Global-E Online (GLBE +9%) is enjoying solid gains today after surpassing Q1 expectations and raising its FY24 revenue, gross merchandise volume (GMV), and adjusted EBITDA forecasts. Before its Q1 report, GLBE shares had been in a downward trend, dropping nearly 25% this year, largely due to disappointing Q4 results in late February.
What does GLBE do? The company is a cross-border e-commerce service provider, helping direct-to-consumer (DTC) online retailers sell internationally. GLBE's services include global payment processing, local tax computation, and managing delivery and returns. The company also helps customers create websites that comply with local regulations. One of its partners is Wix.com (WIX, Financial). Additionally, GLBE manages cross-border fulfillment for merchants. Its annual revenue is evenly split between these two business segments.
GLBE faced some challenges recently. Toward the end of last year, shares fell after the company forecasted another quarter of weak revenue growth, impacted by industry-wide inventory issues and significant exposure to the apparel retail market. Investor frustration grew with GLBE's underwhelming FY24 guidance. However, GLBE is now seeing positive trends that boosted its Q1 performance, hinting at a potential turnaround.
- For the first time in nearly a year, GLBE exceeded top and bottom-line estimates in Q1, with GMV growth of 32%, surpassing the high end of its previous forecast. Adjusted EPS was $(0.19), an improvement from $(0.26) a year ago. Revenue increased by 24.1% year-over-year to $145.9 million, a decent rise given the challenging +54.1% comparison from 1Q23.
- Management's tone was more optimistic than in previous quarters. CEO Amir Schlachet expressed confidence in the company's long-term growth potential. This optimism partly stems from GLBE's strategic partnership with Shopify (SHOP, Financial). GLBE's Market Pro offering allows SHOP merchants to leverage its cross-border technology easily. The company is seeing rising adoption of Markets Pro, paving the way for substantial revenue growth.
- As a result, GLBE expects increased volume contribution in 2H24 from large merchant launches. With this positive outlook, GLBE raised its FY24 forecast, projecting revenues of $733-773 million (up from $731-771 million) and GMV of $4.625-4.865 billion (up from $4.590-4.830 billion).
The key takeaway from GLBE's Q1 report is that trends are starting to favor the company. Investors have been waiting for the SHOP partnership to significantly impact quarterly results since launching Markets Pro in the U.S. in September 2023. As retailers seek to expand internationally to boost their revenues, GLBE offers a significant technological advantage. Current prices present a compelling entry point to capitalize on GLBE's potential turnaround.
