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E-commerce Software Stocks Q2 In Review: GoDaddy (NYSE:GDDY) Vs Peers

StockStory - Thu Sep 28, 2023

GDDY Cover Image

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the e-commerce software stocks have fared in Q2, starting with GoDaddy (NYSE:GDDY).

While e-commerce has been around for over two decades and enjoyed meaningful growth, its overall penetration of retail still remains low. Only around $1 in every $5 spent on retail purchases comes from digital orders, leaving over 80% of the retail market still ripe for online disruption. It is these large swathes of the retail where e-commerce has not yet taken hold that drives the demand for various e-commerce software solutions.

The 6 e-commerce software stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 1.64%, while on average next quarter revenue guidance was 0.06% above consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again and while some of the e-commerce software stocks have fared somewhat better than others, they have not been spared, with share prices declining 5.71% since the previous earnings results, on average.

Weakest Q2: GoDaddy (NYSE:GDDY)

Founded by Bob Parsons after selling his first company to Intuit, GoDaddy (NYSE:GDDY) provides small and mid-sized businesses with the ability to buy a web domain and tools to create and manage a website.

GoDaddy reported revenues of $1.05 billion, up 3.21% year on year, missing analyst expectations by 0.61%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.

"Our mission at GoDaddy – to empower entrepreneurs everywhere, making opportunity more inclusive for all – is getting an unprecedented boost by AI technology," said GoDaddy CEO Aman Bhutani.

GoDaddy Total Revenue

GoDaddy delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 5.76% since the results and currently trades at $71.36.

Read our full report on GoDaddy here, it's free.

Best Q2: Shopify (NYSE:SHOP)

Originally created as an internal tool for a snowboarding company, Shopify (NYSE:SHOP) provides a software platform for building and operating e-commerce businesses.

Shopify reported revenues of $1.69 billion, up 30.8% year on year, beating analyst expectations by 4.27%. It was a very strong quarter for the company, with a significant improvement in its gross margin compared to the previous quarter and a decent beat of analysts' revenue estimates.

Shopify Total Revenue

Shopify delivered the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 16.8% since the results and currently trades at $51.98.

Is now the time to buy Shopify? Access our full analysis of the earnings results here, it's free.

VeriSign (NASDAQ:VRSN)

While the company is not a domain registrar and does not directly sell domain names to end users, Verisign (NASDAQ:VRSN) operates and maintains the infrastructure to support domain names such as .com and .net.

VeriSign reported revenues of $372 million, up 5.71% year on year, missing analyst expectations by 0.29%. It was a mixed quarter for the company, with a miss of analysts' revenue estimates. On the other hand, free cash flow was still strong and in line with last year.

The stock is down 4.38% since the results and currently trades at $200.2.

Read our full analysis of VeriSign's results here.

BigCommerce (NASDAQ:BIGC)

Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce (NASDAQ:BIGC) provides software for businesses to easily create online stores.

BigCommerce reported revenues of $75.4 million, up 10.6% year on year, beating analyst expectations by 2.84%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter.

BigCommerce had the weakest full year guidance update among the peers. The stock is up 3.88% since the results and currently trades at $9.9.

Read our full, actionable report on BigCommerce here, it's free.

Squarespace (NYSE:SQSP)

Founded in New York City in 2003, Squarespace (NYSE:SQSP) is a platform for small businesses and creators to build their digital presences online.

Squarespace reported revenues of $247.5 million, up 16.4% year on year, beating analyst expectations by 1.72%. It was a solid quarter for the company, with strong sales guidance for the next quarter and full-year revenue guidance topping analysts' expectations.

The stock is down 11.1% since the results and currently trades at $28.51.

Read our full, actionable report on Squarespace here, it's free.

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The author has no position in any of the stocks mentioned

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