Shopify’s stock went up by 22% in early trading on Wednesday. This happened because the company did better than expected in the second quarter, even though people were spending money carefully.
Strong Performance/Shopify Shares Jump
| Earnings | 26 cents per share (expected: 20 cents) |
| Revenue | $2.05 billion (expected: $2.01 billion) |
More Sales
Shopify said the total value of items sold on its platform (gross merchandise volume) went up by 22% to $67.2 billion. This was higher than the expected $65.8 billion.
What Shopify Does
Shopify sells software and services like advertising and payment tools for online businesses. The company’s CFO, Jeff Hoffmeister, said Shopify gained more market share during the quarter, even though people are spending money more carefully due to economic challenges.
Competition and Consumer Spending
Other e-commerce companies like Amazon, Etsy, and Wayfair have said that people are being careful with their spending. Often, they are choosing cheaper brands and looking for deals.
Shopify’s Advantage
During a call with investors, Shopify’s leaders said their merchants (businesses using Shopify) are doing better than others. This is because Shopify has a wide range of different businesses using its platform.
Shopify President Harley Finkelstein said, “Our merchants are doing better because we have a very diverse range of businesses and locations.”
Future Expectations
For the third quarter, Shopify expects its revenue to grow by 20-25% compared to last year. Analysts think sales will grow by 21% to $2.07 billion.
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