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Shopify Swings to 2Q Loss

By Adriano Marchese


Shopify Inc. on Wednesday reported a loss in its second quarter as global e-commerce trends took a different turn than expected post-pandemic.

The Ottawa-based e-commerce company reported a loss of 95 cents a share, compared with a profit of 69 cents a share in the comparable quarter a year ago. The net loss was $1.2 billion, compared with a profit of $879.1 million a year ago.

Spotify said the net loss includes a $1 billion net unrealized loss on its equity and other investments, whereas in the previous year's quarter, it reported a net unrealized gain of $800 million.

Revenue rose to $1.3 billion from $1.12 billion, while analysts expected a rise to $1.33 billion.

Revenues at its merchant solutions segment, the company's largest, rose 18% to $928.6 million while its subscription solutions segment revenue rose to $366.4 million from $334.2 million.

Gross merchandise volume, a key company metric which measures the total value of merchandise sold through its platform, was $46.9 billion, a growth of 11% over the same period in the previous year.

Year-to-date, Shopify's shares have fallen about 77%, largely in step with the greater tech sector which has seen valuations decimated as investors exited en masse.

On Tuesday, shares took a further hit after Founder and Chief Executive Tobi Lutke said in a memo to staff that the consumer shopping habits that drove its success during the Covid-19 pandemic were changing and that it would need to reduce its global workforce by about 10%.

"After expanding the company in anticipation of rapid and sustained structural e-commerce market expansion, which has not materialized, we are recalibrating to meet the new reality," the company said Wednesday.

Expenses have also been higher at Shopify. In May, the company unveiled the $2.1 billion acquisition of fulfillment technology provider Deliverr to build up its own logistics network. The company closed the transaction this month.


Write to Adriano Marchese at


(END) Dow Jones Newswires

July 27, 2022 08:00 ET (12:00 GMT)

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