Shopify continued to see massive growth in the first quarter of 2021 with revenue, income and gross profit all significantly increasing year-over-year.
Shopify’s total revenue for the first quarter of this year was $988.6 million, an increase of 110 percent year-over-year. The company’s gross profit was up 117 percent to $558.7 million, compared with $257 million for the first quarter of 2020. All numbers are in USD.
The Ottawa-based company’s net income for the quarter was $1.25 billion, or $9.94 per diluted share. This is compared with a net loss of $31.4 million, or $0.27 per diluted share. Shopify’s net income also included a $1.3 billion unrealized gain on its equity investment in Affirm, which went public in January.
“Shopify’s momentum continued into 2021 as digital commerce tailwinds remained strong and merchants took advantage of the range of capabilities offered by our platform,” said Amy Shapero, Shopify’s CFO. “We are focused on building a commerce operating system that will help shape the future of retail. Our merchant-first business model positions us to capture the massive opportunity presented by the growth of digital commerce, benefiting both our merchants and Shopify.”
The e-commerce giant’s revenue continued to be bolstered by its merchant solutions revenue, which increased by 137 percent from last year to $668 million. Subscription solutions revenue was $320.7 million and attributed to more merchants joining the platform.
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Monthly recurring revenue (MRR) was $89.9 million, up from $55.4 million in the same quarter last year. Shopify attributed this to more merchants joining its platform and the quarter being the first full quarter of revenue from its Retail POS Pro subscription offering.
In its quarterly report, Shopify noted continued work to build the foundation of the Shopify Fulfillment Network. The company pointed to a focus on “optimizing” its software and network, as well as the introduction of inventory and management features for merchants.
Shopify also saw positive momentum with its mobile shopping assistant app, Shop. At the end of Q1 2021, Shop had more than 107 million registered users, of which more than 24 million were monthly active users.
The company also dolled out $308.6 million in merchant cash advances and loans from Shopify Capital in the first quarter of this year, with Shopify calling that a record for the loan program. The dollar amount represented a 90 percent increase from last year. Shopify Capital launched in Canada in April 2020 after initially only being available in the United States. The program is currently available in the US, Canada, and the United Kingdom.
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Looking ahead, Shopify expects it revenue to continue to grow at a rapid pace in 2021, but a lower rate than in 2020. The company pointed to possible changes in consumer spending habits as countries continue to roll out vaccines in 2021 and “populations are able to move about more freely.”
“Some consumer spending will likely rotate back to offline retail and services; and the ongoing shift to ecommerce, which accelerated in 2020, will likely resume a more normalized pace of growth,” the report stated.
The beginning of this year was also an active one for Shopify’s team. Just after the close of the first quarter, it was announced three senior Shopify executives are set to step down from their roles at the company in the coming months. The executives include chief technology officer Jean-Michel Lemieux, Brittany Forsyth, chief talent officer, and Joe Frasca, chief legal officer. The moves came six months after another major executive shuffle at the company, which saw longtime chief operating officer (COO) Harley Finkelstein moved into the president role, while CEO Tobi Lütke took over the responsibilities of chief product officer from Craig Miller, who departed the company. Toby Shannan, former chief support officer, took over Finkelstein’s COO role.