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Shopify Earnings Top Views. E-Commerce Stock Plunges On Profit Margin Outlook
https://www.investors.com/news/technology/shopify-stock-shopify-earnings-news-q12024/?src=A00220
REINHARDT KRAUSE07:45 AM ET 05/08/2024

Shopify (SHOP) on Wednesday reported first-quarter earnings that topped analyst estimates while revenue edged by views. Shopify stock plunged on the e-commerce firm's guidance for the current June quarter.

Released before the market open, Shopify earnings for the quarter ending March 31 were 20 cents on an adjusted basis. Analysts polled by Visible Alpha predicted profit of 16 cents, up from 1-cent in the year earlier period.

Revenue climbed 23% to $1.9 billion versus estimates of $1.843 billion.

Further, Shopify said Q1 gross merchandise volume from merchant transactions rose 23% to $60.9 billion vs. estimates of $59.67 billion.

Shopify Stock Tumbles

Merchant solutions revenue rose 20% to $1.4 billion vs. estimates of $1.34 billion. Subscription revenue rose 34% to $511 million versus estimates of $499.3 million.

On the stock market today, Shopify stock plunged 17% to 63.80 in early trading. Heading into the earnings report, shares had clawed back above the company's 50-day moving average.

Heading into the Shopify earnings report, shares were up 2% in 2024 and 26% from a year ago.

Revenue, Margin Outlook

For the current June quarter, Shopify said it expects: "Revenue to grow at a high-teens percentage rate on a year-over-year basis, which translates into a year-over-year growth rate in the low-to-mid-twenties when adjusting for the 300 to 400 basis points impact from the sale of our logistics businesses. Gross margin for Q2 is expected to decrease by approximately 50 basis points compared to Q1 2024."

For the June quarter, analysts estimated $2.025 billion in revenue and $65.46 billion in GMV for SHOP stock.

The company in 2023 sold its delivery and logistics business to Flexport, easing Wall Street worries over rising capital spending.

Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping.

Meanwhile, SHOP stock holds a Relative Strength Rating of 77 out of a best-possible 99, according to IBD Stock Check-up.