Business

Shopify's revenue rise 97% in the second quarter, to $714.3 million, crushing the market's expectations

Purchases through Shopify's platform more than doubled between April and June, outpacing eBay for the first time

Tobi Lütke, CEO at Shopify.
Tobi Lütke, CEO at Shopify. Photo: Screenshot/YouTube Shopify
  • The number of new stores created on the Shopify platform grew 71% in Q2 2020 compared with Q1 2020, driven by the Covid-19 pandemic;
  • The company’s total revenue in this year second quarter reached $714.3 million.

Shopify announced this Wednesday revenue of $714.3 million in this year’s second quarter, a 97% increase if compared to the same quarter of 2019, and a result $200 million higher than expected by the market. As a result, Shopify’s stock jumped 7%, though the e-commerce giant declined to provide guidance for the next quarters.

This second-quarter growth is mainly related to the ongoing situation regarding the Covid-19 pandemic. According to the company, the isolation measures accelerated the shift of purchase habits, bringing new stores and consumers to e-commerce.

Shopify’s financial report shows that the number of new stores created on the platform grew 71% in Q2 2020 compared with Q1 2020, driven by offline-online shift and the extension of the free trial period on standard plans from 14 days to 90 days.

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Purchases through Shopify’s platform more than doubled between April and June, outpacing eBay for the first time, according to the Financial Times.

Shopify’s subscription solutions revenue in Q2 reached $196.4 million, up 28% year over year, primarily due to more merchants joining the platform during the pandemic.

“The world is changing fast,” said Tobi Lütke, Shopify’s CEO, commenting about “a massive disruption to conventional employment, and growing conviction that opportunity needs to be more evenly distributed, entrepreneurship has never been more important. With all of these changes, our core principles remain the same: everything we ship is designed to lower barriers to entrepreneurship and reduce friction wherever we can.”

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The Ottawa-based company said that Q2 2020 Gross Merchandise Volume (GMV), a measure of consumers’ total spending before fees and revenues with retailers, grew 119% compared to the same period last year, with year-on-year GMV growth accelerating in April and May and decelerating in June and thus far in July. “The strength of Shopify’s value proposition was on full display in our second quarter,” said Amy Shapero, Shopify’s CFO.

We are committed to transferring the benefits of scale to our merchants, helping them sell more and sell more efficiently, which is especially critical in this rapidly changing environment. With our strong balance sheet and through prudent capital allocation, we remain well positioned to continue solving critical pain points for our merchants and contribute to their success for years to come.

Amy Shapero, Shopify’s CFO.

Shopify is building a U.S. distribution network to store and ship products for its merchant customers. A year ago, the company announced plans to spend $1 billion in five years on its own fulfillment network. It is no wonder that analysts are betting on the Canadian phenomenon as a match for Amazon.