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Breaking: Shopify Shares Plunge 16.5% on Bleak Revenue Forecast

MarketAlleys Desk

Published · 1 min read

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In premarket trading on Wednesday, Shopify (NYSE:SHOP) experienced a significant drop of 16.5% following the company's announcement of a bleak revenue outlook for fiscal Q2 2024.

Despite exceeding analysts' expectations for the fiscal Q1, with earnings per share (EPS) of $0.20 and revenue hitting $1.9 billion, Shopify's projection for the upcoming quarter disappointed investors.

The company anticipates revenue growth in the high teens year-over-year, with a growth rate in the low-to-mid twenties after accounting for the impact from the sale of its logistics businesses.

Furthermore, Shopify foresees a decline in gross margin by approximately 50 basis points for Q2 compared to the first quarter of 2024. Operating expenses are expected to increase at a low-to-mid single-digit percentage, representing around 45% to 46% of revenue, with stock-based compensation totaling $120 million and capital expenditures reaching $5 million. The free cash flow margin is anticipated to closely align with Q1 of 2024.

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