Cloud Stocks: Shopify Focuses On Social Commerce

Earlier last month, Ontario-based Shopify (NYSE: SHOP) announced its quarterly results that continued to surpass market expectations. Shopify has been investing in the growth of its social commerce and fulfillment network capabilities and its PaaS ecosystem story remains impressive.

Shopify’s Financials

Shopify’s first-quarter revenues grew 110% to $988.6 million, significantly ahead of the market’s forecast by 15.6%. Net income was $1.26 million, compared with a net loss of $31.4 million a year ago. On an adjusted basis, earnings grew to $2.01 per share, surpassing the market’s forecast by 158%.

By segment, subscription revenues grew 70.93% to $320.7 million. Merchant solutions revenue rose 136.54% to $668 million.

Among other metrics, gross merchandise volume (GMV) rose 114% to $37.3 billion in the quarter. Gross Payments Volume (GPV) grew 115% over the year to $17.3 billion.

Shopify did not provide a forecast for the quarter.

Shopify’s Social Commerce Focus

Shopify is expanding its focus on driving sales through social commerce. The number of shops actively selling on Facebook shops has more than quadrupled since Q1 a year ago. During the first quarter, it expanded its marketing partnership with TikTok internationally to an additional 14 countries in North America, EMEA, and APAC. Shopify entered into a partnership with TikTok last year and has seen good traction in the adoption of TikTok in the US since its launch.

Shopify has also expanded its Pinterest channel in 27 additional markets, opening discoverability and sales opportunities globally. It is also making the experience better for the consumers by extending the availability of its services like Shop Pay as a checkout option for merchants selling on Facebook Shops and Instagram Checkout.

It also introduced in-app buy buttons so that buyers can purchase products that are recommended to them from the app itself. Its products like the accelerated payout service, Shop Pay; Buy Now, Pay Later product, Shop Pay Installments; and end-to-end order tracking are helping merchants increase the lifetime value of their customers.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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