It was a busy and overall good third quarter for web-based e-commerce platform Shopify.
The vendor says its Q3 sales totaled $99.6 million, up 89% from $52.8 million in Q3 2015. Gross merchandise volume (GMV) or the value of goods sold via its clients’ websites also doubled to $3.8 billion in the quarter ended Sept. 30, Canada-based Shopify said today.
“Our accomplishments over the last few months support the strategy we have made clear from the beginning, which is to do the things that help merchants succeed,” says Tobi Lutke, founder and CEO of Shopify. “We launched Apple Pay, Sell on Messenger and a brand new mobile Shopify app that lets a merchant set up and run their entire business from their mobile phone. Each of these is already making a difference for merchants, and we expect to enjoy the full benefits of these investments over the next several years,” Lutke says.
In addition to reporting its sales, Shopify also identified trends in e-commerce based on technologies that its retail clients are using. One example is Facebook’s Messenger app, which was launched to the retail market in April to enable retailers and brands to build chat bots that enable consumers to make purchases and pose customer service questions within the Shopify platform. A chat bot is interactive software that uses artificial intelligence to simulate human conversation. More than 30,000 Shopify merchants have installed Facebook Messenger for their shops, Shopify said in its earnings announcement.
Additionally, “tens of thousands” of Shopify’s merchants now offer Apple Pay for checkout. Web stores supporting Apple Pay have experienced an increase of up to 200% in their checkout conversion rate on mobile, Shopify says, and customers are able to checkout up to 60% faster with Apple Pay than with a credit card.
During the quarter Shopify bought Boltmade Inc., a product design and development consultancy based in Waterloo, Ontario. The purchase price was not disclosed. Shopify says the acquisition of Boltmade will help accelerate the development of its Shopify Plus, the e-commerce platform for larger merchants, which the company launched in 2014.
Shopify, which went public in May 2015, works with 325,000 businesses in approximately 150 countries. It serves 12 North American retail clients in the Internet Retailer 2016 Top 1000, including apparel retailer BHFO (No. 470) and Barstool Sports (No. 947).
For the third quarter ended Sep. 30, Shopify also reports:
- Subscription revenue for its software of $49.839 million up 68.6% from $29.560 million a year earlier. Revenue from processing payments on behalf of e-retailer clients increased 114.2% to reach $49.739 million from $23.226 million.
- Gross merchandise value processed through Shopify Payments grew to $1.5 billion, accounting for 39% of GMV processed in the quarter.
- The number of merchants using Shopify grew to 325,000 in the quarter, up 62.5% from just over 200,000.
- Net loss was $9.1 million compared with a loss of $4.7 million.
- Shopify signed a deal with Export Development Canada to help insure merchant cash advances offered by Shopify Capital. Shopify Capital, which launched earlier this year, helps merchants secure financing to grow their businesses. Shopify Capital has advanced more than $20 million to merchants.
- Shopify expanded Shopify Shipping beyond USPS by integrating Canada Post. The move enables Canada-based Shopify merchants to buy and print discounted Canada Post shipping labels at up to 40% off retail Canada Post rates.
For the full year, Shopify expects revenue between $379 million and $381 million. For Q4 it estimates revenue will total $120 million to $122 million.