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Shopify Announces First-Quarter 2016 Financial Results

OTTAWA, Ontario, May 04, 2016 (BUSINESS WIRE) -- Shopify Inc. SHOP, -2.13% (SH), the leading cloud-based, multi-channel commerce platform designed for small and medium-sized businesses, today announced strong financial results for the quarter ended March 31, 2016.

“The era of mobile commerce has officially arrived: mobile orders from Shopify merchants surpassed those of desktops in February, and have continued to climb since,” said Tobi Lütke, founder and CEO of Shopify. “Mobile is bringing commerce to places it’s never been before, it is making it more social, and we are pushing that forward in a big way. With our recent integration with Facebook’s new Messenger platform and our acquisition of a leader in mobile messaging for commerce, Kit CRM, we’re making it easier for our merchants to thrive in this new era.”

“Our first quarter delivered a great start to the year,” stated Russ Jones, Shopify’s CFO. “The strong merchant adds in the quarter, together with GMV once again doubling year on year, highlight the value we bring to merchants of all sizes. Our unique combination of strengths is clearly meeting a pressing need in commerce right now.”

First-Quarter Financial Highlights

-- Total revenue was $72.7 million, a 95% increase from the first quarter of 2015. Within this, Subscription Solutions revenue grew 73% to $38.7 million, driven primarily by an increase in the number of merchants using our platform; and Merchant Solutions revenue grew 127% to $34.0 million, primarily driven by an increase in revenue from Shopify Payments.

-- Monthly Recurring Revenue [1] (“MRR”) as of March 31, 2016 was $12.8 million, up 73% compared with $7.4 million on March 31, 2015.

-- Gross Merchandise Volume [2] (“GMV”) for the first quarter was $2.7 billion, an increase of 102% over the first quarter of 2015.

-- Gross profit grew 82% to $39.3 million for the first quarter of 2016, versus $21.6 million for the first quarter of 2015.

-- Operating loss for the first quarter of 2016 was $9.7 million, compared with an operating loss of $3.5 million for the first quarter of 2015.

-- Adjusted operating loss [3] was $5.9 million, compared with $1.5 million for the first quarter of 2015.

-- Net loss was $8.9 million, or $0.11 per share, compared with $4.5 million, or $0.12 per share, for the first quarter of 2015.

-- Adjusted net loss [3] for the first quarter of 2016 was $5.1 million, or $0.06 per share, compared with an adjusted net loss of $2.5 million, or $0.06 per share, for the first quarter of 2015.

-- At March 31, 2016, Shopify had $189.5 million in cash, cash equivalents and marketable securities, compared with $190.2 million on December 31, 2015.

First-Quarter Business Highlights

-- Orders on mobile surpassed those on desktop for the first time ever in the first quarter of 2016, as just over 51% of orders exiting the quarter came from mobile devices. The share of traffic from mobile devices in the quarter was even higher, at 62%.

-- Shopify’s partner ecosystem, a critical component to Shopify’s success, was well represented at Shopify’s first-ever partner conference, Unite, in San Francisco. More than 650 partners participated in Unite, where we unveiled a number of platform enhancements, including the Sales Channel SDK, which enables partners to use Shopify’s APIs to build out new channels for Shopify merchants. Houzz, Wanelo and Ebates have already built channels through which Shopify merchants can list and sell.

Since the close of the first quarter, Shopify made several key announcements:

-- Shopify acquired Kit CRM to strengthen our capabilities in messaging and conversational commerce. Kit’s virtual marketing assistant uniquely interfaces with business owners via messaging to help manage marketing, reporting and other back-office tasks. A top-rated app in the Shopify app store, Kit helps merchants grow their business by placing targeted ads, posting updates to merchants’ Facebook Pages, and making recommendations based on shop or business activity.

-- Shopify was the first commerce platform to integrate with Facebook’s new Messenger Platform, making it easier for merchants to engage in conversational commerce with their customers. The integration allows merchants to provide live customer support, automatically send order confirmations, shipping updates, and push notifications all within Facebook Messenger. Shopify is also developing commerce Bots for Messenger to allow merchants to have more interactive and engaging conversations with customers who opt in for these capabilities.

-- Shopify announced Shopify Capital, offering merchant cash advances to select merchants, which provide them timely access to funds to respond quickly to capital needs for their business. During the pilot program, merchants used cash advances to buy equipment and inventory, launch new products, hire more employees, and add new channels and products.

-- Shopify expanded same-day shipping options with its integration with Postmates. Live in over 200 cities across the United States and serviced by over 25,000 couriers, merchants and customers can track purchases from checkout to delivery.

Financial Outlook

The financial outlook that follows constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond Shopify’s control. Please see “Forward-looking Statements” below.

In addition to the other assumptions and factors described in this press release, Shopify’s outlook assumes the continuation of growth trends in our industry, our ability to manage our growth effectively and the absence of material changes in our industry or the global economy. The following statements supersede all prior statements made by Shopify regarding 2016 financial outlook. All numbers provided in this section are approximate.

For the full year 2016, Shopify currently expects:

-- Revenues in the range of $337 million to $347 million

-- GAAP operating loss in the range of $41 million to $47 million

-- Adjusted operating loss [3] in the range of $16 million to $22 million, which excludes stock-based compensation expenses and related payroll taxes of...


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