Shopify Inc. SHOP-T -9.02%decreaseSHOP-T -9.02%decrease topped analyst expectations with double-digit revenue growth in its first quarter, but its shares fell in premarket trading as it recorded a net loss as a result of its equity investments in other companies and projected slowing revenue and profit-margin growth in the current quarter.
The Ottawa-based company, which provides tools for businesses to run their stores online, said its revenue was US$3.1-billion for the quarter ended March 31, up 34 per cent from the same period last year, beating analyst expectations of $3-billion.
Gross merchandise value (GMV) – thetotal sales through its platform– increased nearly 35 per cent to US$101-billion over the quarter, compared to an analyst consensus of US$98.7-billion.
This represents the company’s fourth consecutive quarter of GMV growth at a rate of more than 30 per cent, Royal Bank of Canada analyst Paul Treiber said in a note to investors Tuesday morning.
Shopify reported a net loss of US$581-million for the quarter, compared with a net loss of US$682-million a year earlier, owing to a US$941-million loss on its equity investments, marked to market, net of taxes.
Tech stocks were once again hit during the quarter on concerns about the impact of artificial intelligence on software, as well as geopolitical turmoil.
Excluding the impact of those equity investments, the company’s net income was US$360-million.
Shopify’s stock on the Toronto Stock Exchange was down 19 per cent from the beginning of the year before markets opened Tuesday morning.
Shopify Inc
The company’s share price fell 8 per cent in premarket trading, as it lowered its second-quarter guidance compared to estimates it provided last quarter.
Shopify is now projecting revenue growth in the high twenties, while it had guided for growth in the low thirties three months ago. It is expecting second-quarter gross profit growth in the mid-twenties, compared to previous guidance in the high twenties.
However, these estimates came in mostly above what analysts were expecting, according to Mr. Treiber.
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