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: https://discussion.fool.com/global-e-online-34835116.aspx?sort=w….
Their Q2 results–a record for them, with a beat and raise–is here: https://investors.global-e.com/news-releases/news-release-de….
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: https://investors.global-e.com/news-releases/news-release-de….
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: https://investors.global-e.com/news-releases/news-release-de….
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.
- 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.”
- 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.
- 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.