Shopify Inc. plans to declare third quarter financial results on October 27, 2022, Thursday, the company said in a press release. Results of the third quarter, which ended on September 30, 2022, will be discussed by the management team in a press conference hosted at 8:30 a.m. ET. The conference will be made available via webcast on Shopify’s official website. Those who missed it can watch the archived replay of the webcast after the call concludes.
Shopify’s Second Quarter Result
Shopify announced its Q2 financial results on July 27, 2022. The results were announced just day after the layoff in which 10 percent of the company’s employees were ousted. A summary Of Q2 results:
The Canada-based company stated that the total revenue in Q2 increased 16 percent year over year to $1.3 billion. The figure represents three-year compound annual growth rate of 53 percent.
MRR
As of June 30, 2022, Monthly Recurring Revenue was $107.2 million. It grew 13 percent year over year, up from $95.1 million as compared to June 30, 2021. Shopify Plus chipped in with 31 percent of MRR accounting to $33.7 million, higher than the last year.
Subscription Solutions revenue was $366.4 million, up 10 percent year over year, Shopify mentioned in the press release.
GMV
GMV or Gross Merchandise Volume for Q2 was $46.9 billion. It represented a three- year compound annual growth rate of 50 percent and growth of $4.7 billion or 11 percent over second quarter last year. “Gross Payments Volume3 (“GPV”) grew to $24.9 billion, which accounted for 53% of GMV processed in the quarter, versus $20.3 billion, or 48%, for the second quarter of 2021,” the company stated.
Shopify announced that its Merchant Solutions revenue was $928.6 million, up 18 percent year over year and gross profit dollars increased 6 percent to $655.6 million in 2022 Q2 compared with $620.9 million for last year’s second quarter. At the same time, adjusted gross profit dollars increased by six percent to $665 million in 2022 Q2, compared with $627 million for Q2 2021.
$1.2 Billion Loss
Shopify’s net loss for the second quarter of 2022 was $1.2 billion or $0.95 per diluted share compared with $0.9 billion of net income or $0.695 per diluted share, for 2021 Q2. The loss also included $1 billion net unrealized loss on equity and other investments while last year’s net income in Q2 included a roughly $0.8 billion net unrealized gain from equity and other investments in the second quarter.
Adjusted net loss for Q2 was US$38.5 million, or three cents per diluted share, as compared to the adjusted net income of $284.6 million, or 22 cents per diluted share in the 2021 second quarter.
Operating Loss
Company’s operating loss was $190.2 million, or 15 percent of revenue for 2022 Q2 compared with the income of $139.4 million or 12 percent of revenue for the last year.
2022 second quarter’s adjusted operating loss was $41.8 million or three percent of revenue, compared with adjusted operating income of $236.8 million or 21 percent of revenue in 2021 Q2.
Major Shopify Developments Before 2022 Third Quarter Results
1. Top Leadership Change
Shopify announced senior leadership change on September 8, 2022, replacing two of its executives. Shopify replaced its Chief Financial Officer, Amy Shapero with long-time investment banker Jeff Hoffmeister. Meanwhile, Vice-President of Product, Kaz Nejatian doubled up as Chief Operating Officer. It was announced that ex-COO Toby Shannan is retiring after serving 12 years in Shopify. Shannan is expected to be a part of Shopify’s Board of Directors throughout 2023.
Toby Shannan (COO) is retiring after 12 years with Shopify and will join the Board of Directors. I’ve asked @CanadaKaz to take over as VP Product & COO. Amy Shapero (CFO) will leave after the next quarter and then transition the role to Jeff Hoffmeister https://t.co/hhPaWV7URo
— tobi lutke (@tobi) September 8, 2022
Hoffmeister, who succeeded Shapero has worked for two decades at Morgan Stanley in its Technology Investment Banking group. He led Shopify’s initial public offering in 2015 during his tenure at Morgan Stanley. Meanwhile, new COO Nejatian led the development and delivery of Shopify Capital and Shop Pay.
2. Announcement of Flex Comp
Shopify announced Flex Comp on September 16, 2022. Flex Comp means flexible compensation to reward employees serving the company. Announcing the same, Shopify founder Tobi Lutke wrote on his Twitter account, “We totally revamped our compensation system this summer.
In short, “Flex Comp” now gives everyone a simple UX where you see your total compensation and choose a mix of Cash/RSU/Stock via simple sliders”. Shopify believes that its new story of compensation will inspire other giants to companies to follow the same. Shopify’s Flex Comp is based on three key elements: agency, clarity and impact.
The main feature of Flex Comp is that it allows employees to decide whether they want to get paid in cash or in equity. In the third point, Shopify said that “as employees advance in their careers and have a positive impact on our mission, their compensation will grow (no speed limits here).”
3. POS Go
On September 27, Shopify launched its latest retail hardware offering — POS Go, a point-of-sale (POS) handheld system that resembles a smartphone. With this, Shopify aims to compete with brick-and-mortar stores. POS Go offers wireless checkout options anywhere in the store. It doesn’t need to be connected to a computer or mobile phone.
It comes with a card reader, inventory tracker and a built-in bar code scanner. It also helps merchants manage staff and payments irrespective where they are based — online or physical store. Shopify POS Go app can be customised to manage store and provide better services to customers. Shopify has started to accept pre orders for POS Go for merchants based in the United States.
4. Shopify Capital Launched In Australia
Shopify launched Shopify Capital in Australia on August 21, 2022. Through Shopify Capital, the e-commerce giant provided quick access to funding to Australian merchants on its retail platform. Shopify said that small business owners in Australia can now access up to $2.5 million AUD. To assess risk and lend off its balance sheet, sales data from the platform will be evaluated.
“Australian businesses are concerned about the increasing cost of capital, inflationary pressures impacting margins, and declining consumer confidence impacting sales. Shopify Capital is remitted only when a sale is made, so Australian merchants can be confident that they can afford to invest in their businesses,” said Shaun Broughton, APAC Managing Director at Shopify.
5. Shopify Markets Pro, Shopify Translate & Adapt
Shopify Markets Pro and Shopify Translate & Adapt were launched on September 14, 2022. The new products are based on Shopify Markets and aim to democratize small business owners’ access to international commerce. For the unversed, Shopify Markets allows merchants to sell their products online to consumers across the globe. Top features of Shopify Markets Pro are — managing tax and duty compliance on behalf of merchants, affordable express shipping with DHL and localised seamless customer experience.
Shopify Translate & Adapt, on the other hand, will translate information on a website in different languages. Merchants can also create different shipping terms for different market. As per Shopify data, translating content increases gross merchandise value from local buyers by 13 percent. Top features of Shopify Translate & Adapt are- machine and manual translations of store into different languages and custom content adaptation for different markets.
6. Shopify Collabs For Content Creators
Shopify announced Shopify Collabs on August 16, 2022. The latest offering will work as a medium to directly connect merchants on its platform and content creators. This will not only allow creators to discover brands easily but will also help merchants to reach new consumers.
Creators can apply for Shopify Collabs account and then browse for merchants whose products match the interest of their audience. After finding the best, they can share a list of products on social media via Shopify’s link in bio tool, Linkpop. When someone buys a product via shared link, the creator will receive the payment. As per TechCrunch, Collabs’ pay structure can differ with each merchant and creators will receive their remuneration directly via PayPal.
