Shopify (NYSE: SHOP) reported second-quarter results on Aug. 1. The rapidly growing number of online entrepreneurs is fueling demand for the Canadian software-maker's cloud-based commerce solutions.
Shopify results: The raw numbers
What happened with Shopify this quarter?
Revenue surged 75% year over year, to $151.7 million, as the number of merchants using Shopify's platform rose to more than 500,000, up sharply from 300,000 in the second quarter of 2016.
Subscription revenue jumped 64%, to $71.6 million, driven by a 64% rise in monthly recurring revenue -- the number of merchants times the average subscription fee -- to $23.7 million. And merchant solutions revenue -- which includes Shopify's payments and shipping services -- soared 86%, to $80.1 million.
Moreover, gross merchandise volume -- which represents the total dollar value of orders processed on Shopify's platform -- leapt 74%, to $5.8 billion, while gross payments volume -- the amount of GMV processed through Shopify Payments -- increased to $2.2 billion, up from $1.3 billion in the year-ago quarter.
Still, Shopify remains unprofitable. Second-quarter GAAP operating loss was $15.9 million compared to $8.7 million in Q2 2016. Both figures represented 10% of revenue in their respective quarters. Meanwhile, adjusted operating loss -- which excludes stock-based compensation expense -- was $2.9 million, or 1.9% of revenue, versus $3.2 million, or 3.7% of revenue, in the prior year period.
For the third quarter, Shopify anticipates revenue of between $164 million and $166 million. The company also expects to generate a GAAP operating loss of $17 million to $19 million, and an adjusted operating loss of $2 million to $4 million.
Additionally, Shopify boosted its full-year financial outlook, including:
- Revenues in the range of $642 million to $648 million, up from a previous forecast of $615 million to $630 million
- GAAP operating loss of $62 million to $66 million, down from $69 million to $73 million
- Adjusted operating loss of $7 million to $11 million versus $14 million to $18 million
"The fundamental shift in retail toward multi-channel and mobile, the ongoing adoption of Shopify by larger brands, and our continued focus on building out the market-leading platform for sellers all contributed to the strength of our results this past quarter," CFO Russ Jones said in a press release. "As we have been able to predict and capitalize on these shifts, and continue to innovate so entrepreneurs of all sizes can take advantage of them, we feel we are exceptionally well-positioned for the next several years."
10 stocks we like better than ShopifyWhen 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 August 1, 2017