Software Revenue Growth
Q: When will software revenue growth accelerate?
A: Management expects software revenue growth to exceed 10% starting in the second half of the fiscal year, driven by account managers shifting focus back to software cross-selling and upselling, pricing adjustments, and pipeline building. Leading indicators point to strong confidence in this outlook. " "

Gross Margin Outlook
Q: How should we think about gross margin trends?
A: Gross margin was near 41%, slightly down from 42% a year ago due to declining higher-margin residuals as customers transition to Lightspeed Payments, which has gross margins of 20%-25% in North America and over 30% in Europe. Lightspeed Capital, with over 95% gross margins, is growing but still nascent. Meaningful impact on overall gross margin will come as Lightspeed Capital scales further. "

Supplier Network Monetization
Q: When will supplier network revenues become meaningful?
A: Monetization of the supplier network is underway, with expectations of meaningful impact starting in fiscal 2026. The supplier network handles an annual GTV of $10 billion, which is not yet included in reported GTV numbers. Recent signings of notable brands and expansion into new verticals support future growth. "

Payments Penetration Progress
Q: How is payments penetration expected to evolve?
A: Payments penetration is projected to continue its upward trajectory toward the 50% target, despite seasonal GTV fluctuations. All net new eligible customers are required to adopt Lightspeed Payments, and the shift of account managers back to software is not expected to materially affect this progress. "

Organic GTV Reacceleration
Q: When will GTV growth accelerate?
A: While total GTV growth was 1% year-over-year, flagship products saw 24% growth. Management anticipates overall GTV growth to accelerate in the back half of the year as initiatives like outbound sales, verticalized marketing, and expansion of Ideal Customer Profile locations bear fruit. " "

Lightspeed Capital Growth
Q: What is the outlook for Lightspeed Capital?
A: Lightspeed Capital revenue increased over 300% year-over-year in Q1, though from a small base. With net cash outflows of about $15 million in the quarter, the business is still nascent but showing strong demand and low default rates. Management is excited about the prospects and plans to manage risk carefully while scaling the offering. "

Capital Allocation Priorities
Q: What are the capital allocation plans moving forward?
A: The Board authorized a share repurchase program for up to 10% of the public float, representing $140 million. In the quarter, the company repurchased about 2.7 million shares for approximately $40 million. Management plans to be opportunistic with further buybacks, taking a prudent approach to capital allocation. "

Price Increases on Subscription Revenue
Q: What impact will price increases have on subscription revenue?
A: Significant opportunities exist to adjust pricing upwards based on benchmarking and the value provided to merchants. Price increases are being applied to both new and existing customers, with minimal expected disruption. The impact of these adjustments is anticipated to be seen from Q3 onwards. " "

ARPU Growth and Upselling
Q: Where is ARPU growth coming from?
A: Higher ARPU on flagship products is driven by advanced software modules like Insights in hospitality and inventory management in retail. Account managers are generating pipeline for expanding customer modules, which will contribute meaningfully to revenue as these efforts progress. "

Competitive Environment and Win Rates
Q: How is Lightspeed performing against competitors?
A: Lightspeed's focused strategy on specific verticals and deep functionality tailored to ideal customer profiles has led to overall close rates of 32%-33%, climbing to 45%-50% in certain sub-verticals. Innovation in flagship products helps displace legacy players and enhances competitiveness in both retail and hospitality sectors. "