86% jump in Q4 revenue caps off monumental year for Ottawa’s Shopify

Coming off a strong holiday retail season, Shopify executives were in a cheery mood as they shared details of the company’s fourth-quarter earnings results in a call to investors and media this morning.

The Ottawa-based e-commerce giant brought in revenues of $130.4 million in the fourth quarter ending Dec. 31, 2016, representing an 86-per-cent increase from the same period a year previous.

“I don’t think public companies grow at a 90-per-cent annual rate, so it’s been very fun to pull it off,” said CEO Tobi Lutke during the company’s earnings call.

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Shopify stated that its growth was primarily driven by increases in monthly recurring revenue. As of Dec. 31, MRR stood at $18.5 million, an increase of 63 per cent compared to a year ago.

A record number of merchants were also added to Shopify’s platform this past quarter, with the total now reaching more than 375,000.

The company has yet to turn a profit, with net losses for the quarter coming in at $8.9 million, or $0.10 per share. This compares to a net loss of $6.3 million, or $0.08 per share, for the fourth quarter of 2015.

Shopify also reported strong overall results for its fiscal 2016. Total revenue for the year grew to $389.3 million, a 90 per cent increase over fiscal 2015.

Gross merchandise volume, or the total value of goods sold by merchants using the Shopify platform, reached $15.4 billion on the year, nearly double the GMV over the same period a year ago.

Shopify chief operating officer Harley Finkelstein used the earnings call as an opportunity to run down the numerous partnerships and features Shopify added over the past year. Among them, sales channel integrations with Amazon and on Facebook Messenger, adding Apple Pay, and a shipping partnership with Canada Post.

He also touted a unique solution for the Canadian Football League’s Grey Cup store that saw certain players’ jerseys promoted on the store immediately after scoring a touchdown.

In addition, Mr. Finkelstein announced the introduction of variable pricing on the Shopify Plus channel, which will aim to increase Shopify’s returns from larger merchants using the platform.

A statement accompanying the earnings suggested Shopify planned to expand its facilities and infrastructure, building on a year that saw a doubling of the company’s employees and the addition of tens of thousands of merchants on its platform.

Reflecting on the year’s success and new endeavours during the call, Mr. Finkelstein asked the question that he believes will continue Shopify’s growth into the next year and beyond: “What aren’t we doing today that we could or should be doing?”

The company’s share price ended the day up more than eight per cent to $60.61 on the New York Stock Exchange.

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