Shopify Q2 2017 results show 75% revenue increase as it celebrates 500,000 merchant milestone

Shopify has released the results for its second quarter of 2017, which ended on June 30, 2017. The company also announced that it now powers over 500,000 businesses in 175 countries around the world.

Shopify, which reported its Q2 2017 results in US dollars, said its total revenue in the second quarter was $151.7 million, a 75 percent increase from the second quarter of 2016. When Shopify recently reported its Q1 2017 results, its total revenue was $127.4 million.

With an increase in merchants using the company’s ecommerce platform, subscription solutions revenue grew 64 percent to $71.6 million, while merchant solutions revenue grew 86 percent to $80.1 million.

Shopify’s monthly recurring revenue was $23.7 million, up 64 percent from June 30, 2016, when the company reported $14.4 million. Gross profit dollars grew 83 percent to $86.8 million for the second quarter of 2017, versus $47.5 million for the second quarter of 2016. The company also reported a net loss of $14 million ($0.15 per share) compared to $8.4 million ($0.10 per share) for the second quarter of 2016.

As of June 30, Shopify had $932.4 million in cash, cash equivalents, and marketable securities, compared with $392.4 million on December 31, 2016.

“The fundamental shift in retail toward multi-channel and mobile, the ongoing adoption of Shopify by larger brands…contributed to the strength of our results this past quarter.”
– Russ Jones, CFO, Shopify

Russ Jones, Shopify’s CFO, indicated that Shopify’s shift toward multi-channel and mobile solutions has contributed to the company’s strong Q2 2017 results.

“The fundamental shift in retail toward multi-channel and mobile, the ongoing adoption of Shopify by larger brands, and our continued focus on building out the market-leading platform for sellers all contributed to the strength of our results this past quarter,” said Jones. “As we have been able to predict and capitalize on these shifts, and continue to innovate so entrepreneurs of all sizes can take advantage of them, we feel we are exceptionally well-positioned for the next several years.”

Company highlights in Shopify’s Q2 report included the company’s growth across continents. Shopify noted that Shopify Pay, which targets cart abandonment, went live to all merchants using Shopify Payments. Additionally, Shopify Payments went live in New Zealand, bringing the total number of countries where Shopify Payments is available to six.

When it comes to mobile traffic to merchants’ stores, Shopify reported that the traffic continued to grow, reaching 72 percent of traffic and 60 percent of orders at the end of June 2017, versus 69 percent and 59 percent, respectively, exiting the first quarter of 2017.

Other company highlights also reflected the company’s bullish focus on mobile solutions for merchants. Shopify noted that last month, it began shipping pre-orders of its chip and swipe card reader to ecommerce merchants that do festivals and pop-up shops. The company also announced that as of today, the chip and swipe card reader is now generally available and free for new and existing merchants on a Shopify subscription, who have not redeemed a free reader before. Another company highlight was Shopify’s recent integration of eBay as a sales channel for merchants.

Noting that it hit a 500,000 merchant milestone, Shopify stressed that the merchant growth is a result of the company’s global growth in Q2 YoY. Shopify saw a 56 percent increase in Shopify merchants in North America, an 82 percent increase in Asia, a 168 percent increase in South America, and a 70 percent increase in Africa. The company also reported that Shopify merchants generated sales of over $100,000 per minute during Black Friday and Cyber Monday sales in 2016, and 131 million people bought from Shopify stores in the last 12 months.

For Q3 2017, Shopify expects revenues in the range of $164 million to $166 million.

“Through our platform, over half a million entrepreneurs have turned their dreams into reality,” said Tobi Lütke, founder and CEO of Shopify. “Entrepreneurship is the foundation of the global economy and it’s not easily done alone. That’s why our mission has always been to make commerce better for everyone to encourage anyone, anywhere to become an entrepreneur.”

For the third quarter of 2017, Shopify expects revenues in the range of $164 million to $166 million. For the full year 2017, Shopify expects revenues in the range of $642 million and $648 million, and adjusted operating loss in the range of $7 million to $11 million, which excludes stock-based compensation expenses and related payroll taxes of $55 million

In addition to releasing its Q2 financial results, Shopify said that Jones has informed the company and its board of directors of his decision to retire in 2018. Jones, who joined Shopify in 2011, will serve as CFO until a new CFO is found and transitioned into the role — a process that is expected to be completed within the next 12 months.

Amira Zubairi

Amira Zubairi

Amira Zubairi is a staff writer at BetaKit. As a fourth-year journalism student who has written primarily about entrepreneurship, Amira has developed a growing interest in Canadian startup, business, and tech news. In her free time, Amira enjoys reading, baking and watching legal shows.