Shopify Plus At 3600+ Merchants

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I wanted to make sure this link doesn’t get lost in another thread.

https://www.shopify.com/plus

That’s the landing page for Shopify Plus.

It tells us that:

-Shopify Plus has 3600+ businesses
-Shopify Plus Merchants have yoy growth of 126%
-Those businesses do $1M-$500M+ in annual sales

In another post I had estimated based off Shopify Plus MRR and subscription costs that in March they had 3575 Shop Plus merchants. So that got pretty close to the actual “3600+” number. I believe this means that the prior year estimate of about 1750 Plus merchants should be a decent ballpark for comparison. No need to do math going forward I’m going to bookmark it and check back when I want. That page showed “2500+” about December 8 2017. See the screenshot on this Quora post.

https://www.quora.com/How-many-customers-does-Shopify-Plus-h…

This means the number of Plus merchants grew slightly more than 100% yoy. Which would match the 103% growth in MRR that Shop Plus contributed.

Bigger picture while that helps MRR which is always good, the $1M-500M+ in sales is what matters more to Shop. Merchants Selling stuff and getting merchant solutions revenue from that is what will drive this business to the next level. This is reflected in +75% growth for merchant solutions and +60% for Subscription Services (57% MRR). That resulted in revenue of $114M(53%) and $100M(47%), respectively.
So the bigger pie is growing faster, though 60% is still impressive.

Who knows what the stock will do. It is premium valued as it should be given their growth even when dealing with increasingly tougher comps.

I have made some bad calls lately, selling AAPL and MA recently. I’m not trying to offer advice, just presenting information.

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W do not know exactly wen the 2500+ was posted. I have a recollection of 3000 at last quarter, so it could be another 500 Plus merchants added, still a good 205 sequential increase. This merchant number may be number of websites, as some merchants have more than one website pushing different promotions or sub products. But still a number to work with.

Excellent detective work Darth! I am feeling much better today, go the swimming pool water pump blowing water into the creek so I can finally fix my dang pool, but yesterday, although I could find the data, there was nothing I could do to try to put it together. Not an easy thing.

I also agree with Duma, what the F**** is management doing. How can they be that clumsy. They refuse to give the number, and yet they give it out on their own website, updated periodically!!!

Seriously, that calls into question their management sanity. For whatever that is worth. I do believe, and it comes through rather clear, that the company is run as if by a kid (and well it is, but then again so is Facebook) and it is clear they are cocky. They have reason to be cocky, they kicked everyone’s butt, and now they think they can do almost anything and it will work!

And you know what, although we have less insight to the B2B sites for things like eCommerce or Demandware/Salesforce, kind of like Paycom, in the mid to high level area (Salesforce would just be highest tier one would think) I am not aware of any serious competition at all.

But yeah, how clumsy of management when an idiot blogger, and a throwing up their lung in fever pitch attorney, for free, can come up with the number that they themselves gave and refuse to give at an earnings conference.

Well, for whatever that is worth. This Shopify Plus sector is the future and still far from secure, but it is moving in the right direction.

Tinker

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Maybe this particular item goes along with their strategy of guiding for the $1.00 to $1.01 billion range on the year…and the coyness about what they plan to do with their $1.6 billion cash pile.

Speaking of that cash pile, rather than using a simple P/S for Shopify, an EV/S ratio would be more useful. EV to 2018 sales is right around 10 for Shopify with their net cash position.

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It’s been discussed before but I can’t remember. Looking for a higher or lower number with EV/S ratio and what seems to be a good number for success?

Thanks!

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Not so fast!

Here’s what Finkelstein said on the Q4 2017 earnings call:

“We ended 2017 with approximately 3600 merchants on Shopify Plus.”

So they were already at 3600 at then end of 2017. So the 3600 number can’t be right because the following was said on the earnings call yesterday:

“Turning to Shopify Plus, while the first quarter of the calendar year is seasonally a slow one for buyers in the enterprise, we still added far more new merchants in the quarter versus the same period last year.”

The above 2 statements imply that the number of Shopify Plus merchants is well above 3600 now.

Chris

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But yeah, how clumsy of management when an idiot blogger, and a throwing up their lung in fever pitch attorney, for free, can come up with the number that they themselves gave and refuse to give at an earnings conference.

So the above is false. Shopify seems to update investors on the merchant numbers annually, not quarterly. After Q4 the reported 3600 Shopify Plus merchants and 609,000 total merchants. The number on the website is consistent with what was reported after Q4. I believe that 2500 was the number given after Q4 of the prior year. Given that they added far more Shopify merchants in Q1 2018 than in Q1 2017 they must be near or at 4000 merchants now (1100 annual increase divided by 4 quarters is 275).

I wouldn’t assume that management is being sneaky or secretive. They are being consistent in that they report the merchant figures annually. I think this management team is very ethical which I base on some interviews that Tobi has given and some of the statements that they make. The really put their customers/merchants ahead of making profits.

Chris

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“Seriously, that calls into question their management sanity. For whatever that is worth. I do believe, and it comes through rather clear, that the company is run as if by a kid (and well it is, but then again so is Facebook) and it is clear they are cocky. They have reason to be cocky, they kicked everyone’s butt, and now they think they can do almost anything and it will work!”

I have a much different impression of their management. For example. I see Tobi Luetke as a gifted leader the likes of which are rarely seen in my opinion. He has taken a fledging start up and transformed it into one of the fastest growing companies in the market. Their execution has been exemplary. This is hardly the work of a “kid”. He has built a nourishing work environment where employee satisfaction is paramount. He has a passion for what he is doing which is bringing the possibility of entrepreneurship to the common folk so to speak. I don’t believe this passion has anything to do with his own self aggrandizement. I find it peculiar, to be honest, that someone would see him as being “cocky”.

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Nice work Chris.

So that site probably said “2500+” for all of last year and will probably say “3600+“ for all of this year.

I guess too many variables goes in to the MRR number(discounts, new adds, etc) to reverse figure that out. Any way you slice it, it looks good.

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I took a quick look but could not find the number for Q4 or Q1 2016 and 2017, although it may be out there somewhere. But with that, we can probably assume more than 4,000 Shopify Plus. Fees are $2,000 per month except for the largest sites, and those are cut in transactions. So yes, difficult to mathematically figure that out.

But to put that into perspective, that is more Shopify Plus customers than AYX has clients, about the same as the number of customers that OKTA has and that PSTG has, about 50% less than Nutanix has, and yet Shopify Plus was only started in 2014.

Since all these other companies were started much earlier, that puts SHOP in rarified territory, based upon Shopify Plus alone.

Great catch Chris. A smart group of people woking together and challenging each other always performs well.

Tinker

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Not so fast!

Here’s what Finkelstein said on the Q4 2017 earnings call:

“We ended 2017 with approximately 3600 merchants on Shopify Plus.”<?I>

Thanks Chris…that makes more sense…essentially they have NOT grown SHOP Plus by some insane amount in sequential quarters.

I think the MRR data I presented suggests that as well…we should be looking for 15% sequential growth in MRR in the next 3 quarters.

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If anyone cares you can find archived websites at

https://web.archive.org/

and Shopify at

https://web.archive.org/web/20180101031936/https://www.shopi…

Dec 31 2017 was 2500+
Dec 31 2016 didn’t have a number, website might have been under construction.

I, personnaly, don’t expect CEO’s to know what is on every webpage of their company.

The way back machine is fun to check out

Robert

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