First-Quarter Financial Highlights
- Total revenue in the first quarter was $988.6 million, with growth accelerating to 110% year over
- Subscription Solutions revenue was $320.7 million, with growth accelerating to 71% year over year, primarily due to more merchants joining the
- 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 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,
- Gross Merchandise Volume, or GMV, represents the total dollar value of orders facilitated through the Shopify platform including certain apps and channels for which a revenue-sharing arrangement is in place in the period, net of refunds, and inclusive of shipping and handling, duty and value-added taxes.
- Monthly Recurring Revenue, or MRR, is calculated by multiplying the number of merchants by the average monthly subscription plan fee in effect on the last day of that period and is used by management as a directional indicator of subscription solutions revenue going forward assuming merchants maintain their subscription plan the following
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 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
- 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
- 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
- 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
- Adjusted net income4 for the first quarter of 2021 was $254.1 million, or $2.01 per diluted share, compared with adjusted net income of $22.3 million, or $0.19 per diluted share, for the first quarter of
- At March 31, 2021, Shopify had $7.87 billion in cash, cash equivalents and marketable securities, compared with $6.39 billion on December 31, 2020. The increase reflects $1.5 billion of net proceeds from Shopify’s offering of Class A subordinate voting shares in the first quarter of 2021.
First-Quarter Business Highlights
- Shopify continued to build the foundation of Shopify Fulfillment Network, focusing on optimizing our software and network, and introduced features that offer merchants greater insights into their inventory and increased flexibility to manage their orders.
- Shopify continued to develop Shop, our all-in-one mobile shopping assistant, reducing friction for buyers with the introduction of an in-app buy button and adding more ways that merchants can be discovered, including filters to find Asian-owned businesses, women-owned businesses in March, and merchants practicing and promoting sustainable commerce. At the end of Q1 2021, Shop had more than 107 million registered users, including buyers using Shop Pay as well as the Shop App, of which more than 24 million were Monthly Active Users. At the end of March 2021, Shop Pay had facilitated over $24 billion in cumulative GMV since its launch in 2017.
- Shopify announced that it had purchased more Direct Air Capture (DAC) carbon removal than any other company in This milestone came with our agreement to purchase 10,000 tonnes of removal from
- Gross Payments Volume, or GPV, is the amount of GMV processed through Shopify
- Non-GAAP financial measures exclude the effect of stock-based compensation expenses and related payroll taxes, amortization of acquired intangibles, unrealized gains on equity and other investments, and tax effects related to non-GAAP Please refer to “Non-GAAP Financial Measures” in this press release for more information.
Carbon Engineering, adding to a previous 5,000-tonne commitment to Climeworks. The goal of Shopify’s Sustainability Fund is to engineer market forces to get momentum behind new technologies that at scale could have a material impact on tackling climate change, and the Fund earmarks $1 million or more per year specifically for carbon sequestration.
- Shopify released the documentary, “Own the Room”, co-produced with Saville Productions for National Geographic Documentary Films, which premiered on Disney Plus in March. Own the Room showcases the real stories of five young entrepreneurs as they compete in the prestigious Global Student Entrepreneur
- Merchants in the U.S., Canada, and the U.K. received a record $308.6 million in merchant cash advances and loans from Shopify Capital in the first quarter of 2021, an increase of 90% versus the $162.4 million received by S. merchants in the first quarter of last year. Shopify Capital has grown to approximately
$2.0 billion in cumulative capital advanced since its launch in April 2016, approximately $312.8 million of which was outstanding on March 31, 2021.
- Shopify’s partner ecosystem continued to expand, as approximately 45,800 partners referred a merchant to Shopify over the past 12 months, up 73% compared with 26,400 over the 12 months ended March 31,
Subsequent to First Quarter 2021
- Shopify introduced a new integrated card reader using our All-New POS software in the U.K. and Ireland, strengthening our Shopify POS offering to merchants in these regions and laying the groundwork to put Shopify POS with integrated payments into the hands of new and existing merchants
- Shopify published its 2020 Global Economic Impact Report showcasing Shopify as a platform that drives substantial business growth and expansion for entrepreneurs and economies around the world. In 2020, businesses on Shopify generated over $307 billion in global economic impact, supporting over three million jobs worldwide. In addition, our partner ecosystem generated $12.5 billion in revenue as our merchants’ selling drove massive volumes of economic
The outlook that follows constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond Shopify’s control. Please see “Forward-looking Statements” below.
In addition to the other assumptions and factors described in this press release, Shopify’s outlook assumes the continuation of growth trends in our industry, our ability to manage our growth effectively, the absence of material changes in our industry or the global economy and other assumptions related to the COVID-19 pandemic, which are described in detail below. The following statements supersede all prior statements made by Shopify and are based on current expectations. As these statements are forward-looking, actual results may differ materially.
These statements do not give effect to the potential impact of mergers, acquisitions, divestitures or business combinations that may be announced or closed after the date hereof. All numbers provided in this section are approximate.
Our full-year 2021 outlook is guided by assumptions that remain unchanged from February: that as countries continue to roll out vaccines in 2021 and populations are able to move about more freely, the overall economic environment will likely improve; some consumer spending will likely rotate back to offline retail and services; and the ongoing shift to ecommerce, which accelerated in 2020, will likely resume a more normalized pace of growth.
In March 2021, the US government passed a coronavirus relief package, and began processing stimulus payments in early March. The benefit to Shopify’s GMV from this latest round of stimulus ended in early April.
In view of these factors, we continue to expect to grow revenue rapidly in 2021, but at a lower rate than in 2020. For the full year 2021, we continue to expect the following:
- 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;
- 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;
- Merchant solutions revenue growth to be driven by continued GMV growth from existing merchants, new merchants joining the platform, and expanded adoption of Shopify’s growing menu of merchant solutions, including established offerings such as Shopify Payments, Shopify Shipping, and Shopify Capital, both geographically and as merchants grow into them, while newer solutions such as Shopify Fulfillment Network and 6 River Systems contribute nascent but incremental revenue in their early
While we expect that the first quarter will likely still contribute the smallest share of full-year revenue and the fourth quarter the largest, the revenue spread may be more evenly distributed across the four quarters than it has been historically if the rollout of a vaccine shifts more consumer spending to services and offline shopping towards the back half of the year.
2020 catapulted commerce into a period of incredibly rapid change, presenting Shopify with unprecedented opportunities in 2021 to accelerate innovation. We continue to expect rapid growth in gross profit dollars in 2021 and plan to reinvest back into our business as aggressively as we can, with the year-over-year growth in operating expenses accelerating each quarter throughout the rest of the year. As such, we expect full year 2021 adjusted operating income to be below the level we achieved in 2020.
For 2021, we now anticipate stock-based compensation expenses and related payroll taxes of $425 million and amortization of acquired intangibles of $21 million.
Quarterly Conference Call
Shopify’s management team will hold a conference call to discuss our first-quarter results today, April 28, 2021, at 8:30 a.m. ET. The conference call will be webcast on the investor relations section of Shopify’s website at https:// investors.shopify.com/news-and-events/. An archived replay of the webcast will be available following the conclusion of the call.
Shopify’s First Quarter 2021 Interim Unaudited Condensed Consolidated Financial Statements and Notes and its First Quarter 2021 Management’s Discussion and Analysis are available on Shopify’s website at www.shopify.com and will be filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Shopify is a leading global commerce company, providing trusted tools to start, grow, market, and manage a retail business of any size. Shopify makes commerce better for everyone with a platform and services that are engineered for reliability, while delivering a better shopping experience for consumers everywhere. Proudly founded in Ottawa, Shopify powers over 1.7 million businesses in more than 175 countries and is trusted by brands such as Allbirds, Gymshark, Heinz, Staples Canada, and many more. For more information, visit www.shopify.com.
CWEB Analyst’s have initiated a Buy Rating for Shopify Inc. (NYSE:SHOP) and potential upside of $1600 by 2021.