Shopify records ‘stunning’ Q2 as Ottawa e-commerce firm surpasses 500K merchants

CFO Russ Jones announces retirement
Shopify
Shopify CEO Tobi Lütke at the New York Stock Exchange.

Shopify shares soared more than 13 per cent on Tuesday after the firm reported a massive increase in revenues and merchants using the Ottawa-based e-commerce company’s platform.

Analysts called the company’s results “stunning” and among “the most impressive growth stories” they’ve seen during a call with Shopify (TSX:SHOP) (NYSE:SHOP) executives to discuss its financial results. Those results included a 75 per cent year-over-year increase in revenues, which reached $151.7 million. The firm’s monthly recurring revenues hit $23.7 million, up 64 per cent year-over-year.

As is common with many software-as-a-service companies that are focused on growing their market and recurring revenues, Shopify’s net loss for the quarter climbed to $14 million. That compares with a loss of $8.4 million a year earlier.

Shopify also signed up a record number of new merchants during the second quarter, surpassing the half-million mark.

“Five hundred thousand merchants is such a crazy number,” CEO Tobi Lütke told analysts. “It’s amazing to get here, but there’s so much work left to be done.”

While Shopify got its start by enabling entrepreneurs and small businesses to set up an online store within minutes, it’s increasingly providing commerce solutions to major global brands.

In the last quarter alone, it’s signed up Canada Time, the New York Times and Jones New York, all of whom were drawn to Shopify’s attractive pricing, scalability and ease of use, chief operating officer Harley Finkelstein told analysts.

“I point this out because it highlights just how vast our total addressable market is,” Mr. Finkelstein said. “It is essentially anyone who wants to make more money than their shop costs them.”

Russ Jones retiring

Shopify also used its second-quarter to announce that chief financial officer Russ Jones, who joined the company in 2011, is retiring. When pressed by an analyst on what he’ll do next, he said he planned to travel, read, golf and spend more time with his family.

“I haven’t quite figured out the second week, but I’ll keep you in the loop,” Mr. Jones joked.

Mr. Lütke recalled that when Mr. Jones joined Shopify in 2011, the company’s finance department consisted of “a part-time bookkeeper, my mother-in-law and two Ruby scripts that I wrote.”

Today, Mr. Jones’ “fingerprints are on everything,” Mr. Lütke added.

While a search for a new chief financial officer is underway, Mr. Jones said he expects to continue serving in his current position until his successor is found and has transitioned into the role.

Shopify’s shares ended the day up 13.7 per cent to $130.61 on the Toronto Stock Exchange.