Please ensure Javascript is enabled for purposes of website accessibility

Shopify's Sales Surge 72%

By Joe Tenebruso - Updated Nov 3, 2017 at 12:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The e-commerce platform's torrid growth continued in the third quarter.

Every 90 seconds, an entrepreneur makes their first sale on Shopify's (SHOP 8.52%) platform. And with more people launching their own businesses every day, the multi-channel commerce company is enjoying booming demand for its services, as evidenced by its strong third-quarter results. 

Shopify results: The raw numbers


Q3 2017

Q3 2016

Year-Over-Year Change


$171.456 million

$99.578 million


Net loss

($9.380 million)

($9.120 million)


Net loss per share




Data source: Shopify Q3 2017 earnings press release.

A person pushing a button with the words business and start on it

Image Source: Getty Images.

What happened with Shopify this quarter?

Revenue soared 72% year over year, to $171.5 million, as entrepreneurs continue to flock to Shopify's platform.

"In today's fast-changing retail environment, merchants large and small are hungry to leverage all that technology can do for them," CFO Russ Jones said in a press release. "This is why our platform is so valuable to merchants and why they keep coming to Shopify." 

Subscription revenue rocketed 65% higher, to $82.4 million, fueled by a 65% jump in monthly recurring revenue (MRR) -- the number of merchants times the average subscription fee -- to $26.8 million. Notably, Shopify Plus -- the company's high-end enterprise-level service -- accounted for 20% of MRR, up from 15% in the year-ago quarter.

Meanwhile, merchant solutions revenue -- which includes Shopify's payments and shipping services -- surged 79%, to $89 million. That was driven primarily by a 69% rise in gross merchandise volume (GMV) -- which represents the total dollar value of orders processed on Shopify's platform -- to $6.4 billion. And gross payments volume, the amount of GMV processed through Shopify Payments, increased to $2.4 billion, though that represented 37% of GMV compared to 39% in the prior-year period.

Shopify, however, remains unprofitable on a GAAP basis. The company generated third-quarter operating and net losses of $12.7 million and $9.4 million, respectively, compared to $9.5 million and $9.1 million, respectively, in Q3 2016.

Looking forward

Shopify's fourth-quarter financial forecast includes:

  • Revenue of $206 million to $208 million
  • GAAP operating loss of $12.5 million to $14.5 million
  • Adjusted operating income -- which excludes stock-based compensation -- of $2 million to $4 million

"As we move into the busiest selling period for our merchants, we are ready to help them have their best selling season ever, and we look forward to helping new merchants realize their potential," Chief Operating Officer Harley Finkelstein said during a conference call with analysts. "At Shopify, we strongly believe that entrepreneurship is the foundation of the global economy, and it's not easily done alone."

Shopify is serving as the technological core of hundreds of thousands of small -- and increasingly large -- businesses, so it's particularly well positioned to benefit from the growth of entrepreneurship and e-commerce in the years ahead.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Shopify Inc. Stock Quote
Shopify Inc.
$391.33 (8.52%) $30.71

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.