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3 Must-See Quotes From Shopify's Earnings Call

By Daniel Sparks – Aug 5, 2019 at 1:15PM

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Management talks Shopify Plus, international momentum, and more.

Shopify's (SHOP 0.67%) second-quarter results impressed last week. Revenue surged 48% year over year to $362 million, handily beating analysts' average forecast for revenue of $350 million. Non-GAAP (adjusted) earnings per share came in at $0.14, crushing a consensus estimate for $0.02. Topping it all off, management lifted its full-year revenue guidance by $30 million.

For investors looking for more than these headline numbers, it's worth turning to the company's second-quarter conference call. During the question-and-answer session with analysts, management shared insight into important topics like international growth and the company's new fulfillment network. Here are three key quotes from the e-commerce platform specialist's quarterly call.

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

Image source: Shopify.

Shopify Plus momentum

In Shopify's first-quarter earnings call, management said it was seeing strong momentum in the number of merchants signing up for Shopify Plus, the company's subscription plan designed for high-volume merchants. Strong performance from Shopify Plus continued in Q2, explained COO Harley Finkelstein during the call.

Shopify Plus ... had another phenomenal quarter; the agility and flexibility of the platform gives these large merchants the ability to move fast, offer exceptional buying experiences, and grow their business.

More specifically, the company said Shopify Plus accounted for 26% of monthly recurring revenue (MRR), up from 23% of MRR in the year-ago period. This means Shopify Plus revenue grew faster than the 34% year-over-year increase Shopify saw in its overall MRR.

Impressive growth internationally

Shopify's international markets continue to be a key growth driver for the company.

"Our mix of international merchants continue to grow relative to total new merchant adds," explained CFO Amy Shapero during the company's second-quarter earnings call. "International also contributed to the reacceleration of GMV with its contribution relative to overall GMV continuing to expand in the second quarter."

One key driver for Shopify's international momentum recently has been its growth in its international partner network. Capturing how these partners are contributing to Shopify's growth, the company said 22,000 partners referred merchants to its platform over the last 12 months, up from 19,000 partners in Q1 -- and the growth in these referrals are primarily international partners, management said.

A promising start for Shopify's new fulfillment network

Earlier this summer, Shopify announced plans for its own fulfillment network -- a move that would put it in direct competition with Amazon (AMZN -3.01%). The network launched in the U.S. to early access customers. Interest in the network from merchants and partners has been promising, explained Shapero.

Given that the uptake and interest for Shopify Fulfillment Network has been much stronger than anticipated, our plan is to accelerate investing so we can move fast and execute on this opportunity for our merchants.

While this is a good sign, investors should still look for more tangible success from Shopify's new network before they begin betting it can morph into a meaningful catalyst for the stock. Amazon is a fierce competitor with 175 fulfillment centers globally, covering over 150 million square feet of space. Competing with the e-commerce giant won't be easy. 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Shopify. The Motley Fool has a disclosure policy.

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