Shopify
Shopify shares rose as much as 28% Thursday after reporting a profit and announcing the sale of its logistics business.
It also announced that it will reduce headcount at the company by 20%.
Insider previously reported that Shopify was looking to change tack and pivot from logistics.
Shopify stock surged 28% on Thursday after the e-commerce company reported a surprise earnings beat for the first quarter and announced that it sold its logistics unit and would embark on a new round of reductions to headcount.
Insider previously reported in April that people at the company were expecting more layoffs ahead of the latest earnings, following a round of cuts last year.
Separately, Insider also reported this week that company insiders were bracing for a big strategy shift to the logistics side of the business, with plans to pull back on its “fulfillment center” warehouses, capital-heavy projects that had trouble turning a profit.
On Thursday, the company confirmed the reports, announcing it had sold its logistics unit to freight company Flexport. The deal includes the sale of Deliverr, a shipping service Shopify bought last year for $2.1 billion.
Like many online retail rivals, Shopify had focused on warehouse investments as the pandemic fueled longer-term expectations for e-commerce growth. In the new deal, Shopify will receive a 13% share in Flexport, which will become the retailer’s logistics partner.
Meanwhile, the UK’s Ocado Group agreed to purchase Shopify’s warehouse automation provider, 6 River Systems.
Shopify’s first-quarter revenue came in at $1.51 billion, surpassing estimates of $1.43 billion and adding $0.01 per share. The company benefited from its integration on the websites of other businesses, such as Mattel and Coty.
The stock was trading at $57.71 at 1:10 p.m ET, up about 24%.