Ecommerce platform and technology provider Shopify Inc. said Wednesday that the Biden administration’s stimulus package and “sustained momentum of digital commerce trends” helped it generate better-than-expected revenue with lower operating costs than anticipated during the second quarter.
It was the 24th consecutive quarter that the company’s earnings surpassed analysts’ forecasts. Gross merchandise volume, or the value of goods sold through its platform, reached its highest quarterly level ever at $42.2 billion, up 40% over Q2 2020.
“As a result, we now expect full-year 2021 adjusted operating income to be above the level we achieved in 2020,” the company said. With economies reopening, Shopify said it sees ecommerce growing at a “more normalized pace” compared to last year.
Revenue was up 57% year over year to reach $1.12 billion, surpassing $1 billion for the first time, as the shift to online shopping continued. Analysts had expected $1.05 billion.
Larger retailers are increasingly interested in cloud-based providers like Shopify, which allow them to easily add features like curbside pickup and to use integrated marketing channels, according to Bloomberg Intelligence.
The company has recently expanded its relationships with other online channels such as Google Inc., allowing merchants to reach consumers across the web and on multiple social media platforms. Google, for example, plans to display buying options more prominently on its sites such as Google Maps and YouTube and is now adding the Canadian company’s payments service, Shop Pay, as an option for consumers. 47 retailers in the Digital Commerce 360 2021 Top 1000 use Shopify as their ecommerce platform.
“Shopify fired on all cylinders in our second quarter,” said Amy Shapero, Shopify’s chief financial officer, in a written statement. “As consumer spending remained strong, our merchants thrived and extracted more value from our platform, contributing to our rapid growth.”
“Every 28 seconds, a new entrepreneur gets their first sale on Shopify,” Shopify president Harley Finkelstein said in an earnings transcript obtained by Seeking Alpha.
He also said sales made through store-based point-of-sale systems are back to “pre-COVID levels as a percentage of overall GMV as physical stores reopen and merchants are better equipped with our upgraded hardware and software.”
More stores added Shopify’s point-of-sale system in the quarter for its omnichannel features like buy online pick up in store, which was adopted by 63% of Shopify’s brick-and-mortar merchants in English-speaking geographies at the end of June, up from just 2% in February 2020, he said.
In Q2, year-over-year GMV growth from Facebook and Google channels was “several times” that of online stores, Shopify said. And Shop Pay is available now to U.S. merchants on Facebook, Finkelstein said. As of the end of June, Shop Pay had facilitated nearly $30 billion in cumulative GMV since its launch in 2017, Shopify executives said on the call.
Shopify also signed several big-name brands on its Shopify Plus enterprise platform for larger merchants, including Netflix, luxury fashion designer Diane Von Furstenberg (No. 829 in the Digital Commerce 360 Top 1000), winery Robert Mondavi, shoe company The Aldo Group Inc. (No. 946), and vintage clothing retailer ModCloth (owned by Walmart Inc., No. 2).
Shopify also said it nearly doubled the number of new hires quarter over quarter, specifically bolstering its engineering teams.
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