Q2 Earnings Highs And Lows: GoDaddy (NYSE:GDDY) Vs The Rest Of The E-commerce Software Stocks

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how e-commerce software stocks fared in Q2, starting with GoDaddy (NYSE:GDDY).

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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was in line.

Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.

Thankfully, e-commerce software stocks have been resilient with share prices up 6.5% on average since the latest earnings results.

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 $1.12 billion, up 7.3% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a decent beat of analysts’ bookings estimates.

GoDaddy pulled off the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 9.9% since reporting and currently trades at $155.26.

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

Best Q2: 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 $296.8 million, up 19.9% year on year, outperforming analysts’ expectations by 1.2%. The business had a strong quarter with an impressive beat of analysts’ billings estimates and a decent beat of analysts’ ARR (annual recurring revenue) estimates.

The market seems happy with the results as the stock is up 5.4% since reporting. It currently trades at $46.47.

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

Slowest Q2: VeriSign (NASDAQ:VRSN)

While the company is not a domain registrar and does not directly sell domain names to end users, Verisign (NASDAQ:VRSN) operates and maintains the infrastructure to support domain names such as .com and .net.

VeriSign reported revenues of $387.1 million, up 4.1% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted an improvement in its gross margin.

VeriSign delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 4.1% since the results and currently trades at $183.92.

Read our full analysis of VeriSign’s results here.

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 $435.7 million, up 11.7% year on year. This number was in line with analysts’ expectations. More broadly, it was a satisfactory quarter as it also logged a solid beat of analysts’ billings estimates but full-year revenue guidance missing analysts’ expectations.

The stock is flat since reporting and currently trades at $157.93.

Read our full, actionable report on Wix 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 $2.05 billion, up 20.7% year on year. This print beat analysts’ expectations by 1.7%. Overall, it was a satisfactory quarter for the company. Shopify topped analysts' revenue and EPS expectations, driven by better-than-anticipated gross merchandise and payment volume.

Shopify pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 49% since reporting and currently trades at $80.78.

Read our full, actionable report on Shopify here, it’s free.

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