Shopify’s Revenue Nearly Doubles as Covid-19 Pushes Shopping Online
Date: Thursday, July 30, 2020
Source: The Wall Street Journal
E-commerce platform sells tools to businesses that make it easier to build, run and market their online stores
The Canadian company said it has seen more businesses signing up to use the company’s e-commerce platforms during the pandemic. Revenue surged to $714.3 million in the second quarter, up from $362 million in the year-ago quarter and above the analysts’ forecast of $511 million.
Shopify, which was founded in 2004, is an e-commerce platform that sells businesses a variety of tools to make it easier to build, run and market their online stores. The company has benefited from consumers shopping online because of government-mandated lockdown measures that have forced businesses to close in-person retail.
Shopify said the number of new stores created on its platform increased 71% in the second quarter compared with the first, driven by e-commerce shifts fueled by the pandemic and a promotional offering for a 90-day free-trial period. Shopify said it had a slightly lower rate of free-trial accounts converting to paid subscriptions during the 90-day free trial.
The company swung to a profit of $36 million, or 29 cents a share, in the three months ended June 30, compared with a loss of $28.7 million, or 26 cents a share, in the year-ago period. Its adjusted profit was $1.05 a share; analysts polled by FactSet had expected per-share earnings of a penny.
Gross merchandise volume increased 119% compared with last year’s second quarter, although Shopify said the rate of growth, which was strongest in April and May, has decelerated since then.
Subscription-solutions revenue grew 28% year over year to $196.4 million, and merchant-solutions revenue more than doubled to $517.9 million.