Global-E Reports Second Quarter 2021 Results
08/16/2021 - 04:05 PM
PETAH-TIKVA, Israel, Aug. 16, 2021 (GLOBE NEWSWIRE) -- Global-e Online Ltd. (Nasdaq: GLBE) the company that makes global e-commerce border agnostic, today reported financial results for the second quarter of 2021 as well as outlook for the third quarter and full year 2021
“The record results we are publishing today for the second quarter of 2021, together with the updated guidance for the third quarter and full year, illustrate the continued momentum of our business, as evident from both Gross Merchandise Value (GMV) and revenues growing more than 90% year over year, improved profitability and several key clients we launched with this quarter”, said Amir Schlachet, Founder and CEO of Global-e. “In parallel, we remain focused on executing across all our strategic vectors, from geographical expansion, to adding additional features and innovative capabilities, to expanding the network of strategic partners in our ecosystem.”
Q 2 2021 Financial Results
GMV in the second quarter of 2021 was $326 million , an increase of 95% year over year Revenue in the second quarter of 2021 was $57.3 million , an increase of 92% year over year, of which Service fees was $21.1 million and Fulfillment services revenue was $36.2 million Gross margin in the second quarter of 2021 was 36.0% , an increase of 360 basis points from 32.4% in the second quarter of 2020 Adjusted EBITDA1 in the second quarter of 2021 improved to $7.6 million compared to $3.1 million in the second quarter of 2020 Net loss was ($22.2) million , compared to a net loss of ($0.4) million in the year-ago period. Net profit excluding the Shopify warrants related amortization expense of $25.5 million was $3.3 million Q 2 2021 Business Highlights
Outperformance across the business lines Service fees revenue grew by 104% and its share constituted 37% of revenues; Fulfillment fees grew by 86% Continued accelerated growth of US-outbound Continuing the strong penetration to the US market, US outbound revenues were up 131% year over year Continued to launch new merchants across our main geographies, including both new merchants and continued ‘land and expand’ efforts. Notable examples include: During Q2 we launched Tag Heuer, Sephora and Rimowa which are all part of the LVMH group, adding to our portfolio of LVMH brands In the months following the launch, Tag Heuer added many more destination markets to our platform The lingerie brand La Perla, which went live with us during the first quarter of 2021, added many more destination markets during the second quarter and also went live with La Perla Beauty, its sister brand Continued progress on our expansion plans to new geographies, with emphasis on Asia Pacific. Launched our first APAC-based merchant, Theory Hong Kong which is part of the Fast Retailing group Opened a new office in Tokyo We continue to build capabilities and broaden our range of value added services, with emphasis on capabilities that further enhance our level of support for larger merchants and new verticals, such as consumer electronics, which often require an elaborate multi-local approach in order to optimize conversion rates in key markets On track with the rollout of our newly established exclusive strategic partnership with Shopify Continue signing up and going live with Shopify-based merchants on an on-going basis Working together with Shopify on a new and deeper integration of Global-e’s offering into the Shopify platform and checkout, which is expected to be finalized later this year Q 3 and Full Year Outlook
Global-e is introducing third quarter guidance and raising previously issued guidance for the fiscal year as follows:
Q3 2021 Prior FY 21 Updated FY 2021 (in millions) GMV $328 - $338 $1,210 - $1,255 $1,350 - $1,370 Revenue $54.3 – $56.3 $209.0 – $213.5 $227.0 – $231.0 Adjusted EBITDA (1) $2.8 – $3.8 $16.2 - $18.2 $22.0 - $24.0
Given the uncertainty of the ongoing impact and unprecedented conditions surrounding COVID-19 pandemic on business globally, we will provide investors with updated business trends as they evolve.
1 Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information regarding this metric, including the reconciliations to Operating Profit (Loss), its most directly comparable GAAP financial measure. The Company is unable to provide a reconciliation of Adjusted EBITDA to Operating Profit (Loss), its most directly comparable GAAP financial measure, on a forward-looking basis without unreasonable effort because items that impact this GAAP financial measure are not within the Company’s control and/or cannot be reasonably predicted. These items may include, but are not limited to, share based compensation expenses.Conference Call Information:
Global-e will host a conference call at 4:30 p.m. ET on Monday, August 16, 2021.
United States/Canada Toll Free: 877-705-6003 International Toll: +1-201-493-6725 Conference ID: 13722014
A live webcast will also be available in the Investor Relations section of Global-E’s website at: https://investors.global-e.com/news-events/events-presentations
Approximately two hours after completion of the live call, an archived version of the webcast will be available on the Investor Relations section of the Company’s web site and will remain available for approximately 30 calendar days.
Non-GAAP Financial Measures
To supplement Global-e’s financial information presented in accordance with generally accepted accounting principles in the United States of America, or GAAP, Global-e considers certain financial measures that are not prepared in accordance with GAAP, including Adjusted EBITDA. Global-e defines Adjusted EBITDA as operating profit (loss) adjusted for depreciation and amortization, and stock-based compensation expense. Adjusted EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate directly to the performance of the underlying business.
Global-e uses Adjusted EBITDA in conjunction with GAAP measures as part of Global-e’s overall assessment of its performance, including the preparation of Global-e’s annual operating budget and quarterly forecasts, to evaluate the effectiveness of Global-e’s business strategies, and to communicate with Global-e’s board of directors concerning its financial performance. Adjusted EBITDA is a measure used by our management to understand and evaluate our operating performance and trends. Adjusted EBITDA is a key performance measure that Global-e’s management uses to assess its operating performance and the operating leverage in Global-e’s business.
Global-e’s definition of Adjusted EBITDA may differ from the definition used by other companies and therefore comparability may be limited. In addition, other companies may not publish this metric or similar metrics. Furthermore, this metric has certain limitations in that it does not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. Thus, Adjusted EBITDA should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
Global-e also uses Gross Merchandise Value (GMV) as a key operating metric. Gross Merchandise Value or GMV is defined as the combined amount we collect from the shopper and the merchant for all components of a given transaction, including products, duties and taxes and shipping.
For more information on the non-GAAP financial measures, please see the reconciliation tables provided below. The accompanying reconciliation tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
Cautionary Note Regarding Forward Looking Statements
Certain statements in this press release may constitute “forward-looking” statements and information, within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding Global-e’s operations, strategy and Global-e’s projected revenue and other future financial and operational results. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this announcement, including but not limited to, the ability to retain merchants or the GMV generated by such merchants; the ability to attract new merchants; our expectations regarding our revenue, expenses and operations; anticipated trends and challenges in our business and the markets in which we operate; our ability to compete in our industry; our ability to anticipate merchant needs or develop or acquire new functionality or enhance our existing platform to meet those needs; our ability to manage our growth and manage expansion into additional markets; our ability to establish and protect intellectual property rights; our ability to hire and retain key personnel; our expectations regarding the use of proceeds from our initial public offering; our ability to adapt to emerging or evolving regulatory developments, technological changes, and cybersecurity needs; our anticipated cash needs and our estimates regarding our capital requirements and our needs for additional financing; and the other risks and uncertainties described in Global-e’s prospectus filed with the Securities and Exchange Commission (the "SEC") on May 13, 2021 and other documents filed with or furnished by Global-e from time to time with the SEC. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this press release. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
About Global-E Online Ltd.
Global-e’s mission is to make global e-commerce “border-agnostic.” Global-e is the world's leading platform to enable and accelerate global, direct-to-consumer cross-border e-commerce. The chosen partner of more than 500 global brands and retailers across the United States, Europe and Asia, Global-e makes selling internationally as simple as selling domestically. Founded in 2013 by Amir Schlachet, Shahar Tamari and Nir Debbi, the company enables e-commerce retailers to increase the conversion of international traffic into sales by offering online shoppers in over 200 destinations worldwide a seamless, localized shopping experience. Global-e's end-to-end e-commerce solutions combine best-in-class localization capabilities, big-data best-practice business intelligence models, streamlined international logistics and vast cross-border experience, enabling international shoppers to buy seamlessly online and retailers to sell from, and to, anywhere in the world.
Investor Contact: IR@global-e.com
Press Contact: Globale@headline.media
Global-E Online Ltd. CONSOLIDATED BALANCE SHEETS (In thousands) Period Ended December 31, June 30, 2020 2021 (Audited) (Unaudited) Assets Current assets: Cash and cash equivalents $ 68,637 $ 391,008 Short-term deposits 6,457 78,370 Accounts receivable, net 3,594 4,167 Prepaid expenses and other current assets 23,047 28,651 Marketable securities 16,871 18,550 Funds receivable, including cash in banks 34,492 30,992 Total current assets 153,098 551,738 Property and equipment, net 717 849 Operating lease right-of-use assets 4,160 3,570 Long term deposits 2,223 2,272 Deferred contract acquisition costs, noncurrent 729 1,001 Other assets, noncurrent 368 191 Commercial agreement asset - 184,234 Total long-term assets 8,197 192,117 Total assets $ 161,295 $ 743,855 Liabilities, Convertible Preferred Shares and Shareholders ’ (Deficit) Equity Current liabilities: Accounts payable $ 19,057 $ 19,051 Accrued expenses and other current liabilities 29,432 25,026 Funds payable to Customers 34,492 30,992 Short term operating lease liabilities 915 909 Total current liabilities 83,896 75,978 Long-term liabilities: Deferred tax liabilities, net 105 124 Warrants liabilities to preferred shares 5,738 - Long term operating lease liabilities 3,513 2,891 Total liabilities $ 93,252 $ 78,993 Commitments and contingencies Convertible preferred shares 112,553 - Shareholders’ deficit: Share capital and additional paid-in capital 8,087 741,594 Accumulated comprehensive income 111 (51 ) Accumulated deficit (52,708 ) (76,681 ) Total shareholders’ (deficit) equity (44,510 ) 664,862 Total liabilities, convertible preferred shares and shareholders’ (deficit) equity $ 161,295 $ 743,855
Global-E Online Ltd. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) Three Months Ended Six Months Ended June 30, June 30, 2020 2021 2020 2021 (Unaudited) (Unaudited) Revenue $ 29,787 $ 57,287 $ 49,476 $ 103,438 Cost of revenue 20,122 36,687 34,029 67,471 Gross profit 9,665 20,600 15,447 35,967 Operating expenses: Research and development 3,606 5,739 6,821 11,182 Sales and marketing 1,924 30,017 3,776 33,117 General and administrative 2,683 4,337 3,960 7,051 Total operating expenses 8,214 40,093 14,557 51,350 Operating profit (loss) 1,451 (19,493 ) 890 (15,383 ) Financial expenses, net 1,847 2,420 2,549 8,129 Loss before income taxes (396 ) (21,913 ) (1,659 ) (23,512 ) Income taxes 5 311 9 461 Net loss attributable to ordinary shareholders $ (401 ) $ (22,224 ) $ (1,668 ) $ (23,973 ) Basic and diluted net loss per share attributable to ordinary shareholders $ (0.02 ) $ (0.25 ) $ (0.08 ) $ (0.44 ) Basic and diluted weighted average ordinary shares 21,208,147 87,308,647 20,686,427 54,750,595
Global-E Online Ltd. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended Six Months Ended June 30, June 30, 2020 2021 2020 2021 (Unaudited) (Unaudited) Operating activities Net profit (loss) $ (401 ) $ (22,224 ) $ (1,668 ) $ (23,973 ) Adjustments to reconcile net profit (loss) to net cash provided by operating activities: Depreciation and amortization 57 69 109 131 Share-based compensation expense 1,600 1,551 1,686 2,618 Accounts receivable (578 ) (1,530 ) (227 ) (573 ) Prepaid expenses and other assets (3,114 ) (7,561 ) (3,201 ) (5,432 ) Funds receivable (3,732 ) (7,452 ) (2,359 ) (9,520 ) Long-term receivables - 957 - - Funds payable to customers 5,101 6,122 (2,841 ) (3,500 ) Operating lease ROU assets 251 208 (3,200 ) 590 Deferred contract acquisition costs (107 ) (184 ) (181 ) (374 ) Accounts payable 3,902 2,857 351 (6 ) Accrued expenses and other liabilities 5,252 7,163 3,088 (4,406 ) Deferred tax liabilities - 8 - 19 Operating lease liabilities (207 ) (163 ) 3,020 (628 ) Warrants liabilities to preferred shares 2,252 1,625 2,261 5,872 Commercial agreement asset - 25,486 - 25,486 Net cash used in operating activities 10,276 6,932 (3,162 ) (13,696 ) Investing activities Investment in long-term marketable securities - (508 ) - (2,154 ) Proceeds from marketable securities - 257 - 257 Purchases of short-term investments (2 ) (64,360 ) (52 ) (71,913 ) Purchases of long-term investments 9 (31 ) (198 ) (49 ) Purchases of property and equipment (53 ) (149 ) (209 ) (263 ) Net cash used in investing activities (46 ) (64,791 ) (459 ) (74,122 ) Financing activities Proceeds from issuance of convertible preferred shares, net of issuance costs 58,821 - 58,821 - Proceeds from issuance of Ordinary shares in IPO, net of issuance costs - 396,983 - 396,983 Proceeds from exercise of share options 282 20 440 173 Net cash provided by financing activities 59,103 397,003 59,261 397,156 Net decrease in cash, cash equivalents, and restricted cash 69,333 339,144 55,640 309,338 Cash and cash equivalents and restricted cash—beginning of period 6,676 55,227 20,369 85,033 Cash and cash equivalents and restricted cash—end of period $ 76,009 $ 394,371 $ 76,009 $ 394,371
Global-E Online Ltd. SELECTED OTHER DATA (In thousands ) Three Months Ended Six Months Ended June 30, June 30, 2020 2021 2020 2021 (Unaudited) (Unaudited) Key performance metrics Gross Merchandise Value 167,008 326,231 281,447 592,786 Adjusted EBITDA (a) 3,108 7,613 2,685 12,852 Revenue by Category Service fees 10,345 35 % 21,106 37 % 17,299 35 % 38,202 37 % Fulfillment services 19,442 65 % 36,181 63 % 32,177 65 % 65,236 63 % Total revenue $ 29,787 100 % $ 57,287 100 % $ 49,476 100 % $ 103,438 100 % Revenue by merchant outbound region United Kingdom 18,393 62 % 27,706 48 % 31,260 63 % 49,250 48 % United States 7,218 24 % 16,638 29 % 10,919 22 % 29,845 29 % European Union 3,913 13 % 12,433 22 % 6,899 14 % 23,581 23 % Israel 263 1 % 243 0 % 398 1 % 494 0 % Other - - 267 0 % - - 268 0 % Total revenue $ 29,787 100 % $ 57,287 100 % $ 49,476 100 % $ 103,438 100 % (a) See reconciliation to adjusted EBITDA table
Global-E Online Ltd. RECONCILIATION TO ADJUSTED EBITDA (In thousands) Three Months Ended Six Months Ended June 30, June 30, 2020 2021 2020 2021 (Unaudited) (Unaudited) Operating profit (loss) 1,451 (19,493 ) 890 (15,383 ) (1) Stock-based compensation: Cost of revenue 3 19 4 39 Research and development 171 222 205 444 Selling and marketing 98 223 117 444 General and administrative 1,328 1,087 1,360 1,691 Total stock-based compensation 1,600 1,551 1,686 2,618 (2) Depreciation and amortization 57 69 109 131 (3) Commercial agreement asset amortization - 25,486 - 25,486 Adjusted EBITDA 3,108 7,613 2,685 12,852
