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Shopify (SHOP) Q2 Earnings Lag Estimates, Revenues Up Y/Y
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Shopify (SHOP - Free Report) reported a second-quarter 2022 adjusted loss of 3 cents per share, which missed the Zacks Consensus Estimate by 200%. The company reported earnings of 22 cents in the year-ago quarter.
Total revenues increased 16% year over year to $1.3 billion, which lagged the Zacks Consensus Estimate by 2.98%.
Quarter in Detail
Subscription Solutions revenues climbed 10% year over year to $366.4 million, driven by the addition of new merchants.
Merchant Solutions revenues surged 18% year over year to $928.6 million, driven by strong Gross Merchandise Volume (“GMV”), which improved 11% year over year to $46.9 billion.
As of Jun 30, 2022, Monthly Recurring Revenue (“MRR”) was $107.2 million, up 13% from the year-ago quarter. The growth benefited from more merchants joining the platform and an increase in the number of retail locations using POS Pro.
Shopify Plus revenues were $33.7 million, representing 31% of MRR compared with 26% reported in the year-ago quarter.
Gross Payments Volume (“GPV”) was $24.9 billion, constituting 53% of GMV processed in the second quarter compared with $20.3 billion (48% of GMV) in the year-ago quarter.
GPV benefited from strong performances by merchants on Shopify Payments, growing adoption of Shopify Plus, increased penetration of Shop Pay and Shopify Markets, and expanded availability of Shopify’s POS Pro hardware with integrated payments.
Shopify Capital advanced $416.4 million in cash and loans to merchants in the United States, Canada and the U.K. in the reported quarter, up 15% year over year. Since the launch of Shopify Capital, cumulative merchant cash advances have risen to $3.8 billion, out of which $537.8 million was outstanding as of Jun 30, 2022.
Operating Details
Non-GAAP gross profit increased 6% year over year to $665 million.
Non-GAAP operating expenses surged 75.7% year over year to $845.9 million, reflecting expansion in research & development and sales & marketing teams.
Shopify reported an adjusted operating loss of $41.8 million in the quarter against an operating income of $236.8 million reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2022, Shopify ended the reported quarter with cash, cash equivalents and marketable securities balance of $6.95 billion compared with $7.25 billion as of Mar 31, 2022.
Guidance
For 2022, Merchant Solutions will continue to grow as a percentage of GMV, driven by Shopify Payments, Shopify Capital, Shopify Markets, Shop Pay Installments, and Shopify Fulfillment (including Delivery), and continue to benefit from the growth of partner revenues.
Merchant Solutions’ revenue growth year-over-year will be more than double that of Subscription Solutions’ growth for 2022.
GMV growth will continue to outperform the broader retail market in the second half of 2022.
Zacks Rank & Stocks to Consider
Shopify currently has a Zacks Rank #3 (Hold).
Shopify shares lost 74.4% year to date, underperforming the Zacks Computer & Technology sector’s decline of 25.9%.
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Shopify (SHOP) Q2 Earnings Lag Estimates, Revenues Up Y/Y
Shopify (SHOP - Free Report) reported a second-quarter 2022 adjusted loss of 3 cents per share, which missed the Zacks Consensus Estimate by 200%. The company reported earnings of 22 cents in the year-ago quarter.
Total revenues increased 16% year over year to $1.3 billion, which lagged the Zacks Consensus Estimate by 2.98%.
Quarter in Detail
Subscription Solutions revenues climbed 10% year over year to $366.4 million, driven by the addition of new merchants.
Merchant Solutions revenues surged 18% year over year to $928.6 million, driven by strong Gross Merchandise Volume (“GMV”), which improved 11% year over year to $46.9 billion.
As of Jun 30, 2022, Monthly Recurring Revenue (“MRR”) was $107.2 million, up 13% from the year-ago quarter. The growth benefited from more merchants joining the platform and an increase in the number of retail locations using POS Pro.
Shopify Inc. Price, Consensus and EPS Surprise
Shopify Inc. price-consensus-eps-surprise-chart | Shopify Inc. Quote
Shopify Plus revenues were $33.7 million, representing 31% of MRR compared with 26% reported in the year-ago quarter.
Gross Payments Volume (“GPV”) was $24.9 billion, constituting 53% of GMV processed in the second quarter compared with $20.3 billion (48% of GMV) in the year-ago quarter.
GPV benefited from strong performances by merchants on Shopify Payments, growing adoption of Shopify Plus, increased penetration of Shop Pay and Shopify Markets, and expanded availability of Shopify’s POS Pro hardware with integrated payments.
Shopify Capital advanced $416.4 million in cash and loans to merchants in the United States, Canada and the U.K. in the reported quarter, up 15% year over year. Since the launch of Shopify Capital, cumulative merchant cash advances have risen to $3.8 billion, out of which $537.8 million was outstanding as of Jun 30, 2022.
Operating Details
Non-GAAP gross profit increased 6% year over year to $665 million.
Non-GAAP operating expenses surged 75.7% year over year to $845.9 million, reflecting expansion in research & development and sales & marketing teams.
Shopify reported an adjusted operating loss of $41.8 million in the quarter against an operating income of $236.8 million reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2022, Shopify ended the reported quarter with cash, cash equivalents and marketable securities balance of $6.95 billion compared with $7.25 billion as of Mar 31, 2022.
Guidance
For 2022, Merchant Solutions will continue to grow as a percentage of GMV, driven by Shopify Payments, Shopify Capital, Shopify Markets, Shop Pay Installments, and Shopify Fulfillment (including Delivery), and continue to benefit from the growth of partner revenues.
Merchant Solutions’ revenue growth year-over-year will be more than double that of Subscription Solutions’ growth for 2022.
GMV growth will continue to outperform the broader retail market in the second half of 2022.
Zacks Rank & Stocks to Consider
Shopify currently has a Zacks Rank #3 (Hold).
Shopify shares lost 74.4% year to date, underperforming the Zacks Computer & Technology sector’s decline of 25.9%.
Airbnb (ABNB - Free Report) , Aspen Technology (AZPN - Free Report) , and Fastly (FSLY - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All three stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Airbnb shares are down 35.5% year to date. ABNB is set to report second-quarter 2022 results on Aug 2.
Aspen shares are up 28.8% year to date. AZPN is set to report fourth-quarter fiscal 2022 results on Aug 8.
Fastly shares are down 68.7% year to date. FSLY is set to report second-quarter 2022 results on Aug 3.