Text size
Shopify posted a surprise first-quarter profit.
Dreamstime
Shopify
stock jumped in premarket trading Thursday after the e-commerce software company’s eventful first-quarter earnings report.
The company announced it was selling off its logistics business, will be cutting 20% of its workforce, and posted an unexpected profit in its first quarter.
Shopify
will be selling its logistics business to global logistics company Flexport. Under the transaction, Shopify will receive stock representing a 13% of equity interest in Flexport, on top of its existing equity interest. Flexport will become Shopify’s preferred logistics partner.
As part of the sale, Shopify will be laying off about 20% of its staff, the company said in a press release. The company expects to incur a severance charge of up to $150 million in the second quarter tied to the workforce reduction.
Shopify
(ticker: SHOP) reported first-quarter adjusted earnings of 1 cent a share, better than the Wall Street consensus forecast for a loss of 4 cents. Sales of $1.5 billion jumped 25% from the year-ago quarter, and were ahead of estimates of $1.4 billion.
Gross merchandise volume on the company’s platform, a key indicator for online retailers, increased 15% to $49.6 billion. Analysts were expecting that figure to come in at $47.7 billion.
The company also provided an update to its second-quarter guidance. Shopify now expects revenue to grow at a similar rate to the first quarter. Wall Street is currently projecting revenue could clock in at $1.57 billion for the June quarter, implying a 9% increase.
Shares of Shopify surged 16% ahead of Thursday’s opening bell, while futures for the
Nasdaq Composite
ticked down 0.1% and the
S&P 500
fell 0.4%. The stock has risen 33% this year.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
