Earlier last month, Ontario-based Shopify (NYSE: SHOP) announced its quarterly results that continued to surpass market expectations. Shopify remains focused on building a partner ecosystem that leverages its PaaS capabilities to change the face of eCommerce.
Shopify’s Financials
Shopify’s second-quarter revenues grew 57% to $1.1194 billion, significantly ahead of the market’s forecast of $1.05 billion. GAAP net income was $879.1 billion, compared with net income of $36 million a year ago. Non GAAP earnings grew to $2.24 per share, shattering the market’s expectations of $0.97 per share.
By segment, subscription revenues grew 70% to $334.2 million, ahead of the estimates of $265 million. Merchant solutions revenue rose 52% to $785.2 million.
Among other metrics, gross merchandise volume (GMV) rose 40% to $42.2 billion. Gross Payments Volume (GPV) grew to $20.3 billion. During the quarter, more merchants on standard plans upgraded to Shopify Plus and more international brands joined Shopify Plus to grow their businesses. It added names like Netflix, Diane von Furstenberg, ALDO, Justice, and many more to its portfolio.
Shopify did not provide a forecast for the quarter.
Shopify’s Growth Focus
Shopify is leveraging the entire ecosystem to create a global retail operating system. During its recently held developer-focused partner conference Shopify Unite, it announced major upgrades to its platform on which it is building the Internet’s commerce infrastructure. Some of these upgrades include the creation of Online Store 2.0, a flexible and customizable storefront that allows its merchants to build their stores quickly without touching code while giving max code access to developers for extending and customizing both the storefront and the checkout. Powerful new APIs and developer tooling was added that gives its partners and merchants more creative control without sacrificing speed or scalability. It added a faster and more powerful checkout designed to give each individual shop the ability to handle increased sales volume and a scalable payments platform, enabling partners to build third-party payment gateways as apps.
To continue to encourage developers to build on its apps, Shopify announced that it would not charge any revenue share for app and theme store developers on their first $1 million of annual revenue. These efforts are helping grow its partner ecosystem. During the quarter, the number of partners sending business to Shopify continued to expand with over 46,000 partners referring at least one merchant on Shopify, up 53%.
Its stock is trading at $1,481.41 with a market capitalization of $184.8 billion. It had touched a 52-week high of $1,650 in July and a 52-week low of $839.40 in September last year.
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