EX-99.1 2 financialstatementsfy24q3.htm EX-99.1 Document



Lightspeed Commerce Inc.
Condensed Interim Consolidated Financial Statements
(Unaudited)
For the three and nine months ended December 31, 2023
(expressed in thousands of US dollars)


Lightspeed Commerce Inc.
Condensed Interim Consolidated Balance Sheets
(Unaudited)
As at December 31 and March 31, 2023
(expressed in thousands of US dollars)
Notes
December 31,
2023		March 31,
2023
Assets
$
$
Current assets
Cash and cash equivalents749,407 800,154 
Trade and other receivables9113,249 84,334 
Inventories18,594 12,839 
Other current assets1044,153 37,005 
Total current assets925,403 934,332 
Lease right-of-use assets, net
17,875 20,973 
Property and equipment, net
19,284 19,491 
Intangible assets, net
247,114 311,450 
Goodwill111,352,203 1,350,645 
Other long-term assets1241,998 31,540 
Deferred tax assets710 301 
Total assets2,604,587 2,668,732 
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities13, 1477,673 68,827 
Lease liabilities6,864 6,617 
Income taxes payable1,247 6,919 
Deferred revenue63,121 68,094 
Total current liabilities148,905 150,457 
Deferred revenue894 1,226 
Lease liabilities16,592 18,574 
Other long-term liabilities1,974 1,026 
Total liabilities168,365 171,283 
Shareholders’ equity
Share capital154,355,013 4,298,683 
Additional paid-in capital209,169 198,022 
Accumulated other comprehensive loss16(337)(3,057)
Accumulated deficit(2,127,623)(1,996,199)
Total shareholders’ equity2,436,222 2,497,449 
Total liabilities and shareholders’ equity2,604,587 2,668,732 
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, 2023 and 2022
(expressed in thousands of US dollars, except per share amounts)
Three months ended December 31,Nine months ended December 31,
Notes
2023202220232022
$
$$$
Revenues4239,695 188,697 679,054 546,278 
Direct cost of revenues5, 6138,218 102,691 393,504 301,278 
Gross profit101,477 86,006 285,550 245,000 
Operating expenses
General and administrative629,934 28,429 81,202 83,800 
Research and development634,675 37,405 101,791 109,637 
Sales and marketing660,908 60,505 176,486 193,487 
Depreciation of property and equipment1,894 1,327 4,844 3,736 
Depreciation of right-of-use assets1,651 2,109 5,528 6,219 
Foreign exchange loss (gain)(979)(968)381 (496)
Acquisition-related compensation— 6,290 3,105 36,046 
Amortization of intangible assets23,671 25,366 72,166 76,926 
Restructuring1,232 1,324 1,784 3,134 
Goodwill impairment11— 748,712 — 748,712 
Total operating expenses152,986 910,499 447,287 1,261,201 
Operating loss(51,509)(824,493)(161,737)(1,016,201)
Net interest income710,899 8,300 32,007 15,158 
Loss before income taxes(40,610)(816,193)(129,730)(1,001,043)
Income tax expense (recovery)
Current149 38 2,119 818 
Deferred(530)(1,429)(425)(6,320)
Total income tax expense (recovery)(381)(1,391)1,694 (5,502)
Net loss(40,229)(814,802)(131,424)(995,541)
Other comprehensive income (loss)
Items that may be reclassified to net loss
Foreign currency differences on translation of foreign operations5,379 9,197 1,862 (6,325)
Change in net unrealized gain (loss) on cash flow hedging instruments
897 1,407 858 (1,371)
Total other comprehensive income (loss)166,276 10,604 2,720 (7,696)
Total comprehensive loss(33,953)(804,198)(128,704)(1,003,237)
Net loss per share – basic and diluted8(0.26)(5.39)(0.86)(6.64)

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, 2023 and 2022
(expressed in thousands of US dollars)
Nine months ended December 31,
20232022
Cash flows from (used in) operating activities
$
$
Net loss(131,424)(995,541)
Items not affecting cash and cash equivalents
Share-based acquisition-related compensation2,953 31,520 
Amortization of intangible assets72,166 76,926 
Depreciation of property and equipment and lease right-of-use assets10,372 9,955 
Deferred income taxes(425)(6,320)
Share-based compensation expense62,503 107,845 
Unrealized foreign exchange loss156 50 
Goodwill impairment
— 748,712 
(Increase)/decrease in operating assets and increase/(decrease) in operating liabilities
Trade and other receivables(29,563)(19,689)
Inventories(5,755)(2,603)
Other assets(16,622)(4,746)
Accounts payable and accrued liabilities8,453 (10,362)
Income taxes payable(5,672)(91)
Deferred revenue(5,305)(4,039)
Other long-term liabilities1,039 (156)
Net interest income(32,007)(15,158)
Total operating activities(69,131)(83,697)
Cash flows from (used in) investing activities
Additions to property and equipment(4,191)(7,211)
Additions to intangible assets(7,720)(2,375)
Purchase of investments— (1,256)
Interest income 33,757 13,706 
Total investing activities21,846 2,864 
Cash flows from (used in) financing activities
Proceeds from exercise of stock options2,127 4,297 
Share issuance costs(106)(193)
Repayment of long-term debt— (30,000)
Payment of lease liabilities net of incentives and movement in restricted lease deposits(5,863)(6,405)
Financing costs(37)(734)
Total financing activities(3,879)(33,035)
Effect of foreign exchange rate changes on cash and cash equivalents
417 (1,668)
Net decrease in cash and cash equivalents during the period(50,747)(115,536)

Cash and cash equivalents – Beginning of period800,154 953,654 
Cash and cash equivalents – End of period749,407 838,118 
Interest paid to financial institutions— 374 
Income taxes paid6,547 979 
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, 2023 and 2022
(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, 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 compensation
225,939 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 
Balance as at March 31, 2022148,661,312 4,199,025 123,777 2,677 (926,190)3,399,289 
Net loss— — — — (995,541)(995,541)
Share issuance costs— (193)— — — (193)
Exercise of stock options and settlement of share awards1,773,146 43,656 (39,359)— — 4,297 
Share-based compensation— — 107,845 — — 107,845 
Share-based acquisition-related compensation284,206 31,520 — — — 31,520 
Other comprehensive loss16— — — (7,696)— (7,696)
Balance as at December 31, 2022150,718,664 4,274,008 192,263 (5,019)(1,921,731)2,539,521 




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, 2023 and 2022
(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, 2023.
These unaudited condensed interim consolidated financial statements were approved for issue by the Board of Directors of the Company on February 7, 2024.
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, 2023.
    3. Significant 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, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
New and amended standards effective within the three and nine months ended December 31, 2023
In May 2023, the IASB issued International Tax Reform—Pillar Two Model Rules, which amended IAS 12, Income Taxes, to introduce a temporary exception to the requirements to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes, and targeted disclosure requirements for affected entities. The relief is effective immediately upon issuance of the amendments and should be applied retrospectively in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, while the targeted disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2023, but not for any interim periods ending on or before December 31, 2023. The Company is currently assessing the impact of these amendments on the consolidated financial statements.
    4. Revenues
Three months ended December 31,Nine months ended December 31,
20232022

20232022
$
$

$$

Subscription revenue80,882 74,494 240,652 222,548 
Transaction-based revenue147,834 107,156 406,476 299,984 
Hardware and other revenue10,979 7,047 31,926 23,746 
Total revenues239,695 188,697 679,054 546,278 
Transaction-based revenue includes $5,235 and $11,016 of revenue from the Company's merchant cash advance program for the three and nine months ended December 31, 2023 (December 31, 2022 – $2,402 and $5,583).
    5. Direct cost of revenues

Three months ended December 31,

Nine months ended December 31,
2023202220232022
$
$

$$
Subscription cost of revenue19,774 19,948 59,077 61,028 
Transaction-based cost of revenue103,785 71,584 292,229 204,496 
Hardware and other cost of revenue14,659 11,159 42,198 35,754 
Total direct cost of revenues138,218 102,691 393,504 301,278 
    6. Employee compensation
The total employee compensation comprising salaries and benefits, including share-based compensation and related payroll taxes, excluding government assistance and acquisition-related compensation, for the three and nine months ended December 31, 2023, was $92,281 and $265,560 (December 31, 2022 – $98,915 and $298,038).
7
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
The following table outlines share-based compensation and related payroll taxes included in the following expenses:
Three months ended December 31,Nine months ended December 31,
2023202220232022
$$$$
Direct cost of revenues1,772 1,652 5,212 6,110 
General and administrative6,527 11,719 19,171 30,430 
Research and development6,993 10,144 22,332 31,013 
Sales and marketing8,344 10,955 18,958 40,147 
Total share-based compensation and related payroll taxes
23,636 34,470 65,673 107,700 
As at December 31, 2023, the Company had 11,289,461 options (1,900,000 of which have vesting dependent on market conditions tied to the Company's future share price performance), 6,277,224 restricted share units, 110,343 deferred share units, and nil performance share units which include non-market performance conditions outstanding (December 31, 2022 - 10,398,171 options, 4,632,425 restricted share units, 60,802 deferred share units and 619,640 performance share units which include non-market performance conditions outstanding).
    7. Finance income and costs
Three months ended December 31,Nine months ended December 31,
20232022

20232022
$
$

$$

Interest income11,220 8,722 33,118 16,826 
Interest expense(321)(422)(1,111)(1,668)
Net interest income10,899 8,300 32,007 15,158 
    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, 2023 and 2022. All outstanding potentially dilutive shares could potentially dilute loss per share in the future.

Three months ended December 31,

Nine months ended December 31,
2023202220232022
Issued Common Shares
153,238,219 150,718,664 153,238,219 150,718,664 
Weighted average number of Common Shares (basic and diluted)154,194,745 151,187,993 153,401,512 149,952,650 
Net loss per share – basic and diluted($0.26)($5.39)($0.86)($6.64)
8
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
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 16,642,128 and 17,095,219 stock options and share awards for the three and nine months ended December 31, 2023 (December 31, 2022 - 15,462,117 and 16,720,672). 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,
2023		March 31,
2023
$
$
Trade receivables47,131 37,167 
Allowance for expected credit losses(5,228)(4,131)

Trade receivables, net41,903 33,036 
Research and development tax credits receivable7,476 8,424 
Sales tax receivable5,018 4,862 
Merchant cash advances measured at fair value55,549 29,492 
Indemnification receivables— 4,042 
Accrued interest and other3,303 4,478 
Total trade and other receivables113,249 84,334 
The indemnification receivables were for indemnities on certain liabilities assumed through our acquisitions.
    10. Other current assets
December 31,
2023		March 31,
2023
$
$
Restricted cash and restricted deposits1,218 1,366 
Prepaid expenses and deposits14,991 14,149 
Commission asset14,144 12,160 
Contract asset and other13,800 9,330 
Total other current assets44,153 37,005 
    11. Goodwill
Impairment analysis
During the three months ended December 31, 2023, 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, 2023 using the Company's fair value less costs of disposal method. This test demonstrated no impairment of goodwill as at December 31, 2023. Fair value less
9
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
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, 2023, 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 %39 %
Terminal Value Multiple2.71.8
Revenue Growth Rate (%)26 %18 %


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, 2024, or earlier should there be a goodwill impairment trigger before then.
    12. Other long-term assets
December 31,
2023		March 31,
2023
$
$

Restricted cash384 408 
Prepaid expenses and deposits3,498 3,775 
Commission asset17,613 15,147 
Contract asset18,994 10,691 
Investments1,509 1,519 
Total other long-term assets41,998 31,540 
10
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
    13. Accounts payable and accrued liabilities
December 31,
2023		March 31,
2023
$$

Trade payables39,241 36,958 
Accrued compensation and benefits23,499 22,543 
Accrued payroll taxes on share-based compensation4,311 3,030 
Acquisition-related payables— 331 
Sales tax payable5,266 3,556 
Other5,356 2,409 
Total accounts payable and accrued liabilities77,673 68,827 
    14. Contingencies, Provisions and Commitments
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 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.
The Company is presently engaged in a dispute with one of its residual payments partners that has resulted in that partner purporting to terminate two agreements it has with the Company and ceasing to pay the Company amounts owed pursuant to those agreements, approximately $9,525 in the nine months ended December 31, 2023, beginning in April 2023. Although the Company is not yet aware of a formal claim having been filed by the partner, the partner alleges that the Company has breached certain covenants in each of the two agreements and has made a demand for damages under each agreement. The Company intends to vigorously defend against any claims resulting from the dispute.
On November 16, 2023, the Supreme Court of New South Wales (the "Australian Court") ruled in proceedings commenced by Tyro Payments Limited ("Tyro") against a subsidiary of the Company that such subsidiary be restrained until September 6, 2024 from soliciting, inducing or otherwise attempting to persuade any Tyro merchant to become a merchant of any entity providing the functions and facilities provided by Tyro to facilitate the processing of financial transactions. In its ruling, the Australian Court made findings that the Company's subsidiary had breached its contractual and fiduciary obligations to Tyro. The Company's subsidiary has filed an application for leave to appeal along with a notice of appeal in respect of the matter. If the appeal is unsuccessful, a further trial is expected to be held in respect of Tyro seeking other relief including damages, an account of profits or equitable compensation, contractual indemnity and costs. A provision is included in accounts payable and accrued liabilities in the other category in respect of the matter for the three months ended December 31, 2023. The Company and management intend to continue to vigorously defend against these proceedings.
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
11
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
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") and, during the three month period ended December 31, 2023, 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 in the matter is in the midst of its window to appeal 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.
Commitments
During the nine months ended December 31, 2023, the Company increased its commitments from those disclosed in its audited annual consolidated financial statements for the fiscal year ended March 31, 2023. The Company renegotiated certain contracts with payments processors which include additional commitments of $12,435 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.
    16. Accumulated other comprehensive income (loss)
Foreign currency differences on translation of foreign operations
Hedging reserve
Total accumulated other comprehensive income (loss)
202320222023202220232022
$$$$$$
Balance as at March 31,(2,932)2,654 (125)23 (3,057)2,677 
Foreign currency differences on translation of foreign operations1,862 (6,325)— — 1,862 (6,325)
Change in net unrealized gain (loss) on cash flow hedging instruments
— — 858 (1,371)858 (1,371)
Balance as at December 31,(1,070)(3,671)733 (1,348)(337)(5,019)
Foreign exchange forward contracts
The Company designates certain foreign exchange forward contracts as cash flow hedges when all the requirements in IFRS 9, Financial Instruments are met. The Company's currency pair used for cash flow hedges is US dollar / Canadian dollar. The notional principal of the foreign exchange contracts was $38,850 CAD as at December 31, 2023 (March 31, 2023 - $109,200 CAD).
12
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
    17. Related party transactions
Key management personnel includes executive officers. Other related parties include close family members of the key management personnel and entities controlled by the key management personnel.
The executive compensation expense to the top five key management personnel is as follows:
Three months ended December 31,Nine months ended
December 31,
2023202220232022
$$$$

Short-term employee benefits and termination benefits846 677 2,444 2,091 
Share-based payments3,432 6,573 10,959 19,898 
Total compensation paid to key management personnel4,278 7,250 13,403 21,989 
    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 accounts payable and accrued liabilities is considered to be equal to their respective carrying values due to their short-term maturities.
The fair value of accrued payroll taxes on share-based compensation approximates its carrying value as at December 31 and March 31, 2023.
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.
13
Lightspeed Commerce Inc.
Notes to Condensed Interim Consolidated Financial Statements
(Unaudited)
December 31, 2023 and 2022
(expressed in thousands of US dollars, except number of shares and per share amounts)
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. The fair value of investments was determined based on Level 3 inputs using the prices for financial instruments stemming from private investments that the Company participated in.
As at December 31 and March 31, 2023, financial instruments measured at fair value in the unaudited condensed interim consolidated balance sheets were as follows:
December 31, 2023March 31, 2023
Fair
value
hierarchy
Carrying
amount
Fair
value
Fair
value
hierarchy
Carrying
amount
Fair
value
$
$

$$

Assets:
Cash and cash equivalents
Level 1749,407 749,407 Level 1800,154 800,154 
Restricted cash and restricted depositsLevel 11,602 1,602 Level 11,774 1,774 
Merchant cash advancesLevel 355,549 55,549 Level 329,492 29,492 
Foreign exchange forward contractsLevel 2733 733 Level 200
InvestmentsLevel 31,509 1,509 Level 31,519 1,519 
Liabilities:
Foreign exchange forward contractsLevel 20 0 Level 2125125

14