10:15 AM EDT, 05/08/2024 (MT Newswires) -- Shopify ( SHOP ) reported better-than-expected first-quarter results amid double-digit gross merchandise volume gains, but the e-commerce platform flagged a sales growth slowdown in the current period, sending its US-listed shares tumbling in Wednesday trading.

The Canada-based company anticipates second-quarter revenue to rise by a high-teens percentage rate year over year, impacted by 300 to 400 basis points from the sale of its logistics business last year. The consensus on Capital IQ is for revenue of $2.03 billion, while sales increased 31% to $1.69 billion in the 2023 second quarter.

"The impact of the pricing changes in standard and plus will have a smaller combined benefit in (the second quarter) versus (the first quarter)," Chief Financial Officer Jeff Hoffmeister said during an earnings call, according to a Capital IQ transcript. "In (the second quarter), we begin to lap the initial pricing changes on our standard plans that went into effect in April of 2023, resulting in a headwind to our revenue growth quarter-over-quarter."

Shopify's ( SHOP ) shares on the New York Stock Exchange plunged 19% in Wednesday's session.

Sales climbed 23% to $1.86 billion for the three months through March 31, just ahead of the Street's view for $1.85 billion. Adjusted earnings jumped to $0.20 per share from $0.01 the year before, topping analysts' $0.17 estimate.

Subscription solutions revenue soared 34% to $511 million buoyed by price hikes on standard subscription plans as more merchants joined the platform. Merchant solutions advanced 20% to $1.35 billion while gross merchandise volume, or GMV, rose 23% to $60.86 billion. Gross payments volume accounted for 60% of GMV versus 56% in the prior-year quarter.

Gross margin rose to 51.4% from 47.5% last year, aided by the logistics business' divestiture and pricing changes. For the second quarter, the company forecasts the metric to decline sequentially by 50 basis points due to expected growth of its lower-margin payments business, as well as reduced revenue contribution from a "high-margin noncash partnership revenue agreement that we'll have fully amortized," Hoffmeister said on the call.

Total operating costs fell to $871 million from $910 million on a yearly basis, according to the company. Operating expense dollars are projected to increase at a low-to-mid-single digit rate in the current period versus the previous quarter.

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