- GMV: $1.08 billion, representing 31% year-on-year growth.
- Revenue: $168 million, up 26% year-over-year.
- Adjusted Gross Profit Margin: 47.8%, up from 43.3% in Q2 of last year.
- Adjusted EBITDA: $31 million, nearly 50% growth over the same period last year.
- Service Fee Revenue: $82.2 million, up 38% year-over-year.
- Fulfillment Services Revenue: $85.8 million, up 16% year-over-year.
- Non-GAAP Gross Profit: $80.2 million, up 39% year-over-year.
- GAAP Gross Profit: $77.4 million, representing a margin of 46.1%.
- R&D Expense: $21.2 million, 12.6% of revenue.
- Sales and Marketing Expense: $18.9 million, 11.3% of revenue.
- General and Administrative Expenses: $9.4 million, 5.6% of revenue.
- Net Loss: $22.4 million, compared to a net loss of $35.5 million in the year-ago period.
- Cash and Cash Equivalents: $341 million.
- Cash Flow from Operating Activities: $64.1 million, compared to $17.6 million a year ago.
- Q3 2024 GMV Guidance: $1.07 billion to $1.11 billion, 30% growth year-over-year.
- Q3 2024 Revenue Guidance: $165.7 million to $171.7 million, 26% growth year-over-year.
- Q3 2024 Adjusted EBITDA Guidance: $27 million to $31 million.
- Full Year 2024 GMV Guidance: $4.605 billion to $4.845 billion, 33% annual growth.
- Full Year 2024 Revenue Guidance: $710 million to $750 million, 28% annual growth.
- Full Year 2024 Adjusted EBITDA Guidance: $127 million to $143 million.
Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Global E Online Ltd (GLBE, Financial) achieved a historical landmark with its first non-peak quarter GMV surpassing $1 billion, reaching $1.08 billion, representing a 31% year-on-year growth.
- Revenues grew by 26% to $168 million in the quarter, demonstrating strong business momentum.
- Adjusted gross profit margin expanded to a record 47.8%, up from 43.3% in the same period last year.
- Adjusted EBITDA for the quarter was $31 million, representing nearly 50% growth over the same period last year.
- The company has a strong pipeline with significant contributions expected from large new merchants and continued growth from managed markets on Shopify.
Negative Points
- The company experienced the unexpected churn of one of its largest merchants, Ted Baker's UK and Europe franchisee, which went bankrupt, impacting H2 results.
- There were slight signs of potential softness in consumer sentiment observed in late July and early August.
- Higher average order values negatively impacted fulfillment revenue, leading to a lower fulfillment take rate.
- The company had to slightly adjust its same-store sales assumptions for the back half of the year due to mixed macro signals.
- The ongoing migration of merchants from the Borderfree platform is slower than expected, with some merchants still on the legacy platform.
Q & A Highlights
Q: Can you clarify the impact of the churned merchant on your guidance?
A: The churned merchant, Ted Baker, accounted for over 3% of our revenue. This loss significantly impacts our top line due to its high take rate, although it has a limited impact on our bottom line. The rise in average order values also affects our fulfillment take rate.
Q: What is driving your confidence in maintaining a 30% growth trajectory beyond the second half of the year?
A: We have a strong pipeline, including large merchants like Victoria's Secret, which recently launched. We expect additional large merchants to go live in early Q4. Our managed markets on Shopify are also performing well, contributing to our confidence in sustained growth.
Q: Have you adjusted your assumptions for the macroeconomic environment in your guidance?
A: Yes, we have slightly adjusted our same-store sales assumptions due to mixed signals and some softness in consumer sentiment observed in the last few weeks. However, this is the third driver in terms of impact on our guidance.
Q: Can you provide more details on the growth and expectations for the managed markets product?
A: Managed markets are performing slightly above our expectations. We see a strong funnel and expect continuous onboarding of merchants, including larger ones. This growth trajectory is expected to accelerate into 2025.
Q: What are your churn rates excluding Ted Baker, and are there any changes expected?
A: Excluding Ted Baker, churn rates are similar to previous years. We do not expect significant changes in the next few months. However, we might see some churn from the remaining Borderfree merchants once the platform is shut down in 2025.
Q: How is the Shopify relationship progressing, and what are the impacts of new features?
A: We have added several new features, such as additional shipping options and the ability to include duties in product prices. These enhancements increase the platform's appeal and applicability to more merchants. We continue to work closely with Shopify to release more features.
Q: How should we model fulfillment take rates for the back half of the year?
A: We expect fulfillment take rates to decrease due to higher average order values and the loss of Ted Baker, a high take rate merchant. This trend is expected to continue into the second half of the year.
Q: What are the risks and volumes associated with shutting down the Borderfree platform?
A: The remaining volume on the Borderfree platform is about 2% of our business. We have extended the timeline for migration to give merchants more time. We expect to shut down the platform in the first half of 2025.
Q: Can you provide more details on the Victoria's Secret launch and the risk of delays for other large merchants?
A: The Victoria's Secret launch is on schedule, with a phased rollout already well underway. We expect the remaining large merchants to go live in early Q4, with sufficient project buffers to ensure they are ready before the peak season.
Q: What are your long-term margin expectations given the current high gross margins?
A: We expect gross margins to remain high in the coming quarters, although not as high as this quarter due to mix impacts. We are working on new long-term targets and hope to introduce them in the coming months.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
