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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Shopify Inc | NYSE:SHOP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.07 | 0.09% | 77.44 | 77.825 | 75.295 | 76.45 | 2,612,311 | 16:06:10 |
Revenue Grows 75% Year on Year
Second-Quarter Gross Profit Grows 83% Year on Year
Shopify reports in U.S. dollars and in accordance with U.S. GAAP
Shopify Inc. (NYSE:SHOP)(TSX:SHOP), the leading cloud-based, multi-channel commerce platform designed for small and medium-sized businesses, today announced strong financial results for the quarter ended June 30, 2017.
“The fundamental shift in retail toward multi-channel and mobile, the ongoing adoption of Shopify by larger brands, and our continued focus on building out the market-leading platform for sellers all contributed to the strength of our results this past quarter,” stated Russ Jones, Shopify’s CFO. “As we have been able to predict and capitalize on these shifts, and continue to innovate so entrepreneurs of all sizes can take advantage of them, we feel we are exceptionally well-positioned for the next several years.”
Second-Quarter Financial Highlights
Business Highlights
CFO Retirement
Shopify’s Chief Financial Officer Russ Jones has informed the Company and its Board of Directors of his decision to retire in 2018. Russ, who joined Shopify in 2011, intends to continue to serve as CFO until his successor is found and has transitioned into the role, a process that is now underway and that Shopify expects will be completed within the next 12 months.
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 “Forward-looking Statements” below.
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. The following statements supersede all prior statements made by Shopify and are based on current expectations. As these statements are forward-looking, actual results may differ materially.
These statements do not give effect to the potential impact of mergers, acquisitions, divestitures or business combinations that may be announced or closed after the date hereof. All numbers provided in this section are approximate.
For the full year 2017, Shopify currently expects:
For the third quarter of 2017, Shopify currently expects:
Quarterly Conference Call
Shopify’s management team will hold a conference call to discuss its second-quarter results today, August 1, 2017, at 8:30 a.m. ET. The 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 Second-Quarter 2017 Interim Unaudited Condensed Consolidated Financial Statements and Notes and its Second-Quarter 2017 Management’s Discussion and Analysis are available on Shopify’s website at www.shopify.com, and will be filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
About Shopify
Shopify is the leading cloud-based, multi-channel 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 and physical retail locations. The platform also provides merchants with a powerful back-office and a single view of their business. The Shopify platform was engineered for reliability and scale, making enterprise-level technology available to businesses of all sizes. Shopify currently powers half a million businesses in approximately 175 countries and is trusted by brands such as Tesla, Nestle, GE, Red Bull, Kylie Cosmetics, 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, non-GAAP operating expenses, adjusted net loss and adjusted net loss per share are non-GAAP financial measures that exclude the effect of share-based compensation expenses and related payroll taxes.
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 U.S. 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) a disruption of service or security breach; (vii) payments processed through Shopify Payments; (viii) our reliance on a single supplier to provide the technology we offer through Shopify Payments; (ix) a breach involving personally identifiable information; (x) serious software errors or defects; (xi) exchange rate fluctuations; (xii) achieving or maintaining data transmission capacity; and (xiii) 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.
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 Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 $ $ $ $ Revenues Subscription solutions 71,598 43,674 133,678 82,380 Merchant solutions 80,057 42,973 145,356 76,989 151,655 86,647 279,034 159,369 Cost of revenues Subscription solutions 13,688 9,098 25,942 17,330 Merchant solutions 51,127 30,026 94,011 54,431 64,815 39,124 119,953 71,761 Gross profit 86,840 47,523 159,081 87,608 Operating expenses Sales and marketing 54,872 29,413 100,206 57,421 Research and development 32,714 16,732 59,308 30,402 General and administrative 15,161 10,037 29,935 18,156 Total operating expenses 102,747 56,182 189,449 105,979 Loss from operations (15,907 ) (8,659 ) (30,368) (18,371) Other income 1,877 220 2,740 1,003 Net loss (14,030 ) (8,439 ) (27,628) (17,368)Other comprehensive income (loss), net oftax
4,631 (80 ) 6,068141
Comprehensive loss (9,399 ) (8,519 ) (21,560) (17,227)Basic and diluted net loss per shareattributable to shareholders
(0.15 ) (0.10 ) (0.30 )(0.21)
Weighted average shares used to computebasic and diluted net loss per shareattributable to shareholders
94,290,538 81,349,248 92,277,895 80,918,872Shopify Inc.Condensed Consolidated Balance Sheets(Expressed in US $000’s, except share and per share amounts, unaudited)
As at June 30, 2017 December 31, 2016 $ $ Assets Current assets Cash and cash equivalents 199,397 84,013 Marketable securities 733,020 308,401 Trade and other receivables 12,599 9,599 Merchant cash advances receivable, net 32,839 11,896 Other current assets 16,382 8,989 994,237 422,898 Long-term assets Property and equipment, net 44,235 45,719 Intangible assets, net 18,444 6,437 Goodwill 20,317 15,504 82,996 67,660 Total assets 1,077,233 490,558 Liabilities and shareholders’ equity Current liabilities Accounts payable and accrued liabilities 57,118 45,057 Current portion of deferred revenue 25,771 20,164 Current portion of lease incentives 1,354 1,311 84,243 66,532 Long-term liabilities Deferred revenue 1,125 922 Lease incentives 12,728 12,628 Deferred tax liability 1,693 — 15,546 13,550 Shareholders’ equityCommon stock, unlimited Class A subordinate voting sharesauthorized, 85,404,395 and 77,030,952 issued and outstanding;unlimited Class B multiple voting shares authorized, 13,122,943and 12,374,528 issued and outstanding
1,051,490 468,494 Additional paid-in capital 32,541 27,009 Accumulated other comprehensive income (loss) 4,250 (1,818 ) Accumulated deficit (110,837 ) (83,209 ) Total shareholders’ equity 977,444 410,476 Total liabilities and shareholders’ equity 1,077,233 490,558Shopify Inc.Condensed Consolidated Statements of Cash Flows(Expressed in US $000’s, except share and per share amounts, unaudited)
Six Months Ended June 30, 2017 June 30, 2016 $ $ Cash flows from operating activities Net loss for the period (27,628) (17,368) Adjustments to reconcile net loss to net cash provided by operating activities: Amortization and depreciation 9,887 5,834 Stock-based compensation 20,808 8,375 Provision for uncollectible receivables related to merchant cash advances 1,922 441 Vesting of restricted shares — 172 Unrealized foreign exchange gain (901) (1,161) Changes in operating assets and liabilities: Trade and other receivables (2,978) 1,779 Merchant cash advances receivable (22,865) (4,494) Other current assets 348 (787) Accounts payable and accrued liabilities 10,595 8,020 Deferred revenue 5,810 3,913 Lease incentives 143 1,481 Net cash provided by (used in) operating activities (4,859) 6,205 Cash flows from investing activities Purchase of marketable securities (638,212) (81,393) Maturity of marketable securities 213,609 49,457 Acquisitions of property and equipment (5,290) (10,057) Acquisitions of intangible assets (2,024) (1,256) Acquisition of businesses, net of cash acquired (15,718) (7,969) Net cash provided by (used in) investing activities (447,635) (51,218) Cash flows from financing activities Proceeds from the exercise of stock options 6,932 1,832 Proceeds from public offering, net of issuance costs 560,057 — Net cash provided by financing activities 566,989 1,832 Effect of foreign exchange on cash and cash equivalents 889 1,251 Net increase (decrease) in cash and cash equivalents 115,384 (41,930) Cash and cash equivalents – Beginning of Period 84,013 110,070 Cash and cash equivalents – End of Period 199,397 68,140Shopify Inc.Reconciliation from GAAP to Non-GAAP Results(Expressed in US $000’s, except share and per share amounts, unaudited)
Three months ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 $ $ $ $ GAAP Gross profit 86,840 47,523 159,081 87,608 % of Revenue 57 % 55 % 57 % 55 % add: stock-based compensation 261 129 475 234add: payroll taxes related to stock-basedcompensation
46 23 81 33 Non-GAAP Gross profit 87,147 47,675 159,637 87,875 % of Revenue 57 % 55 % 57 % 55 % GAAP Sales and marketing 54,872 29,413 100,206 57,421 % of Revenue 36 % 34 % 36 % 36 % less: stock-based compensation 2,004 942 3,485 1,506less: payroll taxes related to stock-basedcompensation
301 83 480 124 Non-GAAP Sales and marketing 52,567 28,388 96,241 55,791 % of Revenue 35 % 33 % 34 % 35 % GAAP Research and development 32,714 16,732 59,308 30,402 % of Revenue 22 % 19 % 21 % 19 % less: stock-based compensation 7,255 3,035 13,088 5,066less: payroll taxes related to stock-basedcompensation
820 220 1,305 480 Non-GAAP Research and development 24,639 13,477 44,915 24,856 % of Revenue 16 % 16 % 16 % 16 % GAAP General and administrative 15,161 10,037 29,935 18,156 % of Revenue 10 % 12 % 11 % 11 % less: stock-based compensation 2,081 980 3,760 1,741less: payroll taxes related to stock-basedcompensation
201 36 442 56 Non-GAAP General and administrative 12,879 9,021 25,733 16,359 % of Revenue 8 % 10 % 9 % 10 % GAAP Operating expenses 102,747 56,182 189,449 105,979 % of Revenue 68 % 65 % 68 % 66 % less: stock-based compensation 11,340 4,957 20,333 8,313less: payroll taxes related to stock-basedcompensation
1,322 339 2,227 660 Non-GAAP Operating Expenses 90,085 50,886 166,889 97,006 % of Revenue 59 % 59 % 60 % 61 %Shopify Inc.Reconciliation from GAAP to Non-GAAP Results (continued)(Expressed in US $000’s, except share and per share amounts, unaudited)
Three months ended Six Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 $ $ $ $ GAAP Operating loss (15,907 ) (8,659 ) (30,368 ) (18,371 ) % of Revenue (10 )% (10 )% (11 )% (12 )% add: stock-based compensation 11,601 5,086 20,808 8,547add: payroll taxes related to stock-basedcompensation
1,368 362 2,308 693 Adjusted Operating loss (2,938 ) (3,211 ) (7,252 ) (9,131 ) % of Revenue (2 )% (4 )% (3 )% (6 )% GAAP Net loss (14,030 ) (8,439 ) (27,628 ) (17,368 ) % of Revenue (9 )% (10 )% (10 )% (11 )% add: stock-based compensation 11,601 5,086 20,808 8,547 add: payroll taxes related to stock-based compensation 1,368 362 2,308 693 Adjusted Net loss and comprehensive loss (1,061 ) (2,991 ) (4,512 ) (8,128 ) % of Revenue (1 )% (3 )% (2 )% (5 )% GAAP net loss per share attributable to shareholders (0.15 ) (0.10 ) (0.30 ) (0.21 ) add: stock-based compensation 0.12 0.06 0.23 0.11 add: payroll taxes related to stock-based compensation 0.01 — 0.03 0.01 Adjusted net loss per share attributable to shareholders(1) (0.01 ) (0.04 ) (0.05 ) (0.10 )Weighted average shares used to compute GAAPand non-GAAP net loss per share attributable toshareholders
94,290,538 81,349,248 92,277,895 80,918,872(1) Totals may not foot due to rounding differences.
1. Monthly 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.2. Gross Merchandise Volume, or GMV, represents the total dollar value of orders processed on the Shopify platform in the period, net of refunds, and inclusive of shipping and handling, duty and value-added taxes.3. Gross Payments Volume, or GPV, is the amount of GMV processed through Shopify Payments.4. Please refer to "Non-GAAP Financial Measures" in this press release.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170801005517/en/
ShopifyINVESTORS:Katie Keita, 613-241-2828 x 1024Director, Investor RelationsIR@shopify.comorMEDIA:Sheryl So, 416-238-6705 x 302Public Relations Managerpress@shopify.com
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