Global-e Online Q2 2022 results

I know a few on this board hold Global-e Online who reported today.

They’ve maintained hyper growth of 50%+ revenue gains this quarter with Shopify native integration progressing, flow integration gaining traction and US commerce and international ex Europe commerce growth well ahead in triple digits.

They have raised gross margins by a massive 5.8 percentage points year on year from 36% to 41.8%.

Lots to like here. Waiting for the presentation and transcript but in the meantime the market seems to like what they see.

Borderfree revenues to kick in from July 1st transaction close adding ~10% to GMV and at a similar take rate as Global-e Online.



You beat me to it!

I held a full position in Global-e (GLBE) from it’s IPO in May 2021 and sold out in April of this year when it looked like e-commerce was getting wrecked. I bought back a small position this morning.

The company was first brought to the board by Rubenslash here:….

Their Q2 results–a record for them, with a beat and raise–is here:….

Some notable things from this year and from the call:

1. Last November they acquired Flow Commerce, which was basically their only competitor. That deal closed in January (cash and Global-e stock) and you can read the details in the press release about it here:….

The call indicated that they are now starting to see the fruit of that acquisition.

2. Last month they acquired Borderfree, a part of Pitney Bowes, which strengthens GLBE’s logistics and gave them a partnership with Pitney Bowes. (Deal was all cash.) That press release is here:….

Helping with logistics is critical, since that is the main thing weighing on their gross margins and is the biggest macro risk outside of their control with things like war and Covid messing with supply chains.

While still low compared to our other companies, their gross margins increased 580 bp from 36% to 41.8% YoY. They said on the call that they expect that to keep growing, but not at that high of a jump.

3. The biggest news on the call/news from this morning is that they have a new deal with Disney. With a land and expand model, Disney is using them right now to reach into the APAC region, but the deal is not exclusive of other areas. It is just where they are beginning.

  1. Last quarter they were wary of the macro headwinds in e-commerce and the slowdown they saw, especially in Europe. But they have seen that reverse in the past couple of months in Europe and higher demand in other areas, thus allowing them to increase their guide.

In perhaps the saddest comment on the call they said, “People get used to things, even war.”

  1. The re-opening shift they are seeing is not away from e-commerce but rather in the kinds of businesses that are slowing or accelerating their sales. They called out athletic wear as having less traction, for example. Apparently some offices look down on yoga pants.

Their primary business is Direct to Consumer (D2C) and they see a definite uptick in brands who want to engage customers directly around the world through their platform. They called out growth in luxury, fashion, and celebrity brands. US outbound revenues were up 104% YoY.

6. Their partnership with Shopify continues to amplify their enterprise business and the Flow acquisition is now integrated enough to help expand this. They cited “earlier than planned synergies” from their acquisitions.

  1. They highlighted their first live Australian merchant and their first-ever Japanese merchant.

My thesis when I bought them at their IPO was that they were handling all the worst headaches for merchants who want to sell across borders–from currency issues, to language, to cultural issues in advertising, to regulations, to logistics. While some merchants might technically be able to build that out, I can’t imagine merchants who would WANT to do it, especially if you want to sell in hundreds of countries.

Their leadership team has proven that they can execute and still keep what looks to me like a strong balance sheet, growing at a rapid pace, and expanding gross margins as they scale and make strategic acquisitions. One beef I had with ZoomInfo was that they had a firehose of acquisitions but then had trouble actually integrating them into the business. Not so with Global-e. They appear to not only acquire sensible assets for their business, but their ability to integrate has put them ahead of schedule in realizing their benefits.

The market clearly liked the news as the stock is up 28% as I write this. Worst-case scenarios were baked in and the stock was beaten down as a result. It is still way off its highs. I’m back in with about half the shares I had when I sold in April, but only because I don’t have more cash to put in. I’ll be adding to my position as I can. They have proven themselves, imo.



Thanks JabbokRiver

Ok so here’s the link to the transcript……

A few additional points:-

  1. Early Q1 weakness in Europe post Ukraine invasion bounced back in May/June

  2. Native Shopify integration going well with dozens on board and dozens more in the process

  3. First white label Flow 'merchant of record" beta version now live with first client

  4. Growth in higher margin “Services” continued to exceed “Fulfilment” revenues growth

  5. ex Pitney Bowes Borderfree business again has a growth skew towards “Services” vs “Fulfilment” but has a lower margin overall that should weigh on margins in next few quarters but thereafter be addressed through synergy savings (as demonstrated with Flow) and revert to trending upwards (partly through operating leverage from scale and partly from the mix shift towards Services)

  6. Pitney Bowes’ Borderfree acquisition isn’t just about solution fit and cost synergy but also revenue upside from pre-existing client. They will be able to partner with Pitney Bowes for additional services and go to market to offer Pitney Bowes’ clientele Global-e Online solutions.

  7. Global-e Online were transparent enough to issue guidance with and without Pitney Bowes’ Borderfree impact - kudos to them!

We expect Q3 GMV to be in the range of $600 million to $614 million. At the midpoint of the range, this represents a growth rate of 72.4% versus Q3 of 2021. Of this, Borderfree is expected to contribute $50 million to $54 million of GMV.

We expect Q3 revenue to be in the range of $99.5 million to $102.5 million. At the midpoint of the range, this represents a growth rate of 70.9% versus Q3 of 2021. Adjusted EBITDA is expected to be in the range of $8.5 million to $11.5 million. Please note that Borderfree’s take rate in Q3 is expected to be similar to Global-Es take rate, while Borderfree’s adjusted EBITDA is slightly negative.

Full Year:-
For the full year of 2022, we now anticipate GMV to be in the range of $2.45 billion to $2.55 billion, representing 72.5% annual growth at the midpoint of the range. Of this, Borderfree is expected to contribute $125 million to $135 million of GMV.

Excluding Borderfree, we are raising our full year GMV guidance to $2.32 billion to $2.42 billion. Revenue for the full year is expected to be in the range of $406 million to $426 million, representing a growth rate of 69.6% at the midpoint of the range.

We are also increasing our full year adjusted EBITDA guidance, which was previously at $38 million to $42 million. And now we expect it to be in the range of $41 million to $46 million, despite the slightly negative contribution from Borderfree.

My take:-
I’ve held this now since June 2021 after its IPO and haven’t had a conviction issue with them at all. Their problem/solution story (in DTC cross border commerce) is clear, their underlying GMV hyper growth is visible, their take rate is excellent and their continued progress on the GM front is strong. I’ve been happy to hold this and see high potential and durable growth in this going forwards.