Shopify Third-Quarter 2019 Earnings

Investor News Details

October 29, 2019

Third-Quarter Revenue Grows 45% Year on Year
Shopify Now Powers Over One Million Merchants Worldwide

“More than a million merchants are now building their businesses on Shopify, as more entrepreneurs around the world reach for independence,” said Tobi Lütke, Shopify’s CEO. “These merchants chose Shopify because we’re making entrepreneurship easier, and we will continue to level the playing field to help merchants everywhere succeed.”

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“There is NO better time then NOW to learn shopify”

“Our strong results in the quarter were driven in part by the success of our international expansion, which is just one of the many ways we are investing in the platform,” said Amy Shapero, Shopify’s CFO. “By carefully balancing these multiple opportunities that have different investment time horizons, we can keep investing in the innovations that will power merchants in the future while helping them grow rapidly today.”

Third-Quarter Financial Highlights

  • Total revenue in the third quarter was $390.6 million
  • Subscription Solutions revenue grew 37% to $165.6 million.
  • Merchant Solutions revenue grew 50%, to $225.0 million
  • MRR as of September 30, 2019 was $50.7 million
  • GMV for the third quarter was $14.8 billion, an increase of $4.8 billion, or 48%
  • Gross profit dollars grew 45%, to $216.7 million
  • Operating loss for the third quarter of 2019 was $35.7 million
  • Adjusted operating incomefor the third quarter of 2019 was 3% of revenue
  • Net loss for the third quarter of 2019 was $72.8 million
  • Adjusted net loss4 for the third quarter of 2019 was $33.6 million
  • At September 30, 2019, Shopify had $2.67 billion in cash

Financial Outlook

The financial outlook that follows constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond Shopify’s control. Please see “Forward-looking Statements” below.

In addition to the other assumptions and factors described in this press release, Shopify’s outlook assumes the continuation of growth trends in our industry, our ability to manage our growth effectively and the absence of material changes in our industry or the global economy. The following statements supersede all prior statements made by Shopify and are based on current expectations. As these statements are forward-looking, actual results may differ materially.

These statements do not give effect to the potential impact of mergers, acquisitions, divestitures or business combinations that may be announced or closed after the date hereof. All numbers provided in this section are approximate.

For the full year 2019, Shopify currently expects:

  • Revenues in the range of $1.545 billion to $1.555 billion
  • GAAP operating loss in the range of $158 million to $168 million
  • Adjusted operating incomein the range of $27 million to $37 million
  • Revenues in the range of $472 million to $482 million
  • GAAP operating loss in the range of $47 million to $57 million
  • Adjusted operating income4 in the range of $10 million to $20 million
  1. Monthly Recurring Revenue, or MRR, is calculated by multiplying the number of merchants by the average monthly subscription plan fee in effect on the last day of that period and is used by management as a directional indicator of subscription solutions revenue going forward assuming merchants maintain their subscription plan the following month.
  2. Gross Merchandise Volume, or GMV, represents the total dollar value of orders processed on the Shopify platform in the period, net of refunds, and inclusive of shipping and handling, duty and value-added taxes.
  3. Gross Payments Volume, or GPV, is the amount of GMV processed through Shopify Payments.
  4. Non-GAAP financial measures exclude the effect of stock-based compensation expenses and related payroll taxes as well as amortization of acquired intangibles and related taxes. Please refer to “Non-GAAP Financial Measures” in this press release for more information.

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