Earnings report just out. Waiting on the call. Up over 5% already this morning.
Here’s the summary:
The results of the second quarter of 2023, together with the updated guidance for the remainder of the year, illustrate the continued strong momentum of our business, as evident from both top-line growth, improved profitability and new client launches,” said Amir Schlachet, Founder and CEO of Global-e. “We remain focused on executing across all fronts, as we continue to tap into the massive global opportunity presented by the direct-to-consumer cross-border e-commerce market.
HI Dave - I think yesterday was just a bad day across the board and I need to review this in a whole lot more detail, however with regards to what degree they deserved the drop, I would still caution on a number of forward looking headwinds:
The forward guidance of the top line has seen Q1 and Q2 cumulative raises of about $11m which equals the beats already secured in Q1 and Q2 so it doesn’t really reflect any change in outlook wrt Q3 and Q4
With the Borderfree acquisition passing the 1 year mark from Q3, YoY comparisons going forwards will be strictly organic. The forward guidance of Q3 at the mid point means a drop from 50%+ growth to ~32% growth as we are left with just the underlying like for like growth in the business.
Shopify’s Market Pro full roll out is still without a fixed forecast date and simply slated for later in the year. Given that we are in August and they still cannot either secure this with any real assurance let alone accelerate this then risk is rising as to uncertainty and even impact of any delays.
Of course I still hold and am keen on the business and the potential here as an investor but I don’t think this is without risk or concerns which is what the market has to factor in.
Immediate positives I saw were with:
Gross Margin progress
US outbound international business
APAC business adoption
The % of Service vs Fulfilment in $ terms was a function of GMV of items shipped rather than a progression in the service business vs fulfilment.
Perfectly put, Ant. This is one of the main reasons I got out a few months ago. Sure, it’s all expected…the question is, is it actually priced in? 30-something percent growth is very low compared to 50%+ which up until now has been the lowest they’ve ever recorded.
I don’t hate the business but I just think it’s far from a slam dunk. Profitability should come at some point, but with their margins, EPS won’t be as high as with SaaS companies. It seems fairly solid, but I wouldn’t “load up” here.
Ok we haven’t got Global-e Online’s Q3 results yet but reassuringly and of immense significance, Shopify - its number 1 commercial partner, announced its Q3 results with this bullet point (#4 of 10) under recent highlights…
“Expanded our end-to-end cross-border commerce solution with native merchant of record offering, Shopify Markets Pro, to general availability in the U.S. in the third quarter.”
The rest of Shopify’s report was outstanding - a beat across the board FWIW.
I guess of relevant interest was MercadoLibre’s commentary on the standout strength of cross border eCommerce in Q3.