Lightspeed Commerce (TSX: LSPD) provides a comprehensive suite of products and services that help businesses around the world operate more efficiently and scale their operations. Earlier this month, the company reported a strong second-quarter fiscal 2026 performance, surpassing its internal guidance. Supported by these results, Lightspeed also raised its full-year fiscal 2026 outlook. Although the stock initially rallied on the positive news, broader weakness in the technology sector has put pressure on the stock, leading to a 6.1% decline since the earnings release. Year to date, the company has lost around 30% of its stock value.
With this backdrop, let’s review the company’s second-quarter results, growth prospects, and current valuation to determine whether Lightspeed presents an attractive buying opportunity at these levels.
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Lightspeed’s second-quarter performance
During the quarter, Lightspeed generated revenue of $319 million, surpassing its internal guidance of $310–$315 million. On a year-over-year basis, revenue rose 15%, driven by a 17% increase in transaction-based revenue and a 9% rise in subscription revenue. Supported by new product launches and the continued expansion of its payments offering, the company grew its customer base to 146,000 locations. Meanwhile, average revenue per user (ARPU) climbed 15% to $685, reflecting higher adoption of payment solutions, new software features, and recent pricing adjustments.
Total GTV (gross transaction value) increased 7% to $25.3 billion, while GPV (gross payment volume) surged 22% to $10.8 billion, with GPV representing 43% of GTV. Gross profit rose 18% year over year to $135.2 million, coming in ahead of analysts’ expectations. Overall gross margin expanded by 100 basis points to 42%, supported by margin improvements in both the transaction and subscription segments.
The Montreal-based company reported a net loss of $32.7 million for the quarter. However, after adjusting for one-time items, adjusted net income came in at $22.2 million. Adjusted EPS (earnings per share) was $0.16, marking a 23.1% increase from the same quarter last year. Lightspeed also delivered adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $21.3 million, up 52.1% year over year and ahead of its guidance. In addition, the company generated $18 million in free cash flow and ended the quarter with $462.5 million in cash and cash equivalents, providing ample liquidity to support its growth initiatives. With that in mind, let’s examine its growth prospects.
Lightspeed’s growth prospects
The accelerating shift toward omnichannel commerce continues to create substantial long-term growth opportunities for Lightspeed. The company is also investing in innovative product development, including AI (artificial intelligence)-powered tools designed to meet evolving customer needs, enhance the user experience, and help merchants grow their businesses. In addition, the further adoption of its payment solutions is expected to strengthen financial performance in the coming years. Lightspeed is also implementing several cost-reduction initiatives—such as leveraging AI to streamline support and service delivery—aimed at improving operational efficiency and boosting profitability.
Following its strong second-quarter results, the company raised its fiscal 2026 outlook. The updated guidance calls for revenue and gross profit growth of more than 12% and 15%, respectively, along with adjusted EBITDA exceeding $70 million.
Investors’ takeaway
The recent pullback in Lightspeed’s share price has made its valuation more compelling. The stock now trades at an attractive NTM (next-12-month) price-to-sales ratio of 1.2 and an NTM price-to-earnings ratio of 18.1. Given its solid growth prospects, strengthening financial performance, and growing adoption of its products, I believe Lightspeed presents an appealing buying opportunity at current levels.
