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

Shopify Inc.’s SHOP +0.23% revenue nearly doubled in the latest quarter, as the company benefited from the e-commerce boom spurred by the Covid-19 pandemic.

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.

Shares of Shopify rose 7% on Wednesday to $1,053.59, and are up 165% this year.

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.

 

 

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