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Shopify reports 47% revenue growth, earns $800,000 profit

Shruti Shekar
Telecom & Tech Reporter
GETTY

Canadian e-commerce giant Shopify (SHOP.TO) reported a 47 per cent year-over-year increase in revenue totalling US $505.2 million in Q4 2019.

In its earnings report that was released on February 12, the company said it earned a profit $0.8 million, compared to a net loss of $1.5 million that was reported in the same period a year ago. 

The company’s stock was up nearly eight per cent premarket after it released its earnings.

The Ottawa-headquartered company said its Gross Merchandise Volume (GMV) was $20.6 billion, an increase of $6.6 billion in the quarter compared to the same period a year ago. 

On Merchant Solutions Revenue (MSR), it reported a 53 per cent growth to $322 million, which was “driven primarily by the growth of GMV” according to a company press release.

“2019 was a milestone year for us,” Tobi Lütke, Shopify’s CEO, said in the press release. “We’ve earned the trust of more than one million merchants, and we are motivated more than ever to keep lowering the learning curve so anyone, anywhere can become an entrepreneur.”

The company’s Monthly Recurring Revenue (MRR) as of December 31, 2019 was $53.9 million, a 32 per cent increase compared to the same period a year ago. Twenty-seven per cent of the MRR came from its Plus platform, which powers larger direct-to-consumer retail stores.

Shopify CFO Amy Shapero said in the call that they plan to “do all the things to attract larger merchants on the Plus side” in 2020.

“We’re going to continue to grow our merchant solutions and will continue to expand our more established solutions,” she said.

Shopify’s COO Harley Finkelstein said in the past year “more and more merchants are coming to us with existing large businesses,” adding that many of them are not new direct-to-consumer brands but established brands that come with a large following. They will be adding features in 2020 to help these merchants.

“Some of our merchants are now running stores in multiple locations internationally, and the ability to run a number of stores from one centralized dashboard... that is a big part of what we’re trying to get,” Finkelstein said.

It noted that from Black Friday through the end of Cyber Monday sales on the platform reached more than $2.9 billion worldwide, with a majority coming in from mobile devices. This was an increase from the $1.8 billion that was reported in the same quarter a year ago.

The e-commerce giant expects revenues in 2020 to be in the range of $2.13 billion to $2.16 billion.