(Bloomberg) -- Shopify Inc. reported second-quarter sales and profit that beat analysts’ estimates, showing that the Canadian e-commerce company is managing to navigate cautious consumer spending. The shares surged.
Revenue for the period came in at US$2.05 billion, up about 21 per cent year-over-year and beating the $2 billion average estimate of analysts surveyed by Bloomberg. Profit, excluding one-time items, was 26 cents a share, above the 20 cents expectation.
Percentage revenue growth for the current quarter ending in September will be in the low to mid twenties on a year-over-year basis, Shopify said in a statement Wednesday. Analysts were looking for 21 per cent growth.
The U.S.-traded shares rose about 18 per cent in pre-market trading. The stock had been down about 30 per cent so far this year after more than doubling in 2023.
Shopify has been struggling with slowing revenue growth in recent quarters. In an effort to kick-start growth, President Harley Finkelstein has pledged to invest heavily in marketing even if doing so crimps profit margins.
Signs of consumer caution emerged in other earnings reports last week. Amazon.com Inc. said shoppers continued to trade down to lower-cost items, and Wayfair Inc.’s chief executive officer said demand for home goods has declined to an extent not seen since the 2008 financial crisis.
Last year Shopify cut more than 2,000 jobs, then — in a major strategic reversal — sold most of its logistics unit and agreed to let merchants use Amazon’s “Buy with Prime” service to deliver packages.
Gross merchandise volume, the overall value of merchant sales across Shopify’s systems, increased 22 per cent in the second quarter to $67.2 billion, beating Wall Street projections of $65.7 billion.
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