Shopify Q4 Earnings Reveal a Company That is Not Slowing Down

Shopify Q4 2019 Earnings Report

Shopify released its Q4 and 2019 earnings yesterday, and the company surpassed Wall Street estimates by increasing revenues 47% Year-over-Year.

“2019 was a milestone year for us. We’ve earned the trust of more than one million merchants and we are motivated more than ever to keep lowering the learning curve so anyone, anywhere can become an entrepreneur.”


Tobi Lütke, Shopify’s CEO

Strong Holiday Season For Shopify Merchants

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 $2.9 billion, with the majority coming from mobile devices. This compares with more than $1.8 billion in GMV for the Black Friday Cyber Monday period in 2018.

The company continues to lay the foundation for timely and affordable fulfillment through its Shopify Fulfillment Network, expanding its number of partners, merchants, and nodes, and performing well for merchants over the busy Black Friday Cyber Monday weekend.

Shopify plans to continue its measured approach with the Shopify Fulfillment Network (SFN) through 2020, optimizing for the merchant experience first and adding scale only at the rate at which service levels can be maintained.

Further, Shopify said that purchases from merchants’ stores coming from mobile devices versus desktop continued to climb in the quarter, accounting for 80% of traffic and 68% of orders for the three months ended December 31, 2019, versus 78% and 66%, respectively, for the fourth quarter of 2018.

The eCommerce platform also expanded its Shopify Capital program by issuing $115.9 million in merchant cash advances and loans in the fourth quarter of 2019. That is an
increase of 61% versus the $71.8 million issued in the fourth quarter of last year.

Shopify Capital has grown to approximately $885 million in cumulative cash advanced since its launch in April 2016 through 2019, approximately $150 million of which was outstanding on December 31, 2019.

More Big Names Launch on Shopify Plus

The company also revealed that its enterprise-level solution Shopify Plus is gaining momentum as more high-volume DTC brands and legacy brands wishing to expand with direct to consumer sales are launching on the platform.

Shopify plans to launch a new Shopify Plus experience in the coming months that will further reduce complexity for these high volume merchants.

The Bottom Line

Simplicity and innovation appear to be keys to Shopify’s success. The expansion of its fulfillment network may be its most ambitious project yet, and the company is poised to roll out SFN to more merchants in a responsible manner.

2020 is shaping up to be another exciting year for Shopify, and it looks like merchants of all sizes will be able to benefit from the investments the company is making in technology and operations.

What do you think of Shopify’s success and where it is heading?

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