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Shopify Inc.'s quarterly revenue surpassed the $1 billion mark for the first time in the company's history, as customers spend more and continue shopping online as economies reopen.
Shopify's (SHOP) (SHOP.TO) second-quarter sales in the three-month period ending June 30 hit US$1.1 billion, a 57 per cent increase from the same time last year and the first time the company has exceeded the billion-dollar mark in a single quarter.
The company, which tracks its financial results in U.S. dollars, also reported net income of $879.1 million, or $6.90 per diluted share, compared to just $36 million last year, or 29 cents per diluted share. Most of that increase is due to an unrealized gain of $778 million on Shopify's equity investments, including its stake in e-commerce company Global E, which recently went public. Still, without the equity investment, Shopify's adjusted net income came in at $284.6 million in the quarter, or $2.24 per share, compared to $129.4 million, or $1.05 per share, last year.
Chief financial officer Amy Shapero says the second-quarter performance saw the company "fired on all cylinders" by keeping merchants "well equipped to seize the opportunities presented in a post-pandemic retail era."
While there have been questions about whether Shopify can maintain and build on the rapid e-commerce growth spurred by the onset of the pandemic, the company is seeing strength in economies that have reopened substantially, particularly when it comes to gross merchandise value (GMV), a measure of the total value of orders facilitated by Shopify.
"In places that have begun to reopen like the U.K., GMV grew faster than our over GMV in the quarter year-over-year, indicating that online and in-store commerce are no longer mutually exclusive," Shopify president Harley Finkelstein said on a conference call with analysts on Wednesday.
"While we did start to see a shift in some consumer spend back to services and recreation towards the end of the quarter, which we expected, all regions remain at GMV levels above pre-COVID levels."
The company expects revenue will continue to "grow rapidly" in 2021, albeit at a lower rate than in 2020, when the COVID-19 pandemic forced businesses and consumers to shift rapidly to e-commerce. It did not provide specific revenue targets, but says it expects full-year adjusted operating income to be above 2020 levels.
Shopify's executives were also asked Wednesday about the impact Apple's decision to allow users to opt out of being tracked by apps they use on iPhones will have on merchants.
"In the near term, we do think it will reduce the efficacy of some ads, but I think it further will incentivize merchants to look for new ways and multiple ways to connect with buyers," Finkelstein said.
"Merchants on Shopify have always been resilient whether it was through the pandemic, or through different technological changes, and we think they'll continue to be resilient and find ways to connect with buyers."
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.