Every 90 seconds, an entrepreneur makes their first sale on Shopify‘s (NYSE: SHOP) platform. And with more people launching their own businesses every day, the multi-channel commerce company is enjoying booming demand for its services, as evidenced by its strong third-quarter results.
Continue Reading Below
Shopify results: The raw numbers
|
Q3 2017 |
Q3 2016 |
Year-Over-Year Change |
|
|---|---|---|---|
|
Revenue |
$171.456 million |
$99.578 million |
72% |
|
Net loss |
($9.380 million) |
($9.120 million) |
N/A |
|
Net loss per share |
($0.09) |
($0.11) |
N/A |
What happened with Shopify this quarter?
Revenue soared 72% year over year, to $171.5 million, as entrepreneurs continue to flock to Shopify’s platform.
“In today’s fast-changing retail environment, merchants large and small are hungry to leverage all that technology can do for them,” CFO Russ Jones said in a press release. “This is why our platform is so valuable to merchants and why they keep coming to Shopify.”
Continue Reading Below
ADVERTISEMENT
Subscription revenue rocketed 65% higher, to $82.4 million, fueled by a 65% jump in monthly recurring revenue (MRR) — the number of merchants times the average subscription fee — to $26.8 million. Notably, Shopify Plus — the company’s high-end enterprise-level service — accounted for 20% of MRR, up from 15% in the year-ago quarter.
Meanwhile, merchant solutions revenue — which includes Shopify’s payments and shipping services — surged 79%, to $89 million. That was driven primarily by a 69% rise in gross merchandise volume (GMV) — which represents the total dollar value of orders processed on Shopify’s platform — to $6.4 billion. And gross payments volume, the amount of GMV processed through Shopify Payments, increased to $2.4 billion, though that represented 37% of GMV compared to 39% in the prior-year period.
Shopify, however, remains unprofitable on a GAAP basis. The company generated third-quarter operating and net losses of $12.7 million and $9.4 million, respectively, compared to $9.5 million and $9.1 million, respectively, in Q3 2016.
Looking forward
Shopify’s fourth-quarter financial forecast includes:
- Revenue of $206 million to $208 million
- GAAP operating loss of $12.5 million to $14.5 million
- Adjusted operating income — which excludes stock-based compensation — of $2 million to $4 million
“As we move into the busiest selling period for our merchants, we are ready to help them have their best selling season ever, and we look forward to helping new merchants realize their potential,” Chief Operating Officer Harley Finkelstein said during a conference call with analysts. “At Shopify, we strongly believe that entrepreneurship is the foundation of the global economy, and it’s not easily done alone.”
Shopify is serving as the technological core of hundreds of thousands of small — and increasingly large — businesses, so it’s particularly well positioned to benefit from the growth of entrepreneurship and e-commerce in the years ahead.
10 stocks we like better than Shopify
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Shopify wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of October 9, 2017
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool has a disclosure policy.
