(Reuters) -Canada’s Shopify beat second-quarter revenue expectations on Wednesday, helped by new signups and price increases across its services.
Merchants and businesses are turning to Shopify, which offers tools to create and manage online store-fronts, as retail spending picks up on signs of stabilizing macroeconomic conditions.
The company is also benefiting from its wide gamut of services, from payments to marketing, which is helping it sell users of one service more expensive bundled plans.
“We’re not just shipping products faster, but we are also expanding our global merchant base,” said Harley Finkelstein, president at Shopify.
Total revenue grew 31% to $1.7 billion in the quarter ended June 30 and beat analysts’ average estimate of $1.62 billion.
Gross merchandise volume – or the total value of orders facilitated through the Shopify platform – grew 17%, to $55 billion, compared to expectations of $53.34 billion.
Following the results, Shopify’s U.S.-listed shares, which have surged nearly 80% so far this year, added 7% before settling marginally higher in extended trading.
The increase in Shopify’s share price this year comes amid a rejig in its business as a result of revenue growth slowing to about 20% in 2023 from an average of 60% in 2017-21, according to Refinitiv data.
The company had in May decided to lay off 20% of its workforce and divest its logistics arm to freight forwarder Flexport, sharpening its focus on cutting costs.
Shopify had raised the prices of some of its services plans that went into effect in January and April.
In the quarter ending September, it expects revenue growth at “low-twenties” percentage compared to analysts’ expectations of 17.2% growth.
(Reporting by Yuvraj Malik and Akshita Toshniwal in Bengaluru; Editing by Pooja Desai and Arun Koyyur)
