Shopify earnings are out

About a year ago, I posted here about how Shopify had integrated itself into both and Facebook Shops. Merchants on Shopify could therefore have their online stores and product catalogs instantly accessible through these additional, massive distribution channels.

Here are the links to my two Shopify posts last year:……

Strategies like these appear to have paid off big time, as SHOP has just announced some pretty spectacular earnings.

First-Quarter Financial Highlights

  • Total revenue in the first quarter was $988.6 million, with growth accelerating to 110% year over year.

  • Subscription Solutions revenue was $320.7 million, with growth accelerating to 71% year over year, primarily due to more merchants joining the platform.

  • Merchant Solutions revenue was $668.0 million, with growth accelerating to 137%, driven primarily by the growth of Gross Merchandise Volume1 (“GMV”).

  • Monthly Recurring Revenue2 (“MRR”) as of March 31, 2021 was $89.9 million. Growth accelerated to 62% year-over-year with MRR up from $55.4 million as of March 31, 2020 as more merchants joined the platform and POS Pro contributed its first full quarter of revenue. Shopify Plus contributed $23.1 million, or 26%, of MRR compared with 28% of MRR as of March 31, 2020 as a result of the significantly higher number of merchants on standard plans joining the platform in the past 12 months and our first full quarter of revenue from our Retail POS Pro subscription offering.

  • GMV for the first quarter was $37.3 billion, an increase of $19.9 billion, with growth accelerating to 114% over the first quarter of 2020. Gross Payments Volume3 (“GPV”) grew to $17.3 billion, which accounted for 46% of GMV processed in the quarter, versus $7.3 billion, or 42%, for the first quarter of 2020.

  • Gross profit dollar growth accelerated, up 117% to $558.7 million in the first quarter of 2021, compared with $257.0 million for the first quarter of 2020.

  • Adjusted gross profit4 growth accelerated, up 114% to $565.1 million in the first quarter of 2021, compared with $263.8 million for the first quarter of 2020.

  • Operating income for the first quarter of 2021 was $118.9 million, or 12% of revenue, versus a loss of $73.2 million, or 16% of revenue, for the comparable period a year ago.

  • Adjusted operating income4 for the first quarter of 2021 was $210.8 million, or 21% of revenue, compared with adjusted operating loss of $7.3 million or 2% of revenue in the first quarter of 2020.

  • Net income for the first quarter of 2021 was $1,258.4 million, or $9.94 per diluted share, compared with a net loss of $31.4 million, or $0.27 per diluted share, for the first quarter of 2020. Q1 2021 net income includes a $1.3 billion unrealized gain on our equity investment in Affirm as a result of its IPO in January 2021.

Long SHOP since Feb 2018.


Thank you Ron !
I have made many mistakes in my early investor life (October-November start) but making Shopify my biggest allocation was not one of them.

What other company is turning out metrics like this at this scale ? I cannot find anything comparable.

I believe similarly to PINS they are in an excellent position - and Pins will not doubt rebound very very fast.


Unfortunately I’m not holding my original Shopify shares (purchased at a price in the double digits), but I did buy back into a full position a while ago. I really cannot believe the numbers they are putting out, I had to do a double take when I saw revenue of 988 million, I thought surely I was reading it wrong. Almost $1 Billion in quarterly revenue and growing at 110% YOY, no other company we follow comes close. Not to mention the fact that they are now profitable. PE is going to evaporate with numbers like this going forward. I really don’t even know where the limit is for this company now, every time I think things are finally slowing down for good they hit a home run.


Don’t focus too much on that triple digit growth, as of next quarter growth will most likely slowdown to 50-60% range due to difficult comparables. Still very good.

Shopify Quarterly Revenue
Year      Q1      Q2      Q3      Q4
2019     321     362     391     505
2020     470     714     767     978
2021     988

Sequential Growth
Year      Q1      Q2      Q3      Q4
2019     -7%     13%      8%     29%
2020     -7%     52%      7%     27%
2021      1%

Best first quarter ever. Very impressive. And if you break it down, Merchant Services decreased less than usual and Subscription Revenue increased a LOT more than usual.

Unfortunately for the outlook they said:

Subscriptions solutions revenue growth to be driven by more merchants around the world joining the platform in a number lower than the record in 2020, but higher than any year prior to 2020; [Bear: important to note that a “number” higher could still mean a rate lower (than any year prior to 2020)]

The growth rates of subscription solutions and merchant solutions revenues to be more similar to each other than in the recent past, as we do not expect the surge in GMV that drove merchant solutions in 2020 to repeat;

I listened to some of the call and didn’t catch any more detail on when this slower growth (especially in Subscription Revenue) is expected to start. Because it didn’t slow in Q1.

If I had to guess, I’d expect YoY revenue growth to come in at around 50% in Q2, and quickly slow to around 35% or 40% over the next few quarters. (Revenue grew 47% in 2019.) Still pretty amazing for a company of this size, but I believe it’s priced in, so I’ll continue to watch and admire but not own shares.



I agree with Bear here. I think that the growth will slow to 50s and 40s soon. Good company to own in LTBH portfolio, but - in my opinion - we will have better horses to ride on in our concentrated high (hyper) growth portfolios. Just my opinion, could be wrong.


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Almost $1 Billion in quarterly revenue and growing at 110% YOY, no other company we follow comes close.

Well, actually Peloton in their most recently reported quarter had $1.06B in quarterly revenue with 128% YOY growth.

Though they’re in a similar boat as SHOP (or ZM) as those extremely high YOY growth rates will come down this year as they hit hard compares against their Covid accelerated growth of 2020. How much they end up coming down will determine how they’re valued in the short to medium term.


One of my favorite companies doing what I expected them to do. Even so I’ve been reducing as part of a wider strategy to include the size of a company in my decision making more. I recently reduced from about a 14% to 6% and bought 6% of Lightspeed POS, which overlaps a bit but only directly competes when a customer is a specific combination of type and need. SHOP is 7x the size of LSPD! I am seriously considering trading out my SHOP for ZI or some other position, but I haven’t decided yet. I may hold it for while at the reduced allocation.

I wrote this over a month ago as part of a larger review and never posted it! I’ll share it here for those interested with one comment bolded about the quarter just reported…

Shopify (SHOP) & Lightspeed (LSPD)
I decided to see this as a single position that is a blend of these two companies, at least for this rebalance (moving forward of course they must each stand on their own). I know SHOP well and a really love this company while LSPD is new and smaller and I want to learn more about them before increasing my holdings.

SHOP Market cap: $142.2B
LSPD Market cap: $8.5B

SHOP is not an e-commerce company or solely a place for e-commerce companies to host a website. Shopify says they are an “entrepreneurship company for merchants of all sizes” and their vision is a cloud-based “Single Integrated Back Office”. With POS integration, shipping, payment processing, accounting integration, multinational configuration of taxes/duties, policy, pricing, etc, small business loans, an app store to extend functionality of online stores, and more, they mean it. The other important quality of note is their entire mission is to profit WITH their merchants rather than from them. This is why the Shopify Shop app is not about monetizing but about driving more value to their merchants. While they are not monetizing on the surface, go back and read the list of things they do and many of them are streams of revenue. For the MUCH larger companies there is also Shopify+ which has more services on offer. Even for a small business the included customer service is fantastic though. They aren’t like some companies that only give you a chatbot and email system if you aren’t paying a lot more.

Here is a post on Shopify with more detail on the above and these highlights:…

  • Revenue growth: 94% YoY and 27.4% sequentially (QoQ)
  • Subscription Solutions revenue was $279.4 million, up 53% (sort of the “land”)
  • Merchant Solutions revenue growth increased 117% (sort of the “expand”)
  • Operating leverage continues to improve significantly. S&M shrank from 28% to 18% of revenue and - R&D shrank from 16% to 12%
  • Integrated with all the social media stores to shop right in those apps including inventory and - price sync and such and is very easy to add to a store.

These numbers are not unusually high either (not a massive covid-effect). They are consistent. All great stuff but this company is getting large and this was the seasonally great quarter. Next quarter carries a bit of risk. They did not offer guidance. Here is an interesting guess that actually shows negative growth, which has happened historically in the next quarter. I simply changed the revenue to get a QoQ number inline with past seasonality. Note the YoY still looks great as it smooths the seasonality out, but that has always been true as well. Consider what it would be like if they actually grow this coming quarter.

	Guess	Dec-20	Sep-20	Jun-20	Mar-20	Dec-19	Sep-19	Jun-19	Mar-19	Dec-18	Sep-18
Revenue	 920	977.7	767.4	714.3	470	505.2	390.6	362	320.5	343.9	270.1
YoY	95.7%	93.5%	96.5%	97.3%	46.6%	46.9%	44.6%	43.8%	49.6%	54.4%	57.5%
QoQ	-5.9%	27.4%	 7.4%	52.0%	-7.0%	29.3%	 7.9%	12.9%	-6.8%	27.3%	 7.3%

Posted as a stand-alone post here:…
Some numbers at a glance:

       	4Q'21	3Q'21	2Q'21	1Q'21	4Q'20	3Q'20	2Q'20	1Q'20		
       	GUIDE	Dec-20	Sep-20	Jun-20	Mar-20	Dec-19	Sep-19	Jun-19	Mar-19	Dec-18
Revenue 	70	57.6	45.5	36.2	36.2	32.2	28	24	21.2	20
YoY     	93.4%	78.9%	62.5%	50.8%	70.8%	61.0%	51.4%	37.9%	--	--
QoQ     	21.5%	26.6%	25.7%	0.0%	12.4%	15.0%	16.7%	13.2%	6.0%	8.1%
QoQ$     	12.4	12.1	9.3	0.0	4.0	4.2	4.0	2.8	1.2	1.5

I don’t want to sidetrack this thread so if interested in Lightspeed POS, see the link above here at the end.

It is interesting to see my guess and comments after getting the real results. Very cool Shopify!

I think it is quite possible for them to continue putting out great growth numbers considering all they do and the lack of real competition. By “competition” I don’t simply mean one hosting eCommerce sites, but one that has the same ease of integration with social media, accounting, banking, inventory and supply chain, POS, and so on, and can scale along with a company to almost any size and offers great customer support and aligned values.


Ok I thought these results were incredible.


Whilst clearly the pandemic impact and the resulting stimulus was a boost for Shopify I believe the results this quarter are really revealing a longer term strength in the business.

At $37bn GMV for the quarter still growing at over 100% they are already 1/3rd larger in GMV terms than eBay (growing at 40%) and already at 1/10th of the GMV of Ali Baba (growing core commerce at 35%).

They are producing a Lightspeed market cap equivalent and 10x a Lightspeed in revenue terms from growth every quarter.

Whilst I fully expect the growth rate to drop back to 40-50% on tough compares and Shopify are guiding accordingly, I think that there might still be cause for optimism on that front…

  1. During the first 1-2 quarters of the Pandemic whilst they benefited from a bump in GMV they were giving away free memberships which will be paid memberships this year so helping the compares

  2. The Shopify Fulfilment solution is gradually being scaled having been cautiously deployed last year

  3. Shopify Instalment Payments were only just introduced from January so should add incremental revenues

  4. More POS solutions are getting rolled out and the Shop App is scaling fast

I just don’t see any other companies that we are investing in that could possibly reach the potential scale (trillion $+ business) that Shopify could (with the possible exception of Snowflake). There is still a lot of monetisation take rate Shopify can achieve from its existing business and the eCommerce potential of the future is almost unlimited. I also see huge potential for leverage delivering outsized gains at the bottom line.

Shopify remains a 15%+ holding for me and I’m happy to hold at this stage.
Shopify has a strong track record of surprising us to the upside.



What impresses me is the sheer magnitude of SHOP’s earnings beats. Take a look at these numbers:

  • Revenue of $989M, up 110% YoY, and beat the consensus estimate by $139M (!)

  • GMV of $37B, up 114%, and beat by $5B (!!)

  • EPS of $2.01 vs $0.77 estimated (granted, this includes a one-time $1.3B gain from its investment in Affirm)

This is also good news for us Cloudflare shareholders, because Shopify’s Content Delivery Network (CDN) is Cloudflare. That means that all the product images stored in the online catalogs of Shopify’s 1 million+ merchants are cached at the edge by Cloudflare! That has to be petabytes of content passing through that CDN due to Shopify alone.

Quoting from this SA article:

"Shopify now has a GMV/revenue ratio of 40, so for every $1 Shopify makes, its merchants make $40 which is quite impressive. …this goes to show that Shopify’s singular goal is indeed to help its merchants succeed, which has been the core company value of SHOP.

With 1Q 2021 revenue of nearly $1 billion, it is almost a guarantee that SHOP will beat the current FY 2021 revenue estimate of $4.1 billion. Historically for online retail, the 1Q of the year sees the lowest sales, while it gradually increases in 2Q and 3Q, then explodes in 4Q (usually a 40-50% increase compared to 1Q) due to the holiday season. I don’t think SHOP will have 110% growth YoY for the rest of the three quarters in 2021, but even if we only get 50% growth in the next 3 quarters, which is quite conservative in my opinion, FY 2021 revenue would still be $4.68 billion, almost a 15% beat. More importantly, that means SHOP right now has a forward P/S ratio of around 34, which is still quite high but not that crazy for a SaaS company."…

The analyst at Susquehanna just raised his price target on SHOP to $1,500 -…

Finally, I’d like to thank Saul for getting me into SHOP more than 3 years ago at around $124. It’s up 10x since then, and is one of many tech-driven growth stocks mentioned on this board that have delivered life-changing returns for me and my family.



Shopify results:

	Mar-21	Dec-20	Sep-20	Jun-20	Mar-20	Dec-19	Sep-19	Jun-19	Mar-19	Dec-18	Sep-18
Revenue	  988    977.7	767.4	714.3	470	505.2	390.6	362	320.5	343.9	270.1
YoY     110.2%	93.5%	96.5%	97.3%	46.6%	46.9%	44.6%	43.8%	49.6%	54.4%	57.5%
QoQ 	  1.1%	27.4%	 7.4%	52.0%	-7.0%	29.3%	 7.9%	12.9%	-6.8%	27.3%	 7.3%

The notable thing to me is the comparison of the March quarters. It’s the first time in two years there is a positive result.


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