash on a cumulative basis, indicating that the path to sustained positive FCF is not yet secured.

The capex-to-revenue ratio has been consistently below 6%, which is typical for a software company, but the 2027Q1 jump to 5.4% is a notable departure from the sub-1% levels seen in 2025. This could indicate a shift toward growth capex, possibly for data centers or product development, but the low historical levels suggest that most investment is in intangible assets, which are not captured here. Investors should monitor whether this capex increase is a one-time event or the start of a new investment cycle.

The working capital line is highly erratic, with positive contributions in only two of the last ten quarters. This suggests that the company is not efficiently managing collections or payables, or that seasonality and payment migration are causing timing distortions. The negative working capital changes in most quarters indicate cash outflows for receivables or inventory, which may be a sign of growth-related investment but also adds unpredictability to cash flow. Given the company's focus on payments migration, these swings could persist.

The company spent $84.5M on buybacks in 2027Q1, a significant amount given its market cap and cash flow, and this follows $116.4M in buybacks in 2026Q1. These repurchases may be aimed at offsetting dilution from stock-based compensation, but they consume cash that could be used for operations. Acquisition activity has been minimal in recent quarters, but the $18.6M outflow in 2027Q1 suggests continued M&A. With no dividends paid, the primary use of cash is buybacks and acquisitions, which may not be value-accretive if growth continues to decelerate.

The cumulative net loss is heavily influenced by the $575.9M impairment in 2025Q4, which is a non-cash charge. Excluding that, net losses would be around $271.5M, still exceeding cumulative OCF of -$41.3M. This suggests that the company's cash generation is better than its accounting earnings, but still negative. The divergence indicates that the company is not yet generating cash from operations, and the reliance on non-cash charges to explain the gap may obscure the underlying cash burn.