Reflecting On E-commerce Software Stocks’ Q2 Earnings: VeriSign (NASDAQ:VRSN)
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at VeriSign (NASDAQ:VRSN), and the best and worst performers in the e-commerce software group.
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 mixed Q2; on average, revenues beat analyst consensus estimates by 1.64%, while on average next quarter revenue guidance was 0.03% above consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again, but e-commerce software stocks held their ground better than others, with share prices down 2.63% since the previous earnings results, on average.
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 $372 million, up 5.71% year on year, missing analyst expectations by 0.29%. It was a mixed quarter for the company, with a miss of analysts' revenue estimates. On the other hand free cash flow was still strong and in line with last year.
The stock is down 0.92% since the results and currently trades at $207.46.
Is now the time to buy VeriSign? Access our full analysis of the earnings results here, it's free.
Best Q2: Shopify (NYSE: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 $1.69 billion, up 30.8% year on year, beating analyst expectations by 4.27%. It was a very strong quarter for the company, with a significant improvement in its gross margin compared to the previous quarter and a decent beat of analysts' revenue estimates.
Shopify achieved the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 11.2% since the results and currently trades at $55.4.
Is now the time to buy Shopify? Access our full analysis of the earnings results here, it's free.
Weakest Q2: 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 $1.05 billion, up 3.21% year on year, missing analyst expectations by 0.61%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
GoDaddy had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 0.09% since the results and currently trades at $75.65.
Read our full analysis of GoDaddy's results here.
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 $75.4 million, up 10.6% year on year, beating analyst expectations by 2.84%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter.
BigCommerce had the weakest full year guidance update among the peers. The stock is up 4.72% since the results and currently trades at $9.98.
Read our full, actionable report on BigCommerce here, it's free.
Squarespace (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 $247.5 million, up 16.4% year on year, beating analyst expectations by 1.71%. It was a solid quarter for the company, with strong sales guidance for the next quarter and full-year revenue guidance topping analysts' expectations.
The stock is down 6.18% since the results and currently trades at $30.08.
Read our full, actionable report on Squarespace here, it's free.
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The author has no position in any of the stocks mentioned
