No respite here.
The Connected Economy 100 (CE100) Stock Index was down 3.7% for the week – although its performance was better than the major benchmarks, which were all down around 4% or more.
CE100 Relative performance
At first glance, the biggest culprit may be the rate we saw on Friday, as stocks fell in the wake of comments from Fed Chairman Jerome Powell, who said the fight against inflation would be a long and painful one and interest rates is destined to last. rising
The struggle our CE100 names have – well, it’s evident in the 29.4% decline seen year to date. Each of our pillars ended lower on the week, led by the Communications group, down 8.6%, and the Pay and Be Paid sector, which lost 6.1%.
Within the payments segment we watch, concerns about the resilience of buy-now-pay-later (BNPL) – and specifically consumer spending – helped hurt shares in some marquee names in the industry.
BNPL names lead to the downside
Within those two groups, Affirm led the names that lost ground, down 20% on the heels of earnings results that disappointed investors, although we noted here that long-term trends for buy now, pay later remain intact.
The company’s total transactions rose 139% in the latest quarter, and its transactions per active user rose 31%, compared to a growth rate of 8% a year ago. Repeat business was in evidence as the typical BNPL user made three transactions during the quarter, up from two a year ago. Affirm said 85% of consumers transacting through its platform are repeat customers.
But seasonality will lead to a decrease in revenue as a percentage of GMV. GMV guidance of $20.5 billion to $22 billion would imply 20% to about 41% growth from the most recent fiscal year, where that rate was 77% in the most recent quarter.
Sezzle, also within the BNPL industry, lost around 17%, after announcing the launch of a new direct integration with Klaviyo earlier this month.
Klaviyo is a customer platform that helps more than 100,000 paying users maximize revenue, increase repeat sales and improve retention with personalized emails and SMS, according to the announcement between the companies. As for the mechanics of the deal, by working with Sezzle, Klaviyo merchants can launch campaigns that include flexible financing messaging.
Within communications, Zoom lost the most ground, losing 18.2%. As reported by PYMNTS after Zoom posted earnings, the company’s online business (focused on smaller businesses and consumer accounts) saw fewer new subscriptions, management said on the call.
See also: Zoom’s slow growth shows the pitfalls and pitfalls of the connected economy
This business should see a decline of as much as 7% to 8% in the current year. Larger firms take longer to close deals, according to management’s comments.
Greg Tomb, Zoom’s president, said that larger deals see “extra sets of eyes” as deals go through. Total enterprise customer accounts came in at 204,100, which equates to 18% growth year-over-year. This is a marked slowdown from 160% seen five quarters ago.
Offsetting – a little – by the enablers and store businesses
These losses were somewhat blunted by the Enablers and Shopping segments, which also fell on the week, from a relatively better 0.4% and 2.6%, respectively.
Snowflake rose 28.% in the past week to top the Enablers names. The company said in a presentation that it saw 83% year-over-year product revenue growth. The company also said it had 36% growth in larger enterprise customers as more firms embrace the cloud to manage data more efficiently.
Read more: Chinese online marketplace Pinduoduo expands to the US
Elsewhere, within the shopping pantheon, Pinduoduo collected 25%. As reported, the Chinese e-commerce firm is expanding its platform globally, with its first US launch set for next month.
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