Shopify Posts Q3 Revenue of $99.6 Million, an 89 Percent Increase

Last week cloud-based, multi-channel e-commerce platform Shopify (NYSE: SHOP)(TSX: SHOP) posted strong third quarter financials, including total revenue of $99.6 million, an 89 percent

Subscription News: Shopify Posts Q3 Revenue of $99.6 Million

Last week cloud-based, multi-channel e-commerce platform Shopify (NYSE: SHOP)(TSX: SHOP) posted strong third quarter financials, including total revenue of $99.6 million, an 89 percent increase compared to the same period last year. Shopify’s Subscription Solutions revenue was also impressive, growing 69 percent to $49.8 million year-over-year. In Shopify’s Q3 announcement, the company attributes the revenue increases to the continued rapid growth of monthly recurring revenue.

Other third quarter highlights include:

  • More than 325,000 small and medium-sized businesses now use Shopify.
  • Merchant Solutions grew 114 percent to $49.7 million.
  • Subscription Solutions and Merchant Solutions each make up about 50 percent of Shopify’s total revenue.
  • Monthly Recurring Revenue as of September 30 was $16.3 million, a 67 percent increase year-over-year.
  • Gross Merchandise Volume was $3.8 billion, a 100 percent increase year-over-year.
  • Gross profit grew 82 percent to $52.5 million year-over-year.
  • Operating loss for the quarter was $9.5 million, about 10 percent of revenue, compared to a $4.3 million operating loss this time last year.
  • Net loss was $9.1 million, or $0.11 per share, compared to $4.7 million, or $0.06 per share for the same period in 2015.

[Editor’s note: Shopify is based in Canada, but reports in U.S. dollars.]

Tobi Lutke, founder and CEO of Shopify commented on the company’s third quarter results:

 an 89 Percent Increase

Source: Shopify

“Our accomplishments over the last few months support the strategy we have made clear from the beginning, which is to do the things that help merchants succeed. We launched Apple Pay, Sell on Messenger and a brand new mobile Shopify app that lets a merchant set up and run their entire business from their mobile phone. Each of these is already making a difference for merchants, and we expect to enjoy the full benefits of these investments over the next several years,” Lutke said.

“We are pleased with our third-quarter results,” added Russ Jones, CFO of Shopify. “We continued to expand revenue at an exceptional pace and once again delivered operating leverage. With the expansive opportunities that exist right now for multi-channel commerce, prioritizing investments to support future growth, while improving financial results today, is especially important for Shopify.”

Since the quarter closed, Shopify has made two key announcements:

  • It has completed the acquisition of Boltmade to help accelerate the development of its Shopify Plus products.
  • Shopify expanded integration with Facebook Messenger so that merchants could engage customers directly from Messenger. Over 30,000 merchants have installed Messenger for their shops.

The company offers the following guidance for the fourth quarter: revenues will range between $120 million to $122 million; GAAP operating loss will be between $10 million and $12 million; and adjusted operating loss will be between $1 million and $3 million.

Despite the net loss, investors didn’t panic when the third quarter results were released on November 2. As of 6:11 PM, EDT, on November 4, Shopify’s stock price on the New York Stock Exchange was $39.15 in after-hours trading, a $1.03 drop from its opening price of $40.18 that morning. However, on November 9, 2015, Shopify’s stock price was $30.23, so it has improved just under 30 percent in the last year.

Subscription News: Shopify Posts Q3 Revenue of $99.6 Million

Source: Google Finance – Yahoo Finance – MSN Money

Insider Take:

Why aren’t investors panicking, despite Shopify’s growing losses? Shopify is in growth mode. It is the leading cloud-based, multi-channel e-commerce platform for small to medium-sized businesses, and it is working to provide them with products to better market, sell and collect. With the introduction of its new Shopify Plus Partner program earlier this year and the addition of Apple Pay and Android Pay, it is holding true to its mission to make being an e-commerce merchant easier.

Yes, the company is reporting losses now, but it is seeing significant growth already in both revenue categories: Subscription Solutions (69 percent growth) and Merchant Solutions (114 percent growth). If Shopify continues on this trajectory, it will eventually reverse the trend to report gains to its investors, rather than losses.

Up Next

Register Now For Email Subscription News Updates!

Search this site

You May Be Interested in: