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Shopify President Harley Finkelstein said the results show the company is showing “greater speed and agility.” Dreamstime
Shopify posted better-than-expected results for the second quarter, sending share of the e-commerce software provider higher in late trading Wednesday.
For the quarter, Shopify (ticker: SHOP) posted revenue of $1.7 billion, up 31% from a year earlier, and ahead of the Wall Street consensus forecast of $1.63 billion. Revenue growth accelerated from 25% in the March quarter.
On an adjusted basis, Shopify earned 14 cents a share, well ahead of the consensus call for six cents. Under generally accepted accounting principles, the company lost $1.3 billion, or $1.02 a share, largely reflecting a $1.34 billion impairment charge related to the sales of the company’s former logistics business.
Gross merchandise volume was $55 billion, up 17% from the year earlier quarter, and above the consensus of $53.5 billion.
For the third quarter, Shopify sees revenue increasing at a percentage in the low 20s from the year-earlier level. Adjusting for the recent sale of the logistics business would boost the growth rate by 3 to 4 percentage points. Street consensus estimates had implied 18% growth.
Shopify expects third-quarter gross margin will be 2 to 3 percentage points above the 49.3% recorded in the second quarter. The company also said that third- quarter free cash flow should exceed the combined total for the first two quarters of the year.
One quarter earlier, the company had announced plans to cut 20% of its staff, while also selling its logistics business to Flexport, a deal that has since closed.
President Harley Finkelstein said in an interview that the second-quarter results reflect “the new shape of Shopify,” and that the company is showing “greater speed and agility, shipping more products and at a faster clip.” He noted that the company’s growth in gross merchandise value was faster than for the overall e-commerce market.
The strong results bode well for Amazon.com (AMZN), which will report its June quarter results on Thursday afternoon.
Shopify shares, which tumbled 7.4% in the regular session, were 0.4% higher in late trading to $62.73. The stock is up about 80% for the year to date.
Write to Eric J. Savitz at [email protected]
