Shopify Shares Fall 12% on Cautious Q2 Guidance

Shopify Inc. shares plunged more than 12 percent on Tuesday after the Ottawa-based ecommerce platform reported stronger-than-expected first-quarter results overshadowed by cautious guidance for the current quarter.

The company posted revenue of $3.17 billion for the three months ended March 31, a 34 percent increase from $2.36 billion a year earlier. That figure surpassed analyst estimates of $3.09 billion. On an adjusted basis, Shopify earned 36 cents per diluted share, up 44 percent from 25 cents the prior year and ahead of the 33 cents expected. Gross merchandise volume, the total value of goods sold on its platform, reached $100.7 billion, up about 35 percent year over year and marking the fourth straight quarter of more than 30 percent growth.

Merchant solutions revenue, which includes payment processing, climbed to $2.42 billion from $1.74 billion, while subscription solutions revenue rose to $750 million from $620 million. Despite the gains, Shopify recorded a net loss of $581 million, or 45 cents per diluted share, an improvement from the $682 million loss, or 53 cents per share, in the year-ago period.

The stock selloff stemmed from second-quarter projections that...