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Shopify ends 2016 with solid results

Shopify ends 2016 with solid results

Posted by PanamericanWorld on February 15, 2017

Shopify’s stock soared 6% today after it posted a quarterly earnings that impressed investors.

The Ottawa company booked revenue of $130 million USD in the fourth quarter, an increase of 86% over the same quarter a year prior and ahead of expectations.

Losses rose from $6 million to $9 million because of increased expenses, but that didn’t slow the company’s stock from soaring above $5 billion valuation for the first time.

Shopify says it expects to earn revenue upward of $600 million this year, which would be a year-over-year increase of almost 50%.

The Canadian ecommerce company now has 378,000 merchants using its platform.

The fourth quarter is Shopify’s busiest, encompassing the holiday shopping season. Shopify ended the year with 377,500 merchants using its platform, up by more than 50,000 since Sept 30, and said merchants on average increased the value of merchandise sold through the platform in 2016 by 25 per cent year over year

The company also said it expected revenue in 2017 to range between $580-million and $600-million, ahead of average analyst expectations of $562-million. That would represent a 49 per cent-plus increase over the company’s $389.3-million revenue for 2016. Revenues are expected to be $120 million in the first quarter, up 65 per cent year over year.

“Shopify delivered an exemplary quarter and revenue growth outlook, Canaccord Genuity analyst Richard Davis wrote in a note. “Given the high probability that Shopify will execute well this year and beyond, there should be plenty of growth investors waiting in line to buy this stock”

Shopify management reiterated its earlier goal to exit 2017 running its business in the black on an operating profit basis. But analysts questioned on a conference call why it forecast a full-year operating loss of $73 million and $77 million, double last year’s level.

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