The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how e-commerce software stocks fared in Q2, starting with BigCommerce (NASDAQ: BIGC).
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 5 e-commerce software stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged 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 $84.43 million, up 3.2% year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.
“The second quarter was a defining period for our company, and today we mark an important milestone as we reintroduce ourselves as Commerce,” said Travis Hess, CEO of Commerce.
BigCommerce delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 4.6% since reporting and currently trades at $4.99.
Is now the time to buy BigCommerce? Access our full analysis of the earnings results here, it’s free.
Best Q2: Shopify (NASDAQ: 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 $2.68 billion, up 31.1% year on year, outperforming analysts’ expectations by 5.2%. The business had an exceptional quarter with a solid beat of analysts’ gross merchandise volume estimates and an impressive beat of analysts’ EBITDA estimates.
Shopify delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 18% since reporting. It currently trades at $150.00.
Is now the time to buy Shopify? Access our full analysis of the earnings results here, it’s free.
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 $409.9 million, up 5.9% year on year, in line with analysts’ expectations. It was a slower quarter, leaving some shareholders looking for more.
VeriSign delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 8.7% since the results and currently trades at $262.
Read our full analysis of VeriSign’s results here.
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 $489.9 million, up 12.4% year on year. This number surpassed analysts’ expectations by 0.6%. Aside from that, it was a mixed quarter as it also logged billings in line with analysts’ estimates but a slight miss of analysts’ EBITDA estimates.
Wix pulled off the highest full-year guidance raise among its peers. The stock is down 8.1% since reporting and currently trades at $117.50.
Read our full, actionable report on Wix 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 $1.22 billion, up 8.3% year on year. This print beat analysts’ expectations by 0.9%. Taking a step back, it was a satisfactory quarter as it also produced a decent beat of analysts’ EBITDA estimates but bookings in line with analysts’ estimates.
GoDaddy had the weakest full-year guidance update among its peers. The company lost 75,000 customers and ended up with a total of 20.41 million. The stock is down 6.6% since reporting and currently trades at $140.41.
Read our full, actionable report on GoDaddy here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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