Shares of Shopify popped as much as 20% in afternoon trading Wednesday after the Canadian e-commerce company topped expectations for the second quarter, citing strong demand despite “a mixed consumer spend environment.”
Here’s how the company did compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: 26 cents vs. 20 cents expected
- Revenue: $2.05 billion vs. $2.01 billion expected
The company said gross merchandise volume, or the total volume of merchandise sold on the platform, jumped 22% during the quarter to $67.2 billion. That easily topped consensus estimates of $65.8 billion, according to FactSet.
Shopify sells software for merchants who run online businesses as well as services such as advertising and payment processing tools. Jeff Hoffmeister, Shopify’s CFO, said in a statement the company continued to “take share” during the quarter even as consumer spending remains in flux amid a rocky economic backdrop.
Rival e-commerce companies including Amazon, Etsy and Wayfair have all said in earnings reports in recent weeks that consumers continue to be cautious about their spending and are in some cases “trading down” to cheaper brands while hunting for deals.
On a conference call with investors, Shopify executives said its merchants have been able to navigate the consumer slowdown, a factor it attributed to the “very diverse set” of businesses that use its platform.
“I think that our merchants do seem to be, you know, outperforming and doing better than others,” Shopify President Harley Finkelstein said on the call. “And I think a big part of the reason that we are not seeing the same thing that others might is because we simply have merchants across a ton of verticals and across a ton of [geographies].”
For the third quarter, Shopify said it expects revenue to grow at a low-to-mid-20s percentage rate year over year. Analysts surveyed by FactSet expect sales to grow 21% year over year to $2.07 billion.
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