tl;dr
Shopify (NYSE:SHOP) shares are down as much as 17% ahead of Wednesday’s open following the company’s latest quarterly results. The results were overshadowed by a GAAP loss and expectations for a 50 basis point decline in its gross margin. CEO Harley Finkelstein stated, “You’re seeing the strongest v...
Shopify (NYSE:SHOP) shares are down as much as 17% ahead of Wednesday’s open following the company’s latest quarterly results. The results were overshadowed by a GAAP loss and expectations for a 50 basis point decline in its gross margin. CEO Harley Finkelstein stated, “You’re seeing the strongest version of Shopify in our history.” However, investors are focusing on the $0.21 loss per share in net income compared to a profit of $0.05 in the same quarter last year, attributed to higher costs for subscription services, merchant solutions, and increased marketing expense. This missed analysts’ estimates for a profit of $0.08 per share. Gross margin is expected to shrink 50 basis points in Q2, potentially an adjustment from Q1 where gross margin had expanded to 51.4% from 47.5% due to the lack of dilutive impact of the logistics business and changes in pricing from standard plans. Other Q2 projections include revenue growth of high-teens percentage rate, translating into year-over-year growth rate in the low-to-mid-twenties when adjusted for the 300-400 basis point impact from the sale of the logistics unit. GAAP operating expense dollars in Q2 are expected to be up at a low-to-mid-single digit percentage rate, resulting in operating expenses as a percentage of revenue of around 45% to 46%. Free cash flow margin should remain in the double digits. Shares are expected to open at their lowest level since November.
More about Shopify Inc
Shopify Inc. Summary Shopify Inc.
Shopify Inc., a commerce company, offers a commerce and service platform in Canada, the United States, the United Kingdom, Australia, Latin America, and internationally. The company is headquartered in Ottawa, Canada.
Company Information
Sector: TECHNOLOGY
Industry: SERVICES-PREPACKAGED SOFTWARE
Key Financials
Market Cap: 99470533000
Stock Price: 772.04
Dividend Yield: None
P/E Ratio: 82.93
EPS: 5.51
Beta: 0.1
ROE: 4.858%
Debt to Equity: 0.236
Revenue: 7060000000
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