Important events
Feb 162023
Shopify stock tumbles on weak outlook
Shares of the ecommerce company were down more than 10% in after-hours trading.- Shopify, the ecommerce platform beloved by stay-at-home shoppers, took a beating in post-market deals after it reported lower-than-expected Q1 guidance. More precisely, the company said it now projects revenue for the March quarter to be “in the high teens” on a percentage basis.
- Wall Street wasn’t exactly happy with these figures as investors were rooting for a 20% increase forecast. “Empty your bags!” – investors, probably, as Shopify fell more than 10% ahead of the opening bell in New York. This year’s 50% rise, though, will provide some cushioning.
- Still, Shopify’s 2022 performance wasn’t too bad. The Canadian shopping platform reported full-year revenue of $5.6bn, up 21% from a year ago. The December quarter revenue of $1.7bn was up 26% and topped Street estimates of $1.65bn. Profit hit 7 cents a share.
Illustration by TradingView
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Jul 272022
Shopify lightens its basket
Shopify saw its shares sink further towards pre-pandemic levels thanks to an earnings update filled with spoiled goods.- Shopify shares dropped over 14% on Tuesday to close at $31.55. That’s around the same levels it hit when covid first appeared on the market landscape in March 2020, meaning the brand’s pandemic-fueled catapult to the top is officially but a distant memory after losses of 76% this year so far – and they know it too.
- Which is why Shopify is laying off 10% of its workforce. The e-commerce platform cut around 1,000 employees, all of whom got less than 24 hours’ notice and would be “leaving by the end of the day”. It gives investors a nerve-wracking preview into the company’s next earnings report, which is due out today.
- CEO Tobi Lütke says he made a bet that “didn’t pay off”, taking full responsibility for the miscalculation – which is more than a lot of execs would do tbh. Lütke said he believed “the share of dollars that travel through e-commerce rather than physical retail would permanently leap ahead by five or even 10 years”, but is now sitting around where pre-covid data would have suggested.
Shopify
May 062022
Pandemic gains Stopify
The post-pandemic e-commerce slump makes its mark on Shopify, sending shares tumbling to lose all their pandemic gains.- Shares fell just under 15% on Thursday to their lowest levels since April 2020 following a dramatic Q1 miss. Shopify reported EPS of $0.20 vs estimates for $0.63, on revenues that were up 22% but still missed estimates at $1.24bn – that marks the company's slowest ever growth rate.
- E-commerce brands have been pummeled this earnings szn, highlighted by Amazon’s worst day since 2006. Shopify reckons the pandemic-boom is well and truly over, forecasting slowing revenue growth for the rest of the year as it contends with tough pandemic-era comparisons.
- It’s trying to build out its infrastructure to make up for the slump though, reaching a deal to buy Deliverr for $2.1bn to expand its fulfillment services, and President Harley Finkelstein is determined that online shopping is still trendy. It wasn’t enough to appease analysts though, at least seven of whom dramatically cut their price target on the stock.
The Earthy Forger / gumroad
Apr 082022
Strike goes SHOPping for Bitcoin adoption
Strike announces a collab with SHOP to bring Bitcoin Lightning payments to the e-commerce giant.- Strike (a digital payments platform) will integrate the Bitcoin Lightning network to Shopify, allowing users to do their retail therapy on the blockchain. Speaking at Bitcoin’s Miami conference, Strike CEO Jack Mallers announced US merchants will be able to receive Bitcoin payments from customers all over the world.
- Fear not, fiat lovers – Shopify merchants will be able to convert into dollars easily, with Strike’s tech supposedly smoothing over any tricky stuff involved in receiving Bitcoin as a method of payment.
- SHOP traded down 4% on Thursday, clearly not catching the rays of sunshine coming out of Miami. But diversifying accepted modes of payment could prove smart. Strike’s announcement closely follows Lightning Labs’ effort to bring stablecoins to the Bitcoin Lightning Network. Get your satoshis ready – adoption is picking up folks.
Muhammad Asyfaul / Unsplash
Feb 172022
Shopify gets maxed out
Investors think Shopify might be a bit of a spendthrift after getting spooked by how much cash it’s splashing on fulfillment centers.Key points:
- Shopify spiraled down 16% on Wednesday in its worst day on record, sinking to its lowest price since June 2020 despite beating on both ends with EPS of $1.36 on revenues of $1.38bn.
- It’s investing more heavily into its fulfillment centers in an effort to move from a “prototype” phase to a “build phase” – a larger fulfillment network means Shopify can offer one or two day shipping (among other perks), but it’s going to have to spend over $1bn in the next few years to get there.
- It also warned of a slowdown in revenue for 2022, which it’s expecting to be much lower than the 57% growth it saw in 2021. The once-hot company is experiencing a downturn in consumer spending as the pandemic-induced e-commerce surge fades, much like many other lockdown winners.
Milad Fakurian / Unsplash
Nov 152021
Shopify gets some meme army attention
The online army is “buying to try” with Shopify stock on Friday, having had their ears perked by impressive earnings last month.- Shopify jumped 12% on Friday, leaving investors scratching their heads after a distinct lack of news from the e-commerce company.
- We smell meme mania – mentions of the stock soared 4,000% on social media platforms on Friday.
- Shares are up 24% since its earnings showed off impressive growth prospects and got retail investors paying attention two weeks ago.
Oct 292021
Shopify breaks its winning streak
E-commerce giant Shopify posts its first revenue miss in five years with its third quarter earnings, but shares are up in after-hours trading nevertheless because its future is looking bright.Shopify, which basically helps businesses set up online shops, has thrived during the pandemic to build on a five year earnings beat streak – but this quarter saw that come to an end as the company missed on both the top and bottom lines with its Q3 release. Shopify reported earnings per share of $0.81 on revenue that was up 46% to $1.12 billion, compared to expectations of $1.23 in earnings per share on $1.15 billion in revenue. For the same quarter last year, the company posted earnings of $9 per share and revenue of $767 million thanks to the pandemic boom. Going forward, the company is expecting to feel pressure from supply chain delays and increased shipping and labor costs, much like the rest of the tech industry, but is has stressed the importance of its long-term growth plans. Chief Financial Officer Amy Shapero said:
As a reminder, we are building a portfolio of growth initiatives with different return time horizons that we expect will contribute to Shopify’s growth over the long term. Initiatives like international expansion and Shopify POS, which we embarked upon a few years ago, are further ahead in product and market development, and some of our more complex and groundbreaking initiatives like Shopify Fulfillment Network and Shop are still in their early stages.
Regarding the fourth quarter, the company said:
While the commerce market, both online and offline, may be impacted by supply chain delays or increased costs for materials, labor, shipping or advertising in the fourth quarter, and spending on Black Friday Cyber Monday may be pulled forward.
Analysts were impressed enough by Shopify’s growth potential to ignore the dramatic earnings miss. Baird analyst Colin Sebastian said:
Clearly a modest miss (or worse) was priced into shares, and consensus expectations should now be better calibrated to moderating growth and higher investment spending.
Jefferies analyst Samad Samana noted the company’s strong partnerships and mainstream adoption as key sources of hope, saying:
Management noted that its partnerships with TikTok, Facebook (FB) and Instagram are progressing with social GMV gaining share of total GMV during the quarter. Shopify was a high-growth company long before COVID, and it's going to be a high-growth company after the pandemic tailwinds fade
The stock was up 3% in after-hours trading.
Illustration by TradingView
Jul 302021
Shopify tops $1 billion in revenue for the first time
Despite blowing past expectations and topping $1 billion in revenue for the first time, shares of Shopify slipped on Wednesday as investors worried about how the e-commerce giant will fare post-COVID.Shopify started the week with a bang after opening at its highest price ever, but prices slipped on Wednesday despite earnings that blew past expectations. The e-commerce behemoth reported earnings per share of $2.24 in the quarter, up 113% from the year before and impressively outpacing expectations of $0.96 per share. Revenue came in at $1.12 billion, up 57% from the same period a year before and well ahead of expectations of $1.04 billion, and also marking the first time that Shopify has topped $1 billion in revenue in its history. The success is thanks to sustained strength in online spending as the economy rebounds from the pandemic.
Shopify fired on all cylinders in our second quarter, keeping our merchants well equipped to seize the opportunities presented in a post-pandemic retail era. As consumer spending remained strong, our merchants thrived and extracted more value from our platform, contributing to our rapid growth,
said Amy Shapero, Shopify’s CFO.
The stock’s reaction wasn’t as upbeat as its earnings, and prices slipped 1.10% on Wednesday and a further 0.85% on Thursday as investors worry about what next quarter holds as online shopping sees a slowdown amid re-opening economies.
Shopify is Canada’s most valuable publicly traded company and its favourite homegrown tech success story, and has a market cap of over $191 billion while it supports over a million businesses around the world. The stock is up just under 200% since the pandemic hit in March last year.
Illustration by TradingView
Apr 282021
Shopify slays in Q1
Shopify soars over 11% after its Q1 earnings beat previous estimates into pulp, reporting a revenue growth of more than 100%. Killing it.Shopify crushed expectations with its Q1 numbers, reporting $988.6 million in revenue – up a massive 110% from the same period the year before and leaving estimates of $862.7 million in the dust. The company reported adjusted earnings per share of $2.01, triple Wall Street’s estimations of 75 cents per share, boosted by $1.30 in unrealized gains from its investment in Affirm, an online payment company that went public in January. Guidance-wise though, Shopify cautioned that growth could slow as the pandemic eases.
“Our full-year 2021 outlook is guided by assumptions that remain unchanged from February: that as countries continue to roll out vaccines in 2021 and populations are able to move about more freely, the overall economic environment will likely improve; some consumer spending will likely rotate back to offline retail and services; and the ongoing shift to ecommerce, which accelerated in 2020, will likely resume a more normalized pace of growth,”
Shopify said in its earnings release.
Glitch Lab App / Unsplash
Apr 152021
Shopify exodus
Shopify bounces back after losing 5% yesterday following the announcement that three of its senior execs will be leaving the company. Shares recover 2.41%.Tobi Lutke, the CEO and Founder of the e-commerce platform, announced in a blog post that the Chief Talent Officer, Chief Legal Officer, and Chief Technology Officer will all transition out of their positions; adding that the trio “have been “spectacular and deserve to take a bow”.
The company didn't give any reason for the departure, simply saying it was best for both them and the firm. The founder didn’t give any indication of who might be taking over the positions, but noted that “we have a phenomenally strong bench of leaders who will now step up into larger roles” so perhaps they’ll be looking internally to replace the three. Craig Miller, Chief Product Officer, also left the company in September last year after nine years and Lutke took on his position in addition to CEO.
Shopify is Canada’s most valuable publicly traded company and its favourite homegrown tech success story, and has a market cap of around $154 billion while it supports over a million businesses around the world. Shares have shot up 137% in the last year, but is down 1.7% in the first quarter of the year as investors cash in on those pandemic highs.
An analyst at Summit Insights Group, Jonathan Kees, called the timing of the departures "a little alarming" but said that the specific roles make it less worrying as those leaving are in "more back-office roles." Analyst Tom Forte added that they
Remain confident Shopify can continue to execute at a high level, despite the departures
Keagan Henman / Unsplash
Feb 232021
Shopify raises $1.55bn in share sale
Shopify shares fell sharply to lose almost 5% following a $1.55 billion share sale on February 23.The shares were only offered for sale in the US and Canada. The firm expects to use the net proceeds from the offering to strengthen its balance sheet, providing flexibility to fund its growth strategies.
Feb 172021
Shopify posts strong FY and Q4 results
Shopify reports another great year on the back of pandemic sales, driven by a whopping 99% jump in Gross Merchant Volume (GMV), up $20.5bn to $41.1bn for Q4.Revenue for the quarter was $977.7 million, up 94% from the previous year and well ahead of Wall Street estimates, which stood at $910.2 million. Adjusted profits were $1.58 a share, also ahead of Wall Street expectations of $1.25 a share. Total revenue for the full year 2020 was $2,929.5 million, an 86% increase over 2019. GMV for 2020 was $119.6 billion, an increase of 96% over 2019.
Q4 net income was $123.9 million, or $0.99 per diluted share, compared with a net income of $0.8 million, or $0.01 per diluted share, for the fourth quarter of 2019. Net income for the full year of 2020 was $319.5 million, or $2.59 per diluted share, compared with a net loss of $124.8 million, or $1.10 per basic and diluted share, for 2019.
“Our fourth-quarter results capped off an outstanding 2020, thanks to the success of our merchants in a year that truly tested their mettle and triggered more entrepreneurs around the world to start their journey toward economic independence,” said Amy Shapero, Shopify’s CFO. “Shopify was prepared to ship the features that our merchants needed during the pandemic because we had invested for several years in a future that arrived early with the acceleration of online commerce. We’re amplifying our efforts in 2021, as we focus on executing on a portfolio of initiatives that will fuel further growth for our merchants and for Shopify.”
Highlights of the year included the Black Friday weekend, which saw sales on Shopify’s platform reach more than $5.1 billion from the start of Black Friday in New Zealand, through the end of Cyber Monday in California, compared to $2.9 billion in GMV for the global Black Friday Cyber Monday period in 2019. Shopify also offset all carbon emissions from the delivery of every order placed on its platform during the weekend, resulting in nearly 62,000 tonnes of carbon emissions offset.
Fakurian Design / Unsplash
Feb 092021
Shopify expands on social media
Good news, influencers! Shopify has expanded its Shop Pay payment to all Shopify merchants selling on Facebook and Instagram. The market loves the news, and stock jumps almost 7%.With the new integration, shoppers on Instagram and Facebook can access Shop Pay as a payment option in the Facebook Pay menu. They can not only track their orders but they can also see the carbon emissions offset from what they purchased (Shop Pay offsets 100% of the delivery emissions for every order, because it says 53% of its shoppers want sustainable products.)
Shop Pay also offers encrypted one-click payments, a 70% faster checkout experience, and fewer forms to fill out. And it's popular. In 2020 buyers completed more than 137 million orders via Shop Pay, which has seen $20 billion in cumulative merchandise volume since its launch in 2017.
“People are embracing social platforms not only for connection but for commerce,” said Carl Rivera, General Manager of the Shop App at Shopify. “Making Shop Pay available outside of Shopify for the first time means even more shoppers can use the fastest and best checkout on the Internet. And there’s more to come: we’ll continue to work with Facebook to bring a number of Shopify services and products to these platforms to make social selling so much better.”
The news cemented a strong month for Shopify, which had already rallied 22% in the first week of February. The Shop Pay news pushed it even higher, jumping another 6.53% to hit $1499.75 by February 10.
Jan 272021
Shopify announces earnings announcement
Shopify says that it's going to release Q4 earnings on February 17, 2021. Despite 2020 being a pretty good year for the company, the news doesn't bring a great response from the market, and stock slides by almost 6%.The lack of confidence is odd, because Shopify is actually doing pretty great. The stock grew by over 150% in 2020, and its financials are looking pretty healthy too. The last two quarters have seen strong year-on-year revenue growth, and in Q3 it made a $191 million profit, compared to a $78 million loss in Q3 2019. Analysts are pretty bullish on the stock for 2021, despite the recent volatility.
Jan 062021
Engineering team to double
Shopify hires a new VP of Engineering and announces plans to double its engineering team with the hire of over 2,000 new employees. Many of these are likely to be in Ireland, its largest cluster of staff outside the home base of Canada. On its website, Shopify said it was looking for people with experience in front and back end development, data, mobile and infrastructure work.Cathy Polinsky also joined the firm as its new Engineering VP. She was previously Chief Technology Officer at online personal styling service Stitch Fix and has also held senior roles at Salesforce, Oracle and Yahoo. “Shopify’s mission to make commerce better for everyone is incredibly inspiring, and it’s what attracted me most to the role," she said.
Dec 222020
Rapid growth exposes Shopify to fraudsters
It's not great news to end the year with, as new analysis from ecommerce authentication service FakeSpot finds that over a fifth of Shopify sites pose a risk to their customers.Fakespot analyzed 124,000 Shopify sites, and found that around 26,000 were
"related to fraudulent practices" – including 40% described as "problematic sellers" and 28% possible scam stores.
“We recognise there will be those — however few they may be relative to our base of more than one million merchants — that may abuse our service, and we take this matter seriously,” said Shopify, which has employed “multiple teams” to address what it calls "an industry-wide problem."
The problem is that while centralized sites like Amazon can operate a relatively robust system of reviews that allow customers to see at a glance what they're getting into, the fragmented nature of Shopify (and its "anti-Amazon" strategy) means that it can be difficult to separate legit sellers from dodgy ones.
The market did not like the news at all, and the stock dropped by almost 7% the day after it broke, falling to $1,197.96 on December 23.
Dec 112020
Arming the rebels
Shopify has often been labeled the young disruptor compared to its giant rival, with an approach to business that champions independent brands and small businesses. But in a Fortune podcast in December, Shopify Plus General Manager Loren Padelford debunks the myth."I don't consider us the anti-Amazon, I think that's a media narrative,” said Padelford. She did admit, though, that: “We want merchants to be front and center… That's a worldview difference." Way to be tactful, Loren.
However, it doesn’t quite tally with what Founder and CEO Toby Lutke said back in 2019. When asked in a Twitter Q&A if Shopify was going to be the next Amazon (AMZN), he was pretty clear on the subject, saying: “Amazon is trying to build an empire and Shopify is trying to arm the rebels.”
“Amazon is trying to build an empire and Shopify is trying to arm the rebels.” Photo: Becky Fantham / Unsplash
Dec 012020
$5bn Black Friday
The pandemic might be receding, but Shopify is still winning the retail game. In this year’s Black Friday/Cyber Monday weekend (November 27-30 2020) the firm sees sales of over $5bn from more than one million Shopify-powered brands around the world. The market likes it too – the stock rises 5.41% over the weekend to close at $1,090.38 on the Monday.It looks like customers are voting with their wallets, and seeking to support smaller and independent brands (which Shopify has historically championed) over the Amazonian giants. In the week leading up to Cyber Monday, from November 23 through November 30, sales increased by 84% from 2019 – a pretty strong result.
“This has been a transformative year for commerce globally,” said Harley Finkelstein, President of Shopify. “The record sales we saw on Shopify over Black Friday/Cyber Monday weekend demonstrate the power of the independent and direct-to-consumer businesses on our platform. With the center of gravity in commerce shifting from in-store to online, the pandemic has accelerated a change we have long anticipated. This multichannel shopping phenomenon is the blueprint for the future of retail – and we couldn’t be more excited by it.”
Nov 102020
Vaccine hopes
Everyone wants a vaccine – and it looks like one is finally be on the way as drugs company Pfizer (PFIZER) claims on November 9 that its treatment is (in theory) 90% effective against the coronavirus. This poses a threat to stay-at-home stocks and Shopify shares have a turbulent few days. The stock declines by 13.6% on November 9 to $902.60 and falls another 2.3% to $885 by November 10 before rising 7% to $947 on November 11.Questions had already been raised by analysts about how long the momentum can be maintained for Shopify’s stock. It had been sitting pretty at above $1,000 for weeks but would it be as attractive once pandemic restrictions eased and people started going outside again? E-commerce sales rose 135% annually between October 18 and 25. But would as many people shop online once it is safe to go outside and mix again or would we all need a break from our devices?
Samad Samana, an analyst with Jefferies (JEF), joined the chorus of questions. Samana said: “The looming question for Shopify and really all e-commerce related businesses is can they sustain that momentum that we’ve seen in the early half of the year into the second half, especially as stimulus is tapered off here in the United States.”
Oct 272020
TikTok partnership
Are you ready to dance? Shopify gets trendy by linking with social network TikTok so its stores can upload videos showcasing their products to sell to its 800m active users. Investors are down with the kids and excited at the prospect of a partnership, sending the stock up 4.2% to $1,082.89TikTok lets users posts minute long videos where they dance, twerk, sing, make jokes and now Shopify’s stores will be able to advertise directly to them. It soared in popularity in 2019 and jumped from 269th to 4th in global app downloads rank. The app is used by celebrities such as former wrestler The Rock and US dancer and social media personality Charli D'Amelio, who boasts more than 100m followers.
The TikTok for Business Ads Manager was added to the range of Shopify apps in the US initially. It let Shopify stores create video ads through their own account where targeted viewers can click to make a purchase. That’s if they can stop lip-syncing for a minute.
Helping users get on TikTok provided a new global market beyond Facebook (FB), Instagram, and Twitter (TWTR). That was important as trends change and users shift platforms. Growth among young people aged 16-24 has slowed on Facebook and Twitter but is still rising on TikTok. After all, who wants to be on the same social media platform as their parents? Now Shopify users could reach potential customers on whichever social media platform they were on and whatever their age, meaning more opportunities for sales.