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Lightspeed Commerce Inc.
Condensed Interim Consolidated Financial Statements
(Unaudited)
For the three and nine months ended December 31, 2025
(expressed in thousands of US dollars)


Lightspeed Commerce Inc.
Condensed Interim Consolidated Balance Sheets
(Unaudited)
As at December 31 and March 31, 2025
(expressed in thousands of US dollars)
Notes
December 31,
2025		March 31,
2025
Assets
$
$
Current assets
Cash and cash equivalents479,002 558,469 
Trade and other receivables940,135 53,077 
Merchant cash advances18105,642 106,169 
Inventories12,086 14,612 
Other current assets1068,341 65,696 
Total current assets705,206 798,023 
Lease right-of-use assets, net
16,268 12,714 
Property and equipment, net
17,042 17,102 
Intangible assets, net
93,113 159,542 
Goodwill11806,130 797,962 
Other long-term assets1237,475 40,562 
Deferred tax assets449 298 
Total assets1,675,683 1,826,203 
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities1380,363 73,075 
Lease liabilities5,408 5,654 
Income taxes payable1,332 1,540 
Deferred revenue68,915 68,714 
Total current liabilities156,018 148,983 
Deferred revenue843 1,088 
Lease liabilities14,801 11,319 
Other long-term liabilities1,662 562 
Deferred tax liabilities72 284 
Total liabilities173,396 162,236 
Shareholders’ equity
Share capital153,912,508 4,157,395 
Additional paid-in capital203,911 200,634 
Accumulated other comprehensive income (loss)163,760 (7,462)
Accumulated deficit(2,617,892)(2,686,600)
Total shareholders’ equity1,502,287 1,663,967 
Total liabilities and shareholders’ equity1,675,683 1,826,203 
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, 2025 and 2024
(expressed in thousands of US dollars, except per share amounts)
Three months ended December 31,Nine months ended December 31,
Notes
2025202420252024
$
$$$
Revenues4312,346 280,134 936,251 823,407 
Direct cost of revenues5, 6178,769 164,260 538,438 485,042 
Gross profit133,577 115,874 397,813 338,365 
Operating expenses
General and administrative629,575 29,459 93,388 92,562 
Research and development633,189 32,148 98,308 90,139 
Sales and marketing668,464 54,012 206,686 176,763 
Depreciation of property and equipment1,792 1,891 5,124 5,717 
Depreciation of right-of-use assets1,306 1,218 3,786 3,981 
Foreign exchange loss (gain)571 2,514 (1,957)1,262 
Acquisition-related compensation157 157 471 209 
Amortization of intangible assets34,781 22,105 104,143 67,612 
Restructuring141,381 6,368 4,213 16,073 
Total operating expenses171,216 149,872 514,162 454,318 
Operating loss(37,639)(33,998)(116,349)(115,953)
Net interest income74,851 8,388 3,861 28,097 
Loss before income taxes(32,788)(25,610)(112,488)(87,856)
Income tax expense (recovery)
Current1,117 867 3,924 3,360 
Deferred(327)109 (567)37 
Total income tax expense
790 976 3,357 3,397 
Net loss(33,578)(26,586)(115,845)(91,253)
Other comprehensive income (loss)
Items that may be reclassified to net loss
Foreign currency differences on translation of foreign operations236 (8,511)8,214 (3,662)
Change in net unrealized gain (loss) on cash flow hedging instruments, net of tax611 (3,837)3,008 (3,767)
Total other comprehensive income (loss)16847 (12,348)11,222 (7,429)
Total comprehensive loss(32,731)(38,934)(104,623)(98,682)
Net loss per share – basic and diluted8(0.24)(0.17)(0.83)(0.59)

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

Lightspeed Commerce Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
For the nine months ended December 31, 2025 and 2024
(expressed in thousands of US dollars)
Nine months ended December 31,
20252024
Cash flows from (used in) operating activities
$
$
Net loss(115,845)(91,253)
Items not affecting cash and cash equivalents
Amortization of intangible assets104,143 67,612 
Depreciation of property and equipment and lease right-of-use assets8,910 9,698 
Deferred income tax expense (recovery)
(567)37 
Share-based compensation expense45,657 42,983 
Unrealized foreign exchange loss (gain)(654)100 
(Increase)/decrease in operating assets and increase/(decrease) in operating liabilities
Trade and other receivables12,386 18,915 
Merchant cash advances527 (27,080)
Inventories2,526 621 
Other assets1,777 (11,516)
Accounts payable and accrued liabilities10,991 3,546 
Income taxes payable(208)(955)
Deferred revenue(44)(7,605)
Other long-term liabilities1,100 170 
Net interest income(3,861)(28,097)
Total operating activities66,838 (22,824)
Cash flows from (used in) investing activities
Additions to property and equipment(5,226)(2,840)
Additions to intangible assets(37,710)(13,284)
Acquisition of business, net of cash acquired
(165)(6,813)
Interest income 17,108 30,534 
Total investing activities(25,993)7,597 
Cash flows from (used in) financing activities
Proceeds from exercise of stock options, net of tax withholding for net share settlement 1,124 1,829 
Shares repurchased and cancelled(86,238)(39,946)
Shares repurchased for settlement of non-treasury RSUs
(30,208)— 
Payment of lease liabilities
(6,392)(6,333)
Financing costs
(63)(45)
Total financing activities(121,777)(44,495)
Effect of foreign exchange rate changes on cash and cash equivalents
1,465 (812)
Net decrease in cash and cash equivalents during the period(79,467)(60,534)

Cash and cash equivalents – Beginning of period558,469 722,102 
Cash and cash equivalents – End of period479,002 661,568 
Income taxes paid3,905 4,242 
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, 2025 and 2024
(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, 2025146,399,347 4,157,395 200,634 (7,462)(2,686,600)1,663,967 
Net loss— — — — (115,845)(115,845)
Exercise of stock options and settlement of share awards
2,069,998 36,587 (35,463)— — 1,124 
Share-based compensation— — 45,657 — — 45,657 
Shares repurchased and cancelled15(9,013,953)(255,975)— — 182,345 (73,630)
Shares repurchased for settlement of non-treasury RSUs
15(2,594,833)(30,208)— — — (30,208)
Settlement of non-treasury RSUs
15404,758 4,709 (6,917)— 2,208 — 
Other comprehensive income 16— — — 11,222 — 11,222 
Balance as at December 31, 2025137,265,317 3,912,508 203,911 3,760 (2,617,892)1,502,287 
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, net of shares withheld for taxes2,095,915 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 loss16— — — (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 




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, 2025 and 2024
(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, Québec, Canada. Lightspeed's one-stop commerce platform provides its customers with the critical functionalities they need to engage with consumers, manage their operations, order their inventory, 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 as issued by the International Accounting Standards Board ("IFRS Accounting Standards") applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34, Interim Financial Reporting. 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, 2025.
These unaudited condensed interim consolidated financial statements were approved for issue by the Board of Directors of the Company on February 4, 2026.
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 Accounting Standards 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, 2025.
As at April 1, 2025, the estimated useful lives of the acquired software technologies and customer relationships were revised. Assuming that the intangible assets are held until the end of their revised estimated useful lives, amortization in future years will be increased/(decreased) by the following amounts:
6
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)
Fiscal Year$
202647,931 
2027(45,577)
2028(2,354)
    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.
New and amended material accounting policies issued but not yet effective
As described in the most recent audited annual consolidated financial statements, the Company continues to evaluate the impact of the amendments to IFRS 9, Financial Instruments, and IFRS 7, Financial Instruments: Disclosures, and the impact of IFRS 18, Presentation and Disclosure in Financial Statements, on its consolidated financial statements.
    4. Revenues
Three months ended December 31,Nine months ended December 31,
20252024

20252024
$
$

$$

Subscription revenue92,951 88,064 277,356 256,914 
Transaction-based revenue209,447 181,659 629,772 539,464 
Hardware and other revenue9,948 10,411 29,123 27,029 
Total revenues312,346 280,134 936,251 823,407 
Transaction-based revenue includes $13,689 and $36,301 of revenue from the Company's merchant cash advance program for the three and nine months ended December 31, 2025, respectively (December 31, 2024 – $10,246 and $27,293).
    5. Direct cost of revenues

Three months ended December 31,

Nine months ended December 31,
2025202420252024
$
$

$$
Subscription cost of revenue16,523 18,385 50,966 53,901 
Transaction-based cost of revenue145,179 131,439 441,416 392,888 
Hardware and other cost of revenue17,067 14,436 46,056 38,253 
Total direct cost of revenues178,769 164,260 538,438 485,042 
7
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)
    6. Employee compensation
The total employee compensation comprising salaries and benefits, including share-based compensation and related payroll taxes and severances included in restructuring, excluding government assistance and acquisition-related compensation, for the three and nine months ended December 31, 2025, was $88,931 and $265,750 (December 31, 2024 – $86,831 and $256,786).
The following table outlines share-based compensation and related payroll taxes included in the following expenses:
Three months ended December 31,Nine months ended December 31,
2025202420252024
$$$$
Direct cost of revenues651 840 1,547 2,653 
General and administrative5,332 4,579 14,937 14,413 
Research and development7,448 5,267 19,648 14,189 
Sales and marketing3,072 2,879 11,768 13,511 
Total share-based compensation and related payroll taxes16,503 13,565 47,900 44,766 
As at December 31, 2025, the Company had 10,896,856 options (320,490 of which have vesting dependent on market conditions tied to the Company's future share price performance), 7,890,059 restricted share units and 242,354 deferred share units outstanding (December 31, 2024 - 10,341,253 options, 6,098,900 restricted share units and 152,158 deferred share units outstanding).
    7. Finance income and costs
Three months ended December 31,Nine months ended December 31,
20252024

20252024
$
$

$$

Interest income5,155 8,704 16,586 29,163 
Interest expense and finance costs
(304)(316)(12,725)(1,066)
Net interest income4,851 8,388 3,861 28,097 
Interest expense and finance costs for the three and nine months ended December 31, 2025 includes a loss from the change in fair value of the share repurchase liability related to the automatic share purchase plan (“ASPP”) of nil and $11,800 (December 31, 2024 – nil).
    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 are the same for the three and nine months ended December 31, 2025 and 2024. All outstanding potentially dilutive shares could potentially dilute loss per share in the future.
8
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)

Three months ended December 31,

Nine months ended December 31,
2025202420252024
Issued and outstanding Common Shares137,265,317 152,969,605 137,265,317 152,969,605 
Weighted average number of Common Shares outstanding - basic and diluted
138,634,403 154,283,524 139,054,322 154,190,673 
Net loss per share – basic and diluted($0.24)($0.17)($0.83)($0.59)
The issued and outstanding Common Shares as at December 31, 2025 are net of 2,190,075 Common Shares that have been purchased and are held in trust as described in note 15 (December 31, 2024 - nil).
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 17,412,055 and 17,447,966 stock options and share awards for the three and nine months ended December 31, 2025 (December 31, 2024 - 15,461,898 and 15,942,449). 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,
2025		March 31,
2025
$
$
Trade receivables31,180 39,744 
Allowance for expected credit losses(6,202)(6,445)

Trade receivables, net24,978 33,299 
Research and development tax credits receivable9,066 7,626 
Sales tax receivable4,429 9,898 
Accrued interest and other1,662 2,254 
Total trade and other receivables40,135 53,077 
    10. Other current assets
December 31,
2025		March 31,
2025
$
$
Restricted cash and restricted deposits1,539 1,364 
Prepaid expenses and deposits23,657 29,414 
Commission asset18,696 18,010 
Contract asset and other24,449 16,908 
Total other current assets68,341 65,696 
9
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)
    11. Goodwill
Impairment analysis
During the three months ended December 31, 2025, 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, 2025 using the Company's fair value less costs of disposal method. This test demonstrated no impairment of goodwill as at December 31, 2025. 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 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, 2025, 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 (%)16 %27 %
Terminal Value Multiple1.10.6
Revenue Growth Rate (%)15 %5 %


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, 2026, or earlier should there be a goodwill impairment trigger before then.
10
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)
    12. Other long-term assets
December 31,
2025		March 31,
2025
$
$

Restricted cash475 510 
Prepaid expenses and deposits4,558 5,486 
Commission asset19,856 18,877 
Contract asset12,586 15,689 
Total other long-term assets37,475 40,562 
    13. Accounts payable and accrued liabilities
December 31,
2025		March 31,
2025
$$

Trade payables and trade accruals42,703 34,146 
Accrued compensation and benefits27,449 25,538 
Accrued payroll taxes on share-based compensation3,324 2,892 
Sales tax payable3,647 4,655 
Provisions and other
3,240 5,844 
Total accounts payable and accrued liabilities80,363 73,075 
    14. Contingencies, provisions and commitments
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 Québec. The application was sought on behalf of purchasers of the Company's securities, and based upon allegations that the defendants made false and/or misleading statements to the public, both on the primary and secondary market. The plaintiffs sought unspecified damages. On June 16, 2025, the Company and the plaintiffs agreed in principle that the Company would pay $7,568 in full and final settlement of the proceedings, inclusive of class counsel fees, notice and administration costs, fees, and expenses relating to the settlement or the litigation. The Company paid the settlement amount of $7,568 in escrow in July 2025. The settlement was approved by the Superior Court of Québec in November 2025.
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 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 and, in December 2025, the PTAB's decisions were affirmed by the United States Court of Appeals for the Federal Circuit. The lawsuit was dismissed by the United States District Court for the Western District of Texas on January 7, 2026.
11
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)
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.
Except as indicated, the Company has not provisioned for the above-referenced matters.
Restructuring
The Company implemented a reorganization to streamline the Company's operating model while continuing to focus on profitable growth. The restructuring expense consisted primarily of cash severance costs.
Provision for severance
Nine months ended December 31,
20252024
$$
Balance - Beginning of period1,715 2,591 
Expensed during the period4,213 16,073 
Paid during the period(4,644)(15,188)
Balance - End of period1,284 3,476 
The provision is included in accounts payable and accrued liabilities in the provisions and other category in note 13.
Commitments
During the nine months ended December 31, 2025, the Company increased its significant commitments from those disclosed in its audited annual consolidated financial statements for the fiscal year ended March 31, 2025. The Company renegotiated certain contracts with a service provider which include additional commitments totalling $46,000 over the next five fiscal years.
    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 TSX and the Board of Directors of the Company approved the renewal of the Company's normal course issuer bid ("NCIB") to purchase at its discretion for cancellation up to 9,013,953 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 21, 2025, over the twelve-month period commencing on April 5, 2025 and ending no later than April 4, 2026.
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 153,504 Subordinate Voting Shares representing 25% of the average daily trading volume of 614,018 Subordinate Voting Shares, as calculated per the TSX rules for the six-month period ended on February 28, 2025.
12
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)
In connection with the NCIB, the Company also entered into an 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 are made in accordance with certain purchasing parameters.
During the nine months ended December 31, 2025, under the NCIB and pursuant to the ASPP, the Company repurchased and cancelled 9,013,953 Subordinate Voting Shares representing the total authorized amount pursuant to the NCIB for a total consideration, including transaction costs, of $85,430 (December 31, 2024 - 2,673,926 Subordinate Voting Shares for a total consideration, including transaction costs, of $39,946). Interest expense and finance costs for the nine months ended December 31, 2025 includes a loss from the change in fair value of the share repurchase liability related to the ASPP of $11,800. There was no share repurchase liability outstanding as at December 31, 2025.
Common Shares purchased for settlement of non-treasury RSUs
Non-treasury RSUs have the same features as RSUs, except that they can either be settled in cash based on the Company’s share price on the settlement date, or through the delivery of Common Shares purchased on the open market, at the Company's option. For the three and nine months ended December 31, 2025, the non-treasury RSUs were settled in Common Shares purchased on the open market.
The Company has established a trust for the purpose of settling vested non-treasury RSUs. For non-treasury RSUs, the Company directs the trustee to purchase Common Shares of the Company on the open market to be held in trust for and on behalf of the holders of non-treasury RSUs until they are released and delivered for settlement. For accounting purposes, the Common Shares are considered as held in treasury, and recorded as a temporary reduction of Common Shares outstanding and as a temporary reduction of share capital equal to the consideration paid, including transaction costs. Upon delivery of the Common Shares for settlement of the non-treasury RSUs, the number of Common Shares outstanding is increased, offsetting the initial temporary reduction of Common Shares outstanding, and the amount in contributed surplus associated with the non-treasury RSUs being settled is transferred to share capital, offsetting the initial temporary reduction of share capital. Any difference between the contributed surplus and the initial temporary reduction of share capital is recorded in accumulated deficit. As at December 31, 2025, a total of 2,190,075 Common Shares purchased for settlement of non-treasury RSUs were considered as held in treasury and recorded as a temporary reduction of outstanding Common Shares and share capital (December 31, 2024 - nil Common Shares).
    16. Accumulated other comprehensive income (loss)
Foreign currency differences on translation of foreign operations
Hedging reserve
Total accumulated other comprehensive income (loss)
202520242025202420252024
$$$$$$
Balance as at March 31,(4,966)(4,234)(2,496)189 (7,462)(4,045)
Foreign currency differences on translation of foreign operations8,214 (3,662)— — 8,214 (3,662)
Change in net unrealized gain (loss) on cash flow hedging instruments— — 3,192 (3,835)3,192 (3,835)
Deferred income tax recovery (expense)
— — (184)68 (184)68 
Balance as at December 31,3,248 (7,896)512 (3,578)3,760 (11,474)
13
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)
Foreign exchange forward contracts
The Company designates certain foreign exchange forward contracts as cash flow hedges when all the requirements in IFRS 9, Financial Instruments are met. The Company's currency pair used for cash flow hedges is US dollar / Canadian dollar. The notional principal of the foreign exchange contracts was $62,500 CAD as at December 31, 2025 (March 31, 2025 - $113,750 CAD).
    17. Related party transactions
Key management personnel includes executive officers. Other related parties include close family members of the key management personnel and entities controlled by the key management personnel.
The executive compensation expense to the top five key management personnel is as follows:
Three months ended December 31,Nine months ended
December 31,
2025202420252024
$$$$

Short-term employee benefits
774 547 2,462 1,854 
Share-based payments2,489 2,954 8,850 9,469 
Total compensation paid to key management personnel3,263 3,501 11,312 11,323 
    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:
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 payables and accrued liabilities is considered to be equal to their respective carrying values due to their short-term maturities.
14
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2025 and 2024
(expressed in thousands of US dollars, except number of shares and per share amounts)
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, 2025 include an average repayment period of 7 months, an average discount rate, over the repayment period, of 14% and amounts deemed uncollectible, which includes write offs, of $10,061. 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,
20252024
$
$
Balance - Beginning of period106,169 74,236 
Principal issued
257,520 207,061 
Amounts collected(284,287)(197,552)
Transaction-based revenues from fees collected incorporating fair value movement
36,301 27,293 
General & administrative expenses from amounts deemed uncollectible
(10,061)(9,722)
Balance - End of period105,642 101,316 
As at December 31 and March 31, 2025, the fair value of the financial instruments measured at fair value in the consolidated balance sheets were as follows:
December 31, 2025March 31, 2025
Fair
value
hierarchy
Carrying
amount
Fair
value
Fair
value
hierarchy
Carrying
amount
Fair
value
$
$

$$

Assets:
Cash and cash equivalents
Level 1479,002 479,002 Level 1558,469 558,469 
Restricted cash and restricted depositsLevel 12,014 2,014 Level 11,874 1,874 
Merchant cash advancesLevel 3105,642 105,642 Level 3106,169 106,169 
Foreign exchange forward contractsLevel 2696 696 Level 200
Liabilities:
Foreign exchange forward contractsLevel 20 0 Level 22,496 2,496 

15