Tag Archives: shop

Shopify Falls As Losses To Widen Despite Soaring Revenue

Shopify ( SHOP ) shares fell Wednesday after the e-commerce software provider forecast bigger full-year losses and some investors sold after a recent jump in the stock. The full-year operating loss will be $41 million to $47 million, Shopify said, compared with a previous forecast of $36 million to $42 million. Last month, Shopify secured new office space in Toronto that can accommodate as many as 700 employees, signaling more spending by the company. The operating loss for the first quarter was $9.7 million, the company said, compared with $3.5 million a year earlier. The stock fell 4.4% to 29.39 in afternoon trading on the stock market today . Shopify’s first-quarter revenue and its sales forecast exceeded analysts’ estimates. However, that wasn’t enough after a 31% climb in the shares over the past three months had raised hope for even better performance. “Some investors are taking the profits — some of the very substantial profits they’ve made over the past three months,” said Gil Luria, an analyst at Wedbush Securities. “The stock implied a very good quarter.” Revenue in the three months ended March 31 surged 95% to $72.7 million, Ottawa-based Shopify said in a statement, beating the average analyst estimate of $66.9 million. In the second quarter, sales will range from $79 million to $81 million, above the $74.8 million average analyst estimate. The Canadian company also forecast full-year sales of $337 million to $347 million, compared with a previous forecast of $320 million to $330 million and analysts’ estimates of $327.9 million. Mobile orders surpassed those on desktop for the first time in the first quarter, Shopify said, as just over 51% of orders came from mobile devices. An integration with the Facebook ( FB ) Messenger app makes it easier for merchants to engage in “conversational commerce” with customers, Shopify said. “The era of mobile commerce has officially arrived,” founder and Chief Executive Officer Tobi Lutke said in the statement. “Mobile orders from Shopify merchants surpassed those of desktops in February, and have continued to climb since.”

Facebook Revs Engine On Multibillion-Dollar Market Opportunities

A series of announcements by Facebook ( FB ) at its conference for developers this week puts the company on a solid path toward adding billions to its revenue stream. CEO Mark Zuckerberg set a 10-year strategy for Facebook on Tuesday that emphasized pushing its Messenger chat platform deeper into the business world with chatbots and by enhancing Live video with virtual reality. Zuckerberg presented his vision in a keynote speech at the start of Facebook’s two-day F8 Developer Conference on Tuesday in San Francisco. Analysts say the monetization strategy of Messenger will closely follow that of Instagram, with both platforms seen becoming multibillion-dollar businesses. That will be followed by its Oculus Rift virtual reality business and its WhatsApp messaging platform. “We see Facebook’s revenue growth visibility being enhanced by Instagram this year, Messenger in 2017, and more mass-market virtual reality and maybe WhatsApp by 2018,” wrote Rosenblatt Securities analyst Martin Pyykkonen in a research note Wednesday. He estimates Instagram’s ad revenue will reach $1 billion this year. “It’s still very early, but Messenger could become that single app interface for multiple mobile payments and be a competitive issue for the likes of PayPal ( PYPL ), Square ( SQ ) and credit card companies,” he wrote. Cowen analyst John Blackledge wrote in a research note that, given Messenger’s sheer user scale, it could potentially be another transformational platform for Facebook. Messenger has 900 million users, up from 800 million in January. “Facebook will continue to follow its proven playbook of building great products, achieving scale and then building ecosystems around those products/apps in order to monetize,” Blackledge wrote. Facebook Messenger Can Be Added Feature For Ads Facebook provided a glimpse as to how it might monetize Messenger at the F8 conference. Examples included businesses placing an ad on Facebook and then, when the ad is clicked, the user is taken over to Messenger, where that user can communicate with the company and transact on the platform. As widely expected, Zuckerberg announced a program for developers to write apps that are powered by artificial intelligence, known as chatbots. The digital assistants will help Messenger users communicate with businesses for services, perhaps to fix a problem or to buy goods. Demonstrations on how bots will be used by businesses included ordering flowers through the chatbot of 1-800-Flowers ( FLWS ). Facebook highlighted over 40 existing partnerships that included Shopify ( SHOP ) and Hyatt Hotels ( H ). While ads and promotions are not currently allowed in the bot platform, Facebook has begun testing “Sponsored Messages” in small groups. Facebook also said it will be able to earn revenue through “Click to Message” links in News Feed ads. Another major focus at the F8 conference is on live video streaming, which generates 10 times more comments than regular videos. Facebook is already pumping up revenue from standard video ads placed on its website. The addition of Facebook Live video will accelerate that opportunity. Blackledge estimates Facebook video revenue will hit $10 billion by 2021, up from $1.8 billion last year. Facebook Live is comparable to the Twitter ( TWTR ) Periscope app, which launched last year and has logged more than 100 million broadcasts. Twitter has integrated Periscope into the Twitter app feed. The vast majority of Facebook revenue comes from ads on its main website, but the company is looking to build on that with Instagram, Messenger and Live. “Messenger is clearly increasingly important, in our view, but its vision of the post-app world will be a challenge to pull off,” wrote Pacific Crest Securities analyst Evan Wilson in a research note. “It has a real opportunity with Live video in the near term.” Facebook stock was down more than 2%, near 108, in early afternoon trading in the stock market today . Facebook is set to report Q1 earnings after the market close on April 27. Analysts expect revenue will rise 48% from the year-earlier quarter to $5.25 billion, while earnings per share minus items also are expected to rise 48%, to 62 cents.

New Amazon Payments Unit Ups Ante Vs. Rivals PayPal, Square

Mighty e-commerce firm Amazon.com ( AMZN ) is launching its payments service on several platforms that cater to small and midsize businesses, the company said Monday. Called the Global Partner Program , the new business will allow firms that build e-tail storefronts on the platforms Amazon is partnering with to integrate the “Pay With Amazon” feature. Pay With Amazon aims to reduce any friction when checking out online. By logging in with Amazon, shoppers don’t have to enter a 16-digit credit card number and other billing details. Rival payments firms such as  PayPal ( PYPL ) have been working on reducing friction at checkout for years. Partners in Amazon’s Global Partner Program include Japan-based FutureShop, France-based PrestaShop and Canada-based  Shopify ( SHOP ). Amazon stock fell nearly 1%, to 593.19, on the stock market today . The company has an IBD Composite Rating of 77, where 99 is the highest. Amazon stock is forming a cup base, with a buy point of 696.54, after touching a seven-month low of 474 in early February. The new payments program “could help Amazon reach a much larger audience of merchants,” Colin Sebastian, an analyst with Robert W. Baird, told IBD via email. “However, I believe there are still channel conflicts that may exist with allowing Amazon to see transaction data. In fact, Shopify and others already have relationships with payment platforms such as PayPal and Stripe. As such, it may still be an uphill battle for Amazon payments to gain a lot more traction with merchants. “That said, Amazon does have a lot of customers who may wish to use Amazon payments, and the plus side for merchants would be higher transaction volumes.” Wedbush analyst Gil Luria says Amazon has struggled for years to make headway in the payments business against firms such as PayPal. Apple ( AAPL ) and Google, a unit of Alphabet ( GOOGL ), also have entered the payments sector with digital wallet technologies that revolve around use of cellphones for payments transactions. The Amazon announcement is hot on the heels of similar moves by PayPal and  Square ( SQ ). On Wednesday,  Square said it planned to add Web checkout capabilities to its payment processing product — a direct challenge to much larger competitor PayPal, which has more than 13 million merchants vs. Square’s 2 million. Also Wednesday, PayPal’s Braintree unit — which boasts that it processes payments for startups such as Airbnb, Jet.com and Uber — announced that it was partnering with several all-in-one e-commerce platforms, such as BigCommerce.