What happened
Shares of Global-E Online (GLBE 3.82%) initially went down in flames on Tuesday, plunging as much as 18.5%. However, by 12:45 p.m. ET, the stock had returned to positive territory, up 6.3%.
The catalyst that sent the cross-border e-commerce specialist whipsawing was its quarterly financial results, which were something of a mixed bag -- but the devil is in the details.
So what
Global-E Online generated first-quarter revenue of $76.3 million, which rose 65% year over year, pushed higher by gross merchandise volume (GMV) that surged 71%. Unfortunately, the higher revenue did little to help the deteriorating bottom line. The company reported a net loss of $53.6 million, which resulted in a loss per share of $0.35.
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To put those numbers in context, analysts' consensus estimates were calling for revenue of $75.1 million and a loss per share of $0.13.
The mixed numbers aside, there were plenty of reasons to be bullish on Global-E. The company launched partnerships with a number of high-profile consumer companies, including shoemaker Adidas and apparel icons Brooks Brothers and Ralph Lauren.
Further, e-commerce platform Shopify (SHOP 4.90%) has a strategic partnership with Global-E Online, which made it the exclusive provider cross-border services for the software-as-a-service (SaaS) provider's 1.7 million merchants. Additionally, Shopify currently holds more than 14.4 million shares of Global-E Online stock, a 9% stake valued at roughly $287 million.
Now what
On the conference call to discuss the results, co-founder and CEO Amir Schlachet said that Global-E Online discontinued service to Russia during the quarter, which accounts for roughly 2% of the company's GMV. Additionally, it reported a significant reduction in sales in several Central and Eastern European markets, accounting for roughly 4% to 5% of its GMV.
In the face of those obvious headwinds, Global-E reduced its full-year guidance. The company is now expecting revenue of $393 million at the midpoint of its guidance (down from $416 million), which would still represent growth of about 60%.
Given the reason for the mixed results and lowering of its guidance, investors recovered from the initial knee-jerk reaction and concluded that Global-E Online stock is still a buy.
