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Unpacking Q1 Earnings: Squarespace (NYSE:SQSP) In The Context Of Other E-commerce Software Stocks


Max Juang /
2024/07/09 3:46 am EDT

Looking back on e-commerce software stocks' Q1 earnings, we examine this quarter's best and worst performers, including 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 6 e-commerce software stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 1.5%. while next quarter's revenue guidance was in line with consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, but e-commerce software stocks have shown resilience, with share prices up 9.3% on average since the previous earnings results.

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 $281.1 million, up 18.6% year on year, topping analysts' expectations by 1.7%. It was a decent quarter for the company, with an impressive beat of analysts' billings estimates but a decline in its gross margin.

"We had a strong start to 2024, with Q1 revenue growing 19% and bookings growing 23%" said Anthony Casalena, Founder & CEO of Squarespace.

Squarespace Total Revenue

Squarespace scored the highest full-year guidance raise of the whole group. The stock is up 23.3% since the results and currently trades at $43.69.

Is now the time to buy Squarespace? Access our full analysis of the earnings results here, it's free.

Best Q1: 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 $80.36 million, up 12% year on year, outperforming analysts' expectations by 4.1%. It was a solid quarter for the company, with an impressive beat of analysts' billings estimates and full-year revenue guidance topping analysts' expectations.

BigCommerce Total Revenue

BigCommerce delivered the biggest analyst estimates beat among its peers. The stock is up 18.1% since the results and currently trades at $7.91.

Is now the time to buy BigCommerce? Access our full analysis of the earnings results here, it's free.

Slowest Q1: 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 $419.8 million, up 12.2% year on year, in line with analysts' expectations. It was a mixed quarter for the company, with a decent beat of analysts' billings estimates but a decline in its gross margin.

Wix had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is up 14.5% since the results and currently trades at $155.62.

Read our full analysis of Wix'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 $1.11 billion, up 7% year on year, surpassing analysts' expectations by 1.1%. It was an ok quarter for the company, with a solid beat of analysts' bookings estimates but a decline in its gross margin.

The stock is up 15.6% since the results and currently trades at $143.68.

Read our full, actionable report on GoDaddy here, it's free.

VeriSign (NASDAQ:VRSN)

While the company is not a domain registrar and does not directly sell domain names to end users, Verisign (NASDAQ:VRSN) operates and maintains the infrastructure to support domain names such as .com and .net.

VeriSign reported revenues of $384.3 million, up 5.5% year on year, in line with analysts' expectations. It was an ok quarter for the company. VeriSign beat analysts' revenue and EPS estimates this quarter as it processed 9.5 million new domain name registrations.

VeriSign had the slowest revenue growth among its peers. The stock is down 3.4% since the results and currently trades at $176.54.

Read our full, actionable report on VeriSign here, it's free.

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