Shopify (NYSE:SHOP) has hiked the cost of its Plus plan, a premium offering tailored for larger merchants, Business Insider (BI) reported on Thursday.
This increase, marking a 25% rise from $2,000 to $2,500 monthly on a one-year commitment, follows a previous increase in the company's base subscription rates last year—an adjustment that has beneficially affected Shopify's financial performance. Merchants agreeing to a three-year term can secure a monthly rate of $2,300.
However, they have until April 24 to lock in their existing rates by opting for this longer contract, the report says.
Moreover, fees for third-party transactions, variable platform charges for online sales, and Shopify Payments rates will see slight increases, alongside a new 0.18% fee for B2B transactions.
"Today's pricing update allows us to continue to solve the most difficult problems in the industry and empower more businesses to scale to their full potential, and to do it at a pace that's necessary to make commerce better for everyone," Shopify’s spokesperson told BI.
Expressing its views on the move, Moffett Nathanson Research analysts issued a note saying they expect a $120 million boost to Shopify’s 2024 adjusted operating income following the launch.
This “equates to a 7.5% uplift from our published estimate of $1.6B and 8.5% uplift versus consensus of $1.4B,” analysts wrote.
“We estimate a 100% incremental AOI margin given the scalability of software and flow through the changes beginning in 2Q. For simplicity, we categorize the impact of the pricing change into three specific buckets,” they added.
Moffett Nathanson maintained its Buy rating on Shopify and upheld their price target of $82.