Shopify, the Canadian e-commerce firm, served up a mixed up bag of news on Thursday, sending its stock soaring in premarket trading.
The company beat analyst estimates with its earnings and revenue for the first quarter of 2023, with revenue of $1.5 billion versus the $1.4 billion expected and adjusted earnings per share (EPS) of $0.01 compared to the loss of $0.04 per share pegged by analysts.
The company's gross merchandise volume (GMV) also rose by 15% to $49.6 billion, beating analysts' forecasts of $47.746 billion.
In a surprise move, Shopify also announced that it had sold its delivery and logistics business to Flexport, a freight forwarder, though the sales price was not disclosed.
Flexport will provide logistics services to Shopify, which will retain a minority stake in the logistics business.
Separately, the firm announced plans to cut 20% of its workforce after cutting nearly 10% in July 2022.
In a blog post Thursday, Shopify CEO Tobias Lütke told employees that the company is “changing the shape of Shopify significantly.”
“There are a number of consequences to this, and I don’t want to bury the lede: after today Shopify will be smaller by about 20% and Flexport will buy Shopify Logistics; this means some of you will leave Shopify today,” the CEO wrote. “I recognize the crushing impact this decision has on some of you, and did not make this decision lightly.”
The company expects revenue to grow at a similar rate to the first quarter growth rate on a year-over-year basis.
Shopify's stock surged 27% on Thursday morning in New York. After plunging in 2022, Shopify shares have advanced 34% this year.
Shopify sets up e-commerce websites for small businesses and partners with others to handle digital payments and shipping. The company is also building a US distribution network to store and ship products for its merchant customers.
--Updates with share price--
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