Shares in Canadian e-commerce company Shopify dipped this week as the company posted a wider-than-expected Q1 loss and issued a cautious profit forecast, despite revenue and gross merchandise volume (GMV) growth that largely met expectations.
Shopify reported first-quarter revenue of US$2.36 billion (A$3.61 billion), up 27% year-on-year and slightly ahead of analyst forecasts.
GM, representing the total value of sales processed through the platform, rose 22.8% to US$74.75 billion (A$114.37 billion), just below consensus estimates of US$74.8 billion (A$114.45 billion).
However, the company posted a net loss of US$682 million (A$1.04 billion), more than double the US$273 million (A$418 million) loss a year earlier.
The shortfall, driven partly by a US$900 million (A$1.38 billion) markdown on equity investments, spooked investors, sending Shopify’s stock down as much as 6.7% in early trading before recovering slightly.
Shopify’s CFO Jeff Hoffmeister said the loss will not derail its growth plans, noting ongoing investment in platform development, international expansion, and enterprise offerings.
“We are still a growth company,” he said on an earnings call, adding that the company expects Q2 revenue to grow in the mid-20% range, with gross profit dollars growing at a high-teens percentage.
Investors are keeping a close eye on how US trade policy might impact Shopify and its merchants. The recent end of the U.S. “de minimis” tariff exemption for low-value Chinese imports is not expected to significantly affect the company, with only about 1% of GMV tied to those imports.
Shopify President Harley Finkelstein (pictured) said the platform is helping merchants adapt through new tools and resources, including duties calculators and updated shipping guides.
“We’re staying ahead of evolving trade conditions so our merchants can too,” he said.
