Press Releases

Shopify Announces Third-Quarter 2017 Financial Results

October 31, 2017

Third-Quarter Revenue Grows 72% Year on Year, Third-Quarter Gross Profit Grows 86% Year on Year

OTTAWA, Canada - October 31, 2017 - 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 September 30, 2017.

“In today’s fast-changing retail environment, merchants large and small are hungry to leverage all that technology can do for them,” stated Russ Jones, Shopify’s CFO.  “This is why our platform is so valuable to merchants and why they keep coming to Shopify.  Our results underscore this, with another record quarter for merchant adds, along with a record number of store launches on Shopify Plus in the third quarter. On the strength of these results and our underlying business model, we are raising our forecasts for the fourth quarter and full year 2017.”

Third-Quarter Financial Highlights

  • Total revenue in the third quarter was $171.5 million, a 72% increase from the comparable quarter in 2016. Within this, Subscription Solutions revenue grew 65% to $82.4 million.  This acceleration was driven by the continued rapid growth in Monthly Recurring Revenue1 (“MRR”) as another record number of merchants joined the platform in the period. Merchant Solutions revenue grew 79% to $89.0 million, driven primarily by the growth of Gross Merchandise Volume2 (“GMV”).
  • MRR as of September 30, 2017 was $26.8 million, up 65% compared with $16.3 million as of September 30, 2016. Shopify Plus contributed $5.3 million, or 20%, of MRR compared with 15% of MRR as of September 30, 2016.
  • GMV for the third quarter was $6.4 billion, an increase of $2.6 billion, or 69% over the third quarter of 2016.  Gross Payments Volume3 (“GPV”) grew to $2.4 billion, which accounted for 37% of GMV processed in the quarter, versus $1.5 billion, or 39%, for the third quarter of 2016.
  • Gross profit grew 86% to $100.0 million as compared with the $53.8 million recorded for the third quarter of 2016.
  • Operating loss for the third quarter of 2017 was $12.7 million, or 7.4% of revenue, versus $9.5 million, or 9.5% of revenue, for the comparable period a year ago. 
  • Adjusted operating income4 for the third quarter of  2017 was $1.7 million, or 1.0% of revenue; adjusted operating loss for the third quarter of 2016 was $2.2 million, or 2.2% of revenue
  • Net loss for the third quarter of 2017 was $9.4 million, or $0.09 per share, compared with $9.1 million or $0.11 per share, for the third quarter of 2016.
  • Adjusted net income4 for the third quarter of 2017 was $5.0 million, or $0.05 per share, compared with an adjusted net loss of $1.8 million, or $0.02 per share, for the third quarter of 2016.
  • At September 30, 2017, Shopify had $926.6 million in cash, cash equivalents and marketable securities, compared with $392.4 million on December 31, 2016.

Business Highlights

  • Shopify’s pace of innovation to keep merchants on the cutting edge of a rapidly evolving retail environment continues, with numerous launches over the past few months to help merchants sell and ship more products, more often, to more places.
  • Shopify’s Instagram channel was made available in a limited release to tens of thousands of merchants earlier this month.  Merchants in categories like fashion, jewelry, beauty, furniture, and home decor, can start tagging their posts with products in Instagram’s apps to showcase to their over 800 million monthly active users.
  • Shopify recently announced the addition of Lyst as a channel for merchants. As the largest global fashion search engine, Lyst leveraged Shopify’s Sales Channel SDK to develop their channel for Shopify and enable merchants selling fashion in the U.S., U.K., Germany, Sweden, Finland, and Austria to reach new audiences they may not have been able to capture before.
  • In September, Shopify expanded shipping capabilities beyond single label printing, adding bulk label printing to Shopify Shipping; and earlier this month Shopify integrated DHL Express as an international shipping option at discounted rates for merchants based in the U.S. 
  • Shopify built an in-app Augmented Reality feature for Magnolia, the home and lifestyle brand of Chip and Joanna Gaines from HGTV’s Fixer Upper. Built using the Shopify Mobile Buy SDK and Apple’s ARKit, users’ phones can now help showcase how housewares and homegoods will look in their real-life surroundings before buying. This is the first product of its kind for a Shopify merchant.
  • Shopify announced the addition of a second Waterloo office, and with it, plans to expand hiring by 300 to 500 new jobs over the next 2 to 3 years.  Shopify expects to open the new space, which is steps away from its existing Waterloo location, in the first quarter of 2018.    
  • Mobile traffic to merchants’ stores continued to grow, reaching 74% of traffic and 62% of orders for the three months ended September 30, versus 72% and 60%, respectively, for the second quarter of 2017.
  • Shopify Capital issued $44.1 million in merchant cash advances in the third quarter of 2017, nearly five times the $9.2 million issued in the third quarter of last year.  Shopify Capital has grown to over $130 million in cumulative cash advanced since its launch in April 2016.

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:

  • Revenues in the range of $656 million to $658 million
  • GAAP operating loss in the range of $55.5 million to $57.5 million
  • Adjusted operating loss4 in the range of $1.5 million to $3.5 million, which excludes stock-based compensation expenses and related payroll taxes of $54 million

For the fourth quarter of 2017, Shopify currently expects:

  • Revenues in the range of $206 million to $208 million
  • GAAP operating loss in the range of $12.5 million to $14.5 million
  • Adjusted operating income4 in the range of $2 million to $4 million, which excludes stock-based compensation expenses and related payroll taxes of $16.5 million

Quarterly Conference Call

Shopify’s management team will hold a conference call to discuss its third-quarter results today, October 31, 2017, at 8:30 a.m. ET.  The conference call will be webcast on the investor relations section of Shopify’s website at  An archived replay of the webcast will be available following the conclusion of the call.

Shopify’s Third-Quarter 2017 Interim Unaudited Condensed Consolidated Financial Statements and Notes and its Third-Quarter 2017 Management’s Discussion and Analysis are available on Shopify’s website at, and will be filed on SEDAR at and on EDGAR at

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, brick-and-mortar locations, and pop-up shops. 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. Headquartered in Ottawa, Canada, Shopify currently powers over 500,000 businesses in approximately 175 countries and is trusted by brands such as Red Bull, Nestle, Rebecca Minkoff, 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 income (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 plans to grow its Waterloo-based workforce and open a new office space and Shopify's financial outlook and future financial performance. Words such as “expects”, “anticipates”, “will”, 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.

To view our detailed results with financial tables download this PDF.

SOURCE: Shopify

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