Shopify (SHOP) Tops Q4 EPS by 6c, Revenues Beat; Offers Q1 & FY19 Revenue Guidance
Shopify (NYSE: SHOP) reported Q4 EPS of $0.26, $0.06 better than the analyst estimate of $0.20. Revenue for the quarter came in at $343.9 million versus the consensus estimate of $327.63 million.
Fourth-Quarter Financial Highlights
- Total revenue in the fourth quarter was $343.9 million, a 54% increase from the comparable quarter in 2017.
- Subscription Solutions revenue grew 42% to $133.6 million. This increase was driven primarily by growth in Monthly Recurring Revenue1 ("MRR"), driven primarily by an increase in the number of merchants joining the Shopify platform.
- Merchant Solutions revenue grew 63%, to $210.3 million, driven primarily by the growth of Gross Merchandise Volume2 ("GMV"), as well as by strong growth in Shopify Capital and Shopify Shipping.
- MRR as of December 31, 2018 was $40.9 million, up 37% compared with $29.9 million as of December 31, 2017. Shopify Plus contributed $10.4 million, or 25%, of MRR compared with 21% of MRR as of December 31, 2017.
- GMV for the fourth quarter was $14.0 billion, an increase of $4.9 billion, or 54% over the fourth quarter of 2017. Gross Payments Volume3 ("GPV") grew to $5.8 billion, which accounted for a record 41% of GMV processed in the quarter, versus $3.5 billion, or 39%, for the fourth quarter of 2017.
- Gross profit dollars grew 53%, to $185.7 million, compared with the $121.1 million recorded for the fourth quarter of 2017.
- Operating loss for the fourth quarter of 2018 was $9.5 million, or 3% of revenue, versus a loss of $6.1 million, or 3% of revenue, for the comparable period a year ago.
- Adjusted operating income4 for the fourth quarter of 2018 was 6% of revenue, or $20.0 million; adjusted operating income for the fourth quarter of 2017 was 5% of revenue, or $11.6 million.
- Net loss for the fourth quarter of 2018 was $1.5 million, or $0.01 per share, compared with $3.0 million, or $0.03 per share, for the fourth quarter of 2017.
- Adjusted net income4 for the fourth quarter of 2018 was $27.9 million, or $0.26 per share, compared with adjusted net income of $14.7 million, or $0.15 per share, for the fourth quarter of 2017.
- At December 31, 2018, Shopify had $1.97 billion in cash, cash equivalents and marketable securities, compared with $938 million on December 31, 2017.
“We made history in 2018: no other SaaS company has crossed the $1 billion-dollar revenue mark at a faster growth rate than Shopify has,” said Tobi Lütke, Shopify’s CEO. "This milestone is significant due to the backdrop: Shopify allows people to partake in the entrepreneurial world who would otherwise not be able to do so. We have been focused on growing this market for the past 12 years even though a lot of people told us that this isn’t a valuable business model. We let the results speak for themselves."
"Our merchants had an incredible fourth quarter, and we are energized by their success," said Amy Shapero, Shopify’s CFO. "With our focus on helping entrepreneurs everywhere, including those within the enterprise, launch their businesses and grow them, in 2018 we reached a billion orders cumulatively, and saw the highest-ever mix of merchants join the platform from outside our core geographies. We look forward to expanding our footprint even more in 2019 as we continue to bring more product innovation and more value to merchants of all sizes around the world."
Shopify sees Q1 2019 revenue of $305-310 million, versus the consensus of $308 million.
Shopify sees FY2019 revenue of $1.46-1.48 billion, versus the consensus of $1.48 billion.
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