Lightspeed Narrows Losses, Raises Fiscal Outlook as Revenue Grows 20%

• Lightspeed Commerce reported a reduced Q3 net loss of $29.7 million, improved from $42.5 million last year, with revenue up 20% to $277.2 million.
• Adjusted EBITDA reached $14 million, exceeding guidance, and the company raised its fiscal 2025 EBITDA target to a minimum of $50 million.
• Gross Transaction Volume (GTV) grew 26%, with nearly 50% processed through Lightspeed Payments, showing solid adoption of its unified POS and payments platform.

Quarterly Financial Highlights

Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) posted revenue of $277.2 million for Q3 2024, marking a 20% increase year-over-year. This growth was driven by a 33% rise in transaction-based revenue, which reached $183.8 million, as more clients adopted Lightspeed Payments. Subscription revenue rose by a modest 6% to $85.5 million, impacted by slower-than-expected uptake, though the company projects acceleration in this segment in coming quarters.

The company’s gross profit increased 19% to $114.3 million, supported by a stable gross margin of 41%, as more clients adopted higher-margin payments products. Notably, gross profit margins on subscription revenue grew from 75% to 79%, signaling Lightspeed’s success in controlling operational costs.

Adjusted EBITDA exceeded guidance, reaching $14 million versus $0.2 million in Q3 2023, driven by operating efficiencies and cost-control measures. Adjusted income improved to $19.9 million, or $0.13 per share, a notable increase from $0.04 per share a year prior.

Positive Traction in Core Metrics

Key metrics for Lightspeed’s unified payments strategy showed impressive growth. Gross Transaction Volume (GTV) increased by 26% to $23.6 billion, with Gross Payments Volume (GPV) rising 49% to $8.8 billion. This progress underscores the strong adoption of Lightspeed’s POS and payments integration by high-GTV clients, which tend to generate more stable, high-value transactions.

Average Revenue per User (ARPU) increased by 24% year-over-year to $527, reflecting Lightspeed’s emphasis on upselling existing customers to its unified solutions. High-profile clients like Mavi Jeans, Columbia Sportswear, and Nathalie in London have chosen Lightspeed’s tailored POS solutions, enhancing its brand credibility in retail and hospitality.

Outlook and Strategic Updates

Following its solid quarterly performance, Lightspeed raised its adjusted EBITDA outlook for fiscal 2025 from $45 million to at least $50 million, reflecting confidence in sustained revenue growth and profitability. The company also postponed its Capital Markets Day as it undergoes a strategic review, leaving room for potential business shifts, though no concrete outcomes have been announced.

For the third quarter of fiscal 2025, Lightspeed anticipates revenue between $280 million and $285 million, driven by renewed subscription revenue growth, expected improvements in upselling, and selective price adjustments. Transaction-based revenue is also projected to grow, supporting Lightspeed’s overall target of 20% revenue growth for the year.

Investor Takeaway

Lightspeed’s improved financials and raised guidance indicate positive momentum in its core business. The company’s success in scaling payments adoption and driving higher ARPU, along with its enhanced operational efficiency, makes it an attractive prospect for growth-focused investors interested in fintech and POS innovation. Lightspeed’s expansion potential and strengthened competitive position in retail and hospitality signal resilience and strategic value in its long-term outlook. Year to date, the stock has declined by 12%.