Shopify Q4 2020 Results

Shopify released their 2020 Q4 and Full Year results today - another beat across the board. The business continues to ride the Covid era boom in eCommerce and whilst Shopify is forecasting a return to pre Covid growth normality in 2021 they see this as incremental to the 2020 uplift. No discernible Earth shattering news in the announcement but definitely progress across the board.

For those interested in Afterpay and Affirm there is an update on BNPL and instalments which are interestingly referred to separately - I will post on that on the Affirm thread.

Q4 Non-GAAP EPS of $1.58 beats by $0.37; GAAP EPS of $0.99 beats by $0.35.
Revenue of $977.74M (+93.6% Y/Y) beats by $64.42M.
GMV grew 99% Y/Y to $41.1B; Gross Payments Volume grew to $19.1B, which accounted for 46% of GMV processed in the quarter.
Total merchant count reached 1.7m and Shopify Plus merchants across the year rose by 3000 to over 10,000.



Announcement/Webcast/Report @ the Investor Resource Center:




Ok I wanted to come back to this with more time and reflect on the most important takeaways to me, (Shopify is my largest holding at 15%+).

  1. Shopify is reaching a $1bn/quarter revenue run rate - let that sink in. This now a business of serious scale. This is not a collection of mom and pop online stores selling knick knacks.

  2. Headline YoY growth has continued at ~100% level with GMV growing 99% and Revenues growing 94% (latest Q)

  3. Profitability and cash generation have absolutely exploded this last year in terms of operating margin, margin and net inc and cash flow. The following charts are worth a thousand words…

  4. Subscription revenues and MRR have re-accelerated and grew 53% YoY in the latest quarter which is up from the 21% growth rates at the nadir of the Covid pandemic crisis when Shopify ran its 90 day free trial which has clearly paid off!

  5. Merchant count has leapt up this year reaching 1.7m across the platform and >10,000 Shopify Plus customers (up 3000). This is a massive platform of operators and Shopify is certainly making headway with both corporates as well as SMEs.

  6. SHOP App has over 100m active users. This is getting up into an Amazon Prime or Ali Baba Tao Bao level of adoption even though it is a B2B app.

  7. Shopify Payments penetration has increased from 43% of GMV to 46%. Shopify Pay and Shopify Pay Instalments will only help increase this which was launched selectively within US last quarter. Particularly as Shop Pay has been added to Instagram and Facebook since year end - to add to the link ups with Tick Tok, Walmart and even Alipay.

  8. Shopify Shipping has increased from 45% to 52% of GMV penetration and the Shopify fulfilment network has been scaled substantially.



Of all of the great comments in the Shopify conference call, I just wanted to point out one quick exchange:

Trevor Young – Barclays – Analyst

Thanks for taking the question. Just looking at first quarter, how should we think about trends so far quarter to date? Has it been a continuation of the strength that you saw last quarter on top of the pretty difficult compares in January and February versus an easier compare in March? And are you seeing any of that spend shift back to off-line versus online?

Amy Shapero – Chief Financial Officer

Yeah. We continue in Q1 to see strong e-commerce tailwinds and strong interest in the Shopify platform.

Now that pretty much says it all. No reason for a long-winded, hand-waving answer. Just short and sweet.

Long SHOP ~ 25% position and willing to ride the ups and downs