Canadian e-commerce platform Shopify Inc’s stock tumbled more than 21 per cent in morning session in New York on Wednesday after announcing financial results.
At 11:55 a.m. EDT on Wednesday, Shopify Inc shares were at $62.40, down 19.01 per cent on the New York Stock Exchange (NYSE).
The company posted a loss of $273 million in the first quarter after a profit of $68 million a year ago.
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The loss per share was 21 cents on revenue of $1.86 billion, Shopify said in a statement on Wednesday.
Subscription Solutions revenue was $511 million, a 34 per cent jump from a year earlier, helped by the price increases and more merchants using its services.
Last year, Shopify shares had rallied more than 120 per cent.
According to Shopify, the sale of its logistics business to Flexport weighed on its financial results.
Ottawa-based Shopify said it expects revenue in the second quarter to grow at a high-teens percentage pace. Gross margins for the second quarter are expected to fall by about 50 basis points.
Shopify also expects operating expenses to increase by a low-to-mid-single digit percentage rate in the second quarter, compared with a 4 per cent fall in the first three months of the year.
Last year in May, Shopify had laid off more than 2,000 staff in a cost-cutting measure.
Gross merchandise volume, the overall value of merchant sales across Shopify’s systems, increased 23 per cent in the first quarter to $60.9 billion.
Shopify’s finance chief Jeff Hoffmeister said price increases will provide a smaller benefit in the current quarter compared to the prior period.
“In the second quarter, we begin to lap the initial pricing changes on our standard plans that went into effect in April of 2023, resulting in a headwind to our revenue growth quarter-over-quarter.”
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Published: 08 May 2024, 09:39 PM IST
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