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E-commerce Software Stocks Q3 Recap: Benchmarking BigCommerce (NASDAQ:BIGC)

StockStory - Mon Jan 8, 9:15AM CST

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Looking back on e-commerce software stocks' Q3 earnings, we examine this quarter's best and worst performers, including BigCommerce (NASDAQ:BIGC) and its peers.

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 Q3; on average, revenues beat analyst consensus estimates by 0.9% while next quarter's revenue guidance was 0.8% above consensus. Inflation (despite slowing) has investors prioritizing near-term cash flows, but e-commerce software stocks held their ground better than others, with the share prices up 18.1% on average since the previous earnings results.

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 $78.05 million, up 7.8% year on year, falling short of analyst expectations by 0.1%. It was a weak quarter for the company as it continued to burn cash, while the revenue outlook for the next quarter came in roughly in line with Wall Street's expectations.

“In the third quarter, BigCommerce made progress toward long-term growth and profitability,” said Brent Bellm, CEO at BigCommerce.

BigCommerce Total Revenue

BigCommerce delivered the weakest full-year guidance update of the whole group. The stock is down 14.3% since the results and currently trades at $8.6.

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

Best Q3: 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 $1.71 billion, up 25.5% year on year, outperforming analyst expectations by 2.6%. It was a very strong quarter for the company, with a significant improvement in its gross margin and a decent beat of analysts' revenue estimates.

Shopify Total Revenue

Shopify scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 55.3% since the results and currently trades at $75.82.

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

Weakest Q3: 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 $376.3 million, up 5.4% year on year, falling short of analyst expectations by 0.8%. It was a weak quarter for the company, with a miss of analysts' revenue estimates.

VeriSign had the weakest performance against analyst estimates in the group. The stock is down 3.6% since the results and currently trades at $197.59.

Read our full analysis of VeriSign's results here.

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 $1.07 billion, up 3.5% year on year, in line with analyst expectations. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter. Growth is slow these days, but at least Godaddy delivered strong free cash flow.

GoDaddy had the slowest revenue growth among its peers. The stock is up 34.5% since the results and currently trades at $101.12.

Read our full, actionable report on GoDaddy 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 $257.1 million, up 18.1% year on year, surpassing analyst expectations by 2%. It was a decent quarter for the company, with strong sales guidance for the next quarter but a decline in its gross margin.

Squarespace scored the highest full-year guidance raise among its peers. The stock is up 3.5% since the results and currently trades at $31.12.

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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