Lightspeed Commerce Q4 Earnings Call Highlights
Key Points
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- Lightspeed posted a strong Q4 with revenue of $291 million and gross profit of $129 million, both up 15% year over year and ahead of guidance. Adjusted EBITDA rose 17% to $15 million, while full-year adjusted free cash flow turned positive at $18.2 million.
- Growth is being driven by North American retail and European hospitality, which saw 24% revenue growth, 19% GTV growth and 11% customer location growth in the quarter. Lightspeed added about 3,200 net new locations, and these “growth engines” now make up about 75% of total revenue.
- Management highlighted AI, payments and capital allocation as key priorities, noting AI now resolves more than 80% of support tickets and new product releases are gaining traction. The company also reiterated fiscal 2027 guidance for revenue of $1.225 billion to $1.265 billion and adjusted EBITDA of $75 million to $95 million, alongside ongoing share repurchases.
Lightspeed Commerce (NYSE:LSPD) executives said the company’s fiscal fourth quarter capped a “pivotal” year in which its narrower focus on North American retail and European hospitality drove stronger growth, improved profitability and a more streamlined operating model following the divestiture of its Upserve U.S. hospitality product line.
Founder and CEO Dax Dasilva said Lightspeed delivered fourth-quarter revenue of $291 million and gross profit of $129 million, both up 15% year-over-year and ahead of the company’s prior outlook. Adjusted EBITDA was $15 million, up 17% from the prior-year period.
“Fiscal 2026 was a pivotal year for Lightspeed,” Dasilva said. “We pursued a disciplined strategy that focused our organization on the two areas where we have a proven right to win, retail in North America and hospitality in Europe. The results today show unequivocally that the strategy is working.”
Growth engines drive location and transaction gains
Lightspeed’s “growth engines” — North American retail and European hospitality — posted fourth-quarter revenue growth of 24%, gross transaction volume growth of 19% and customer location growth of 11%, according to Dasilva. The company added approximately 3,200 net new locations in the quarter, marking the fourth consecutive quarter of accelerating location growth. Total customer locations, including growth and efficiency markets, reached 150,000.
After the Upserve divestiture, Dasilva said the growth engines account for about 75% of total revenue, with the company expecting that figure to move toward 80% during fiscal 2027.
New customer wins included luxury lifestyle brand AERIN, Oshima Surf Skate in Hawaii, RedWater Golf in Michigan, Gaucho in the U.K., Novikov in London and Osmans Töchter in Berlin. Dasilva also highlighted additional wholesale brands joining the Lightspeed ecosystem, including SOREL, Nixon, Proenza Schouler and BBC International Footwear.
CFO Asha Bakshani said the growth engines delivered fiscal 2026 total revenue growth of 24%, software revenue growth of 15%, GTV growth of 15% and payments penetration of 46%, up from 41% a year earlier. The company added about 9,400 net customer locations in the growth engines during the year.
Profitability improves as payments penetration rises
Bakshani said total fourth-quarter revenue increased 15% to $290.8 million, exceeding Lightspeed’s outlook, supported by an expanding location count, higher software average revenue per user and increased payments penetration. Software revenue was $93.3 million, up 6% year-over-year and up 9% within the growth engines. Transaction-based revenue rose 17% to $185.3 million, while gross payment volume increased 22%.
Fourth-quarter GTV rose 11% to $22.9 billion. Total monthly ARPU reached approximately $602, up 10% year-over-year.
Gross profit increased 15% year-over-year in the quarter, while total gross margin was 44%, flat from the prior-year period. Software gross margin was 87%, up from 81% a year earlier, though Bakshani said the quarter benefited from a non-recurring cloud provider rebate. On a normalized basis, software gross margin would have been about 82%.
Bakshani said transaction-based gross margin improved to 31% from 29%, reflecting higher international payments penetration and growth in Lightspeed Capital revenue. transaction-based gross profit rose 26% year-over-year.
For the full fiscal year, Lightspeed generated $18.2 million in adjusted free cash flow, which Dasilva called “a landmark accomplishment.” Adjusted EBITDA for the year rose 35% to $72.5 million.
AI and product releases remain a focus
Dasilva emphasized artificial intelligence as a core component of Lightspeed’s product roadmap, saying the company’s proprietary transaction, wholesale, merchant and consumer data give it an advantage in developing tools for retailers and restaurants.
Recent product releases included an integration between Lightspeed Wholesale and Faire, AI-driven brand recommendations, an AI-powered optical character recognition tool for product data entry, AI menu imports for restaurants and a new promotion engine within Lightspeed Order Anywhere.
Dasilva said nearly 30% of restaurant customers have adopted Lightspeed Pulse, more than 20,000 reservations have been made using Lightspeed Reservations, about 20% of target restaurant locations have adopted Lightspeed Restaurant AI and usage of retail insights has increased more than three times year-over-year.
Bakshani also said AI is already contributing to cost efficiency, noting that AI now resolves more than 80% of Lightspeed’s support tickets.
“This is not theoretical,” Bakshani said. “It is already embedded in our cost structure today, and we’re only just getting started.”
Guidance reflects Upserve divestiture
Lightspeed closed fiscal 2026 with approximately $454 million in cash. Bakshani said about $200 million remains under the board’s broader authorization to repurchase up to $400 million in shares. The board also approved renewal of the company’s normal course issuer bid to repurchase an additional 8.5 million shares, representing approximately 10% of the public float.
Bakshani said shares outstanding were down 6% year-over-year, primarily due to $86 million in shares repurchased and canceled over the past 12 months. She added that, beyond potential buybacks, the company’s largest use of cash will be growing its merchant cash advance program. Lightspeed had $118 million in merchant cash advances outstanding at year-end.
For fiscal 2027, Lightspeed expects total revenue of $1.225 billion to $1.265 billion, representing organic growth of 12% to 15%. The company expects total gross profit of $565 million to $585 million, representing organic growth of 12% to 16%, and adjusted EBITDA of $75 million to $95 million.
For the fiscal first quarter, Lightspeed guided for revenue of $305 million to $315 million, gross profit of $136 million to $141 million and adjusted EBITDA of $15 million to $20 million.
Bakshani said the company’s updated three-year targets mainly reflect the Upserve divestiture. Lightspeed now expects fiscal 2028 gross profit of approximately $665 million to $685 million, compared with its prior $700 million target before the divestiture. The company also expects fiscal 2028 adjusted free cash flow of about $95 million, slightly below its previous outlook of $100 million.
Executives address sales, payments and capital in Q
During the question-and-answer session, Bakshani said revenue growth is expected to accelerate through fiscal 2027 as product releases, payments penetration and the company’s focus on growth engines contribute to results.
On Lightspeed Capital, Bakshani said the business should continue to grow in fiscal 2027, though the company intends to remain prudent to keep default rates in the low single digits. She said that on a pro forma basis, Lightspeed still sees more than 35% growth in the Capital business.
Dasilva said location growth should remain within the company’s 10% to 15% three-year compound annual growth target, though quarterly location additions may fluctuate due to seasonality. He said most new locations are coming from new business and new logos, while some growth also comes from existing multi-location customers adding sites.
Bakshani said outbound sales remains an important part of the company’s strategy, particularly in European hospitality, where field sales are helping Lightspeed enter new cities. She said the company tracks seller productivity, quota achievement and customer acquisition cost payback closely.
Asked about payments penetration, Bakshani said fourth-quarter penetration reached 42%, up from 38% a year ago, though the figure is slightly below 40% after removing Upserve. She said the company sees opportunities to increase payments revenue across both growth and efficiency markets.
About Lightspeed Commerce (NYSE:LSPD)
Lightspeed Commerce Inc is a Canadian technology company that develops cloud-based point-of-sale (POS) and e-Commerce software for small and medium-sized businesses across the retail and hospitality sectors. Its integrated platform enables merchants to manage sales, inventory, customer relationships and analytics through a single interface. By combining in-store and online channels, Lightspeed helps businesses streamline operations and improve customer engagement in an increasingly omnichannel marketplace.
The company's product suite includes POS terminals, payment processing services, inventory management tools, customer loyalty programs and data reporting dashboards.
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