Shopify - Lest you think they are slowing down

Shopify revenues were up 75% in the March quarter from 72.7 million to 127.4 million.

Last year’s Mar quarter they were up 95% from 37.3 million to 72.7 million.

Terrible, huh? Let’s look at it another way: Last year they increased revenue by $35.4 million. This year they increased revenue by $54.7 million. Rather than slowing down, their revenue increase was markedly accelerating in dollar terms and was up more than one and a half times as much as the year before.

Just my way of looking at it.

Best,

Saul

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I have been a small business owner for 42 years. I would LOVE to have increased my revenue $54.7 million YOY!!! A 57% increase, if I’ve done the math correctly.

I’d be uncorking the champagne!

Thanks, Saul, for your informative, timely post re: Shopify.

Jim

7:08 AM ET 5/2/17 | Briefing.com
Reports Q1 (Mar) loss of $0.04 per share, $0.06 better than the Capital IQ Consensus of ($0.10); revenues rose 75.2% year/year to $127.4 mln vs the $121.67 mln Capital IQ Consensus. Within this, Subscription Solutions revenue grew 60% to $62.1 million. This increase was driven by the continued rapid growth in Monthly Recurring Revenue as a record number of merchants joined the platform in the period. Merchant Solutions revenue grew 92% to $65.3 million, driven primarily by the growth of Gross Merchandise Volume. GMV for the first quarter was $4.8 billion, an increase of 81% over the first quarter of 2016. Gross Payments Volume grew to $1.8 billion, which accounted for 38% of GMV processed in the quarter, versus $1.0 billion, or 37%, for the first quarter of 2016.Co issues upside guidance for Q2, sees Q2 revs of $142-144 mln vs. $137.09 mln Capital IQ Consensus Estimate; adj operating loss $6-8 mln.Co issues upside guidance for FY17, raises FY17 revs to $615-630 mln from $580-600 mln vs. $600.77 mln Capital IQ Consensus Estimate; adj operating loss $14-18 mln from $18-22 mln.“In addition to merchant growth and their adoption of both new channels and merchant solutions, we also continue to see expansion of merchants’ GMV. Retail is shifting headlong toward the vision we laid out two years ago – of inspiring entrepreneurship with multi-channel commerce – and we fully expect to continue leading this industry transition for years to come.”

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Hi Saul - this is a great way of looking at it. What I’ve been doing is tracking revenue/share. Since they are still issuing lots of shares this allows me to track value to a P/S ratio since they’re not reporting positive earnings.

When I look at revenue/share they are up 56%, from $0.90 to $1.41. These are still great numbers and allows me to keep an eye on “equity ownership” stake per se. Just a different way of looking at it.

Chad

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At 2 minutes after the opening up $6!! Not what I expected…

Saul

What I’ve been doing is tracking revenue/share. Since they are still issuing lots of shares this allows me to track value to a P/S ratio since they’re not reporting positive earnings. When I look at revenue/share they are up 56%, from $0.90 to $1.41.

Chad, you should make clear that that $1.41 per share is revenue for the quarter. If you look at the annual revenue they are guiding to, it’s more like $7.00 per share for 2017. That’s important in relationship to the current price. (And they will beat what they are guiding to).

Saul

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Here are the 1) weighted average shares, 2) the sales per share and 3) the price per sales per share.


WASh	Mar	Jun	Sep	Dec	Sal/Shr	Mar	Jun	Sep	Dec	P/Sal	Mar	Jun	Sep	Dec
2015	39.3	53.0	75.9	78.0	2015	0.95	0.85	0.70	0.90	2015	25.4	40.1	50.6	28.7
2016	80.5	81.3	84.9	89.1	2016	0.90	1.07	1.17	1.46	2016	31.2	28.9	36.6	29.3
2017	90.2				2017	1.41				2017	48.2	__*58.8__

YoY	Mar	Jun	Sep	Dec	YoY	Mar	Jun	Sep	Dec
2016	104.6%	53.4%	11.9%	14.3%	2016	-4.8%	25.8%	68.6%	62.6%
2017	12.1%				2017	56.2%

*$83/Q1 WA Shares

There is a lot of dilution. But the per share sales is growing a lot faster. However, the price we pay for this growth is at its highest level ever.

I am continually buying small amounts, and am hoping for a market correction, which should take the price of Shopify down quite a bit. Given the nature of the business, it should quickly bounce back.

DJ

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Nice day for SHOP up 7.4%. We need a market wide sell off so I can buy more on sale. =)

Unreal - for a business that can’t even make a loss if they tried (which they did) that’s an amazing business to be invested in.

Imagine that - you try to make a loss but instead you fail, grow business by 75% and make a profit.

Ant

However, the price we pay for this growth is at its highest level ever.

Agreed, but … Do you own anything that is * not * in the same predicament? I’m having trouble
pulling the trigger on almost anything, but the merchandise (stock shares) just keep flying off the
shelves and the prices continue to soar so we might as well join the party, right? I will say one
thing; this can’t last forever. Meanwhile, who wants to miss out on the giveaway?

Dan

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