Shares of Shopify (NYSE:SHOP) surged late last month, following the e-commerce platform's better-than-expected first-quarter results. Capturing Shopify's impressive growth, first-quarter revenue soared 50% year over year to $320.5 million, and non-GAAP earnings per share increased from $0.04 in the year-ago quarter to $0.09. In addition, Shopify raised its outlook for both full-year revenue and adjusted operating income, reflecting management's confidence in the company's continued momentum.
There's more to the quarter than these headline figures. To gain a better understanding of the drivers behind Shopify's business, investors can turn to the company's first-quarter earnings call. During the call, three important topics that surfaced were Shopify Plus, Shopify Payments, and international performance.
1. Strong growth in new Shopify Plus merchants
Shopify saw strong growth in its subscription plan designed for high-volume merchants, Shopify Plus. The subscription platform accounted for 25% of monthly recurring revenue (MRR), up from 22% in the year-ago quarter.
Shopify Plus revenue was helped by higher-than-expected merchant additions during the quarter, said COO Harley Finkelstein: "Merchant adds [for Shopify Plus] in the first quarter, which is typically a slower period, nearly matched merchant adds in our fourth quarter, which is typically a stronger period. This momentum reaffirms the strength of Shopify Plus' value proposition, which more larger-volume merchants are beginning to recognize."
Later in the call, CFO Amy Shapero added that the strong growth in Shopify Plus merchants is attributable to the success of "a maturing sales team and Plus ..."
2. Shopify Payments are on a roll
Shapero detailed several impressive statistics on the rapid growth of Shopify Payments, or the company's own native solution for accepting payments online: "... $4.9 billion of [gross merchandise volume] was processed on Shopify payments in Q1, an increase of 65% versus the comparable quarter last year. Shopify payments penetration of GMV grew to 41% in the first quarter versus 38% in Q1 2018 as Shopify Plus increased its share of gross payments volume and payments adoption increased internationally.
Since Shopify Payments accounts for the bulk of Shopify's merchant solutions revenue, this rapid growth helped the segment post impressive 58% year-over-year revenue growth.
3. International momentum
The company is seeing particular strength internationally, as international payments volume nearly doubled year over year during the quarter.
"The pace of merchant adds from international accelerated in Q1, powering net new core MRR," Shapero said.
Indeed, the company's momentum internationally is one of the reasons Shopify raised its revenue outlook for the full year, management said.