Shopify is the latest ecommerce company to take a post-pandemic hit, which isn't surprising given that not even Amazon was immune to the changing tide of online shopping.
Shopify reported underwhelming earnings of 20 cents per share, far below analyst expectations of 63 cents per share. The company also announced its acquisition of Deliverr, a fulfillment tech provider that provides services for Amazon and other marketplaces, for $2.1 billion in cash and stock.
“While we’ve experienced massive macro shifts since the start of the pandemic, the one mainstay has been that Shopify is the commerce platform of choice for merchants in any environment, with the ability to support commerce on any surface,” Shopify President Harley Finkelstein said in a release. "This has earned Shopify significant merchant trust and the ability to help them with more parts of their business, which is why we are eager to bring Deliverr’s team and technology to our merchants."
The company's revenue increased year-over-year to $1.2 billion but still fell below expectations of $1.24 billion. The company said it expects growth to be lower in the first half of 2022 as the pandemic tapers off. Its shares dropped more than 16% on the news of its earnings.
Deliverr is Shopify's biggest purchase to date. The company ships more than a million orders per month.
"We are confident Deliverr’s ability to simplify the process, and arm merchants with visibility and control from the display of a delivery promise across multiple channels through its completion, will be a huge benefit to our merchants," Shopify CFO Amy Shapero said in a statement.
Shopify isn't the only ecommerce company to report slower growth. EBay's second-quarter outlook also fell below expectations, which the company blamed on inflation, the war in Ukraine and changing online consumer habits. Etsy also expects to take a hit this year as people return to stores for shopping.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE