Wrapping up Q4 earnings, we look at the numbers and key takeaways for the e-commerce software stocks, including Shopify (NYSE:SHOP) and its peers.
While e-commerce has been around for over two decades and enjoyed meaningful growth, its overall penetration of retail still remains low. Only around $1 in every $5 spent on retail purchases comes from digital orders, leaving over 80% of the retail market still ripe for online disruption. It is these large swathes of the retail where e-commerce has not yet taken hold that drives the demand for various e-commerce software solutions.
The 6 e-commerce software stocks we track reported a slower Q4; on average, revenues beat analyst consensus estimates by 1.38%, while on average next quarter revenue guidance was 0.52% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but e-commerce software stocks held their ground better than others, with the share prices up 0.72% since the previous earnings results, on average.
Best Q4: Shopify (NYSE:SHOP)
Originally created as an internal tool for a snowboarding company, Shopify (NYSE:SHOP) provides a software platform for building and operating e-commerce businesses.
Shopify reported revenues of $1.73 billion, up 25.7% year on year, beating analyst expectations by 5.11%. It was a strong quarter for the company, with a decent beat of analyst estimates and solid revenue growth.
"Since the very beginning, Shopify's mission has been to level the playing field for our merchants by lowering barriers, simplifying operations, and leveraging our scale to give them the superpowers they need to compete globally. The strength of our Q4 and full year performance in 2022 is a testament to the resilience of our merchants. Despite persistent macroeconomic challenges, they continued to succeed on Shopify, growing sales and using more of our mission-critical tools to run their businesses," said Harley Finkelstein, Shopify President.
Shopify pulled off the strongest analyst estimates beat and fastest revenue growth of the whole group. The stock is down 12.4% since the results and currently trades at $46.75.
Is now the time to buy Shopify? Access our full analysis of the earnings results here, it's free.
Squarespace (NYSE:SQSP)
Founded in New York City in 2003, Squarespace (NYSE:SQSP) is a platform for small businesses and creators to build their digital presences online.
Squarespace reported revenues of $228.8 million, up 10.3% year on year, beating analyst expectations by 2.99%. It was a solid quarter for the company, with very strong guidance for the next quarter and the full year.
Squarespace achieved the highest full year guidance raise among its peers. The stock is up 30.6% since the results and currently trades at $31.4.
Is now the time to buy Squarespace? Access our full analysis of the earnings results here, it's free.
Weakest Q4: BigCommerce (NASDAQ:BIGC)
Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce (NASDAQ:BIGC) provides software for businesses to easily create online stores.
BigCommerce reported revenues of $72.4 million, up 11.6% year on year, missing analyst expectations by 1.24%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
BigCommerce had the weakest performance against analyst estimates and weakest full year guidance update in the group. The stock is down 25% since the results and currently trades at $8.5.
Read our full analysis of BigCommerce's results here.
GoDaddy (NYSE:GDDY)
Founded by Bob Parsons after selling his first company to Intuit, GoDaddy (NYSE:GDDY) provides small and mid-sized businesses with the ability to buy a web domain and tools to create and manage a website.
GoDaddy reported revenues of $1.04 billion, up 2.02% year on year, missing analyst expectations by 0.31%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and slow revenue growth.
GoDaddy had the slowest revenue growth among the peers. The stock is down 7.45% since the results and currently trades at $75.
Read our full, actionable report on GoDaddy here, it's free.
The author has no position in any of the stocks mentioned