It’s no secret that brick-and-mortar stores have been struggling of late as consumers opt for a more user-friendly, mobile approach to shopping. Enter Shopify (SHOP 100.80, +8.43 +9.1%), a cloud-based commerce platform where merchants sell both online and use SHOP’s software to process things like in-person orders.
With a reach now north of 500,000 businesses, SHOP reported strong Q2 results. Adjusted net loss of $0.01 for Q2 came in ahead of market expectations while revenues of $151.7 million also beat anticipations.
Within this, Subscription Solutions revenue grew 64% to $71.6 million. Management attributed the acceleration in Subscription Solutions revenue to continued rapid growth in Monthly Recurring Revenue as another record number of merchants joined the platform in the period. Additionally, Merchant Solutions revenue grew 86% to $80.1 million, driven mostly by the growth of Gross Merchandise Volume.
MRR as of June 30, 2017 was $23.7 million, up 64% compared with $14.4 million as of June 30, 2016. Shopify Plus contributed $4.3 million, or 18%, of MRR compared with 13% of MRR as of June 30, 2016. GMV for Q2 was $5.8 billion, an increase of $2.5 billion, or 74% compared to the identical period a year ago. Gross Payments Volume grew to $2.2 billion, which accounted for 38% of GMV processed in the quarter, versus $1.3 billion, or 38%, for Q2 of last year.
SHOP has guided Q3 and FY17 ahead of market expectations as well, in light of the solid Q2. For Q3, the company now sees revenues between $164-166 million on an adjusted operating loss between $2-4 million. For FY17, the company now sees revenues in the range of $642-648 million (up from $615-630 million) on an adjusted operating loss of $7-11 million (down from $14-18 million).
In corporate news, SHOP also announced the retirement of CFO Russ Jones in 2018. Jones has been on at SHOP since 2011 and will continue to serve in his current capacity until a successor is named.
As a solid number of merchants joined the platform in Q2, SHOP’s quarterly earnings still hold at a loss as the company has not yet become profitable. Shares sky to all-time highs today, surging past the $105 mark which had provided some resistance in mid-June.