The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how BigCommerce (NASDAQ:BIGC) and the rest of the e-commerce software stocks fared in Q2.
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.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. However, e-commerce software stocks have held steady amidst all this with share prices up 3.8% on average since the latest earnings results.
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 $81.83 million, up 8.5% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with an impressive beat of analysts’ billings estimates but a miss of analysts’ ARR (annual recurring revenue) estimates.
“The second quarter delivered results consistent with our top- and bottom-line plans,” said Brent Bellm, CEO of BigCommerce.
BigCommerce delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 30.8% since reporting and currently trades at $5.61.
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Best Q2: Squarespace (NYSE: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.
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 an ok quarter for the company with an improvement in its gross margin.
VeriSign posted 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.
Shopify (NYSE:TSX: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 good 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.
GoDaddy (NYSE:NYSE:GDDY) Founded by Bob Parsons after selling his first company to Intuit (NASDAQ:INTU), 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 scored the highest full-year guidance raise among its peers. The stock is up 14.8% since reporting and currently trades at $162.25.
This content was originally published on Stock Story
