Shopify Q1 Sales Exceeded Q4 on 'Robust Consumer Spending'
Shopify reported strong Q1 revenue performance, with gross merchandise value (GMV) growing across all geographies on “robust consumer spending,” said President Harley Finkelstein on a Wednesday call. Revenue grew 110% to $988.6 million, with about $321 million coming from subscriptions,…
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just under $668 million from merchants, said the company. Though U.S. stimulus programs had an impact on revenue, GMV “was strong even without it,” said Chief Financial Officer Amy Shapero, saying GMV outside of the U.S. accelerated at a faster pace. Q1 revenue exceeded Q4 revenue, “a remarkable achievement” given the typical seasonal falloff after the holiday selling season, Shapero said. Markets that opened post-pandemic, including Australia and New Zealand, aren’t slowing down, said Finkelstein, saying online GMV remains elevated: “So I don't think the consumer preference shift that happened through COVID was a temporary thing.” Multichannel selling is becoming “more critical as the costs of customer acquisition climbs and the lines blurred between online and offline commerce,” said Finkelstein. In the quarter, Shopify expanded its TikTok partnerships to an additional 14 countries and broadened its Pinterest channel by 27 markets, he said. The company launched in-app buy buttons. It integrated Shop Pay as a checkout option with merchants selling on Facebook shops and Instagram Checkout. Lord & Taylor launched on Shopify in the quarter. Finkelstein noted it was America's first department store, founded in 1826, and said it’s “exciting to see their value proposition evolve into an excellent mobile and social experience" and to build on a future-looking platform "experiences that haven't even been thought of yet.” Shopify has under 30% e-commerce penetration in North America, slightly higher in the U.K., said the executive: “There's so much headroom, and there's so much room for e-commerce to grow.” As countries roll out vaccines in 2021 and populations can move about more freely, "the overall economic environment will likely improve," Shopify said. "Some consumer spending will likely rotate back to offline retail and services, and the ongoing shift to e-commerce, which accelerated in 2020, will likely resume a more normalized pace of growth." Shares closed 11.4% higher at $1,288.80.