Shopify shares plunge 18% on weak guidance

Shopify

reported
first-quarter
earnings
and
sales
on
Wednesday
that
were
ahead
of
Wall
Street
expectations,
but
it
gave
a
downbeat
forecast
for
the
current
quarter.

Shares
dropped
as
much
as
18%
in
premarket
trading.

Here’s
how
the
company
did
for
the
quarter,
compared
with
consensus
expectations
from
LSEG:

• 
  Earnings
  per
  share:
  20
  cents
  adjusted
  vs.
  17
  cents
  expected
• 
  Revenue:
  $1.86
  billion
  vs.
  $1.85
  billion
  expected

Gross
margins
for
the
second
quarter
are
expected
to
decrease
by
about
50
basis
points
compared
to
the
first
quarter,
as
a
result
of
the
sale
of
Shopify’s
logistics
business
to
freight
forwarder
Flexport

last
May.

Shopify
said
it
expects
second-quarter
revenue
to
grow
at
a
high-teens
percentage
rate
year-over-year,
a
slowdown
from
the
previous
period.
The
company
has
posted
year-over-year
revenue
growth
in
the
low-to-mid
twenties
for
the
past
six
quarters.
Second-quarter
revenue
would
grow
in
the “low-to-mid-twenties”
year-over-year
when
adjusting
for
the
divestiture
of
the
logistics
business,
Shopify
said.

The
company
reported
a
net
loss
of
$273
million,
or
21
cents
a
share,
compared
with
a
profit
of
68
million,
or
5
cents
a
share,
during
the
year-ago
quarter.

Shopify,
which
makes
tools
for
companies
to
sell
products
online,
said
gross
merchandise
volume,
or
the
total
volume
of
merchandise
sold
on
the
platform,
increased
23%
to
$60.9
billion.
That
surpassed
consensus
expectations
of
$59.5
billion,
according
to
StreetAccount.