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Shopify Announces Fourth-Quarter and Full-Year 2015 Financial Results

OTTAWA, Ontario, Feb 17, 2016 (BUSINESS WIRE) -- Shopify Inc. SHOP, +3.88% (SH), the leading cloud-based, multi-channel commerce platform designed for small and medium-sized businesses, today announced strong financial results for the full year and quarter ended December 31, 2015. Continued adoption of the Shopify platform by merchants and a strong holiday shopping season drove a second consecutive quarter of accelerated growth in revenue, GMV and merchants.

"We are coming off not only a tremendous quarter for Shopify, but also for the hundreds of thousands of merchants that trust the Shopify platform to power their businesses," said Tobi Lütke, founder and CEO of Shopify. "Over the holiday season our merchants collectively sold almost 3 billion dollars worth of products, a huge increase from the year before. We are also seeing our merchants use Shopify to sell on multiple new sales channels like mobile and social. We believe that multichannel, cloud commerce is an industry-wide shift that is still in its infancy."

"Our strong fourth-quarter performance highlights the strength of our business model, one where we win when our merchants win," said Russ Jones, Shopify's CFO. "Many of our efforts in 2015 -- such as adding multiple new sales channels to a single integrated back office -- were driven by our simple goal of helping merchants become more successful. We added a record number of new merchants in the fourth quarter and are proud that over half of the more than 1,000 merchants now using Shopify Plus are upgrades from merchants who have grown their businesses on Shopify. We're entering 2016 with excellent momentum and expect to close this year even better positioned than we are today."

Fourth-Quarter Financial Highlights

  • Total revenue for the fourth quarter of 2015 was $70.2 million, a 99% increase from the fourth quarter of 2014. Within this, Subscription Solutions revenue grew 70% to $34.6 million, driven by an increase in the number of merchants using our platform; and Merchant Solutions revenue grew 140% to $35.6 million, driven primarily by an increase in revenue from Shopify Payments.
  • Monthly Recurring Revenue [1] ("MRR") as of December 31, 2015 was $11.3 million, up 72% compared with $6.6 million on December 31, 2014.
  • Gross Merchandise Volume [2] ("GMV") for the fourth quarter was $2.8 billion, a 109% increase over the fourth quarter of 2014.
  • Gross profit grew 81% to $35.5 million for the fourth quarter of 2015, versus $19.6 million for the fourth quarter of 2014.
  • Operating loss for the fourth quarter of 2015 was $6.5 million, compared with an operating loss of $4.5 million for the fourth quarter of 2014.
  • Adjusted operating loss [3] for the fourth quarter of 2015 was $1.3 million, compared with $0.8 million for the fourth quarter of 2014.
  • Net loss for the fourth quarter of 2015 was $6.3 million, or $0.08 per share, compared with a net loss of $4.8 million, or $0.12 per share, for the fourth quarter of 2014.
  • Adjusted net loss [3] for the fourth quarter of 2015 was $1.1 million, or $0.01 per share, compared with an adjusted net loss of $1.1 million, or $0.03 per share, for the fourth quarter of 2014.
  • At December 31, 2015, Shopify had $190.2 million in cash, cash equivalents and marketable securities, compared with $59.7 million on December 31, 2014.

Full-Year 2015 Financial Highlights

  • Total revenue for 2015 was $205.2 million, a 95% increase from 2014. Within this, Subscription Solutions revenue grew 68% to $112.0 million; and Merchant Solutions revenue grew 143% to $93.3 million.
  • Monthly Billings Retention Rate [4] continued to exceed 100% for 2015.
  • Gross Merchandise Volume [2 ] ("GMV") for 2015 was $7.7 billion, a 105% increase over 2014.
  • Gross profit grew 80% to $111.1 million for 2015, versus $61.8 million for 2014.
  • Operating loss for 2015 was $17.8 million, compared with an operating loss of $21.6 million for 2014.
  • Adjusted operating loss [3 ] for 2015 was $6.7 million, compared with $15.0 million for 2014.
  • Net loss for 2015 was $18.8 million, or $0.30 per share, compared with a net loss of $22.3 million, or $0.57 per share, for 2014.
  • Adjusted net loss [3] for 2015 was $7.7 million, or $0.13 per share, compared with an adjusted net loss of $15.7 million, or $0.40 per share, for 2014.

Fourth-Quarter and Full-Year Business Highlights

  • During the fourth quarter 2015, our strongest seasonal quarter for merchant sales, the Shopify team executed flawlessly over the Black Friday Cyber Monday weekend. GMV and order volume more than doubled compared with 2014's comparable weekend on Shopify's scalable multi-tenant platform.
  • Shopify was among the first ecommerce providers to add the ability to sell over the leading social media platforms, including Facebook, Pinterest and Twitter, and now over 25% of Shopify merchants have enabled social media selling. While these channels currently account for a small portion of transactions, sales on social media channels are growing rapidly. Approximately 61% of the traffic and 46% of orders on the Shopify platform came from mobile devices in December 2015.
  • Shopify expanded the number of channels over which merchants can sell by adding a mobile buy button software development kit, enabling transactions on any site a merchant controls, and by integrating social media options into its administrative interface.
  • Shopify enhanced our integrated back office capabilities: we expanded the number of reports available to merchants; we added shipping and delivery options, starting with the US Post Office and UberRush; and we enhanced merchants' in-person selling capabilities with the addition of EMV readers that accept chip-and-pin and ApplePay.

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 section below, "Forward-looking Statements".

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. All numbers provided in this section are approximate.

For the full year 2016, Shopify currently expects:

  • Revenues in the range of $320 million to $330 million
  • GAAP operating loss in the range of $36 million to $42 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 $20 million

For the first quarter of 2016, Shopify currently expects:

  • Revenues in the range of $65 million to $67 million
  • GAAP operating loss in the range of $11 million to $12 million
  • Adjusted operating loss [3] in the range of $6.5 million to $7.5 million, which excludes stock-based compensation expenses and related payroll taxes of $4.5 million

Quarterly...


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