Lightspeed “showing encouraging signs”, ATB Capital says

Lightspeed Commerce (Lightspeed Commerce Stock Quote, Chart, News, Analysts, Financials TSX:LSPD) delivered better-than-expected results in its fiscal Q1 2026, reporting $304.9-million in revenue and $15.9-million in Adjusted EBITDA, both slightly ahead of consensus. While the company maintained full-year guidance, management emphasized growing traction in core markets and reiterated its long-term transformation strategy.

ATB Capital Markets analyst Martin Toner reiterated his “Sector Perform” rating and raised his price target to $18.00 from $17.00, citing stronger near-term growth assumptions and improved long-term EBITDA margin expectations. “We view the beat as a sign the company’s shift in strategy is showing encouraging signs,” Toner wrote in a July 31 report.

Montreal-based Lightspeed provides point-of-sale and e-commerce software solutions to retail and hospitality businesses globally.

First-quarter revenue rose 14.6% year over year and came in above both guidance and consensus estimates. Gross transaction volume reached $24.6-billion, up 4.2%, while payment-related revenue climbed 14.8% to $204.6-million—beating ATB’s forecast and accelerating from Q4. Adjusted EBITDA of $15.9-million was just above the $15.5-million Street expectation.

Toner highlighted Lightspeed’s progress in its two main growth verticals: North American retail and European hospitality. Customer locations grew 5% year over year to roughly 90,000, and average revenue per user increased 16%. Despite these gains, consolidated gross margin fell to 42.3% from 44.1% in Q4, though margins on software and transactions both improved year over year.

The company ended the quarter with $447.8-million in cash and repurchased approximately nine million shares for $85.4-million. Total buybacks since the start of FY25 now amount to nearly 12% of the float.

“Management is continuing to progress on its ‘full transformation plan’ to focus on growth in North American retail and EMEA hospitality, with the goal of driving profitable growth,” Toner said. “This includes: one, improving go-to-market efficiency, two, freeing up capital for investment in growth areas, and three, initiating a $400-million share repurchase program, with approximately $200 million remaining as of today.

“Moving forward, management will be focused on expanding customer locations throughout their preferred growth markets. Ultimately, management believes that its shift in growth resources, combined with cost optimization and efficient resource allocation, should drive improved Adjusted EBITDA and free cash flow in the years ahead.”

Toner added that Lightspeed’s outlook reflects greater confidence in the company’s ability to execute against its longer-term targets, particularly as gross profit and software ARPU trends strengthen alongside disciplined cost controls.

Toner expects Lightspeed to post $69.1-million in Adjusted EBITDA on $1.233-billion in revenue for fiscal 2026, improving to $95.5-million on $1.358-billion in 2027.

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