Shopify (NYSE:SHOP) reported first-quarter results on May 2. The provider of multi-platform commerce solutions is enjoying ardent demand for its services from a growing army of entrepreneurs, prompting management to boost its outlook for the year ahead.

Shopify results: The raw numbers


Q1 2017

Q1 2016

Year-Over-Year Change


$127.379 million

$72.722 million


Net profit

($13.598 million)

($8.929 million)


Net profit per share




Data source: Shopify Q1 2017 earnings press release.

Start my own business? Yes

More and more entrepreneurs are choosing Shopify to help them launch their businesses. Image source: Getty Images.

What happened with Shopify this quarter?

Subscription revenue jumped 60% year over year to $62.1 million, with the number of merchants using Shopify's platform increasing to more than 400,000, up from 375,000 in the fourth quarter and 275,000 in Q1 2016. Notably, monthly recurring revenue (the number of merchants times the average subscription fee) as of March 31, 2017 was $20.7 million, signifying year-over-year growth of 62%.

Sales for Shopify's merchant solutions segment -- which includes the company's payments and shipping services -- rose an even more impressive 92%, to $65.3 million.

Together, that drove a 75% surge in total revenue to $127.4 million, which was significantly above Shopify's guidance for Q1 revenue in the range of $120 million to $122 million.

Moreover, gross merchandise volume -- which represents the total dollar value of orders processed on Shopify's platform -- soared 81% to $4.8 billion in the first quarter. And gross payments volume (the amount of GMV processed through Shopify Payments) leapt more than 80% to $1.8 billion. That accounted for 38% of GMV processed in the quarter, up from 37% in Q1 2016.

Still, Shopify remains unprofitable. The quarter's GAAP operating loss was $14.5 million, or 11% of revenue, compared to $9.7 million, or 13% of revenue, in Q1 2016. And adjusted operating loss -- which excludes stock based compensation expense -- was $4.3 million (3.4% of revenue), versus $5.9 million (8.1% of revenue) in the prior year quarter. Those figures bested Shopify's guidance for GAAP and adjusted operating losses of $20 million to $22 million and $9 million to $11 million, respectively.

Looking forward

These results prompted Shopify to raise its full-year financial outlook, including:

  • Revenues in the range of $615 million to $630 million, up from prior estimates of $580 million to $600 million.
  • GAAP operating loss of $69 million to $73 million, down from $73 million to $77 million.
  • Adjusted operating loss of $14 million to $18 million, versus $18 million to $22 million.

"With our excellent start to the year, it is clear we are becoming the de facto platform for sellers," CFO Russ Jones said in a press release. "Retail is shifting headlong toward the vision we laid out two years ago -- of inspiring entrepreneurship with multi-channel commerce -- and we fully expect to continue leading this industry transition for years to come."

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