Shopify's Net Losses in Q1 2022 Are Not Because of Fulfillment Network
It's unhappy times for Shopify (NYSE: SHOP) shareholders. The stock price has plummeted nearly 80% from its all-time high in just a six-month period. Growth is slowing as it laps the booming revenue expansion from early on in the pandemic, and worry is mounting that inflation and aggressive U.S. Federal Reserve interest rate hikes could dramatically slow -- or worse, even crash -- the global economy.
Now investors can add one more item to the list of concerns: Shopify reported a $1.47 billion net loss in Q1 2022, compared to a $1.26 billion net profit a year ago. During the full-year 2021 financial update a few months ago, Shopify outlined how it would ramp up its investment in its shipping and logistics segment Shopify Fulfillment Network (SFN) in the next couple of years. This concerned some shareholders as Shopify continuously moves away from its ultra-asset-light and profitable e-commerce software business as it tries to woo over more merchants from platforms like Amazon.
However, investment in SFN is not to blame for the big Q1 2022 net loss -- far from it. Shopify is still a nimble commerce technologist, as the biggest blame for the Q1 red ink were its equity investments.
Source Fool.com
