Share of companies realizing international e-commerce global e-online (NASDAQ:GLBE) Shares rose on Monday after the company announced its first quarter 2024 financial results. As of 11:30 a.m. ET, Global-e stock was up just 6%, compared with a 20% jump earlier in the day.
Growth is faster than expected
Global-e's software allows companies to easily operate e-commerce businesses across borders. In the first quarter, the company's merchandise volume was $930 million, up 32% year over year and exceeding management's most optimistic guidance of $915 million.
Global-e's sales and adjusted earnings were slightly higher than expected, given that it has more business than expected. As a result, management modestly raised his 2024 guidance for both categories. Ultimately, I think it's this increased financial guidance that is why investors are rooting for Global-e stock to rise today.
Global-e is increasing profitability
There are currently two particularly encouraging trends in Global-e's business. First, the company's gross profit margin has consistently increased as it has grown. As the graph shows, the same is true for free cash flow.
GLBE Gross Margin (Quarterly) Data by YCharts
That's how a software company like Global-e should be, but it's not always the case. Therefore, shareholders should be encouraged that the company is gaining operating leverage as it grows.
At the midpoint of management's revised guidance, Global-e expects sales to increase approximately 32% this year, thanks to several key partnerships. That's nothing to sneeze at. And if all these trends continue on their current trajectory, that bodes well for Global-e shareholders in the long term.
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John Quast has no position in any stocks mentioned. The Motley Fool is affiliated with and recommends Global-E Online. The Motley Fool has a disclosure policy.
