- Shopify surprised investors by reporting unexpected losses in the first three months of this year.
- The e-commerce platform posted a loss of $273 million in the first quarter.
- It hit a new low following a booming period during the COVID-19 pandemic.
Shopify shares plunged almost 20% on Wednesday after the e-commerce giant fell into the red in the first three months of this year.
The Canadian online seller platform posted a net loss of $273 million in the first quarter, down from a profit of $68 million a year earlier.
Despite sales increasing 23% year-on-year to $1.9 billion, the company was in the red. Shopify also said it expects gross profit to decline 50 basis points in the second quarter due to the sale of its logistics business to supply chain firm Flexport in 2023.
The stock was trading at about $62.50, giving the company a value of about $80 billion. The plunge wiped out about $20 billion in market capitalization, wiping out all the gains from the previous 12 months.
The loss marks an unexpected decline for Shopify, which hit a low last year around October 2022 and has clawed back some of the profits it made during online shopping during the pandemic.
The company has also made several rounds of layoffs, including a significant 20% reduction in its workforce last May.
Shopify President Harley Finkelstein told investors Wednesday that “we're looking at the strongest version of Shopify” in the company's history, insisting the goal is to build a “100-year company.”
“Our outstanding first quarter performance reflects our commitment to a new shape for Shopify, our commitment to operating at a consistent team size, and our focus on building for the long term to deliver both growth and profitability. “This is clear evidence that this is the case,” he said.
