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Q4 E-commerce Software Earnings Review: First Prize Goes to Squarespace (NYSE:SQSP)

StockStory - Mon Apr 1, 6:25AM CDT

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Let's dig into the relative performance of Squarespace (NYSE:SQSP) and its peers as we unravel the now-completed Q4 e-commerce software earnings season.

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 Q4; on average, revenues beat analyst consensus estimates by 1.7% while next quarter's revenue guidance was 0.9% below consensus. Stocks have faced challenges as investors prioritize near-term cash flows, but e-commerce software stocks held their ground better than others, with share prices down 2% on average since the previous earnings results.

Best Q4: 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 $270.7 million, up 18.3% year on year, topping analyst expectations by 2.9%. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates and a solid beat of analysts' ARR (annual recurring revenue) estimates.

"Squarespace surpassed $1 billion in revenue for the first time in its 20-year history in 2023, driven by new customer growth across markets and strong retention, which speaks to our robust product offering," said Anthony Casalena, Founder & CEO of Squarespace.

Squarespace Total Revenue

Squarespace pulled off the highest full-year guidance raise of the whole group. The stock is up 7.9% since the results and currently trades at $36.4.

We think Squarespace is a good business, but is it a buy today? Read our full report here, it's free.

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 $2.14 billion, up 23.6% year on year, outperforming analyst expectations by 3.4%. It was a strong quarter for the company, with a decent beat of analysts' revenue and free cash flow estimates.

Shopify Total Revenue

Shopify pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 13.5% since the results and currently trades at $77.1.

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

Slowest Q4: Wix (NASDAQ:WIX)

Founded in 2006 in Tel Aviv, Wix.com (NASDAQ:WIX) offers a free and easy to operate website building platform.

Wix reported revenues of $403.8 million, up 13.7% year on year, in line with analyst expectations. It was an ok quarter for the company, with full-year revenue guidance in line with analysts' expectations.

The stock is up 9.9% since the results and currently trades at $137.67.

Read our full analysis of Wix'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 $84.15 million, up 16.2% year on year, surpassing analyst expectations by 3.2%. It was a weaker quarter for the company, with full-year revenue guidance missing analysts' expectations.

BigCommerce had the weakest full-year guidance update among its peers. The stock is down 17.2% since the results and currently trades at $6.84.

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

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 $1.1 billion, up 5.8% year on year, falling short of analyst expectations by 0.1%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and full-year.

GoDaddy had the weakest performance against analyst estimates among its peers. The stock is up 5% since the results and currently trades at $118.68.

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

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