Revenue Grows 93% Year on Year
Number of Merchants Surpasses 200,000
Gross Merchandise Volume (GMV) Grows 101% Year on Year
Shopify reports in U.S. dollars and in accordance with U.S. GAAP
Shopify Inc. (NYSE:SHOP)(TSX:SH), a leading cloud-based, multichannel
commerce platform, today announced strong financial results for the
quarter ended September 30, 2015. The third quarter also included a
string of product and partnership announcements that further expand the
Shopify platform for our 200,000+ merchants.
"We continue to focus the company on making the Shopify platform better.
This quarter we introduced many exciting product enhancements, like
Shopify Shipping and integrations with Amazon, Facebook and Twitter,"
said Tobi Lütke, Shopify's CEO. "While these initiatives are still in
their early stages, we see strong potential for all of them to
contribute to our long-term growth. Multichannel commerce is the future
of retail, and we're excited for Shopify to take a bigger and bigger
role in determining it."
"Year-on-year revenue growth was strong across both Subscription
Solutions and Merchant Solutions, as we continue to attract new
merchants and help facilitate their business success," said Russ Jones,
Shopify's CFO. "We are revising our full-year outlook upward to reflect
our better-than-expected results in the third quarter, as well as the
increased momentum we're carrying into the busiest season of the year
for retail."
Third-Quarter Financial Highlights
-
Total revenue for the third quarter of 2015 was $52.8 million, a 93%
increase from the third quarter of 2014. Within this, Subscription
Solutions revenue grew 67% to $29.6 million, driven by an increase in
the number of merchants using our platform as reflected in the Monthly
Recurring Revenue1 ("MRR"); and Merchant Solutions revenue
grew 141% to $23.2 million, driven primarily by an increase in revenue
from Shopify Payments.
-
MRR as of September 30, 2015 was $9.8 million, up 70% compared with
$5.7 million on September 30, 2014.
-
Gross Merchandise Volume2 ("GMV") for the third quarter was
$1.9 billion, a 101% increase from the third quarter of 2014.
-
Gross profit grew 77% year on year to $28.7 million for the third
quarter of 2015, versus $16.2 million for the third quarter of 2014.
-
Operating loss for the third quarter of 2015 was $4.3 million,
compared with an operating loss of $4.1 million for the third quarter
of 2014.
-
Adjusted operating loss3 for the third quarter of 2015 was
$2.0 million, compared with $3.2 million for the third quarter of 2014.
-
Net loss for the third quarter of 2015 was $4.7 million, or $0.06 per
share, compared with a net loss of $4.3 million, or $0.11 per share,
for the third quarter of 2014.
-
Adjusted net loss3 for the third quarter of 2015 was $2.4
million, or $0.03 per share, compared with an adjusted net loss of
$3.4 million, or $0.09 per share, for the third quarter of 2014.
-
At September 30, 2015, Shopify had $191.5 million in cash, cash
equivalents and marketable securities, compared with $59.7 million on
December 31, 2014.
Third-Quarter Business Highlights
-
Shopify continued to add new channels for merchants to expand their
selling opportunities and accommodate the evolving shopping habits of
their customers. With the addition of a Shop
section on Facebook Pages as well as a "Buy Now" button on
Twitter, Shopify merchants can now expand their ability to sell within
mobile apps, where consumers are increasingly spending time. These new
channels augment Shopify's announcements earlier this year on various
buy button initiatives for Facebook, Pinterest, blogs and websites.
-
Shopify was selected by Amazon as the preferred migration
solution for Amazon Webstore merchants and is offering tools and
services to help merchants integrate with Amazon, including Login and
Pay with Amazon, Fulfilment by Amazon and, in the future, Sell on
Amazon.
-
Shopify introduced Shopify
Shipping, initially offering US merchants the ability to print and
buy USPS shipping labels through Shopify for up to 60% savings off
retail rates.
-
Shopify launched the sixth Build
A Business Competition, together with the New York Stock Exchange,
to jumpstart the creation of new businesses on the Shopify platform.
Since the close of the third quarter, Shopify announced a partnership
with Uber for UberRUSH delivery services, which gives merchants the
ability to offer same-day delivery to their customers in select US
cities.
Financial Outlook
The financial 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 section below, "Forward-looking Statements".
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 and the
absence of material changes in our industry or the global economy. These
statements supersede all prior statements made by Shopify regarding 2015
financial results. All numbers provided in this section are approximate.
For the fourth quarter 2015, Shopify currently expects:
-
Revenues in the range of $59 million to $61 million
-
GAAP operating loss in the range of $7 million to $8 million
-
Adjusted operating loss3 in the range of $4 million to $5
million, which excludes share-based compensation expenses of $3 million
For the full year 2015, Shopify currently expects:
-
Revenues in the range of $194 million to $196 million
-
GAAP operating loss in the range of $18.5 million to $19.5 million
-
Adjusted operating loss3 in the range of $9.5 million to
$10.5 million, which excludes share-based compensation expenses of
$8.4 million and non-recurring sales and use tax of $0.6 million
Quarterly Conference Call
Shopify's management team will hold a conference call to discuss its
third-quarter results today, November 4, 2015, at 8:30 a.m. ET. The
third-quarter 2015 conference call will be webcast on the investor
relations section of Shopify's website at https://investors.shopify.com/events/Events-Presentations/default.aspx.
An archived replay of the webcast will be available following the
conclusion of the call.
Shopify's Third Quarter 2015 Interim Unaudited Consolidated Financial
Statements and Notes and its Third Quarter 2015 Management's Discussion
and Analysis are available on Shopify's website at Shopify.com, and will
be filed on SEDAR at www.Sedar.com
and on EDGAR at www.sec.gov.
About Shopify
Shopify is a leading cloud-based, multichannel commerce platform
designed for small and medium-sized businesses. Merchants can use the
software to design, set up and manage their stores across multiple sales
channels, including web, mobile, social media, marketplaces,
brick-and-mortar locations, and pop-up shops. The platform also provides
a merchant with a powerful back-office and a single view of their
business. The Shopify platform was engineered for reliability and scale,
using enterprise-level technology made available to businesses of all
sizes. Shopify currently powers over 200,000 businesses in approximately
150 countries, including: Tesla Motors, Budweiser, Red Bull, LA Lakers,
the New York Stock Exchange, GoldieBlox, and many more.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared
and presented in accordance with United States generally accepted
accounting principles (GAAP), Shopify uses certain non-GAAP financial
measures to provide additional information in order to assist investors
in understanding its financial and operating performance.
Adjusted operating loss, adjusted net loss and adjusted net loss per
share are non-GAAP financial measures that exclude the effect of
share-based compensation expenses and non-recurring sales and use tax.
Management uses non-GAAP financial measures internally for financial and
operational decision-making and as a means to evaluate period-to-period
comparisons. Shopify believes that these non-GAAP measures provide
useful information about operating results, enhance the overall
understanding of past financial performance and future prospects, and
allow for greater transparency with respect to key metrics used by
management in its financial and operational decision making. Non-GAAP
financial measures are not recognized measures for financial statement
presentation under US GAAP and do not have standardized meanings, and
may not be comparable to similar measures presented by other public
companies. Such non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, or superior to, the
corresponding measures calculated in accordance with GAAP. See the
financial tables below for a reconciliation of the non-GAAP measures.
Forward-looking Statements
This press release contains certain forward-looking statements within
the meaning of applicable securities laws, including statements
regarding Shopify's financial outlook and future financial performance.
Words such as "expects", "anticipates" and "intends" or similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are based on Shopify's current
projections and expectations about future events and financial trends
that management believes might affect its financial condition, results
of operations, business strategy and financial needs, and on certain
assumptions and analysis made by Shopify in light of the experience and
perception of historical trends, current conditions and expected future
developments and other factors management believes are appropriate.
These projections, expectations, assumptions and analyses are subject to
known and unknown risks, uncertainties, assumptions and other factors
that could cause actual results, performance, events and achievements to
differ materially from those anticipated in these forward-looking
statements. Although Shopify believes that the assumptions underlying
these forward-looking statements are reasonable, they may prove to be
incorrect, and readers cannot be assured that actual results will be
consistent with these forward-looking statements. Actual results could
differ materially from those projected in the forward-looking statements
as a result of numerous factors, including certain risk factors, many of
which are beyond Shopify's control, including but not limited to: (i)
merchant acquisition and retention; (ii) managing our growth; (iii)our
history of losses; (iv)our limited operating history; (v) our ability to
innovate; (vi) payments processed through Shopify Payments; (vii) our
reliance on a single supplier to provide the technology we offer through
Shopify Payments; (viii) serious software errors or defects; (ix) a
disruption of service; (x) achieving or maintaining data transmission
capacity; (xi) exchange rate fluctuations; and (xii) other one-time
events and other important factors disclosed previously and from time to
time in Shopify's filings with the U.S. Securities and Exchange
Commission and the securities commissions or similar securities
regulatory authorities in each of the provinces or territories of
Canada. The forward-looking statements contained in this news release
represent Shopify's expectations as of the date of this news release, or
as of the date they are otherwise stated to be made, and subsequent
events may cause these expectations to change. Shopify undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required by law.
1Monthly 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 month.
2GMV represents the total dollar value of orders processed on
the Shopify platform in the period.
3Please refer to "Non-GAAP Financial Measures" in this press
release.
Shopify Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Expressed in US $000’s, except share and per share amounts;
unaudited)
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
September 30, 2015
|
|
September 30, 2014
|
|
September 30, 2015
|
|
September 30, 2014
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Subscription solutions
|
|
29,560
|
|
17,690
|
|
77,371
|
|
46,310
|
|
Merchant solutions
|
|
23,226
|
|
9,656
|
|
57,689
|
|
23,526
|
|
|
|
52,786
|
|
27,346
|
|
135,060
|
|
69,836
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
Subscription solutions
|
|
6,414
|
|
4,615
|
|
16,869
|
|
11,741
|
|
Merchant solutions
|
|
17,629
|
|
6,492
|
|
42,630
|
|
15,913
|
|
|
|
24,043
|
|
11,107
|
|
59,499
|
|
27,654
|
|
Gross profit
|
|
28,743
|
|
16,239
|
|
75,561
|
|
42,182
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
18,216
|
|
11,433
|
|
47,847
|
|
33,720
|
|
Research and development, net of refundable tax credits of $223 and
$523 (2014 – $240 and $720)
|
|
10,068
|
|
6,563
|
|
26,181
|
|
19,296
|
|
General and administrative
|
|
4,759
|
|
2,352
|
|
12,770
|
|
6,286
|
|
Total operating expenses
|
|
33,043
|
|
20,348
|
|
86,798
|
|
59,302
|
|
Loss from operations
|
|
(4,300)
|
|
(4,109)
|
|
(11,237)
|
|
(17,120)
|
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
57
|
|
15
|
|
98
|
|
38
|
|
Foreign exchange loss
|
|
(414)
|
|
(174)
|
|
(1,344)
|
|
(431)
|
|
|
|
(357)
|
|
(159)
|
|
(1,246)
|
|
(393)
|
|
Net loss and comprehensive loss
|
|
(4,657)
|
|
(4,268)
|
|
(12,483)
|
|
(17,513)
|
|
Basic and diluted net loss per share attributable to shareholders
|
|
$
|
(0.06
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.45
|
)
|
|
Weighted average shares used to compute basic and diluted net loss
per share attributable to shareholders
|
|
75,901,840
|
|
39,036,334
|
|
56,229,575
|
|
38,850,291
|
Shopify Inc.
Condensed Consolidated Balance Sheets
(Expressed in US $000’s except share amounts; unaudited)
|
|
|
As at
|
|
|
|
September 30, 2015
|
|
December 31, 2014
|
|
|
|
$
|
|
$
|
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
115,315
|
|
41,953
|
|
Marketable securities
|
|
71,621
|
|
17,709
|
|
Trade and other receivables
|
|
3,836
|
|
7,227
|
|
Other current assets
|
|
4,704
|
|
1,495
|
|
|
|
195,476
|
|
68,384
|
|
Long term assets
|
|
|
|
|
|
Long-term marketable securities
|
|
4,545
|
|
—
|
|
Property and equipment
|
|
29,105
|
|
21,728
|
|
Intangible assets
|
|
4,140
|
|
2,708
|
|
Goodwill
|
|
2,373
|
|
2,373
|
|
|
|
40,163
|
|
26,809
|
|
Total assets
|
|
235,639
|
|
95,193
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
16,713
|
|
12,514
|
|
Current portion of deferred revenue
|
|
11,013
|
|
6,775
|
|
Current portion of lease incentives
|
|
784
|
|
485
|
|
|
|
28,510
|
|
19,774
|
|
Long term liabilities
|
|
|
|
|
|
Deferred revenue
|
|
597
|
|
394
|
|
Lease incentives
|
|
9,226
|
|
7,293
|
|
|
|
9,823
|
|
7,687
|
|
Commitments and contingencies
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
Convertible preferred shares
|
|
—
|
|
87,056
|
|
Common shares
|
|
—
|
|
4,055
|
|
Common stock
|
|
228,197
|
|
—
|
|
Additional paid-in capital
|
|
10,656
|
|
5,685
|
|
Accumulated deficit
|
|
(41,547)
|
|
(29,064)
|
|
Total shareholders’ equity
|
|
197,306
|
|
67,732
|
|
Total liabilities and shareholders’ equity
|
|
235,639
|
|
95,193
|
Shopify Inc.
Condensed Consolidated Statements of Cash Flows
(Expressed in US $000’s; unaudited)
|
|
|
Nine months ended
|
|
|
|
September 30, 2015
|
|
September 30, 2014
|
|
|
|
$
|
|
$
|
|
Cash flows from operating activities
|
|
|
|
|
|
Net loss for the period
|
|
(12,483)
|
|
(17,513)
|
|
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
Amortization and depreciation
|
|
5,034
|
|
3,363
|
|
Stock-based compensation
|
|
5,012
|
|
2,428
|
|
Vesting of restricted shares
|
|
267
|
|
539
|
|
Unrealized foreign exchange loss
|
|
1,507
|
|
261
|
|
Changes in lease incentives
|
|
2,232
|
|
3,099
|
|
Change in deferred revenue
|
|
4,442
|
|
1,977
|
|
Changes in non-cash working capital items
|
|
4,788
|
|
674
|
|
Net cash provided by (used in) operating activities
|
|
10,799
|
|
(5,172)
|
|
Cash flows from investing activities
|
|
|
|
|
|
Purchase of marketable securities
|
|
(82,812)
|
|
(20,162)
|
|
Sale of marketable securities
|
|
23,975
|
|
—
|
|
Acquisitions of property and equipment
|
|
(11,367)
|
|
(11,143)
|
|
Acquisitions of intangible assets
|
|
(2,397)
|
|
(1,441)
|
|
Net cash used in investing activities
|
|
(72,601)
|
|
(32,746)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Proceeds from initial public offering, net of issuance costs
|
|
136,251
|
|
—
|
|
Proceeds from the exercise of stock options
|
|
241
|
|
115
|
|
Net cash provided by financing activities
|
|
136,492
|
|
115
|
|
Effect of foreign exchange on cash and cash equivalents
|
|
(1,328)
|
|
(361)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
73,362
|
|
(38,164)
|
|
Cash and cash equivalents – Beginning of Period
|
|
41,953
|
|
83,529
|
|
Cash and cash equivalents – End of Period
|
|
115,315
|
|
45,365
|
Shopify Inc.
Reconciliation from GAAP to Non-GAAP Results
(Expressed in US $000’s, except share and per share amounts;
unaudited)
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
September 30, 2015
|
|
September 30, 2014
|
|
September 30, 2015
|
|
September 30, 2014
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
GAAP Gross profit
|
|
28,743
|
|
|
16,239
|
|
|
75,561
|
|
|
42,182
|
|
|
% of Revenue
|
|
54
|
%
|
|
59
|
%
|
|
56
|
%
|
|
60
|
%
|
|
add: stock-based compensation
|
|
67
|
|
|
54
|
|
|
198
|
|
|
159
|
|
|
Non-GAAP Gross profit
|
|
28,810
|
|
|
16,293
|
|
|
75,759
|
|
|
42,341
|
|
|
% of Revenue
|
|
55
|
%
|
|
60
|
%
|
|
56
|
%
|
|
61
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and marketing
|
|
18,216
|
|
|
11,433
|
|
|
47,847
|
|
|
33,720
|
|
|
% of Revenue
|
|
35
|
%
|
|
42
|
%
|
|
35
|
%
|
|
48
|
%
|
|
less: stock-based compensation
|
|
325
|
|
|
161
|
|
|
681
|
|
|
451
|
|
|
Non-GAAP Sales and marketing
|
|
17,891
|
|
|
11,272
|
|
|
47,166
|
|
|
33,269
|
|
|
% of Revenue
|
|
34
|
%
|
|
41
|
%
|
|
35
|
%
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and development
|
|
10,068
|
|
|
6,563
|
|
|
26,181
|
|
|
19,296
|
|
|
% of Revenue
|
|
19
|
%
|
|
24
|
%
|
|
19
|
%
|
|
28
|
%
|
|
less: stock-based compensation
|
|
1,248
|
|
|
512
|
|
|
2,853
|
|
|
2,010
|
|
|
Non-GAAP Research and development
|
|
8,820
|
|
|
6,051
|
|
|
23,328
|
|
|
17,286
|
|
|
% of Revenue
|
|
17
|
%
|
|
22
|
%
|
|
17
|
%
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and administrative
|
|
4,759
|
|
|
2,352
|
|
|
12,770
|
|
|
6,286
|
|
|
% of Revenue
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
9
|
%
|
|
less: stock-based compensation
|
|
628
|
|
|
156
|
|
|
1,547
|
|
|
347
|
|
|
less: Sales and use tax
|
|
—
|
|
|
—
|
|
|
566
|
|
|
—
|
|
|
Non-GAAP General and administrative
|
|
4,131
|
|
|
2,196
|
|
|
10,657
|
|
|
5,939
|
|
|
% of Revenue
|
|
8
|
%
|
|
8
|
%
|
|
8
|
%
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating loss
|
|
(4,300
|
)
|
|
(4,109
|
)
|
|
(11,237
|
)
|
|
(17,120
|
)
|
|
% of Revenue
|
|
(8
|
)%
|
|
(15
|
)%
|
|
(8
|
)%
|
|
(25
|
)%
|
|
add: stock-based compensation
|
|
2,268
|
|
|
883
|
|
|
5,279
|
|
|
2,967
|
|
|
add: sales and use tax
|
|
—
|
|
|
—
|
|
|
566
|
|
|
—
|
|
|
Non-GAAP Operating loss
|
|
(2,032
|
)
|
|
(3,226
|
)
|
|
(5,392
|
)
|
|
(14,153
|
)
|
|
% of Revenue
|
|
(4
|
)%
|
|
(12
|
)%
|
|
(4
|
)%
|
|
(20
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net loss and comprehensive loss
|
|
(4,657
|
)
|
|
(4,268
|
)
|
|
(12,483
|
)
|
|
(17,513
|
)
|
|
% of Revenue
|
|
(9
|
)%
|
|
(16
|
)%
|
|
(9
|
)%
|
|
(25
|
)%
|
|
add: stock-based compensation
|
|
2,268
|
|
|
883
|
|
|
5,279
|
|
|
2,967
|
|
|
add: sales and use tax
|
|
—
|
|
|
—
|
|
|
566
|
|
|
—
|
|
|
Non-GAAP Net loss and comprehensive loss
|
|
(2,389
|
)
|
|
(3,385
|
)
|
|
(6,638
|
)
|
|
(14,546
|
)
|
|
% of Revenue
|
|
(5
|
)%
|
|
(12
|
)%
|
|
(5
|
)%
|
|
(21
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per share attributable to shareholders
|
|
(0.03
|
)
|
|
(0.09
|
)
|
|
(0.12
|
)
|
|
(0.37
|
)
|
|
Weighted average shares used to compute GAAP and non-GAAP net loss
per share attributable to shareholders
|
|
75,901,840
|
|
|
39,036,334
|
|
|
56,229,575
|
|
|
38,850,291
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151104005435/en/
Copyright Business Wire 2015