ecommerce
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Shopify beat earnings. Its shares plunged anyway.

The ecommerce company surpassed analyst estimates for the fourth quarter. But Wall Street was focused on the future.

Shopify logo

Shopify attributed this year's slower growth to the absence of “COVID-triggered acceleration."

Image: Protocol

Shopify reported record revenue of $1.38 billion for the fourth quarter, surpassing analysts' consensus forecast of $1.34 billion. But the beat wasn't enough for Wall Street. Its shares tumbled by 18% Wednesday after the company reported a slower growth outlook.

The slower growth as compared to last year was attributed by Shopify to the absence of “COVID-triggered acceleration [...] in the form of lockdowns and government stimulus,” as well as “caution around inflation and consumer spend near term.” In other words, the pandemic boost to ecommerce is fading.

Shopify said it still expected to grow faster than the ecommerce industry as a whole, and expects growth to pick up speed again in the second half of the year, as it predicts that “certain commercial initiatives and sales and marketing investments will gain momentum over the course of 2022.”

Lindsey Choo
Lindsey Choo is a former Protocol reporter covering fintech. She is a graduate of UC San Diego, where she double majored in communications and political science. She has previously covered healthcare issues for the Center for Healthy Aging and was a senior staff writer for The UCSD Guardian. She can be reached at lchoo@protocol.com.
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