Lightspeed's Q1 Exceeds Forecasts.
Lightspeed Commerce Exceeds Q1 Revenue Estimates, Narrows Net Loss Amid Strategic Transformation.
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Key Points
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In the quarter, Lightspeed’s revenue by segment consisted of transaction-based revenue of $214.5 million (up 5% year over year; organic growth 20%) and subscription revenue of $95.4 million (up 5%; organic growth 8%), contributing to total revenue of $322.7 million.
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Excluding the Upserve divestiture completed in late April, Lightspeed noted that revenue grew 17% year over year.
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Lightspeed added about 1,300 new customers in the quarter as part of its growth momentum.
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The quarter’s revenue of $322.7 million topped the top end of guidance, which ranged up to $315 million.
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Lightspeed spent about $86 million on a share buyback during the quarter.
Lightspeed Commerce posted first-quarter revenue of $322.7 million, topping the high end of its own guidance of $315 million and beating analyst expectations, according to MarketWatch. The Montreal-based payments and commerce software company also narrowed its net loss to just $2.4 million, or 2 cents per share, a sharp improvement from prior quarters.
Adjusted earnings came in at 13 cents per share, above what analysts had expected, BetaKit reported. Revenue grew 6% year over year on a reported basis — and 17% when stripping out the Upserve business Lightspeed sold in late April.
Transaction and Subscription Revenue Both Climb
Transaction-based revenue — money Lightspeed earns when merchants process payments — hit $214.5 million, up 5% year over year. On an organic basis, stripping out the Upserve sale, that growth was 20%. Subscription revenue reached $95.4 million, also up 5% reported and 8% organic, according to MarketWatch.
Total revenue of $322.7 million cleared the top of Lightspeed's own guidance range. The company added roughly 1,300 new customers during the quarter, a sign that its push into North American retail and European hospitality is gaining traction, BetaKit reported.
Gross Margin Dips as Hardware Weighs on Results
Gross margin slipped to 43% from 45% a year ago. Lightspeed blamed the drop largely on hardware sales, which carry lower margins than software. The company said it is still working on longer-term margin improvement efforts.
To support its stock price, Lightspeed spent about $86 million on share buybacks during the quarter, according to MarketWatch. The buyback signals management confidence even as the company continues its business transformation.
AI Products Flagged as Key Profitability Driver
Lightspeed's management pointed to AI-powered product features as a major lever for future growth and profitability. The company is investing in tools that help merchants run their businesses more efficiently. Executives framed these innovations as central to sustaining the gains made during the ongoing transformation, according to BetaKit.
Market Screener noted that both adjusted earnings and revenue rose significantly in the quarter, reflecting the early payoff of Lightspeed's strategy to focus on higher-value customers in North America and Europe, according to Market Screener.
Full-Year Guidance Holds Steady at Up to $1.27 Billion
For the second quarter, Lightspeed guided revenue of $316 million to $326 million. The midpoint of $321 million is roughly in line with analyst estimates of $323.6 million, according to Benzinga.
For the full fiscal year, Lightspeed held its guidance at $1.225 billion to $1.265 billion. The company also expects adjusted EBITDA — a measure of operating profit before certain costs — of $75 million to $95 million. That range affirms management's view that Lightspeed can keep improving profitability even while reshaping the business, Benzinga reported.
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