Shopify (SHOP 3.75%) reported third-quarter results on Oct. 25. The multichannel commerce company's sales once again rose at a greater than 50% clip, as businesses continue to flock to its platform.
Shopify results: The raw numbers
|
Q3 2018 |
Q3 2017 |
Year-Over-Year Change |
|
|---|---|---|---|
|
Revenue |
$270.06 million |
$171.46 million |
58% |
|
Net loss |
($23.18 million) |
($9.38 million) |
N/A |
|
Net loss per share |
($0.22) |
($0.09) |
N/A |
Data source: Shopify Q3 2018 earnings press release.
What happened with Shopify this quarter?
Gross merchandise volume (GMV) is a key metric for investors to watch as it represents the total value of sales made by all the merchants on Shopify's platform and therefore can be viewed as a measure of the overall health of its businesses. Shopify's GMV surged 55% year over year to $10 billion. "We relentlessly shipped new products and features to prepare our merchants for their biggest selling season of the year, merchants' GMV expansion was well ahead of e-commerce growth overall, and our merchant base continues to expand at a healthy clip," CFO Amy Shapero said in a press release.
In turn, Shopify's subscription revenue jumped 46%, to $120.5 million, including a 41% increase in monthly recurring revenue (the number of merchants times the average subscription fee), to $37.9 million.
Additionally, Shopify's merchant solutions revenue climbed 68%, to $149.5 million, boosted by the continued strong growth of Shopify Payments, Shopify Capital, and Shopify Shipping.
Shopify delivered impressive revenue growth in the third quarter. Image source: Getty Images.
Shopify also delivered an unexpected adjusted profit -- excluding stock-based compensation expense -- of $4.5 million. Management had previously guided for a loss.
However, Shopify remains unprofitable on a GAAP basis. The company generated a net loss of $23.2 million, or $0.22 per share in the third quarter compared to a loss of $9.4 million, or $0.9 per share, in the year-ago period.
Looking forward
Shopify's strong sales results prompted it to lift its full-year financial forecast, which now includes:
- Revenue of $1.045 billion to $1.055 billion -- up from a previous estimate of $1.015 billion to $1.025 billion -- representing 56% year-over-year growth.
- A GAAP operating loss of $95 million to $97 million, down from $105 million to $110 million.
- Adjusted operating profit of $8 million to $10 million versus $0 to $5 million.
Better still, management expects to finish the year on a high note. "We're well positioned to close 2018 and enter 2019 with excellent momentum," Shapero said.
