Lightspeed Warns of Softer Revenue Growth Amid Weakening Economic Conditions

In what could be an ill omen for other payments processors that softer transaction growth lies ahead, Lightspeed Commerce Inc., provider of an e-commerce platform and payment services for small and mid-sized businesses, on Monday revised its outlook for fiscal 2025 to include year-over-year revenue growth of approximately 18%, down from about 20% projected earlier. Lightspeed cited a drop in same-store sales for client locations, along with dampened new-business formation.

The revised outlook comes just over six weeks after Montreal-based Lightspeed committed to remaining a publicly held company after a strategic review. At the time, Lightspeed said it was doubling down on the North American retail market and on the European hospitality sector.

“Since reporting third-quarter fiscal 2025 results on February 6, 2025, several macroeconomic conditions have deteriorated, primarily due to heightened inflationary pressures, increased job insecurity, and weakened consumer confidence, impacting discretionary spending among consumers,” Lightspeed said in a financial update. “This shift has led to a decline in same-store sales through February and March to date. In addition, declining small-business optimism is dampening new business formation. As a result of these factors, Lightspeed experienced significant pressure on transaction,-based revenue and, to a lesser extent, on subscription revenue.”

Lightspeed still expects fiscal 2025 adjusted earnings before interest, taxes, depreciation, and amortization to exceed $53 million. “Despite the macroeconomic headwinds, the company remains focused on profitable growth and is proactively managing costs,” the update says.

The company’s fiscal year ends March 31. On Wednesday, Lightspeed will present its three-year strategy and “transformational journey” to investors in New York, the update says.

The company’s shares trade on the Toronto and New York stock exchanges. In the wake of Monday’s news, Lightspeed’s share prices on both exchanges were down in the 4%-to-5% range Monday morning from Friday’s close.