Shopify (NYSE:SHOP) reported first-quarter results on May 1. The leading multi-channel commerce platform is growing rapidly along with its merchant base.

Shopify results: The raw numbers


Q1 2018

Q1 2017

Year-Over-Year Change


$214.34 million

$127.38 million


Net loss

($15.90 million)

($13.60 million)


Net loss per share




Data source: Shopify Q1 2018 earnings press release.

A person pointing to an upwardly sloping sales chart.

Shopify's sales are booming. Image Source: Getty Images.

What happened with Shopify this quarter?

Gross merchandise volume -- which represents the total dollar value of orders processed on Shopify's platform -- leapt 64% to $8 billion. And gross payments volume (the amount of GMV processed through Shopify Payments) rose to $3 billion, representing 38% of GMV, consistent with the prior-year quarter.

"Merchants love Shopify because it allows them to sell anywhere, anytime," CEO Tobi Lutke said in a press release. "It also helps them with the many tasks that come with running a retail business."

To Lutke's point, Shopify has become an invaluable technology partner to hundreds of thousands of e-commerce businesses. In turn, the company is enjoying booming revenue growth. Shopify's merchant solutions revenue soared 75% to $114.1 million. And its subscription sales surged 61% to $100.2 million, including a 57% jump in monthly recurring revenue (MRR, the number of merchants times the average subscription fee) to $32.5 million.

Notably, Shopify Plus -- the company's high-end enterprise-level service -- continues to grow as a percentage of its business; it accounted for 22% of MRR in the first quarter, up from 17% in the year-ago period. "While the first quarter of the calendar year is seasonally a slow one for buyers in the enterprise, we still added far more new merchants in the quarter versus the same period last year," COO Harley Finkelstein said during a conference call with analysts.

Shopify also delivered an unexpected profit in the first quarter. Adjusted net income was $4.2 million, or $0.04 per share, compared to a loss of $3.5 million, or $0.04 per share, in the first quarter of 2017. However, Shopify remains unprofitable on a GAAP basis. The company generated a GAAP net loss of $15.9 million, or $0.16 per share, compared to a net loss of $13.6 million, or $0.15 per share, in the prior-year quarter.

Looking forward

For the second quarter, Shopify is guiding for revenues of $230 million to $235 million. The company also expects a GAAP operating loss of $32 million to $34 million and an adjusted operating loss of $5 million to $7 million.

Shopify also updated its full-year financial outlook, which now includes:

  • Revenue of $1 billion to $1.01 billion, up from a previous forecast of $970 million to $990 million.
  • GAAP operating loss of $105 million to $110 million, compared to a previous estimate of $95 million to $105 million.
  • Adjusted operating income of $0 to $5 million, versus negative $5 million to positive $5 million in the previous estimate.

Additionally, new CFO Amy Shapero highlighted the tremendous growth opportunities Shopify has before it.

I want to underscore the importance the rest of the exec team and I places around investing for growth today to lay a strong foundation for what we expect to be a much bigger company in the future. We believe the 50% revenue growth implied by our expectations for 2018 is achievable due to all of the vectors of growth we have near term: adding new merchants, Shopify Plus, new product offerings, and our push internationally, all aided by tailwinds of growth in mobile, e-commerce, and entrepreneurialism. Add to this favorable mix the vitality of the Shopify organization and it is easy to see how and why we're in a place to make incredible things happen.

With so many powerful trends fueling its growth, Shopify gives investors many ways to win.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.