Q3 2021 Global-E Online Ltd Earnings Call
Greetings and welcome to the global E third quarter 2021 earnings call. This call is being simultaneously webcast on the company's website in the investors section under news and events for opening remarks and introductions.
Now I'll turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.
Thank you and good morning with me today from globally are Amir <unk> co founder and Chief Executive Officer, Oh for Karyn.
Chief Financial Officer.
And near Debbie co founder and President.
I will begin with a brief review of the business results for the third quarter ended September 32021, Ultra who will review the financial results for the third quarter, followed by the company's outlook for the fourth quarter and full year of 2021.
We will then open the call for questions.
Certain statements, we make may constitute forward looking statements and information within the meaning of section 27 a of.
Of the Securities Act of $19 33 section 21 E of the Securities Exchange Act of $19 34, and the Safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and futures excuse me and views of future events.
These forward looking statements are subject to risks uncertainties and assumptions some of which are beyond our control.
In addition, these forward looking statements reflect our current views with respect to future events and are not a guarantee of future performance.
Actual outcomes may differ materially from the information contained in the forward looking statements as a result of a number of factors, including those set forth in the section titled risk factors in our prospectus filed with the SEC on September 13, 2021, and other documents filed with or furnished to the SEC.
These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this call you.
You should not put undue reliance on any 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.
Please refer to our press release dated November nine 2021 for additional information.
In addition, certain metrics will be discussed today.
Excuse me, we will discuss today non-GAAP metrics. The presentation of this financial information is not intended to be considered in isolation or as a substitute for or superior to financial information prepared and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and operating decision, making and as a means to evaluate period to period comparisons.
We believe that these measures provide useful information about operating results enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.
For more information on the non-GAAP measures.
Excuse me the non-GAAP financial measures. Please see the reconciliation tables provided in our press release dated November nine 2021.
Throughout this call we provide a number of key performance indicators used by our management and often used by competitors in our industry.
These and other key performance indicators are discussed in more detail in our press release dated November nine 2021, I will now turn the call over to Amir co founder and CEO.
Thank you Erica and welcome everyone.
Hope everyone is keeping safe and healthy.
Thank you all for joining us today for our quarterly earnings calls and let's jump straight into our third quarter results.
I'm proud to report that Q3 was another record quarter for us.
Merchandize value GMB grew to $352 million or 86% growth year on year <unk>.
Revenues for the quarter were $59 1 million.
Representing 77% year on year growth.
Our gross profit grew even faster.
127% year on year, reaching $22 $8 million.
Our gross profitability margin further expanded in Q3 to 38, 6% up from 32% in Q3 of last year, thanks to our growing economies of scale and increased efficiencies.
Adjusted EBITDA for the quarter totaled $7 $7 million almost tripling year over year.
Attributed primarily through our highly efficient operating model.
Before we dive forever.
I would like to mention that from a broader market perspective.
During Q3, we have started to see signs of the anticipated return to normality in ecommerce growth trends.
We are seeing key markets beginning to exhibit various levels of Covid relief in the form of reopening with physical retail.
Independent of consumer spend slightly back from the record levels of E Commerce market share we have witnessed throughout the height of the pandemic.
That being said, we expect ecommerce to continue gaining market share faster than during pre pandemic times as in.
New consumer audiences as well as small to large brands alike are shifting more weight towards ecommerce.
We then of course, the DTC direct to consumer cross border ecommerce market opportunity is immense and continues to grow significantly faster than the overall equal risk market.
As such during Q3, we continued to reinvest heavily into our business and it made great progress across all our key strategic growth levers.
First we continue to onboard more merchants onto our platform across all geographies, we operate while expanding our work with existing merchants and brand groups.
For example, our relationship with the <unk> luxury group continue to develop as during Q3, we launched with two more group houses.
And so for us the lesser contributing to our growing business in Asia Pacific.
Another example of a successful new large merchant relationship is the fast growing sports clothing brands, although yoga, we choose our latest large enterprise brands to go live on the Shopify platform.
For example, the value of our strategic partnership with shown before.
This quarter also saw several merchants expanding the scope of the partnership robust two additional lanes.
Notable examples include a consumer electronics brands, Anheuser, which added 15 additional market the luxury jewelry brands both.
Part of the carrying luxury group that added the U S and Europe as well as Spanish footwear brand camper, which added support for 15 new markets.
Second our direct sales channels continue to be augmented by an ever expanding list of strong channel partners.
The latest partnership we announced is with the Australian post group, yielding us access to their vest, Australia and client base and providing further support for our penetration into the APAC region.
Third we continue to develop and enhance our multi local support features and capabilities launching with job growth. Our first global consumer electronics brand as well as with the football club Leeds United representing the latest addition to our growing list of Sports club merchant partners.
Another notable feature we deployed for our merchants at the beginning of Q3 with support for the new Oss and Io assess value added tax regimes in Europe.
With such support provided natively by the globally platform. The overrides complicated transition from the old distance selling via a T regime to the new Io assessed one with seamless entrance spirit for origin.
Furthermore, due to their complexity, which is involved in supporting the new regime.
All of our merchants such as the Sports Club Arsenal for example, which in the past operated in Europe by themselves.
Jos now to move the European markets to be operated by globally.
Across all these channels, our pipeline remains stronger than ever.
Fourth we continue to put significant effort and resources into our fast growing strategic cooperation with shelf before.
We are seeing great market traction with the Shopify merchant base as part of our partnership with enterprise merchants, such as Netflix and other yoga as well with a growing number of smaller emerging brands.
On the technical side, we recently completed the first phase over a new native integration into shop before.
With the first pilot merchant already live and selling through the new seamless plug.
Netflix who might have already mentioned is actually one of the first enterprise merchants to be selling through the new native integration.
Over the next quarters, we intend to continue working together with you all before in order to rollout the additional phases of the new native integration, which is expected to lead to an even more seamless merchant go live process.
Last but not least in parallel to capturing our fast organic growth opportunities consistent with our previously announced strategy. We intend to continue exploring synergetic M&A opportunities is nonorganic options to further enhance our platform's capabilities.
As you all know our people have always been the key element of our success.
As such throughout Q3, we continued to recruit many more great and passionate individuals.
They join our Super talented and dedicated teams around the globe, helping us build sound foundations of our continued future growth.
As part of these efforts. We also recently signed a long term lease for a new R&D center in headquarters in Israel.
We cannot wait to move to a new home in Q2 of next year. Once the renovation work is done.
We are still in the early innings of dark to consumer cross border E Commerce and.
And within it we believe that we are just taking off.
We are a reputation first company and merchants recognition of the tremendous value we create for them and for the entire ecosystem continues to grow.
Day in and day out more and more merchants from around the world are coming onto our platform to grow their international business and serves our shoppers around the world.
We believe that our leading end to end solution, coupled with our execution capabilities.
Position us for rapid growth and success well into the future.
And with that I will hand, it over to offer our CFO to go over our financial results in more depth as well as provide our outlook for the remainder of the year.
Okay.
Thank you Amir and thanks again, everybody for joining us today for our quarterly earnings call. We are pleased that our business has been tracking well and our strong growth momentum continued throughout Q3.
I'd like to point out again that in addition to our GAAP results I'll also be discussing certain non-GAAP results, our GAAP financial results along with a reconciliation between GAAP and non-GAAP results can be found in our earnings release.
As Amir mentioned, a rapid growth in <unk> continued in Q3, as we generated $352 million of DMV and an increase of 86% deal over year, we continue to tap into the massive opportunity of the direct to consumer cross border E Commerce market, which is growing.
Much faster than the overall e-commerce market, while the reopening of physical retail and the return of e-commerce growth rates to normality is evident.
Total revenue for the three months ended September 32021 were $59 1 million up 77% year over year.
Service fees revenues were $23 million up 89% fulfillment services revenue were up 71% to $36 2 million.
The higher growth in service fees revenues relative to fulfillment services revenue was driven mainly by the launch of our multi local offering for which we typically do not provide fulfillment services as the model is largely based on local shipping. Another factor is a decrease in the customs clearance fees revenue.
Alongside custom clearance costs as a result of the new Oss and iOS rules related to cross border ecommerce.
And into the EU, which came into force on July as we mentioned in our previous call.
While we generated considerable growth across the business. We have continued to experience higher base growth in our U S outbound revenue, reflecting the strength and reputation of globally in the U S market.
U S outbound revenue was up 91% year over year in.
In addition.
During the quarter, we were pleased to see continued significant contribution of <unk> and revenue from some of the new logos, we launched during the year.
Now, let's review the income statement in more detail gross profit continues to grow significantly faster than our top line as we continue to improve gross margin gross margins leveraging our scale and improving efficiencies in Q3 gross profit was $22 8 million.
Up 127% year over year, and representing a gross margin of 38, 6% compared to 32% in the same period last year also affected by the higher share of service fee revenue.
We are very pleased with our margin expansion will continue to put efforts to support this trend.
Moving on to operational expenses on the R&D front, we continued to invest in the development and enhancement of our platform to further expand our offering and lay the foundation for future growth as Amir mentioned during Q3, we continued the development of the new Shopify platform integration.
In collaboration with Shopify team.
We have already launched the first pilot, including the Onboarding of Netflix RMB.
R&D expense, excluding stock based compensation was $6 $4 million or 10, 8% of revenue compared to $3 $6 million or 10, 9% in the same period last year as we scale up our investment in R&D total R&D spend in Q3 with <unk>.
<unk> $8 3 million.
We continue to invest in sales and marketing to support the fast growth and capture the growing market opportunity and we continue to see a very healthy and growing pipeline, while still maintaining high efficiency levels sales and marketing expense, excluding the amortization expenses related to the Shopify Warren.
Was $5 $4 million or nine 2% of revenue compared to $2 2 million or six 5% of revenue in the same period last year.
Shopify warrant related amortization expense was $29 $4 million, including this expense sales and marketing expenses for the quarter totaled $34 9 million.
General and administrative expense, excluding stock based compensation was $4 $5 million or seven 5% of revenue compared to $1 7 million or 5% of revenue in the same period last year.
This expense reflects the full quarter impact of additional expenses related to being a public company, including our D&O insurance policy costs and also one time costs related to the follow on secondary offering, which we executed during the quarter.
Total G&A spend in Q3 was seven 8 million.
Adjusted EBITDA totaled $7 $7 million, representing a 13, one adjusted EBITDA margin, increasing from $2 7 million or eight 2% margin in the same period last year net.
Net loss was $28 5 million compared to a net income of $1 3 million in the year ago period, a direct outcome of the amortization expense related to the shopify warrants net profit excluding the amortization expense related to the shopify warrants was 0.9 million.
Switching gears and turning to the balance sheet and cash flow statement. We ended Q3 with $492 million in cash cash equivalents, including short term deposits and marketable securities, which reflect the high level of liquidity.
Operating cash flow in the quarter was $5 $5 million compared to a negative operating cash flow of zero point $5 million a year ago due to the increase in adjusted EBITDA.
Moving to our financial outlook, we are raising our Q4 and full year guidance. Our guidance reflects the strong momentum of the business alongside the normalizing of e-commerce growth rates due to the reopening of physical stores for Q4, we are expecting <unk> to be in the range of 406.
65% to $475 million at the midpoint of this range. This represents a growth rate of 55% versus Q4 of 2020.
We expect Q4 revenue to be in the range of 76, 4% to $78 4 million.
This represents a growth rate of 45% at the midpoint of the range versus Q4 of 2020.
For adjusted EBITDA, we expected a profit in the range of seven 3% to $8 3 million.
For the full year of 2021, we are raising our guidance and anticipate <unk> to be in the range of $1 $41 billion to $142 billion, representing nearly 83% annual growth at the midpoint of the range revenue is expected to be in the range of 239.
$1 million to $241 million.
Representing a growth rate of 76% at the midpoint of the range.
For adjusted EBITDA, we're expecting profit of 27, 9% to $28 9 million.
Our outlook for the full year of 2021 reflects additional investments in personnel related costs sales and marketing and product development as well as incremental general and administrative costs associated with being a public company.
In conclusion, we believe that there are tremendous opportunities for more high face growth well above the market average in the years to come we are gearing ourselves up in order to be well positioned to capture all of these opportunities exciting times ahead and with that <unk>.
And I are happy to take any of your questions.
<unk>.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
You are using a speakerphone please pick up your handset before pressing the keys.
At any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
To ensure we are able to get to everyone. Please limit yourself to one question.
And one follow up.
At this time, we will pause momentarily to assemble our roster.
The first question comes from James Faucette with Morgan Stanley. Please go ahead.
Thank you very much and thanks.
Thanks for taking the time today.
I wanted to ask first on your demand an ability to fulfill are you seeing any adverse impacts right now from the well publicized.
Apply chain constraints et cetera that seem to be in the market and impacting.
Good production globally, and if so has that been how are you factoring that into your outlook and planning.
Thanks, James Thanks for the question.
As a mirror generally speaking we ourselves don't encounter any.
Interruptions due to the challenges and the global logistics market with.
The reason that basically our entire volume of shipments goes up.
<unk> Air and we have.
Very good and close relationships with our strategic logistics partner that partners in general that would give us.
Priority most of the challenges currently are in the world Our sea freight in North and are having said that we do see from time to time some challenges for our merchants some of our merchants.
<unk>.
Some inventory issues.
Issues from time to time, but nothing material and nothing that to.
To date has made any any disruption in our business or in our merchant business.
Got it and then.
You highlighted that you're in.
You are starting to see good movement with Shopify merchants and Youre in the pilot phases.
Are you thinking or better said, how should we be thinking about the ramp on the pace at which it will ramp.
Big of a merchant base within.
The Shopify group or you're currently engaged with and ultimately targeting just a bit more color on.
The ways to track and anticipate the evolution and ramp up of that relationship.
Hi, James Thank you for the question it's there.
So we do expect some level of growth in the next quarters as we see demand and bookings of large <unk> merchants such as.
Yogurt, let just lumped with Oslo Netflix.
<unk> continued to build up.
However, as we see strong bookings momentum also with large brands outside shortly.
Through our partnership with FCC E Commerce and others.
Do expect the growth shopify sharing the mix it will be gradual but overall, we see our bookings I would say growing at a fast pace versus <unk>.
Last year, but we've lost deal we nearly solely we more than doubled our new GMP bookings versus 2019.
Expect this trend to continue as this year or at least bookings.
Currently at the phase two more than doubled versus 2020 numbers.
That's great. Thank you so much.
The next question comes from Sandbox Samana with Jefferies. Please go ahead.
Hi, good morning, Thanks for taking my questions, maybe a follow up to that.
James's question around Shopify.
The company rolled out shopify markets during the quarter and we get a lot of questions about maybe what the difference is between what shop by markets and what globally is offering and we think we know the differences, but just could you help us maybe clarify.
How you think about shopify markets and how that impacts the relationship that globally has with shopify.
Yes. Thank you for that question commodities.
Basically.
We see and Shopify sees it as well Shelby five market is a complementary solution towards globally holes for.
Obviously markets comes to cater for the smarter SMB brands at all I would say is the vast majority in terms of number of <unk> clients.
Xie Xie.
The vast majority of that potential gmg in cross border trade in is concentrated its adult one 2% of shopify merchants and those.
Do need I would say a more comprehensive solution, including <unk>.
Our solutions globally provides including the high touch I would say guidance into best practices, including customer services.
Around the world in multiple languages.
Are not a part of the call and.
All future.
Shopify markets offering so it's much more differentiation.
On high touch services that are catered more for the larger breadth.
Great. That's helpful. And then maybe if I, if I think about the <unk>.
The guidance and I know you gave some color around it but.
As we think about that.
Maybe some of the like if we could double click on it.
How are you thinking about have you factored in that maybe some of your clients may be impacted by supply chain issues or just are you factoring in that the world will be more open and just maybe help us understand.
Some of the factors that are that have been kind of accounted for in that initial outlook for the fourth quarter.
Thank you some of the offer do you want to take that question.
Sure.
Some art. Thank you for the question.
I think that.
Even though there was a lot of uncertainty during the year when we initially planned 2021.
We thought that there might be some COVID-19 relief at some point in time, and we took that into account even in our original planning so.
Basically that was taken into account through Q3 and Q.
Q4, so it was already baked in.
Our regional guidance and.
As we went through the year, we thought that we were sort of.
Picking up momentum and growing fast and we were able to.
To update the guidance.
Every quarter and we are raising the guidance also.
Towards Q4, we feel.
Confidant and I think all those factors are already baked in.
In our guidance.
Great and maybe yeah.
I'd like to squeeze in a third one just.
Uh huh.
I mean are we had mentioned M&A came up on the last call the company and it had brought it up so I'm just curious if any update on the M&A front, especially with us being fairly close to year end should we should we still have that in mind for 2021 or should we now be starting to think about that more as a 2022.
Type of event.
Yes, Thanks a lot.
Indeed, we are a we continue to explore a potential M&A opportunities we still.
We have some in the pipeline in various stages we.
We do still expect a I would say at.
At least one.
<unk> announcement.
In Chile, this side of Christmas and.
And yes.
As we mentioned in the past as well, we do view Nonorganic.
Gross as is.
As means to enhance our or keep up the capabilities of the platform.
Our reach so we.
We definitely expect to continue exploring these in 2022 as well.
Great. Thanks for taking all my questions and congrats on all the success.
Thanks, a lot of them.
The next question comes from Brent <unk> with Piper Sandler. Please go ahead.
Thanks for taking the question here, one for EMEA and a clarification for O'hara Amir it's exciting to hear that the Netflix merch shop in an allo Yoga go live on Shopify platform. This quarter I was hoping just to drill down a little bit and really.
Looking for color on like the scope deployments or you're lighting up a handful of geos are similar to the traditional merchants are you writing them up.
Globally.
How long did the onboarding process take and that kind of high touch approach.
Just any additional color as you think about kind of Onboarding now new merchants via that shopify integration will be interesting. Thanks.
Yes, just Brent just to just to make sure you're asking in terms of.
Whether it's a regional globally in terms of the markets that we support towards <unk> in terms of our.
Ability to deploy the solution for our four brands around the world on shelf before I just want to make sure that I'm answering the right question.
Yeah, just love to know Onboarding like how much how challenging it was onboard the merchant number one and then number two you talked about a camper going into 15, new markets. You typically start with a retailer a large retailer and a handful of markets and that spanned over time is that the same deployment method for these or.
Do they light up all 200 markets.
As they launch.
Got you thank you for clarifying.
First in terms of deployment, both these merchants deployed glue.
Globally with us so it wasn't a gradual or a subset launch it.
It really it's on us.
On a case by case basis.
The larger merchants. These two specific ones regard irrespective of the fact that theyre on shopify just as merchants.
<unk> decided to launch <unk> into our world.
And the first go in terms of complexity and deployment I would say.
They were fairly in.
In line with our Oh call it a regular process Netflix.
As we mentioned on the call.
<unk> on the new integrations. So as you can probably imagine that this is the first deployment there were some additional steps and checks and.
The slightly more complex from a project.
Point of view, but all in all.
I'd say there is nothing out of the ordinary in terms of these are these merchant deployment.
Helpful color, there and just a clarification for ofer gross profit you're talking about triple digit growth here in Q3 outpacing revenue.
What drove the gross margin expansion, particularly on the <unk>.
The software services side, and how sustainable are those trends. Thanks.
Okay.
Thank you for that brand.
Well.
As you know we have a very clear trend of gross margin improvement over time, which.
On a macro level as a result of our focus on leveraging our growing scale and ongoing optimization in this specific quarter. The main drivers behind.
The improvement were the higher share of.
Service fees and also the increase in service fee take rate.
The ongoing optimization of our payments shipping and fraud management component and there was also a slightly favorable mix and as we go forward. We think this is fairly sustainable and we will continue to food.
A lot of efforts to leverage our scale and continued to support this general trend of improvement.
Great to hear thank you.
Thank you your next question.
The next question comes from Paul Walsh.
Excuse me Pat Wall Ravens with JMP Securities. Please go ahead.
Hey, guys its Joe I'm ready to take on for Pat. Thank you so much for taking our questions and congrats on the nice results here. So first how do you think about the potential to expand into other verticals and then second can you just remind us of your Dnb concert concentration from your top merchants and then maybe how you see that changing over.
Thank you.
Great. So I'll, let <unk> take the first question and offer you can take the second one.
Thank you for that question in terms of expanding.
Our reach into new verticals and I think that overall Q3, we managed to penetrate two new significant royalty calls.
One of them is consumer electronics with the successful launch of the job Brock.
Across multiple geographies.
As well as.
This substantial increase in.
Operations with Zen Hinesville, and which is.
Consumer electronics as well so this building our foothold into.
Consumer electronics, where we haven't.
<unk> traded much at all.
Before.
Does this also supports our new I would say business models.
<unk> vertical which is a multi local approach so.
Both Jeff.
As Amir mentioned earlier this United are example of merchants that are moving into a well multi local approach where we support domestic.
Domestic interaction with consumers worldwide. So it's not only across border awarded will you ship for the single pivotal lead to multiple countries. It's actually deployment in multiple countries around the world and transacting locally with our clients. So we see quite a lot of expansion.
And we do expect.
Additional very large breads.
Joining us over this model in the coming quarters, so quite a lot of expansion in those two verticals is it.
In parallel to the continuous growth in our current main worthy cause.
<unk> session apparel cosmetics jewelry.
And all of those.
Referring to the second question.
We have a relatively fragmented merchant base, our largest largest merchant share is decreasing over time. Although this merchant is growing very nicely, but the entire company is growing faster. So the largest merchant is.
Is less than 10% of DMV and then.
10, including the largest merchant are less are around I would say, 30% of DMV and again give them give you some color on that some of those.
Top 10 are actually new merchant, Jeff on boarded and came into this list. So it's.
I would tell you the dynamic.
But all in all it.
Is relatively fragmented.
Super helpful. Thank you and congrats on the quarter again, okay.
Thanks, a lot.
The next question comes from Josh Beck with Keybanc. Please go ahead.
Thanks for taking the question I wanted to ask a industry.
Question.
You talked a bit about the reopening and certainly.
The impact on e-commerce at the same time it seems like there are a lot of folks that are going back to work.
Going back to dine in.
There's a bit of a apparel super cycle I think that's also taking place. Some other companies have certainly called out strength in that vertical. So I'm just kind of curious how you would maybe balance those two factors in.
How they could interplay of as we go into next year.
Yeah. Thanks, Josh.
Sure So I would say.
You are right. So we agree with this.
The reservation on the one hand, there is physical reopening on the other hand there are also.
Other factors that are.
Contributing to the.
Our continued growth in e-commerce spend spending general and e-commerce spend and in particular I would say.
All in all the trends that we're seeing in the numbers and in our interactions with our with our clients are pretty much.
In line with the numbers that we baked into our into our guidance.
You should you should take our our kind of guidance.
Our view on how the market will continue to evolve.
Okay very helpful and I wanted to ask a take rate question I realize this is not how you manage the business. It's much more of an output, but I'm getting lots of questions on it. So when we when we do look at the fulfillment take rate.
It was down.
I think sequentially and year over year and it seems like there is a tax regime change from <unk> to this this one stop shopping and certainly it seems to be.
Bit more simplified a bit more streamlined.
Obviously not material to the gross profit take rate because that went up but should.
Should we think about this as more of a effectively like baseline and three Q2, one that incorporates that and as we move forward and again I know, it's not the most important metric, but it's going to be more influenced by things like mix and other factors. So I just wanted to kind of clarify the change in the quarter and what we should be mindful of in the future as well.
<unk>.
Sure. Thanks, Joshua offer do you want to give just some color around our secret dynamic sure.
So yeah as you said.
<unk> says.
Has decreased this quarter awareness.
Actually service fee take rate slightly increased to over six 5%, while as you mentioned the decrease in overall take rate was the result of the <unk>.
The expected decrease in fulfillment take rate there are two main drivers for that the first one is the fact that you just mentioned.
Oss and iOS implementation in Europe in that yes.
At one time.
I would say.
One time step down.
We don't expect to see additional influence from this change at the second driver is the fact that we have launched our multi local offering which for us is a very exciting opportunity and which we discussed in the previous quarter.
For the multi local offering we typically do not provide fulfillment services as the model is largely based on local shipping. So basically those two factors are.
Have influenced our take rate, but at the same time also contributed to our higher.
Gross margin in this quarter one of them is sort of a one off.
Stepped down and the other will still accompany us.
In future quarters.
Crystal clear, thank you Ofer and thank you appreciate it.
Thanks, Rob.
The next question comes from Scott Berg with Needham. Please go ahead.
Hi, everyone. Congrats on the strong quarter and thanks for taking my questions.
I guess I wanted to start off on the <unk>.
Comparing.
Maybe the most recent quarter with with the timeframe from a year ago. As you look at new customers that you sold in the quarter is the I don't know is the onus or pressure on them to be able to more.
Quickly or accurately fulfill global ecommerce sales as strong as what it was maybe a year ago candidates during the earlier phases of the pandemic or is there.
Maybe their priority maybe not as strong in.
On the <unk>.
Global E Commerce, maybe.
Maybe requirements.
Yes.
Hi, Scott Thanks for the question it's Neal.
Basically we havent seen a change in the sentiment of all emerge as towards cross border.
I think even on the.
Some aspects or some merchant, it's other way around where we see more OTT momentum towards E. Commerce is as a secular trend of the growth of e-commerce expected to continue.
We've seen it with the rollout of multiple new markets with existing you've seen it in our land and expand number that is actually driving a substantial part of our growth is so we do see merchants continue to explore avenues to continue and expand in e-commerce, especially global ecommerce, but we haven't seen I would say.
<unk> concentration back to Mike.
Bias towards my home country.
Is it causal so steel as we see it.
Quite optimistic about the long term trend as we see a super tier one brands opting towards that towards a modern it towards the E Commerce Cross border and we do see this trend continue overtime, maybe with some normalization that this offer explained is already baked into our numbers.
Very good helpful. And then I wanted to ask a question on your in your press release, you had talked about some strength in.
And U S outbound.
Sales, there, but how does the playbook work and.
Selling to merchants in the U S is it very comparable and similar to as you sell some of the more established markets and maybe EMEA or is the playbook, maybe focus a little differently as you engage with U S merchants.
Thank you for the question, it's Nir again.
Basically the playbook itself or the approach to the clients slowly.
I'd say guiding them through the solution until the until we sign that rollout is.
The same across all different territories as the ultra flavors Tweed as.
As you will see in merchant is different key geographies he wants to focus on.
He has a more focus on <unk> related issue in the whole market et cetera, which we don't see.
U S brands, but they sell flavors on the same process in terms of the pipe.
Pipeline itself in the U S. We see a bit more.
I would say.
It's more mix towards Shopify merchants as shopify has a stronger position.
In the U S versus the.
More traditional market, where we see other platforms.
In more significant shifts in the mix.
Okay.
Thanks for the color quite helpful.
Yeah.
Thanks, Scott again.
Again, if you have a question. Please press Star then one.
The next question comes from Brian Peterson with Raymond James. Please go ahead.
Congrats on the really strong results and it's great to hear that you guys are winning seemingly ever seen at Premier League, that's near and Dear to my heart, but.
So first question I just wanted to ask.
Carnival on the land size with customers. So obviously cross border is very very dramatic and it sounds like you're landing at larger levels and you were a few years ago I'm curious how many geos on average there's a new merchant take maybe versus a year or two ago in what is the reasonable expectation.
For that metric going forward.
Okay.
Yes.
Think of it.
The answer to the question would depend.
Based on the merchant side to start any merchant.
We define that is less than the very large enterprise.
It would usually rollout.
All international another market it get goals.
Outside of this whole market old Navy to whole markets. If they are already establishing too is it will rollout in autos or international activities at the get go with that with a large I would say more traditional brands as the likes of the Hugo boss's risks such as.
The World you would see a more I would say.
A phased approach as they do have tradition.
Distribution agreements around the world. So basically we see more phased rollout.
In countries, where they can actually go and do E Commerce direct and then they roll out another batch and overtime.
When we have the ability in and can actually deploy more markets, we see additional expansion.
And I would say pure players and.
All the clients that are not really I would say large traditional ones. We would see all markets advance usually on average we see merchants trading at close to 160 and 170 <unk>.
Active market.
Got it that's great color on that maybe maybe a higher level question broadly.
You mentioned returning to normal I think we're all trying to figure out what that is here but.
You guys are launching with new merchants, you're expanding with those merchants. There is geo expansion and obviously cross border I think it's growing faster than overall E. Commerce. If we tried to unpack that a little bit what is the same store GMB from brands in regions that have been on the platform for more than a year.
Any sense for how to unpack that thanks guys.
Yeah.
Yes.
It is true that everybody is trying to understand what's been.
No really vision actually means and yet I think we all feel that I would say Jeff.
Generally speaking that the the if you look at the the ecommerce equivalent of a store in store growth Lamar who are merchant at.
It remains.
Strong, we obviously don't we don't disclose the exact numbers, but I would say, it's a it's a strong double digit growth for our for our merchant base year on year, even through this gradual normalization.
Okay.
Thank you.
This concludes our question and answer session.
I'd like to turn the conference back over to mirror or.
Any closing remarks.
Yes.
Thanks, a lot.
You all for your questions and on behalf of over near myself and the entire global team I would like to thank you all for joining today and for your continued interest in globally.
I would also like to take this opportunity and thank our growing list of merchants around the globe for their ongoing trust important issue.
Finally, I would like to thank our super dedicated and passionate team of employees around the globe, who strive tirelessly everyday to fulfill our vision and make the future of global ecommerce truly border agnostic.
I'll take here and we very much look forward to speaking with you again on our future earnings calls.
Okay.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
[music].