I’m going to go through each category with real $ numbers…I think we lose something just talking percentages sometimes.
Sep 2016: 99.6M
Sep 2017: 171.5M
Sep 2016: -0.02
Sep 2017: +0.05
Sep 2016: 52.5M
Sep 2017: 100.0M
Sep 2016: 61.9M
Sep 2017: 112.7M
I love that they were non-gaap profitable, but this is 0% of my thesis for SHOP…that’s simply optics. They are still investing a TON of money in growing this company. I mean, OpEx was up 10M sequentially. But, you know what? That’s exactly what I want them to do. They’d be idiots not to. The company is growing at over 70% YoY!
As far as the cries of “will they ever be profitable!?” – I really think these people just aren’t looking very carefully. Growing profit at 91% and expenses at 82% is a really good trend. As I said, OpEx grew 10M sequentially, but gross profit grew 13M. You can easily see how soon, the 100M in profit will catch the 113M in expenses, and Shopify will be profitable no matter how you slice it.
There was a question on the CC from an analyst who expected margin pressure this quarter. The CFO confirmed that margins are increasing due to operating leverage and higher margin revenue, as well as some operating efficiency improvements.
The stock is down. It never ceases to amaze me how irrational the market can be:
Some unhappy with the report? What were they expecting?
Some people are trading. “taking profits” 10% lower than they could have taken them yesterday (???)
Some people are sheep - selling because others are selling
Not only was there nothing negative in this report…there really wasn’t even anything surprising. Just the beat and raise quarter we’ve come to expect. At the current price of 99.50, the PS is down to 16.9 (even as Square’s is up to 17.1 today), and Shopify is looking a lot less expensive…especially considering how little growth slowed.
Bought more shares today. I now have 70% (not a typo) more than I did on Sep 30, even though it was already a 17% position for me then. I know…kind of crazy, but I always say when there’s a buying opportunity, buy.
PS - If you want to accuse me of being in love with this stock, show me where I go wrong in the numbers.