Shopify Swings to Quarterly Loss After Growth Skids

Scott Peters
05 May, 2022
New York City

Shopify Inc, the online merchant services provider, reported lower-than-expected quarterly revenues of $1.2 billion, an increase of 22% from a year ago. 

Monthly recurring revenues increased 17% to $105.2 million.

Net loss in the quarter was $1.5 billion compared to $1.3 billion of net income. Diluted loss per share was $11.70 compared to net income of $9.94.   

Subscription revenues increased 8% to $344.8 million as more merchants joined the platform. 

Gross merchandise volume increased 16% to $43.2 billion and gross payment volume rose 46% to $22 billion. 

Merchant solutions which include the fees received for processing payment increased 29% to 858.9 million from a year ago. 

Adjusted operating earnings were $31.9 million or 3% of revenues in the quarter compared to $210.8 million or 21% of revenues in the quarter a year ago.  

The company also announced plans to acquire San Francisco-based merchant fulfillment services provider Deliverr for $2.1 billion paid 80% in cash and 20% in Shopify Class A Subordinate Voting Shares.

Deliverr ships over one million orders a month across the United States. 

At the end of the quarter, Shopify had $7.25 billion in cash equivalent compared to $7.77 billion a year ago. 

Guidance and Outlook 

The company guided lower revenues in the first-half compared to the period a year ago after eliminating certain revenue sharing fees with smaller merchants with less than one million in revenues. 

Subscription revenues growth are estimated to match the 2021 growth levels and merchant revenues are estimated to be twice the rate of subscription revenues growth. 

The company estimates capital expenditure of $200 million and stock-based compensation including payroll taxes of $800 million. 

 

Shopify Inc is headquartered in Ottawa, Ontario, Canada and employs about 10,000 people. 

In today's trading, Shopify stock declined 15.8% to $409.37 and has fallen 70% in the year-so-far.