Global-e Online Ltd. (GLBE) Earnings

Management highlights

- Overall Q1 2026 Performance * GMV grew 40% year-over-year to $1.74 billion, beating the midpoint of prior guidance across all metrics; non-GAAP gross margin expanded 150 basis points to 47%; adjusted EBITDA grew 59% year-over-year to $50.2 million, with a 19.9% margin (up 330 basis points YoY) * Strong growth was driven by above-trend same-store sales, faster-than-expected volume ramp from 2025 H2 new merchant launches, higher average order value (AOV), and FX tailwinds, partially offset by temporary disruption from the Iran conflict in the Middle East/GCC region * The company repurchased $60 million of stock in Q1 2026, bringing total repurchases under the 2025 $200 million plan to $131 million, with $69 million of remaining capacity - Product & Offering Updates * Shopify Managed Markets 2.0 (white-label merchant of record solution) is progressing in line with plans; expansion to Canada and the UK is imminent, with new platform features rolling out over upcoming quarters; management expects a meaningful volume ramp in H2 2026 * Duty drawback (value-added service for reclaiming import duties on exported and returned goods) expanded to new markets and now supports economy shipping partners; strong merchant interest for U.S. import drawback, with onboarding proceeding slightly slower than expected, with initial claims already processed * Borderfree.com referral platform grew to over 6% of total sales for participating merchants, and monetization launched in early 2026, with early positive adoption trends * AI is embedded across all business functions, driving faster product development without increasing headcount, faster customer/merchant support ticket resolution, and improved regulatory compliance navigation; AI chat traffic is growing as an incremental new referral channel for merchants, strengthening the company's competitive moat - New Merchant & Existing Customer Expansion * Dozens of new brands launched across North America, Europe, and APAC in Q1, including multiple new brands from LVMH and Richemont luxury groups, expanding existing strategic partnerships * Key existing merchant expansions included Alo Yoga (expanded to new markets and added BOPIS in Canada, the UK, and Europe), FIGS (launched in Eastern Europe, expanded in Asia), Bandai Namco (opened markets in the Middle East, Africa, and Eastern Europe), Stella McCartney (expanded to over 12 new markets), and Patu (LVMH, expanded to full global coverage with GlobalE)

Guidance

- The company raised full-year 2026 guidance across all key metrics, driven by better-than-expected Q1 performance and strong underlying business momentum - Q2 2026 Guidance: * GMV expected in the range of $1.945 billion to $1.985 billion, representing 35.2% YoY growth at the midpoint, with significantly lower FX tailwinds than Q1 * Revenue expected in the range of $278.5 million to $285.5 million, representing 31.2% YoY growth at the midpoint * Adjusted EBITDA expected in the range of $55 million to $58 million, representing a 20% margin at the midpoint - Full-Year 2026 Updated Guidance: * GMV expected in the range of $8.53 billion to $8.88 billion, representing 32.5% YoY growth at the midpoint; same-store sales growth is expected to moderate to normalized multi-year averages in H2 2026 * Revenue expected in the range of $1.22 billion to $1.28 billion, representing 29.9% YoY growth at the midpoint (an acceleration from 2025 growth rates) * Adjusted EBITDA expected in the range of $264.5 million to $289.5 million, representing 39.5% YoY growth at the midpoint, with a 22.2% adjusted EBITDA margin, driven by ongoing operating leverage - Guidance embeds current spot exchange rates, with very low expected FX tailwinds for H2 2026, and assumes no additional major disruption from the Iran conflict in the Middle East

Segment performance

GlobalE reports two core revenue segments for Q1 2026: 1) Service fee revenue: $120.8 million, contributing 47.9% of total company revenue, with a stable service fee take rate of 6.9% (flat relative to recent quarters). 2) Fulfillment services revenue: $131.3 million, contributing 52.1% of total company revenue, with a fulfillment take rate of 7.5% (flat relative to Q4 2025, and lower than Q1 2025 due to a ongoing volume shift to multi-local service models, which have lower inherent take rates). Total company revenue for Q1 2026 was $252.1 million, up 33% year-over-year.

Risks & headwinds

- The ongoing Iran conflict temporarily reduced Q1 volumes in directly impacted Middle East/GCC markets, which represent approximately 5% of total company GMV; while volumes have mostly recovered as of the call, further escalation could disrupt future trading and increase fuel and transportation costs * The company has fuel surcharge mechanisms to pass through most fuel cost changes to customers, but unanticipated price volatility could still pressure margins - The removal of the EU de minimis exemption for non-EU imports starting July 2026 creates new compliance and pricing complexity for merchants, though management expects a much smaller impact than the U.S. de minimis removal, due to the lower 150 euro threshold vs. the U.S. $800 threshold - Merchant adoption of new offerings including duty drawback and Managed Markets 2.0 could proceed slower than currently expected, delaying projected revenue and margin contributions - Persistent macroeconomic weakness or reduced consumer spending across major regions could pressure same-store sales growth below current projections

Analyst Q&A

• Q: How is Shopify Managed Markets 2.0 progressing relative to expectations, when will it meaningfully ramp, and which merchant segments are adopting fastest? /

  A: Managed Markets 2.0 is progressing in line with initial plans, with gradual growth in adoptions and improving lead conversion. Additional markets (Canada, the UK) and Shopify marketing support are expected to launch later this year. Management still expects a material volume ramp in the second half of 2026 and into 2027. No specific merchant vertical or size segment is outperforming adoption expectations, as the offering appeals to a wide range of merchant types.

• Q: How should we expect take rates to trend for the rest of 2026, given the ongoing shift to multi-local services? /

  A: Management expects take rates to be broadly stable for the full year. Fulfillment take rates may see a very limited incremental decline from the multi-local mix shift, but no material change is expected. Service fee take rates have held steady at ~6.8-6.9% for six quarters, and are expected to remain near that level. While Managed Markets 2.0 has a different revenue share P&L structure that reduces reported service fee take rates for the segment, the overall bottom-line impact is negligible.

• Q: What is the growth outlook for borderfree.com, and what is the long-term upside for adoption and contribution? /

  A: Borderfree.com's sales contribution for participating merchants has grown from 4% three quarters ago to over 6% today, and management expects it to grow toward 10% over time. More merchants are expected to adopt the platform as it proves its value as a low-cost global customer acquisition channel, particularly amid rising search and social traffic costs and growth in AI-driven product discovery. While monetization launched this year, no material revenue contribution is expected in 2026, and no meaningful merchant churn has been seen since monetization launched.

• Q: How do you differentiate GlobalE's Managed Markets offering from Shopify's native international commerce features? /

  A: Shopify's native international features (multi-currency, alternative payments) cater to merchants that are new to global sales and just testing international expansion. When merchants want to scale international sales into a meaningful core business, the complexity of cross-border compliance, duties, taxation, and logistics makes a fully managed merchant of record solution necessary. That is where GlobalE's Managed Markets and enterprise offerings add value, leveraging years of specialized experience and proprietary data to handle the complexity that merchants cannot efficiently manage in-house. Both offerings can grow in parallel, with Shopify driving broader merchant interest in international expansion that ultimately benefits GlobalE's scaled solutions.

• Q: What will be the impact of the EU's upcoming removal of the de minimis exemption for non-EU imports? /

  A: The impact is expected to be far smaller than the 2025 U.S. de minimis removal. The EU threshold is 150 euros (~$180 USD), compared to $800 USD in the U.S., so far fewer orders are affected. The average impact on AOV is estimated at ~5% (vs. 15-25% in the U.S.), so most merchants will be able to absorb the cost or pass it through to consumers without meaningful volume impact. GlobalE's existing duty management and drawback offerings are well positioned to help merchants navigate the new regulatory environment.