At its Capital Markets Day investor presentation today, executives for Montréal-based Lightspeed Commerce detailed how the company will invest in a sales-led go-to-market strategy across North America and Europe, the Middle East, and Africa (EMEA).
The go-to-market shift is part of a transformation plan Lightspeed unveiled alongside its third-quarter earnings last month, which identified its North American retail and EMEA hospitality businesses as its two “leading growth engines.”
The transformation plan is the product of a months-long strategic review of the company that explored taking the commerce platform private. After extensive acquisition discussions with several potential suitors, Lightspeed ultimately decided the plan to focus on North American retail and EMEA hospitality presented “the best available path to maximizing value” for both the firm and its shareholders.
“We’ve identified these markets as our growth engines because they drive our highest close rates, our strongest product market fit, have compelling unit economics, and our most defensible competitive position,” CEO Dax Dasilva said. “Just in the last 12 months, the growth engines generated approximately $630 million in revenue, even in just our near term focus areas, we are looking at a [total addressable market] more than 30 times that.”
Lightspeed plans to have 100 “feet-on-the-street” sales reps in EMEA by next March.
Dasilva told investors the company will allocate capital to support its priorities as part of the transformation plan, which are to grow Lightspeed’s customer locations in its growth engines, drive gross profit through subscription revenue in particular, and enhance its profitability with a focus on adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and free cash flow.
As part of its renewed focus on these markets, Lightspeed will rely less on inbound sales through advertising and more on outbound direct sales, Lightspeed president JD Saint-Martin explained to investors. Dasilva said Lightspeed plans to expand its sales team to more than 150 reps across its retail and hospitality areas, though this sales strategy will manifest slightly differently between the two.
For retail, Saint-Martin said that Lightspeed is verticalizing its sales and marketing infrastructure, reorienting its remote sales team and brand marketing to specialize on its “eight fortress verticals” rather than “one-size-fits-all.” Those focus verticals are apparel and footwear, home and garden, sports and leisure, vape and smoke, jewelry and watches, wine and liquor, health and beauty, and pets.
“Underpinning this strategy is AI and automation, which helps us refine how we identify those ideal customer profiles, how we engage with these merchants and, ultimately, how we convert those leads into Lightspeed customers,” Saint-Martin said, claiming the company has grown its outbound bookings by more than 300 percent year-over-year.
For EMEA, Saint-Martin said the strategy includes more “feet on the street,” bolstering a hyper-local sales force in major urban areas across Europe, and ensuring a direct relationship with restaurant owners and operators. The company has grown its team from only 20 sales reps this past November to 55 current sales reps, with plans to have 100 by March 2026.
Dasvila said the company is already seeing results from its transformation plan, which included changes to its pricing to “better align” with the value Lightspeed delivers and its December reorganization that saw the company lay off approximately 200 employees to “prioritize resources for strategic areas of the business.”
“We started the year with an adjusted EBITDA outlook of at least $40 million and have increased that guide by more than 30 percent because of the benefits of the transformation that we have seen in-year,” Dasilva said.
RELATED: Dax Dasilva on staying public, Lightspeed’s plans for growth, and hiring in Montréal
Earlier this week, Lightspeed scaled back its revenue outlook by two points, from an approximate 20-percent increase year-over-year to approximately 18 percent year-over-year. Dasilva addressed investor concerns about the pullback at the presentation, saying it reflected a “softness” in same-store sales across North America and Europe, as well as small business optimism, which has led to fewer new businesses and cautious investing from established ones. CFO Asha Bakshani also said the company is assuming the near-term softness will continue for the 2026 fiscal year, but is confident it will achieve, if not beat, its revised outlook.
As part of Lightspeed’s transformation plan, the company said last month that it intended to free up capital to invest in growth areas and conduct a share repurchase program to return up to $400 million USD in cash to shareholders. Bakshani announced at the presentation that Lightspeed has completed a share repurchase representing about 6 percent of total shares, or $132 million USD, and had renewed its bid to repurchase another tranche of shares worth about $95 million USD.
With its transformation plan in place, Bakshani said that Lightspeed is targeting total gross profit growing at a compound annual growth rate of 15 to 18 percent across its next three fiscal years, representing a total of $700 million USD in gross profit and 20 percent adjusted EBITDA margins. That would be a marked improvement for the company, which reported $115.9 million USD in gross profit last quarter, a 14 percent increase year-over-year.
Feature image courtesy Elevate.