Canada’s Shopify topped Wall Street estimates for fourth-quarter revenue and profit on Tuesday, riding on demand for its ecommerce services from merchants during the holiday shopping season.
However, the company’s U.S.-listed shares, which had more than doubled last year, fell more than nine per cent as of 11:00 a.m. ET.
“Shopify reported a strong quarter and exceeded revenue growth expectations. While guidance for the first quarter was also healthy, it may not be enough given high investor expectations,” said Gil Luria, analyst at D.A. Davidson.
Total revenue rose 24% to $2.14 billion for the three months to December, higher than analysts’ average estimate of $2.08 billion, according to LSEG data.
Shopify to lay off 20% of staff in another round of cuts
On an adjusted basis, Shopify earned 34 cents per share, beating expectations of 31 cents.
Shopify, which offers tools and services for businesses to set up their online stores, has launched new tools and offerings along with artificial intelligence products to stay ahead in a competitive e commerce space.
Get the latest Money 123 news.
Sent to your email, every week.
Merchants on the platform reached a record of $9.3 billion in sales over the Black Friday-Cyber Monday weekend, the company had said in November, a 24% increase from a year earlier.
The company expects first-quarter revenue to grow at a low-20s percentage rate, while analysts were expecting a 20% rise.
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Sriraj Kalluvila)