Canada’s Shopify Inc on Wednesday forecast a slowing pace in first-half revenue growth. It indicates the e-commerce boom seen during the pandemic is cooling as retailers shift their focus back to brick-and-mortar stores from online. U.S.-listed shares of the company were down about 6% in trading before the bell.
Ottawa-based Shopify – which helps merchants set up online stores through subscription-based software tools. While offering services such as shipping to payments – benefited during the pandemic as businesses quickly moved online to ride a boom in e-commerce.
Lockdowns pushed millions of small businesses to open online stores, as retail sales rapidly shifted away from physical stores. U.S. retail e-commerce sales grew 32% in 2020 from the prior year, according to the U.S. Commerce Department.
Fourth-Quarter Financial Highlights
Total revenue in the fourth quarter was $1,380.0 million, a 41% increase from the comparable quarter in 2020.
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.
Shopify Plus contributed $29.8 million, or 29%, of MRR compared with 25% of MRR as of December 31, 2020.
Gross Payments Volume (“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.
Adjusted gross profit dollars 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 income for 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.
Adjusted net income for 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.
On December 31, 2021, Shopify had $7.77 billion in cash, cash equivalents, and marketable securities, compared with $6.39 billion on December 31, 2020.
What’s Next
Shopify said it plans to expand and simplify its fulfillment network. So merchants can spend less money managing their inventory and deliver orders more quickly. “Being able to offer [fulfillment services] to 90% of the US, two-day affordable shipping is really the goal,” Shopify President Harley Finkelstein told analysts Wednesday.
The company said it expects capital expenditures of $200 million for 2022. It outpacing its spending on physical assets from the previous two years combined, according to Mr. Kessler of Third Bridge. Shopify said it plans to spend roughly $1 billion over 2023 and 2024 leasing warehouse hubs throughout the U.S.