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.
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 $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 Total Revenue](https://news-assets.stockstory.org/chart-images/Squarespace-Total-Revenue_2022-10-17-073744_yvfl.png)
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 Total Revenue](https://news-assets.stockstory.org/chart-images/BigCommerce-Total-Revenue_2022-10-17-073746_zzlq.png)
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.
Wix (NASDAQ:WIX)
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.
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 $1.01 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