Amazon-fueled e-commerce boom hits first-quarter earnings

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Amazon-fueled e-commerce boom hits first-quarter earnings

- Shopify Inc.'s growth continued tempered in the first quarter as it crushed both revenue and earnings expectations, countering fears that the pandemic fueled e-commerce boom would come to an abrupt end as economies open up.

Stocks of the largest company in New York were up 10% just before noon on Wednesday in Canada.After climbing almost 40 fold in the last five years, they had been flat for the year on the assumption that growth would inevitably slow down.

For months, investment developers have been speculating whether the pandemic would help curb global spending by driving upwards of 5 billion dollars from internet spending in the world.But the latest estimate-defying results were driven by increasing revenue in every geography and at every type of retail market through Shopify's platform, told analysts on a conference call.The US stimulus checks, issued in March, added to the tailwind but the trend was already in place.

'The stimulus did have a noticeable impact to our GMV in the quarter, but the GMV was almost strong without it, said Shapiro, talking about the gross merchandise volume, the broadest measure of sales activity moving through merchants on its platform.

GMV more than doubled from a year earlier to more than $37 billion.It began accelerating in January and February, well before the stimulus was mailed out to consumers, Shapiro said.Importantly, that acceleration was faster outside the United States.

The company does still expect to moderate growth compared with the last year's lockdown-fueled bonanza.After initially dampening expectations for the first half of 2021, the company is now saying any deceleration in revenue growth will be pushed further back over the year as some consumers return to their pre-pandemic shopping habits or spend more on travel and other services.

Shopify Beats sales of website sales as E-Commerce volume more than doubles.

However, there are early signs that any pandemic-related downturn in e-commerce spending will be countered by a longer-term shift to online shopping, said Shopify President Harley Finkelstein.

In those places where things have actually opened up post-pandemic, we're actually not seeing any slowdown whatsoever in terms of buyers that come from our merchants, he said on the call.

With adjusted revenue and expected earnings the quarter, Shopify posted much higher-than expected revenues.The revenue was $988.6 million compared to $570 million a year earlier.Analysts had expected sales of $863 million.Adjusted earnings per share were $2.01 compared with analyst estimates of 77 cents.

Net income was helped by a $1.33 billion nonrealized gain on its equity investment in Affirm Holdings Inc. which went public in January.

The 450-year-old Ottawa investment company says it is actively investing in expansion.Shapiro said most of this spending will be made in the second half of the year, resulting in lower adjusted operating income for 2021 compared to 2020, according to Shapiro.

Asked why his commitment to stay with the company after three long-time executives said they'd leave, founder and Chief Executive Tobi Lutke said: I'm for the long term here.I'll never come up with a better idea than the Shopify from my life.

More: Shopify makes a huge rise since July: Street Wrap:

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