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.

Meanwhile, it continues to invest in the Fulfillment Network. It has been optimizing its software and network, by adding features that give merchants insights into their inventory. Additionally, its service is helping provide increased flexibility to the merchants by facilitating the management of their orders. More merchants continued to join its fulfillment network in Q1, and it delivered similar volumes during the quarter as in the previous holiday quarter, while maintaining the same service levels.

Shopify’s PaaS Ecosystem

Shopify has always been focused on building an active partner ecosystem which includes developers who build apps for the marketplace or run agencies, consultancies and provide other Shopify-related services such as marketing and accounting services. It has believed that a healthy ecosystem will create more business value for its partners, and for itself.

For developers, in particular, the growth has been impressive. What started in 2010 with a collection of a few integrations to services like Mailchimp for Shopify has now graduated to a thriving economy of its own. Shopify has an active PaaS ecosystem built through API integrations. Its app marketplace has helped developers earn $233.7 million in revenues last year – growing from $139.7 million in 2019. 84% of the apps on its platform have earned revenues so far and nearly half of their top-grossing apps were published within the last two years. Analysts estimate that Shopify takes 20% of all earned revenues through the apps as its revenue share. With the developer growth continuing, Shopify’s platform revenues are bound to grow as well.

Its stock is trading at $1,223.43 with a market capitalization of $152.2 billion. It had touched a year high of $1,499.75 in February. The stock has been climbing from the year low of $685.00 that it had fallen to in June last year.