Shopify Q1 Earnings: Will Shopify layoffs drive share price higher?

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Shopify Q4FY22

Shopify Q1 results: Key insights

  1. Shopify announced layoffs, affecting 20% of its global workforce. 
  2. Shopify also sold off its logistics business to focus purely on its e-commerce platform business.
  3. Company's Q1 revenue of $1.51 billion beat analysts' estimate of $1.43 billion. 
  4. Shopify did not declare and dividend during the quarter. 
  5. Shopify also sold its subsidiary 6 Rivers to British firm Ocado. 

Shopify share price and Shopify results:

Shopify shares jumped 8.3% on May 5, 2023, on expectation beating revenue and profits coupled with planned layoffs. Click here for a more detailed view into Shopify shares and in-depth company analysis.

Shopify share historical performance:

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Decoding Shopify Q1 earnings:

Shopify Revenue

Shopify reported a revenue of $1.5 billion, a 25% increase from the corresponding quarter the previous year, pushed higher by a rise in subscriptions and merchant solutions as retail sales jumped in the aftermath of the coronavirus pandemic.

 Q1FY23Q1FY22% change
Net Sales$1.2 billion$1.5 billion25%

Shopify Net Profit

Shopify reported a $64 million net profit during the quarter ended March 2023, compared to a loss of $1.4 billion in the corresponding quarter last year. The company announced layoffs affecting 20% of its global workforce and also sold its logistics arm in an all-stock deal to focus purely on its e-commerce platform business.  

 Q1FY23Q1FY22% change
Net Profit$64 million-$1.4 billion105%

Shopify dividend

Shopify board did not declare any dividend while announcing the earnings for the March 2023 quarter.

Shopify Gross Merchandise Volume

Gross merchandise volume on the company’s platform increased 15% to $49.6 billion, an increase of $6.4 billion over the first quarter of 2022.

Shopify share price target

  • Brokerage Oppenheimer raised the share target price to $70 from $65.
  • Renowned brokerage Barclays raised the share target price to $50 from $40.
  • Brokerage TD Securities raised the share target price to $60 from $47.
  • Brokerage Credit Suisse raised the share target price to $53 from $40.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.