Shopify Reports Q1 Revenue of $127.4 Million, a 75 Percent Increase

Subscription Solutions revenue was $62.1 million, a 60 percent increase.

Subscription News: Shopify Reports Q1 Revenue of $127.4 Million

Source: Shopify

Yesterday Shopify Inc.* (NYSE: SHOP)(TXS: SHOP), a cloud-based, multi-channel commerce platform for small and medium-sized businesses, announced its first quarter 2017 results, including total revenue of $127.4 million, a 75 percent increase year-over-year. Of this total, $62.1 million in revenue came from Subscription Solutions, representing a 60 percent increase year-over-year. Merchant Solutions revenue was $65.3 million, representing a 92 percent increase over the prior year. The company currently has 400,000 active Shopify stores with $34 billion in sales.

*Note: Shopify is based in Ottawa, Ontario, but all figures reported are in U.S. dollars.

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“With our excellent start to the year, it is clear we are becoming the de facto platform for sellers,” said Shopify CEO Russ Jones in a statement. “In addition to merchant growth and their adoption of both new channels and merchant solutions, we also continue to see expansion of merchants’ GMV. Retail is shifting headlong toward the vision we laid out two years ago — of inspiring entrepreneurship with multi-channel commerce — and we fully expect to continue leading this industry transition for years to come.”

 a 75 Percent Increase

Source: Shopify

Other first quarter financial highlights include:

  • Monthly Recurring Revenue was $20.7 million, a 62 percent increase over the prior year.
  • Gross Merchandise Volume was $4.8 billion, an 81 percent increase year-over-year.
  • Gross profit was $72.2 million, an 80 percent increase.
  • Operating loss for Q1 was $14.5 million, or 11 percent of total revenue, compared to $9.7 million, or 13 percent of total revenue, for the same period last year.
  • Net loss was $13.6 million, or $0.15 per share.
  • Adjusted net loss was $3.5 million, or $0.04 per share.

Operational highlights for the first quarter include:

  • More than 1,000 Shopify partners and developers attended Shopify Unite in April to discuss the future of Shopify, e-commerce and technology.
  • To be released in Q2: Shopify designed its first piece of hardware, a chip-and-swipe reader, for use at physical locations.
  • To be released in Q2: Shopify Pay to securely save shipping and credit card information for future purchases from any Shopify-empowered store.
  • To be released in Q2: Wholesale Channel for Plus. Shopify Plus merchants can create separate, password-protected storefronts within their existing stores for the use of specific buyers.
  • To be released in Q2: New APIs for partners.
  • To be released in Q2: In-game transactions of physical products.
  • Mobile traffic to merchant stores grew, becoming 69 percent of total traffic and 59 percent of total orders.
  • Shopify Capital reached $49 million in aggregate cash advances to U.S. merchants using Shopify Payments. By April 30, 2017, total advances reached more than $60 million.

For the second quarter of 2017, Shopify estimates the following:

  • Revenue between $142 million and $144 million
  • GAAP operating loss between $18 million and $20 million
  • Adjusted operating loss between $6 million and $8 million

For the full year 2017, Shopify estimates the following:

  • Revenue between $615 million and $630 million
  • GAAP operating loss between $69 million and $73 million
  • Adjusted operating loss between $14 million and $18 million

Investors reacted favorably to the report. Monday, the day before the financials were released, Shopify closed at $77.34 per share. At 6:20 PM EDT yesterday, May 2, stock was priced at $82.98 per share. That’s more than double the value of Shopify stock this time last year when it was $30.74 per share on May 3, 2016.

Subscription News: Shopify Reports Q1 Revenue of $127.4 Million

Source: Google Finance – Yahoo Finance – MSN Money

Insider Take:

Shopify is still operating in the red, but it is seeing big increases in every category. It is also beefing up its offerings with new technology, including hardware for physical retail locations. The company is in growth mode, but investors are optimistic that Shopify is moving in the right direction.