Shopify (SHOP.US), a Canadian e-commerce company, reported second-quarter earnings before items of $26 million, or $0.26 per share, beating Wall Street's expectations of $0.20 per share. Revenue was $2.05 billion, up 21% year-over-year, above the $2 billion expected by analysts. Shares jumped after the announcement, up 18% at the time of writing.
Additionally, second-quarter gross merchandise volume (GMV) grew 22% to $67.2 billion, above the $65.7 billion expected by analysts. The company's gross margin was 51.1%, up from 49.3% in the prior quarter. The stock has fallen about 30% this year, but has more than doubled in 2023.
Looking ahead, the company expects third-quarter revenue growth of 21% to 26%, above the 21% expected by analysts. It expects gross margin to improve by about 50 basis points from the current quarter.
Shopify has been focused on addressing the issue of slowing revenue growth in recent quarters. To drive growth, CEO Harley Finkelstein has pledged to invest heavily in marketing, even if it may impact margins.
The company also recently laid off more than 2,000 employees and made a significant strategic shift, selling off most of its logistics division and agreeing to let merchants use Amazon's "Buy with Prime" service to ship packages.
The Canadian e-commerce company is trying to navigate the increasingly cautious consumer spending environment. Notably, other consumer companies reported last week that they too were facing this trend, with Amazon (AMZN.US) saying that shoppers continued to buy cheap goods and Wayfair (W.U) CEO saying that the decline in home goods demand was the worst since the 2008 financial crisis.