Shopify (SHOP) is down 5.6% on Wednesday after the company announced that it would be selling $1 billion in convertible senior notes. The news comes as Shopify reported strong fourth-quarter results, but the company’s guidance for the first quarter of 2020 was below Wall Street’s expectations.
Here’s what you need to know.
Shopify reported fourth-quarter revenue of $505.2 million, up 47% year over year and ahead of the $493.5 million that Wall Street was expecting.
Adjusted EPS came in at $0.63, up from $0.30 in the fourth quarter of 2018 and ahead of the $0.50 that analysts were expecting.
For the full year, Shopify’s revenue came in at $1.585 billion, up 47% from 2018 and ahead of the company’s guidance for annual revenue of $1.55 billion to $1.57 billion.
Shopify also announced that it would be selling $1 billion in convertible senior notes due 2025 in a private placement. The company said it intends to use the proceeds for general corporate purposes, which may include “working capital, operating expenses, capital expenditures, repurchases or redemptions of our outstanding common shares or debt securities, acquisitions, and strategic investments.”
Looking ahead to the first quarter of 2020, Shopify said it expects revenue of between $575 million and $585 million, which would represent growth of 42% to 44% year over year but is below the $586 million that Wall Street was expecting.
The stock is down today becauseShopify is selling $1 billion in convertible senior notes and guidance for Q1 2020 was below expectations.
