Shopify announces $509 million total revenue in 2016, expects up to $785 million in 2017


Shopify has released its financial results for the quarter and full year ending on December 31, 2016. The results were released shortly after CEO Tobi Lütke responded to calls for Shopify to remove Breitbart from its platform.

The company reported significant business milestones for the year, as well as optimism for continued growth in the coming months.

“Shopify continues to post impressive results. They are increasing revenues and doing so with strong financial discipline (narrow losses),” said Mark MacLeod, founder of SurePath Capital and former Shopify CFO. “Investors love them because they are beating expectations and telling the market that they are going to do even better going forward. From where I stand, they have a ton of momentum and still have so much room to grow. They are well on their way to being the next iconic technology company.”

Numbers have been converted to CAD from the report’s USD figures.

Fourth quarter highlights

The company’s total revenue in the fourth quarter was $170 million, an 86 percent increase from the comparable quarter in 2015. The company also reported that its subscription solutions revenue grew 63 percent to $73.8 million, driven by growth in monthly recurring revenue (MRR).

As of December 31, 2016, the company’s MRR was $24.2 million, up 63 percent compared with $14.7 million as of December 31, 2015.

The number of merchants on the Shopify platform surpassed 375,000 in the fourth quarter, while merchant solutions revenue grew 108 percent to $96.8 million. This was driven primarily by the growth of gross merchandise volume (GMV).

Operating loss for the fourth quarter of 2016 was $12.1 million (seven percent of revenue) versus $8.5 million (nine percent of revenue) for the comparable period a year ago. Adjusted operating loss for the fourth quarter of 2016 was $1 million (one percent of revenue); adjusted operating loss for the fourth quarter of 2015 was $1.3 million (two percent of revenue).

Related: CEO Tobi Lütke responds to petition asking Shopify to stop powering Breitbart store

Net loss for the fourth quarter of 2016 was $11.6 million, or $0.13 per share, compared with $8.2 million, or $0.10 per share, for the fourth quarter of 2015. As of December 31, 2016, Shopify had $513 million in cash, cash equivalents, and marketable securities, compared with $248.8 million on December 31, 2015.

“Our work at Shopify is to help entrepreneurs thrive in a space that’s changing all the time, and we did our job especially well this past holiday season,” said Tobi Lütke, founder and CEO of Shopify. “That eight of our ten top sellers over the Black Friday Cyber Monday weekend were merchants that had upgraded from lower-priced plans reminds us that today’s startups become tomorrow’s superstars, at a velocity that appears to be increasing all the time. As the engine powering the growth of these merchants, Shopify has an opportunity that stretches years into the future.”

Full year highlights

Total revenue for the full year grew 90 percent to $509 million, compared with $268.4 million in 2015. Within this, Shopify’s subscription solutions revenue grew 68 percent to $246.9 million, and merchant solutions revenue grew 115 percent to $262.7 million.

Operating loss for 2016 was $48.7 million (10 percent of revenue), versus $23.3 million (nine percent of revenue), for 2015.

“That we grew revenue by 90 percent and GMV by 99 percent for the full year 2016 speaks to the enormous opportunity in retail right now and our strategic position within it,” said Russ Jones, Shopify’s CFO. “Throughout 2017 we will continue to build out our ability to seize this opportunity by expanding not only our existing features, such as channels, payments, shipping and capital, but also our facilities and infrastructure. These investments are timely, as we expect the number of merchants on Shopify to continue expanding rapidly and their collective sales volumes to continue to grow at a rate several times that of overall retail.”

Related: CanCon Podcast Ep.54: What should Shopify do about Breitbart?

In 2016, the company added 133,000 net new merchants, and ended the year with approximately 377,500 merchants on the platform.

Shopify also noted developments with third parties and entreprneurs throughout 2016. Notable Shopify integrations include Facebook and Amazon, and the company launched a software development kit allowing third parties to make their sites natively available to Shopify merchants. The company also made a move to fund entrepreneurs on its platform with the launch of Shopify Capital.

Financial outlook

For the full year 2017, Shopify expects revenues in the range of $758.6 million to $785 million. The company is expecting adjusted operating loss in the range of $23.5 million to $28 million, excluding stock-based compensation expenses and related payroll taxes of $71 million.

For the first quarter of 2017, Shopify expects revenues in the range of $157 million to $159 million. It also expects adjusted operating loss in the range of $11.7 million to $14.3 million, which excludes stock-based compensation expenses and related payroll taxes of $14.3 million.

Jessica Galang

Jessica Galang

Freelance tech writer. Former BetaKit News Editor.