Cheat Sheet: Shopify’s revenues more than doubled, but the return to normal is coming
The pandemic has been good to Shopify. The increase in online shopping, paired with small and mid-sized businesses swiftly moving to meet that online demand, resulted in $37 billion in GMV for the first quarter. But even though the company has had good tailwinds in the last year, analysts and even Shopify executives cautioned that 2021 growth, while still good, will not be at 2020 levels after the platform announced its first-quarter earnings Wednesday.
The key details:
- Shopify announced first-quarter revenues of $988.6 million, up 110% from $470 million in the same quarter last year.
- The company did $321 million in subscription revenue, up 71% year over year. The growth came from new merchants joining the platform.
- Merchant solutions revenue came in at $668 million, an increase of 137% from the same time last year.
- Three of the company’s seven C-suite executives will be leaving this summer.
During Shopify’s fourth-quarter earnings call, CFO Amy Shapero highlighted several priorities for 2021, including the Shopify fulfillment network, the Shop app, and international expansion.
President Harley Finkelstein said in the call that the company plans to continue to grow its fulfillment network with more partnerships and by exploring more Shop Pay options.
In June 2019, Shopify launched its fulfillment network to help speed deliveries and lower merchant shipping costs. Last year, the company opened an R&D warehouse in Ottawa, Canada to further test fulfillment technology, and expanded its warehouses.
Most recently, Shopify expanded its partnership with Pinterest to 27 more countries, now allowing 1.7 million Shopify merchants to post products on Pinterest. In November 2020, Shopify partnered with TikTok, allowing Shopify merchants to run TikTok marketing campaigns from the Shopify dashboard.
Shopify products outside the core subscription offerings include the Shop Pay app, Shopify’s point of sale software, its shipping and fulfillment network, plus a 6,600 app ecosystem to support merchants.
Beginning of the slowdown?
Shopify could be focusing on those investments as value-adds to mitigate any slow downs in sales.
Shopify recognized that the rollout of vaccines and the reopening of the economy will likely slow 2021 growth. “Some consumer spending will likely shift back to offline, and e-commerce will fall back in line with historical levels,” Shapero said.
Analysts will also be keeping an eye on how the company handles transitioning nearly half of its C-suite.
In an April 14th letter to employees, Shopify co-founder and CEO Tobias Lutke announced that the company’s chief talent officer, chief legal officer, and chief technology officer will all be voluntarily leaving their roles this summer.
‘It’s where our key customers are’: Why a DTC shoe brand spends big on Instagram and Facebook
As Apple continues its data privacy crackdown, a newly launched DTC brand says launching with Facebook and Instagram at the helm of its media mix is key.
As the almost-billion-dollar esports betting industry expands, companies are seeing green beyond early-stage challenges
As interest in esports betting rises, companies in the space are working to address the unique challenges that come with this relatively new form of wagering.
Cheat Sheet: New rules and funding for FTC could be on the way
Legislators want the FTC to establish new rules to prevent deceptive or unfair data practices. And the FTC is already laying the groundwork.
SponsoredHow retailers can be ready for holiday shoppers this year
Suchi Sastri, managing director and partner, Boston Consulting Group As the holiday season approaches and the pandemic continues to evolve, retailers want to know what to expect. Will e-commerce continue to grow at the rate it did last year? How big of a role will in-store shopping play in holiday shopping? While it’s still early, […]
How the new CEO of the IAB Tech Lab plans to support a responsible digital ad ecosystem
Anthony Katsur is only weeks into his new role as the CEO of the IAB Tech Lab, but already has big plans for what he wants to do at the organization.
‘The data strategies of these companies aren’t progressive enough’: 10 Confessions on the pivot to privacy
An inside view of how privacy changes are having big consequences throughout advertising.