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Lightspeed Commerce Revises Fiscal 2025 Financial Outlook

Lightspeed Commerce Inc., known for empowering merchants with its all-in-one commerce platform, has recently updated its financial outlook for the fiscal year ending March 31, 2025. This revision comes in response to various macroeconomic challenges that have surfaced since the third quarter results reported on February 6, 2025.

The company revealed that several economic factors have negatively impacted its performance, particularly heightened inflation, job insecurity, and reduced consumer confidence. These conditions have resulted in lower discretionary spending, severely affecting same-store sales for February and March. Additionally, a decrease in optimism among small businesses is dampening new business formation, leading to pressures on transaction-based revenue for Lightspeed.

Given these developments, Lightspeed has adjusted its revenue growth forecast for Fiscal 2025 to approximately 18%, down from an earlier projection of 20%. This new outlook primarily reflects the adverse impact of decreased transaction-based revenues. Despite these challenges, Lightspeed emphasizes its commitment to profitable growth and is taking proactive measures to manage costs effectively.

Looking ahead, the company anticipates maintaining an Adjusted EBITDA of over $53 million for Fiscal 2025, demonstrating resilience amidst a shifting economic landscape. Lightspeed's focus remains on its core strengths: providing innovative commerce solutions, empowering its merchant users, and creating long-term value for its stakeholders.

In light of these adjustments, Lightspeed has announced its upcoming Capital Markets Day set for March 26 at the New York Stock Exchange. During this event, the company plans to detail its three-year strategy and transformational journey moving forward.

Financial Outlook and Assumptions

It's crucial to note that Lightspeed's financial outlook is not without its assumptions and risks. The company has outlined several key assumptions underpinning its forecasts, which include expectations related to inflation rates, interest rates, consumer spending behaviors, foreign exchange rates, as well as the overall macroeconomic environment.

For instance, Lightspeed has accounted for factors such as potential requests for subscription pauses and customer churn that could arise from business failures. It is essential that the jurisdictions where Lightspeed operates do not impose strict restrictions analogous to those observed during the COVID-19 pandemic. Furthermore, the company is hopeful for a ~7%-8% growth in subscription revenue in the fourth quarter, which reflects its expectations of customer adoption of its platforms.

The financial parameters also cover strategic relationships with partners and the anticipated performance of newly integrated offerings, which have seen a shift toward unified Point of Sale (POS) and payment solutions.

However, Lightspeed acknowledges that a variety of unknown risks exist that could materially affect its performance. These range from global health crises, geopolitical instability, changes in consumer trends, fluctuations in exchange rates, and challenges in attracting and retaining customers.

Conclusion

Despite the harsh economic realities impacting its operations, Lightspeed remains bullish about its potential for growth and adaptability. By focusing on delivering tailored solutions and fostering robust customer relationships, the company is positioning itself to navigate through turbulent times. With its eyes firmly set on innovation and sustainable practices, Lightspeed Commerce is set to solidify its place as a leading force in the global commerce landscape.

Founded in Montreal in 2005, Lightspeed continues to serve retail, hospitality, and golf sectors across over 100 countries, showcasing its commitment to drive forward the businesses that form the backbone of the economy. By maintaining clear communication with its stakeholders and implementing responsive strategies, Lightspeed aims to emerge stronger from these economic challenges.