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LSPD's transaction-based revenues rose 15% Y/Y to $209.4M, making up 67.1% of total revenues.
Lightspeed Commerce saw total ARPU climb 11% Y/Y to about $660 on higher payment adoption.
LSPD generated $28.9M in operating cash flow, sharply up from $2.7M a year earlier.
Lightspeed Commerce (LSPD - Free Report) reported fiscal third-quarter earnings of 15 cents per share, beating the Zacks Consensus Estimate by 21.66%. The bottom line increased 25% year over year.
In the third quarter, LSPD reported revenues of $311.2 million, up 11% year over year. The figure surpassed the Zacks Consensus Estimate by 0.37%. The revenue growth was primarily driven by strong performance in transaction-based revenues, which increased 15% year over year, fueled by expanding adoption of Lightspeed's payments solutions.
Lightspeed Commerce Inc. Price, Consensus and EPS Surprise
Transaction-based revenues (67.1% of total revenues) reached $209.4 million in the reported quarter, marking a 15% increase year over year, reflecting the company's strategic focus on embedding payments into its platform.
Subscription revenues (29.8% of total revenues) totaled $93.0 million, increasing 6% year over year.
Hardware and other revenues (3.1% of total revenues) declined 5.05% year over year to $9.9 million.
Lightspeed's designated growth engines, retail customers in North America and hospitality customers in Europe, demonstrated robust performance during the quarter, generating 21% year over year growth. Software revenues increased 13% year over year, Gross Transaction Volume grew 16% year over year and Gross Payment Volume as a percentage of GTV reached 46%, up from 42% in the prior year quarter.
Lightspeed's Q3 Key Performance Metrics
Total ARPU increased 11% year over year to approximately $660, driven by expanding adoption of payment offerings, innovative software modules and signing more high-GTV customers. Subscription ARPU increased 4% during the quarter.
Total GTV reached $25.3 billion, up 8% year over year. GPV of $10.5 billion represented 42% of total GTV, compared to 38% in the prior-year quarter, indicating continued progress in converting GTV to payments processing.
Lightspeed ended the quarter with approximately 148,000 total customer locations. The company added approximately 2,600 net customer locations sequentially in its growth engines, bringing total customer locations in these segments to approximately 94,000, up 9% year over year.
LSPD’s Q3 Operating Details
Gross profit increased 15% year over year to $133.6 million, with gross profit margin improving 200 bps annually to 43%. The margin expansion was driven by optimization of headcount and spending, as well as improved transaction-based gross margin, which rose to 31% from 28% year over year. Subscription gross margin improved 300 bps annually to 82%.
Adjusted EBITDA reached $20.2 million, up from $16.6 million in the prior-year quarter, reflecting improved operational efficiency and disciplined expense management.
Total operating expenses increased 14% year over year to $171.2 million. General and administrative expenses remained relatively flat, while research and development expenses increased 3% year over year to $33.2 million. Sales and marketing expenses rose 27% year over year to $68.5 million. Restructuring charges decreased 78% to $1.4 million compared to $6.4 million in the prior year quarter.
Balance Sheet and Cash Flow
As of Dec 31, 2025, Lightspeed maintained cash and cash equivalents of $479 million, compared to $494.9 million as of Sept. 30, 2025. Lightspeed generated positive cash flow from operating activities of $28.9 million in the fiscal third quarter, a significant improvement from $2.7 million in the third quarter of fiscal 2025.
Adjusted Free Cash Flow reached $14.9 million in the quarter compared to a negative $0.5 million in the prior year quarter.
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Lightspeed Commerce Q3 Earnings Beat Estimates, Revenues Rise Y/Y
Key Takeaways
Lightspeed Commerce (LSPD - Free Report) reported fiscal third-quarter earnings of 15 cents per share, beating the Zacks Consensus Estimate by 21.66%. The bottom line increased 25% year over year.
In the third quarter, LSPD reported revenues of $311.2 million, up 11% year over year. The figure surpassed the Zacks Consensus Estimate by 0.37%. The revenue growth was primarily driven by strong performance in transaction-based revenues, which increased 15% year over year, fueled by expanding adoption of Lightspeed's payments solutions.
Lightspeed Commerce Inc. Price, Consensus and EPS Surprise
Lightspeed Commerce Inc. price-consensus-eps-surprise-chart | Lightspeed Commerce Inc. Quote
Lightspeed's Q3 Revenue Details
Transaction-based revenues (67.1% of total revenues) reached $209.4 million in the reported quarter, marking a 15% increase year over year, reflecting the company's strategic focus on embedding payments into its platform.
Subscription revenues (29.8% of total revenues) totaled $93.0 million, increasing 6% year over year.
Hardware and other revenues (3.1% of total revenues) declined 5.05% year over year to $9.9 million.
Lightspeed's designated growth engines, retail customers in North America and hospitality customers in Europe, demonstrated robust performance during the quarter, generating 21% year over year growth. Software revenues increased 13% year over year, Gross Transaction Volume grew 16% year over year and Gross Payment Volume as a percentage of GTV reached 46%, up from 42% in the prior year quarter.
Lightspeed's Q3 Key Performance Metrics
Total ARPU increased 11% year over year to approximately $660, driven by expanding adoption of payment offerings, innovative software modules and signing more high-GTV customers. Subscription ARPU increased 4% during the quarter.
Total GTV reached $25.3 billion, up 8% year over year. GPV of $10.5 billion represented 42% of total GTV, compared to 38% in the prior-year quarter, indicating continued progress in converting GTV to payments processing.
Lightspeed ended the quarter with approximately 148,000 total customer locations. The company added approximately 2,600 net customer locations sequentially in its growth engines, bringing total customer locations in these segments to approximately 94,000, up 9% year over year.
LSPD’s Q3 Operating Details
Gross profit increased 15% year over year to $133.6 million, with gross profit margin improving 200 bps annually to 43%. The margin expansion was driven by optimization of headcount and spending, as well as improved transaction-based gross margin, which rose to 31% from 28% year over year. Subscription gross margin improved 300 bps annually to 82%.
Adjusted EBITDA reached $20.2 million, up from $16.6 million in the prior-year quarter, reflecting improved operational efficiency and disciplined expense management.
Total operating expenses increased 14% year over year to $171.2 million. General and administrative expenses remained relatively flat, while research and development expenses increased 3% year over year to $33.2 million. Sales and marketing expenses rose 27% year over year to $68.5 million. Restructuring charges decreased 78% to $1.4 million compared to $6.4 million in the prior year quarter.
Balance Sheet and Cash Flow
As of Dec 31, 2025, Lightspeed maintained cash and cash equivalents of $479 million, compared to $494.9 million as of Sept. 30, 2025. Lightspeed generated positive cash flow from operating activities of $28.9 million in the fiscal third quarter, a significant improvement from $2.7 million in the third quarter of fiscal 2025.
Adjusted Free Cash Flow reached $14.9 million in the quarter compared to a negative $0.5 million in the prior year quarter.
LSPD’s Zacks Rank & Stocks to Consider
LSPD currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Arista Networks (ANET - Free Report) , Advanced Energy (AEIS - Free Report) and Amkor Technology (AMKR - Free Report) .
While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Arista Networks and Advanced Energy currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Arista Networks have declined 7.7% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12.
Shares of Advanced Energy have surged 75.8% in the trailing six-month period. Advanced Energy is slated to report fourth-quarter 2025 results on Feb. 10.
Amkor Technology shares have surged 93.5% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.