As we reflect back on the just completed Q2 e-commerce software sector earnings season, we dig into the relative performance of Squarespace (NYSE:SQSP) 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 5 e-commerce software stocks we track reported a weak Q2; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 2.41% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows and while some of the e-commerce software stocks have fared somewhat better that others, they have not been spared, with share prices declining 7.46% since the previous earnings results, on average.
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 $212.7 million, up 8.51% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analysts' expectations.
"Squarespace achieved $213 million in revenue, growing 12% year over year in constant currency," said Anthony Casalena, Founder & CEO of Squarespace.
Squarespace delivered the slowest revenue growth and weakest full year guidance update of the whole group. The stock is up 4.76% since the results and currently trades at $20.87.
Read our full report on Squarespace here, it's free.
Best Q2: 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 $68.2 million, up 39.1% year on year, beating analyst expectations by 3.08%. It was a mixed quarter for the company, with an exceptional revenue growth but an underwhelming revenue guidance for the next quarter.
BigCommerce scored the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The stock is down 31.1% since the results and currently trades at $12.65.
Is now the time to buy BigCommerce? Access our full analysis of the earnings results here, it's free.
Weakest Q2: 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 $1.29 billion, up 15.6% year on year, missing analyst expectations by 2.67%. It was a weak quarter for the company, with a miss of the top line analyst estimates and a slow revenue growth.
Shopify had the weakest performance against analyst estimates in the group. The stock is down 7.81% since the results and currently trades at $26.05.
Read our full analysis of Shopify's results here.
Founded in 2006 in Tel Aviv, Wix.com (NASDAQ:WIX) offers a free and easy to operate website building platform.
Wix reported revenues of $345.2 million, up 9.1% year on year, in line with analyst expectations. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.
The stock is up 1.94% since the results and currently trades at $70.11.
Read our full, actionable report on Wix here, it's free.
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 $1.01 billion, up 9.04% year on year, in-line with analyst expectations. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analysts' expectations.
The stock is down 5.02% since the results and currently trades at $71.77.
Read our full, actionable report on GoDaddy here, it's free.
The author has no position in any of the stocks mentioned