Shopify Inc. nearly doubled its revenue in the first quarter of 2016 over the prior year as it increased the number of retailers using its e-commerce software by 70%.
The provider of cloud-based software for small and midsized web merchants on Wednesday reported revenue of $72.7 million, an increase of 95% over the same quarter a year earlier, and more than 275,000 e-retailer clients as of March 31, up from 162,261 a year earlier.
The value of sales on the Shopify platform increased 102% to $2.7 billion. Mobile devices accounted for 51% of those sales and 62% of traffic to Shopify clients’ e-commerce sites in the first quarter. It was the first time mobile sales exceeded PC sales for Shopify retailers.
“Mobile overtook desktop in terms of order volume on our platform,” CEO Tobi Lutke told investments analysts on a conference call Wednesday, according to a transcript from SeekingAlpha. “Absolutely not surprising, we predicted this rather, but it is cool to see it finally happen.”
Shopify, which is based in Ottawa, Ontario, also highlighted new initiatives announced since its first quarter ended March 31. They include:
- Shopify acquired Kit CRM. “A toprated app in the Shopify app store, Kit helps merchants grow their business by placing targeted ads, posting updates to merchants’ Facebook Pages, and making recommendations based on shop or business activity,” Shopify said in its earnings release. The purchase price was not disclosed.
- Shopify enabled its merchants to work with Facebook Inc.’s new Messenger Platform, allowing retailers to use the messaging service to provide customer service, and to send shipping updates, order confirmations and marketing messages called “push notifications” to customers’ mobile phones.
- Shopify announced a program called Shopify Capital that provides loans to client e-retailers.
- The company expanded its alliance with delivery service Postmates to enable retailer clients to offer same-day delivery in over 200 U.S. cities.
Shopify also announced a new software development kit at its Unite conference in March that enables online selling portals to more easily work with Shopify e-retail clients. Home design site Houzz, online shopping mall Wanelo and eBay Inc. have implemented the technology “so that Shopify merchants can now easily list and sell their products through any one of these channels,” chief operating officer Harley Finkelstein told analysts.
He also said Shopify expects to be able to link its client retailers to the Amazon.com Inc. marketplace by the end of the year. Amazon, No. 1 in the Internet Retailer 2016 Top 500, announced in September that it was phasing out its Webstore service that hosted e-retail sites for other merchants and encouraging clients to move to Shopify.
Shopify has nine clients among the 1,000 top online retailers in North America, according to Top500Guide.com.
Shopify, which went public in May 2015, reported for the first quarter ended March 31:
- Revenue of $72.722 million, an increase of 94.7% from $37.348 million in the same quarter a year earlier.
- Subscription revenue for its software of $38.706 million, up 73.2% from $22.352 million. Revenue from processing payments on behalf of e-retailer clients increased nearly 127% to $34.016 million from $14.996 million.
- A net loss of $8.929 million compared with a loss of $4.530 million a year earlier. Excluding stock-based compensation costs and related payroll taxes the loss was $5.920 million in the recent quarter versus $1.470 million a year earlier.
Shopify also projected revenue in the range of $79 million to $81 million for the second quarter and $337 million to $347 million for all of 2016, which would be an increase of between 64% and 69% from revenue of $205.2 million in 2015.
Shopify, whose software is delivered over the web in an arrangement known as software-as-a-service, offers monthly subscription packages that range from $29 to $199 depending on features. Shopify’s prospectus filed in advance of last year’s IPO said annual revenue per merchant client averages $1,000.
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