Canada-based commerce star Shopify (SHOP -1.77%) continues to defy skeptics, as it once again reported torrid sales growth in the fourth quarter.
Shopify results: The raw numbers
| Metric |
Q4 2017 |
Q4 2016 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$222.814 million |
$130.383 million |
71% |
|
Net loss |
($2.987 million) |
($8.867 million) |
N/A |
|
Net loss per share |
($0.03) |
($0.10) |
N/A |
Data source: Shopify Q4 2017 earnings press release.
What happened with Shopify this quarter?
Revenue surged 71% year over year, to $222.8 million, driven by a 67% jump in subscription sales, to $93.9 million, and 74% rise in merchant-solutions revenue, to $128.9 million.
Notably, monthly recurring revenue (MRR) -- the number of merchants times the average subscription fee -- leapt 62%, to $29.9 million. Also of note is that Shopify Plus -- the company's high-end enterprise-level service -- continues to gain traction among larger businesses -- it accounted for 21% of MRR in the fourth quarter, up from 17% in the prior-year period.
Moreover, Shopify is benefiting from the boom in mobile commerce. Seventy-three percent of the traffic and 61% of the orders from its merchants' stores came from mobile devices in Q4.
Shopify is helping its customers ride the mobile wave. Image Source: Shopify.
Perhaps most importantly, gross merchandise volume (GMV) -- which represents the total dollar value of orders processed on Shopify's platform -- soared 65%, to $9.1 billion. And gross payments volume -- the amount of GMV processed through Shopify Payments -- rose to $3.5 billion, representing 39% of GMV, consistent with prior quarters.
Still, Shopify remains unprofitable on a GAAP basis. The company delivered a net loss of $3 million, or $0.03 per share in the fourth quarter. That's an improvement from a net loss of $8.9 million, or $0.10 per share, in the fourth quarter of 2016. And on an adjusted basis -- which excludes stock-based compensation -- Shopify generated net income of $14.7 million compared to a loss of $0.4 million in the year-ago quarter.
Looking ahead
Shopify expects first-quarter revenues of $198 million to $202 million. The company is also forecasting a GAAP operating loss of $25 million to $27 million and an adjusted operating loss of $6 million to $8 million.
In addition, Shopify issued full-year financial guidance for 2018, including:
- Revenue of $970 million to $990 million, representing year-over-year growth of 44% to 47%.
- GAAP operating loss of $95 million to $105 million compared to a loss of $49 million in 2017.
- Adjusted operating income of negative $5 million to positive $5 million versus adjusted operating income of $6 million in 2017
"That our merchants sold more in the fourth quarter than in all of 2015 ... speaks to how far we have come in the past few years," said CFO Russ Jones in a press release. "Our leadership role in commerce, together with the scale we have achieved, position us well to invest in our next phase of growth: one marked by expansion of our capabilities upmarket and down, in retail, in our ecosystem, and internationally."
