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UPDATE 2-Shopify rides online shopping wave to crush profit, revenue estimates

(Adds analyst comment)

April 28 (Reuters) - Canada’s Shopify Inc, on Wednesday smashed first-quarter profit and revenue estimates on resilient demand for the company’s e-commerce platform from businesses despite a gradual opening of economies.

The company, which provides infrastructure for retailers to set up their stores online, emerged as a pandemic winner with revenue soaring 86% last year from 2019 and shares nearly doubling to make it Canada’s most valuable firm.

U.S.-listed shares of the Ottawa-based company rose nearly 5% in early trading on Wednesday, while its Canadian stock gained 4%.

“Shopify saw real strength again during the quarter, and with total volume growth on the platform accelerating from 4Q, it’s clear their role in the retail ecosystem continues to get stronger,” said Wedbush analyst Ygal Arounian.

In the first quarter, Shopify’s revenue soared 110% to $988.6 million, above analysts’ average estimate of $865.5 million. Adjusted profit of $2.01 per share was also well ahead of estimates of 73 cents.

Gross merchandise volume (GMV), a widely watched figure for the e-commerce industry’s performance, surged 114% to $37.3 billion in the quarter ended March 31. Analysts on average had expected $34.38 billion, according to IBES data from Refinitiv.

“To see merchants growing at the best pace ever except last year and expectations for continued strong revenue growth on COVID-19 comps means Shopify is not giving back any of the gains it saw during the pandemic,” added Arounian.

Shopify, which generates revenue mainly through subscription and merchant services, reiterated it expects to grow revenue rapidly this year but at a slower rate than in 2020. It comes as COVID-19 vaccine rollouts and easing of curbs encourage shoppers to return to brick-and-mortar stores.

Earlier this month, the company said three of its seven top executives will be leaving in the coming months.

Reporting by Tiyashi Datta in Bengaluru; Editing by Sriraj Kalluvila

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