Shopify released financial results today for Q2 2018, which ended on June 30, 2018.
Shopify’s total revenue in the quarter was $245 million (all numbers USD), a 62 percent increase year-over-year from Q2 2017.
With an increase in the number of merchants using the company’s ecommerce platform, Shopify’s subscriptions solutions revenue grew by 55 percent to $110.7 million, while merchant solutions revenue grew 68 percent to $134.2 million.
“The diversity of our revenue drivers and of our merchant base contributed to our strong revenue growth this past quarter.”
– Amy Shapero, CFO, Shopify
Shopify’s monthly recurring revenue was $35.3 million, up 49 percent a year prior, when the company reported $23.7 million recurring. Shopify Plus contributed $8.1 million (23 percent) of monthly recurring revenue, compared to 18 percent in the second quarter of 2017. Gross profit dollars grew by 58 percent to $137 million for the second quarter of 2018, versus $86.8 million in the second quarter of 2017. The company also reported a net loss of $24 million ($0.23 per share) compared to $14 million ($0.15 per share) for the second quarter of 2017.
As of June 30, 2018, Shopify had $1.57 billion in cash, cash equivalents, and marketable securities, compared with $938 million on December 31, 2017.
Amy Shapero, Shopify’s new CFO, said the company’s multi-channel solutions and its merchant base contributed to its strong Q2 2018 results.
“The diversity of our revenue drivers and of our merchant base contributed to our strong revenue growth this past quarter,” said Shapero. “We built the Shopify platform to meet the many and varied needs of all types of merchants, whether they are makers or curators, entrepreneurs or household brands. This presents us with an expansive opportunity set that we will continue to invest in with a view to even greater success over the long term.”
Previous year-over-year revenue growth for Shopify:
– 2018Q1 68%
– 2017Q4 71%
– 2017Q3 72%
– 2017Q2 75%
– 2017Q1 75%
It's wild that 62% growth is "disappointing" but Shopify's growth looks like it's slowing down.
— 𝙅𝙖𝙢𝙚𝙨 🤗 𝙈𝙘𝙇𝙚𝙤𝙙 (@jamespmcleod) July 31, 2018
The numbers do indicate that Shopify’s growth is slowing, however, with year-over-year revenue increases dropping in each of the last five quarters. Gross Merchant Volume (GMV) hit $9.1 billion in the quarter, a 56 percent increase year-over-year. That number is down from the 64 percent year-over-year increase in Q1 2018, continuing an eight-quarter trend, per Bloomberg.
Company highlights in Shopify’s Q2 2018 report included the company’s annual Unite conference, where Shopify announced several new features to help merchants sell and work efficiently. Specifically, Shopify’s company highlights included its Tap and Chip reader, features such as multi-channel returns and exchanges, in-store pickups, and tipping options. Highlights also included Shopify’s recent payment integrations with Google Pay , as well as Shopify Ping, which allows merchants to manage their tasks and communication through a messaging app.
For Q3 2018, Shopify expects revenues in the range of $253 million to $257 million.
Other company highlights included Shopify’s launch of Shopify Payments in Japan, its recent partnership with Nest to give merchants access to camera footage through a store cam via the Shopify app, as well as more merchants using Shopify Shipping. When it comes to mobile traffic to merchants’ stores, Shopify reported that the traffic continued to grow, reaching 76 percent of traffic and 66 percent of orders at the end of June 2018, versus 72 percent and 60 percent, respectively, for the second quarter of 2017.
Shopify said that Shopify Capital, which launched in April 2016 to help merchants secure funding, issued $68.5 million in merchant cash advances during Q2 2018, an increase of 84 percent, compared to the $37.2 million issued in Q2 2017.
For the third quarter of 2018, Shopify expects revenues in the range of $253 million to $257 million, and adjusted operating loss in the range of $9 million to $11 million, which excludes stock-based compensation expenses and related payroll taxes of $31 million. For the full year 2018, Shopify expects revenues in the range of $1.015 billion to $1.025 billion and adjusted operating profit of $0 to $5 million.