We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Shopify (SHOP) Reports Narrower Loss in Q1, Guidance Up
Read MoreHide Full Article
Shopify Inc. (SHOP - Free Report) reported loss of 15 cents, which was 7 cents narrower than the Zacks Consensus Estimate, but wider than 11 cents posted in the year-ago quarter.
Revenues increased 75.2% from the year-ago quarter to $127.4 million, comfortably surpassing the Zacks Consensus Estimate of $122 million. The figure was also better than management’s guided range of $120–$122 million.
Shopify also raised full-year 2017 top-line projections.
Shares increased more than 4% over the last two trading sessions. We note that Shopify has outperformed the Zacks Internet Services industry on a year-to-date basis. While the stock returned 99.5%, the industry gained 16.6%.
Quarter Details
Subscription Solutions revenues grew 60.4% to $62.1 million. This increase was driven by the continued rapid growth in Monthly Recurring Revenue (MRR).
As of Mar 31, 2017 MRR was $20.7 million, up 62% compared with $12.8 million as of Mar 31, 2015. Shopify Plus accounted for 3.5 million or 17% of this MRR compared with 11% of MRR in the year-ago quarter.
Merchant Solutions revenues grew 92% to $65.3 million, backed primarily by the growth of GMV, which soared 81% from the year-ago quarter to $4.8 billion. Gross Payments Volume (GPV) grew to $1.8 billion, which accounted for 38% of GMV processed in the quarter, compared with $1 billion, or 37%, in first-quarter 2016.
Mobile traffic to merchants’ stores continued to grow, reaching 69% of traffic and 59% of orders at the end of March 2017 compared with 62% and 51%, respectively, at the end of Mar 2016.
Gross margin expanded 160 basis points (bps) from the year-ago quarter to 56.7%. The expansion was primarily driven by robust performance across both the segments. Subscription and Merchant solutions gross margin expanded 150 bps and 610 bps, respectively.
Adjusted operating loss (including stock-based compensation) was $14.5 million much wider than loss of $9.7 million reported in the year-ago quarter. The figure was also wider than management’s expectation of an adjusted operating loss of $9–$11 million.
Acquisitions
On Apr 28, 2017, Shopify completed the acquisition of Oberlo UAB, a company that facilitates product sourcing and drop-shipping.
Guidance
For second-quarter 2017, Shopify projects revenues in the range of $142–$144 million. Adjusted operating loss is expected to be in the range of $6–$8 million.
For full-year 2017, management projects revenues in the range of $615–$630 million (up from $580–$600 million). Adjusted operating loss is expected to be in the range of $14–$18 million.
Zacks Rank & Key Picks
Shopify carries a Zacks Rank #3 (Hold). Blucora , Alphabet (GOOGL - Free Report) and Interxion are better-ranked stocks worth looking in the sector. While Blucora sports a Zacks Rank #1(Strong Buy), both Alphabet and Interxion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Blucora, Alphabet and Interxion are pegged at 20%, 16.7% and 13.6%, respectively.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
Image: Bigstock
Shopify (SHOP) Reports Narrower Loss in Q1, Guidance Up
Shopify Inc. (SHOP - Free Report) reported loss of 15 cents, which was 7 cents narrower than the Zacks Consensus Estimate, but wider than 11 cents posted in the year-ago quarter.
Revenues increased 75.2% from the year-ago quarter to $127.4 million, comfortably surpassing the Zacks Consensus Estimate of $122 million. The figure was also better than management’s guided range of $120–$122 million.
Shopify also raised full-year 2017 top-line projections.
Shopify Inc. Price, Consensus and EPS Surprise
Shopify Inc. Price, Consensus and EPS Surprise | Shopify Inc. Quote
Shares increased more than 4% over the last two trading sessions. We note that Shopify has outperformed the Zacks Internet Services industry on a year-to-date basis. While the stock returned 99.5%, the industry gained 16.6%.
Quarter Details
Subscription Solutions revenues grew 60.4% to $62.1 million. This increase was driven by the continued rapid growth in Monthly Recurring Revenue (MRR).
As of Mar 31, 2017 MRR was $20.7 million, up 62% compared with $12.8 million as of Mar 31, 2015. Shopify Plus accounted for 3.5 million or 17% of this MRR compared with 11% of MRR in the year-ago quarter.
Merchant Solutions revenues grew 92% to $65.3 million, backed primarily by the growth of GMV, which soared 81% from the year-ago quarter to $4.8 billion. Gross Payments Volume (GPV) grew to $1.8 billion, which accounted for 38% of GMV processed in the quarter, compared with $1 billion, or 37%, in first-quarter 2016.
Mobile traffic to merchants’ stores continued to grow, reaching 69% of traffic and 59% of orders at the end of March 2017 compared with 62% and 51%, respectively, at the end of Mar 2016.
Gross margin expanded 160 basis points (bps) from the year-ago quarter to 56.7%. The expansion was primarily driven by robust performance across both the segments. Subscription and Merchant solutions gross margin expanded 150 bps and 610 bps, respectively.
Adjusted operating loss (including stock-based compensation) was $14.5 million much wider than loss of $9.7 million reported in the year-ago quarter. The figure was also wider than management’s expectation of an adjusted operating loss of $9–$11 million.
Acquisitions
On Apr 28, 2017, Shopify completed the acquisition of Oberlo UAB, a company that facilitates product sourcing and drop-shipping.
Guidance
For second-quarter 2017, Shopify projects revenues in the range of $142–$144 million. Adjusted operating loss is expected to be in the range of $6–$8 million.
For full-year 2017, management projects revenues in the range of $615–$630 million (up from $580–$600 million). Adjusted operating loss is expected to be in the range of $14–$18 million.
Zacks Rank & Key Picks
Shopify carries a Zacks Rank #3 (Hold). Blucora , Alphabet (GOOGL - Free Report) and Interxion are better-ranked stocks worth looking in the sector. While Blucora sports a Zacks Rank #1(Strong Buy), both Alphabet and Interxion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Blucora, Alphabet and Interxion are pegged at 20%, 16.7% and 13.6%, respectively.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>