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Shopify's Revenue Jumps 68%

By Joe Tenebruso - Updated May 3, 2018 at 9:38AM

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The e-commerce company's torrid growth continued in the first quarter.

Shopify (SHOP -5.87%) 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.

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