Online Shopping Platform and Mobile App Shopify Raises Full-Year Revenue Guidance

Shares of Canadian e-commerce software maker Shopify made quite a jump on Thursday after the company reported a notable jump in second-quarter revenue and adjusted earnings that was better than they had expected. 

It should be noted that Shopify did report a second-quarter loss of $28.7 million. This is equivalent to an adjusted profit of roughly 14 cents per share, with revenue increasing 48 percent to $362 million. Analysts had expected to see reported earnings of 3 cents per share on revenue of $350 million.

Accordingly, CEO Tobi Lutke comments, “Our job is to keep innovating on behalf of entrepreneurs so they can compete in an ever-changing retail landscape. Every announcement we made at Unite, especially the Shopify Fulfillment Network, is designed to democratize commerce and make it easier for our merchants to reach for independence.” 

Shopify only very recently launched this fulfillment network, in June, announcing further plans to spend more than one billion dollars to operate and expand over the next few years.  In all, Shopify noted that total operating expenses jumped 46 percent to $244.4 million in the second quarter.  

With that, the company reported a net loss widened during the second quarter, to $28.7 million, or 26 cents per share, ending on June 30.  This is notably higher than the $24 million—about 23 cents per share—posted from the same period last year.  Also, excluding items, the company reported 14 cents per share, definitely besting the average analyst estimate of 2 cents per share. 

When all is said and done, Shopify’s gross merchandise volume (GVM) rose 51 percent to $13.8 billion. This is a broadly-monitored figure in the e-commerce industry. Concurrently, US-listed shares were up 7.5 percent, to $341.57 early in the day, on Thursday.  

All of this should go to serve Shopify’s goal of occupying a bigger piece of the e-commerce pie, so to speak. Obviously, the big players in this field are Amazon and eBay, so it has become imperative for Shopify to invest heavily in new strategies—like this new fulfillment network—to attract new merchants, and new tools to attract new shoppers.

Now, Ottawa-based company expects full year revenue to register somewhere between $1.51 and $1.53 billion. This will accompany a forecast for third-quarter revenue within a range of $377 million and $382 million.  At the end of the day, the stock was up more than 5 percent, to $334. 

Leave a Reply

Your email address will not be published. Required fields are marked *