Kalkine Media -
Shopify Inc. (TSX: SHOP), one of the largest e-commerce companies in the world, announced its latest earnings on Wednesday, February 16.Highlights
- In Q4 2022, Shopify (TSX:SHOP)'s gross merchandise volume (GMV) amounted to US$ 61 billion.
- Notably, Shopify's revenue jumped 26 per cent YoY and 28 per cent on a constant currency basis.
- Shopify said that its gross margin in Q1 2023 will be slightly more than Q4 2022.
Shopify enables small enterprises to set up an online store and carry out online sales using a single, streamlined interface.
In terms of stock performance, 2022 was probably the worst year for SHOP as it declined massively amid heavily fluctuating market conditions due to rising inflation and interest rates.
Let's see how Shopify (SHOP) did in terms of financials: In the fourth quarter of fiscal 2022, Shopify's gross merchandise volume (GMV) amounted to US$ 61 billion, up 13 per cent year-over-year (YoY) or an increase of US$ 6.9 billion. Meanwhile, the gross payments volume (GPV) was US$ 34.2 billion compared to US$ 27.7 billion in Q4 2021.
Notably, Shopify's revenue jumped 26 per cent YoY and 28 per cent on a constant currency basis to US$ 1.7 billion. The company said that its subscription solutions revenue increased to US$ 400.3 million and merchant solutions revenue increased to US$ 1.3 billion, reflecting an increase of 14 per cent and 30 per cent, respectively.
The gross profit of Shopify was US$ 798.5 million, up by 15 per cent from the same period of the previous fiscal year. However, the company posted an operating loss of US$ 188.7 million in Q4 2022 compared to an income of US$ 14.4 million in Q4 2021.
For 2022, SHOP's operating loss stood at US$ 822.3 million versus an income of US$ 268.6 million in 2021.
What's in store for Shopify? In its earnings release, Shopify said that in Q1 2023, it expects its gross margin to be slightly more than in Q4 2022. Also, the company expects its revenue growth in the high-teen percentages on a YoY basis.
Meanwhile, Shopify also said that the financial estimate for 2023 takes into account the pricing adjustments to their subscription plans, the anticipated effects of Deliverr and Shopify Fulfillment Network, and rising personnel-related costs, including the impact of Flex Comp.
Any latest updates from Shopify? The company has not given any significant updates since the beginning of this year. However, on November 29, 2022, the company said it created a new record for Black Friday & Cyber Monday weekend by generating US$ 7.5 billion from sales.
Shopify said that during this weekend, more than 52 million customers purchased from brands listed on its platform, and it jumped 18 per cent YoY.
Bottom line The SHOP share price increased after the earnings release, and it jumped about seven per cent during the trading session and ended the day at a price of C$ 71.44 per share.
The SHOP stock has surged 46.4 per cent year-to-date (YTD) and around nine per cent in a month.
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