Shopify Shares Rose Nearly 6% in Premarket Trading after Announcing Its Financial Results

Shopify shares rose nearly 6% in premarket trading after announcing its financial results.

Fourth-Quarter Financial Highlights

• Total revenue in the fourth quarter was $1,380.0 million, a 41% increase from the comparable quarter in 2020.
• Subscription Solutions revenue was $351.2 million, up 26% year over year, primarily due to more merchants joining the platform.
• Merchant Solutions revenue was $1,028.8 million, up 47% year over year, driven primarily by the growth of Gross Merchandise Volume1("GMV"), exceeding $1 billion of revenue for the first time in a single quarter.
• Monthly Recurring Revenue2("MRR") as of December 31, 2021 was $102.0 million, surpassing $100 million for the first time. MRR increased 23% year over year, up from $82.6 million as of December 31, 2020 as more merchants joined the platform and the number of retail locations using POS Pro increased. Shopify Plus contributed $29.8 million, or 29%, of MRR compared with 25% of MRR as of December 31, 2020.
• GMV for the fourth quarter was $54.1 billion, an increase of $12.9 billion or 31% over the fourth quarter of 2020. Gross Payments Volume3("GPV") grew to $27.7 billion, which accounted for 51% of GMV processed in the quarter, versus $19.1 billion, or 46%, for the fourth quarter of 2020.
• Gross profit dollars grew 37% to $692.7 million in the fourth quarter of 2021, compared with $504.4 million for the fourth quarter of 2020.
• Adjusted gross profit4dollars grew 37% to $700.6 million in the fourth quarter of 2021, compared with $510.6 million for the fourth quarter of 2020.
• Operating income for the fourth quarter of 2021 was $14.4 million, or 1.0% of revenue, versus income of $112.5 million, or 12% of revenue, for the comparable period a year ago.
• Adjusted operating income4for the fourth quarter of 2021 was $130.2 million, or 9% of revenue, compared with adjusted operating income of $200.0 million or 20% of revenue in the fourth quarter of 2020.
• Net loss for the fourth quarter of 2021 was $371.3 million, or $2.95 per basic and diluted share, compared with net income of $123.9 million, or $0.99 per diluted share, for the fourth quarter of 2020. Q4 2021 net income includes a $509.7 million net unrealized loss on our equity and other investments.
• Adjusted net income4for the fourth quarter of 2021 was $172.8 million, or $1.36 per diluted share, compared with adjusted net income of $198.8 million, or $1.58 per diluted share, for the fourth quarter of 2020.
• At December 31, 2021, Shopify had $7.77 billion in cash, cash equivalents and marketable securities, compared with $6.39 billion at December 31, 2020. The increase reflects $1.5 billion of net proceeds from Shopify's offering of Class A subordinate voting shares in the first quarter of 2021 and $0.5 billion of net cash provided by operating activities, partially offset by the purchase of equity and other investments during 2021.

Fourth-Quarter Business Highlights

• From the start of Black Friday in New Zealand, through the end of Cyber Monday in California, sales on Shopify's platform reached more than $6.3 billion. This compares with more than $5.1 billion in GMV for the global Black Friday Cyber Monday period in 2020. Shopify purchased enough carbon removal to completely eliminate the impact of carbon emissions from shipping on every single order on our platform over the shopping weekend, resulting in nearly 60,000 tonnes of carbon emissions offset.
• Merchants in the U.S., Canada, and the U.K. received $323.7 million in merchant cash advances and loans from Shopify Capital in the fourth quarter of 2021, an increase of 43% versus the $226.9 million funded in the fourth quarter of last year. Shopify Capital has grown to $3.0 billion in cumulative capital funded since its launch in April 2016, approximately $470.7 million of which was outstanding on December 31, 2021.
• Shopify was named #1 on G2's Crowd Grid for E-commerce Platforms in its Winter 2022 report, retaining this leading position for the seventh consecutive year.

Subsequent to Fourth Quarter 2021

• Shopify launched the JD Marketplace sales channel as part of a new partnership with JD.com, unlocking the world's largest ecommerce market for merchants by giving them access to one of China's leading ecommerce marketplaces and supporting their cross-border commerce efforts. This new channel provides merchants with expedited onboarding to sell quickly, end-to-end fulfillment from JD's U.S. warehouses directly to consumers in China, smart price conversion to local currency, and intelligent translation of product names and descriptions, opening up access to JD's 550 million active customers in China.