Update: Ottawa’s Shopify passes US$1B in annual revenues, looks abroad for next billion

shopify
Shopify CEO Tobi Lütke.

Shopify passed a major milestone – and did so faster than any other SaaS firm before it – in its fourth quarter earnings report on Tuesday.

The Ottawa-based e-commerce giant reported revenues of $1.07 billion for fiscal 2018, the first time the firm has passed the billion-dollar mark in its history. (All figures in USD.)

Shopify executives touted another accomplishment during the company’s earnings call with investors and analysts Tuesday morning: With 59-per-cent year-over-year revenue growth, the company is also the fastest-growing SaaS firm to ever crest $1 billion in sales.

Chief financial officer Amy Shapero said on Tuesday’s call that she believes Shopify is “still in the early stages” of its opportunity in the global commerce market and pointed to its $400-million share offering at the end of last year as lining the company’s coffers for new initiatives.

Shapero said the company plans to spend more on its product offerings and other expansions in the coming year, including a $30-million investment to promote its brand. Initiatives such as the launch of Shopify Studios – an in-house production arm to develop original series telling entrepreneurial stories – and the firm’s bricks-and-mortar store in Los Angeles are examples of Shopify’s attempt to become a household name.

The Ottawa firm, which chief operating officer Harley Finkelstein noted during the call now employs more than 4,000 people in total, is also making a concerted effort to expand internationally.

Last year Shopify announced it would target a few key countries outside of major geographic markets such as North America and the United Kingdom with localized versions of its platform in languages such as French, German and Japanese. Shapero said initial results on Shopify’s global push have come back promising: 24 per cent of its merchant base is now based outside its core markets, up from 21 per cent a year ago; gross merchandise volume also doubled year-over-year in 2018 from users in three of its four target countries.

Finkelstein also noted how Shopify’s aggressive pursuit of cannabis commerce in Canada set the firm up for international success. By landing deals to handle online pot sales for several provinces, Finkelstein says the firm is putting its name forward as a go-to leader in the space as markets around the world move towards decriminalization.

Revenue for the firm’s fourth quarter ending Dec. 31 totalled $343.9 million, up from $222.8 million for the same period in 2017. Shopify reported a fourth-quarter loss of $1.5 million compared with a loss of $3 million in the same quarter a year earlier.

Shopify set its full-year revenue guidance for fiscal 2019 between $1.46 billion and $1.48 billion.

Shares of the e-commerce giant dropped more than five per cent in early morning trading on the Toronto Stock Exchange Tuesday before rebounding slightly. Shopify’s stock was priced at C$227.81 in mid-afternoon trading, down just a couple dollars on the day.

– With files from Canadian Press