Les Gones were ousted 4-0 on aggregate by Real Sociedad after suffering a 2-0 defeat in the second leg in San Sebastian on Wednesday night.
Having admitted Lyon were going through a transitional period, Garde felt the better side had progressed but was quick to focus on the positives of what it meant for his young squad.
"I think we have to admit that having lost 2-0 twice the opponent was stronger than us," he said in L'Equipe.
"We thought we still had a chance had we scored first but we failed to do that.
"I would have preferred the squad to grow in the Champions League although it would have been difficult for us.
"It will now develop in the Europa League, a competition which is a little bit more achievable.
"During this transitional period, we know there will be times when we suffer and this is a difficult period. But it is not every day when we face an opponent of the calibre of Real Sociedad."
Two Carlos Vela goals saw Sociedad through, leaving question marks over some members of the Lyon squad.
Striker Bafetimbi Gomis continues to be linked with Newcastle while highly-rated midfielder Clement Grenier has caught the eye of several top clubs.
Grenier, 22, has pledged his future to the Stade Gerland club, for now at least, telling RMC Sport: "There is no question to ask. I will stay at least one more season.
"I do not want to let go of the boat. It'll be hard (when I do) but then I must ask the president. But I'm good at Lyon."