E-commerce Software Stocks Q2 Teardown: Wix (NASDAQ:WIX) Vs The Rest
Wrapping up Q2 earnings, we look at the numbers and key takeaways for the e-commerce software stocks, including Wix (NASDAQ:WIX) 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 a decent Q2. As a group, revenues beat analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was in line.
Stocks--especially those trading at higher multiples—had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts. Thankfully, e-commerce software stocks have been resilient with share prices up 6.3% on average since the latest earnings results.
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 $435.7 million, up 11.7% year on year. This print was in line with analysts’ expectations, and overall, it was a decent quarter for the company with a solid beat of analysts’ billings estimates but full-year revenue guidance missing analysts’ expectations.
"Excellent Q2 results capped off a strong first half of 2024, fueled by successful execution of our strategic initiatives, solid business fundamentals and continued product innovation," said Avishai Abrahami, Wix Co-founder and CEO.
Interestingly, the stock is up 6.9% since reporting and currently trades at $168.
Is now the time to buy Wix? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $296.8 million, up 19.9% year on year, outperforming analysts’ expectations by 1.2%. It was a strong quarter for the company with an impressive beat of analysts’ billings estimates and a decent beat of analysts’ ARR (annual recurring revenue) estimates.
The market seems content with the results as the stock is up 2.1% since reporting. It currently trades at $45.
Is now the time to buy Squarespace? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: 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 $387.1 million, up 4.1% year on year, in line with analysts’ expectations. It was a mixed quarter for the company with an improvement in its gross margin.
VeriSign had the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 1.9% since the results and currently trades at $180.
Read our full analysis of VeriSign’s results here.
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 $2.05 billion, up 20.7% year on year, surpassing analysts’ expectations by 1.7%. Zooming out, it was a strong quarter for the company with a solid beat of analysts’ total payment volume estimates and a decent beat of analysts’ GMV (gross merchandise value) estimates.
Shopify achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 40.6% since reporting and currently trades at $76.23.
Read our full, actionable report on Shopify 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 $1.12 billion, up 7.3% year on year, in line with analysts’ expectations. Taking a step back, it was a good quarter for the company with a decent beat of analysts’ bookings estimates.
GoDaddy delivered the highest full-year guidance raise among its peers. The stock is up 14.8% since reporting and currently trades at $162.25.
Read our full, actionable report on GoDaddy here, it’s free.
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