Shopify results Q118: they expect $1bn in revenue in 2018

Shopify results for the first quarter of 2018 are now available. For the full year 2018, Shopify say it currently expects revenues in the range of $1 billion to $1.01 billion. Profitability though will be less exciting. The predicted profits of $0 million to $5 million excludes employee expenses and payroll.

Here they report the financial highlights for the first quarter:

• Total revenue in the first quarter was $214.3 million, a 68% increase from the comparable quarter in 2017

• Subscription Solutions revenue grew 61% to $100.2 million. This increase was driven by the continued rapid growth in Monthly Recurring Revenue1 (“MRR”) , driven by an increase in the number of merchants joining the Shopify platform.

• Merchant Solutions revenue grew 75% to $114.1 million, driven primarily by the growth of Gross Merchandise Volume2 (“GMV”), which includes revenue from payments processing, transaction fees, Shopify Capital, referral fees from partners and Shopify Shipping, each of which grew more than 50% over last year’s first quarter. Increasing penetration of Shopify Capital and Shopify Shipping also contributed to the slight acceleration in the year-over-year growth rate of Merchant Solutions revenue.

• Gross merchandise volume (GMV) for the first quarter was $8.0 billion, an increase of $3.1 billion, or 64% over the first quarter of 2017. Gross Payments Volume3 (“GPV”) grew to $3.0 billion, which accounted for 38% of GMV processed in the quarter, versus $1.8 billion, or 38%, for the first quarter of 2017.

So, it’s a mixed picture but the revenue numbers are most impressive and the immediate future for Shopify seems assured. The report also explains what they feel the attraction is for merchants:

Merchants love Shopify because it allows them to sell anywhere, anytime. It also helps them with the many tasks that come with running a retail business. These layers of value we offer merchants give us a healthy variety of growth drivers. One of those drivers is our merchants’ own success. Helping them get their first sale and keeping them selling is a big part of what we work on every day.
– Tobi Lütke, Shopify CEO