Lightspeed Commerce (NYSE:LSPD) reported a stronger-than-expected start to fiscal 2027, with first-quarter revenue surpassing its outlook as software growth accelerated, payments penetration increased and the company continued to focus its operations on North American retail and European hospitality.
Founder and CEO Dax Dasilva said the company generated $323 million in first-quarter revenue, up 17% year over year on an organic basis, while gross profit increased 12% to $139 million. Adjusted EBITDA was $18 million, within the company’s guided range.
Growth engines lead revenue and location gains
Lightspeed’s designated growth engines, which center on retail in North America and hospitality in Europe, generated 20% revenue growth during the quarter. Gross transaction value in those markets rose 14%, customer locations increased 10%, and payments penetration reached 49%, up from 45% a year earlier.
The company ended the quarter with approximately 99,000 customer locations in its growth engines. Total customer locations, including efficiency markets, stood at 146,000 following the divestiture of the non-core Upserve U.S. hospitality product line.
Dasilva said the company terminated a legacy white-label partnership during the quarter, resulting in the removal of about 500 low-average-revenue-per-user locations. He said Lightspeed is emphasizing higher-quality agreements with its ideal customer profile, particularly more sophisticated, multi-location small and midsize businesses that can use its broader software suite.
Examples of new customers cited by the company included Adorn Boutique in Texas, Synergy Sportswear, Dutch hospitality chain Vlaamsch Broodhuys, U.K. restaurant chain Afrikana Peri Kitchen and Grill, Encore Leisure Group, and Belgium’s Royal Latem Golf Club.
Lightspeed also said NuORDER by Lightspeed continues to support its retail customer-acquisition strategy. The company added Lafayette 148, Slowtide and Head Golf to the wholesale platform during the quarter. Dasilva said expanding the number of brands on NuORDER is intended to strengthen a network effect in which more brands attract retailers and more retailers attract brands.
Payments, software and AI initiatives
CFO Asha Bakshani said total revenue rose 17% organically to $322.7 million, above the company’s outlook for 10% to 14% growth. Software revenue totaled $95.4 million, up 8% year over year, while software revenue in growth engines rose 12%.
Software average revenue per user increased 6% year over year, compared with 4% in the previous quarter. Bakshani attributed the acceleration to growth in high-GTV customer locations, larger customers adopting more of Lightspeed’s software suite, upsells to existing customers and a larger mix of annual contracts.
Transaction-based revenue increased 20% to $214.5 million, while gross payments volume also rose 20%. Total GTV increased 9% to $25.7 billion, including 14% growth in the company’s growth engines. Total monthly ARPU reached approximately $676, up 13% year over year.
Lightspeed Capital revenue grew 56% year over year. Bakshani said customers using the capital offering demonstrate lower churn and higher lifetime value, making continued expansion of the product a priority. Merchant cash advances outstanding totaled $160 million at quarter-end, while default rates remained in the low single-digit range, according to the company.
Management also emphasized its AI product efforts. Dasilva said Lightspeed AI has been among the fastest-adopted releases on the Lightspeed Restaurant platform. The company has introduced AI tools designed to generate reports, charts and insights, and said it sees an opportunity to develop specialized agents that could help merchants manage inventory, pricing, suppliers and operations.
While Lightspeed has not yet added separate pricing for its AI products, Dasilva said strong adoption could provide pricing power over time. He also said the company is using different AI models depending on the task in an effort to manage costs.
Margins, cost actions and capital returns
First-quarter gross margin was 43%, compared with 45% a year earlier on an organic basis. Bakshani said the decline reflected a higher mix of transaction-based revenue, which carries lower margins than software, and pressure on hardware margins from supply-chain constraints and higher freight costs.
Software gross margin improved to 83% from 81% a year earlier, which Bakshani said was supported by AI resolving 80% of support tickets. Transaction-based gross margin rose to 32% from 31% organically, aided by international payments adoption and Lightspeed Capital growth.
The company expects hardware margins to improve in the second half of fiscal 2027 after implementing supply-chain management measures. Hardware represents about 4% of company revenue, according to Bakshani.
Adjusted operating expenses across research and development, sales and marketing, and general and administrative functions increased 7% year over year, partly due to field and outbound sales investments. However, management said it is taking steps to raise efficiency, including broader self-onboarding for certain customer groups and a recent reduction of about 10% of headcount in product and technology.
Adjusted EBITDA rose to $17.5 million from $15.9 million a year earlier. Net loss narrowed to $2.4 million, or $0.02 per share, from a $49.6 million loss, or $0.35 per share, in the prior-year period. Adjusted free cash flow was negative $4.4 million, which management attributed to working-capital movements.
Lightspeed repurchased and canceled 7 million shares for $66 million during the quarter and spent another $21 million repurchasing shares to fund future share-award settlements. The company returned approximately $86 million to shareholders through repurchases and ended the quarter with about $372 million in cash. About $150 million remained under its broader share repurchase authorization.
Outlook maintained
Lightspeed maintained its fiscal 2027 guidance, calling for revenue of $1.225 billion to $1.265 billion, representing organic growth of 12% to 15%. It forecast gross profit of $565 million to $585 million and adjusted EBITDA of $75 million to $95 million.
For the fiscal second quarter, the company expects revenue of $316 million to $326 million, gross profit of $141 million to $146 million, and adjusted EBITDA of $20 million to $25 million.
Chief Revenue Officer Gabriel Benavides said the company’s sales-capacity buildout is “largely behind us” and that future growth will rely more heavily on improving seller productivity, tightening customer targeting and expanding partnerships. He said Lightspeed is pursuing both deeper relationships with existing partners and greater monetization opportunities across its customer base.
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.
