What could have caused Shopify’s small growth rate in the previous quarter?
The Canadian eCommerce company were bombarded with questions about their small Gross Merchandise Volume (GMV) for the second quarter of 2018.
Their second-quarter financial results showed a GMV of $9.1 billion, a 56% year-on-year increase; being lower than the 64% growth which they reported in the first quarter of the year, it made financial analysts wonder.
Shopify’s total revenue rose 62% to $245 million, beating analysts’ forecast of $234.9 million, but it’s relatively low compared with the 75% YOY revenue increase they reported in the same period last year.
However, during a conference call, Amy Shapero, chief financial officer at Shopify, stressed that the company exhibited solid growth. She said:
“GMV growth, along with continued adoption by our merchant base of every one of our merchant solutions offerings in the quarter, drove the strong growth in merchant solutions revenue. The amount processed on Shopify Payments reached $3.6 billion, an increase of 66% versus the comparable quarter last year.”
She also brushed aside remarks that Shopify’s 49% increase in monthly recurring revenue exhibited a slow-paced growth.
“We think our almost 50% MRR growth is pretty solid performance, and was within our expectations. We don’t expect MRR growth to accelerate every quarter. Our Q2 results indicated our growth drivers are varied and strong. We continue to add merchants at a healthy pace.”
Shopify expect a third-quarter revenue of $253 million to $257 million, and their full-year revenue to grow between $1.015 billion and $1.025 billion.
Do you sell through Shopify? If so, what can you say about the observation of financial analysts on the platform’s sluggish sales growth?
We hope to hear from you in the comments below.
As always, to your continued success,
Dave & Matt