Photo Credit: Open Grid Scheduler / Grid Engine from Flickr.com

Earlier last month, Ontario-based Shopify (NYSE: SHOP) announced its quarterly results that failed to impress the market. But the company continues to surge forward in building a logistics solution for its vendors. Recently, it announced another acquisition to further this objective.
 

Shopify’s Financials

Shopify’s second-quarter revenues grew 16% to $1.3 billion, falling short of the market estimates by 2.98%. Net loss was $1.2 billion, compared with a net income of $900 million a year ago. On an adjusted basis, the loss was $0.03 per share, falling short of the market’s forecast by 200%.

By segment, subscription revenues grew 10% to $366.4 million, ahead of the estimates of $265 million. Merchant solutions revenue rose 18% to $928.6 million.

Among other metrics, gross merchandise volume (GMV) rose 11% to $46.9 billion in the quarter. Gross Payments Volume (GPV) grew to $24.9 billion.

Shopify did not provide a forecast for the quarter.
 

Shopify’s Deliverr Acquisition

Recently, Shopify announced the acquisition of San Francisco-based Deliverr for an estimated $2.1 billion. Deliverr was founded in 2017 by Michael Krakaris and Harish Abbott to provide shipping services for e-commerce businesses. Its products help online marketplace vendors to meet shipping standards, avoiding late shipment penalties for orders.

The acquisition will allow Shopify Fulfillment Network (SFN) to give millions of independent businesses, both on and off Shopify an end-to-end logistics platform to unlock fast and easy fulfillment. SFN will help merchants to better align the supply of their inventory with buyer demand. Additionally, the acquisition will allow SFN to use Deliverr’s software, talent, data, and scale to offer merchants a place for all of their logistics needs including initial receipt of inventory, smart distribution, fast delivery, and easy returns. For the customers, Shopify will leverage Deliverr’s technology to roll out a new feature called Shop Promise. The service will allow Shopify to offer reliable two-day and next-day delivery options across the U.S.

Shopify plans to integrate Deliverr with SFN’s direct-to-consumer fulfillment operations and 6 River Systems’ warehouse automation technology. It aims to create a full set of turnkey solutions that will connect through Deliverr’s network technology and Shopify’s embedded software and robotics inside both Shopify and partner-operated warehouses. When combined, it will help create a fast and reliable fulfillment offering. Prior to the acquisition, Deliverr had raised $490.9 million in seven rounds of funding led by Activant Capital, GLP, 8VC, Alumni Ventures, Tiger Global Management, Brookfield Growth, and Coatue. Its most recent round was held in November 2021 where it raised $250 million.

But all is not rosy with Shopify. The current macro conditions are hurting the company as well, as it announced a more cautious view on its GMV expectations in the coming quarters. During the current quarter, its GMV grew 11% over the year, missing the consensus expectations of 15%. Offline GMV growth of 47% significantly outpaced online GMV growth of 8% growth for the quarter. Shopify also announced a lay-off of nearly 10% of its workforce.

Its stock is trading at $39.72 with a market capitalization of $50.2 billion. It had touched a 52-week high of $176.29 in November last year and a 52-week low of $29.72 in June.

More By This Author:

Cloud Stocks: Analysis Of GoDaddy’s Dan.com Acquisition
HubSpot’s Marketplace Strategy Continues To Thrive
Will Meta’s Bet On Metaverse Pay Back?