Shopify earnings and revenue and for the second quarter topped analyst estimates on Wednesday as gross merchandise volume slowed from previous quarters. Shopify stock fell as the e-commerce software firm updated its 2021 outlook but did not provide specific guidance.
Canada-based Shopify (SHOP) said it earned $2.24 per share on an adjusted basis in the quarter ended June 30, including gains on equity investments, up 113% from a year earlier. Revenue jumped 57% to $1.12 billion, the company said.
Analysts expected Shopify earnings of 97 cents a share on revenue of $1.04 billion. A year earlier, Shopify earned $1.05 per share on revenue of $714 million.
Gross merchandise volume from merchant customers rose 40% to $42.2 billion vs. estimates of $40.28 billion. GMV increased 114% in the March quarter and 99% in the December quarter.
In the second quarter, Shopify added 85,000 net merchants, less than the 145,000 added in the previous quarter, Jefferies analyst Samad Samana said in a report to clients.
Shopify Earnings: Higher Investments Expected
“Due to the sustained momentum of digital commerce trends in the first half of 2021 combined with the U.S. stimulus distributed in March and April of 2021, Shopify generated higher-than-anticipated revenue while incurring lower-than-planned operating expenses as a percent of revenue in the first half of 2021,” the company said in a release. “As a result, we now expect full-year 2021 adjusted operating income to be above the level we achieved in 2020.”
Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping. The e-commerce firm has stepped up business lending amid the coronavirus emergency.
“We continue to expect rapid growth in gross profit dollars in 2021 and plan to continue reinvesting back into our business as aggressively as we can, with the year-over-year growth in operating expenses accelerating in Q3 and again in Q4,” the company said.
Shopify stock fell 1.1% to close at 1,538 on the stock market today. Heading into the Shopify earnings report, the stock traded just within a buy zone. Shopify stock belongs to the IBD Leaderboard.
Shopify Stock: $7.7 Billion In Cash On Balance Sheet
The company said merchant solutions revenue climbed 52% to $785 million vs. estimates of $715.9 million. In addition, subscription solutions revenue rose 70% to $334.2 million vs. estimates of $328.1 million.
Also, Shopify is building a U.S. distribution network to store and ship products for its merchant customers.
Ahead of the Shopify earnings report, the company had a Relative Strength Rating of 88 out of a possible 99, according to IBD Stock Checkup.
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