Shopify And BigCommerce Building API-based Ecosystems

Ontario-based Shopify (NYSE: SHOP) recently announced its fourth-quarter results that surpassed all market expectations. Nothing seems to be stopping Shopify as it continues to invest in its platform and business.

Shopify’s Financials

Shopify’s fourth-quarter revenues grew 94% to $977.7 million, significantly ahead of the market’s forecast of $910.2 million. Net income was $123.9 million, compared with a net income of $0.8 million a year ago. On an adjusted basis, earnings grew to $1.58 per share, surpassing the market’s forecast of $1.28 per share.

By segment, subscription revenues grew 53% to $279.4 million, ahead of the estimates of $265 million. Merchant solutions revenue rose 117% to $698.3 million.

Among other metrics, gross merchandise volume (GMV) rose 99% to $41.1 billion and Gross Payments Volume (GPV) grew 115% to $19.1 billion.

Revenue for the full year grew 86% to $292.5 million and adjusted net income was $3.98 per share compared with $0.30 per share a year ago.

Shopify did not provide a forecast for the first quarter.

Shopify’s Growth Focus

During the quarter, Shopify made its product, Shopify Balance, available for early access. Shopify Balance lets US-based sellers open no-fee business accounts, allowing them to assess the health of their business by being able to separate their business finances from their personal finances.

Recently, it expanded its accelerated checkout service, Shop Pay. Keeping the growing importance of social networks in mind, Shop Pay has been integrated with Instagram and Facebook. With the expansion, Shopify Payments will process all transactions by Shopify merchants on Facebook and Instagram upon full implementation of the integration later this year. This will be the first time that Shop Pay will be offered outside of Shopify. It will provide buyers on Facebook and Instagram a fast and secure way to checkout. Shop Pay is currently available on Instagram in the US and will be rolled out to merchants on Facebook in the US in the coming weeks.

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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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