Shopify reports 89 percent YoY Q3 revenue growth as Gail Goodman joins board

Shopify TSX

Shopify released its results for Q3 2016, which ended on September 30, 2016.

Shopify’s total revenue in the third quarter was $99.6 million, or an 89 percent increase from the comparable quarter in 2015. Its total revenue in Q2, which ended on June 30, was $86.6 million.

Gross Merchandise Volume for this third quarter was $3.8 billion, an increase of 100 percent over the third quarter of 2015. GMV processed through Shopify Payments grew to $1.5 billion, which accounted for 39 percent of GMV processed in the quarter.

The company MRR was $16.3 million, up 67 percent compared to $9.8 million on September 30, 2015. Shopify’s MRR in Q2 2016 was $14.4 million.

As of the end of the quarter, Shopify had $400 million in cash, cash equivalents, and marketable securities, compared with $190 million on December 31, 2015.

“Our accomplishments over the last few months support the strategy we have made clear from the beginning, which is to do the things that help merchants succeed,” said Tobi Lütke, founder and CEO of Shopify. “We launched Apple Pay, Sell on Messenger, and a brand new mobile Shopify app that lets a merchant set up and run their entire business from their mobile phone. Each of these is already making a difference for merchants, and we expect to enjoy the full benefits of these investments over the next several years.”

As for losses, the company reported that its operating loss for the third quarter of 2016 was $9.5 million, or 10 percent of revenue, compared to $4.3 million, or 8 percent of revenue, for the comparable period a year ago.

Net loss was $9.1 million, or $0.11 per share, compared with $4.7 million, or $0.06 per share, for the third quarter of 2015. Adjusted net loss for the third quarter of 2016 was $1.8 million, or $0.02 per share, compared with an adjusted net loss of $2.4 million, or $0.03 per share, for the third quarter of 2015.

“We are pleased with our third-quarter results,” said Russ Jones, CFO of Shopify. “We continued to expand revenue at an exceptional pace and once again delivered operating leverage. With the expansive opportunities that exist right now for multi-channel commerce, prioritizing investments to support future growth, while improving financial results today, is especially important for Shopify.”

The company also shared business highlights over this quarter, including its launch of Apple Pay and a new mobile app. Shopify entered into an agreement with Export Development Canada to insure merchant cash advances offered by Shopify Capital.

Shopify reported that Gail Goodman, former CEO and chairperson of Constant Contact, is joining its board of directors. Constant Contact is a software company providing small businesses with online marketing tools to grow their businesses, and after joining as CEO in 1999, she led Constant Contact through its IPO and for eight years as a publicly traded company.

“For the past 16 years, I’ve worked to support small businesses,” said Gail Goodman, “I’m eager to continue that work as part of Shopify’s team and help make commerce better for everyone.”

Goodman was named Executive of the Year at the 2009 American Business Awards, and was the 2008 New England Regional winner of Ernst & Young Entrepreneur of the Year. In 2011, she was inducted into the MITX Innovation Hall of Fame.

“Gail shares our passion for helping entrepreneurs succeed,” said Lütke. “She brings with her a deep knowledge of marketing and connecting with small businesses. We are thrilled to welcome her to our board.”

Shopify expects revenues in the range of $379 million to $381 million for the full year of 2016, and adjusted operating los in the range of $12 million to $14 million, excluding stock-based compensation expenses and related payroll taxes of $26 million.

“Shopify continues to give investors the best of both worlds: increasing top line growth at the same as they deliver more fiscal discipline in the form of narrower losses. For the first time ever, revenue from payments exceeds revenue from their core SaaS platform. This shows that they are capturing more value from the overall Shopify economy,” said Mark MacLeod, founder of SurePath Capital and former Shopify CFO. “Finally, their appointment of Gail Goodman to the board is huge. There is a massive absence of accomplished female executives in today’s boardrooms. As a result, Gail can join any board she likes. She is one of the most accomplished CEOs in the SMB SaaS World and is a big addition to the Shopify story.”

Jessica Galang

Jessica Galang

Jessica Galang is BetaKit’s News Editor.