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7 Metrics Behind Shopify's Soaring Stock Price

By Daniel Sparks – Updated May 6, 2019 at 9:31AM

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The e-commerce software-as-a-service platform is firing on all cylinders.

E-commerce software-as-a-service platform Shopify (SHOP 0.67%) has continued to defy gravity. Following a solid first-quarter earnings release with better-than-expected revenue and non-GAAP earnings per share, the stock soared to new highs. Shares have now risen 90% year to date.

Driving the stock's sharp run-up has been the company's consistent execution and robust underlying business growth. To get a glimpse of Shopify's wild momentum, just take a look at these seven key metrics from Shopify's first-quarter results.

Shopify's e-commerce platform on a smartphone, laptop, and tablet

Image source: Shopify.

1. Total revenue: Up 50%

Shopify's first-quarter revenue increased 50% year over year to $320.5 million. Though this was a deceleration from 54% growth in the fourth quarter of 2018, it was well ahead of analysts' average forecast for revenue of $310 million.

2. Subscription solutions revenue: Up 40%

Shopify's subscription solutions revenue, which accounts for 44% of total revenue, rose 40% year over year to $140.5 million.

Revenue from the segment includes subscriptions to its platform, as well as sales of its themes, apps, and registration of domain names. The segment's growth was primarily driven by rising revenue from its Shopify platform subscriptions, management said. More specifically, it was driven mostly by a boost in the number of merchants joining the Shopify platform -- a great sign for long-term shareholders.

3. Merchant solutions revenue: Up 58%

Most of Shopify's revenue is from merchant solutions, or payment processing, transaction, and referral fees, as well as sales of its point-of-sale hardware. This segment generates the bulk of its revenue from Shopify Payments.

Merchant solutions revenue climbed 58% year over year to $180 million. Growth was broad-based, helped by a 50% year-over-year increase in gross merchandise volume and "robust growth in Shopify Capital and Shopify Shipping," management said in its first-quarter earnings release.

4. Shopify Plus: 26% of monthly recurring revenue

A fast-growing platform subscription is Shopify Plus, a subscription plan designed specifically for high-volume merchants. Revenue during the quarter was $11.3 million, or 26% of Shopify's monthly recurring revenue. This is up from 22% of revenue in the year-ago quarter.

5. Amount loaned through Shopify Capital: $87.8 million

Shopify loaned $87.8 million in merchant cash advances and loans during Q1, up 45% year over year. This is an impressive amount, considering Shopify Capital was launched just three years ago.

6. Adjusted net income: $10.3 million

Shopify's net income, adjusted to exclude the effect of share-based compensation expenses and related payroll taxes, was $10.3 million -- up from $4.2 million in the year-ago quarter.

7. Full-year revenue guidance: $1.48 billion to $1.5 billion

Reflecting Shopify's strong first-quarter performance, Shopify raised its outlook for full-year revenue to $1.48 billion to $1.5 billion, up from a previous forecast for revenue between $1.46 billion and $1.48 billion. Shopify also notably said it is now expecting a narrower loss for the full year of $130 million to $140 million. Previously, management expected a loss of $140 million to $150 million.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool has a disclosure policy.

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