Shopify reported a surprise first-quarter profit on Thursday and announced the plans to sell its logistics business, sending its shares surging about 28%.
Gross profit grew 12% to $717 million in the quarter ended March 31, 2023. Total revenue increased 25% to $1.5 billion compared to the prior year, up 27% on a constant currency basis.
Gross merchandise volume increased 15% to $49.6 billion, an increase of $6.4 billion over the
first quarter of 2022, up 18% on a constant currency basis.
“Shopify’s strong first quarter results demonstrate once again that we’re the go-to solution powering businesses of all sizes, on every surface where they sell. The changes we’re announcing today will ensure we keep pace with the high velocity of change before us, delivering the cutting-edge solutions our customers have come to expect from Shopify,” said Shopify’s President, Harley Finkelstein.
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Despite the strong performance, operating loss was also up at $193 million, or 13% of revenue, versus $98 million, or 8% of revenue, for the comparable period a year ago.
The Canadian ecommerce company has announced the decision to sell the majority of its logistics business to Flexport, a leading tech-driven global logistics platform.
The transition will be led by Harish Abbott, co-founder and CEO of Deliverr, and will net Shopify stock
representing a 13% equity interest in Flexport, on top of its existing equity interest. The agreement will make Flexport the official logistics partner for Shopify and the preferred provider for Shop Promise.
For the second quarter, Shopify expects to grow at a similar rate to the first quarter, achieving free cash flow profitability for each quarter of 2023 and capital expenditures of approximately $100 million for the full year.
Shopify previously recorded an increase in profits and revenue in its fourth quarter and full year in 2022 amid its launch of several new key strategic products.
